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LaBarbera’s Lower Court Library

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KOHANE’S COVERAGE CORNER
Dan D. Kohane
ddk@hurwitzfine.com

06/18/25 Laxton v. Hagerty Insurance Company
Appellate Division, Second Department
Thousands Flee. SUM Arbitration Award Affirmed, Even Though (a) No Offer by Tortfeasor of Policy Limits, (b) SUM Coverage Should Not Have Triggered, and (c) No Article 75 Proceeding Commenced

So, here’s what happened. Two car accident. Laxton was insured by Essentia Insurance Company with liability and SUM Limits of $100,000. Accident with Allstate-insured tortfeasor with liability limits of $100,000.

Immediately, the reader should appreciate that even though Allstate offers its liability limits of $100,000, a SUM claim (underinsured motorist claim) cannot be pursued because Laxton’s liability limits do not exceed the Allstate policy.

So, what does Laxton do? It bypasses chasing down the tortfeasor’s policy and files a SUM claim. Now the proper thing for Essentia to do at that point is to file an Article 75 proceeding, within 20 days, to stay arbitration on the ground that (a) coverage doesn’t trigger and (b) there was not a written offer of the policy limits. For reasons that escape us, that doesn’t happen. In fact, Laxton’s counsel had advised Allstate that it was not going to pursue the claim against the tortfeasor, and it should close its file.

Because no application to stay arbitration was made, the parties appeared before the SUM arbitrator. The Arbitrator issued an Award denying the claim:

It is well established that as a condition precedent to payment of uninsured or underinsurance benefits, the limits of liability of all bodily injury … policies applicable at the time of the accident shall be exhausted by the payment of judgment or settlements. Here, it is uncontroverted that Claimant …. Failed to exhaust the [Allstate} policy.

True enough, but was that within the arbitrator’s authority?

In the underlying proceeding, Laxton argued that since Essentia did not move to stay arbitration as required under Article 75, the Arbitrator exceeded his power when he denied the award. Can’t argue with the law.

Essentia argued that Laxton should never have filed a demand to arbitrate (no argument there) since it was not eligible for the benefits.

The lower court found that under CPLR 7511 an arbitration award may be vacated if, among other things, it exceeds an arbitrator’s power. However, it concluded that the arbitrator did not exceed its power since the award was based on documentary evidence and admissions from Laxton’s counsel that it was aware of the Allstate policy limits.

That ain’t the rule. Essentia should have moved to stay arbitration and failing to do so, the arbitrator’s power was exceeded.
The Second Department affirmed.

Pursuant to CPLR 7511(b)(1)(iii), an arbitration award shall be vacated if the court finds that the rights of a party were prejudiced by an arbitrator exceeding his or her power or so imperfectly executing it that a final and definite award upon the subject matter submitted was not made. "A party seeking to overturn an arbitration award on one or more grounds stated in CPLR 7511(b)(1) bears a heavy burden and must establish a ground for vacatur by clear and convincing evidence.

Here, the arbitrator properly determined that arbitration was not available to the petitioner because he failed to exhaust by payment the limits of an applicable bodily injury insurance policy (see Insurance Law § 3420[f][2]; Matter of Sutorius v Hanover Ins. Co., 233 AD2d 332, 333-334). Furthermore, the petitioner failed to establish by clear and convincing evidence that the arbitrator exceeded his power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made (see CPLR 7511[b][1][iii]).

Clearly, Laxton had no right to file an arbitration demand without exhausting the tortfeasor’s policy (and couldn’t anyway, because his liability limits did not exceed the tortfeasor’s liability limits. No question. However, the law required Esteria to file an application to stay in Supreme Court and the arbitrator had no power to act on this question.

Editor’s Note We thank our friend and subscriber Albert Galatan for his note on this one. He was a shocked as we were.

06/18/25 Peak Property and Casualty Insurance Corporation v. Mulverhill
Appellate Division Second Department
Can’t Rescind New York Auto Policy Retroactively. Nobody Raised the Fact That a Florida Policy Can Be Rescinded

This involved rescission of a Florida auto policy, but nobody paid attention to that

The court found that "Vehicle and Traffic Law § 313 (1) (a) supplants an insurer's common-law right to cancel a contract of insurance retroactively on the grounds of fraud or misrepresentation, and mandates that the cancellation of a contract pursuant to its provisions may only be effected prospectively. That’s true, when there is a New York policy involved, under the holding in Teeter v. Allstate, 9 NY2d 655.

However, this was a Florida policy and Florida allows retroactive rescission and New York courts have allow Florida policies to be rescinded. Nobody raised it. Oh well.

06/18/25 Collado v. Port Authority of New York and New Jersey
Appellate Division, Second Department
In a Non-Construction Contract, Port Authority Able to Secure Indemnification, Even for Its Own Negligence

In 2012, Port Authority of New York and New Jersey (“Port”) and Gateway Security, Inc. (“Gateway”), entered into a contract, whereby Gateway agreed, to provide taxi dispatch services at John F. Kennedy International Airport (“JFK”). The contract required Gateway to procure specified insurance coverage and to name the Port as an additional insured. In the contract, Gateway agreed, to the extent permitted by law, to indemnify and hold the Port Authority harmless "from and against all claims and demands, just or unjust, . . . arising out of or in any way connected . . . with the Contract and all other services and activities of [Gateway] under this Contract . . . whether they arise from the acts or omissions of . . . the Port Authority."

In April 2016, the plaintiff, an employee of Gateway, allegedly was injured when she tripped and fell on uneven pavement in one of the parking lots at JFK while performing her duties for Gateway. She sued the Port Authority to recover damages for personal injuries. The Port Authority commenced a third-party action against Gateway, asserting, among other things, causes of action for contractual indemnification and alleging breach of contract for failure to procure insurance.

The right to contractual indemnification depends upon the specific language of the contract. Here, the Port established, prima facie, that the plaintiff's allegations fell within the broad indemnification provision of the contract, which encompassed even those claims that were alleged to arise out of the Port’s own negligence.

While one cannot secure indemnification for one’s own negligence in a construction contract under General Obligations Law § 5-322.1. that section is inapplicable to this case, as the contract was unrelated to "the construction, alteration, repair or maintenance of a building."

There is another lesser known section of the GOL, Section 5-323. It provides that.

Every covenant, agreement or understanding in or in connection with or collateral to any contract or agreement affecting real property made or entered into, whereby or whereunder a contractor exempts himself from liability for injuries to person or property caused by or resulting from the negligence of such contractor, his agent, servants or employees, as a result of work performed or services rendered in connection with the construction, maintenance and repair of real property or its appurtenances, shall be deemed to be void as against public policy and wholly unenforceable.

That section is inapplicable because the contract is not one "affecting real property" or for "services rendered in connection with the construction, maintenance and repair of real property" within the meaning of General Obligations Law § 5-323.

Additionally, the Port Authority established its prima facie entitlement to judgment as a matter of law on the third-party cause of action alleging breach of contract for failure to procure insurance, by demonstrating that Gateway failed to procure all of the coverage required by the contract.

06/10/25 Certain Underwriters at Lloyd's v. Nissanoff
Appellate Division First Department
Reservation of Rights Letter OK in Property Damage Cases, and Preclude Claims of Prejudice

Underwriters commenced this action for a declaration that it has no duty to defend or indemnify Nissanoff, et al in the underlying action which stemmed from the loss of a diamond. Plaintiff claimed that coverage was unavailable because defendants breached a warranty of the insurance policy and failed to meet a condition precedent to coverage, as there was no working security system at the time of the loss.

The court properly found that defendants breached a warranty in their insurance policy and failed to meet a condition precedent to coverage by failing to have a working security alarm system at the time of loss. Defendants' argument that plaintiff waived its right to disclaim coverage is unavailing. Plaintiff's reservation of rights letter is irrelevant to whether plaintiff timely sent a notice of disclaimer. While that is true, the strict timeliness standard under Insurance Law § 3420(d) applies only for denials of coverage "for death or bodily injury" and is inapplicable to the property insurance claim in this action. Plaintiff's explicit reservation of rights precluded any arguments as to waiver and equitable estoppel.

Editor’s Note: The Court’s opinion serves as a reminder. Insurance Law Section 3420(d)(2) disclaimer requirements only apply to NY bodily injury and wrongful death claims, not property damage claims.

06/05/25 Century Indem. Co. v. Brooklyn Union Gas Co.
Appellate Division, First Department
Long-Tail Environmental Claim Remanded for New Trial, Based on Improper Jury Instruction and Improper Preclusion of Evidence to Support Untimely Notice Defense by Excess Carrier

The instant matter involves twenty-five-year-old litigation centralized around clean-up costs associated with three manufacturing gas plants formally owned and operated by Brooklyn Union Gas Company (“Brooklyn Union”), all sites which bordered the Gowanus Canal. When processing gas, the sites environmentally contaminated the canal and subsoil. In the early to mid-2000s, Brooklyn Union received a series of orders from the NYS DEP and the EPA, requiring an investigation and remediation of the pollution in the canal and subsoil. After an unrelated threat to sue by New York City, Brooklyn Union placed certain carriers on notice of the pollution and clean-up efforts occurring at the cites boarding the Gowanus Canal.

Century Indemnity Company (“Century”), one of the excess liability insurers for Brooklyn Union filed suit, seeking a declaration that it lawfully disclaimed excess coverage for contamination remediation and related costs, based on the untimely notice of an occurrence. Century had issued six policies to Brooklyn Union, from 1941-1969, providing coverage for third-party property damage claims. Each of these policies contained a one-year term, a self-insured retention, and was renewed annually. Four policies contained an objective notice provision which required Brooklyn Union to give notice upon the happening of an occurrence or accident that appears reasonably likely to involve liability on part of Brooklyn Union. The remaining two contained a subjective notice standard, requiring Brooklyn Union to provide notice upon learning of an occurrence which is likely to result in a claim in excess of the self-insured retention.

During the action, both parties made multiple motions, resulting in two successive appeals. In 2009, the Appellate Division affirmed the denial of Century’s summary judgment motion on its claim of untimely notice, finding material issues of fact regarding whether Brooklyn Union considered pro rata allocation of damages in its notice analysis, as to whether the costs of remediating the waste contamination were likely to implicate excess coverage prior to February 1993. Had Brooklyn Union considered pro rata allocation in its notice analysis, there was a question of fact as to whether notice was untimely, based on the fact that the contamination and clean-up efforts over time, were unlikely to satisfy the self-insured retention, which would require notice to be provided to Century.

Ten years later, the Appellate Division affirmed the holding that Century’s successive policies were subject to a pro rata allocation for all losses resulting from long term, continuous contamination that spanned successive policy periods. However, the Appellate Division modified to deny Century’s motion for summary judgment, finding that the policies were ambiguous as to the application of the per-occurrence limits.

After a trial in 2022, a jury returned a verdict in favor of Brooklyn Union, finding that there was coverage for the remediation at the cites boarding the Gowanus Canal, and that Century’s defense of untimely notice lacked merit. Century made a motion to set aside and modify a jury verdict, and for a new trial. The motion was denied, and Century appealed the decision. Century argued that there is no controlling precedent which allows an instruction to the jury that they must simply perform a pro rata allocation calculation of potential clean-up costs and retention over the extensive periods of contamination. Century argued that the instruction wrongly allowed the jury to conclude that the attachment point was not reached in February 1993, even if the sum of damages exceeded the $100,000 self-insured retention threshold. As such, the calculations led the jury to wrongly determine that notice was timely sent. In addition, Century contended that it was inappropriately precluded from presenting two pieces of crucial evidence at trial, which would support its claim that notice was untimely provided by Brooklyn Union.

The Appellate Division determined that the trial court erred in its instruction to the jury. Instead, the Appellate Division opined that the jury should have been left to consider all factors relevant to determine when the original retention amount was reasonably likely to be exceeded. The Appellate Division identified that this determination should include Brooklyn Union’s motive, and other evidence which the trial court erroneously excluded regarding whether Century was provided timely notice of the remediation efforts and clean-up costs. It was determined that the trial court should have let the jury decide whether Brooklyn Union was on inquiry notice of an occurrence, and if so, whether it properly investigated the alleged contamination claims.

Accordingly, the Appellate Division unanimously modified the trial court’s decision on the law and remanded the case for a new trial on notice and the duty to investigate.

Editor’s Note: The Appellate Division was additionally asked to consider the application of contra proferentem in resolution of ambiguities in the excess policy. Although for academic purposes, the Appellate Division chose to address this point in their decision. They found that the trial court properly refused to apply the doctrine of contra proferentem. The Appellate Division pointed to facts indicating that Brooklyn Union was a sophisticated insured, employing a large in-house insurance department, processing dozens of claims in house monthly, self-insures for large amounts, and has numerous lawyers and brokers. Accordingly, because Brooklyn Union is a sophisticated party in insurance coverage matters, with sufficient knowledge and bargaining power to craft an agreement to its benefit, there was no basis to apply the doctrine of contra proferentem.

PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
sep@hurwitzfine.com

06/06/25 KO Bar & Grill, Inc. v. Midstate Mut. Ins. Co.
Appellate Division, Fourth Department
Renter Has Insurable Interest in Property Damaged by Water Loss

Plaintiff operated a bar and grill at a leased premises and apparently secured first party coverage on the property through Midstate. When that premises was damaged, plaintiff presented a claim for payment. Midstate denied the claim, in part, due to a lack of insurable interest. The Appellate Division, in affirming the trial court, noted that insurance interest can be satisfied by merely showing a person “would profit by or gain some advantage from the property’s continued existence or suffer some loss or disadvantage by its destruction.” Against this standard, the Court ruled that even a leasehold interest in a property was sufficient to create an insurable interest. Thus, because Midstate could not demonstrate that plaintiff would have, or did in fact, suffer pecuniary or economic loss, it did not reach its burden on summary judgment.

Midstate also argued that even if an insurable interest was found, coverage was still removed by the “wear and tear” exclusion found on the policy. Midstate’s motion was supported by an expert affidavit which determined that the loss was subject to the “wear and tear” exclusion. Plaintiff, however, countered that the damage was caused by frozen and leaking pipes which would, potentially, trigger coverage. Faced with two experts contradicting the ultimate cause of the loss, the Court determined that a question of fact existed and remanded the matter to the trial court for jury resolution.

06/19/25 Koffler v. Cincinnati Ins. Co.
Appellate Division, Second Department
Court Affirms Appraisal, Dismissed E.C. Claims in a Singular Decision

Not an issue of coverage defenses in this case, but rather the tricky subject of a good faith disagreement on valuation. When the parties could not reach resolution, plaintiff made a claim for appraisal as was his right under the policy. Unfortunately for plaintiff, the appraiser’s award was apparently significantly less than plaintiff requested. As such, in April of 2022, plaintiff commenced a lawsuit against Cincinnati seeking to set aside the appraisal award. Plaintiff also alleged claims for extra-contractual damages therein asserting that Cincinnati deliberately undervalued the amount of damage. Cincinnati, in turn, moved to dismiss the extra-contractual portions of the claim. At the same time, it moved to confirm the appraiser’s award which established damages for the otherwise covered loss.

With regard to the appraisal process, the Appellate Division confirmed that the appraisal was conducted pursuant to the terms proscribed by the policy. Further, because plaintiff failed to demonstrate the aware “was the product of fraud, bias or bad faith” there was no reason to disturb the calculations. The Court went on to dismiss plaintiff’s claim for breach of the implied warranty of good faith and fair dealing, therein holding that it was duplicative of plaintiff’s breach of contract claim. The Court also ruled that the claim for “bad faith” should also be dismissed because “there is no separate tort for bad faith refusal to comply with an insurance contract.” Finally, the Appellate Division dismissed plaintiff’s claims for punitive damages and attorneys’ fees because neither are appropriate remedies for an “ordinary breach of contract.”

LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
lss@hurwitzfine.com

In Greece, up to my elbows. Heading back to the states today. See you in two.

RUFFNER’S ROAD REVIEW
Kyle A. Ruffner
kar@hurwitzfine.com

06/02/25 Am. Trans. Ins. Co. v. Neptune Medical Services P.C.
Supreme Court, New York County
Article 75 Proceeding Brought by Insurer to Vacate Arbitration Award in Favor of Medical Provider Is Denied

Pursuant to an independent medical examination report of Peter Chiu, M.D., dated February 20, 2023, American Transit denied coverage for medical bills submitted by Neptune Medical on the basis that the treatment provided to the non-party insured was not medically necessary. In the underlying arbitration, the arbitrator found that Dr. Chiu's report met the insurer’s burden of showing the medical treatment billed as unnecessary but also found that the medical provider successfully rebutted this report with the affidavit of a doctor who opined that the EMG/NCV studies were necessary given the insured’s symptoms of cervical radiculopathy and peripheral neuropathy. The rebuttal report cited medical literature in support of the argument that all patients who have suspected cervical radiculopathy should undergo any such treatment. The award was further affirmed by a Master Arbitrator, and the insurer brought a petition to vacate the award.

In the context of no-fault arbitrations, an arbitrator's decision will not be vacated as long as it is “rationally based.” An Article 75 proceeding is not an opportunity for "judicial second-guessing" of an arbitrator's findings, and courts are bound by the arbitrator's factual In this case, the Court found the master arbitrator's affirmance of the lower arbitrator's award was not irrational and was based in the applicable no-fault regulations, as the arbitrator rationally concluded that the provider’s rebuttal affidavit showed the medical services provided were medically necessary. The court explained that, when presented with conflicting evidence, it is up to the arbitrator to evaluate and weigh which evidence is determinative. Therefore, there was no basis to vacate the arbitration award and the insurer’s petition to vacate was denied.

Further, because the provider successfully defended this petition to vacate an arbitration award, the court held it is entitled to attorneys' fees pursuant to 11 NYCRR § 65-4.10(j)(4) in an amount fixed by the Court adjudicating the matter. However, because the Medical Provider did not submit an affirmation of services detailing the number of hours spent opposing the application and/or any reason why the $400.00 an hour rate is reasonable, its cross-petition for attorney’s fees was denied without prejudice.

06/04/25 Lam Quan M.D., P.C. v. LM General Insurance Company
Appellate Division, Second Department
Appellate Court Remits to Supreme Court for Recalculation of No-Fault Interest and Attorney Fees

Petitioner, a medical provider, was the assignee of a claim for no-fault benefits in the amount of $1,002.74 for treatment it rendered to the respondent’s insured. After the respondent denied the claim, the provider submitted the claim to arbitration and the arbitrator denied the claim, which was affirmed by a Master Arbitrator.

Thereafter, the provider commenced this proceeding pursuant to CPLR article 75 to vacate the master arbitrator's award, which was unopposed. The Supreme Court granted the petition and entered judgment which, among other things, awarded the petitioner interest on the overdue claim in the sum of only $39.40 and failed to award the petitioner attorneys' fees pursuant to 11 NYCRR 65-4.6(d). Therefore, the petitioner provider appealed.

The Appellate court noted that, pursuant to Insurance Law § 5106(a) and 11 NYCRR 65-3.9(a), interest accrues on overdue no-fault insurance claims at a rate of 2% per month, which is to be "calculated on a pro-rata basis using a 30-day month" (11 NYCRR 65-3.9[a]). The interest which accrues on overdue no-fault benefits is a statutory penalty designed to encourage prompt adjustments of claims and inflict a punitive economic sanction on those insurers who do not comply. Here, the Supreme Court failed to properly calculate the amount of interest to which the petitioner was entitled on the overdue claim in accordance with Insurance Law § 5106(a) and 11 NYCRR 65-3.9(a). Further, having determined that the denial of the claim was improper, the Supreme Court should have awarded the petitioner attorneys' fees pursuant to 11 NYCRR 65-4.6(d) and 11 NYCRR 65-4.10(j), to be fixed by the court.

Therefore, the Appellate court modified the judgment and remitted the matter to the Supreme Court, Nassau County, for a recalculation of the award of interest and attorney’s fees.

RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
rpm@hurwitzfine.com

06/18/25 Northway Medical v. Sentinel Insurance
Second Circuit Court of Appeals
Insured Fails to Provide Alternative Explanation for Excluded Damages

Short and sweet. Northway brought suit against Sentinel, alleging that Sentinel breached an insurance contract by denying coverage for damage to a building owned by Northway. Sentinel provided prima facie evidence showing that the damage to the building was caused by negligent work and/or rust and corrosion, and that coverage for the damage would therefore be excluded under the insurance policy. Northway failed to provide an alternative explanation supported by record evidence. Checkmate.

STORM’S SIU
Scott D. Storm
sds@hurwitzfine.com

05/28/25 Govt. Empls. Ins. Co. v. Clarke
United States District Court, Eastern District of New York.
Medical Provider’s Attorney Admonished by the Court for Not Disposing of an Inadvertently Produced Draft Affidavit; But His Actions Did Not Rise to the Level of Acting in Bad Faith or Engaging in Wrongful Conduct to Warrant Sanctions

Geico moved for sanctions against Colin Clarke, M.D. and Wesley Mead, Esq., counsel for Clarke.

The Court had granted Plaintiffs' motion for a protective order as to "drafts of . . . the affidavit signed by Defendant Melana Kay." Ms. Kay's counsel had inadvertently produced a draft of her affidavit to Mr. Mead. Plaintiffs demanded that Mr. Mead destroy the document, but he refused.

Mr. Mead does not dispute that a draft of Ms. Kay's affidavit was inadvertently disclosed, clearly marked as a draft of affidavit. He contends instead that his refusal to destroy the document was proper for two reasons. First, Mr. Mead states that he had an ethical duty to preserve the document to present it to the Court for purposes of a potential application for reconsideration of the Order. Mr. Mead contends that in their motions for a protective order, Plaintiffs made material misrepresentations to the Court about the documents they sought to be protected from disclosure, such that Mr. Mead had a "duty of Candor" to apprise the Court of these purported misrepresentations. Secondly, Mr. Mead argues that sequestration of the document was the appropriate method of handling the inadvertent disclosure.

Pursuant to 28 U.S.C. § 1927, the Court may impose sanctions on an attorney "who so multiplies the proceedings in any case unreasonably and vexatiously." "A party seeking sanctions under either 28 U.S.C. § 1927 or the Court's inherent authority must provide 'clear evidence that (1) the offending party's claims were entirely without color, and (2) the claims were brought in bad faith—that is, motivated by improper purposes such as harassment or delay.'" A court need not make a finding of bad faith, however, when an attorney "violates a court order or engages in other misconduct that is not undertaken for the client's benefit." The Court may also sanction a party or counsel under its inherent powers "for conduct which abuses the judicial process." The Court's inherent powers "must be exercised with restraint and discretion."

Mr. Mead is wrong on both points. First, even if Mr. Mead sought to apply for reconsideration of the Order based on Plaintiffs' purported misrepresentations to the Court and his ethical "duty," he had no need to "prevent destruction" of a document that was clearly already in the possession of Plaintiffs and Ms. Kay's counsel.

Second, by invoking Fed. R. Civ. P. 26(b)(5)(B) and insisting on sequestration, Mr. Mead expressed his intent to seek the Court's "direction" as to the "status" of the document—despite the Court having already established in the Order that the document's "status" was protected from disclosure. Mr. Mead implies ambiguity where there was none.

Mr. Mead's ethical duty upon receipt of the draft affidavit was to "promptly notify the sender", which he failed to do. Instead, Mr. Mead reviewed the document—comparing it with the final affidavit —and thereafter communicated to Plaintiffs his intention to use the document to seek the Court's reconsideration of the Order. Mr. Mead's review and use of a document that is clearly protected by a Court order is improper.

Finally, when Plaintiffs moved for sanctions following his steadfast refusal to destroy the protected document, Mr. Mead doubled down, not only filing a 10-page single-spaced letter but also cross-moving for sanctions, as well as filing an impermissible sur-reply. Throughout these filings, Mr. Mead provides scant legal support for the proposition that a document clearly protected from disclosure must be sequestered for judicial review or that such a document could properly be used to move for reconsideration of the Order. Similarly, he provides no legal support for his own cross-motion for sanctions, which this Court has already denied.

Despite being incorrect, Mr. Mead advanced a legal theory to support his belief in sequestration, which both sought to further his clients' interests and was not "entirely without color." Moreover, while his actions were misguided and wrong, there is no evidence before this Court that he undertook them for "improper purposes." As a result, the Court, therefore, does not find that Mr. Mead acted in bad faith or engaged in misconduct "that is not undertaken for the client's benefit." Accordingly, the Motion is denied.

Nevertheless, the Court admonishes Mr. Mead for both his failure to comply with the clear Order of the Court and for his excessive and unauthorized filings. Mr. Mead is cautioned to comply with all Court orders and Individual Practice Rules of any Judge assigned to this case.

FLEMING’S FINEST
Katherine A. Fleming
kaf@hurwitzfine.com

See you in a fortnight.

GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
edg@hurwitzfine.com

06/03/25 Beyond Point LLC v. ACMP Transport LLC et al.
Superior Court of New Jersey, Essex County (Special Civil Part)
Court Dismisses Declaratory Judgment Action as an Improper Direct Action

Beyond Point rented a truck to ACMP Transport and its owner, Cantos, for a period of several months. According to Beyond Point, the truck was returned at the conclusion of the rental period with severe property damage. Beyond Point brought suit against not only ACMP Transport and Cantos, but against three insurance companies it alleged insured ACMP Transport and Cantos at various points during those months.

An action brought by a third-party claimant directly against the alleged tortfeasor’s insurance carrier is known as a “direct action.” No right to bring such an action exists at common law; rather, a statute granting to bring one must be in place in order for such an action to stand.

Many jurisdictions, including New Jersey, have such a statute. One can find New Jersey’s direct action statute here. The statute provides that, in New Jersey, no direct action can be maintained unless three conditions precedent are satisfied: (1) the third-party claimant bringing the action has already obtained a judgment against the alleged tortfeasor; (2) that judgment has gone unsatisfied; and (3) the unsatisfaction of the judgment was due to the alleged tortfeasor’s insolvency or bankruptcy.

Each of the three defendant carriers moved to dismiss the complaint on the basis that it constituted an improper direct action. As the carrier-defendants noted, the plaintiff did not purport to have a judgment against ACMP Transport (their purported mutual insured), and, to the extent that it did have such a judgment, the action would have to be dismissed anyway on res judicata grounds, because ACMP Transport was included as a defendant in the instant action. The carrier defendants also noted that even if the plaintiff had a judgment against ACMP Transport that would not result in the action being dismissed on res judicata principles, the action was subject to dismissal nonetheless because the plaintiff neither alleged nor submitted any proof that any purported judgment went unsatisfied, or that any purported unsatisfaction of the judgment was due to ACMP Transport’s insolvency or bankruptcy.

The plaintiff cross-moved for leave to amend its Complaint to add a cause of action seeking a declaratory judgment was owed. In New Jersey (and many other jurisdictions), leave to amend is freely granted as justice so requires, unless amending the complaint in the manner proposed would be futile. Here, the carrier defendants opposed the cross-motion on the basis that adding a cause of action seeking a declaratory judgment does not cure the fact that the plaintiff has not satisfied the direct action statute.

The Court denied the plaintiff’s cross-motion to amend its pleadings, noting that the direct action rules described above apply equally to declaratory judgment actions. However, the Court granted the carrier defendants’ respective motions to dismiss, noting that none of the conditions precedent, provided by the direct action statute, were satisfied.

A copy of the decision has not yet been made publicly available but is available upon request from the over-signed.

Editor’s Note: I had the humble privilege of representing one of the carrier defendants in this case. Since this decision came down, the plaintiff has moved for a default against ACMP Transport and Cantos. Will the legal landscape change as to the carrier defendants if plaintiff’s motion is granted? I think not, since even if a default judgment is granted and returned unsatisfied, the direct action is only proper once it is established that the unsatisfaction is due to either the insolvency or bankruptcy of the alleged tortfeasor—neither of which has been established. That, and the fact that the decision reported on now dismissed the carrier defendants from the case on the merits and with prejudice, tells me that a decision on the default application will make no difference in terms of coverage.

O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
rpo@hurwitzfine.com

06/06/25 Razuki v. AmGuard Ins. Co.
United States Court of Appeals, Ninth Circuit
Failure to Correctly Identify Fire Safety System Breaches Protective Safeguards Condition

Razuki owned a multi-tenant commercial building that was damaged by fire. Razuki’s building was insured through AmGuard. The policy contained a Protective Safeguard Endorsement (“PSE”). The applicable Symbol within the PSE was P-1, which provides in pertinent part:

"P-1" Automatic Sprinkler System, including related supervisory services. Automatic Sprinkler System means:

a. Any automatic fire protective or extinguishing system, including connected:

(1) Sprinklers and discharge nozzles;

(2) Ducts, pipes, valves, and fittings;

(3) Tanks, their component parts and supports; and

(4) Pumps and private fire protection mains.

b. When supplied from an automatic fire protective system:

(1) Non-automatic fire protective systems; and

(2) Hydrants, standpipes, and outlets. . . .

AmGuard denied coverage for the loss due to the lack of a sprinkler system in violation of the PSE’s condition. Instead, the building only contained an Ansul system which is a wet chemical fire extinguishing equipment. Notably, an Ansul system falls under Symbol P-9G in the PSE.

Razuki contested that the PSE is ambiguous because the broadness of P-1 could include the Ansul system. In support, he submitted an expert opinion that the policy was ambiguous. The appellate court disagreed finding the PSE separately identified Ansul systems in the P-9G symbol, and its inclusion under P-1 would be redundant.

The court further rejected Razuki’s estoppel argument. Razuki submitted AmGuard failed to inspect the building, paid a $50,000 advance without reservation, and continued to insure the building post-loss. But, Razuki’s broker represented the type of sprinkler within the application and AmGuard was entitled to rely on that representation. Also under California law, estoppel cannot be used to extend coverage after a loss.

For these reasons, the Ninth Circuit affirmed the grant of AmGuard’s summary judgment.

LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
ihl@hurwitzfine.com

05/22/25 St. Farm Mut. Auto. Ins. Co. v. All City Fam. Healthcare Ctr., Inc.
Supreme Court, New York County
Intentional Acts, Fraudulent Statements, and Failure to Return Executed Examination Under Oath Transcript Results in Loss of Coverage for Medical Payment Providers

State Farm Mutual Automobile Insurance Company (“State Farm”) started a declaratory judgment action, seeking a declaration that it owed no coverage for medical bills submitted by certain medical providers following an automobile accident.

State Farm issued an automobile insurance policy to Jose Ordonez, and his auto repair and body shop, providing coverage for a 2013 Lincoln MKT. In November 2020, three individuals were allegedly inside of the insured vehicle, which was reported to be involved in a side-swipe automobile accident. After the incident, all individuals in the vehicle received around one hundred thousand dollars of medical bills.

During the investigation, State Farm requested an examination under oath of all three individuals reported to be involved in the incident. All three appeared, but two failed to return the subscribed transcripts. State Farm disclaimed coverage for failure to return the transcripts. As to the third individual, State Farm disclaimed on the basis that false statements, with the intent to conceal, were made during the examination.

The court granted State Farm’s motion for summary judgment in its entirety. Under New York law, it is well established that the failure to return an executed examination under oath transcript is a breach of a condition precedent to coverage. Doing so bars coverage to the insured, and all assignees of an insured. Based on the evidence submitted, it was undisputed that two individuals seeking benefits failed to return the transcripts subsequent to the examination under oath.

Further, the court found that State Farm submitted sufficient evidence in support of the portion of its summary judgment motion that the accident was intentionally caused, or the result of fraud. The court looked at the testimony of a claims investigator. In addition, the court pointed to the fact that all three individuals failed to appear in the declaratory judgment action and had defaulted. The court identified that by failing to appear, the defendants had admitted that their examination under oath statements were false, and their injuries were not the result of the accident. As the appearing defendant medical providers failed to produce any evidence of a person with knowledge supporting the legitimacy of their claims, there was insufficient proof offered to rebut State Farm’s position.

Accordingly, the court granted the motion in its entirety, finding that State Farm has no obligation to provide medical payments under the automobile policy issued to Jose Ordonez.

06/05/25 Main St. Am. Assur. Co. v. Calabria et al.
New York State Supreme Court, County of Albany
On a Very Sad Set of Facts, Court Finds Mother Not an Insured Under Businessowners Policy for Injuries to Child in Mother’s Bakery

Trigger warning: This case involves very serious, albeit accidental, injuries to a little girl. I will do my best to keep the facts light.

Anna Calabria owned a bakery called Café Crisan. Calabria specialized in cake decorating and had one employee, Dohner, to assist in baking the sweet treats. Calabria’s husband, Ignatius, dropped off their young daughter at the bakery due to a lack of alternative childcare. At depositions, the Calabrias each testified that this was outside of the normal sequence of events; usually, as they testified, they hired a sitter to look after the young Calabria at times when both parents were at work.

When Ignatius dropped the girl off at the bakery, Anna gave her some dough with which to play. The girl fed the dough through a dough and fondant sheeter (a heavy machine used to flatten fondant before it is wrapped around a cake). Sadly, the girl’s hand became caught in the machine.

The girl, through a guardian ad litem, sued the bakery and Somerset Industries (the manufacturer of the machine). Somerset impleaded Anna.

The bakery was insured by Main Street under a businessowners policy. Anna and Ignatius were insured under a homeowners policy issued by Travelers. Anna sought coverage for the third-party action under each policy.

Main Street denied coverage to Anna under the businessowners policy on the basis that she did not meet the definition of an “insured.” Even though Anna owned the bakery, the policy defined an “insured” as the named insured (i.e., the bakery itself), as well as the bakery’s “executive officers” and “directors,” but only with respect to their duties as officers or directors of the bakery. At the crux of the issue in the declaratory judgment action, as far as coverage under the Main Street policy went, was whether Anna’s potential liability in the third-party action was for acts or omissions taken within the scope of her duties as owner of the bakery.

The Court agreed with Main Street that the act of supervising her own daughter within the bakery was not an act taken within the scope of her employment by or ownership of the bakery. As the Court put it, “Calabria was performing duties related to Café Crisan’s business when the injury occurred, but her supervision of [her daughter] within the bakery room relates to her duty as a mother and guardian of PC.” The Court explained further that a reasonable businessperson would not expect that an insurer for businessowners’ coverage would cover just any act occurring while an employee happens to be performing a business-related duty, regardless of whether the act related to that business duty or not.

The Court then turned to the Travelers homeowners policy. That policy contained an exclusion for bodily injury to any person who is related by blood, marriage, or adoption to a covered person and who is a resident of the household of that person. However, the Travelers policy contained an amendatory endorsement, deleting that exclusion, and replacing it with one that excluded coverage for bodily injury to any insured, as well as to any claim to share or repay damages with anyone else who may be liable for bodily injury.

The difference between the two Travelers exclusions is an important one—the original exclusion did not include an exclusion for claims to share or repay damages, but the amended exclusion did. This distinction is of the utmost importance because Anna was only a third-party defendant in the underlying tort action—Somerset sought to have her share or repay damages for which Somerset may be found liable.

Travelers issued a disclaimer letter to Anna, citing the text of the original exclusion, but not the amended version of the exclusion. Calabria, by counsel, objected to that disclaimer, prompting Travelers to send another letter, this time citing the amended exclusion. By the time the second disclaimer (citing, for the first time, the correct exclusion) was issued, more than 30 days had passed (frequent readers of this newsletter will understand that New York Insurance Law 3420(d)(2) requires third-party bodily injury insurers to issue disclaimer letters “as soon as is reasonably possible,” a phrase understood to mean roughly 30 days).

However, the Court did not buy the argument that Travelers lost its right to rely upon its exclusion by citing the wrong version of it in its initial coverage letter. While the Court acknowledged the important difference between the two versions, it also noted that both versions preclude coverage for bodily injury to a relative who is a resident of the named insured’s household, and that this was mentioned in Travelers’ original disclaimer. Since, in the Court’s view, Travelers informed the Calabrias of this in its initial disclaimer letter, thereby identifying both the applicable policy exclusion and the factual basis for its application, Travelers did not lose the right to rely upon the correct version of the exclusion.

Editor’s Note: Coverage Pointers’ own Dan Kohane and Evan Gestwick successfully litigated this case for Main Street.

LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
lrh@hurwitzfine.com

06/20/25 New York Senate Bill S4433
New York State Senate
The Grieving Families Act Has Passed Both Houses

The Grieving Families Act, S4423, was passed in both the Senate and Assembly. For the fourth year in a row, the Grieving Families Act seeks to provide for the types of damages that may be awarded to the persons for whose benefit an action for wrongful death is brought.

This legislation attempts to amend the estates, powers, and trusts law, in relation to payment and distribution of damages in wrongful death actions. The bill seeks to expand the available economic or pecuniary losses, including damages for grief and anguish, available to “surviving close family members.”

Bill S4433 is substantively the same as Bill A9232-B which was vetoed by the Governor last year. Notably, Bill S4433 does not address Governor Kathy Hochul’s concerns regarding the negative impact on the health care systems and the increased costs, such as insurance premiums.

VICTORIA’S VISION ON BAD FAITH
Victoria S. Heist
vsh@hurwitzfine.com

06/10/25 Mandarin Oriental, Inc. v. HDI Glob. Ins. Co.
United States District Court, SDNY
SDNY Finds Reserve Information Discoverable When the Insured Alleges Bad Faith

This is a declaratory judgment action in which the insured, Mandarin Oriental, Inc. ("Mandarin") is seeking coverage from two of its insurers, HDI Global insurance Company ("HDI") and Assicurazioni Generali S.p.A. ("Generali") pursuant to a special perils provision in each of their respective policies.

Mandarin alleges that the action turns on four issues. First, the trigger of coverage under the special perils endorsement. Second, the number of occurrences under Mandarin's claim. Third, the period of recovery. Fourth, whether the insurers adjusted Mandarin's claims in bad faith.

This case arises out of the COVID-19 pandemic. Mandarin operates hotels in Miami, New York, Washington, DC, and Boston, and seeks coverage from HDI and Generali, amongst other insurers, pursuant to Endorsement No. 3 in each policy, which provides coverage for special perils including "loss resulting from interruption of or interference with the business carried on by [Mandarin] in consequence of (a) Infectious or contagious disease manifested by any person while on the premises of [Mandarin] or within a radius of 5 miles thereof."

On March 24, 2022, Mandarin notified the insurers that it was asserting claims for their business interruption losses at the hotels from the pandemic. On June 1, 2020, the insurers issued a letter notifying Mandarin that they will investigate the claim under a reservation of rights.

After the Court denied Mandarin's motion to dismiss in 2024, the parties entered discovery. The defendant insurers withheld 500 documents from discovery as privileged and provided the applicable privilege logs. This decision arises out of Mandarin's motion to compel discovery of the 500 documents. Specifically, Mandarin challenged the withheld discovery, stating the insurers improperly withheld reinsurance information, reserve information, and other documents under the attorney-client privilege.

First, the Court found the reinsurance information discoverable. The Court found that the insurers did not properly explain how reinsurance information is irrelevant to the action, and the insurers already disclosed some information about the reinsurance policies. The Court discussed how the insurers' communications with their reinsurers could reflect their understanding of the risk, the merits of the claim, and the likelihood of coverage.

Second, the Court found the reserve information discoverable because Mandarin alleged that the insurers breached the covenant of good faith and fair dealing in failing to provide a coverage opinion or payment under the policy. Thus, the Court found the reserve information discoverable because it is relevant to assessing the insurer's motivations. However, it is only discoverable so long as there is not another ground to limit disclosure. The Court also found that the reserve information was not privileged, because reserves are required by New York law and occur in the normal course of business, not in the anticipation of litigation.

Third, the Court found communications and documents exchanged between the insurers, their adjusters, and accountants, without attorneys, discoverable. Further, the Court found communications and documents between non-attorney employees at the insurance companies discoverable.

NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
hasanderson@sanderson-law.com

The content of this column also appears in the ‘Liability & Insurance,” a monthly newsletter focusing on Canadian coverage and published by Heather Sanderson. Contact her for a subscription.

05/29/25 Deasan Holdings Ltd. v. Continental Casualty Company
British Columbia Court of Appeal
A Broker's Actions and Communications Can Reasonably Indicate to an Insured That the Broker Has the Insurer's Implied Authority to Commit the Insurer to Coverage

Beginning on the morning of September 30, 2018, and over the next several days, the small community of Old Fort, British Columbia, found itself isolated when a slow landslide moved down from the slopes above the town.

Old Fort is located just south of Fort St. John, which is the nearest population centre, and a regional hub in northeastern British Columbia. The area surrounding Old Fort is defined by steep, unstable slopes along the Peace River valley, a landscape shaped by layers of shale, clay, and gravel, with a history of landslides and geotechnical challenges.

The landslide began as a slow-moving event, but rapidly escalated, ultimately displacing millions of cubic metres of earth and destroying the sole access road to the community of about 200 to 300 residents. As the slide progressed, the Peace River Regional District declared a state of local emergency and issued mandatory evacuation orders, forcing the evacuation of approximately 145 people and placing the remainder of Old Fort’s population under evacuation alert as the threat persisted for weeks.

The origin of the landslide has been the subject of intense investigation and community concern. While initial suspicions focused on a gravel pit operation above the community, geotechnical experts concluded that, although the weight of stockpiled material may have contributed, the root cause lay in the inherently unstable nature of the valley’s slopes—conditions exacerbated by natural geological processes over time. The provincial government classified the event as a "dangerous occurrence" and the Ministry of Energy, Mines and Petroleum Resources launched a comprehensive geotechnical assessment to determine the root cause and contributing factors, a process that continued for months after the disaster.

As lawsuits emerge from the aftermath of the Old Fort landslide, questions remain about responsibility, the adequacy of oversight, and the long-term safety of the community nestled in this precarious landscape.

One of those lawsuits involves Deasan Holdings Ltd., who operated the gravel pit on the slopes above Old Fort. Local speculation was rampant that the gravel pit was the source of the landslide. Deasan Holdings Ltd. was eventually sued by neighbouring property owners. Deasan reported the claim to Continental Insurance Company (CNA), who denied a duty to defend Deasan, and the coverage fight was on. Unlike most coverage actions, this dispute centred on what information the broker gave to underwriting when the policy was written and whether the broker had authority to bind the insurer. It is a fact intensive but interesting decision.

The Initial SWS Policy

Through the agency of CMB Insurance Brokers, an insurance wholesaler, Specialty Wholesale Services with ties to the London market, issued an insurance policy to DRS Energy Services Inc. DRS provides oil field services, including hauling equipment to and from oilfield sites. The shares of DRS were largely owned by the privately owned companies of Sandy Beech, Dean Swanberg and a minority silent partner, Russell Parker. The companies owned by Beech and Swanberg also owned the shares of an inactive, numbered B.C. shelf company. In August of 2017, that shelf company was re-named Deasan Holdings, which was a contraction of the first three letters of the first names of Beech and Swanberg. That renamed shelf company became active when DRS transferred the title to some developed land in Fort St. John to that shelf company.

DRS stored oilfield equipment in buildings at the site of an old, inactive gravel pit above Old Fort – the very gravel pit that was subsequently suspected as being the origin of the landslide. That property was listed in the application for insurance with SWS as ‘vacant land.’

In October of 2017, DRS transferred the title of that land to Deasan Holdings. About that time, Mr. Beech called Brett Kanuka at CMB Brokers and told him about the gravel pit land transfer; that their plan was to start a gravel pit operation in the future. Mr. Beech wanted liability insurance on the gravel pit in case someone ventured into the area and hurt themselves.

Mr. Kanuka told Mr. Beech that Deasan Holdings would be added as an additional insured to DRS’s policy; that the gravel pit lands would be described as vacant; that if and when the gravel operation gets underway, they should move to a different company which would offer better terms and rates. That information was relayed to SWS with the comment that DRS and Deasan Holdings have common ownership. SWS replied that under their definition of ‘insured,’ Deasan Holdings was already an insured.

Prior to the SWS policy expiry, Mr. Kanuka began looking at alternative markets. He had a producer agreement with Continental/CNA and sent a request for a quote to CNA. That request contained several errors: The forms wrongly indicated insurance was being sought for the preceding year, not the current year. In the forms, Mr. Kanuka summarized the business of DRS but did not explain the ownership or business of Deasan; or even mention that Deasan required coverage. He listed the real property owned by both companies on a “property statement of values” but did not identify the fact that Deasan owned several of the properties. He described as “vacant lands” the gravel pit lands and one parcel of the original lands, seeking coverage for liability in relation to this property, but elsewhere he set out that there were no vacant properties. The scheduled equipment included equipment owned by Deasan but this ownership was not identified. The same document requested a broad definition of ‘insured.’

The Continental/CNA Policy

The CNA underwriter that received the request understood that the coverage being sought for the gravel pit was for liability only. He sent a quote to Mr. Kanuka for insurance coverage, and on December 29, 2017, the Broker responded to the Continental quote asking that the Underwriter to “please bind coverage” for the year beginning December 31, 2017.

On January 5, 2018, Mr. Kanuka created a certificate of insurance that he sent to Mr. Beech. He did not send it to Continental. That certificate listed DRS as the named insured with respect to Rig Relocation and Movement of Oilfield Equipment. Deasan Holdings was listed as an additional insured ‘wrt’ ownership of the Fort St. John property. The gravel pit was listed in the statement of values to the Certificate (no mention of who owned it) but that it was insured for liability only.

DRS paid the full premium to CRM/Kanuka who remitted it to CNA. CNA then forwarded the policy wording to Mr. Kanuka who did not send it to Mr. Beech until after the landslide.

On August 31, 2018, just under a month before the landslide, Mr. Beech told Mr. Kanuka that Deasan intended to activate the gravel pit. Both believed that Deasan had coverage under the CNA policy. Mr. Beech sent Mr. Kanuka the legal description of the gravel pit and a list of equipment that required coverage. On September 4, 2018, Mr. Kanuka spoke to the CNA underwriter about covering the active gravel pit. Mr. Kanuka’s team at CMB took steps to send that material to CNA but CNA did not receive it before the landslide occurred on September 29, 2018.

This is clearly not brokering’s finest hour.

CNA denied a duty to defend Deasan Holdings against its liability arising from the ownership and operation of the gravel pit.

The Trial Judgment

The trial judge concluded that the insurance broker acted as an agent for Continental but the broker’s authority as agent did not extend as far as having the authority to bind coverage for Deasan's gravel pit operations. The judge found that the broker had authority to deliver a certificate of insurance naming Deasan as an additional insured but limited this to a building on the original Fort St. John land, not the gravel pit. The judge rejected Deasan's argument that the policy definitions included Deasan as an insured. Accordingly, CNA did not have a duty to defend Deasan.

The Appeal Judgment

The British Columbia Court of Appeal reversed the trial judgment and determined that CNA is obligated to defend Deasan.

The Court of Appeal found that the trial judge erred in limiting the broker's authority to what was expressly stated in the certificate of insurance. The broker, acting as an agent for CNA, had the authority to extend coverage to Deasan, including coverage for an active gravel pit. The trial judge failed to consider the entire factual matrix and the context of the relationship between the broker and Deasan, which indicated that the broker had implied authority to extend such coverage. Relying upon a Manitoba Court of Appeal decision, Berryere v. Fireman’s Fund Insurance Co., the British Columbia Court of Appeal held that an insurance agent’s implied authority is based on conduct, and, as regards, third parties it is what the agent “is reasonably, believed to have having regard to all of the circumstances.”

In addition, the Court of Appeal held that Mr. Beech’s notice to the broker that it was activating the gravel pit was noticed to CNA, and, that nullified any argument that the policy is void for misrepresentation.

The Court of Appeal also dismissed CNA’s argument that the certificate of insurance stated that it was not part of the policy and that the certificate could not modify or expand the coverage under that policy; the policy did not ensure an active gravel pit, and therefore there is no duty to defend Deasan. In opposition to this argument that Court held that the certificate when viewed on its own is ambiguous and can only be explained by the factual matrix known to Mr. Kanata and Deasan at the time the certificate was issued. The certificate list of the gravel pit on the schedule of property insured; it was known to Mr. Kanata that the land was owned by Deasan and that there were no buildings on that land. That meant that the fact that the certificate stating that Deasan was an additional insured with respect to ownership of the Fort St. John property was an ambiguous statement. That ambiguity is to be resolved in favour of coverage: Progressive Homes. That Court continued:

The only way to resolve the ambiguity in the certificate of insurance, in the context of Mr. Kanuka’s prior conversations with Mr. Beech and conduct, was to conclude that the certificate of insurance communicated to Deasan exactly what Mr. Kanuka intended and thought to be the case, consistent with what Deasan expected: that the gravel pit lands were covered by the Policy for liability no matter which of DRS or Deasan owned the lands; and Deasan was an additional insured including with respect to its ownership of the gravel pit lands, but that the only buildings it owned that were covered by the insurance were located on the original lands.

On this basis alone, then, the judge ought to have found that Deasan was added to the Continental Policy as an insured, together with DRS. The Broker informed Deasan that it was an “additional insured” by way of the certificate of insurance, and therefore, in accordance with the history of the Broker’s communications with Deasan’s principal, this meant Deasan was an insured under the Policy.

Comment

This judgment does not rule out the possibility of CNA suing the broker for the costs of defending and possibly indemnifying Deasan.

A copy of this decision is available upon request to the over-signed.

Coverage Pointers - Volume XXVI No. 26

Fri, 06 Jun 2025 13:26:48 +0000

Volume XXVI, No. 26 (No. 699)
Friday, June 6, 2025
A Biweekly Electronic Newsletter

In some jurisdictions, newsletters such as this may be considered Attorney Advertising.

If you know of others who may wish to subscribe to this free publication, or if you wish to discontinue your subscription, please advise Dan D. Kohane at ddk@hurwitzfine.com or call 716-849-8900.

You will find back issues of Coverage Pointers on the firm website listed above.

Dear Coverage Pointers Subscribers:

Do you have a situation? We love situations. HF celebrated its 48^th anniversary on June 1. Congratulations to our professional staff and THANK YOU to our clients and friends for the great support we’ve received from you over the decades.

Welcome to the final issue of our 26^th year of continuous publication. Have no fear, Volume XXVII, No. 1, will be in your mailbox in two weeks.

Firm Promotions and Accolades

We have exciting news this month, as three members of our Labor Law Team, Ashley M. Cuneo, Patrice C.S. Melville, and Eric D. Andrew, have been elevated to Member of the Firm.

Eric D. Andrew has been a member of Hurwitz Fine’s Labor Law team for nearly a decade. In addition to his work in Labor Law, Eric also focuses on toxic tort/environmental law and other insurance defense matters.
Patrice C.S. Melville, a key member of our Melville litigation team, focuses on defending businesses and individuals in complex litigation matters, primarily New York Labor Law claims.
Ashley M. Cuneo has also played a pivotal role in our Melville office’s growth. Her practice is focused on New York Labor Law. She also handles other complex litigated matters.

All three are experienced Labor Law attorneys, and the firm is stronger with them as Members. Congratulations, we appreciate all you do! I am personally thrilled to work with each of the three of you and am glad you are on the Labor Law Team.

We’re also proud to recognize two of our attorneys who were recently accepted into nationally respected legal defense organizations:

Brian M. Webb has been accepted into the Trucking Industry Defense Association (TIDA), an exclusive organization of attorneys and industry professionals who specialize in the defense of the trucking and transportation sector.
Anastasia M. McCarthy was recently accepted into the National Retail and Restaurant Defense Association (NRRDA), a prestigious organization dedicated to defending retail and hospitality-related claims. This recognition underscores her professional excellence and growing leadership in the industry.

“Serious Injury” Training for your Claims Staff Available

Damages in lawsuits arising out of motor vehicle accidents in the State of New York are often subject to a unique aspect of New York Law contained in Article 51 of the Insurance Law – the “No Fault statute.” These concepts, both the “serious injury threshold” for noneconomic damages and “basic economic loss” for economic damages are often misunderstood by both claims professionals and personal injury attorneys alike. Understanding how Article 51 works to limit the damages available to plaintiffs in automobile claims is necessary in order to properly handle such cases. Upon request, Brian Webb from our office who heads our transportation team (and, as noted above, was just elected to TIDA membership), is available to put on a presentation giving an overview of Article 51, as well as some of the nuances and pitfalls of it. Please reach out to him – bmw@hurwitzfine.com.

One Hundred Years Ago – What Insurance Issues were Facing the United States

As we bring this Volume XXVI to a close, and as you review this cover note and the attached issue of Coverage Pointers, you will see the usual array of 100 Years Ago stories. When we first started including the 100 years ago clippings, I’d guess a decade ago, I focused on insurance coverage decisions, but over the years I changed my focus to stories that may have some relevance to what is going on in the world today (or articles that I found reflective of the times).

I thought, though, it might make sense to peek back, 100 years ago, to see what insurance issues faced our nation. With the help of AI, I offer the following:

A century ago—in the mid-1920s—the United States was experiencing a period of economic expansion, industrialization, and social change following World War I. Insurance was evolving rapidly to meet the demands of a transforming society. The most important insurance issues around 1925 included:

Industrial Accidents and Workers' Compensation

Context: As factories and mechanized labor increased, workplace injuries became common.
Issue: States were still in the process of implementing and standardizing workers' compensation systems. By 1925, nearly every state had adopted some form of workers’ comp, but insurers and employers were still adjusting to the legal and financial burdens.
Debate: How to fairly compensate injured workers without exposing employers to ruinous liability.

Automobile Insurance and the Rise of Personal Liability

Context: Car ownership exploded in the 1920s, but insurance lagged behind.
Issue: Few states mandated auto liability insurance, and many drivers were uninsured.
Concern: Courts were starting to see a surge of litigation from car accidents. Insurers had to quickly develop new products to cover liability, collision, and theft.

Life Insurance Growth and Public Trust

Context: Life insurance was a booming industry—often seen as a savings vehicle or moral duty.
Issue: There were concerns about misleading sales tactics, policy forfeitures, and lack of consumer education.
Trend: The major mutual life companies were expanding rapidly, with regulatory scrutiny increasing.

Fire Insurance and Urban Development

Context: Fire insurance was still one of the largest lines of property coverage.
Issue: Large urban fires in cities like Baltimore and San Francisco in the early 20th century led to concerns about rating standards, building codes, and insurer solvency.
Development: The National Board of Fire Underwriters was pushing for uniform fire codes and better risk classification.

Insurance Regulation and Solvency

Context: States regulated insurance independently, with no federal oversight.
Issue: Lack of consistency and solvency oversight led to consumer risk. Some insurers failed or operated fraudulently.
Solution: The National Association of Insurance Commissioners (NAIC), founded in 1871, was pushing for model laws and cooperation between state regulators.

Fraud and Moral Hazard

Context: Fraudulent claims, arson-for-profit, and staged accidents were already known problems.
Issue: Insurers were concerned about the cost of fraud and began creating internal investigative units—early precursors to today's special investigative units (SIUs).

7. Health Insurance: Largely Nonexistent

Context: Health insurance was virtually unheard of; most medical expenses were paid out-of-pocket or covered by fraternal benefit societies.
Future Flashpoint: While not a major issue yet, the groundwork was being laid for employer-sponsored health insurance, which would arise in the 1940s.

LinkedIn

For those who need to keep up to date on insurance coverage between issues of Coverage Pointers, we’re happy to help. Just follow me on LinkedIn and we’ll keep you up to date. I’m easy to find – my linked in name is (ready for this unusual and unexpected name): Kohane (now there’s a shock) and you can find me here: https://www.linkedin.com/in/kohane/

Need a Mediator or Arbitrator, Give a Call

A growing percentage of my practice has been a mediator (and sometimes as an arbitrator) in insurance coverage, commercial, personal injury, and other disputes. With a robust national client base, I am regularly called on by friends and colleagues from around the country, folks who know me and trust me, to help resolve disputes. Often, particularly in mediated matters, I know the insurers and lawyers on both (or several) sides of the dispute. Since they all trust me as a fair dealer, they feel comfortable having me try to help close the file (and avoid precedent). Just pick up the phone, 716.849.8942 or send an email to ddk@hurwitzfine.com and I’ll try to help.

Newsletters:

We have other firm newsletters to which you can subscribe by simply letting the editor (or me) know, including a new publication, which was created to advise on business and employment law questions:

Premises Pointers: This monthly electronic newsletter covers current cases, trends and developments involving premises liability and general litigation. Our attorneys must stay abreast of new cases and trends across New York in both State and Federal Court and will now share their insight and analysis with you. This publication covers a wide range of topics including retail, restaurant and hospitality liability, slip and fall accidents, snow and ice claims, storm in progress, inadequate/negligent security, inadequate maintenance and negligent repair, service contracts, elevator and escalator accidents, swimming pool and recreational accidents, negligent supervision, assumption of risk, tavern owner and dram shop liability, homeowner liability and toxic exposures (just to name a few!). Please drop a note to Jody Briandi at jeb@hurwitzfine.com to be added to the mailing list.
Labor Law Pointers: Hurwitz Fine P.C.’s Labor Law Pointers offers a monthly review and analysis of every New York State Labor Law case decided during the month by the Court of Appeals and all four Departments. This e-mail direct newsletter is published the first Wednesday of each month on four distinct areas – New York Labor Law Sections 240(1), 241(6), 200 and indemnity/risk transfer. Contact Dave Adams at dra@hurwitzfine.com to subscribe.
Products Liability Pointers: Whether the claim is based on a defective design, flawed manufacturing process, or inadequate instructions/warnings, product liability litigation is constantly evolving. Products Liability Pointers examines recent New York State and Federal cases as well as high court decisions from other jurisdictions, keeping our readers up to date with the latest developments and trends, and providing useful practice tips and litigation strategies. This monthly newsletter covers all areas of product liability litigation, including negligence, strict products liability, breach of warranty claims, medical device litigation, toxic and mass torts, regulatory framework, and governmental agencies. Contact V. Christopher Potenza at vcp@hurwitzfine.com to subscribe.
Medical & Nursing Home Liability Pointers. Medical & Nursing Home Liability Pointers provides the latest news, developments, and analysis of recent court decisions impacting the medical and long-term care communities. Contact Elizabeth Midgley at emm@hurwitzfine.com to subscribe.

Quiet Night – 100 Years Ago:

Buffalo Post
Buffalo, New York
6 June 1925

Only Six Drunks.

Only Six drunks were arraigned before Judge Lamson this morning. Daniel Daley, a one-armed man, known to the police as a drunken panhandler, lodging at 146 East Eagle Street, drew 30 days, as did James O’Brien of 85 Llyod Street, who is an old timer.

Peiper on Property (and Potpourri):

A quiet start to a traditionally quiet time of the year. Nothing to report this week.

If you have lived in Upstate New York, or really anywhere in the Upper Midwest, this Spring, you deserve a beautiful, long, hot summer. This week has been a nice start to what we hope will follow. Wishing you nothing but fairways and greens for the rest of the Summer. And energy efficient air conditioning.

That’s it for this week. See in you two more.

Steve
Steven E. Peiper
sep@hurwitzfine.com

Kardashian Doppelganger – 100 Years Ago:

Buffalo Courier Express
Buffalo, New York
6 June 1925

INDIC PLOTTERS

Men who planned to kidnap Mary
Pickford are Jailed

Los Angelese, Cal., June 5 – Three men were indicted on a conspiracy charge in connection with an alleged plot to kidnap Mary Pickford, moving picture actress, and hold her for $200,000 ransom.

They are Charles F. Stevens, Adrian J. Wood, and Claude E. Holcomb.

Douglas Fairbanks, husband of the actress appeared before the grand jury. The men were jailed in the absence of $50,000 bail each.

Lee’s Connecticut Chronicles:

Dear Nutmeggers:

Thanks to all of you who offered your condolences and kind words on the passing of my mother. It was meaningful to feel the love of the Coverage Pointers community.

On the Connecticut coverage front, we have an important decision courtesy of our friend, Wystan Ackerman. There, the court granted Standard Fire’s (Travelers) motion to strike statutory and common law bad faith counts, recognizing the “general trend” by our state courts to hold these causes of action to a higher pleading standard than simply parroting the “magic words” of the CUTPA/CUIPA statutes. Although we’re still waiting for an appellate court to weigh in, the Superior Courts’ coalescence around a stricter standard seems to have taken hold.

Until next time, keep keeping safe.

Lee
Lee S. Siegel
lss@hurwitzfine.com

American Ancestry – 100 Years Ago:

Buffalo Courier Express
Buffalo, New York
6 June 1925

CITIZENSHIP OF
AMERICAN’S WIFE
PROVES MYSTERY

Canadians reject passport plea
and American State Department
Refuses answer.

Bridgeburg, Ont., June 5. – A native American citizen who has lived in Canada since he married a girl born in Scotland is having great difficulty procuring a passport for his wife who for several years has been planning to spend this summer in Scotland.

The Ottawa government declined to issue the passport because Canadian law says that a women is of the citizenship of her husband. After three trips to Niagara Falls, Ont., the United States vice consul there forwarded the application for a passport to Washington. That was three weeks ago, and nothing has been heard of it yet. The United States law, as amended a few years ago declared that a wife remains of her native nationality until she has lived at least a year in the states and has gone through the process of naturalization.

Incidentally, the United State citizen had to produce a birth certificate from the clerk of a small town in New England and a Niagara Falls (Ont.) lawyer charged his $5 for completing it in affidavit form.

Ruffner’s Road Review:

Dear Readers,

It finally feels like Summer is here, with a high of 80 degrees in Buffalo, a great day to be golfing after work! In other sports news, I’m excited for both the Stanley Cup and NBA finals to get underway this week and, of course, for our Hurwitz Fine Softball team to continue to fight for our first win of the year this Thursday.

I have two cases this week stemming from motor vehicle accidents. In the first, the appellate court reversed the lower court’s decision, holding MVAIC's motion for summary judgment dismissing the complaint should have been granted, as the injured party was not a "qualified person" pursuant to Insurance Law 5202(b) because she was an owner of the vehicle in which she was a passenger at the time of the accident. In the second, the insurer’s motion for summary judgment was granted against the medical provider assignee’s as (1) the claimant’s failure to sign and return their examination under oath transcripts, breaching a condition precedent to coverage, and (2) the insurer established a founded belief that the accident was intentionally caused or a result of fraud.

Until next time,

Kyle
Kyle A. Ruffner
kar@hurwitzfine.com

President on Ice – 100 Years Ago:

The Republican
Springfield, Massachusetts
6 June 1925

Rice Cakes Keeping Car
Cool for Coolidge

Washington, June 6 – The car President Coolidge is scheduled to occupy on his trip to Minnesota today is parked in the coolest shed in the Washinton railway yards crammed with huge cakes of ice.

By keeping the compartments iced until 20 minutes before the train is scheduled to leave at 3 p.m. railway officials hope to prove the President with the coolest accommodations possible.

The compartments to be occupied by Secretary of State and Mrs. Kellogg and Senator Lenroot are likewise packed.

Ryan’s Federal Reporter:

Hello Loyal Coverage Pointers Subscribers:

I had the opportunity to volunteer yesterday as part of our local school district’s Distraction Free Schools Committee, providing input to the district as it prepares its Students and Personal Electronic Devices Policy—a New York State requirement following the recent passage of an amendment to its education law restricting student use of internet-enabled devices during the school day. Much different hat to wear than I am used to, but the discussion was equally robust. What I found most interesting was the variance of issues faced at all levels of K-12 education. My kids are of elementary school age and my input was from that perspective. And the younger the kids, the lesser the impact of this new law. Who knew that separating iPhones from kindergarteners was less controversial than doing so from High School teenagers? While I’m kidding, it is true. But while elementary school administrators will have little issue eliminating iPhones from classrooms, smartwatches are another story. Only time (and a couple more meetings) will tell what the final policy will look like.

In this edition of Ryan’s Federal Reporter, I tackle a motion to compel disclosure of materials requested of an insured that might bear upon an insurer’s rescission of coverage due to misrepresentations. How broad is overbroad?

Until next time,

Ryan
Ryan P. Maxwell
rpm@hurwitzfine.com

Wonder How They Found Out? – 100 Years Ago:

The Buffalo News
Buffalo, New York
6 June 1925

SENTENCED AS “MAN;”
PROVES TO BE WOMAN

ALBANY, June 5. – Mary Agnes Mitchell of Lowell, Mass., who had been confined in the Albany County jail for two weeks as a man under the name of James F. Schaefer, today revealed that she has been masquerading when she was sentenced to from one and a half to five years in Dannemora prison on a charge of theft of an automobile. Official steps will be taken immediately to have the sentence changed, it was said, as Dannemora is exclusively a man’s prison.

The woman with Margaret MeCann and Grace Schaeffer, who posed as Miss Mitchell’s wife. Fred Burnette and George Prince were arrested in Batavia two weeks ago for theft of an automobile.

Storm’s SIU:

Hi Team:

Two PIP cases for you this week:

Insufficient Evidence of a Staged Accident for Summary Judgment; Denial of Request for Injunctive Relief to Stay Medical Provider Actions in Other Courts.
In No-Fault RICO Action, Insurer Granted Preliminary Injunction to Stay all of Defendant Medical Providers’ Pending Collection Arbitration and State Court Collection Lawsuits.

Well, the Buffalo Bandits are the 2025 National Lacrosse League Cup Champions! The 3^rd straight NLL Cup! Awesome, that’s my team!

Until next time,

Scott
Scott D. Storm
sds@hurwitzfine.com

Their Marriage Lasted Eight Years, his Second of Three – 100 Years Ago:

The Buffalo News
Buffalo, New York
6 June 1925

WANTS PAY ENVELOPE
FOR BEING A WIFE

“Only Slaves Work Without
Pay,” says Women’s Party
Vice President

DETROIT, June 6. – A weekly pay envelope for wives on a pro rate basis of their husband’s earnings, the right of married women to continue in occupations outside the home, and birth control were advocated by Doris Stevens, of New York and Paris, vice president of the National Women’s party, who addressed the Midwestern Equal Rights conference yesterday.

Asked if she were not the wife of Dudley Field Malone, New York Lawyer she said:

“Mr. Malone is my husband. Or, you might say that I married Mr. Malone.”

Miss. Stevens contended that wives and mothers were always and would continue to be slaves until they received pay in dollars for the management of the home and the care of children.

“Only slaves work without pay,” she said. “Homemakers are slaves. Homemaking should be a profession. I would like to see women go on working outside their homes after marriage. They should have fewer children, and they would not be slaves. Women have many gifts to bestow on society besides the function of reproduction.

“We cannot live any longer in this devastating atmosphere of sex antagonism. This idea that because we bear the children we should be penalized, set aside, sanctified, put on a pedestal is false. Men are afraid of us, so they have passed laws for our protection.”

Miss Stevens is a member of the Lucy Stone League of Women who retain their maiden names after marriage.

Fleming’s Finest:

Hi Coverage Pointers Subscribers:

It seems like just yesterday that we were waiting for spring. Now, it is starting to feel like summer. I’ve been enjoying the running conditions and additional daylight after work.

This week’s case from the Arizona Supreme Court considered whether Arizona law requires an insurer to provide coverage under an underinsured motorist (UIM) policy for an accident involving an all-terrain vehicle that did not occur on a public road.

Catch you later,

Kate
Katherine A. Fleming
kaf@hurwitzfine.com

Obituary for Doris Stevens – 100 Years Ago:

The Star Press
Muncie, Indiana
24 Mar 1925

Feminist Crusader

Doris Stevens Dies

NEW YORK (AP) – Feminist Doris Stevens, who spent her life fighting for equal rights for women, died Friday night two weeks after suffering a stroke. She was 70.

She was sentenced to 60 days imprisonment in 1917 for her audacity in attempting to petition President Woodrow Wilson on behalf of national suffrage. She served only part of the sentence.

She clung to her maiden name although she married twice, first to celebrated attorney Dudley Malone and the second time to writer Jonathan Mitchell.

Gestwick’s Garden State Gazette:

Dear Readers:

Buffalo Bandits are three-peat champs! And now that the weather has finally broken, I am heading to Alleghany State Park this weekend for some wilderness relaxation with my fiancé.

The case I have for you this week concerns the definition of “surface water.” Does it mean natural water coming from the sky? The ground? Water from unnatural sources? More importantly, after it’s been found ambiguous by courts past (and it has), does that mean it’s ambiguous in every subsequent case? Read on to find the answers to all your burning questions.

See you in two weeks!

Evan
Evan D. Gestwick
edg@hurwitzfine.com

Predictions for the Future – 100 Years Ago:

Mount Vernon Argus
White Plains, New York
6 June 1925

Radio’s Future As
Seen By a Leader

New York – Here’s a “conservative” prediction for the future of radio. It’s made by General James G. Harbord, who was in charge of the service of supplies for the American Expeditionary forces during the war and is now president of a large radio corporation.

General Harbord’s prediction includes:

“1. Photographs by radio over long distances

“2. Telegraphing a complete newspaper page across the oceans in a fraction of the time required by present telegraphic methods.

“3. Two-way telephone conversations between a passenger on board a ship at mid-ocean and any point on land where an ordinary telephone is available.

“4. International broadcasting

“5. A universal radio ticker service; the actual printing in words on paper of certain daily information or news sent out from a central point at stated intervals much in the same manner as the wire stock and news ticker of today, but on a national basis rather than local, and reaching points not now readily accessible by other means.”

O’Shea Rides the Circuits:

Readers,

There is a mutiny occurring within the household. My wife is a teacher and enjoys a long summer break where she is with the dogs every day. Some would say because of this, the dogs are more attached to her. But the tables are turning. For the past few weeks, the dogs have now focused their attention on me. When I come home from work, a literal dog pile occurs, and my wife is left out. While my ego enjoys this shift, my soul knows it is actually just the fact I feed them dinner.

This week I have case from the Ninth Circuit regarding a suit limitation clause and cooperation condition.

Until Next Time,

Ryan
Ryan P. O’Shea
rpo@hurwitzfine.com

Predictions – the Aeroplane – 100 Years Ago:

The Herald Statesman
Yonkers, New York
6 June 1925

DOLEFUL PREDICTIONS

When the automobile came it was predicted it would make the horse extinct. Horseflesh costs more than ever and equestrianism continues to grow in favor. Now the oracles say the aeroplanes will eliminate both automobile and horse, but like the horse the automobile grows in number and favor. The saturation point in the automobile industry is always being predicted but never reached. It will be found that horse, automobile, and airship each have their purpose and will increase in number as new needs are found for them, and the population grows.

From an article in a current magazine are taken a few quotations on the subject of the automobile:

“The automobile stands unique as the most extravagant piece of machinery ever devised for the pleasure of man.”

“The people are becoming car-poor as their ancestors become land-poor.”

“In this craze for automobile ownership the joy of security in the future is sacrificed for the pleasure of the moment.”

“The whole scheme of domestic life centers in the motor car.”

“Once the man who borrowed in order to buy a car was looked upon as dangerous.”

With some of these statements some will agree, but it is invariably the carless who predict disaster and chaos because so many of their neighbors are on wheels and exchange old cars for new every year.

It is manifest from the popularity of the auto, from the universality of its use and from the jealous tenacity of all car owners cling to their cars, whether palaces on wheels or decrepit derelicts, that there is satisfaction derived from the automobile which the critics of the automobile-age have not discerned.

LaBarbera’s Lower Court Library:

Dear Readers:

After a few busy weekends of travel, I am looking forward to having a few days at home to finish getting it ready for summer nights. The final two projects are the porch and the vegetable garden. Looking forward to being able to sit back and enjoy everything for the next few months.

Another New York County decision this week. Here, the court identifies whether a bolt left at a construction site qualifies as abandoned material under the products-completed operations hazard.

Until next time…

Isabelle
Isabelle H. LaBarbera
ihl@hurwitzfine.com

Heavy Panting – 100 Years Ago:

The Buffalo Times
Buffalo, New York
6 June 1925

Trousers Bought
On His Honeymoon
Last For 41 Years

WASHINGTON, N.J., June 6. - The world’s record for trousers endurance is claimed by Lemual Whitfield Gardner of this city, 74 years old.

Forty-one years ago, while on his honeymoon in Easton, Pa., Gardner, and his wife were looking at some patterns in the window of a tailor’s shop. One pattern in particular caught Gardner’s eye and at his wife’s suggestion he ordered a pair of trousers from the material.

From that time until today these same trousers have served Gardner as his “Sunday best.” They have outlasted three coats, two vests and a dozen pair of suspenders, he says, without even losing a button.

Lexi’s Legislative Lowdown:

Dear Readers,

I am hoping that the rain will hold off this weekend, and we can enjoy a weekend outdoors and get my wildflower garden started!

This week we discuss Bill S5052 which addresses rescission/cancellation of automobile polices in an effort to deter staged automobile accidents.

Thanks for reading,

Lexi
Lexi R. Horton
lrh@hurwitzfine.com

Monkey See, Monkey Do – 100 Years Ago:

Finger Lakes Times
Geneva, New York
6 June 1925

DARWIN’S SON
INTERESTED IN
SCOPES’ TRIAL

Rises to Defense of
Father’s Evolution Theory

Calls Attack Retrograde
Movement Which Will
Soon Pass Away

Cripps Corner, Sussex, England June 6. – Another Darwin arose today in the defense of evolution. It was Major Leonard Darwin, 76-year-old son of Charles Darwin, father of the theory.

The son of the famous scientist has shown keen interest in the approaching trial of John Scopes, Tennessee school master on the charge of teaching evolution. He smiled when asked his opinion. But his replies crackled with youthful vigor.

Seated in a huge armchair in his Tudor home five miles from the railroad, Major Darwin gave his views in an interview today.

“This attack on evolution is a retrograde movement,” he said. “But it is only a passing phase which will fade away. No scientific man disputes evolution, although he may argue in regard to the manner in which evolution came about.

“Every human being originates from a child and originally from a germ or small particle of organic matter. In the process of development from original germ there is no break in the series. We cannot say where mind or consciousness begins, yet no one thinks that in this development we find anything contrary to spiritual ideals.”

Victoria’s Vision on Bad Faith

Dear Readers,

This week marked my return from a short trip to Virginia to visit my younger sister. Great visit, but not so good weather. This weekend, I’m heading to a bachelorette in Syracuse, New York, to celebrate a law school friend.

This week I have a decision from the New York County Supreme Court denying a motion to dismiss a cause of action alleging the insurers’ breach of the covenant of good faith and fair dealing.

Have a great weekend,

Victoria
Victoria S. Heist
vsh@hurwitzfine.com

You Will Know Love When You See It – 100 Years Ago:

The Times
Shreveport, Louisiana
6 June 1925

Advice to the Lovelorn

Breaking an Engagement.

DEAR MISS FAIRFAX:

I’ve been going about with a young man for two years. He is steady and kindhearted and tries his best to get along. But as yet he hasn’t enough money to get married. Lately I don’t seem to be as happy in his company, so I am in the company of my other friends. When he’s away a few days I don’t miss him very much.

Shall I break the engagement? I’ve never met anyone so considerate, but I’ve met other men I could like just as well. I am 20 years old.

GEORGINA

Without being a mind-reader, Georgina, I suspect that you have met some man who you like better than your fiancé, I wouldn’t break that good young man’s heart by playing fast and loose with him. Unless you’re positive that you love him, why not tell him that you have decided you’re too young to know your own mind, thus setting yourself free, and also freeing him.

Talk it all over quietly and kindly with him, you may be actually helping him by taking the first step. For it’s possible that he also in “hanging on” as a matter of habit and from a sense of obligation. Ask him to be your good friend.

You’ll know well enough when you’re in love. You won’t have to ask.

North of the Border:

Amid the relentless news cycle—marked by harrowing wildfires and the far-reaching consequences of increased steel and aluminum tariffs—there’s a welcome respite unfolding on the ice: The Stanley Cup Finals are in full swing. This year, the Edmonton Oilers stand poised to reclaim hockey’s most coveted prize.

Despite hockey’s Canadian origins and ongoing dominance by Canadian players, a Canadian NHL team has not won the Stanley Cup since the Montreal Canadiens in 1993—a drought that has lasted over three decades. The Edmonton Oilers’ current run in the finals has united fans across the country, with many cheering for the team not just as Oilers supporters, but as Canadians hoping to reclaim the Cup for the nation – even though about a third of the Florida Panthers team are Canadian and about the same number on the Edmonton Oilers’ roster are American.

Go Oilers.

Best,

Heather
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
hasanderson@sanderson-law.com

Headlines from this week’s issue, attached:

KOHANE’S COVERAGE CORNER
Dan D. Kohane
ddk@hurwitzfine.com

Collateral Estoppel and Res Judicata Does Not Bar Litigation of a Question Not Previously Litigated by a Party that was Not Part of the Earlier Proceeding
An Issue Which Has Been Discussed by Rarely Litigated on Appeal. With a Greater than Two Year Delay in Providing Notice of an Accident and Claim, Purported Additional Insured Failed to Establish that Named Insured’s Carrier was not Materially Prejudiced
Seems to be the Week of Insurance Procurement Decisions. Here, Insurance Coverage is Limited to that Required in the Contract. Other Decisions Summarized Below
Not Named on Scheduled Policy as an Additional Insured? No AI Coverage Available
Show Me the Money. To Succeed in a Motion for Summary Judgment on an Insurance Procurement Claim, Party Seeking Relief Needs to Prove it Secured All the Coverage

PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
sep@hurwitzfine.com

LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
lss@hurwitzfine.com

Court Recognizes “General Trend” for Strict Bad Faith Pleading Requirements
Undeclared and Anti-Stacking Provisions Preclude UIM Coverage

RUFFNER’S ROAD REVIEW
Kyle A. Ruffner
kar@hurwitzfine.com

Owner of the Vehicle was not a Qualified Person Under the Motor Vehicle Accident Indemnification Corporation Act
Summary Judgment Granted Based on Failure of Claimants to Sign EUO Transcripts and Founded Belief the Accident was Intentionally Caused

RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
rpm@hurwitzfine.com

District Court Agrees that 10 Years Worth of Documents Demanded by Insurer was Overbroad

STORM’S SIU
Scott D. Storm
sds@hurwitzfine.com

Insufficient Evidence of a Staged Accident for Summary Judgment; Denial of Request for Injunctive Relief to Stay Medical Provider Actions in Other Court
In No-Fault RICO Action, Insurer Granted Preliminary Injunction to Stay all of Defendant Medical Providers’ Pending Collection Arbitration and State Court Collection Lawsuits

FLEMING’S FINEST
Katherine A. Fleming
kaf@hurwitzfine.com

Insurer Not Required to Provide UIM Coverage for an Accident Involving an All-Terrain Vehicle That Did Not Occur on a Public Road

GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
edg@hurwitzfine.com

O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
rpo@hurwitzfine.com

Suit Limitation Clause and Cooperation Condition Preclude Coverage for Two First-Party Claims

LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
ihl@hurwitzfine.com

Bolt Unintentionally Left at Construction Site Does Not Qualify as Abandoned Material Under the Products-Completed Operations Hazard.

LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
lrh@hurwitzfine.com

Proposed Legislation to Amend Insurance Law and Vehicle and Traffic Law to Permit an Insurer to Rescind or Retroactively Cancel a Policy in an Effort to Deter Staged Accidents

VICTORIA’S VISION ON BAD FAITH
Victoria S. Heist
vsh@hurwitzfine.com

Supreme Court (Lower Court) Denies Insurers’ Motion to Dismiss Claims Alleging Breach of Good Faith and Fair Dealing

NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
hasanderson@sanderson-law.com

Waiver in the Context of Insurance Coverage Requires an Unequivocal and Conscious Intention to Abandon Legal Rights

See you in a couple of weeks.

Dan

Hurwitz Fine P.C. is a full-service law firm providing legal services throughout the State of New York and providing insurance coverage advice and counsel in Connecticut and New Jersey.

NEWSLETTER EDITOR
Dan D. Kohane
ddk@hurwitzfine.com

ASSOCIATE EDITOR
Agnes A. Wilewicz
aaw@hurwitzfine.com

COPY EDITOR
Evan D. Gestwick
edg@hurwitzfine.com

INSURANCE COVERAGE/EXTRA CONTRACTUAL LIABILITY TEAM
Dan D. Kohane, Chair
ddk@hurwitzfine.com

Steven E. Peiper, Co-Chair
sep@hurwitzfine.com

Michael F. Perley

Agnieszka A. Wilewicz

Lee S. Siegel

Brian F. Mark

Scott D. Storm

Ryan P. Maxwell

Kyle A. Ruffner

Katherine A. Fleming

Evan D. Gestwick

Ryan P. O’Shea

Isabelle H. LaBarbera

Lexi R. Horton

Victoria S. Heist

FIRE, FIRST PARTY AND SUBROGATION TEAM
Steven E. Peiper, Team Leader
sep@hurwitzfine.com

Michael F. Perley

Scott D. Storm

NO-FAULT/UM/SUM TEAM
Dan D. Kohane
ddk@hurwitzfine.com

Ryan P. O’Shea
rpo@hurwitzfine.com

Kyle A. Ruffner
kar@hurwitzfine.com

APPELLATE TEAM
Jody E. Briandi, Team Leader
jeb@hurwitzfine.com

Topical Index

Peiper on Property and Potpourri
Lee’s Connecticut Chronicles

Ruffner’s Road Review

Ryan’s Federal Reporter

Storm’s SIU

Fleming’s Finest

Gestwick’s Garden State Gazette

Victoria’s Vision on Bad Faith

LaBarbera’s Lower Court Library

Lexi’s Legislative Lowdown

Read Our Additional Newsletters

KOHANE’S COVERAGE CORNER
Dan D. Kohane
ddk@hurwitzfine.com

06/04/25 Harco Construction, LLC v. Scottsdale Insurance Company
Appellate Division, Second Department
Collateral Estoppel and Res Judicata Does Not Bar Litigation of a Question Not Previously Litigated by a Party That Was Not Part of the Earlier Proceeding

There were several underlying actions commenced against Harco Construction, LLC (“Harco”), and 301-303 West 125th, LLC (“301-303”), relating to the collapse of a building and adjoining scaffold that occurred on September 20, 2011. 301-303 was the owner of that building. Harco was the general contractor on a construction project that was taking place at the time of the collapse. Disano Demolition Co., Inc. (“Disano”), was the demolition contractor on that project. Disano's workers had cut open the building's elevator shaft, which caused the elevator shaft, and then the building itself, to collapse.

Harco tendered the matter to Disano’s insurers soon after the collapse and before the lawsuits were commenced. First Mercury Insurance Company (“FMIC”) had issued a “primary policy” with limits of $1 million per occurrence to Disano, and Scottsdale issued an “excess policy”. Mt. Hawley Insurance Company as Harco's direct insurer, tendered to FMIC and Scottsdale the defense and indemnification for the underlying actions as an additional insured on the primary policy.

FMIC sent a letter to Mt. Hawley stating that FMIC disclaimed coverage for Harco on various grounds, particularly on the basis of a "work height" exclusion contained in the primary policy. Because the excess policy "follows form," Scottsdale joined FMIC in disclaiming coverage for the underlying actions on the ground that the "work height" exclusion barred coverage.

In August 2013, Harco and 301-303 commenced an action against FMIC, Scottsdale and Disano (“prior action”) seeking a judgment declaring, inter alia, that FMIC and Scottsdale were obligated to defend and indemnify Harco and 301-303 and reimburse them for all costs incurred by them in connection with the underlying actions. The Supreme Court held that FMIC's disclaimer was valid as to Harco in that the "work height" exclusion applied. The court also held that 301-303 was not an additional insured under the primary policy.

Harco and 301-303 appealed from the order, arguing, among other things, that FMIC's disclaimer was invalid as to Harco, that the "work height" exclusion relied on by FMIC in its disclaimer was inapplicable under the facts or was otherwise ambiguous, and that 301-303 qualified as an additional insured under the primary policy. Scottsdale was not a party to the appeal, and while the appeal was pending, Harco, 301-303, and Scottsdale stipulated that the prior action insofar as asserted against Scottsdale would be discontinued without prejudice to Harco re-filing its claims against Scottsdale once the issues regarding FMIC's obligations were resolved.

In the appeal of that prior order, a decision and order dated March 15, 2017, this Court, inter alia, modified the order entered October 9, 2014, by deleting the provision thereof granting that branch of FMIC's motion which was, in effect, for summary judgment declaring that it was not obligated to defend and indemnify Harco (see our review of this decision in the March 24, 2017 edition of Coverage Pointers). In the decision and order, the Court determined that 301-303 was not an additional insured, and thus, FMIC was not required to disclaim coverage as to 301-303 (see id. at 873).

The Court also determined that since FMIC failed to provide timely notice of its denial of coverage on the basis of a policy exclusion to Harco, it was estopped from disclaiming insurance coverage on that ground. The Court did not address the issue of the applicability of the "work height" exclusion and determined that Harco's and 301-303's remaining contentions were "either without merit or not properly before this Court" (id.).

In September 2021, Harco, 301-303, and Mt. Hawley commenced this action pursuant to Insurance Law § 3420 seeking satisfaction of certain judgments obtained by them against Disano and for a judgment declaring that Scottsdale has a duty to indemnify Harco with respect to the underlying actions. Scottsdale moved pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against it, contending, inter alia, that it was entitled to dismissal based upon documentary evidence and the doctrine of collateral estoppel.

Here, Scottsdale failed to establish that the issues necessarily decided in the prior action were identical to the issues raised in this action (see Villaver v Paglinawan, 230 AD3d at 535). The only issues necessarily decided by this Court in the decision and order dated March 15, 2017, were whether FMIC's disclaimer was valid as to Harco and whether 301-303 was an additional insured on the primary policy.

Although Harco and 301-303 raised the issue of the applicability of the "work height" exclusion on the appeal from the order entered October 9, 2014, Scottsdale failed to establish that the issue was "actually litigated, squarely addressed, and specifically decided" by this Court in the prior action (id. [internal quotation marks omitted]). Moreover, Mt. Hawley was not a party to the prior action and thus did not have an opportunity to litigate the issue. Further, the specific claims asserted against Scottsdale in this action are distinct from those asserted in the prior action and were not litigated in the prior action.

05/29/25 Hartford Fire Insurance Co. Hudson Excess Insurance Co.
Appellate Division, First Department
An Issue Which has Been Discussed but Rarely Litigated on Appeal. With a Greater Than Two Year Delay in Providing Notice of an Accident and Claim, Purported Additional Insured Failed to Establish That Named Insured’s Carrier Was Not Materially Prejudiced

This declaratory judgment action concerns coverage for an underlying action brought by a worker, Chen, who alleges that he sustained injuries on September 20, 2017, when, while employed by TS Group, he fell off a ladder while performing work at a construction site. The owner, Mayer, was insured by plaintiff Hartford Fire Insurance Company, and TS Group, a subcontractor, obtained a policy from Hudson which provided additional insurance coverage under specified circumstances.

Chen commenced an action against Mayer in October 2017, and Mayer subsequently commenced a third-party action against TS Group in March 2018.

Although plaintiffs learned of TS Group's coverage in October 2017, they did not tender coverage to Hudson until May 2020. Hudson disclaimed coverage "at this time," because Mayer was not an additional insured and due to the late notice, which was a material breach of the policy.

Because plaintiffs gave notice more than two years after it was practical to do so, plaintiffs had the burden of showing that Hudson was not prejudiced by the delay (see Insurance Law § 3420 [c] [2] [A] [ii]). Plaintiffs' showing that Mayer defended the Chen action "vigorously" is insufficient to meet their burden.

The delay prevented Hudson from examining the accident site near the time of the incident, locating, and inspecting the ladder, and interviewing witnesses while their memories were still fresh. Furthermore, counsel representing Mayer did not locate, interview, or depose witnesses from TS Group, including its owner and foreman, and, since the note of issue had already been filed when plaintiffs provided notice, Hudson would not have the ability to access that evidence itself.

Plaintiffs' contention that Hudson was not prejudiced by the late notice because it also asserted an alternative ground for disclaimer lacks merit and is speculative. Plaintiffs contend that if [*2]notice had been timely provided along with full information concerning the basis for Mayer's claim that it was entitled to additional insured coverage, Hudson still would have disclaimed on the ground that Mayer was not an additional insured. However, when Hudson issued the disclaimer within the statutory time provided (Insurance Law § 3420[d]), plaintiffs had not responded to its request for a full copy of the subcontract that was the basis for Mayer's claim. Hudson preserved its right to disclaim on the basis that Mayer was not entitled to additional insured coverage by stating that Hudson had not established it was entitled to coverage at that time and requested any additional information on coverage. When, during discovery in this action, Hudson received the subcontract demonstrating that Mayer was an additional insured under the policy, it did not pursue that ground for disclaimer. Thus, there is no basis for concluding that "earlier notice would have resulted only in an earlier denial."

05/29/25 Byrnes v. RP1185 LLC
Appellate Division, First Department
Seems to Be the Week of Insurance Procurement Decisions. Here, Insurance Coverage Is Limited to That Required in the Contract. Other Decisions Summarized Below

The court denied the general contractor’s motion insofar as it sought judgment on its cause of action alleging that the subcontractor breached an insurance procurement clause. The subcontract required the provision of insurance coverage "in connection with [the] subcontract," and the subcontractor fulfilled this requirement.

The GC argued that the sub was obliged to obtain coverage that included coverage for the work of material manufacturers and suppliers, as the contract provision relied on does not so state. Because the subcontract was only for installation of the panels and not their design or manufacture, there was no obligation to purchase insurance covering the panels' design and manufacture.

05/28/25 Nino & Nino Corp., v. Utica First Insurance Company
Appellate Division, Second Department
Not Named on Scheduled Policy as an Additional Insured? No AI Coverage Available

In July 2019, Granville Wiltshire (“decedent”), an employee of Door Restaurant died after sustaining injuries in an accident while working at the subject premises. The administrator of the decedent's estate commenced a wrongful death action against, among others, Daniel Nino, and the plaintiff Nino & Nino Corp. (“corporation”) to recover damages for personal injuries and wrongful death (“underlying action”).

At the time of the accident, a lease agreement for the premises was in effect between Nino, as owner, and Door Restaurant, as tenant. In December 2019, more than five months after the accident, Nino transferred ownership of the premises to the corporation. Nino died in January 2020.

At the time of the accident, Door Restaurant had a business owners' insurance policy with Utica First Insurance Company . That policy (hereinafter the Utica policy) contained an endorsement designating "Daniel Nino, c/o Community Realty Corp" and "Firtsultus Inc c/o Daniel Nino" as additional insureds.

The corporation and its insurance carrier, Seneca Insurance Company commenced this action against Utica seeking a judgment declaring that the corporation is an additional insured under the Utica policy and that Utica has a duty to defend and indemnify the corporation in the underlying action.

A party is not entitled to coverage if it is not named as an insured or additional insured on the face of the policy as of the date of the accident for which coverage is sought. Where a third party seeks the benefit of coverage, the terms of the policy must clearly evince such intent.

Through its submission of the Utica policy, Utica conclusively established that the corporation was not a named insured or an additional insured under that policy. Under the circumstances, the defendant had no duty to defend or indemnify the corporation in the underlying action.

05/27/25 Nyanteh v. 590 Madison Avenue, LLC
Appellate Division, First Department
Show Me the Money. To Succeed in a Motion for Summary Judgment on an Insurance Procurement Claim, Party Seeking Relief Needs to Prove It Secured All the Coverage

In connection with a claim for failure to procure coverage, Eclipse, the party that contended it provided the required coverage and moved for summary judgment dismissing the procurement claim, did not provide the proper proof of compliance.

In support of its motion, Eclipse identified the contract provision requiring the procurement of insurance, which required Eclipse to procure commercial general liability insurance with $1 million/$2 million policy limits, $5 million of excess liability coverage, and additional insured coverage. However, Eclipse only produced the endorsement covering additional insureds, and did not establish that it procured the required commercial general liability or excess liability insurance. Not a shocking result.

PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
sep@hurwitzfine.com

See you in two weeks.

LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
lss@hurwitzfine.com

05/07/25 King v. Reid and Standard Fire Ins. Co.
Superior Court of Connecticut, Hartford
Court Recognizes “General Trend” for Strict Bad Faith Pleading Requirements

While the underlying coverage issue is mirky, the court’s ruling is not: It is the general trend among Connecticut trial courts to strike (i.e., dismiss) causes of action for bad faith, CUIPA, and CUTPA where the pleadings merely repeat the “magic words” of the statute but fail to assert specific acts. A plaintiff must plead more than broad industry practices in order to survive a motion to strike.

Here, the plaintiff claimed that Standard Fire acted in bad faith and in violation of CUTPA/CUIPA. The court struck the three counts finding that the complaint failed to allege the carrier’s dishonest purpose, that there is no private right of action for a CUIPA violation, and, as discussed above, cursory, and conclusory allegations of an unfair practice were insufficient. “King has alleged in a conclusory fashion that the alleged unfair practices by Standard Fire were undertaken with other insureds. This mention of other insureds is very limited and non-specific.”

The key takeaway from this decision is the growing trend, now acknowledged as the “general trend,” for a higher level of specificity in a bad faith pleading in order to survive a motion to dismiss. Connecticut courts have seemed to coalesce against the concept that every coverage dispute should engender a bad faith claim.

[Standard Fire was represented by our good friend, Wystan Ackerman, at Robinson & Cole. Congrats!]

05/13/25 Szymczyk v. Old Dominion Ins. Co.
Superior Court of Connecticut, New Britain
Undeclared and Anti-Stacking Provisions Preclude UIM Coverage

The court granted Old Dominion summary judgment, finding that it owed no coverage to its insured for a motorcycle accident. The insured, living with his grandparents, owned a motorcycle that was insured by GEICO. Following an accident in which he collected the full $50,000 limit of the tortfeasor’s policy, he made a UIM claim against Old Dominion. The court found that coverage was expressly precluded by the undeclared vehicle and anti-stacking exclusions.

The grandparent’s policy precluded coverage for an insured “while occupying any motor vehicle owned by the Insured which is not insured for coverage under this Policy.” Since the motorcycle was insured with GEICO and not declared under the grandparent’s policy, the court held that the exclusion precluded coverage. In addition, the policy included an anti-stacking provision in the other insurance clause, which precludes UM/UIM coverage being stacked on top of another UM/UIM policy.

RUFFNER’S ROAD REVIEW
Kyle A. Ruffner
kar@hurwitzfine.com

05/14/25 Med. Supply Depot Grp. Corp. a/a/o Shamecka v. MVAIC
Supreme Court, Appellate Term, Second Department
Owner of the Vehicle Was Not a Qualified Person Under the Motor Vehicle Accident Indemnification Corporation Act

The medical provider commenced the subject action to recover assigned first-party no-fault benefits. Defendant, Motor Vehicle Accident Indemnification Corporation (MVAIC) filed a motion for summary judgment and to dismiss the provider’s complaint on the basis that the injured party was not a covered person under the no-fault law. The Civil Court denied the insurer’s motion and the MVAIC appealed.

In support of its motion for summary judgment, MVAIC included a copy of the application for no-fault benefits where plaintiff's assignor stated she was the owner of the vehicle in which she was a passenger at the time of the accident. As a result, MVAIC made a prima facie showing that she was not a "qualified person" because she was an owner of the vehicle in which she was a passenger at the time of the accident. Pursuant to Insurance Law 5202(b) a qualified person is “a resident of this state, other than an insured or the owner of an uninsured motor vehicle and his spouse when a passenger in such vehicle”. Therefore, MVAIC argued the injured party was not eligible to be deemed to be a covered person entitled to recover no-fault benefits from MVAIC. In opposition, the plaintiff failed to raise a triable issue of fact, and the appellate court held MVAIC's motion for summary judgment dismissing the complaint should have been granted.

05/22/25 St. Farm Mut. Auto. Ins. Co. v. All City Fam. Healthcare Ctr., Inc.
Supreme Court, New York County
Summary Judgment Granted Based on Failure of Claimants to Sign EUO Transcripts and Founded Belief the Accident Was Intentionally Caused

State Farm insured non-parties Jose Ordonez and Jose Ordonez Auto Repair and Body Shop for the insured vehicle. The three defendants were allegedly in the insured vehicle when they were involved in an accident, after which each extensive medical treatment from the numerous named medical provider defendants. To investigate the claims, requested the three claimants submit to an examination under oath ("EUO"). However, two claimants failed to return subscribed transcripts, causing Plaintiff to disclaim coverage for them. State Farm disclaimed coverage for the third claimant on the basis that he made false statements with the intent of concealing certain circumstances related to the claim. State Farm filed this declaratory judgment action seeking a declaration that it owed no coverage for the subject claims.

First, the court held it is well established that the failure to return a subscribed EUO transcript is a breach of a condition precedent to coverage, which also applies to assignees of an insured. Here, it was undisputed that the medical provider defendants were assigned Evelyne and Peterson's rights under the applicable automobile policy. Moreover, it is undisputed that these two claimants failed to sign and return the transcripts of their examinations under oath. Therefore, the court held this was a breach of a condition precedent to coverage warranting summary judgment in the insurer’s favor.

Similarly, State Farm’s motion for summary judgment against the third claimant, based on its founded belief that the accident was intentionally caused or a result of fraud, was granted. State Farm’s evidence, including the affidavit of the claims investigator, as well as the default of the three claimants in this action, which is construed as an admission that their EUO statements were false, and their injuries were not the result of the accident establishes its prima facie burden on its founded belief defense. In response, the court determined that none of the defendants presented evidence sufficient to raise an issue of fact because they did not provide an affidavit of a person with knowledge supporting the legitimacy of their claims.

Therefore, the insurer’s motion for summary judgment was granted in its entirety and all of the defendant provider’s counterclaims were dismissed.

RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
rpm@hurwitzfine.com

06/03/25 Colony Ins. Co. v. Oz Sols.
United States District Court, SDNY
District Court Agrees That 10 Years Worth of Documents Demanded by Insurer was Overbroad

In August 2016, Colony Insurance Company issued an insurance policy to Oz Solutions effective from August 2016 through August 2017 (the "2016 Policy"). Colony alleges that it relied upon representations made in the insurance application that no coverage was necessary for "concrete, drilling, excavation, and demolition" services, and that Oz Solutions performed "'debris removal after construction' or 'debris removal only.'" The policy renewed in August 2017 and similarly described Oz Solutions’ operations as "cleanup of debris at construction sites,” which was consistent with a 2017 renewal application indicating that its operations did not involve demolition or drilling.

On New Years’ Eve, 2018, a non-party, 470 4th Avenue Fee Owner, LLC, filed a state-court action against Oz Solutions for defects arising out of a contract in which Oz Solutions was to staff a construction project involving a mixed-use building in Brooklyn, New York. Colony here alleges that Oz Solutions’ principal admitted during a state-court deposition that Oz Solutions had engaged in drilling and demolition activities that the company was not insured to perform. Colony further asserts that, had Oz Solutions disclosed that it intended to perform such activities, Colony would not have issued the same policy at the same premium. Colony sought rescission and a declaration of non-coverage.

This decision concerned, for our purposes, a demand for production sought by Colony, which included a request for certain documents spanning a 10-year period, sweeping far beyond the two-year period in which the insurance policies at issue were in effect. Oz Solutions objected, labeling the requests overbroad and unduly burdensome and the SDNY agreed.

Specifically, Colony sought "all construction projects, contracts, daily report logs, tax returns, loans, Venmo accounts, loans to family or friends, and lists of names of people involved or with knowledge of ten (10) years of unrelated construction projects for Policies which were in effect," but failed to provide the Court with an explanation “how 10 years' worth of the documents it demands . . . are relevant to whether defendants, during the two-year period covered by the policy, performed services outside those represented.” Such demands were deemed “not ‘proportional to the needs of the case,” and Colony did not carry “its burden of showing that such evidence ‘bears on, or [] reasonably could lead to other matters that could bear on, any issue that is or may be in the case.’"

Colony’s demands were narrowed to the relevant two year window, with a caveat that “[i]f, improbably, Colony has a good-faith basis to seek such discovery for an expanded time horizon, Colony is at liberty . . . to make a particularized showing how discrete materials outside the period authorized by the Court are relevant to the allegation that defendants made misstatements in their 2016 and 2017 insurance applications.”

Maxwell’s Minute: Colony was thrown a bone in the last paragraph above, which appears to open the door for limited post-deposition demands, assuming Colony is able to elicit testimony from Oz Solutions tending to show that Oz Solutions had engaged in concrete, drilling, excavation, and demolition" services prior to its 2016 application on various projects.

STORM’S SIU
Scott D. Storm
sds@hurwitzfine.com

05/12/25 Lancer Ins. Co. v. Thompson
Supreme Court, Nassau County
Insufficient Evidence of a Staged Accident for Summary Judgment; Denial of Request for Injunctive Relief to Stay Medical Provider Actions in Other Courts

Lancer moved for summary judgment that as a matter of law: (1) the subject incident was not the product of a covered event; and (2) the individual Defendants made material misrepresentations of fact in the presentation of the claims. The court denied Lancer’s motion for summary judgment, finding that the evidence presented did not conclusively establish the accident was intentional or non-accidental as a matter of law. Lancer also moved by Order to Show Cause for a stay of several actions by medical providers in a number of Civil Courts within the five boroughs. The court denied Lancer’s request for injunctive relief.

A car accident occurred in Brooklyn between vehicles driven by defendants Smalls and Thompson. Lancer conducted examinations under oath of some defendants, which raised suspicions of potential fraud. The testimony established that the occupants of the Thompson Vehicle were unrelated and apparently did not know one another prior to the accident but nevertheless sought medical treatment at the same clinic and retained the same personal injury attorney. Some defendants failed to appear for scheduled EUOs.

The EUO testimonies raised suspicions but did not conclusively prove the accident was staged or intentional. The accident was reported to the police and documented in a police report. There was no independent corroborative evidence presented to the Court, such as through eyewitnesses or others with actual knowledge of the accident, which tends to prove that the motor vehicle encounter was an intentional loss.

There were significant inconsistencies between the EUO testimonies on the question of whether the Defendant Thompson operated his vehicle as a vehicle for hire which would be in violation of the insurance policy. However, such concerns raise questions of fact and cannot be resolved by mere contradicting testimonies.

In addition, Lancer failed to establish that the claim denials were properly and timely mailed to providers as required by regulations. Conclusory allegations cannot establish that an insurance carrier utilized practices and procedures designed to ensure that the EUO letters were properly addressed to the proper party and properly mailed. An insurance company employee without personal knowledge that a claim form had been mailed to a provider and who makes conclusory representations as to the insurance company's office practices cannot establish as a matter of law that the insurer followed office practices geared to ensure the likelihood that denial of claim forms were always properly addressed and mailed on the date issued.

Lancer failed to establish that its denial of medical provider claims was in fact timely mailed to the medical providers in question, and in conformity with no fault regulation, where it failed to submit a proper affidavit of service to establish that fact in support of its motion.

The court also held that there was insufficient basis for granting injunctive relief to stay proceedings in other courts.

Lancer had not raised any evidence which tends to establish the operator of the Smalls Vehicle had participated in staging a motor vehicle accident in concert with Thompson.

05/19/25 Govt. Empls. Ins. Co. v. Akiva Imaging Inc.
United States District Court, Eastern District of New York
In No-Fault RICO Action, Insurer Granted Preliminary Injunction to Stay All of Defendant Medical Providers’ Pending Collection Arbitration and State Court Collection Lawsuits

GEICO alleges the defendants engaged in a fraudulent scheme to obtain No-Fault insurance benefits through unnecessary medical services and unlawful financial arrangements. GEICO alleges that Defendants committed civil violations under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), common law fraud, unjust enrichment, and aiding and abetting fraud. Additionally, GEICO seeks a declaratory judgment that Defendants may not recover on any of the outstanding bills submitted to it.

GEICO brought RICO claims against the defendants in federal court. GEICO moves for a preliminary injunction to: (1) stay all of Defendants' pending No-Fault insurance collection arbitration and state-court collection lawsuits against GEICO pending disposition of GEICO's declaratory judgment and RICO claims; and (2) to enjoin Defendants from commencing new no-fault insurance collection arbitration or state-court collection lawsuits against GEICO pending resolution of this action.

The court granted GEICO's motion and denied the defendants' motions to stay or dismiss the federal action.

The defendants have filed over 600 state court cases and 8 arbitrations against GEICO to collect on insurance claims. The court granted GEICO's motion for a preliminary injunction to stay pending arbitrations and lawsuits and prevent new ones from being filed.

The "effective vindication" exception to the Federal Arbitration Act applies, allowing the court to enjoin pending arbitrations because the arbitrations interfere with GEICO's ability to pursue its RICO claims.

The "expressly authorized" exception to the Anti-Injunction Act applies, allowing the court to enjoin pending state court proceedings because RICO can only be given its intended scope by staying the state court proceedings.

GEICO's RICO claims have statutory ripeness as the damages are clear and definite, even if they may increase over time. For RICO statutory ripeness, what matters is that the amount of damages will not decrease. A plaintiff's damages are not clear and definite so long as they could be mitigated or abated in pending litigation.

The balance of hardships tipped in GEICO's favor as it would have to defend hundreds of fragmented proceedings absent an injunction. The injunction serves the public interest by preventing fraud and preserving GEICO's ability to prove its allegations.

FLEMING’S FINEST
Katherine A. Fleming
kaf@hurwitzfine.com

05/29/25 State Farm Auto. Ins. Co. v. Orlando
Arizona Supreme Court
Insurer Not Required to Provide UIM Coverage for an Accident Involving an All-Terrain Vehicle That Did Not Occur on a Public Road

Orlando was a passenger on an ATV when it overturned in California’s Imperial Sand Dunes, seriously injuring her leg. The driver’s insurer paid Orlando the liability policy limit, which was insufficient to cover the extent of her injuries. Orlando then filed a claim with her insurer, State Farm, under her UIM policy. State Farm denied coverage on the basis that the ATV was not an underinsured motor vehicle under the policy. The policy provided that “underinsured motor vehicle” did not include a land motor vehicle designed for use primarily off public roads except while on public roads. State Farm commenced an action for a declaratory judgment that the policy did not provide UIM coverage for the ATV accident. Orlando counterclaimed that State Farm’s denial breached the policy. State Farm moved for summary judgment based on the ATV not meeting the definition of an underinsured motor vehicle. State Farm also asserted the exclusion was nearly identical to the exclusions approved of in the uninsured (UM) coverage case law. Orlando argued that UM coverage was separate and distinct from UIM coverage. Further, Orlando argued that the Policy could not limit UIM coverage because exceptions to UIM coverage not permitted by statute are void.

The superior court granted State Farm’s motion, concluding the ATV was not an underinsured motor vehicle under the policy because it was designed for use primarily off public roads and the accident did not occur on a public road. The court also found that the Uninsured/Underinsured Motorist Act did not bar the policy’s limitation of UIM coverage. Orlando moved for a new trial, arguing that the cases relied on by the superior court addressed UM, not UIM, coverage and were therefore inapplicable. The court denied the motion.

The court of appeals reversed, concluding that the UIM provision of the UMA did not permit excluding coverage for the ATV accident. The court observed that: (1) UM coverage is “subject to the terms and conditions of that coverage,” whereas UIM coverage contains no such limitation; and (2) UM coverage applies where a “motor vehicle” caused injury or death, but UIM coverage covers injuries “resulting from [an] accident” without referencing a motor vehicle.

The Arizona Supreme Court held that the UMA does not require coverage for all-terrain vehicles not operated on public roads and that an insurer may preclude such coverage in a UIM policy. The court noted that the UMA would only require coverage if the ATV were a motor vehicle that the state’s Financial Responsibility Act requires to be insured. Under the FRA, a motor vehicle is “a self-propelled vehicle” that is “operated on a highway” and does not include an “[a]ll-terrain vehicle or off-road recreational motor vehicle operating” off-road. As a result, the arguments regarding the textual distinctions between the UM and UIM coverage provisions and what the UMA requires were irrelevant. Applying the FRA definition of motor vehicle, the court held that UIM coverage of an off-road ATV accident is neither required nor prohibited under the UMA. Therefore, the Policy’s definition of “underinsured motor vehicle,” resulting in preclusion of UIM coverage, is permissible under Arizona law. Accordingly, the court vacated the court of appeal’s opinion and affirmed the superior court’s entry of summary judgment in favor of State Farm.

GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
edg@hurwitzfine.com

05/22/25 Shemen et al. v. The Cincinnati Insurance Company
United States District Court, District of New Jersey
The Term “Surface Water” Held Unambiguous and Applicable to the Facts of the Case, Despite Being Found Ambiguous As Applied to the Facts of a Prior Case

Cincinnati insured the Shemens under a homeowners policy. In September 2021, the Shemens’ basement flooded with water, damaging the basement and its contents. Cincinnati retained an engineer to inspect the loss, who found that the damage was caused by surface water accumulating in window wells on the side of the house, and that surface water, clay, and other debris entered the dwelling through these window wells. Cincinnati denied coverage under a policy exclusion for loss caused directly or indirectly by water, including by flood, surface water, and waterborne material, regardless of any other cause or event contributing to the loss.

The Shemens retained their own engineer, who opined that, given the extent and intensity of rainfall, it was reasonable to conclude that the water causing the damage consisted of both rainwater and water flowing in from the surrounding land. This lawsuit followed.

The Shemens challenged Cincinnati’s coverage denial, advancing the argument that the policy does not exclude any and all damage caused directly or indirectly by water, and that the term “surface water” as used in the policy was ambiguous.

In support of their argument, the Shemens cited to a prior New Jersey District Court opinion, finding that the term “surface water” has been defined to possess a permanent nature, such as a body of water. See Sosa v. Mass. Bay, 458 N.J. Super. 639 (N.J. App. Div. 2019). That Court also found that “surface waters” are those falling onto land from the sky, or arising in springs, and are eventually lost by being diffused over the ground through percolation, evaporation, or natural drainage. The Shemens used this dichotomy to advance the argument that the phrase “surface water” is inherently ambiguous.

The Court disagreed with the Shemens’ ambiguity argument. The Court noted that the Sosa court was not tasked with determining whether there was a plain and ordinary meaning of “surface water” that could exclude rainwater hitting the ground—the type of water at issue here. Rather, the Sosa Court was tasked with determining whether “surface water” could water from unnatural sources, such as a water-main break.

In the end, the Court found that the term “surface water” was unambiguous as used in this situation, and indeed, encompassed the type of water at issue here—water hitting the ground, entering the property, and causing damage.

O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
rpo@hurwitzfine.com

05/28/25 Lennox Carwash, Inc. v. Amco Ins. Co.
United States Court of Appeals, Ninth Circuit
Suit Limitation Clause and Cooperation Condition Preclude Coverage for Two First-Party Claims

Amco insured Lennox under a first party property damage policy. Lennox submitted claims to Amco regarding two losses that occurred in 2018 and 2019. Amco began its investigation and requested several pieces of documentation and information from Lennox. By letter dated February 24, 2022, Amco denied the claims.

Lennox then filed a breach of contract action that sought recovery for both claims. Amco moved for summary judgment reliant upon the policy’s suit limitation clause for the 2018 loss and the cooperation condition for the 2019 loss.

On the 2018 loss, Amco’s grant of summary judgment was affirmed. California law departs from New York in that the Western State applies an equitable toll to suit limitation clauses. Amco’s policy contained a one-year suit limitation from the date of direct physical loss. But California tolls the clause from the date the insured gives notice of a claim to the date the insured receives notice of the claim’s denial. Amco’s disclaimer letter for the 2018 loss was dated March 1, 2022. And Lennox filed suit on April 13, 2023, which was more than a year from the date of the denial. Since Lennox failed to rebut the presumption of mailing, the suit limitation clause applied and precluded coverage.

Moving to the 2019 loss, Amco was also successful in applying the cooperation condition. The motion record, and uncontested evidence, showed the Amco requested documentation and material on several occasions. But Lennox failed to provide any of the relevant material. The appellate court determined Lennox’s failure to do so substantially prejudiced Amco. Similar to New York, California law holds that cooperation clauses, on the first-party property part, allow insurers to procure all information material to its rights and obligations.

Author’s Note: Confusion arises amongst counsel and courts when insurers apply the cooperation clause regarding first-party property claims. Many believe the willful and avowed standard announced in Thrasher applies, but it does not. Rather, the standard is whether the information requested was material and necessary for an insurer’s claim investigation. Scott Storm authored an excellent article on first-party non-cooperation. A link to the article is here.

LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
ihl@hurwitzfine.com

05/28/25 Certain Underwriters at Lloyd’s, London v. Southwest Mar. & Gen. Ins. Co.
New York State Supreme Court, New York County
Bolt Unintentionally Left at Construction Site Does Not Qualify as Abandoned Material Under the Products-Completed Operations Hazard

Certain Underwriters at Lloyd’s, London (“Underwriters”) commenced a declaratory judgment action against Southwest Marine and General Insurance Company (“Southwest”), seeking additional insured status in connection with a personal injury action concerning a construction project in Manhattan.

Southwest had issued a commercial liability policy to Arsenal, who was retained to perform work in relation to the construction site. In turn, Arsenal retained JGR to perform work at the construction site in relation to the construction and dismantling of sidewalk sheds at the construction site. As part of the contract between Arsenal and JGR, Arsenal acquired JGR to obtain commercial liability insurance, and name Arsenal as an additional insured on a primary and non-contributory basis.

In the underlying action, the claimant alleges that she tripped and fell on a sidewalk shed bolt left sticking out of the sidewalk at the project. JGR is a defendant in the underlying action, and the pleadings allege that JGR’s negligence in leaving the bolt caused the injuries.

After receipt of the underlying action, Arsenal tendered to Southwest, seeking additional insured coverage. Southwest never responded, and the declaratory judgment action ensued.

Underwriters moved for partial summary judgment, seeking a declaration that Southwest is obligated to provide additional insured status, and defense to Arsenal. Underwriters seeks reimbursement of defense costs for Arsenal incurred from the date of tender in December 2022.

Southwest alleges that the exclusions and conditions of the policy preclude coverage, insisting that an exclusion precludes coverage for bodily injury airing out of tools or abandoned materials. Southwest alleges that JGR finished its work on September 13, 2022, two days prior to the underlying claimant’s fall.

The question before the court was whether the cause of the underlying incident, the sidewalk shed bolt, falls under an exclusion to the policy issued by JGR. The policy contained an exclusion which precludes coverage for bodily injury arising out of the existence of tools, uninstalled equipment or abandoned or unused material.

The court identifies that there is little dispute that the allegations raise a reasonable possibility that JGR may be at fault for the underlying claimant’s bodily injuries. There was no dispute between the parties that the underlying action arises out of JGR’s work at the site, and the underlying claimant alleges that she tripped over a bolt left by JGR.

The court glosses over the fact that the bolt does not qualify as a tool, uninstalled equipment, or unused material. The court takes a closer look at case law across New York to determine whether the bolt qualifies as abandoned materials. The court looks toward Fourth Department law, First Department law, and Black’s Law Dictionary to determine whether the bolt qualifies as abandoned material.

Under Fourth Department law, abandonment contains an element of intent, including the relinquishment of title, possession, or claim. Under this definition, intent cannot be presumed, and there must be proof to support the affirmative action of throwing away. Black’s Law Dictionary further supports this definition, defining intent as “the voluntary relinquishment of all rights, title, or claim to property that rightfully belongs to the owner of the property.” Accordingly, the court agreed with Underwriters that abandonment requires some amount of intentionality. JGR would have been required to notice the bolts and intentionally leave them on the ground for the exclusion to apply.

Based on the evidence submitted, the court found that the exclusion does not apply. JGR’s witness testified that the type of bolt which allegedly caused the incident is typically removed from the sidewalk after a job is complete. They identified that there is no reason to leave the bolt, supporting the determination that the bolt was left accidentally.

In addition, pointing to First Department law, the court observed that the fact the bolt was left at the site means that JGR was technically not finished with their work. Part of JGR’s job was to deconstruct and dismantle the sidewalk shed, which entailed the removal of sidewalk bolts. Failure to remove the bolts, under First Department law, can lead to a finding that work was ongoing because certain tasks had not been performed.

Accordingly, the court found that Arsenal is entitled to additional insured coverage, and a defense in connection with the underlying action. The court granted the partial motion for summary judgment, in favor of Underwriters.

LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
lrh@hurwitzfine.com

06/06/25 New York Assembly Bill S5052
Proposed Legislation to Amend Insurance Law and Vehicle and Traffic Law to Permit an Insurer to Rescind or Retroactively Cancel a Policy in an Effort to Deter Staged Accidents

Senate Bill S5052, just introduced on February 18, 2025, would amend insurance law and vehicle and traffic law to permit insurers to rescind or retroactively cancel a policy in certain circumstances.

The bill removes the incentive for staged automobile accidents by allowing for the retroactive cancellation of newly issued private passenger automobile insurance policies.

Section one of the proposed amendments to 3457 provides, within the first 60 days of an automobile, commercial automobile or assigned risk plan policy being issued, an insurer could rescind the policy if the initial premium payment is dishonored due to

The nonexistence of a bank account,
The unauthorized use of an account, or
The unauthorized use of a credit card

Section B provides that a person injured during this sixty-day period and could have recovered under an insurance policy that was cancelled may recover under his or her own policy, or if uninsured, the motor vehicle indemnification corporation.

VICTORIA’S VISION ON BAD FAITH
Victoria S. Heist
vsh@hurwitzfine.com

05/06/25 Archdiocese of New York v. Century Indemnity Co.
Supreme Court, New York County
Court Denies Insurers’ Motion to Dismiss Claims Alleging Breach of Good Faith and Fair Dealing

This is a declaratory judgment action in which both parties, the Archdiocese of New York, and its insurers, seek a determination of the scope of coverage for policies the Archdiocese obtained between 1956 and 2003. The Archdiocese seeks defense and indemnity for the nearly 1,700 lawsuits brought against it since the enactment of the Child Victims Act and Adult Survivors Act, alleging sexual abuse of the clergy and the Archdiocese's employees during the applicable policy dates.

The insurers moved to dismiss two of the Archdiocese's causes of action, one alleging breach of the covenant of good faith and fair dealing, and the other alleging violations of General Business Law § 349. The insurers agreed to defend the Archdiocese under a reservation of rights, disclaiming coverage because the allegations were "expected and/or intended from the standpoint of the Archdiocese."

The Archdiocese alleges that the insurers undermined their efforts to settle claims, and employed a "wait and see" approach by refusing to participate in mediations, pay claims, waive consent to settle provisions in the policies, and provide indemnity for payments already made. The Archdiocese claims the insurers are putting their own financial interests over its policyholders.

In the motion to dismiss, the insurers argue that the allegation of the breach of the covenant of good faith and fair dealing is duplicative of the breach of contract claim. In the alternative, the insurers argue the Archdiocese failed to state a cause of action by failing to allege that the insurer's conduct constitutes a gross disregard of the insured's interests.

The Court denied the motion to dismiss in its entirety. Discussing the standard for the breach of the covenant of good faith, the Court recognized that "[a] cause of action for breach [of] the implied covenant may be found where an insurer is alleged to have frustrated the purpose of an insurance policy . . . ."

In deciding the motion to dismiss, the Court found that the breach of the covenant of good faith and fair dealing is not duplicative of a breach of contract claim, because each relies on distinct factual allegations. Next, the Court found the Archdiocese did satisfactorily allege gross disregard of the insured's interest, by alleging (1) that the insurers "grossly disregarded their policyholders' interests and repeatedly sought to elevate their own interests to the serious detriment of the Archdiocese," (2) unfair claim settlement practices, and (3) that the insurers improperly elevated their "own financial interests and industry concerns" own their obligations to the policyholders.

NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
hasanderson@sanderson-law.com

The content of this column also appears in the ‘Liability & Insurance,” a monthly newsletter focusing on Canadian coverage and published by Heather Sanderson. Contact her for a subscription.

05/07/25 Kashin v. G.E.S. Construction Limited
Ontario Court of Appeal
Waiver in the Context of Insurance Coverage Requires an Unequivocal and Conscious Intention to Abandon Legal Rights

G.E.S. Construction is a high-end general contractor with a specialty in custom homes and renovations. Its 2016 contract to renovate a condo at the corner of Avenue Road and Lonsdale in Toronto, in the desirable Casa Loma area of Toronto, was a construction contract like any other … until it wasn’t.

G.E.S. subcontracted demolition work to Land Pride Group Inc. Land Pride held an insurance policy with Lloyd’s. G.E.S. insisted that it be added as an additional insured with respect to the demo work. Land Pride agreed.

On April 27, 2016, a water pipe burst during the demolition. Land Pride claimed that it was the fault of the property manager for not turning off the correct water pipes. But, apparently, Land Pride didn’t check. The damage was extensive. Land Pride notified its broker within days of the event.

Lloyd’s investigated the claim and noted that on its application for coverage, Land Pride described itself as a snow removal and landscaping company. There was no mention that it also performs demolition work.

G.E.S. never saw that application. Also, G.E.S. did not ask to see the declarations or the policy itself.

Lloyd’s retained coverage counsel who advised Lloyd’s that they could void the policy on the basis of misrepresentation.

On July 6, 2016, just over three weeks after Lloyd’s received its coverage opinion, Land Pride applied to renew the policy. On July 11, 2016, coverage counsel sent Lloyd’s a draft letter to be sent to the insured which voids the 2015 Policy ab initio but indicates that Lloyd’s might be prepared to issue a new policy to cover just the snow removal and landscaping business – excluding all construction and demolition work. That letter was never sent.

On July 15, 2016, Lloyd’s billed Land Pride for the renewed policy. Land Pride paid that invoice. On July 28, 2016, Land Pride cancelled the new policy. The cancellation was processed, and the unearned premium was returned.

On September 13, 2016, Lloyd’s advised Land Pride that it was voiding both the 2015 policy and the 2016 policy and returned the whole of the 2015 premium and the portion of the 2016 premium that it had retained.

The Issue: Did Lloyd’s waive the Misrepresentation? Is Lloyd’s Estopped by its Conduct?

G.E.S. and Land Pride brought this duty to defend application stating that once Lloyd’s learned of Land Pride’s misrepresentation, it had three options: advise the insured that it was voiding the policy and return the premium; cancel the policy unilaterally under the Ontario Insurance Act; or, treat the policy as valid and subsisting. G.E.S. argued that Lloyd’s elected to treat the policy as valid and subsisting.

The Motion Court /Trial Decision

The Supreme Court of Canada was clear in the Saskatchewan River Bungalows decision that waiver in the insurance context requires an expression of an unequivocal and conscious intention to abandon legal rights under a policy.

The trial judge held that even though Lloyd’s knew that it had the right to void the policy, the evidence does not indicate an unequivocal and conscious intention to abandon the right to void the policy. There was sufficient affidavit evidence before the court that Lloyd’s told Land Pride in the course of phone calls and emails that it had the right to void the 2015 policy under which the claim was reported. When the 2015 policy expired, Lloyd’s stated that “For now, we are binding renewal at expiry terms and conditions.” “For now,” means that their position could change. The renewal took place under discussions that had begun with Lloyds stating that they were ‘holding cover’ until a replacement policy could be arranged, and evolved to a request by Lloyd’s that for the renewal to proceed, the current claim would have to be withdrawn and that exclusionary wording for construction and demolition work must be inserted. The trial judge held that at the time Land Pride cancelled the 2016 policy, Lloyd’s had not communicated an unequivocal and conscious intention to abandon its legal right to void the policy.

As for estoppel, there was no evidence that neither Land Pride, nor G.E.S. relied upon Lloyd’s conduct to its detriment. Without detrimental reliance, there can be no estoppel.

Lloyd’s received an award of $20,000 in costs as against Land Pride. G.E.S. appealed.

The Appeal Decision

The Court of Appeal held that the trial judge applied the correct legal test. The trial judge held that Lloyd’s actions in renewing the 2015 Policy and accepting premiums occurred in the context of resolving Lloyd’s obligation to respond to the claim made under the 2015 Policy. The motion judge carefully reviewed all the relevant circumstances and communications and found that Lloyd’s always maintained the position that the appellant must withdraw the claim if the renewal was going to work. The motion judge was entitled to conclude that, although Lloyd’s timing was not perfect, its brief delay did not preclude it from voiding the 2015 Policy for misrepresentation. There is no error here, let alone palpable and overriding error that would permit this court to intervene.

Equally, the estoppel analysis in the court below was correct.

On appeal, G.E.S. argued that Lloyd’s improperly pressured Land Pride to withdraw its claim for coverage in exchange for Lloyd’s agreement to maintain the 2015 Policy and offer to renew for the 2016-17 term. G.E.S. describes this as bad faith conduct that ought to have precluded Lloyd’s from voiding the 2015 Policy:

There is no merit to this submission. The motion judge carefully reviewed the evidence. He found that Lloyd’s sought to reach an agreement to withdraw the claim. Lloyd’s never deviated from its position as to […Land Pride’s…] misrepresentation. The appellant offers no reason why Lloyd’s was not entitled to act as it did beyond bald suggestions that its actions were taken in bad faith.

As Lloyd’s was wholly successful on the appeal, it received an award of $12,500 for additional costs.

Comment

The motion court’s judgment emphasizes that risk management for an additional insured begins at the time of contracting. An additional insured ought to obtain and review the full insurance policy and its declarations at the time of contracting. This is an important step in determining if the policy aligns with the contract's requirements, helping to avoid a coverage dispute like this one that G.E.S. Construction faced.

Medical & Nursing Home Liability Pointers - 06/05/2025

Thu, 05 Jun 2025 18:58:40 +0000

June 5, 2025

A Note from Liz Midgley:

Happy June!

Instead of commenting on our crummy weather so far this spring, here are some fun Healthcare-related days that can give us all a reason to celebrate in June:

National I Love My Dentist Day (June 2)
Healthcare Executives Appreciation Week (June 6-12)
National Call Your Doctor Day (June 10)
CNA Appreciation Week (June 12-18)
~~Take Your Dog to Work Day (June 20)~~ – oops, wrong newsletter
And, of course, my birthday (June 28)

As you know from our previous Pointers, we have been reporting for the past three years on the three failed attempts by the New York Legislature to pass the Grieving Families Act, legislation that would completely overhaul wrongful death claims in New York by permitting recovery for emotional damages and expanding the class of persons who can seek recovery for a fatality. To give some context on the state of law, we were happy to contribute to the Harmonie Group's 50-State Wrongful Death Compendium. This compendium provides a primer for each state that answers the following questions: what is the state's statutory language, who can recover and what can be recovered, and what is the state's statute of limitations for a wrongful death action.

The Medical Malpractice and Nursing Home Liability team is also happy to announce the addition of associate attorney, Michael L. Lieberman, to our group. Mike graduated Magna Cum Laude from the University of Buffalo School of Law in 2024, where he was a James Kent Faculty Scholar. He has joined the firm in both the General Litigation and Medical Malpractice departments, and we are very excited to have him. Mike has joined associate attorneys Gabrielle D. Markle and Noah C. Neale in preparing the below Case Updates for this edition of our Pointers. Welcome, Mike!

We also have a lot of firmwide news to share this month.

Promotions in Our Litigation Team
We are proud to announce the promotions of Ashley M. Cuneo, Patrice C.S. Melville, and Eric D. Andrew to Member!

Patrice C.S. Melville, a key member of our Melville litigation team, focuses on defending businesses and individuals in complex litigation matters, including premises liability, auto, and New York Labor Law claims.
Ashley M. Cuneo has also played a pivotal role in our Melville office’s growth. Her practice spans general liability defense, including medical malpractice, auto, premises, and Labor Law litigation. Some of you may know Ashley from her work on many of our medical malpractice and nursing home cases over the years!
Eric D. Andrew has been a member of Hurwitz Fine’s Labor Law team for nearly a decade. In addition to his work in Labor Law, Eric also focuses on construction accidents, toxic tort/environmental law, and insurance defense matters. Eric is also a longtime contributor of Labor Law Pointers, the group’s monthly publication that goes out to hundreds of industry professionals.

New General Litigation Department Leadership
We are also pleased to announce the appointment of V. Christopher Potenza (a member of our Med Mal team) and David R. Adams as Co-Chairs of our General Litigation Department. Their appointment reflects a shared commitment to exceptional client service and a strategic vision for the future of our litigation practice.

V. Christopher Potenza is a widely respected litigator whose practice includes general liability, product liability, transportation, commercial litigation, medical malpractice defense, and nursing home negligence. He also leads both the firm’s Products Liability Team and Appellate Advocacy Team.
David R. Adams leads the firm’s NYS Labor Law Team and has deep experience in defending complex and catastrophic injury claims. He also founded and leads the firm’s High Exposure/Catastrophic Injury (CAT) Team, which brings together a multidisciplinary group of attorneys and experts to manage high-stakes litigation.

There are a lot of great things happening at Hurwitz Fine, and we are excited to see what the rest of the year brings!

Want to see us address something in a future Pointers? Send us an email!

Medical Malpractice and Nursing Home Negligence Case Updates

First Department

05/27/2025        Rios v. St. Barnabas Hospital
Appellate Division, First Department
First Department rejects a plaintiff’s attempt to overturn a jury verdict, finding that there was ample evidence to support the verdict and that the trial court properly exercised its discretion in evidentiary issues.

Plaintiff appealed a jury verdict that found the defendant hospital and midwife were not liable for failing to timely diagnose and treat her ectopic pregnancy. The First Department held that there was ample evidence that the defendants complied with the standard of care. The decision highlights that the defendant midwife told the plaintiff that she urgently needed to get repeat bloodwork for a b-hCG test within 48 hours, and that the plaintiff did not seek a repeat test until a week later.

Also in plaintiff’s appeal, plaintiff argued that the trial court should have issued a missing document charge, as the defendant hospital failed to produce documents regarding the hours their clinic lab was open. The First Department held that because the plaintiff failed to object to the jury charges, the argument was not preserved for review. Additionally, the Court noted that the plaintiff did not make any showing the documentation existed or was under the defendants’ control.

Second Department

04/16/2025          Robles v. Brooklyn Queens Nursing Home, Inc.
Appellate Division, Second Department
Second Department affirms trial court’s denial of Plaintiff’s motion to vacate note of issue and re-open discovery.

Plaintiff, in an action for medical malpractice damages against Defendant, filed a note of issue at the close of discovery. Shortly thereafter, plaintiff reversed course and moved to vacate the note of issue and re-open discovery. The trial court denied plaintiff’s motion. On appeal, the Second Department held that there are no appeals as of right from orders that do not decide a motion made on notice. Accordingly, plaintiff had no right to appeal.

Third Department

There were not a lot of pertinent decisions the last quarter, so here is a good reminder that the trial court deadlines do, indeed, matter.

Schultz v Albany Med. Ctr. Hosp.
Appellate Division, Third Department
Third Department upholds Trial Court’s discretion to preclude expert testimony for failure to comply with discovery deadlines.

Plaintiff filed opposition to Defendant’s Motion for Summary Judgment dismissing the complaint and at the same time cross-moved to supplement his expert witness disclosure by proffering the opinion of a second expert witness. The trial court denied plaintiff’s cross motion and granted summary judgment for the Defendant. On appeal, the Third Department found that the trial court has discretion to supervise disclosure deadlines and impose appropriate sanctions if a party fails to comply with that deadline. Here, plaintiff attempted to disclose a second expert in a wholly different field whose opinions did not pertain to the matters addressed by their initial expert, thus not being a supplemental opinion at all. Additionally, their expert affidavit was dated seven months after plaintiff filed his note of issue and had only disclosed this second expert’s identity and opinion in response to Defendant’s summary judgment motion. Plaintiff did not provide any excuse, much less good cause for this nondisclosure throughout the lengthy time permitted for discovery. The court concluded that the Supreme Court did not abuse its discretion in denying plaintiff’s motion to supplement his expert disclosure.

Fourth Department

The Fourth Department had some busy sessions in March addressing Medical Malpractice and Nursing home topics!

03/14/2025   Kingston v. Tennyson Court
Appellate Division, Fourth Department
Fourth Department dismisses Public Health Law causes of action against assisted living facility but declines to overturn precedent allowing such claims under certain circumstances.

Plaintiff’s executor sued the Defendant assisted living facility under a negligence cause of action, as well as two Public Health Law causes of action, for injuries arising out of Decedent’s residency. The trial court denied Defendant’s motion to dismiss each claim. On appeal, the Fourth Department noted that under the precedent it established in Cunningham v. Mary Agnes Manor Mgt., L.L.C., assisted living facilities could be held liable as if they were residential health care facilities under the Public Health Law if they provide health-related services. Here, the Court dismissed the two Public Health Law claims on the theory that plaintiff’s allegations, unlike those in Cunningham, failed to allege sufficient facts overcoming Defendant’s argument that it is an assisted living facility not subject to the Public Health Law claims. Nevertheless, the Fourth Department declined to overturn Cunningham, noting that the instant case could be resolved without disrupting precedent. Two judges concurred in the result reached but argued that Cunningham should be overturned as inconsistent with the governing statutory framework, and that assisted living facilities should never be subject to Public Health Law claims as de facto residential health care facilities.

03/21/2025   Martin v. Kaleida Health
Appellate Division, Fourth Department
Fourth Department reverses grant of a protective order on hospital records regarding COVID-19 patient placement.

Plaintiffs sued Defendant after contracting COVID-19 while admitted to Defendant’s hospital. Plaintiffs alleged that the hospital negligently placed a COVID-positive patient in plaintiff Leon Martin’s room. To support their theory, plaintiffs sought production of Defendant’s hospital records pertaining to the non-party patient, with name and other identifying information redacted. After Defendant refused, plaintiffs moved to compel and Defendant cross-moved for a protective order. The trial court sided with Defendant. On appeal, the Fourth Department observed that although discovery determinations are generally within the discretion of the trial court, the Appellate Division may substitute its own discretion even in absence of abuse. Exercising that discretion, the Appellate Division held that the records, which would allow plaintiffs to determine when Defendant became aware that the non-party patient tested positive for COVID-19, were sufficiently important to plaintiffs’ claim to justify overcoming physician-patient privilege.

03/21/2025       Hurley v. Rochester Regional Health ACO, Inc.
Appellate Division, Fourth Department
Fourth Department holds allegations against hospital for unauthorized access to confidential records as sufficient to maintain a negligence action, but not a breach of contract claim.

Plaintiffs, after receiving care from Defendant hospital, alleged that a co-Defendant nurse impermissibly accessed plaintiffs’ confidential records due to improper record keeping by Defendant. In the lower court, plaintiffs presented claims for both negligence and for breach of implied contract. The trial court granted Defendant’s motion to dismiss under the theory that plaintiffs lacked evidence and failed to state a cause of action. On appeal, the Fourth Department held that plaintiffs’ allegations and affidavits were sufficient to survive dismissal of the negligence claim, since hospitals may be liable in tort for failure to safeguard confidential records, and Defendant’s affidavits would not merit dismissal unless they could conclusively establish that plaintiffs had no cause of action, which they failed to do. Accordingly, the Fourth Department reversed the grant of dismissal with regard to the negligence claims. However, the Court also determined that the tort cause of action was sufficient to protect plaintiffs’ interests here, and upheld the dismissal of the breach of implied contract claims.

Hurwitz Fine's Medical Malpractice & Nursing Home Defense Team
is here to answer your questions:

Elizabeth M. Midgley, Esq. (emm@hurwitzfine.com)
V. Christopher Potenza, Esq. (vcp@hurwitzfine.com)
Stephen M. Sorrels, Esq. (sms@hurwitzfine.com)
Ashley M. Cuneo, Esq. (amc@hurwitzfine.com)
Patrick B. Curran, Esq. (pbc@hurwitzfine.com)
Gabrielle D. Markle, Esq. (gdm@hurwitzfine.com)
Noah C. Neale, Esq. (ncn @hurwitzfine.com)
Michael L. Lieberman, Esq. (mll@hurwitzfine.com)

As a public service, we are pleased to present this newsletter providing the latest news, developments, and analysis of recent court decisions impacting the medical and long-term care communities. In some jurisdictions, newsletters such as this may be considered: Attorney Advertising.

If you know of others who may wish to subscribe to these legal alerts, please feel free to forward it. If you wish to subscribe or unsubscribe, please do so at the bottom of this newsletter.

Coverage Pointers: This twice-monthly electronic newsletter summarizes important insurance law decisions from appellate courts in New York State with the occasional snapshot across borders. Contact Dan Kohane at ddk@hurwitzfine.com to subscribe.

Labor Law Pointers: Labor Law Pointers offers a monthly review and analysis of every New York State Labor Law and construction accident case decided during the month by the Appellate Courts. Contact Dave Adams at dra@hurwitzfine.com to subscribe.

Premises Pointers: This monthly electronic newsletter covers current cases, trends and developments involving premises liability and general litigation. Contact Jody Briandi at jeb@hurwitzfine.com to subscribe.

Products Liability Pointers: This monthly newsletter covers all areas of products liability litigation, including negligence, strict products liability, breach of warranty claims, medical device litigation, toxic and mass torts, regulatory framework and governmental agencies. Contact Chris Potenza at vcp@hurwitzfine.com to subscribe.

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Labor Law Pointers - Volume XIV, No. 7

Fri, 06 Jun 2025 18:40:44 +0000

Volume XIV, No. 7
Wednesday, June 4, 2025

Note from David R. Adams:

Do you have a situation? We love situations. Give us a call, send an email, drop by; we truly enjoy solving complex Labor Law and risk transfer issues.

We have exciting news this month, as three members of our Labor Law Team, Ashley M. Cuneo, Patrice C.S. Melville, and Eric D. Andrew, have been elevated to Member of the Firm.

Eric D. Andrew has been a member of Hurwitz Fine’s Labor Law team for nearly a decade. In addition to his work in Labor Law, Eric also focuses on toxic tort/environmental law and other insurance defense matters.
Patrice C.S. Melville, a key member of our Melville litigation team, focuses on defending businesses and individuals in complex litigation matters, primarily New York Labor Law claims.
Ashley M. Cuneo has also played a pivotal role in our Melville office’s growth. Her practice is focused on New York Labor Law. She also handles other complex litigated matters.

We’re also proud to recognize two of our attorneys who were recently accepted into nationally respected legal defense organizations:

Brian M. Webb has been accepted into the Trucking Industry Defense Association (TIDA), an exclusive organization of attorneys and industry professionals who specialize in the defense of the trucking and transportation sector.
Anastasia M. McCarthy was recently accepted into the National Retail and Restaurant Defense Association (NRRDA), a prestigious organization dedicated to defending retail and hospitality-related claims. This recognition underscores her professional excellence and growing leadership in the industry.

Our firm is truly composed of dedicated and experienced attorneys. Membership in these organizations is not given out like candy at Halloween; it requires a real understanding of the area of law and a comprehensive peer review. Great attorneys but perhaps more important, great people. Proud to be their partner and friend.

We continue with a couple photos below, and we use them for two purposes. First, we understand some of you only read the newsletter to see what crazy photo we found for this month’s edition. Second, we try and use the photo to address a specific area of the law in a concise manner and provide information on a topic we will all see in our cases.

With that, onto the first photo. Here we have a drywall hanger who is wearing stilts to reach the higher portions of the room in a new hotel under construction. As he steps off the ladder and starts across the floor to the next work location, his stilt slips out from under him, and he falls. § 240(1)? What if he fell while still on the ladder and was reaching to insert a screw into the drywall and the ladder moved a bit?

In scenario one above, the plaintiff falls when the stilt slips out from under him as he move to a different location. It would appear the plaintiff has a prima facie case where the owner is a valid defendant. The plaintiff is a person so employed and thus a valid plaintiff. The job entails construction and thus the task is one for which the protections of the Labor Law are applicable. The fly in the plaintiff’s ointment is that while the injury did result from a fall, per the Court of Appeals, the fact that the hazard which caused the fall and resulting injury to the plaintiff was his slipping and not any type of elevation differential or effect of gravity, the likely outcome is summary judgment for the defendant on the § 240(1) claim. Note that as the plaintiff slipped, the § 241(6) result may not fall in line with the § 240(1) decision.

In scenario number two, the cause of the plaintiff’s fall is the movement or shifting of the ladder and thus a relatively easy case of summary judgment to the plaintiff. There would be no difference if he was on foot or on stilts if the ladder shifted causing him to fall. I just liked the picture of the plaintiff on stilts on the ladder. I could not make this stuff up.

In our second offering, we have so much going on. Plaintiff, the guy at the top of the ladder, was hired to replace a burned-out light bulb that the owners of the store could not reach with their ladders. The electrician was sent by his boss to replace the light bulb and brought his tallest ladder. When he got a look at the set up, he said no way he could reach it. He called his boss to tell him he could not do it, and the boss told him that this is a very important customer and to figure out a way to get it done. The electrician, having recently been to the circus, recalled that a performer climbed a ladder as others held it upright. He deduced that if they can do it, so can he. He called some co-workers to the scene to add some muscle, and this is what they came up with. A few observations before we proceed to the fall. First, carrying the light bulb in his mouth did allow him to maintain 3 points of contact while climbing the ladder as recommended by OSHA and safety consultants everywhere. Second, for no apparent reason, the ladder he is climbing is turned over with the extension section on the bottom and not the top. Not actually sure how or why this is but my mind wants to believe they started out with the ladder right side up and there was some narrowly averted disaster that resulted in a spectacular save, as the ladder turning over and the bulb remaining in the plaintiff’s mouth. So when the plaintiff falls, does he have a § 240(1) case?

The plaintiff is a “person so employed” and a valid plaintiff. The owner of the commercial building is a valid defendant. The plaintiff would be injured by an elevation differential and the effects of gravity. Here, the issue for the plaintiff is that the task he was undertaking, replacing a light bulb, is not an enumerated task, but rather routine maintenance and thus not covered by § 240(1). Summary judgment for the defendant. Now, had the plaintiff been up there not to replace a burned-out light bulb but to replace the light fixture, he would then have had a valid § 240(1) claim.

That’s it for this month. As always, please feel free to reach out to us with any questions Labor Law or Risk-Transfer related. Hope you learned something.

-David

Hurwitz Fine P.C.
The Liberty Building
424 Main Street, Suite 1300
Buffalo, New York 14202
Phone: 716.849.8900
Fax: 716.855.0874

Email: dra@hurwitzfine.com

Labor Law Pointers is published the first Wednesday of each month. If you know of others who may wish to subscribe to this free publication, please feel free to forward it. If you wish to subscribe or unsubscribe, please send an e-mail to dra@hurwitzfine.com or call the Editor/Labor Law Team Leader David R. Adams directly at (716) 849-8916.

Don’t forget to subscribe to our other publications:

Coverage Pointers: This twice-monthly electronic newsletter summarizes important insurance law decisions from appellate courts in New York State with the occasional snapshot across borders. Coverage Pointers, the electronic newsletter that started it all, continues to offer guaranteed publication every other Friday, and a read-at-a-glance summary of important decisions as they happen. Contact Dan Kohane at ddk@hurwitzfine.com to subscribe.

Medical & Nursing Home Liability Pointers: Medical & Nursing Home Liability Pointers provides the latest news, developments, and analysis of recent court decisions impacting the medical and long-term care communities. Contact Liz Midgley at emm@hurwitzfine.com to subscribe.

Premises Pointers: This monthly electronic newsletter covers current cases, trends and developments involving premises liability and general litigation. Contact Jody Briandi at jeb@hurwitzfine.com to subscribe.

Products Liability Pointers: This monthly newsletter covers all areas of products liability litigation, including negligence, strict products liability, breach of warranty claims, medical device litigation, toxic and mass torts, regulatory framework and governmental agencies. Contact Chris Potenza at vcp@hurwitzfine.com to subscribe.

Hernandez v Port Auth. of N.Y. & N.J.
May 1, 2025
Appellate Division, First Department

This action arises out of an accident at the World Trade Center Oculus Project. Structure Tone was the owner's general contractor in charge of overseeing the pre-build-outs of various retail stores in the Oculus. Structure Tone subcontracted certain drywall work to O'Kane Enterprises Ltd. and Centre Street Systems, Inc. (hereinafter CSS). After the pre-build-out of an Apple Store was completed in March of 2016, it was turned over to Apple's general contractor, Sajo, to oversee the store's build-out and finish work. Sajo subcontracted various work, including floor protection, to O'Kane. Sajo subcontracted HVAC work to PAI, which sub-subcontracted a portion of that work to PB Ventilating Systems, Inc. (PB Vent).

Plaintiff, a sheet metal worker employed by PB Vent, was installing ductwork in the Apple Store. He encountered a dolly, loaded with sheets of Masonite, and attempted to move it out of the way of where he needed to work. The dolly moved "a foot, maybe two" when it suddenly stopped and tipped over onto plaintiff. Photographs taken of the cart's wheels reflect that they were cracked and had an embedded nail. The dolly was marked "CSS" on the bottom, but the Masonite sheets were the materials of O'Kane, which used them in connection with its floor protection.

The Supreme Court granted plaintiff’s motion for partial summary judgment on their §241(6) claim against PAI and denied PAI’s motion for summary judgment on Plaintiff’s Labor Law §240(1), 241(6), 200, and common-law negligence claims and PAI’s contractual indemnification claim against PB Ventilating Systems, Inc.

The Court also granted defendants CSS motion for summary judgment on plaintiff’s Labor Law claims against it, denied the World Trade Center Owners, Apple Inc. and Sajo, Inc’s motion for summary judgment on plaintiff’ s Labor Law claims, denied the motion of CSS seeking dismissal of common-law claims and cross-claims as well as Structure Tone, Inc.’s claim for contractual indemnification against CSS, denied O’Kane summary judgment motion seeking dismissal of contractual indemnification claim against it by WTC Owners and Sajo, and granted their motion for contractual indemnification against O’Kane, and denied the motion of PB Vent to dismiss contractual indemnification claims against it.

The Appellate Division affirmed the motion court finding that Plaintiff was properly granted partial summary judgment on their Labor Law § 240(1) claim. Recalling Runner, the court also held that while the elevation difference was relatively short, the Masonite weighed approximately 1200 pounds, bringing the accident within the protections of the statute (see Wilinski v 334 E. 92nd Hous. Dev. Fund Corp., 18 NY3d 1, 9 [2011]. The Court also found that Defendants failed to show any error on plaintiff's part in moving the dolly which could not be the sole proximate cause of the accident given its defective condition (see Blake v Neighborhood Hous. Servs. of N.Y. City, 1 NY3d 280, 290 [2003].

PRACTICE POINT: Runner reshaped the essential analysis and framed § 240(1) cases with the seminal question as to, “whether the harm flows directly from the application of the force of gravity to the object.” If so, § 240(1) will apply even if the person or an object does not fall.

Labor Law § 200 and Common-Law Negligence (EDA)

The Appellate Division found that the motion court correctly denied summary judgment to Sajo as to plaintiff's Labor Law § 200 claim. Sajo, the general contractor, failed to make out a prima facie showing that it was not on notice of the defective dolly being used on its project. PAI, however, did not have the same general supervision over the workspace as Sajo. While PAI had authority to supervise plaintiff, the accident was not caused by the means and methods of plaintiff's work, nor any equipment over which PAI had responsibility or control. Thus, the Appellate Division found that plaintiffs' claims against PAI under Labor Law § 200 and common-law negligence should be dismissed. The Appellate Division also found that Plaintiffs' Labor Law § 200 and common-law negligence claims should have been dismissed against CSS. As noted above, there was no evidence that CSS lent its dolly to anyone or even had knowledge of it being used by O'Kane.

Indemnity Issues in Labor Law (PCSM)

The Appellate Division held that WTC Owner, Sajo, and Apple were entitled to summary judgment on their contractual indemnification claim against PAI as the indemnity clause, which provided for indemnification "arising out of or resulting from, the performance or non-performance" of PAI's work, was triggered since the accident arose out of PAI's HVAC contract and its subcontract to PB Vent. The Appellate Division found, however, that indemnification in favor of Sajo to be conditional since plaintiffs' common law and Labor Law §200 claims remained against it. The Appellate division further found that the motion court correctly granted WTC Owners and Sajo summary judgment on their contractual indemnification claim against O'Kane with indemnification in favor of Sajo conditional. In addition, the Appellate Division found that the trial court correctly denied Apple such relief, as they were not named in the subject indemnity clause. The argument of WTC Owner and Apple that they were entitled to contractual indemnification against PB Vent was deemed unpersuasive, as they had never made any such claims against PB Vent. While Sajo did commence a third-party action against PB Vent asserting such claims, Sajo was neither named nor described in the indemnification provision at issue, and thus not entitled to indemnification. The Appellate Division determined that Sajo was not an "agent" as that term is used in the agreement between PAI and PB Vent, as an agreement to indemnify must be strictly construed, and the intent to indemnify must be clearly implied. Issues of fact precluded summary resolution of PAI's contractual indemnification claims against PB Vent. Though PAI argued that plaintiff's actions were wrongful acts, errors, or omissions, triggering the indemnity clause in the contract between them, there had been no such finding. Lastly, the Appellate Division found that Structure Tone's contractual indemnification claims against CSS should be dismissed since there was no evidence that the accident arose "in whole or in part and in any manner from the acts, omissions, breach or default of [CSS]" so as to trigger the indemnification provision in the CSS-Structure Tone contract.

Simon v 4 World Trade Ctr., LLC
May 1, 2025
Appellate Division, First Department

Plaintiff, a laborer on a renovation project at 4 World Trade Center, was injured when large, thick glass panes were compacted in the back of a waste removal truck, which created a build-up of kinetic energy and caused some glass to burst out of the truck, striking and toppling other large glass panes that rested on a nearby A-frame cart behind which plaintiff had crouched for protection. Defendant 4 World Trade Center LLC (4 WTC) owned the building at the 4 World Trade Center address and was the ground lessee of the 44th floor in the building. Defendant Syntactx subleased a portion of the 44th floor from 4 WTC and it was Syntactx's space that was under renovation at the time of the accident.

The Supreme Court denied plaintiff’s motion for partial summary judgment on his Labor Law §240(1) claim against defendants 4 World Trade Center LLC and Syntactx LLC (together, WTC defendants) and on the Labor Law § 200 and common-law negligence claims against defendant Royal Waste Services, Inc.

The Appellate Division affirmed the Supreme Court finding that it correctly denied plaintiff's motion because a triable issue of fact existed as to whether his injuries resulted from a failure to employ appropriate protective devices as required by the statute. It found defendants' argument that plaintiff's own conduct in placing himself behind the A-frame cart, which was located at the rear of the truck, was the sole proximate cause of his accident is unavailing. There was no evidence that plaintiff disobeyed an order not to crouch beside the A-frame cart. Plaintiff's conduct merely presented issues of comparative negligence, which is not a defense where a Labor Law § 240(1) violation proximately caused plaintiff's injury.

PRACTICE POINT: No matter how careless a plaintiff is, it is not considered in a § 240(1) case unless a defendant can prove sole proximate cause or recalcitrant worker.

Labor Law § 200 and Common-Law Negligence (EDA)

The Appellate Division reversed the Supreme Court finding that Royal Waste's evidence established prima facie that it was not a statutory agent of the WTC defendants or Holt for purposes of Labor Law liability. There was no evidence in the record that Holt had delegated any authority to Royal Waste to control plaintiff's disposal work, undermining any argument that Royal Waste had the authority necessary to render it a statutory agent pursuant to Labor Law § 200. The WTC defendants' evidence in opposition failed to raise a triable issue as to whether Royal Waste was a statutory agent. However, factual issues were raised as to whether Royal Waste was negligent in the performance of its work for not discerning plaintiff's location during the glass compaction process and whether such negligence was a proximate cause of plaintiff's injury.

Anguisaca-Morales v St. Paul & St. Andrew United Methodist Church
May 6, 2025
Appellate Division, First Department

Plaintiff alleges that he fell from an unsecured ladder leaning against the side of a sidewalk shed bridge. Plaintiff was climbing the ladder in order to access a taller extension ladder outside of the sidewalk shed so that he could descend to the sidewalk below.

Supreme Court granted plaintiff’s motion for summary judgment on his Labor Law §240(1) claim.

The Appellate Division reversed the Supreme Court finding that Plaintiff's testimony, together with the video footage of his accident that he reviewed during his deposition, failed to establish plaintiff's prima facie entitlement to summary judgment since the video created a question of fact as to whether plaintiff intentionally fell and was thus the sole proximate cause of the accident. Because plaintiff's deposition included responses concerning the video's substantive contents, the video, which defendants submitted in opposition, was necessary to properly apprehend plaintiff's testimony.

PRACTICE POINT: If a picture is worth a thousand words, a video can be worth a million dollars if it can be used to disprove how Plaintiff claims the accident occurred.

Sandoval v 4 World Trade Ctr. LLC
May 6, 2025
Appellate Division, First Department

Plaintiff alleges that he was injured on July 21, 2017, while working on an exterior window washing crew on the roof of a skyscraper at 4 World Trade Center in Manhattan owned by 4 World. On the date of the accident, Plaintiff was employed by Palladium, which had been subcontracted by ABM Janitorial to provide exterior window washing services for the building.

Plaintiff was assigned the role of "third man" for a three-person crew tasked with lowering from the roof in a boom basket to clean the exterior windows. As the third man, Plaintiffs duties included preparing the powered scaffolding apparatus on the roof so his coworkers could wash the windows. This included laying out safety lines, getting water buckets, and plugging the machine into functioning electrical outlets on the roof.

Plaintiff alleges that while walking on the roof and pulling an electrical cable for the machine, he stepped onto a metal grate walkway cover which was wet, and his foot slipped, causing him to fall backward and sustain injuries. Plaintiff had walked over the metal grate platform with no incident prior to pulling the electric cable. Plaintiff did not see that the area was wet before he fell.

The Supreme Court denied plaintiff’s motion for summary judgment on his Labor Law § 241(6) claim, and granted defendants’ motion for summary judgment dismissing the common-law negligence and Labor Law § 200 and § 241(6) causes of action against them.

Labor Law § 241(6) (TPW)

The first Department held that the Supreme Court properly dismissed the Labor Law § 241(6) claim because that statute does not apply to routine exterior window washing.

Labor Law § 200 and Common-Law Negligence (EDA)

The Appellate Division affirmed the Supreme Court finding that defendants established that they lacked actual and constructive notice of the wet metal grille on which plaintiff allegedly slipped and fell

Begnoja v Hudson Riv. Park Trust
May 8, 2025
Appellate Division, First Department

Plaintiff fell from a ladder while insulating ductwork in a ceiling. The Supreme Court granted his motion for summary judgment on his Labor Law §240(1) claim.

The Appellate Division affirmed the Supreme Court finding that Plaintiff established prima facie entitlement to summary judgment by demonstrating that "adequate safety devices to prevent [his] ladder from slipping or to protect [him] from falling were absent". Testimony by plaintiff and a coworker eyewitness established that plaintiff was not provided with any other safety protection except the ladder, which fell along with plaintiff Thus, "the absence of protective devices proximately caused his injuries". Nor was plaintiff required to demonstrate that the ladder was defective to establish prima facie entitlement to summary judgment on his Labor Law § 240(1) cause of action. In opposition, defendants failed to raise a triable issue of fact.

PRACTICE POINT: If an adequate safety device is not provided, it is a prima facie violation and a missing necessary element of sole proximate cause.

Zyskowski v Chelsea-Warren Corp.
May 8, 2025
Appellate Division, First Department

Plaintiff, a carpenter, stepped on a nail while walking along a five-foot-long passageway at a construction site. The Supreme Court denied defendant’s motion for summary judgment seeking dismissal of his Labor Law §200, 241(6), and common-law negligence claims. Plaintiff’s §241(6) claims were predicated upon a violation of 12 NYCRR) §§ 23-1.7(e)(1) and (2).

Labor Law § 241(6) (TPW)

The First Department held that the Supreme Court should have dismissed the Labor Law § 241(6) claim insofar as it was predicated on the first sentence of 12 NYCRR § 23-1.7(e)(1), which provides, "All passageways shall be kept free from accumulations of dirt and debris and from any other obstruction or conditions which could cause tripping" as Plaintiff did not trip on the nail that allegedly injured him. However, the court properly sustained the Labor Law § 241(6) claim insofar as it is based on the second sentence of 12 NYCRR 23-1.7(e)(1), which provides, "Sharp projections which could cut or puncture any person shall be removed or covered." This provision could be applicable, as the nail that injured plaintiff was a sharp projection within the meaning of the regulation. Finally, defendant's reliance on the "integral to the work" doctrine was unpersuasive, as appropriate preventive measures would not have made it impossible for plaintiff to do his work.

Labor Law § 200 and Common-Law Negligence (EDA)

The Appellate Division reversed the Supreme Court finding that the defendant established prima facie entitlement to summary judgment on those claims and plaintiff failed to raise an issue of fact in opposition.

Brito v City of New York
May 13, 2025
Appellate Division, First Department

Plaintiff was performing asbestos removal work on the roof of a residential building in NYCHA's Mariners Harbor complex on Staten Island when the wind knocked over three unsecured panels of galvanized steel fencing onto plaintiff, causing his injuries. Each panel measured 8 feet in height and 8 to 10 feet in length. Together the panels had a combined weight of approximately 150 to 225 pounds.

The Supreme Court granted defendants’ motion for summary judgment dismissing the complaint, denied plaintiff’s motion for summary judgment on his §240(1) claim, and dismissed counterclaims and cross-claims as moot.

The Appellate Division Unanimously reversed the Supreme Court finding that Plaintiff established that at the time the fence panels fell onto him, they were not tied down to a bulkhead or parapet wall or secured by heavy sandbags and/or metal plates. Because of the reasonable possibility that they might topple onto the workspace, the panels required securing for the purposes of the undertaking. Further, plaintiff's evidence demonstrated that the gravitational force generated by the wind-toppled steel fence panels was significant and a proximate cause of his injuries. NYCHA and UCRI failed to raise a triable issue of fact.

PRACTICE POINT: Here the fence panels merely tipped over onto the plaintiff. They did not fall, but they also were not secured for the purposes of the work, a prima facie violation.

Broughton v 553 Marcy Ave. Owners LLC
May 15, 2025
Appellate Division, First Department

Plaintiff, a laborer for a wrecking company, was injured when he was working on a building demolition project. According to the deposition testimony of plaintiff and one of his coworkers, plaintiff was helping to carry building materials across a roof when he fell approximately 20 feet through a hole in the roof to the floor below. Plaintiff's coworker testified that the hole was covered by an unsecured metal sheet that also fell through the hole along with plaintiff.

The Supreme Court denied plaintiff’s motion for summary judgment under Labor Law §240(1), 241(6).

The Appellate Division unanimously affirmed, finding that Plaintiff met his initial burden by showing he was carrying materials on a construction project when he fell through a hole. In opposition, defendants have "raised a triable issue of fact as to whether the accident occurred in the manner described by plaintiff" (Aspromonte v Judlau Contr., Inc., 162 AD3d 484, 485 [1st Dept 2018]). Defendants submitted an affidavit and a report of two experts who "opined that plaintiff's injuries are inconsistent with the alleged fall". Two experts opined that the injuries did not match the description of the accident and that plaintiff's account of the accident "challenges credibility," as "his examination is remarkable for nonphysiologic findings, inconsistencies, symptom magnification, and embellishment." The court however rejected, “defendants' suggestion, based on as yet unproven allegations of fraud in two federal civil RICO actions, that plaintiff may have conspired with his counsel's firm and his medical providers to fabricate his accident and file false insurance and personal injury claims”.

PRACTICE POINT: Experts can create an issue of fact on causation, but any credibility determination will have to be made by a jury.

Labor Law § 241(6) (TPW)

In light of the above, the First Department found that the motion court also properly denied summary judgment on plaintiff's Labor Law § 241(6) claim.

Rivas v Panama Leasing, LLC
May 15, 2025
Appellate Division, First Department

Plaintiff fell from an elevated working platform which did not allow him to reach safely overhead and operate drills to remove old, inoperable globe light fixtures. Plaintiff’s work involved detaching the electrical wires from the old fixture, then re-wiring a new replacement light fixture into place, followed by drilling holes into the canopy's concrete surface to permit screws to affix the new, smaller-size fixture into place and placing a lightbulb cover onto the replacement fixture all while the power was off.

The Supreme Court denied plaintiff’s motion for partial summary judgment on his Labor Law 240(1) claim and granted defendants’ motion for summary judgment dismissing plaintiff’s Labor Law §240(1) and §241(6) claims.

The Appellate Division reversed the Supreme Court and granted Plaintiff summary judgment and denied Panama summary judgment on the claim. Plaintiff's evidence in support of his motion established prima facie that his work, when viewed in totality (see Fitzpatrick v State of New York, 25 AD3d 755, 756-757 [2d Dept 2006]), involved a repair of the canopy's pendent lights that entailed work beyond mere routine maintenance, entitling him to the protections under Labor Law § 240(1). Panama's evidence in opposition failed to raise a triable issue as to plaintiff's Labor Law § 240(1) claim.

PRACTICE POINT: Remember that repairs are covered activities under § 240(1), maintenance is not. Maintenance is proactive, focusing on preventing breakdowns by keeping systems in good working order through regular upkeep. Repair, on the other hand, is reactive, addressing issues after a system has malfunctioned or failed.

Labor Law § 241(6) (TPW)

The First Department held that plaintiff's Labor Law § 241(6) claim was properly dismissed as there was no evidence offered to show his lamp replacement work was undertaken in the context of construction, excavation, or demolition. Moreover, Industrial Code (12 NYCRR) § 23-1.7(d) (slipping hazards) on which plaintiff relied as a predicate for his Labor Law § 241(6) claim, was inapplicable as plaintiff did not slip on an "elevated working surface," but rather, he slipped from the lift's railing, which is not a "working surface".

Solarte v Brearley Sch.
May 15, 2025
Appellate Division, First Department

Plaintiff was injured descending a staircase when a step broke underneath him and caused him to fall.

The Supreme Court denied all defendants’ motions for summary judgment dismissing plaintiff’s common-law negligence, Labor Law §240,241(6), and §200 claims. The Court also denied summary judgment on The Brearley School and E.W. Howell Co., LLC’s claim for contractual indemnification against PAL Environmental Services, Inc (hereinafter PAL) and PAL’s motion to dismiss the claim.

The Appellate Division affirmed the Supreme Court finding that Defendants failed to demonstrate that the injuries plaintiff suffered while descending the staircase were not foreseeable (see Espinosa v Azure Holdings II, LP, 58 AD3d 287, 291 [1st Dept 2008]; Jones v 414 Equities LLC, [*2]57 AD3d 65, 80 [1st Dept 2008]). The fact that the stairwell was a permanent appurtenance does not foreclose plaintiff's claim. Since the stairwell was the only "means of access to his work area, it constituted a safety device within the meaning of the statute" (Conlon v Carnegie Hall Socy., Inc., 159 AD3d 655, 655 [1st Dept 2018]).

Labor Law § 241(6) (TPW)

The First Department held that the Supreme Court also properly denied summary judgment to defendants on the Labor Law § 241(6) claim, to the extent based on Industrial Code (12 NYCRR) § 23-1.7(f). Defendants fail to show that this provision, which "imposes a duty upon a defendant to provide a safe staircase, free of defects," did not apply. Instead, the evidence showed that the step was defective since it broke under plaintiff's foot. The Appellate Division noted, however, that as to any required "continuing inspections" during "hand demolition" (12 NYCRR 23-3.3[c]), plaintiff's testimony shows that inspections of the stairway would not have prevented the accident.

Labor Law § 200 and Common-Law Negligence (EDA)

The Appellate Division reversed the Supreme Court finding that Defendants, owner and construction manager, are entitled to summary judgment dismissing plaintiff's negligence and Labor Law § 200 claims. The testimony in the record, including plaintiff's statements that he observed nothing wrong with the stairs when he ascended and descended several times on the day of his accident, demonstrates that there was no visible or apparent damage to the step that broke as he stepped on it. Thus, any defect with the step was latent so that defendants could not have discovered it upon a reasonable inspection

Indemnity Issues in Labor Law (PCSM)

The Appellate Division held that Defendants were entitled to summary judgment on their contractual indemnification claim finding that the relevant provision in the subcontract evinced an unmistakable intent to indemnify and the plaintiff's injuries arose out of the contract work since he was carrying tools between work areas down the stairs when he suffered an injury.

Vines v Judlau Contr., Inc.
May 15, 2025
Appellate Division, First Department

Plaintiff was struck by an unsecured brick that was dropped by a coworker unloading a hoist on a scaffold above him, which was supported by his foreman's affidavit. Although there was netting around the scaffold, it was inadequate to protect him from the falling brick.

The Supreme Court granted plaintiff’s motion for partial summary judgment on his Labor Law §240(1) claim, and denied defendants’ cross-motions seeking dismissal of the complaint.

The Appellate Division affirmed the Supreme Court. Plaintiff established a statutory violation that was a proximate cause of his injuries through his testimony that he was struck by the brick that was dropped by a coworker unloading a hoist on a scaffold above him. The netting around the scaffold was inadequate to protect him from the brick. Defendants failed to establish that plaintiff was recalcitrant or the sole proximate cause of the accident. Although plaintiff's foreman stated in his affidavit that plaintiff ignored his instruction to move out of the hoist area when it was raised to the scaffold, "an instruction to avoid an unsafe practice is not a sufficient substitute for providing a worker with a safety device to allow him to complete his work safely. Moreover, plaintiff's actions amounted to at most comparative negligence, which is not a defense to a section 240(1).claim

PRACTICE POINT: Warning to avoid an unsafe practice is not a sufficient substitute for providing a worker with a safety device.

McCormick v DiPersia
May 20, 2025
Appellate Division, First Department

Plaintiff was injured when he jumped into an excavated trench to perform his work. Plaintiff testified that the trench was five-to-seven feet deep and that he asked for a ladder to access the bottom of the trench but was told to jump down. Navesink's part owner testified that plaintiff should have been told to use a ladder and indicated that the trench would have been about 36 inches deep. Defendant SLS's incident report described the trench as 3 ½ feet deep and stated as a contributing factor that the "contractor should have had a ladder into excavation."

The motion court denied plaintiff’s motion for partial judgment on his Labor Law §240(1) and 241(6) claims against defendants.

Labor Law § 240(1) (EDA)

The Appellate Division reversed the Supreme Court finding that Plaintiff's descent into the trench constituted an elevation-related hazard within the scope of Labor Law § 240(1) requiring a ladder or ramp for proper protection and that defendants failed to raise a triable issue of fact. The varying depth estimates were irrelevant and the sole proximate cause defense was not available given that plaintiff demonstrated that he was not provided with a ladder.

PRACTICE POINT: This case is another example of the sole proximate cause defense. A defendant has no liability under § 240(1) when plaintiff: (1) had adequate safety devices available, (2) knew both that the safety devices were available and was expected to use them, (3) chose for no good reason not to do so, and (4) would not have been injured had he or she not made that choice. Here, plaintiff was entitled to summary judgment as defendants failed to provide a ladder at all.

Wilson v AC 320 Hotel Partners LLC
May 20, 2025
Appellate Division, First Department

Plaintiff fell from an elevated scaffold through a partially hidden gap where there were no anchor points to tie off a harness or safety railings on the building side of the scaffold.

The Supreme Court granted plaintiff’s motion for summary judgment on his Labor Law §240(1) claim, and granted third-party defendant Rockledge Scaffold Corp.'s motion for summary judgment dismissing defendants AC 320 Hotel Partners LLC, LRR, and Flintlock's third-party claims against it for common-law indemnification, contribution, and contractual indemnification.

Labor Law § 240(1) (EDA)

The Appellate Division affirmed the Supreme Court. It found that since there were no anchor points to tie off a harness or safety railings on the building side of the scaffold, Plaintiff demonstrated a prima facie violation of this provision. It also found that even if the integral-to-the-work defense applied in a Labor Law § 240(1) context and that the gap itself was integral to the work, there is no evidence of any work-related reason for the absence of anchor hooks to tie off a harness or for the presence of the pink Styrofoam partially obscuring the gap. Nor was it clear that there was a work-related reason for the absence of a guardrail. Plaintiff’s failure to keep a lookout was at most comparative negligence and the absence of the safety device prevents a sole proximate cause defense.

PRACTICE POINT: A harness is only one part of a two-part safety device. A defendant must also provide a tie-off location.

Indemnity Issues in Labor Law (PCSM)

The Appellate Division held that Defendants' third-party common-law indemnification, contribution, and contractual indemnification claims against third-party defendant Rockledge were properly dismissed as there was no indication that the accident was caused by or arose out of Rockledge's work or negligence. There was nothing in the record to suggest that Rockledge placed the Styrofoam over the gap or was responsible for installing tie-off anchors. In fact, Rockledge had not been present at the site since the Scaffold was installed, was not contractually responsible for installing tie-off anchors and was not asked by Flintlock to install tie-off anchors. Thus, the lower court’s decision as to summary judgment on the third-party claims was affirmed.

Sarante v Courtlandt Dev., LLC
May 22, 2025
Appellate Division, First Department

Defendant Courtlandt, the premises owner, contracted with defendant AB Capstone to be its general contractor for the construction project. Defendant AB Capstone subcontracted with third-party defendant Gold Lion to reinforce the building's structure with steel beams. Plaintiff was injured while hoisting a heavy steel beam from the basement to the first floor using a chain block pulley system owned by his employer, Gold Lion. The elevated metal poles of the hoist system collapsed, injuring plaintiff.

The Supreme Court granted plaintiff’s motion for partial summary judgment on his Labor Law §240(1) claim and denied defendants’ cross-motion for summary judgement. Plaintiff’s Labor Law §241(6) claim was predicated on a violation of Industrial Code § 23-6.2. The Court also partially granted Courtlandt Development, LLC and AB Capstone Builders Corp.'s cross-motion for summary judgment against Golf Lion Steel, LLC for failure to procure insurance, but denied claims of contractual indemnification.

Labor Law § 240(1) (EDA)

The Appellate Division affirmed the Supreme Court finding that it properly granted plaintiff summary judgment, as the chain block pulley system was a safety device that failed to protect him from the hazard of a falling object, the poles of the device. Courtlandt, AB Capstone, and Gold Lion failed to raise triable issues of fact regarding whether plaintiff's excessive hoisting was the sole proximate cause of the accident based on the testimony that plaintiff pulled the chain at the direction of a Gold Lion foreman. Any such fault on plaintiff's part would only amount to contributory negligence.

PRACTICE POINT: Unlike § 241(6), § 200 and common law negligence, Plaintiff’s comparative negligence is not considered in a § 240(1) case.

Indemnity Issues in Labor Law (PCSM)

The Appellate Division held that the lower court properly denied defendants summary judgment on their contractual indemnification claims against Gold Lion and properly denied Gold Lion's motion for summary judgment dismissing those claims. The Appellate Division found that the Defendants failed to demonstrate that Gold Lion's insurance carrier insures them. In its subcontract, Gold Lion agreed to defend and indemnify defendants for claims or losses arising directly or indirectly from Gold Lion's negligence, recklessness, and willful misconduct in the performance of its work. According to the subcontract and the coverage letter from Gold Lion's insurance carrier, defendants were not additional insureds. In the letter, the carrier agreed to defend defendants based on the "potential for coverage" and further reserved its right to deny coverage for indemnification should there be a determination that Gold Lion is not liable for the loss. The Appellate Division reasoned that an insurer that has paid a claim on behalf of any insured who is only vicariously liable for the loss is entitled to recover the amount paid by way of indemnity from the wrongdoer. Further, as the right to indemnity arises by operation of law when the insurer makes payment to the insured, defendants' right to indemnification had not yet vested.

The Appellate Division found that the lower court properly denied Gold Lion's motion to dismiss defendants' third-party claims for contribution and common-law indemnification as Gold Lion failed to submit competent medical evidence that plaintiff did not suffer a "grave injury" under Workers Compensation Law § 11. Lastly, the Appellate Division affirmed the lower court’s denial of Gold Lion's motion for summary judgment dismissing defendants' third-party claims for failure to procure excess insurance to satisfy the coverage amount required by the subcontract since Gold Lion failed to refute the affidavit of its owner that the company was not covered by the necessary excess insurance on the date of plaintiff's accident.

Skydaniuk v ESRT Empire State Bldg., LLC
May 22, 2025
Appellate Division, First Department

Plaintiff was injured on a renovation project when he tripped and fell down a stationary escalator, which served as the sole means of access between two levels of the construction site. One of DCG's carpenters testified at his deposition that, to protect the escalator, he covered the steps with plastic sheeting and then duct-taped custom-cut Masonite boards to the sheeting. According to plaintiff's deposition testimony, he tripped and fell on the escalator when duct tape got stuck to his boots and he slid on the Masonite.

The Supreme Court denied Plaintiff’s motion for summary judgment on liability on his Labor Law §240(1) claim, and denied the motion of defendant Denko Mechanical, Inc. for summary judgment dismissing the claims of defendants ESRT Empire State Building and DGC Capital Contracting Corp. for contractual indemnification and breach of contract for failure to procure insurance as against it.

Labor Law § 240(1) (EDA)

The Appellate Division reversed the Supreme Court finding that the escalator constituted an enumerated safety device, as it was an elevated surface on which plaintiff was required to work and served as the only way to access his work area (see Rivas v Nestle Realty Holding Corp., 188 AD3d 430, 431[1st Dept 2020] and that defendants failed to provide plaintiff with a proper elevation-related safety device. Defendants failed to raise an issue of fact.

Indemnity Issues in Labor Law (PCSM)

The Appellate Division affirmed the lower court’s denial of Denko's motion for summary judgment dismissing ESRT and DGC's third-party claims for contractual indemnification and breach of contract for failure to procure insurance. The Appellate Division reasoned that the subcontract between Denko and DGC required Denko "[t]o the fullest extent permitted by law . . . to indemnify" defendants for all claims "arising out of or in connection with or as a result of or as a consequence of the performance of the work to be undertaken by" Denko. Since Plaintiff was performing work on its behalf at the time he was injured, the Appellate Division found that Denko failed to establish that the indemnification provision was not triggered. The Appellate Division determined that Denko also failed to establish that it met its insurance procurement obligations of obtaining coverage for ESRT and DGC, as the insurance policy it offered to address that issue was improperly submitted in reply. The Appellate Division noted, however, that Denko was not required to indemnify DGC for DGC's own negligence, which had yet to be determined.

Bowden v Summit Glory Prop. LLC
May 27, 2025
Appellate Division, First Department

Plaintiff' a union carpenter, employed by third-party defendant core contracts to do rough carpentry including plastering and sheetrock work, was injured when he tripped on a portion of unsecured Masonite that covered finished flooring in a hallway of the leased commercial space in Summit's building. Booking, the lessee, hired Marlboro as the general contractor on the buildout of its leased space, and Marlboro had the obligation to install, inspect, and maintain the Masonite floor cover.

The Supreme Court granted plaintiff’s motion for partial summary judgment on his Labor Law §241(6) claim. The court also denied summary judgment on Booking Holdings Inc.’s indemnification claim against Marlboro Group International LLC, and Summit Glory Property LLC’s indemnification claim against Marlboro & Booking. The Court denied all defendant’s motions to dismiss Plaintiff’s complaint and cross-claims.

The First Department held that plaintiffs' evidence, including photographs, deposition testimony, and a video indicating the Masonite was missing tape to hold it securely in place, along with the lack of proof to show when the Masonite was last inspected, established their prima facie entitlement to summary judgment on the Labor Law § 241(6) claim predicated on Industrial Code (12 NYCRR) § 23-1.7(e)(1). In opposition, defendants failed to raise a triable issue of fact. Defendants' argument that the Masonite was integral to plaintiff's work, and thus a defense to his Labor Law § 241(6) claim, was unavailing, as there was no evidence to show the hazardous Masonite condition was inherent to plaintiff's task at hand.

Indemnity Issues in Labor Law (PCSM)

The Appellate Division did find, however, that Summit was entitled to summary judgment on its claim against Marlboro for common-law indemnification, as it established that it will be held vicariously liable without proof of any negligence or actual supervision on its own part. The Appellate Division also found that Summit established prima facie entitlement to summary judgment on its contractual indemnification claim against Booking since the indemnity language in the lease between Summit and Booking obligated Booking to indemnify and hold Summit harmless for liability arising out of the work of its general contractor, Marlboro, where the injury was attributable to the general contractor's negligence. However, the Appellate Division held that Summit's claim against Booking for common-law negligence was properly dismissed, as there was no evidence to indicate that negligence on Booking's part proximately caused plaintiff's injuries.

The Appellate Division held that Summit's contractual indemnification claim against Marlboro should be dismissed as there was no contract between Summit and Marlboro and the language in the general contractor agreement between Booking and Marlboro did not evince an unmistakable intent that Marlboro indemnify Summit. The Appellate Division reasoned that the reference to "Owner" in the Booking/Marlboro indemnification agreement, when reasonably interpreted in the context of such agreement, referred to Booking, since the general contractor agreement referenced Booking (the lessee) as "Owner." The Appellate Division further reasoned that the facts here did not unmistakably demonstrate that Summit was an intended third-party beneficiary of Marlboro's contractual obligations with Booking, even though the "rules" of Booking's lease were appended to the Booking/Marlboro general contractor agreement.

The Appellate Division did find, however, that Summit was entitled to summary judgment on its claim against Marlboro for common-law indemnification, as it established that it will be held vicariously liable without proof of any negligence or actual supervision on its own part. The Appellate Division also found that Summit established prima facie entitlement to summary judgment on its contractual indemnification claim against Booking since the indemnity language in the lease between Summit and Booking obligated Booking to indemnify and hold Summit harmless for liability arising out of the work of its general contractor, Marlboro, where the injury was attributable to the general contractor's negligence. However, the Appellate Division held that Summit's claim against Booking for common-law negligence was properly dismissed, as there was no evidence to indicate that negligence on Booking's part proximately caused plaintiff's injuries.

The Appellate Division found that the indemnity language running from Marlboro to Booking in the Booking/Marlboro general contractor agreement demonstrated that the parties clearly intended that Marlboro would indemnify Booking in such circumstances, and, as such, the indemnification provision should be enforced in Booking's favor.

Lastly, the Appellate Division found that the lower court properly dismissed the third-party action in a prior order and Marlboro did not take an appeal. Since the time to appeal had long since expired, the Appellate Division found Cord to no longer be a party to the action and held that Marlboro could not continue to litigate the third-party claims as against it.

Nyanteh v 590 Madison Ave., LLC
May 29, 2025
Appellate Division, First Department

Plaintiff Chris Nyanteh's accident occurred as he was moving, by himself, an A-frame cart loaded with several heavy metal sheets, when one of the cart's wheels caught on some debris, causing the cart and sheets to tip over and onto him.

The Supreme Court denied third-party defendant/second third-party defendant Eclipse Contracting Corp.'s (Eclipse) motion for summary judgment dismissing, in effect, the third-party complaint and second third-party complaint, and granted that branch of plaintiffs' cross-motion for partial summary judgment on the issue of liability on their Labor Law § 240 (1) claim.

Labor Law § 240(1) (EDA)

The Appellate Division affirmed the Supreme Court finding that plaintiff proved his prima facie entitlement to summary judgment on § 240(1) claim showing the load tipped onto him. That plaintiff may have moved the cart by himself when he was not supposed to amounts, at most, to comparative or contributory negligence. Plaintiff could not have been the sole proximate cause of his accident, since defendants' Labor Law § 240 (1) violation was at least a proximate cause.

Indemnity Issues in Labor Law (PCSM)

The Appellate Division held that Defendant/second third-party plaintiff Shawmut Woodworking & Supply, Inc.'s (“Shawmut”) job order with Eclipse expressly incorporated by reference a prior "universal subcontract" between them, which contained an indemnification clause obligating Eclipse to indemnify "Owner" and Shawmut for claims "arising out of or resulting from any work of and caused in whole or in part by any act or omission of" Eclipse. Thus, this indemnification agreement had both a performance-of-the-work trigger as well as a negligence trigger. Eclipse was not entitled to summary judgment dismissing the third-party contractual indemnification claims because issues of fact remained as to its negligence, particularly as to whether it failed to properly store its A-frame cart and metal sheets by leaving them unattended in another trade's path. However, since the contract documents contain references to both Tourneau and 590 Madison as the "Owner", Eclipse's motion seeking to dismiss 590 Madison's contractual indemnification claim against it was properly denied.

The Appellate Division found that the issues of fact that remained as to Eclipse's negligence also preclude summary judgment dismissing the third-party common-law indemnification and contribution claims against it.

Finally, the Appellate Division held that Eclipse did not establish its prima facie entitlement to summary judgment dismissing the third-party breach of contract claims for failure to procure insurance. Though Eclipse identified the contract provision requiring the procurement of insurance, which required Eclipse to procure commercial general liability insurance with $1 million/$2 million policy limits, $5 million of excess liability coverage, and additional insured coverage for 590 Madison, Tourneau, and Shawmut, Eclipse only produced the endorsement covering additional insureds, and did not establish that it procured the required commercial general liability or excess liability insurance. Thus, the Appellate Division held that the breach of contract claims were properly denied.

Braganca-Ferreira v SREP 10th Ave. Venture LLC
May 29, 2025
Appellate Division, First Department

Plaintiff, an employee of Fitzcon, was injured while walking over a three-foot high pile of wooden beams to transport building material into a construction site. He was carrying the back end of a beam over his shoulder while a coworker supported the front end, and as plaintiff was walking across the pile, the beams beneath his feet suddenly moved, causing him to lose his balance and fall on top of the pile. Plaintiff testified that he received his instructions from Fitzcon, and that it was regular procedure for workers to walk over the pile of loose beams in order to bring building materials into the site.

The Supreme Court granted plaintiff’s motion for summary judgment on his Labor Law 240(1) claim, and denied cross-motion seeking dismissal of his Labor Law §240 claim. The Supreme Court also denied SREP 10^th Ave. Venture LLC’s cross-motion for summary judgment dismissing plaintiff's Labor Law § 200 and common-law negligence claims, and granted defendants' motion for summary judgment on their third-party cause of action for contractual indemnification as against third-party defendant Fitzcon Construction/Ren Corp. to the extent of granting conditional indemnification.

The Appellate Division affirmed the Supreme Court finding that it was regular procedure at the site for workers to walk across a pile of unsecured beams to perform their work, and the unsecured beams moved underneath plaintiff's feet, causing him to fall. In opposition, defendants failed to raise a triable issue of fact. Defendants submitted no evidence supporting their contention that plaintiff was the sole proximate cause of his injury, as the record establishes that plaintiff acted in accordance with regular procedure and the directions of his foreman. In addition, the evidence established that the pile of beams from which plaintiff fell was at least three-feet high, which is not a de minimis height.

PRACTICE POINT: The courts have interpreted the law to mean that a height differential must be significant to trigger 240(1) liability. A height differential considered "de minimis" is not significant enough to warrant the protections of the law. Some cases have considered an 18-inch height differential to be not de minimis, while others have found smaller differentials to be "de minimis". Like Justice Potter describing his threshold test for obscenity in Jacobellis v. Ohio, a court knows it when it sees it.

Labor Law § 200 and Common-Law Negligence (EDA)

The Appellate Division affirmed the Supreme Court finding issues of fact as to whether piles of unsecured building material constituted a recurring dangerous condition that Foundations failed to remedy, thus charging Foundations Group with constructive notice of that condition. The record also established that Foundation Group's construction superintendent routinely inspected the security of delivered material piles if he was present for the delivery, and had previously directed Fitzcon's foreman to fix piles that blocked workers' paths or otherwise endangered anyone.

Indemnity Issues in Labor Law (PCSM)

The Appellate Division held that the lower court properly granted conditional contractual indemnification in favor of Foundation Group as against Fitzcon as the subcontract between Foundation Group and Fitzcon provided that Fitzcon would defend and indemnify Foundations Group for loss from personal injuries and property damage arising from the performance of the work only to the extent that the personal injury or property damage was caused by Fitzcon's "willful misconduct, negligent acts, or omissions." A second provision within the subcontract also provided that Fitzcon would defend and indemnify Foundations Group for all other types of losses arising from the performance of Fitzcon's work "in addition to the indemnification required from Fitzcon" under the first provision. Thus, the Appellate Division found that indemnification in favor of Foundations Group was not limited to loss caused by Fitzcon's culpable conduct. As the Plaintiff's injury arose from the performance of Fitzcon's work and Fitzcon was the entity that directed workers to carry materials into the site, and because plaintiff prevailed on his claim under Labor Law § 240(1) for an injury arising from Fitzcon's work, the Appellate Division upheld the lower court’s granting of summary judgment conditioned on the disposition of the underlying action.

Byrnes v RP1185 LLC
May 29, 2025
Appellate Division, First Department

Plaintiff Thomas Byrnes, a stone derrickman employed by Jemco, was injured when he was forced to jump approximately 15 feet to the ground to avoid being struck by a precast concrete panel as it fell from above him. At the time of the incident, plaintiff was part of a Jemco crew that was installing the panels onto the superstructure of a building owned by RP1185. Global, which designed and manufactured the panels, was a subcontractor of Lendlease, the project's construction manager; Global, in turn, hired Jemco as a subcontractor to install the panels.

The Supreme Court granted Plaintiff’s motion for summary judgment on the issue of liability to the extent it sought judgment on the Labor Law § 200 and common-law negligence claims as against defendant Global Precast Inc., and denied the motion to the extent it sought judgment on the Labor Law § 240(1) claims as against defendants Global, RP1185 LLC, and Lendlease (US) Construction LMB Inc. The Supreme Court also denied Global's motion for summary judgment dismissing plaintiffs' Labor Law §§ 200 and 240(1) claims and for judgment in its favor on its third-party causes of action as against second third-party defendant Jemco Erectors, Inc. for contractual indemnification and breach of contract for failure to procure insurance.

The Appellate Division reversed the Supreme Court finding that plaintiffs' proof on their motion demonstrated that the panel, which was positioned above plaintiff, was inadequately secured. In opposition, defendants failed to raise a triable issue of fact.

PRACTICE POINT: Dualing experts yield questions of fact.

Labor Law § 200 and Common-Law Negligence (EDA)

The Appellate Division affirmed the Supreme Court’s denial of Global's motion for summary judgment, it reversed the Supreme court finding that it should have denied Plaintiff’s motion as well. The record presents issues of fact about what caused the panel to fall, rendering summary judgment against Global inappropriate. Jemco’s expert cited defective design and manufacture. Global’s expert opined that the specifications were adequate, but that improper installation was the cause.

Indemnity Issues in Labor Law (PCSM)

The Appellate Division found that the lower court properly denied the portion of Global's motion seeking summary judgment on its indemnification claim against Jemco. The Appellate Division reasoned that although one of the indemnification clauses in the subcontract contained a savings clause, a grant of conditional indemnity was inappropriate, because the record contained evidence from which a jury could conclude that Global was the sole proximate cause of the accident.

The Appellate Division also found that the lower court correctly denied the portion of Global's motion against Jemco as its breach of contract for failure to procure insurance claim. The Appellate Division pointed out that the Global-Jemco subcontract required Jemco to provide insurance coverage "in connection with [the] subcontract," and Jemco fulfilled this requirement. The Appellate Division rejected Global's argument that Jemco was obliged to obtain coverage that included coverage for the work of material manufacturers and suppliers, as the contract provision Jemco relied on did not state as such. Further, the Appellate Division reasoned that since the subcontract was only for installation of the panels and not their design or manufacture, Jemco was not required to purchase insurance covering the panels' design and manufacture.

Duran v ERY Retail Podium LLC
May 29, 2025
Appellate Division, First Department

Plaintiff fell from an unsecured 12-foot A-frame ladder that suddenly wobbled as he was descending it, causing him to miss a step and fall.

The Supreme Court granted plaintiff’s motion for partial summary judgment on his Labor Law §240(1) claim and denied defendants' motion for summary judgment dismissing that claim.

The Appellate Division affirmed the Supreme Court finding that the facts established prima facie entitlement to summary judgment, and defendants failed to raise an issue of fact. Defendants failed to show that plaintiff was a recalcitrant worker as his failure to maintain points of contact with the ladder is only comparative negligence.

PRACTICE POINT: This raises the Recalcitrant Worker defense. Like Sole proximate cause, it is not enough to just have the appropriate safety equipment available, Plaintiff have been instructed to use it to successfully argue the recalcitrant worker defense.

Cagua v Bushwick Holdings, LLC
May 7, 2025
Appellate Division, Second Department

The plaintiff, an employee of M & C Impact Corp. (hereinafter M & C Impact), allegedly was injured while installing a handrail on a permanent staircase located between the first and second floors of a building in Brooklyn owned by the defendant Bushwick Holdings, LLC (hereinafter Bushwick), through its real estate holding company, the defendant Rabsky Harrison, LLC (hereinafter Rabsky). The defendant Galaxy Developers, LLC (hereinafter Galaxy), served as construction manager for the project.

The Supreme court denied defendants’ cross-motion for summary judgment dismissing common-law negligence and Labor Law §200 and 24(1) and §241(6) based upon a violation of 12 NYCRR 23-2.7(e).

Labor Law § 240(1) (EDA)

The Appellate Division affirmed the Supreme Court finding that the fact that the staircase on which plaintiff fell was constructed as a permanent structure does not remove it from the reach of Labor Law § 240(1).

Labor Law § 241(6) (TPW)

Here, the plaintiff alleged, inter alia, that his injuries were proximately caused by the defendants' violation of 12 NYCRR 23-2.7(e), which requires, in pertinent part, that "[t]he stairwells of temporary wooden stairways and of permanent stairways where enclosures or guard rails have not been erected shall be provided with a safety railing constructed and installed . . . on every open side." The defendants failed to demonstrate, prima facie, that this regulation was inapplicable or not violated, or that the alleged violation was not a proximate cause of the plaintiff's injuries. Accordingly, the Supreme Court properly denied that branch of the defendants' cross-motion which was for summary judgment dismissing so much of the Labor Law § 241(6) cause of action as was predicated upon a violation of 12 NYCRR 23-2.7(e) regardless of the sufficiency of the plaintiff's opposition papers.

Labor Law § 200 and Common-Law Negligence (EDA)

The Appellate Division reversed the Supreme Court finding that the incident related to the means and manner of the work rather than a premises condition. The defendants established, prima facie, that they did not have supervisory authority over the means and methods of the plaintiff's work. In opposition, the plaintiff failed to raise a triable issue of fact.

Canales v Rye Neck Union Free Sch. Dist.
May 14, 2025
Appellate Division, Second Department

On July 10, 2019, the plaintiff, an employee of the third-party defendant Sea Breeze General Construction, Inc. (hereinafter Sea Breeze), allegedly was injured while working at a construction site located at the defendant Daniel Warren Elementary School in Mamaroneck. On the day of the accident, the plaintiff was working as a laborer for Sea Breeze, which was tasked with the demolition and replacement of the roof of the school. According to the plaintiff, he was working on the roof when his Sea Breeze supervisor instructed him to retrieve tools and materials from a Sea Breeze truck, which was parked in the school's parking lot. The plaintiff testified at his deposition that as he was exiting the truck, he slipped on the top step of the truck cab and fell approximately five feet to the ground.

The Supreme Court granted defendants’ motions for summary judgment dismissing plaintiff’s Labor Law §240(1) and 241(6) causes of action, and denied plaintiff’s cross motion for summary judgment.

Labor Law § 240(1) (EDA)

The Appellate Division affirmed the Supreme Court finding that defendants established, that Labor Law § 240(1) was inapplicable to the facts of this case, the plaintiff failed to raise a triable issue of fact in opposition, and the plaintiff failed to establish his prima facie entitlement to judgment as a matter of law on the issue of liability on that cause of action. The approximately five-foot descent from the truck's top step to the ground was not an elevation-related risk for purposes of Labor Law § 240(1) (see Toefer v Long Is. R.R., 4 NY3d 399, 408.

PRACTICE POINT: “Not an elevation risk” is not the same as “de minimus height”. The protections of Labor Law § 240(1) do not encompass any and all perils that may be connected in some tangential way with the effects of gravity'" (Giraldo v Highmark Ind., LLC, 226 AD3d at 876 [internal quotation marks omitted], quoting Nicometi v Vineyards of Fredonia, LLC, 25 NY3d at 97).

Labor Law § 241(6) (TPW)

The Appellate Division held that the plaintiff's deposition testimony that he slipped on the truck's step, established, prima facie, that 12 NYCRR 23-1.7(d) was inapplicable to the facts of this case, as truck steps are not a "floor, passageway, walkway, scaffold, platform or other elevated working surface" within the meaning of that section. Additionally, the defendants established, prima facie, that 12 NYCRR 23-1.7(e)(2), which protects workers from tripping hazards, is inapplicable to the facts of this case, as the plaintiff testified that he "slipped". In opposition, the plaintiff failed to raise a triable issue of fact. Accordingly, the Supreme Court properly granted those branches of the defendants' motion which were for summary judgment dismissing so much of the cause of action alleging a violation of Labor Law § 241(6) as was predicated on violations of 12 NYCRR 23-1.7(d) and (e)(2) insofar as asserted against them and properly denied those branches of the plaintiff's cross-motion which were for summary judgment on the issue of liability on so much of the cause of action alleging a violation of Labor Law § 241(6) as was predicated on violations of 12 NYCRR 23-1.7(d) and (e)(2) insofar as asserted against the defendants.

Pisculli v Tew
May 14, 2025
Appellate Division, Second Department

Plaintiff, while in the course of his employment with A-H Construction, Inc. (hereinafter A-H), as a machine operator in January 2015, sustained injuries at the defendants' facility. The defendants had contracted with A-H to rent a concrete crusher and to utilize the plaintiff's services to operate it. According to the plaintiff, the accident occurred when the bucket of an excavator operated by David Hartmann struck him in the head. The plaintiff asserted, among other things, that the defendants were vicariously liable for Hartmann's alleged negligence and that they were themselves negligent for failing to provide him with a hard hat to perform his work.

The Supreme Court granted defendants’ motion for summary judgment dismissing Labor Law §200 and common-law claims of negligence based upon failure to provide a hard hat but denied defendants’ motions seeking summary judgment premised upon vicarious liability for alleged negligent acts of a nonparty.

Labor Law § 200 and Common-Law Negligence (EDA)

The Appellate Division affirmed the Supreme Court finding that defendants established, that the subject accident was caused by the means and methods of the work and that they did not possess the authority to supervise and control the means and methods of the plaintiff's work at the time of the accident, or have the duty to provide a hard hat. It also found that the Supreme Court properly denied their motion which was for summary judgment dismissing the common-law negligence cause of action as was premised upon the defendants' vicarious liability for the alleged negligent acts of Hartmann. Their motion failed to eliminate triable issues of fact as to the manner in which the accident occurred, including whether it occurred in the manner described by the plaintiff or in the manner described by the defendants' witnesses.

Weekes v Tishman Tech. Corp.
May 14, 2025
Appellate Division, Second Department

The defendant Tishman Technologies Corporation (hereinafter Tishman) was the construction manager with respect to the construction of a building (hereinafter the project) on premises owned by New York City Department of Design and Construction (hereinafter DDC). The plaintiff was employed by AABCO Sheet Metal Co., Inc. (hereinafter AABCO), to perform work on the project's HVAC system. The plaintiff alleges that he was injured in the course of his employment when, while helping dismantle a Baker scaffold belonging to another tradesperson who had been performing separate work on a ceiling, a piece of the scaffold swung and fell on the plaintiff's head.

The Supreme Court denied plaintiff’s motion for summary judgment on Labor Law §240(1) as well as 241(6) predicated upon a violation of 2 NYCRR 23-5.1(h) and granted defendants’ cross-motion seeking dismissal of his §240(1) claim and §241(6) as asserted against Defendant Tishman Technologies Corporation. The Supreme Court also denied plaintiff’s leave to renew his summary judgment motion.

Labor Law § 240(1) (EDA)

The Appellate Division reversed the Supreme Court finding that Tishman was a statutory agent of DDC and was, therefore, potentially liable for the plaintiff's alleged injuries under Labor Law § 240(1). Under the circumstances of this case, the fact that the plaintiff's alleged injuries occurred while he was helping another tradesperson disassemble the other tradesperson's scaffold does not preclude the application of Labor Law § 240(1).

PRACTICE POINT: Work that is ancillary or preparatory to a covered activity is also considered a covered activity (see Gallagher v Resnick, 107 AD3d at 944; see also Mananghaya v Bronx-Lebanon Hosp. Ctr., 165 AD3d 117, 123, 126).

Labor Law § 241(6) (TPW)

The Second Department held that the Supreme Court properly denied that branch of the plaintiff's motion which was for summary judgment on the issue of liability on so much of the cause of action alleging a violation of Labor Law § 241(6) as was predicated on a violation of 12 NYCRR 23-5.1(h), which requires that "[e]very scaffold shall be erected and removed under the supervision of a designated person." The plaintiff failed to establish a violation of that Industrial Code provision and that such alleged violation was a proximate cause of his alleged injuries. However, the court should have denied that branch of the defendants' cross-motion which was for summary judgment dismissing so much of the cause of action alleging a violation of Labor Law § 241(6) as was predicated on a violation of 12 NYCRR 23-5.1(h) insofar as asserted against Tishman. The defendants failed to establish that the alleged violation of that Industrial Code provision was not a proximate cause of the plaintiff's alleged injuries.

Baxter v Jada Constr. & Dev., Inc.
May 21, 2025
Appellate Division, Second Department

On April 4, 2016, while in the process of delivering a prefabricated fireplace to a semi-attached condominium unit under construction, the plaintiff allegedly was injured when he fell due to a slope between two driveways that created a height differential of approximately six to seven inches. At the time of the accident, the defendant Cambridge Heights Holdings, LLC (hereinafter Cambridge), owned the premises. The defendant Jada Construction, Inc., formerly known as Jada Construction & Development, Inc., was the general contractor for the construction project. The plaintiff sued the general contractor under both its present and former name (hereinafter together Jada).

The Supreme Court granted defendants’ motion for summary judgment dismissing plaintiff’s complaint against them asserting causes of action under Labor Law §200 and common-law negligence.

Labor Law § 200 and Common-Law Negligence (EDA)

The Appellate Division reversed the Supreme Court finding that defendant failed to prove that it neither created the dangerous condition nor had actual or constructive notice of its existence.

Cadena v Kupferstein
May 21, 2025
Appellate Division, Second Department

On June 29, 2020, the plaintiff, a carpenter employed by Molding Decor, Inc. (hereinafter Molding Decor), was working on a renovation project at property owned by the defendant Moses Kupferstein. Kupferstein was the sole owner of the defendant BBM Construction Corp. (hereinafter BBM), which was the general contractor on the project and which retained Molding Decor. On the day in question, the plaintiff allegedly was using a table saw to cut a piece of wood when the blade cut off part of one of his fingers.

The Supreme Court denied plaintiff’s motion for summary judgment under Labor Law §241(6) and granted defendants’ motion dismissing the complaint.

The Second Department held that the Supreme Court properly determined that the statutory exemption contained in Labor Law § 241(6) applied to Kupferstein. "Owners of one- or two-family dwellings are exempt from liability under Labor Law § 241(6) unless they directed or controlled the work being performed". "In order for a defendant to receive the protection of the homeowner's exemption, the defendant must show that (1) the premises consisted of a one- or two-family residence, and (2) the owner did not direct or control the work being performed". The phrase "direct or control" is "construed strictly and refers to the situation where the owner supervises the method and manner of the work". "Instructions about aesthetic design matters, or retention of the limited power of general supervision, do not constitute direction or control" within the meaning of Labor Law § 241(6).

However, the Supreme Court should have denied that branch of the defendants' motion which was for summary judgment dismissing the Labor Law § 241(6) cause of action insofar as asserted against BBM. To establish liability under Labor Law § 241(6), a plaintiff must demonstrate that his or her injuries were proximately caused by a violation of an Industrial Code provision that is applicable under the circumstances of the case and we unable to do so based on the given facts.

Montes-Vidal v New York State Thruway Auth.
May 28, 2025
Appellate Division, Second Department

In 2012, the New York State Thruway Auth. (hereinafter defendant) entered into a contract with Tappan Zee Constructors, LLC (hereinafter TZC), for TZC to be the design-builder contractor for the Tappan Zee Hudson River Crossing Project, which sought to demolish the Tappan Zee Bridge and build two new bridges. TZC performed the physical and demolition work on the Tappan Zee Bridge. The defendant's employees were not performing work or directing the demolition work on the Tappan Zee Bridge.

On April 5, 2018, in attempting to reach a portable scaffolding platform underneath the road span of the Tappan Zee Bridge, the claimant, while wearing a safety vest, a harness, and a "retractable yoyo" that attached the harness to the bridge, climbed three or four feet up a support column, lost his grip, and fell, landing on the platform below. The claimant's right foot landed on concrete debris, which slid beneath him and caused him to sustain injuries.

The Supreme Court granted defendants motion for summary judgment dismissing Plaintiff’s Labor Law §200 and §240(1) claims, and his Labor Law §241(6) claim predicated upon a violation of 12 NYCRR 23-1.7(e)(1) and (f), and denied Plaintiff cross-motion for summary judgment on those claims due to its untimeliness.

The Appellate Division affirmed the Court of Claims finding that defendant demonstrated that the claimant was provided with safety equipment, such as a harness and "retractable yoyo," as well as ladders. In opposition, the claimant failed to raise a triable issue of fact as to whether the provided equipment was inadequate or whether the defendant violated Labor Law § 240(1).

The Second Department concluded that the defendant demonstrated, prima facie, that the claimant lost his grip while climbing and slipped on debris on a platform, and did not trip in a passageway. Additionally, the defendant demonstrated, prima facie, that the workers were instructed to use ladders when accessing the portable scaffolding platform and that ladders were available at the work site. In opposition, the claimant failed to raise a triable issue of fact. Accordingly, the Court of Claims properly granted that branch of the defendant's motion which was for summary judgment dismissing so much of the Labor Law § 241(6) cause of action as was predicated upon violations of 12 NYCRR 23-1.7(e)(1) and (f), as they were inapplicable.

Labor Law § 200 and Common-Law Negligence (EDA)

The Appellate Division affirmed the Court of Claims finding that defendant demonstrated that it did not supervise the claimant's work and did not create the debris upon which the claimant slipped. In opposition, the claimant failed to raise a triable issue of fact.

New York Industrial Code Regulations (EDA)

Regulation § 23–1.26 Lead fumes and dust from structural steel.
(c) Cleaning coated surfaces.
(3) Where cleaning is performed with a torch, the person performing such cleaning shall be provided with an approved respirator. Where cleaning is performed by mechanical means, such as in scraping or grinding, the person performing such work shall be provided with an approved respirator.

While there are no cases directly dealing with this subsection, its language is likely specific enough to form the basis of a Labor Law § 241(6) claim, especially with the specific requirement of
an approved respirator.

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Premises Pointers - Volume VIII, No. 12

Fri, 30 May 2025 16:50:42 +0000

Volume VIII, No. 12
May 30, 2025
A Monthly Electronic Newsletter

As a public service, Hurwitz Fine P.C. is pleased to present this monthly newsletter providing summaries of and access to the latest premises liability decisions from the New York State and Federal courts. The primary purpose of this newsletter is to provide timely educational information and commentary for our clients and subscribers. In some jurisdictions, newsletters such as this may be considered Attorney Advertising.

NOTE FROM THE EDITOR:

This edition of Premises Pointers, we’re excited to share a series of updates, promotions and national recognitions throughout our firm.

Promotions in Our Litigation Team
We are proud to announce the well-deserved promotions of Ashley M. Cuneo, Patrice C.S. Melville, and Eric D. Andrew!

Patrice C.S. Melville, a key member of our Melville litigation team, focuses on defending businesses and individuals in complex litigation matters, including premises liability, auto, and New York Labor Law claims.
Ashley M. Cuneo has also played a pivotal role in our Melville office’s growth. Her practice spans general liability defense, including medical malpractice, auto, premises, and Labor Law litigation.
Eric D. Andrew has been a member of Hurwitz Fine’s Labor Law team for nearly a decade. In addition to his work in Labor Law, Eric also focuses on construction accidents, toxic tort/environmental law, and insurance defense matters. Eric is also a longtime contributor of Labor Law Pointers, the group’s monthly publication that goes out to hundreds of industry professionals.

New General Litigation Department Leadership
We are also pleased to announce the appointment of V. Christopher Potenza and David R. Adams as Co-Chairs of our General Litigation Department. Their appointment reflects a shared commitment to exceptional client service and a strategic vision for the future of our litigation practice.

V. Christopher Potenza is a widely respected litigator whose practice includes general liability, product liability, transportation, commercial litigation, medical malpractice defense, and nursing home negligence. He also leads both the firm’s Products Liability Team and Appellate Advocacy Team.
David R. Adams leads the firm’s NYS Labor Law Team and has deep experience in defending complex and catastrophic injury claims. He also founded and leads the firm’s High Exposure/Catastrophic Injury (CAT) Team, which brings together a multidisciplinary group of attorneys and experts to manage high-stakes litigation.

National Recognition: New Organizational Appointments
We’re proud to recognize two of our attorneys who were recently accepted into nationally respected legal defense organizations:

Brian M. Webb has been accepted into the Trucking Industry Defense Association (TIDA), an exclusive organization of attorneys and industry professionals who specialize in the defense of the trucking and transportation sector.
Anastasia M. McCarthy was recently accepted into the National Retail and Restaurant Defense Association (NRRDA), a prestigious organization dedicated to defending retail and hospitality-related claims. This recognition underscores her professional excellence and growing leadership in the industry.

We’re proud of our team’s accomplishments and their continued efforts to deliver the highest level of legal service to our clients!

-Jody

Don’t forget to subscribe to our other publications:

Coverage Pointers: This biweekly electronic newsletter summarizes important insurance law decisions from appellate courts in New York State with the occasional snapshot across borders. Coverage Pointers, the electronic newsletter that started it all, continues to offer guaranteed publication every other Friday, and a read-at-a-glance summary of important decisions as they happen. Contact Dan Kohane at ddk@hurwitzfine.com to be added to the mailing list.

Labor Law Pointers: Labor Law Pointers offers a monthly review and analysis of every New York State Labor Law case decided during the month by the Court of Appeals and all four Departments. This e-mail direct newsletter is published the first Wednesday of each month on four distinct areas – New York Labor Law Sections 240(1), 241(6), 200 and indemnity/risk transfer. Contact Dave Adams at dra@hurwitzfine.com to subscribe.

Medical & Nursing Home Liability Pointers: Medical & Nursing Home Liability Pointers provides the latest news, developments, and analysis of recent court decisions impacting the medical and long-term care communities. Contact Liz Midgley at emm @hurwitzfine.com to subscribe.

Products Liability Pointers: This monthly newsletter covers all areas of products liability litigation, including negligence, strict products liability, breach of warranty claims, medical device litigation, toxic and mass torts, regulatory framework and governmental agencies. Contact Chris Potenza at vcp@hurwitzfine.com to subscribe.

Forward

Retail, Restaurant and Hospitality Happenings Around New York State and Beyond
By: Jody E. Briandi jeb@hurwitzfine.com

5/7/2025          Annabi v. BJ's Wholesale Club, Inc.
New York State, Second Department
Defendants’ duty argument failed on summary judgment because they submitted in sufficient evidence to prove they did not own or control the property at the time of the incident.

The plaintiff commenced an action against Alpine Improvements, LLC and DLC Management Corporation (the defendants) to recover damages for personal injuries allegedly sustained in November 2018 when the plaintiff slipped and fell on snow and ice on real property purportedly owned and managed by the defendants. The defendants moved for summary judgment dismissing the complaint on the ground that their interest in the property terminated when the property was sold at a public auction. As noted by the court, liability for a dangerous condition on real property must be predicated upon ownership, occupancy, control, or special use of the property. The existence of one or more of these elements is sufficient to give rise to a duty of care. The court reasoned that the defendants failed to establish their entitlement to summary judgment because they did not show they were no longer in possession or control of the property at the time of the plaintiff's alleged slip and fall. The Appellate Division reversed the trial court's order granting summary judgment to the defendants, reinstated the complaint against them, and modified the order according.

5/7/2025      Kaufmann v. Starbucks
Supreme Court of New York, New York County
Evidence that the plaintiff collided with someone before falling at a Starbucks location did not negate Starbucks potential liability under an overcrowded theory of negligence.

The court denied Starbucks' motion for summary judgment due to failure to meet its burden of proof. Starbucks failed to establish prima facie that it was not at fault for the accident. The plaintiff's concession that she collided with someone before falling is not determinative of proximate cause.

On July 8, 2021, Kaufman entered a Starbucks store to purchase food and drink. After receiving her order, Kaufman turned to leave, collided with someone, and fell to the floor. Kaufman alleges the store was overcrowded, creating an unsafe condition Starbucks argues Kaufman fell due to collision with another customer, not overcrowding. Kaufman does not know who she collided with or if was more than one person. The court concluded that Starbucks failed to meet its burden for summary judgment by relying on an attorney's affirmation without personal knowledge and a barista's testimony about events she did not witness. The question of proximate cause involving third-party intervention is fact-specific and generally left to the factfinder. There may be more than one proximate cause of an injury, so other parties' potential responsibility does not absolve. The court denied Starbucks' motion for summary judgment in its entirety.

5/7/2024      Kilmetis v. Wal-Mart Stores
United States District Court, Eastern District of New York
The main Walmart witness to the plaintiff’s slip and fall accident at Walmart was permitted to submit to written questions under FRCP 31 in lieu of an in person deposition due to his medical condition.

During discovery, a procedural dispute arose over deposing Colin Jones, a witness to key events that took place after plaintiff’s accident at Walmart. Jones's medical condition, which caused him to miss his deposition, led to the Court's decision to allow a deposition through written questions. Jones was the first on the scene after plaintiff's accident and drafted an incident report, catalogued evidence, preserved video surveillance, took plaintiff's statement, and provided information to Walmart Claims Services. However, Jones suffers from anxiety and panic disorders that are exacerbated by high stress events like depositions. He provided an affidavit and a letter from his treating physician detailing his condition and limitations. Litza Colon, an eyewitness to the accident, was deposed as an alternative witness. The potential testimony of Jones was deemed relevant and not cumulative to the case. Since he sufficiently demonstrated he was likely to endure an undue burden by sitting through an in-person oral deposition due to his medical condition, a deposition through written questions under Federal Rule of Civil Procedure 31 was permitted as an appropriate alternative that balances the need for Jones's testimony with the burden on him.

Labor & Employment for Retailers, Hospitality, and School District Litigation
By: Anastasia M. McCarthy amm@hurwitzfine.com

Dear Readers,

A few labor and employment items to report this month:

First, N.Y. State passed its 2026 budget earlier this month. At $254 billion, the long-awaited budget is the largest in state history. The 2026 budget included legislation that:

Allows striking workers to collect unemployment benefits after a two week waiting period—reduction from the three week waiting period in place before this legislation.
Digitizes youth working papers for young people and their caregivers, schools, and employers and does away with the physical examination requirement previously in place.
Allows the NYS Department of Labor to levy liens, seize financial assets, and issue stop work for judgments arising from unpaid wage theft.
Increases the maximum penalties for illegal child labor violations.
Clarifies available damages (including interest) in frequency of pay cases (if the employees were paid regularly on at least a semi-monthly basis).
Allows resident and fellow physicians in accredited programs (Accreditation Council on Graduate Medical Education accreditation only) to treat injured and ill workers under the supervision of faculty physicians.
Amends NY Worker’s Compensation law to permit Worker’s Compensation Carriers to pay for medical treatment, without accepting liability, for up to one year (beginning January 1, 2027).

At the federal level, the EEOC continues to prioritize its efforts to root out “illegal DEI”, anti-Christian bias and other forms of religious discrimination including antisemitism, “gender ideology”, and national origin discrimination (particularly when it comes to preferences for foreign workers over Americans) in the workplace. A summary of the EEOC’s actions since January, can be read here.

Are You Fall Real? Slip and Fall/Snow and Ice/Storm in Progress/Espinal
By: Patrice C.S. Melville pcsm@hurwitzfine.com

Hi Readers,

Summer is upon us. But, before we start dreaming of warm weather, sandy beaches, and palm trees, check out this month’s snow and ice case featuring a “battle of the experts.” This month’s case involves a slip and fall on ice, which the defendants argued occurred during a storm in progress. Three separate expert reports were submitted during the course of motion practice, but one of them failed to pass muster. This case serves as a reminder that expert reports must be based on more than just speculation or conjecture in order to either support summary judgment dismissal or prevent it. Enjoy the warmer days ahead and always make sure that your expert is, indeed, an expert.

5/21/2025 Grossman v. Bridgeview Holdings, LLC
Appellate Division, Second Department
An expert affidavit that is not supported by the record and is speculative and conclusory is insufficient to defeat a motion for summary judgment pursuant to the “storm in progress” rule.

The plaintiff, who owned and operated a business that was a tenant at a premises owned by Bridgeview Holdings, LLC (“Bridgeview”), slipped and fell on ice in the parking lot of the premises on the morning of February 2, 2015. Bridgeview had contracted with the third-party defendant, W.C.J.L., Inc. (“WCJL”), for snow removal and salting services at the subject property. A winter weather advisory went into effect for the area on February 1, 2015, which did not end until 6:00 p.m. on February 2, 2015. According to weather records, snow began to fall at approximately 10:30 p.m. on February 1, 2015, and continued until February 2, 2015, at approximately 5:00 a.m., when the snow began to change to rain. Approximately three inches of snow fell onto the parking lot of the subject property. The plaintiff arrived at the premises on February 2, 2015, at 8:00 a.m., and parked his vehicle in the parking lot. As he exited his vehicle, the plaintiff noticed ice all over the parking lot and slowly walked across the parking lot before he lost his balance and fell.

The plaintiff filed suit against Bridgeview, who filed a third-party action against WCJL. Bridgeview and WCJL moved for summary judgment dismissing the complaint and third-party complaint, respectively, on the grounds that a storm was in progress at the time of the plaintiff’s accident and that WCJL’s ameliorative efforts during the storm were performed in a reasonable manner. In support of their motions, both Bridgeview and WCJL submitted admissible weather data and the affidavits of their own individual meteorological experts who both opined that there was an ongoing winter storm at the time of the plaintiff’s accident and that the ice and snow the plaintiff slipped on was consistent with the ongoing precipitation event that day.

In opposition to Bridgeview and WCJL’s motions, the plaintiff argued that there was a question of fact as to whether he slipped and fell on old ice that had originated from a prior snowfall on January 27, 2015. Plaintiff submitted his own certified weather reports and the affidavit of his own expert meteorologist who opined that the ice that caused the plaintiff’s accident was formed as a result of the substantial snowfall on January 27, and that the ice “likely” formed because the snow was incompletely removed, “or” returned with drifting on the 28th, “or” that the large snow piles melted and then refroze into ice. The lower court found the plaintiff’s expert report, offering multiple possible causes for the existence of the subject ice, to be speculative since none of the deposition testimony supported the contention that plaintiff slipped on ice that existed prior to the storm in question. The lower court granted the defendants’ motions, and the plaintiff appealed.

On appeal, the Second Department, agreeing with the lower court’s ruling, found that Bridgeview and WCJL met their prima facia showing that there was a storm in progress at the time of the plaintiff’s accident and that the plaintiff’s expert affidavit, not supported by any evidence in the record, was speculative and therefore failed to raise a triable issue of fact.

Slips, Trips, and Legal Shifts: The Latest Retail Slip and Fall New York State Case Updates

By: Elizabeth K. Ognenovski eko@hurwitzfine.com

Hello Readers,

After what has felt like an endless stretch of gray skies and relentless rain, summer is finally making its long-awaited entrance. This month, I have two (2) cases for you. The first case examines whether a party launched a force or instrumentality of harm and the second case dives into a more emotionally charged scenario: an employee’s decision to use deadly physical force as an alleged form of self-defense and whether it was justified.

5/6/2025 Schulman v. Alliance Energy LLC
Appellate Division, First Department
A party can be said to have “launched a force or instrumentality of harm [when] they [have] made the area less safe than it was before they acted”

This action arises from an alleged trip and fall that occurred on a sidewalk in front of American Retro Restaurant and Bar. The plaintiff alleged the incident occurred when his feet became tangled up in a hose from an air machine that was installed adjacent to the sidewalk on the premises of a Mobil gas station. The Mobil was owned by third-party plaintiff Alliance Energy LLC. Third-party defendant Service Station Vending Equipment, Inc. (“SSVE”), installed the air pump at the gas station. Third-party defendant SSVE filed a motion for summary judgment to dismiss the third-party complaint and cross claims against it. The New York County Supreme Court denied the motion.

On appeal, the First Department unanimously affirmed. The Court held SSVE failed to make a prima facie showing that it did not launch a force or instrument of harm by placing a service station's air pump hose in a location adjacent to a sidewalk so that the hose could present a tripping hazard. The Court referenced testimony from the service station’s owner that it was either a mutual decision or the decision of SSVE as to the location of the air pump’s hose. In addition, SSVE’s witness testified that the location was made by both SSVE and the service station that owned the property. The Could further determined “while SSVE argues that plaintiff offers only speculation about the cause of his fall, plaintiff's testimony that he "remember[ed] getting ensnarled [and] tangled," identification of the hose as belonging to the air pump, and the photos of the hose and its placement provides "sufficient facts and circumstances from which causation may be reasonably inferred" and presents an issue of fact.

5/14/2025 Gibbs v. 1429 Food Corp.
Appellate Division, Second Department
Conflicting testimony regarding violent threats and video surveillance which failed to depict a weapon raised a triable issue of fact as to whether a defendant was justified in using deadly physical force against the plaintiff.

This personal injury matter arises from a physical altercation between the plaintiff and the defendant employee who worked at the defendant Kennedy Fried Chicken. The plaintiff allegedly asked the defendant employee for change for a twenty-dollar bill. When the employee told the plaintiff he would not provide change for the bill, a verbal exchange and physical altercation occurred and the plaintiff was struck in his right elbow with a foot-long kitchen knife by the defendant employee. The incident was captured on surveillance and depicts a customer pulling back the plaintiff who began withdrawing from the encounter. The defendant employee then charged toward the counter with a knife and swung/lunged the knife at the plaintiff. The defendants moved for summary judgment to dismiss the complaint and argued that the defendant employee acted justifiably in self-defense by using the knife. The Kings County Supreme Court granted the defendant’s motion. The court issued a judgment, upon the order, in favor of the defendants and against the plaintiff dismissing the complaint.

On appeal, the Second Department reversed. The Court explained that the defendants’ submission “were insufficient to eliminate triable issues of fact as to whether [the defendant employee’s] use of the knife was readily capable of causing death or serious physical injury to the plaintiff, regardless of the degree of injury [the defendant employee] intended or actually inflicted, and thus, constituted the use of deadly physical force.”

The defendant employee testified that he used the knife after being threatened by the plaintiff, who allegedly stated an intent to kill him. However, the plaintiff's account of the incident did not include any such threats and the video evidence failed to indicate that the plaintiff displayed or possessed a weapon. The Second Department held the conflicting accounts raise questions as to whether the defendant employee was the “initial aggressor” in the altercation, as the first person to use or threaten the imminent use of deadly physical force. The Court determined that the evidence presented, including the video and testimony, created triable issues of fact regarding the reasonableness of the defendant employee’s belief that the plaintiff was about to use deadly physical force.

NEWSLETTER EDITOR
Jody E. Briandi
jeb@hurwitzfine.com

ASSISTANT EDITORS
Marc A. Schulz
mas@hurwitzfine.com

Anastasia M. McCarthy
amm@hurwitzfine.com

Patrice C.S. Melville
pcsm@hurwitzfine.com

Ashley M. Cuneo
amc@hurwitzfine.com

Elizabeth K. Ognenovski
eko @hurwitzfine.com

Coverage Pointers - Volume XXVI No. 25

Fri, 23 May 2025 13:43:47 +0000

Volume XXVI, No. 25 (No. 698)
Friday, May 23, 2025
A Biweekly Electronic Newsletter

In some jurisdictions, newsletters such as this may be considered Attorney Advertising.

If you know of others who may wish to subscribe to this free publication, or if you wish to discontinue your subscription, please advise Dan D. Kohane at ddk@hurwitzfine.com or call 716-849-8900.

You will find back issues of Coverage Pointers on the firm website listed above.

Dear Coverage Pointers Subscribers:

Do you have a situation? We love situations.

This newsletter is a labor of our firm’s love of its subscribers. Every two weeks, your editors, all of those who submit columns and letters, set aside time to help you keep abreast of the developments in the field on Insurance Law, not only in New York, but in Connecticut, New Jersey and jurisdictions around the United States and Canada. Without their commitment to you, this publication would not be in your mailbox, like clockwork, for the past 26 years.

A special thank you to Evan Gestwick. Evan is so dedicated to this publication and makes certain that the cats are rounded up each issue, that editing takes place both for this letter and the attached newsletter, and, particularly when I am on the road, as I am today, takes the laboring oar to bring you this publication. Thank you, Evan, for all you do.

Virtual Training Programs to be Announced Shortly

I am really excited about this new development in our office. Many of you have attended the CLE and CE training we’ve provided over the years. But more is coming, on a variety of topics about which we have received requests for help. Our coverage team is working on a schedule of topics, perhaps once a month, which will be offered to our subscribers, friends, and clients. We’ll be covering property insurance, trucking issues (MSC-90 questions), New York coverage training, risk transfer, and so much more. Our subscribers will be the first to learn about it and be able to reserve space for these virtual “lunch and learns.” Watch this space.

I am in the nation’s capital, this week, working with my friends on the PLRB Claims Conference Planning Committee, helping to design next year’s program that will be taking place March 22 – 25, 2026, at the Gaylord National Resort & Convention Center. We were scheduled to be here five years ago, and, in fact, the Planning Committee made it in on Friday, but then the pandemic led to the last moment cancellation. For us, it was the beginning of our 18-month confinement, making it home just in time to lock ourselves in our house. That was the view from the plane’s window as we were coming in to land a Reagan National.

Victoria’s Vision on Bad Faith

We are pleased to introduce Victoria Heist as our newest columnist, covering the bad faith beat. As most of our regular readers know, it is rare that a New York appellate decision considers bad faith issues in New York and even rarer that an appellate court finds an insurer liable for bad faith (how about not since 1998 in New York?). Victoria will corral New York cases and those from around the country and keep you up to date, on a state and national level, on developments on this important topic.

Need a mediator for an insurance dispute? Coverage mediation is a thing! Subject matter expertise may be useful.

Hey coverage lawyers. Hey professionals. Have you and a friend, adversary, or lawyer for whom have respect reached a stalemate on a coverage dispute? Look, we know each other. We know that. We don’t want to litigate every coverage disagreement. Why? Because the position we oppose today may be the one we advocate tomorrow. Face it. We all understand that.

Let me help mediate your disagreement to see if there is some mutual agreement, we can reach that will not box us into a corner. Reach out to me. I will be pleased to mediate your dispute.

My partners, Mike Perley and Ann Evanko, are also available to help resolve other challenges.

You don’t want adverse precedent that will bite you next time you might have a slightly different view on coverage issues. You don’t want to spend tens of thousands of dollars to litigate a coverage issue before a motion judge or appellate justice that knows as much about insurance coverage as you do about nuclear physics. For those in the Western District of New York, I am Court certified and on the WDNY Mediation Panel as are Mike and Ann.

Try mediation.

LinkedIn:

Need a Mediator or Arbitrator, Give a Call:

Newsletters:

We have other firm newsletters to which you can subscribe by simply letting the editor (or me) know, including a new publication, which was created to advise on business and employment law questions:

Premises Pointers: This monthly electronic newsletter covers current cases, trends and developments involving premises liability and general litigation. Our attorneys must stay abreast of new cases and trends across New York in both State and Federal Court and will now share their insight and analysis with you. This publication covers a wide range of topics including retail, restaurant and hospitality liability, slip and fall accidents, snow and ice claims, storm in progress, inadequate/negligent security, inadequate maintenance and negligent repair, service contracts, elevator and escalator accidents, swimming pool and recreational accidents, negligent supervision, assumption of risk, tavern owner and dram shop liability, homeowner liability and toxic exposures (just to name a few!). Please drop a note to Jody Briandi at jeb@hurwitzfine.com to be added to the mailing list.
Labor Law Pointers: Hurwitz Fine P.C.’s Labor Law Pointers offers a monthly review and analysis of every New York State Labor Law case decided during the month by the Court of Appeals and all four Departments. This e-mail direct newsletter is published the first Wednesday of each month on four distinct areas – New York Labor Law Sections 240(1), 241(6), 200 and indemnity/risk transfer. Contact Dave Adams at dra@hurwitzfine.com to subscribe.
Products Liability Pointers: Whether the claim is based on a defective design, flawed manufacturing process, or inadequate instructions/warnings, product liability litigation is constantly evolving. Products Liability Pointers examines recent New York State and Federal cases as well as high court decisions from other jurisdictions, keeping our readers up to date with the latest developments and trends, and providing useful practice tips and litigation strategies. This monthly newsletter covers all areas of product liability litigation, including negligence, strict products liability, breach of warranty claims, medical device litigation, toxic and mass torts, regulatory framework, and governmental agencies. Contact V. Christopher Potenza at vcp@hurwitzfine.com to subscribe.
Medical & Nursing Home Liability Pointers. Medical & Nursing Home Liability Pointers provides the latest news, developments, and analysis of recent court decisions impacting the medical and long-term care communities. Contact Elizabeth Midgley at emm@hurwitzfine.com to subscribe.

New Building for Lloyds – 100 Years Ago:

The Buffalo News
Buffalo, New York
23 May 1925

KING HONORS LLOYDS

LONDON, May 23. – The king and queen, accompanied by Prince Henry, drove in semi-state today to Leavenhall Street where their majesties laid the cornerstone for a new building for Lloyds, the great British shipping, banking, and insurance firm.

Peiper on Property (and Potpourri):

We highlight an interesting decision from the First Department this week. Plaintiff commenced a lawsuit against, in essence, the parent insurance company. Of course, a lawsuit seeking to confirm coverage via breach of contract must be commenced against the company that actually issued the paper. Here, that was a subsidiary company. When counsel realized the mistake, a Supplemental Summons and Amended Complaint was immediately prepared and served. The problem for counsel was that the service of the Supplemental Summons was now beyond the two-year suit limitations period.

On motion to compel acceptance of the Supplemental Summons, the Appellate Division noted that because the parent corporation (and, therefore, the subsidiary corporation) was on notice of the accident, there was no prejudice. The Court then deemed the Supplemental Summons and Amended Complaint timely nunc pro tunc. While counsel avoided dismissal in this instance, the case does underscore the need to identify the entity that actually issued the policy. That party, as outlined by the Appellate Division, is the party against whom relief is sought.

That’s it for the substantive update this week. As we trundle toward what appears to be a wet and unseasonably cool Memorial Day Weekend in our corner of the Country, we will make the best of what the weather gives us. My annual pressure washing marathon can wait until next week. Best wishes to all for a safe and relaxing weekend.

Steve
Steven E. Peiper
sep@hurwitzfine.com

Home Remedy for Worms? – 100 Years Ago:

Buffalo Courier Express
Buffalo, New York
23 May 1925

How to
Keep Well

By. Dr. W. A. Evans

B.M.G. writes: I read an article about pinworm in your column, and I want to tell you a simple remedy that has helped me.

The child should not eat any bread for one month. During this month he should take the following every morning: Garlic cut into small pieces and boiled in a little water for a quarter of an hour and then mix with milk. At 12 o’clock during the night she should take the garlic again (cold or warm). At noon she should take a strong dose of castor oil. Do before eating. Repeat daily for three days. Then wait four days and repeat. Continue this plan for one month exactly so it will never come back. I have had pinworms myself during sixteen years and now I am 22 and do not suffer.

In case repeatedly used enemas of quassia tea or salt solution do not cure it is necessary to take other treatment.

The advice to eat sparingly of sweet and starchy foods is regarded as good. The use of worm medicines by mouth in such difficult cases is also approved of.

I do not know how efficacious garlic is as a worm medicine.

Lee’s Connecticut Chronicles:

Dear Nutmeggers:

It’s been a sad time for my family the past few weeks. My mother was in an accident and, well, she didn’t survive. Luckily, she was her stubborn self, hanging on long enough for her three sons, brother, and husband to assemble by her side. At the end it was peaceful, yet heartbreaking. She was 84 years old. I am hit hardest by the finality of it all—knowing that there are no more conversations, visits, or sharing of her grandchildren’s achievements. The best I can say is that, while she dealt with difficult medical issues, she was in our last conversation the most upbeat she had been in a while. There's definitely some cruel irony there.

But life and insurance coverage go on. This week we watch one Connecticut court grapple with issues of contractual indemnity coverage. The court should have taken Dan Kohane’s risk transfer seminar.

Until next edition, keep on keeping safe.

Lee
Lee S. Siegel
lss@hurwitzfine.com

Spousal Abuse – 100 Years Ago:

Daily News
New York, New York
23 May 1925

WIFE, A PRISONER
FIVER YEARS, FREE;
HUSBAND ON BAIL

Mrs. Kitty Spatolla, the young Irish wife of Anthony Spatolla, 60, Newark gardener, yesterday enjoyed her first day of freedom since her marriage five years ago, while her jealous husband was held in $500 bail for grand jury. Every day of their married life Spatolla had beat her with a club she charged.

Her plight was discovered by women social workers who found her in a two-room apartment at 158 7^th Ave., Newark, the door padlocked, and the windows barred with heavy boards. Mrs. Spatolla said she had never been outside the place since her marriage, that her husband bought her clothing and had given her just five cents in five years.

Ruffner’s Road Review:

Dear Readers,

NBA and NHL playoffs are both at the halfway point, and we are onto the conference championships. I don’t have a team still alive in either, but have gravitated towards rooting for the Minnesota Timberwolves, another team that hasn’t had much success in recent years/decades, which is relatable as a Buffalo sports fan.

I have two cases this week from the world of no-fault. In the first, the insurer moved for summary judgment and in enjoin numerous medical billing actions arising out of the subject motor vehicle accident and denial. The court held against the insurer on both counts, as the insurer did not sufficiently establish its fraud defense nor a basis for the equitable relief sought. In the second case, the court held that the underlying arbitrator appropriately applied collateral estoppel and upheld a Master Arbitration award in favor of the medical provider, as the insurer’s IME report was insufficient to disclaim the subject medical bills based on medical necessity.

Kyle
Kyle A. Ruffner
kar@hurwitzfine.com

Egad. What Will They Think of Next? – 100 Years Ago:

The Chat
Brooklyn, New York
23 May 1925

WOMEN AS JURORS IS PLEA
AT WEST FLATBUSH LEAGUE

SYDNEY M. GTTESMAN MAKES
IMPASSIONED ADDRESS AT
MONTHLY MEETING

SCORE JUDGES ATTIDUDE

Says Fair Sex Would Not Be Moved
By Sentiment – Men Too Often
Shirk Responsibilities

Advocating the advisability of the passage of legislation making possible the serving of women as jurors to obviate the necessity that often arises when litigation must be stopped for the want of the necessary number of talesmen, Sydney M. Gottesman, downtown lawyer and potential County Court candidate from the westerly part of Flatbush League in an address given before them in the Beverly Presbyterian Church, East 8^th street and Beverly road, on Tuesday evening of last week.

Gottesman also took occasion to score the judges of both the Supreme and County Courts who make it a practice of punishing those who serve as jurors by publicly denouncing the verdict in their presence and striking their names from the jury lists so as to disqualify them from further jury duty.

Ryan’s Federal Reporter:

Nothing from me this time. See you in two.

Ryan
Ryan P. Maxwell
rpm@hurwitzfine.com

Oh No! Not That! – 100 Years Ago:

The Ithaca Journal
Ithaca, New York
23 May 1925

Wrote Love Notes: Locked Up.

Norwich, May 23. – Hobbies are hobbies and penchants; but don’t get caught learning to write love letters.

Wilson A. Eccleston, 55, an inmate of the county almshouse, got caught attempting to ferret out the mysteries pf captivating amorous epistles from a book. He was adjudged insane and has been ordered committed to the Binghamton State Hospital.

Eccleston was examined twice at the Norwich Memorial Hospital, where he underwent two operations. It was revealed that he had formed the habit of sitting on verandas engrossed in edifying books on how to write love letters. It is charged that he was also addicted to prowling about homes.

Storm’s SIU:

Hi Team:

One case to report this edition:

Insurer Granted Judgment on Breach of Contract Claim Against Corporate Insured for Unpaid Premium but Precluded from Piercing the Corporate Veil to Recover Against Corporate Officers as it Failed to Show that They Used Their Domination Over the Corporation to Commit Fraud Against the Insurer and that They Intended to Injure It.

Having played lacrosse, I’m Cheering on the Bandits against Saskatchewan in game three of the NLL finals Saturday! If they win, they will be the second team in league history to win three consecutive championships as well as the first NLL team to win seven championships overall. Let’s go Bandits!

B-O-X, B-O-X, to the box, to the box, to the box, box, box, WOOOO!

See you next edition,

Scott
Scott D. Storm
sds@hurwitzfine.com

Maids are Too Important – 100 Years Ago:

Daily News
New York, New York
23 May 1925

No Divorce for Maids on
Employers’ Testimony.

Cincinnati, O., May 22. – Notice was served today that no more divorces would be granted to servants when their employer’s testimony was the chief factor in the case.

Charles W. Hoffman, nationally known divorce judge, refused such a decree today.

“Without reflecting upon the employers’ honesty,” Hoffman said, “a women will do almost anything to keep her servants. Maids are too hard to get—and keep.”

Fleming’s Finest:

Hi Coverage Pointers Subscribers:

This week’s case from the West Virginia Supreme Court considers whether an insurer has to offer underinsured motorist coverage for non-owned vehicles under a commercial automobile policy providing liability coverage for particular owned vehicles and a class of non-owned vehicles.

In other news, I became an auntie this week with the arrival of my niece. Very happy for her parents as they begin this exciting new stage of their lives.

Catch you later,

Kate
Katherine A. Fleming
kaf@hurwitzfine.com

Don’t Spend it All in the Same Pace – 100 Years Ago:

The Buffalo News
Buffalo, New York
23 May 1923

ACTION IS DEFERRED ON
PAY RAISE FOR JURORS

Action by the finance committee of the board of supervisors on the proposal of Supervisor Clergy to increase the pay of jurors from $3 to $5 a day and pay jurors from the towns actual mileage instead of the eight cent a mile allowance, was deferred Friday until budget time in December. It is estimated the cost of putting the resolution into effect will be $100,000/ There is no money available at this time.

Gestwick’s Garden State Gazette:

Dear Readers:

I have been down for the count with a nasty stomach bug, but that’s not going to stop me from writing to you to share the latest on New Jersey coverage action. I hope I am better by Saturday, so I can see my Buffalo Bandits take on the Saskatchewan Rush in Game 3 of the NLL finals. If the Bandits win, it will be their third consecutive league championship, and their seventh overall.

This week’s case explores the less-talked-about second prong of New Jersey’s serious injury threshold. To me, it seems that every time I read or hear about a serious injury threshold case, the question is always whether the claimant met one of the categories of a serious injury. Not this case. The question before the Court was whether plaintiff was able to show that the aggravation of her pre-existing medical conditions was proximately caused by the subject accident. Read on for the full discussion.

See you in two weeks (hopefully with another Bandits championship in hand!)

Evan
Evan D. Gestwick
edg@hurwitzfine.com

200 Years Ago, Today – 100 Years Ago:

The Philadelphia Inquirer
Philadelphia, Pennsylvania
23 May 1925

Insurance against Damage from
FIRE

The trustees of “The Fire Association of Philadelphia,” incorporated by an Act of the Legislature of Pennsylvania, for the purpose of Insuring houses and other buildings, Insure on the most reasonable terms, either perpetually or for a limited period.

On this Association, which is composed of twenty-six Fire Companies, possessing Apparatus, Engines and Hose of very great value, for the extinguishment of fires, the principal security of the city from conflagration depends.

The funds obtained by insurance are designed, first, for the payment of losses to the insured; and secondly, a part of the interest arising from their investment, may be applied for keeping the Fire Apparatus in good order.

For these purposes, the public confidence has hitherto been extended to the Association to an unprecedented extent, and the trustees respectfully solicit a continuation of the public patronage for public benefit.

Applications for Insurance may be made to either of the Trustees, or at the Office, No. 241, Arch Street.

O’Shea Rides the Circuits:

Readers,

Some of you may have heard the collective groan of a city’s championship hopes to flee before its eyes. Indeed, I speak of Toronto and its beloved Maple Leafs. I may be a pariah amongst my fellow Western New Yorkers as an Ottawa Senators fan, both Sabres fans and I both delight in the Maple Leafs misfortune. There is nothing more cherished than a Maple Leafs defeat in the playoffs. Particularly when Leafs fans force one of their most skilled players off the team this coming summer.

This week I have a decision from the Fifth Circuit involving a proof of loss issue. The decision looks to what establishes a “sworn” statement.

Until Next Time,

Ryan
Ryan P. O’Shea
rpo@hurwitzfine.com

Women are Merely Cats – 100 Years Ago:

The Birmingham Post
Birmingham, West Midlands, England
23 May 1925

A NOVELIST’S UTTERANCE ON
WOMEN.

“JUST CATS – BUT CHARMING AND ADORABLE.”

“I sound a great clarion call to every man to put the women back in their place, said Mr. Gilbert Frankau, the novelist, who debated on Thursday that “Woman is a less moral animal than man,” before members of the To-morrow Club at the Central Hall, Westminster.

“Women,” he declared, “are just cats – with no morality.”

“I am going to tell you why I hate you all,” he told his female audience. “Women have no civic conscience, brain power, poise, or anything else. It is a very profound truth that most women have no character at all. The just token of morality is to love your work, and you all hate washing up, sweeping, dusting, and household accounts. No woman is happy unless she is spending money. Most of you are rotten mothers. But you are charming, beautiful, and I adore you. Your only reason for existence is that you are mothers and mates. You bring us into the world and keep us moderately happy while we are there.”

The character of Agnes in David Copperfield was what he called a good woman. She was the sort of woman a man could look up to. Yet if ever there was a cat, she was one as regarded Dora, the modern woman rushed about a tennis court putting man to shame with her furious drives. Where was the glory of her hair? In the wastepaper basket.

“Woman has sharpened her weapons for the sex war,” he said, “and is trying to drive out the lords of creation from their original position as her protectors. Woman is a dangerous animal. She was kept under bars b our ancestors, then under lock and key, and then under petticoats. She has broken the padlocks and defied petticoats, and now she is claiming equality with the finest creature ever made.”

Mrs. Cecil Chesterton, in opposition, said that the trouble with her sex was that woman’s morel sense was too largely developed. Many women made a fetish of washing-up and, although they loved to buy a new hat, they would rather pay the rent.

LaBarbera’s Lower Court Library:

Dear Readers:

Last year, the deer ate all of my outdoor plants within twenty-four hours of planting. Over the past few months, I spent hours researching. Which plants were deer resistant? Which scents deterred deer from grazing? This year, I planned to scatter deer resistant plants, along with strongly scented lavender to keep the deer away. Unfortunately, the deer were not deterred. Sadly, they have already eaten every single flowering plant which I added to the yard (yes – even the lavender).

This week I have a case hot off the press. Evan Gestwick of our office represented ERIE Insurance Company in a petition to stay SUM arbitration brought in Suffolk County. The court ultimately found that SUM coverage had not been triggered, based on the liability limits of the tortfeasor being higher than the insured’s own bodily injury limit. Accordingly, the Court granted ERIE a permanent stay of the SUM proceedings. Congratulations to Evan on the win!

Until next time...

Isabelle
Isabelle H. LaBarbera
ihl@hurwitzfine.com

Scopes Trial to be Broadcast – 100 Years Ago:

Buffalo Courier
Buffalo, New York
23 May 1925

EVOLUTION TRIAL
TO BE BROADCAST

Dayton, Tenn., May 22. – Every word uttered in the courtroom in the trial of J.T. Scopes, arrested on the charge of teaching evolution in a public school in violation of the state’s newly enacted law, will be broadcast through loudspeakers so that all who wish may hear. The trial will begin about the middle of June.

William Jennings Bryan, who will take the part in the prosecution, wired the state’s attorneys today that he would come here to confer with them regarding the case when he completes his present speaking engagements.

Lexi’s Legislative Lowdown:

Dear Readers,

I am looking forward to spending the long Memorial Day weekend in Martha’s Vineyard before heading to Monticello to attend NYIA’s 2025 Annual Conference.

This week we discuss S5342 which would permit the use of telematic devices for auto insurers in New York.

Thanks for reading,

Lexi
Lexi R. Horton
lrh@hurwitzfine.com

Victoria’s Visions on Bad Faith:

Dear Readers,

Very excited to officially make my Coverage Pointers debut after being a long-time reader.

This Memorial Day weekend/week is a busy one. Bridal shower Saturday followed by an evening flight to JFK, Beyoncé concert Sunday, then getting back on a plane to go to Norfolk, Virginia, to visit my sister and attend her medical laboratory science white coat ceremony.

Have a great Memorial Day weekend,

Victoria
Victoria S. Heist
vsh@hurwitzfine.com

Such a Deal! – 100 Years Ago:

Buffalo Courier
Buffalo, New York
23 May 1925

North of the Border:

The world beyond our borders churns with relentless upheaval—Gaza remains trapped in devastating conflict while diplomatic efforts strain toward an elusive ceasefire in Ukraine, trade wars flare with the specter of renewed tariffs, and political rhetoric swirls around provocative notions of territorial expansion.

Yet within the intimate radius of daily life, a different rhythm persists. A grandson approaches his third birthday with all the wonder that milestone brings, while his cousin prepares to celebrate two years of discovering the world around her. The earth itself offers its own gentle counterpoint to global chaos as winter's grip finally loosens, and the last threat of frost retreats enough to allow hands to return to the ancient, soul restoring act of planting. Hope and healing often begin in the most personal spaces, where new life takes root and children mark time not in news cycles but in birthday cake and the love of family.

My article this week describes a unique builders’ risk policy that has a unique result.

Heather
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
hasanderson@sanderson-law.com

Headlines from this week’s issue, attached:

KOHANE’S COVERAGE CORNER
Dan D. Kohane
ddk@hurwitzfine.com

Indemnity Ordered Under Indemnity Agreement but Not for Indemnitee’s Own Negligence, under GOL 5-322.1

Until Indemnity Obligations are Resolved, too Early to Dismiss Claims Based on Anti-Subrogation Rules
Billion Dollar Pro Se Claim Against Liability Insurer Dismissed where Claimant has No Privity

PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
sep@hurwitzfine.com

Amended Complaint to Name the Correct Underwriting Company Deemed Timely Filed and Served Nunc Pro Tunc
Failure to Update Business Address with Secretary of State is Insufficient to Excuse Default

LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
lss@hurwitzfine.com

Court Considers Application of Various Exclusions to Both CGL Coverage and Contractual Liability Coverage

RUFFNER’S ROAD REVIEW
Kyle A. Ruffner
kar@hurwitzfine.com

Insurer Failed to Establish Fact or Founded Belief of Non-Accidental Loss as a Matter of Law
Court Finds Collateral Estoppel was Properly Applied to Arbitration, Denies Insurer’s Motion to Vacate Award

RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
rpm@hurwitzfine.com

Nothing from me this time. See you next time!

STORM’S SIU
Scott D. Storm
sds@hurwitzfine.com

Insurer Granted Judgment on Breach of Contract Claim Against Corporate Insured for Unpaid Premium but Precluded from Piercing the Corporate Veil to Recover Against Corporate Officers as it Failed to Show that They Used Their Domination Over the Corporation to Commit Fraud Against the Insurer and that They Intended to Injure It

FLEMING’S FINEST
Katherine A. Fleming
kaf@hurwitzfine.com

Statute Does Not Require Commercial Automobile Insurance Policy Insuring Certain Owned Vehicles and a Class of Non-Owned Vehicles for Liability Protection to Offer the Named Insured Underinsured Motorist Coverage for the Class of Non-Owned Vehicles

GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
edg@hurwitzfine.com

Verbal Threshold Not Satisfied Absent a Showing of Proximate Cause

O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
rpo@hurwitzfine.com

Unnotarized Sworn Statement in Proof of Loss that Also Fails to Comply With 28 U.S.C. 1746’s Perjury Requirements is Invalid Under Standard Flood Policy

LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
ihl@hurwitzfine.com

SUM Arbitration Permanently Stayed as Tortfeasor’s Liability Coverage was Greater than Respondent’s Bodily Injury Limits

LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
lrh@hurwitzfine.com

S5342 Seeks to Permit the Use of Telematics or Usage-Based Insurance for Private Passenger or Commercial Automobile Insurance Policies in Certain Circumstances

VICTORIA’S VISION ON BAD FAITH
Victoria S. Heist
vsh@hurwitzfine.com

Supreme Court (Lower Cout) Finds Insurer Failed to Act in Good Faith and Fair Dealing After Employing “Wait-and-See" Strategy in Claims Handling

NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
hasanderson@sanderson-law.com

Depending Upon the Wording, a “Mere” Supplier May Be Entitled to Coverage Under a Builders’ Risk/Course of Construction Policy

Enjoy the long weekend.

Remember why we celebrate.

Dan

Hurwitz Fine P.C. is a full-service law firm providing legal services throughout the State of New York and providing insurance coverage advice and counsel in Connecticut and New Jersey.

NEWSLETTER EDITOR
Dan D. Kohane
ddk@hurwitzfine.com

ASSOCIATE EDITOR
Agnes A. Wilewicz
aaw@hurwitzfine.com

COPY EDITOR
Evan D. Gestwick
edg@hurwitzfine.com

INSURANCE COVERAGE/EXTRA CONTRACTUAL LIABILITY TEAM
Dan D. Kohane, Chair
ddk@hurwitzfine.com

Steven E. Peiper, Co-Chair
sep@hurwitzfine.com

Michael F. Perley

Agnieszka A. Wilewicz

Lee S. Siegel

Brian F. Mark

Scott D. Storm

Ryan P. Maxwell

Kyle A. Ruffner

Katherine A. Fleming

Evan D. Gestwick

Ryan P. O’Shea

Isabelle H. LaBarbera

Lexi R. Horton

Victoria S. Heist

FIRE, FIRST PARTY AND SUBROGATION TEAM
Steven E. Peiper, Team Leader
sep@hurwitzfine.com

Michael F. Perley

Scott D. Storm

NO-FAULT/UM/SUM TEAM
Dan D. Kohane
ddk@hurwitzfine.com

Ryan P. O’Shea
rpo@hurwitzfine.com

Kyle A. Ruffner
kar@hurwitzfine.com

APPELLATE TEAM
Jody E. Briandi, Team Leader
jeb@hurwitzfine.com

Topical Index

Peiper on Property and Potpourri
Lee’s Connecticut Chronicles

Ruffner’s Road Review

Ryan’s Federal Reporter

Storm’s SIU

Fleming’s Finest

Gestwick’s Garden State Gazette

Victoria’s Vision on Bad Faith

LaBarbera’s Lower Court Library

Lexi’s Legislative Lowdown

KOHANE’S COVERAGE CORNER
Dan D. Kohane
ddk@hurwitzfine.com

05/22/25 Skydaniuk v. ESRT Empire State Building, LLC
Appellate Division, First Department
Indemnity Ordered Under Indemnity Agreement but Not for Indemnitee’s Own Negligence, Under GOL 5-322.1

The First Department found that a fall down a stationary escalator was a Labor Law 240(1) claim and summary judgment should have been granted to the Supreme Court properly denied Denko’s motion for summary judgment dismissing The owner and GC brought a third party action for contractual indemnity and failure to procure against the plaintiff’s employer, Denko. The subcontract between Denko and the general contractor required Denko “[t]o the fullest extent permitted by law . . . to indemnify” defendants for all claims “arising out of or in connection with or as a result of or as a consequence of the performance of the work to be undertaken by” Denko.

Plaintiff was performing work on its behalf at the time he was injured. Thus, Denko failed to establish that the indemnification provision was not triggered. Denko failed to establish that it met its insurance procurement obligations of obtaining coverage for ESRT and DGC, as the insurance policy it offered to address that issue was improperly submitted in reply.

However, Denko is not required to indemnify the GC’s own negligence, which has yet to be determined (see General Obligations Law § 5-322.1].

05/22/25 Sarante v. Courtlandt Development, LLC
Appellate Division, First Department
Until Indemnity Obligations Are Resolved, too Early to Dismiss Claims Based on Anti-Subrogation Rules

Courtlandt, the premises owner, contracted with defendant AB Capstone to be its general contractor for the construction project. AB Capstone subcontracted with Gold Lion to reinforce the building’s structure with steel beams. Plaintiff alleges that he was injured while hoisting a heavy steel beam from the basement to the first floor using a chain block pulley system owned by his employer, Gold Lion.

The elevated metal poles of the hoist system collapsed injuring plaintiff. The court properly granted plaintiff partial summary judgment on his Labor Law § 240(1) claim.

As to Courtlandt’s third-party claims for contractual indemnification against Gold Lion, the court properly denied defendants summary judgment on their contractual indemnification claims against Gold Lion and properly denied Gold Lion’s motion for summary judgment dismissing those claims.

Courtlandt did not demonstrate that Gold Lion’s insurance carrier insures them. In its subcontract, Gold Lion agreed to defend and indemnify defendants for claims or losses arising directly or indirectly from Gold Lion’s negligence, recklessness, and willful misconduct in the performance of its work. According to the subcontract and the coverage letter from Gold Lion’s insurance carrier, defendants are not additional insureds at the present time.

In the letter, the carrier agreed to defend defendants based on the “potential for coverage” and further reserved its right to deny coverage for indemnification should there be a determination that Gold Lion is not liable for the loss. “As a rule, an insurer that has paid a claim on behalf of any insured who is only vicariously liable for the loss is entitled to recover the amount paid by way of indemnity from the wrongdoer. The right to indemnity “arises by operation of law when the insurer makes payment to the insured” (id. at 294). Therefore, defendants’ right to indemnification has not been vested.

Furthermore, given that Gold Lion’s sole argument is based on the mere future possibility of the anti-subrogation rule’s application, the court also properly denied summary judgment dismissal of the claim based on the carrier’s uncertain duty to defend or indemnify defendants.

The court properly denied Gold Lion’s motion for summary judgment dismissing defendants’ third-party claims for failure to procure excess insurance to satisfy the coverage amount required by the subcontract. Gold Lion failed to refute the affidavit of its owner that the company was not covered by the necessary excess insurance on the date of plaintiff’s accident.

05/19/25 Cincinnati Ins. Co. v. Kan. State Univ. Found.
United States District Court for the District of Kentucky
Billion Dollar Pro Se Claim Against Liability Insurer Dismissed Where Claimant Has No Privity

OK, I had little else on which to report, so I searched low and high for a decision.
The Cincinnati Insurance Company, Inc. seeks a declaratory judgment that it is not obligated to defend or indemnify Kansas State University Foundation (“KSUF”) in a lawsuit filed by Forrest L. Geist. In the underlying lawsuit, Mr. Geist alleged that KSUF and others misappropriated trade secrets because Kansas State University’s 105 initiative had copied his business plan for a statewide network of 105 ag-tech campuses.
Earlier, the District Judge dismissed Mr. Geist’s claims against KSUF which was affirmed on appeal.

Plaintiff and KSUF stipulated to dismiss without prejudice all claims between them under Rule 41(a)(1). Mr. Geist did not sign the joint stipulation of dismissal without prejudice, so the Court directed the Clerk to reopen the case as to plaintiff’s claims against Mr. Geist.

Cincinnati asked the Court to dismiss the complaint against Mr. Geist under Rule 41(a)(2), noting that it included Mr. Geist as a defendant in this case because he could have an interest in the outcome of the declaratory judgment action. The Court has held that plaintiff met its duty to defend KSUF in the underlying lawsuit. Because KSUF prevailed in the underlying action, Mr. Geist cannot establish that he has any interest in this declaratory action between Cincinnati Insurance and KSUF.

Mr. Geist asserted that Cincinnati Insurance’s policy did not prohibit his counterclaim for some one billion dollars, which remains until he settles or the Court resolves the claim. Contrary to Mr. Geist’s assertion, he has not asserted a counterclaim for money damages. In any event, Mr. Geist does not explain how he can assert a contractual claim against Cincinnati Insurance under a policy which it issued to KSUF. As an injured party and absent a judgment against KSUF, Mr. Giest cannot assert a direct claim against Cincinnati Insurance.

PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
sep@hurwitzfine.com

Property

05/14/25 Sealey v. National Gen. Ins. Co.
Appellate Division, Second Department
Amended Complaint to Name the Correct Underwriting Company Deemed Timely Filed and Served Nunc Pro Tunc

Plaintiff previously secured a homeowner’s policy, CastlePoint. In 2015, plaintiff’s coverage was changed from Castlepoint to MIC General Insurance Company (“MIC”). This was a decision made not by plaintiff, but by Castlepoint and MIC’s parent corporation, National General. In July of 2017, plaintiff received further communication from National General which stated, “welcome to National General.” That letter also accompanied a policy of insurance that was issued on MIC General paper. On March 15, 2018, plaintiff sustained a water loss to her premises, and MIC denied coverage. Later, National General issued a second letter further denying the claim on behalf of MIC.

Plaintiff commenced suit on March 11, 2020, against National General only. The matter was duly served on National General in July of 2020. Thereafter, in November of 2020, plaintiff filed a Supplemental Summons and Amended Complaint seeking to pursue coverage not from National General, but rather from MIC who had issued the actual policy under which coverage was sought. MIC received the Complaint and immediately moved to dismiss pursuant to the two-year suit limitation clause. Plaintiff, in turn, moved to have the Amended Complaint deemed timely served or, in the alternative, deemed the complaint served nunc pro tunc.

In review, the Court noted that a motion to cure a misnomer should be granted where (1) there is evidence that the correct defendant was aware of the suit and (2) there is no prejudice to the correct defendant if the lawsuit proceeds. In essence, the Court ruled that there was no prejudice to MIC as it was aware the suit was filed referencing the MIC policy number and the date of loss.

Potpourri

05/15/25 State Farm Mut. Automobile Ins. Co. v. Torres-Jimenez, M.D.
Appellate Division, First Department
Failure to Update Business Address With Secretary of State Is Insufficient to Excuse Default

Plaintiff moved to vacate a default judgment obtained by State Farm. Plaintiff’s motion failed where, as here, he could not establish an actual “lack of notice.”

Defendant argued that he had not received notice because he did not regularly check mail at the location given to the New York Secretary of State. However, he was unable to establish that the address did not belong to him or that he could not receive mail at that location. Further, he did not establish that the address on file with the Secretary of State was incorrect or no longer valid. Finally, he provided no indication of what his procedures were for handling mail sent to the address in question to explain his delay in appearing.

On this Record, the Court found that defendant could not excuse his failure to appear, and the motion to vacate was denied.

LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
lss@hurwitzfine.com

05/07/25 Utica First Ins. Co. v. E&J Pro. Painting, LLC
Superior Court of Connecticut, Hartford
Court Considers Application of Various Exclusions to Both CGL Coverage and Contractual Liability Coverage

In a dispute between Utica First and its putative additional insured, Stellar Painting, known by its trade name CertaPro, the Court examined various coverage exclusions implicated by an accident to an employee.

CertaPro solicited painting jobs and subcontracted part of the work to E&J. The subcontract required E&J hold it harmless for all claims. “In the event a claim is made against [CertaPro] by an employee of [E&J], [E&J] hereby waives its immunity, if any, as a complying employer under applicable workers’ compensation law, to the extent that such immunity would otherwise prohibit [E&J’s] indemnification of [Stellar] for any claim made by [E&J’s] employees against [CertaPro].” The subcontract also required E&J to name CertaPro as an additional insured.

An E&J employee claimed that he was injured on a job and sued the homeowner. The homeowner sued CertaPro for common law indemnification and the employee amended the complaint to include CertaPro as a defendant. CertaPro then sued E&J for contractual indemnification and failure to procure.

The actions were tendered to Utica First, which timely denied coverage. Utica First then brought this declaratory judgment action seeking to enforce the Cross Liability Exclusion, the Employee Bodily Injury Exclusions, the Workers’ Compensation Exclusion, and the Contractual Liability Exclusion. Let’s see how it made out.

Cross Liability Exclusion

The provision reads: “‘We’ do not pay for ‘bodily injury’ . . . to an ‘insured.’” The dispute was whether the exclusion bars contractual liability as well as bodily injury. Utica First contended that the plaintiff was an insured and the exclusion eliminates all coverage related to his claim for bodily injuries. CertaPro contended that the exclusion clearly only applies to bodily injury and does not apply to its rights under the contractual liability coverage. It posited that the underlying claims against it were not for bodily injury but rather for indemnification, which are economic losses.

The court found that the genesis of the contractual claims is the bodily injury claim to an insured, i.e., the injured employee. “Based on the caselaw discussed above and the language of that amended third-party complaint against E&J [buy CertaPro], the cross liability exclusion bars the bodily injury coverage provided by the policy.” The court granted Utica First summary judgment as to both E&J and CertaPro under the exclusion.

The cross liability exclusion bars coverage for CertaPro under the commercial liability coverage for bodily injury. It does not apply, however, the court concluded to the contractual liability coverage.

Employee Bodily Injury Exclusion

The Utica First policy contained a typical employee injury exclusion, regardless of the capacity the insured is sued. The exclusion was not found to be applicable to CertaPro as an additional insured, because it was not the employer. The court relied on the severability clause to defeat the carrier’s argument that the exclusion applies where the ‘insured’ is liable either as an employer or in any other capacity. The exclusion also failed as to E&J because of the insured contract exception.

The Workers’ Compensation Exclusion

Although the exclusion applies to bar any bodily injury coverage for E&J, the exclusion does not apply to CertaPro, the court wrote. There were no allegations that CertaPro had a workers’ compensation policy that paid benefits to the employee for his bodily injuries. “Applying the separate interests clause to this exclusion, as this court must do because it uses the language “the insured,” the court finds that it does not bar coverage for [CertaPro] for these claims.”

Contractual Liability Exclusion

This one the court made quick work of, finding that it did not apply to claims of negligence, in addition to the insured contract exception.

Insured Contract Liability Coverage

In addition to the commercial liability coverage for bodily injury, Utica First’s policy provided a supplemental coverage called contractual liability coverage. As relevant, that coverage provision states:

1. ‘We’ cover ‘bodily injury’ . . . liability which is assumed under the following contracts or agreements:

. . .

f. any part of any other contract of agreement relating to the conduct of ‘your’ business ... under which ‘you’ assume tort liability to pay ‘damages’ because of ‘bodily injury’ .... Tort liability means a liability that would be imposed by law in the absence of any contract or agreement.

The court held that there was no coverage to CertaPro for the homeowners’ claim. “The evidence also demonstrates that there was no contractual provision requiring [CertaPro] to assume tort liability behalf of the Ganeshes. Therefore, the contractual liability coverage does not apply to the[ir] against [CertaPro].” Further, the court noted that you and your only mean the named insured, not the additional insured.

However, the court held that there is the potential for a defense for E&J for CertaPro’s claims under the insured contract provision.

A copy of this opinion is available upon request.

RUFFNER’S ROAD REVIEW
Kyle A. Ruffner
kar@hurwitzfine.com

05/12/25 Lancer Ins. Co. v. Thompson
Supreme Court, Nassau County
Insurer Failed to Establish Fact or Founded Belief of Non-Accidental Loss as a Matter of Law

The Plaintiff insurer moved for Motion for Summary Judgment against numerous Healthcare Provider Defendants, seeking a declaration that (1) the subject incident was not a covered event; (2) the Individual Defendants made material misrepresentation of fact in the presentation of the claims; and (3) multiple claimants violated the applicable policy of insurance and the No-Fault Regulation by failing to submit to an Examination Under Oath.

The insurer contended that the Defendants engaged in a staged motor vehicle accident. The Plaintiff conducted examinations under oath (“EUO”) for the defendants involved in the subject motor vehicle incident and argued the EUO testimony raised significant questionable conduct associated with no fault motor vehicle fraud. The insurer took into consideration EUO testimony which established that that the occupants of the subject vehicle were unrelated and apparently did not know one another prior to the accident but sought medical treatment at the same clinic and retained the same personal injury attorney. Further, the Plaintiff also sought summary judgment on claims made by other Defendants involved in the incident based upon their alleged failure to appear for EUOs.

The court found the EUO testimonies did not conclusively establish that the encounter between the two motor vehicles was intentional or non-accidental, and while raising “red flags”, the EUO testimony did not rise to the level of establishing a non-accidental loss as a matter of law. The accident was reported to the police and was documented in a police report, and there was no independent corroborative evidence presented to the Court, such as through eyewitnesses or others with actual knowledge of the accident, which tends to prove that the motor vehicle encounter herein was an intentional loss.

With respect to the defendants who failed to appear for EUOs, the court stated the No-Fault Regulation provides there shall be no liability on the part of the no-fault insurer if there has not been full compliance with the conditions precedent to coverage. Thus, defendants’ failure to attend the EUOs is a violation of a condition precedent to coverage that may vitiate the policy. (Hertz Corp. v Active Care Med. Supply Corp., 124 AD3d 411 , 411 [1st Dept 20 I 5]). However, an insurance company employee without personal knowledge that a claim form had been mailed to a provider and who makes conclusory representations as to the company’s office practices cannot establish as a matter of law that the insurer followed office practices geared to ensure the likelihood that denial of claim forms were always properly addressed and mailed. Accordingly, the court held the insurer failed to establish that its denial of claims for no-fault insurance medical payments was in fact timely mailed to the medical providers in conformity with no fault regulation.

Therefore, the court held the insurer did not establish a basis for equitable relief in the form of enjoining and staying numerous medical billing actions in multiple different Civil Courts within the five boroughs. The court explained that each individual dispute is subject to establishing compliance with the no fault regulations regarding denial and the processing of claims, including but not limited to the proof of proper and timely mailing of the NF-10 denial of claim forms. Additionally, while the EUO testimonies raised “red flags” regarding possible motor vehicle insurance fraud, the insurer did not sufficiently establish the claimants’ participation in staging a motor vehicle accident. As such, the insurer’s summary judgment motion, as well as their claim for injunctive relief in staying the medical providers’ claim, were denied.

05/02/25 Am. Trans. Ins. Co. v. Corona Chiropractic, PC
Supreme Court, New York County
Court Finds Collateral Estoppel Was Properly Applied to Arbitration, Denies Insurer’s Motion to Vacate Award

The insurer issued an automobile policy with a no-fault endorsement to its insured Sam Jalilov, which was in effect when non-party Maria Rodriguez was involved in a motor vehicle accident. After the accident, Rodriguez sought treatment from the respondent medical provider, which sought reimbursement for services rendered. The claim was denied by the insurer based on an independent medical examination, and the parties proceeded to arbitration. The arbitration was decided by in favor of the provider and the award was upheld by a Master Arbitrator.

The arbitrator based the award on the doctrine of collateral estoppel, finding that the medical necessity of the treatment had already been determined in another arbitration between the insurer and provider, where it was found that the IME defense was insufficient based on contemporaneous medical records that showed Rodriguez needed further medical treatment. Therefore, payment was owed on the bills denied solely based on the IME. In this matter, the insurer argued that collateral estoppel was not applied correctly and asked this Court to vacate the arbitration.

In the context of no-fault arbitrations, an arbitrator’s decision will not be vacated where it is rationally. In this case, the court found that the master arbitrator’s affirmance of the lower arbitrator’s award was not irrational, nor did it ignore binding law. Further, the court found that collateral estoppel principles apply to awards in arbitration just as they do to adjudications in judicial proceedings, and that in this case the principles of collateral estoppel were properly applied.

Collateral estoppel applies when (1) the issues in both proceedings are identical, (2) the issue in the prior proceeding was actually litigated and decided, (3) there was a full and fair opportunity to litigate in the prior proceeding, and (4) the issue previously litigated was necessary to support a valid and final judgment on the merits. The litigant seeking the benefit of collateral estoppel must show that the decisive issue was necessarily decided in the prior action against a party, or one in privity with a party, while the party to be precluded bears the burden of demonstrating the absence of a full and fair opportunity to contest the prior determination.

Here, there was no dispute that the dispositive issue in both proceedings was identical, whether the insurer’s IME report provided sufficient basis to disclaim the subject medical bills related to the claimant’s chiropractic treatment. Further, the court confirmed that the issue in the prior arbitration was litigated and decided and there was no dispute that the parties had a full and fair opportunity to litigate the issues in arbitration, as the validity of the IME defense was central to the arbitration decision. The insurer relied on the same IME report to disclaim coverage for medical bills from Respondent in both arbitrations.

Accordingly, due to the identical issues, and the identical parties, the court found no basis to vacate the Master Arbitration award. Accordingly, the insurer’s petition to vacate the award, rendered in favor of Corona Chiropractic, PC in the amount of $3,576.74 was denied.

RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
rpm@hurwitzfine.com

Nothing from me this time. See you next time!

STORM’S SIU
Scott D. Storm
sds@hurwitzfine.com

05/16/25 Arch Specialty Ins. Co. v. Payne
United States Court of Appeals, Second Circuit
Insurer Granted Judgment on Breach of Contract Claim Against Corporate Insured for Unpaid Premium but Precluded From Piercing the Corporate Veil to Recover Against Corporate Officers as It Failed to Show That They Used Their Domination Over the Corporation to Commit Fraud Against the Insurer and That They Intended to Injure It

Plaintiff-Appellant Arch Specialty Insurance Company appeals from a judgment entered by the USDC, EDNY, which the 2^nd Circuit affirms. Arch alleged that Hewannora Construction, Inc. failed to pay $1,247,950.03 in premium, taxes, and fees. Arch sought to pierce Hewannora’s corporate veil and hold Payne, Williams, and Campbell liable. The district court granted a default judgment on Arch’s breach of contract claim against Hewannora and dismissed Arch’s veil-piercing claims against Payne, Williams, and Campbell because Arch had “failed to set forth facts supporting piercing of the corporate veil in connection with its claim for breach of contract”.

On appeal, Arch argues that the district court “erred in concluding that the corporate veil should not be pierced as to Payne and Campbell.”

“Under New York law, holding a corporate officer or owner personally liable for a wrong the corporation committed requires piercing the corporate veil.” “The concept of piercing the corporate veil is a limitation on the accepted principles that a corporation exists independently of its owners, as a separate legal entity, that the owners are normally not liable for the debts of the corporation, and that it is perfectly legal to incorporate for the express purpose of limiting the liability of the corporate owners.”

“Generally, a plaintiff seeking to pierce the corporate veil must show that: (1) the owners exercised complete domination of the corporation in respect to the transaction attacked; and (2) ... such domination was used to commit a fraud or wrong against the plaintiff which resulted in plaintiff’s injury.”

“While complete domination of the corporation is the key to piercing the corporate veil, especially when the owners use the corporation as a mere device to further their personal rather than the corporate business, such domination, standing alone, is not enough; some showing of a wrongful or unjust act toward plaintiff is required.”

Arch alleged that Campbell, Payne, and Williams “exercised complete domination over Hewannora” and “used Hewannora’s funds for their personal use.” The district court was “concerned” that Arch had failed to allege a basis for veil piercing because “no allegations of fraud have been made.” In response Arch submitted a declaration that offered no facts concerning Campbell and Williams. The district court acted within its discretion by construing Arch’s failure to show cause as to Campbell as a “concession that no claim exists” against him.

Nor did the district court err in declining to hold Payne liable. Arch argues that “significant discrepancies and inaccuracies” on Hewannora’s applications for coverage “combined with Payne’s repeated misuse of the Hewannora Business Accounts for personal purposes” warranted piercing Hewannora’s corporate veil. But Arch failed to show that Payne “used the corporation in a manner intended to injure Plaintiff.”

Arch speculates that Payne intentionally misrepresented information in order “to ensure a significantly lower premium obligation on his part,” but the district court found that there was “no evidence” to support this allegation. Rather, at the close of discovery, he only facts noted by Plaintiff are those which relate to Payne’s withdrawal of funds from the Hewannora account for his personal expenses.” And these facts did not support the finding that Payne intended to injure Arch. It is Plaintiff’s position that the withdrawals of less than $15,000 over a two-year period by Payne justify piercing the Hewannora corporate veil and finding Defendants Payne and Campbell personally liable for $1,247,950.03. The district court did not err in concluding that Arch failed to show that Payne used his domination of Hewannora to commit a fraud against Arch.

FLEMING’S FINEST
Katherine A. Fleming
kaf@hurwitzfine.com

04/29/25 Erie Ins. Prop. & Cas. Co. v. Cooper
West Virginia Supreme Court
Statute Does Not Require Commercial Automobile Insurance Policy Insuring Certain Owned Vehicles and a Class of Non-Owned Vehicles for Liability Protection to Offer the Named Insured Underinsured Motorist Coverage for the Class of Non-Owned Vehicles

Cooper was injured in a car accident while riding as a passenger in Huffman’s vehicle. At the time of the accident, Cooper and Huffman were both employees of Pison Management LLC en route to a job site. Because Cooper’s injuries and resulting damages exceeded the at-fault driver’s insurance limits, Cooper sought underinsured motorist coverage (UIM) under Pison’s commercial auto policy issued by Erie.

The policy provided liability coverage for two particular vehicles owned by Pison as well as a class of non-owned vehicles associated with 1-25 employees, including vehicles owned by Pison’s employees while being used in Pison’s business. The policy provided UIM coverage for the owned vehicles, and there was no option to purchase UIM coverage for the class of non-owned vehicles. The parties agreed that Huffman’s car fell within the class of non-owned vehicles under the policy.

Erie denied Cooper’s claim for UIM coverage based on the policy’s terms and commenced a declaratory judgment action in the federal district court for a declaration of no UIM coverage. Cooper counterclaimed for a declaration that Erie violated the relevant statute by not providing Pison with the opportunity to elect UIM coverage for the class of non-owned vehicles.

Cooper argued that the statute required Erie to offer UIM coverage for every vehicle it insured for liability protection under the policy and that as a passenger in a covered, non-owned vehicle, Cooper qualified as an insured who was entitled to that coverage. Because Erie failed to make an offer, Cooper argued that UIM coverage existed by operation of law to cover him as a passenger. Erie argued that there is no statutory requirement to offer UIM coverage to a named insured for vehicles the named insured does not own. Erie reasoned that the purpose of UIM coverage is to protect the named insured and permissive users of the named insured’s vehicle from underinsured drivers. Erie represented that Pison’s purpose in purchasing liability coverage for the class of non-owned vehicles was to provide Pison with protection from vicarious liability claims resulting from its employees’ operation of their personal vehicles while used in Pison’s business.

On summary judgment, the district court awarded judgment in favor of Cooper, holding that the statute requires that an insurer make a commercially reasonable offer of UIM coverage to all vehicles covered by a liability policy, including the class of non-owned vehicles. Erie appealed to the Fourth Circuit.

Finding no controlling precedent, the Fourth Circuit certified the following question to the West Virginia Supreme Court: Does West Virginia Code § 33-6-31 require an insurer, who issues a commercial automobile insurance policy to a named insured providing liability coverage for particular owned vehicles and a class of non-owned vehicles, to offer underinsured motorist coverage for the class of non-owned vehicles?

The West Virginia Supreme Court answered in the negative and held that where a commercial automobile insurance policy insures certain owned vehicles and a class of non-owned vehicles for liability protection, the relevant statute does not require the insurer to offer to the named insured underinsured motorist coverage for the class of non-owned vehicles. The court noted that UIM coverage is first-party coverage, so the coverage follows the person and not the vehicle. When a tortfeasor is underinsured, the claimant recovers third party liability benefits from the tortfeasor’s insurance and supplements this recovery with the UIM benefits available through their own insurance policy. Determining whether a person is an insured person is the first step to determine if they are entitled to UIM coverage. Since Cooper was not using a named insured’s owned vehicle with consent, he did not meet the statutory definition of an insured in order to be entitled to UIM coverage caused by the negligence of an underinsured motorist.

GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
edg@hurwitzfine.com

05/15/25 Zavis v. New Jersey Mfg. Ins. Co.
Superior Court of New Jersey, Appellate Division
Verbal Threshold Not Satisfied Absent a Showing of Proximate Cause

The plaintiff was riding as a front seat passenger of a vehicle that was t-boned. After settling her third-party claim with the tortfeasor, the plaintiff made an underinsured motorists claim with her own auto carrier, NJM. NJM denied plaintiff’s UIM claim on the basis that the plaintiff had neither alleged nor otherwise established that the T-bone collision was the proximate cause of her injuries. The lower court granted NJM’s motion for summary judgment, reasoning that the plaintiff was required to provide a comparative analysis of her pre-accident and post-accident medical conditions. This appeal followed.

On appeal, the plaintiff argued that because she did not allege aggravation of any pre-existing injuries, she was not required to produce a comparative medical analysis of her pre and post-accident medical conditions. However, as NJM pointed out, the plaintiff’s treating medical physician opined that the plaintiff sustained aggravation of pre-existing asymptomatic degenerative changes, which would likely cause accelerated degeneration of plaintiff’s spine, progressive stiffness, loss of function, and pain. Because the plaintiff’s physician found aggravation of a pre-existing injury, NJM argued, a comparative medical analysis was required.

New Jersey law provides that personal automobile policies can be purchased either with or without the “limitation on lawsuit option.” If an insured purchases a policy with the “limitation on lawsuit option,” the insured must satisfy the “verbal threshold” in order to qualify for non-economic damages. To satisfy New Jersey’s verbal threshold, the insured must show that: (1) they sustained a permanent injury and that, within a reasonable degree of medical probability, the injuries will not return to normal function even with further medical treatment; and (2) their injuries were proximately caused by the defendant’s negligence.

Plaintiff’s treating physician opined that she sustained serious and permanent bodily injuries that would not return to normal functionality within a reasonable degree of medical probability, in satisfaction of the first prong. However, plaintiff never submitted a comparative medical analysis, comparing her pre-accident condition with her post-accident condition. Therefore, the Court held, plaintiff could not establish that the worsening of her injuries was proximately caused by the tortfeasor, barring plaintiff’s UIM claim.

O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
rpo@hurwitzfine.com

05/01/25 Woodland Villas v. Wright Nat’l Flood Ins. Co.
United States Court of Appeals, Fifth Circuit
Unnotarized Sworn Statement in Proof of Loss That Also Fails to Comply With 28 U.S.C. 1746’s Perjury Requirements Is Invalid Under Standard Flood Policy

Woodland Villas is a condominium association that possessed several Standard Flood Insurance Policies (SFIPs) issued by Wright. In August 2021, Hurricane Ida caused flood damage to several buildings insured by Wright through Woodland Villas. Upon notice, Wright inspected and adjusted each loss. The losses reached about forty percent of the policy limit. Wright disbursed the funds in November 2021.

In February 2022, Woodland Villas sought additional compensation. Woodland Villas submitted a report prepared by a Louisiana registered architect that opined Woodland Villas entitled up to sixty percent of the policy limit. The architect’s report included a subject line entitled Sworn Statement in Proof of Loss. The architect signed the report and affixed his seal on the document. Thus, Woodland Villas’ submitted this report as its sworn statement in proof of loss.

The Fifth Circuit affirmed the grant of Wright’s motion for summary judgment. As with most insurance policies, the Wright SFIP contained a proof of loss condition. The material part of the condition provided: “send [the insurer] a proof of loss, which is your statement of the amount you are claiming under the policy signed and sworn to by you[.]” Wright argued that although the report was signed and bore the architect’s seal, it was unsworn. This is because the report lacked a declaration that the insured guaranteed the truth under the penalty of perjury. And in the alternative, the report was unnotarized.

The court looked to a prior unpublished opinion, Clark v. Wright National Flood Insurance Co., and applied its reasoning. Clark found a statement in proof of loss was unsworn due to the lack of under penalty of perjury used in a statement as permitted under 28 U.S.C. § 1746. Since the architect’s report lacked notarization and alternatively failed to comply with § 1746’s “penalty of perjury” requirement, Woodland Villas’ sworn statement in proof of loss was invalid.

Author’s Note: The Clark court looked to 28 U.S.C. § 1746’s declaration exception as “sworn” was not defined in the SFIP. Thus, something to consider is whether an insured has complied with § 1746, or whether your jurisdiction similarly recognizes an unnotarized statement made under the penalty of perjury constitutes a “sworn statement.”

LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
ihl@hurwitzfine.com

05/13/25 Erie Ins. Co. v. Hector Rodriguez
Supreme Court of the State of New York, County of Suffolk
SUM Arbitration Permanently Stayed as Tortfeasor’s Liability Coverage Was Greater Than Respondent’s Bodily Injury Limits

ERIE Insurance Company (“ERIE”) brought a special proceeding pursuant to CPLR § 7503(c), to stay an arbitration demand made by Hector Rodriquez (the “SUM claimant”), seeking supplementary uninsured motorist (“SUM”) benefits. ERIE argued that SUM coverage was unavailable, because the tortfeasor’s liability limits were greater than the SUM claimant’s bodily injury limits.

The special proceeding arose out of an October 25, 2021, motor vehicle accident, in which the SUM claimant was operating a truck insured under an ERIE garage automobile policy, which had bodily injury limits of $1,000,000 and SUM benefits of $500,000 per person. The tortfeasor had a primary policy providing $250,000 in bodily injury limits, and an umbrella policy with a $1,000,000 per occurrence limit.

The SUM claimant commenced an action against the tortfeasor, and ultimately settled the claim, receiving $250,000 from the tortfeasor’s underlying policy, and $750,000 from their umbrella policy.

Under New York Insurance Law 3420(f)(2)(A), supplementary uninsured/underinsured motorists insurance shall provide coverage, in any state or Canadian province, if the limits of liability under all bodily injury liability bonds and 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 any such policy.

Here, the tortfeasor had an automobile liability policy with $250,000 bodily injury limits, as well as an umbrella policy with $1,000,000 per occurrence limits. Meanwhile, the insured, and SUM claimant, had only a policy containing bodily injury liability limits of $1,000,000.

Accordingly, the court held that SUM coverage was not available, because SUM benefits were never triggered.

Accordingly, the court granted ERIE’s motion and held that the SUM claimant was permanently enjoined from arbitrating any alleged entitlement to SUM benefits under the ERIE policy.

LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
lrh@hurwitzfine.com

05/23/25 New York Assembly Bill S5342
New York State Senate
S5342 Seeks to Permit the Use of Telematics or Usage-Based Insurance for Private Passenger or Commercial Automobile Insurance Policies in Certain Circumstances

On February 20, 2025, S5342 was introduced and referred to insurance. The bill seeks to define telematics and usage-based insurance and to provide for a consent-based framework for the use of telematics or usage-based insurance for automobile coverage in New York. This would include permitting insurers to offer incentives for participating in certain risk management programs through the use of telematic devices.

This would allow insurers to track individual driving habits of motorists. Telematics can provide drivers with detailed information about their driving habits and provide suggestions for improvements. The use of these devices can improve driving habits and ultimately lead to a reductio in accidents. Further, the use of telematics could allow insurers to offer discounts to drivers whose behavior is safer than other drivers.

VICTORIA’S VISION ON BAD FAITH
Victoria S. Heist
vsh@hurwitzfine.com

04/07/25 Wing On Realty, Inc. v. DB Insurance Co., Ltd. (US Branch)
Supreme Court, New York County
Supreme Court (Lower Court) Finds Insurer Failed to Act in Good Faith and Fair Dealing After Employing “Wait-and-See” Strategy in Claims Handling

Wing On Realty, Inc. (“Wing On”) is the owner of a three-story building at 5702 8^th Avenue, Brooklyn, New York (the “Premises”). DB Insurance Co., LTD (“DB Insurance”) issued a property insurance policy to Wing On for the Premises. On September 15, 2019, a fire occurred at the Premises, and Wing On hired a contractor to conduct emergency repairs. Wing On submitted a claim of $18,000 to DB Insurance for the emergency repairs, which DB Insurance paid.

Later, DB Insurance retained an engineer and field adjuster to assess the Premises, who found that the Premises suffered fire damage, including charred joists, but ultimately, the full extent of the damage could not be determined due to the first-floor tenant’s repairs of the ceiling. After Wing On offered their first-floor tenant a rent reduction to access the unit, Wing On hired a contractor and architect to assess the Premises’ condition. Wing On’s contractor removed the drywall in May 2020 and replaced the joists in September 2020. The contractor’s invoice stated the repairs were due to rot, corrosion and/or fire damage.

In September 2020, Wing On sent a demand letter to DB Insurance seeking reimbursement for damages for lost rent and remediation by the contractor. DB Insurance did not reimburse Wing On nor deny the claim. Wing On then initiated this lawsuit and moved for summary judgment against DB Insurance, including, inter alia, causes of action for good faith and fair dealing.

The New York County Supreme Court granted in part and denied the motion in part. Importantly, the Court granted Wing On summary judgment on the ground of good faith and fair dealing, holding DB insurance employed a “wait-and-see” strategy in handling the claim. The Court found the DB Insurance policy covers loss of business income during a period of restoration, which included the lost rent from vacant units after the loss, and DB Insurance did not reimburse Wing On for the loss nor issue a disclaimer letter. The Court found an issue of fact as to damages under DB Insurance’s breach of the covenant of good faith and fair dealing, specifically as to the apportionment of Wing On’s damages related to DB Insurance’s failure to adjust the claim in good faith, compared to the damage that was attributed to long term wood rot. DB Insurance filed a notice to appeal the decision to the Appellate Division, First Department on May 2, 2025.

NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
hasanderson@sanderson-law.com

The content of this column also appears in the ‘Liability & Insurance,” a monthly newsletter focusing on Canadian coverage and published by Heather Sanderson. Contact her for a subscription.

04/28/25 Fluid Hose & Coupling Inc. v. Allianz Global Risks U.S. Insurance Company, et al
Ontario Superior Court (trial level)
Depending Upon the Wording, a “Mere” Supplier May Be Entitled to Coverage Under a Builders’ Risk/Course of Construction Policy

In June of 2020, a 36-storey residential apartment building was under construction near the Sheppard & Yonge subway station in North York, Toronto. On June 8 water began leaking from an HVAC cabinet on the 32^nd floor. The source of the leak was traced to a half inch ball valve in the water supply line for the heat pump in unit 3201.

Ball valves are usually controlled by a handle and enable easy shut off-of the line for maintenance and repair. This particular ball valve had broken in half, opening the water line, causing water to flow down to the ground floor. The repair costs for the resulting damage were estimated at about $420,000.

The water damage was reported to Allianz who had issued a builders’ risk /course of construction policy for the project under which the owner developer, Riocan and the general contractor, PCL were the named insureds. Allianz paid for the repairs and initiated a subrogated claim against several parties, including the ball valve supplier, Fluid Hose.

Fluid Hose brought this application for a declaration that the subrogated claim cannot proceed against it as it is a sub-contractor as defined in the Allianz builders’ risk policy and, therefore, an unnamed insured.

As is almost the norm, the project consisted of layers of contracts. In the belief that a picture is worth a thousand words and that there is no time and no space for a thousand words, the project broke down as follows:

Allianz argued that Fluid Hose was a mere supplier and therefore did not meet the definition of sub-contractor under the policy.

The Court heard that two years before the water leak, Sigma had issued a Purchase Order to Fluid Hose for 5,000 ball valves that had to meet Sigma’s specifications. That purchase order did not refer to this project. That was normal, as Fluid Hose customarily provides ball valves to Sigma. Fluid Hose confirmed Sigma’s order and in turn ordered the valves from a Chinese manufacturer.

The day before Sigma’s order of 5,000 ball values, Omega confirmed a previous quote with HTS to supply 728 heat pumps requiring 728 ball values. Of the 5,000 valves that Sigma ordered, 728 were for this project. Fluid Hose was not told that some of the ball valves that it was supplying were for this project.

Without looking at the policy, these facts strongly suggest that Fluid Hose is a “mere” supplier and would not normally be considered an unnamed insured under most builders’ risk policies. But the Allianz policy is not “most” builders’ risk policies.

The Allianz policy contained the following key definitions:

The policy also specified that “property insured” included:

The definitions of contractor and sub-contractor are unique. Historically, builders’ risk policies issued in Canada limit sub-contractors to those “engaged in the construction of the Project” and exclude “suppliers whose sole function is material delivery”. This policy defined a sub-contractor to include any corporation (Fluid Hose) entering into a contract to supply materials in connection with the project (the Sigma Purchase Order) if that contract is, in turn, derived through a contract to supply materials in connection with the project (the contracts between Omega, HTS and Malfar).

Fluid Hose argued that the wording was broad enough to cover any party within the material supply chain for the project. In essence, the Application Judge agreed stating “the word “derived” is indeed broad and can extend to suppliers of subcontractors, such as Fluid Hose” as long as the supply of materials was “in connection with the project”. The judge continued stating that “[t]his phrase is also broad and inclusive. It is not limited to those who are “part of the construction process itself” but includes suppliers who are “collateral to that process” so long as the supply contract is “in connection with the project.”“

The Court noted that this is consistent with the broad wording of the “property insured clause” which includes property “owned by the Insured or in which the Insured has an insurable interest” and “property of others used or to be used in, a part of, or incidental to the construction operations.” RioCan “clearly” had an “insurable interest” in the HVAC units; indeed, it purchased them. The ball valves were an integral and essential part of those units which, in turn, were integral and essential to the building. An additional indication of the broad scope of the Policy is found in s. 7(d) dealing with “miscellaneous unnamed property” which states: “This Policy is extended to insure property of every description used or to be used in, part of, or incidental to the construction operations.”

Finally, the Court noted that this broad interpretation is in keeping with the purpose of the policy which is to provide broad coverage to project participants. If the action continues, Fluid Hose will be alleging faulty installation of the ball valve caused the failure meaning that project participants up the chain will be involved in the litigation. The policy is designed to protect project participants from this exposure.

The Court dismissed Allianz’ argument that this interpretation does not make commercial sense as it means that any party that supplied material to the project would be considered a contractor/sub-contractor. The Court stated that Fluid Hose meets the definitions and is entitled to the protection of the policy: “if an insurer is prepared to provide a very broad policy, as it has done here, and which it presumably priced accordingly, it must live with the consequences.”

Fluid Hose was therefore successful and awarded partial indemnity costs of $37,500 regarding this coverage application and $12,337.80 in costs for defending the subrogated claim, all of which were payable by Allianz.

Comment

The wording considered in this judgment is unique and therefore the finding is unique. However, it stands as a cautionary tale when it comes to interpreting nonstandard builders’ risk policies. I suspect an appeal will be in the offing.

Coverage Pointers - Volume XXVI No. 24

Fri, 09 May 2025 13:29:15 +0000

Volume XXVI, No. 24 (No. 697)
Friday, May 9, 2025
A Biweekly Electronic Newsletter

In some jurisdictions, newsletters such as this may be considered Attorney Advertising.

If you know of others who may wish to subscribe to this free publication, or if you wish to discontinue your subscription, please advise Dan D. Kohane at ddk@hurwitzfine.com or call 716-849-8900.

You will find back issues of Coverage Pointers on the firm website listed above.

Dear Coverage Pointers Subscribers:

Do you have a situation? We love situations.

For those who subscribe to the New York Law Journal, you’ll find an article co-authored with Jeff Steinberg, in today’s issue, on the subject of the necessity of offering tail coverage when E&O policies are rescinded. Only a coverage nerd can embrace that subject. I’d include the article here, but the NYLJ folks have strict rules on reprints

Once again, this issue of Coverage Pointers is chock full of interesting and timely cases on all kinds of subjects. For our newer subscribers, and as reminder for the long-time regulars, the full issue of CP is attached as a pdf. This is what we call our “coverage note” or, affectionately, “Dear CP” in office parlance.

This is the official start of summer. My wife and I have moved back to our home in Canada, where we will be staying for about six months. I make the international commute to my office in Buffalo four days a week, and the travel time, including clearing customs, is about 17 minutes. As someone who grew up in Crown Heights, Brooklyn, in a three-story walk up, four blocks from Ebbets Field, this view is slightly more appealing. Anytime you’re in Western New York or Southern Ontario, please stop by and join us at the Land of the Blue Martinis, aka Crescent Dreams, in Fort Erie, Ontario, on the north shore of Lake Erie..

Chief Justice Roberts in Buffalo

The United States District Court for the Western District of New York is celebrating its quasquicentennial anniversary (that’s 125 in people years). As part of its celebration, Chief Justice Roberts traveled to Buffalo and sat down at a “fireside chat” with his former classmate, USDJ Lawrence Vilardo, for an hour discussion that covered many interesting parts of his life. A Buffalo native (until the age of 10), he disappointed the audience by revealing that he is a Bears fan (rather than a Bills fan). He was presented with a Josh Allen jersey, with the number 17 (also reflecting that he is the nation’s 17^th Chief Justice). I had the opportunity to listen to his remarks, made to a sold-out audience.

With a responding ovation, Chief Justice John Roberts did emphasize the importance of judicial independence:

“The judiciary is a coequal branch of government, separate from the others with the authority to interpret the Constitution as law, and strike down, obviously, acts of Congress or acts of the president.”

He expressed the role of the judiciary to “decide cases but, in the course of that, check the excesses of Congress or the executive.”

Training – Stay Tuned!

So many of you have attended one or more our Zoom training courses of the last few years, and they will be continuing. But I am really excited to advise you that several member of our coverage team will be offering a wide variety of Zoom training programs on a number of different subject areas from first party property to commercial and personal auto, to employers liability coverage, and much, much more. Watch this space for the dates of these Lunch and Learn programs. Lucky for you, you’ll hear from a number of our coverage gurus who are much more interesting than the old professor.

Finally, as I craft this note on Thursday evening, I lift a glass to my dad on his birthday -- gone from this Earth 45 years ago, at age 62, he would have been 107 today. My parents were immigrants, having escaped Nazi Germany, both ending up in Palestine where they met and wed. My older sister was born in Haifa. When my mother was pregnant with , they emigrated to New York, and I was born five months later. They naturalized some years after I was born. That makes me a birthright citizen, one of many, who relies on the United States Constitution for citizenship.

Need a mediator for an insurance dispute? Coverage mediation is a thing! Subject matter expertise may be useful.

Hey coverage lawyers. Hey professionals. Have you and a friend, adversary, or lawyer for whom you have respect reached a stalemate on a coverage dispute? Look, we know each other. We know that. We don’t want to litigate every coverage disagreement. Why? Because the position we oppose today may be the one we advocate tomorrow. Face it. We all understand that.

Let me help mediate your disagreement to see if there is some mutual agreement, we can reach that will not box us into a corner. Reach out to me. I will be pleased to mediate your dispute.

You don’t want adverse precedent that will bite you next time you might have a slightly different view on coverage issues. You don’t want to spend tens of thousands of dollars to litigate a coverage issue before a motion judge or appellate justice that knows as much about insurance coverage as you do about nuclear physics. For those in the Western District of New York, I am certified by the Court and on the WDNY Mediation Panel.

Try mediation.

LinkedIn

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Mandatory Car Insurance Under Consideration – 100 Years Ago:

Buffalo Post
Buffalo, New York
9 May 1925

Compulsory Automobile Bonding

Among the proposals made as a result of the situation created by the prevalence of automobile accidents in the United States that of requiring all automobiles to carry liability insurance is often suggested. Probably more than half of the automobile drivers of the country are already protected, and the persons injured by automobiles operated by these drivers have some recourse.

The number of automobile accidents is large, to be sure, but proportionally not so large as it was a decade ago. The ratio if accidents to the number of cars in use is declining steadily – partly because traffic is more efficiently handled, partly because roads are better, partly because the equipment of cars has been improved and partly because motorists and pedestrians alike have profited somewhat from a long campaign of education designed to reduce the number of accidents.

In 1925, automobile fatalities were 24 to every ten thousand cars; and there has been a lower rate each succeeding year, until in 1923 the number of fatalities to ten thousand cars was only 10.3. The actual number of accidents has not declined to the same degree because the number of cars registered each year surpasses that of the preceding year. In 1924, automobile fatalities declined 13 per cent, as compared with 1923, in Baltimore although 22 per cent more cars were registered. In Battle Creek fatalities were cut 27 per cent, though there were 12 per cent more cars are use; and in Memphis County 47 er cent, though 28 per cent more cars were registered. Similar figures are reported from many other cities.

The problem presented by traffic accidents is national and should be attacked on a national scale. Secretary Hoover declared at the Highway Safety Congress in Washington last December that few states have driven toward sufficient personal accountability for recklessness, and Thomas B. Donaldson, former insurance commissioner of Pennsylvania, said that too little thought had been given to the idea that improved police protection was required for safety when roads are improved.

Peiper on Property (and Potpourri):

Less controversy this week in the Courts. We do suggest that you take a minute, though, to review the interesting subrogation case reported in our column. Where there is notice of a potential subrogation right, the First Department has explained that the carrier’s subrogor cannot unilaterally destroy subrogation rights just because it cuts its own deal with the tortfeasor. Rather, the subrogee’s rights prevail even in the face of a Release which seemingly protects the tortfeasor from future legal jeopardy.

That’s it for this week on a substantive law front. On a more personal note, May 8^th also marks, or much of world, Victory in Europe Day. On this date, 80 years ago, at 10:43 local Berlin time, remaining German “officials” ordered “all German military naval and air authorities and to all forces under German control to cease active operation at 23:01 CET.” And so, with that, the great war came to an end. The numbers of the war are, to this day, staggering. An appalling 70 to 85 million people died as a direct result of the conflict, with half of those deaths directly related to civilian casualties. It is estimated that over 127 million people were mobilized to fight, and 16.4 million Americans answered the call to duty. Of those 16.4 million, only about 60,000 are still with us to stand as a testament to the bravery of the men and women who contributed so much.

Whether or not the day should be recognized formally in the United States is up for debate, but the sacrifice of so many should not be. And, with that, we certainly take a moment to recognize those that gave so much for so much.

That’s it for now. See you in two weeks.

Steve
Steven E. Peiper
sep@hurwitzfine.com

Free Insurance with Purchase of a Car – 100 Years Ago:

The Daily Freeman
Kingston, New York
9 May 1925

Free Insurance
Here Next Week

Kingston Dealers Used Car Exchange
Will Giver Purchasers of Used Cars
A Free Accident Insurance Policy

Next week will be free insurance week as the Kingston dealers Used Car Exchange at 256 Clinton Avenue. Manager Burt has decided to give all purchasers of used cars at the Exchange a free accident insurance policy with any car purchased during the week. This novel feature protects the owner against accident caused either by your own or another car.

This insurance is particularly interesting to the purchaser who buys on time payments. The policy can be so arranged that in case of accident the insurance payments will apply to the car payments this insuring the time payments of any car purchased during the week.

The policy pays varied sums from $5 for doctor’s bill if not disabled to $1,000 for loss of life or two limbs or one eye and one limb or two eyes. Loss of one limb pays #500 and one eye $350. In addition, there is a payment of $25 per week for 26 weeks in case of total disability. Half this amount if partially disabled for four weeks, an indemnity for hospital services of $15 a week for four weeks and a similar amount for nurse fees if not confined to a hospital. In addition, there is provision of $100 emergency expenses.

Lee’s Connecticut Chronicles:

See you in two weeks.

Lee
Lee S. Siegel
lss@hurwitzfine.com

Anything but Booze – 100 Years Ago:

Buffalo Courier
Buffalo, New York
9 May 1925

“FOOD DRUNKARDS”
LATEST OUTGROWTH
OF PROHIBITION ACT

Western Doctor Says increase in Diabetes Due to
Alcohol Craving.

Sacramento, Calif., May 8 ( By the Associated Press). – “Food drunkards” who appease their craving for alcohol by eating rich foods containing a great amount of sugar, have replaced the heavy drinkers of pre-Volstead days and as a result diabetes is claiming hundreds of new victims, Dr. Richard F Tomlin of San Francisco declared in an address today before the convention of the California State Homeopathic Medical Society.

Ruffner’s Road Review:

Dear Readers,

I am looking forward to the start of both softball and golf leagues this week – hopefully I still remember how to swing a club after a long winter…

In our first case this week, the court granted a default judgment in the insurer’s declaratory judgment action against no-fault claimants and medical providers, as the insurer submitted sufficient proof of the default and facts demonstrating its claim. Next, in a petition to stay an Uninsured Motorists arbitration, the court sided with the insurer, as there was no agreement between the claimant, who was not insured under the policy, and the insurer to arbitrate the subject claim.

Until next time,

Kyle
Kyle A. Ruffner
kar@hurwitzfine.com

Diamond Widow – 100 Years Ago:

Buffalo Courier
Buffalo, New York
9 May 1925

“DIAMOND WIDOW”
GOES TO HOSPITAL

‘Obsession’ Prompts Woman’s
Story, Say Police

IDENTIFIED AS CANADIAN’S WIFE

Police say they have shattered the story told by Mrs. Gordon Meyers, formerly of No. 444 Pearl Street, who still insists she is the widow of Joseph Diamond, Brooklyn, recently executed at Sing Sin for his part in slaying two bank messengers in a Brooklyn robbery.

Following the investigation by New York police and a check-up by Captain Hildebrand in Buffalo, authorities say the story of Mrs. Meyers was prompted by a mental obsession, the result of a weakened physical condition and highly nervous state.

Yesterday, after being arraigned in City court before Judge Keeler the woman was committed to the City hospital for treatment. She is suffering from a wound in her abdomen which required 100 stitches after an operation in Bellevue hospital, New York city.

Captain Hildebrand’s investigation revealed, police say, the woman was married to Gordon Meyers, No. 54 Queen Street, St. Catharine’s Ont., on November 1, 1916, at Niagara Falls. The name of Meyers’s marriage license is Louise McLean. The latter told the marriage license clerk she was born in Scotland, the daughter of Hugh McLean. Meyers yesterday told reporters the woman was his wife and had lived in St. Catherine’s, Ont., before marriage.

Ryan’s Federal Reporter:

Hello Loyal Coverage Pointers Subscribers:

I took my oldest son this past week to Rick Lancelloti’s School of Baseball for a batting lesson. I was a student myself, once upon a time, as a participant in the school’s batting cage hitting league (yes, line drives in batting cages can be the premise to an entire league of competition). My son is eight and, while he was reserved at first, he picked up a few key ingredients to a better swing, which he implemented during batting practice for his house team the other day—the only player hit a ball out of the infield in the air. Dad picked up a lifetime of coaching points too, and we are looking forward to the next one soon.

My youngest son has fallen in love with Minecraft and, while he began his journey as many do (in creative mode), I convinced him last week to try out survival mode. While I understand the draw of having access to all the blocks at once, there is a certain poetry to finding resources yourself and it is by far my favorite style of play. There is a learning curve, of course, but he took off running. He has since returned to creative mode, but it won’t take much convincing for him to launch his survival mode world up again next time.

Our baby girl is now two months old and hitting all the benchmarks. We have graduated from the adjusted growth chart for six-week preemies because, well, it does not make sense to reference that chart when you are excelling on the normal chart. A healthy, happy baby. And a little cutie pie to boot!

This edition of my column discusses two different issues arising in the context of diversity jurisdiction and a district court’s continued duty under the Constitution to ensure that it has Article III jurisdiction. Both issues were solved, albeit in different ways. One court retained jurisdiction, while the other did not.

Until next time,

Ryan
Ryan P. Maxwell
rpm@hurwitzfine.com

Good to Know – 100 Years Ago:

Ledger-Star
Norfolk, Virginia
9 May 1925

Junior’s Question

Dear Miss Fairfax:

We are two girls of thirteen and we read your column every night. Please answer some questions for us.

1. Is it proper for a girl of thirteen to play “post office” and “wink?”

2. Should a girl or boy speak first when meeting on the street?

3. Should a girl answer a note a boy has written here?

4. How can you let a boy know you like him without telling him so?

JUST THIRTEEN.

1. If the games are played as I knew them, yes.

2. A girl should speak first.

3. She should show the note to her mother and take her mother’s advice.

4. The best way is not to let him know. He’s too apt to think so anyhow.

Storm’s SIU:

Hi Team:

One case this week:

The Court, Rather than an Umpire, is the Correct Adjudicator for Interpreting the Meaning of the Appraisal Award.

I had the privilege today of attending Dan Kohane’s “N.Y. Disclaimer Training” that he was presenting to an insurer. It’s an extremely informative and invaluable 90 minutes which you should consider for your claims professionals. They will learn so much!

Busy week, gotta run. Talk to you again in two.

Scott
Scott D. Storm
sds@hurwitzfine.com

Mixed Races Cause More Problems Than Mixed Drinks – 100 Years Ago:

The Buffalo News
Buffalo, New York
9 May 1925

BLAMES CRIME IN U.S.
ON MIZING OF RACES

English Judge Says Drinking Here Will Disappear.

Building up of the right principles in youth through boys’ and girls’ organizations is responsible for the marked decrease of juvenile crime in England, Judge Frederick Burris, chairman of the magistrates of the Juvenile court of Bristol, England, said Friday. Judge Burris is making a tour of the United States to study the juvenile courts and probation systems here. He visited Buffalo courts Friday.

Much of American crime is due to the mixing of the races and to the comparative youth of the country, the judge believes. With the education of parents and the instilling of proper principles in children through organization which teach discipline and self-respect, he believes a reduction in crime will come.

Judge Burris is favorable impressed by the probation system here, believing it ultimately will go far towards correcting the situation. “I have never known a man to be reformed by being sentenced to prison,” he remarked. The judge is puzzled about prohibition. He believes that the drinking that is done because of bravado and in a spirit of defiance will disappear.

Fleming’s Finest:

Hi Coverage Pointers Subscribers:

On Wednesday, a few of us attended the WDNY’s 125th anniversary celebration, including a “fireside chat” with Chief Justice Roberts of the Supreme Court. It was a very exciting opportunity to learn more about the Supreme Court.

In this week’s case, the Arizona Supreme Court considered the meaning of the phrase “in connection with your business” regarding an employee’s use of a “non owned” “covered auto” as described in an auto policy. The court also looked at the enforceability of a contingent agreement.

HF softball starts this week. Catch you later,

Kate
Katherine A. Fleming
kaf@hurwitzfine.com

A Buck for a Bride – 100 Years Ago:

The Buffalo News
Buffalo, New York
9 May 1925

CLERK TRUSTS GROOM
FOR COST OF LICENSE

DETRIOT, May 8. – Marriage licenses at nothing down and $1 when the intended groom gets his pay envelope Saturday became an accomplished fact here today.

Garfield Bean, 25, appeared before Thomas F. Farrell, county clerk, and asked if he could get a marriage license and pay for it tomorrow.

“I don’t mind trusting you,” said Mr. Farrell, “but why are you getting married when you haven’t even a dollar for the license?”

“Personally, I would just as soon wait a while.” Bean said, “but my girl has her mind set on being married tonight.”

The license was issued, Josephine Fein, 18, being named as the bride.

“I’ll be back here the first thing Saturday with the dollar,” was Bean’s parting promise.

Gestwick’s Garden State Gazette:

Dear Readers:

It has surely been a busy two weeks, with not much to report. Apparently, the New Jersey courts were quiet on topics of insurance coverage, as I have nothing noteworthy to share with you this time around. Hopefully this means double cases for you next time.

See you in two weeks.

Evan
Evan D. Gestwick
edg@hurwitzfine.com

Such a Deal – 100 Years Ago:

The Buffalo Times
Buffalo, New York
9 May 1925

$5,000 Accident Insurance Policy
To Be Issued by Buffalo TIMES

A $5,000 accident insurance policy has been secured by the Buffalo TIMES for its readers. The policy can be had simply by ordering THE TIMES and the payment of a $1 newspaper registration fee.

The policy pays ten dollars a week for 15 weeks if the policy holder is injured in a fare paying vehicle, private automobile, horse drawn vehicle, passenger elevator, or if the holder should be injured by a storm tornado, burning building or falling wall, or if struck by an automobile while walking.

The death benefits are $5,000 if the policyholder is killed while riding in a streetcar, train or steam-driven vehicle in which he is riding as a passenger, and $1,000 if he is riding in a private automobile or taxicab or horse-drawn vehicle.

In addition, if a pedestrian is killed while crossing a street by being struck by a moving vehicle a payment of $1,000 will be made.

The Buffalo TIMEs has secured thousands of these policies from the North American Accident Insurance Company, the oldest and strongest exclusive Accident Insurance Company in the United States of its old and new readers.

O’Shea Rides the Circuits:

Readers,

Apparently, there is a firm softball team, and the first game is this week. I guess I was omitted from that group chat. Poor joke aside, I am looking forward to this weekend as the weather looks to break. Saturday looks like a fine burger and dog day. Maybe even some smoked chicken wings or duck. I’ll keep you posted on how that situation developed in the next issue.

This week I have a longer read from the Fifth Circuit that involves the application of the Auto Exclusion and the triggering date for property damage. As a preface, the facts involve sugar contaminating a concrete mixture that later caused the slab to manifest cracks.

Until Next Time,

Ryan
Ryan P. O’Shea
rpo@hurwitzfine.com

Make America Safe Again – 100 Years Ago:

The Buffalo News
Buffalo, New York
9 May 1925

SHOPLIFTER CONVICTED

ALBION, May 8. – After a two days’ trial the jury returned a verdict late Thursday convicting Mrs. Joesphine Yacano of Buffalo of stealing a hat from the millinery store of Mrs. Alethea Volk in Main Street. Judge Frederic M. Thompson Jr. sentenced Mrs. Yacano to six months in Monroe count penitentiary.

The jury returned a verdict of not guilty against Pilis Carawana and his wife, Marie Carawana. All three claimed to reside at 633 Genesee Street, Buffalo, which is said to be the residence of the mother of Mrs. Yacana. Pilis and Marie Carawana were re-arrested in court upon a warrant sent here from Gasport N.Y., charging grand larceny. A Gasport clothier is said to be the complainant in that case.

This will be taken to Niagara County tonight and furnish bail for their release for an adjourned date to be set by the justice at Gasport.

LaBarbera’s Lower Court Library:

Dear Readers,

Looks like I might have bit off a bit more than I could chew. I joined a men’s soccer league for the summer. I was excited to make my debut, but after a whole five minutes, I hobbled off the field with a torn MCL and meniscus. Looks like it is stopwatch duty only for me these next eight weeks.

This week I have two cases from the New York Supreme Court, one in New York County, another in Kings. First, I will discuss the application of a Designated Coverage Endorsement. Next, we move on to discuss the application of a choice of law and forum selection clause.

Until next time…

Isabelle
Isabelle H. LaBarbera
ihl@hurwitzfine.com

A Bunch of Rummies – 100 Years Ago:

The Daily Freeman
Kingston, New York
9 May 1925

Rum Doings at
Canadian Border

Daring Skippers of Niagara Booze
Armada Prepare to Run the
Contraband Through Lines of the

Coast Guard and Custom Service

Buffalo, N.Y., May 9. – Two hundred thousand dollars’ worth of Canadian booze, bought and paid for by Buffalo bootleggers, stands sidetracked in the Canadian National railroad freight yard at Welland, Ontario, awaiting arrival of the rum armada to bear it across the boundary line.

Thirteen Fleet rum cruisers, commanded by the most daring skippers of the Niagara booze fleet have been chartered to run the contraband through the lines of the American coast guard and customs service. Four of the cutters are due in Welland today. Canadian representatives and a syndicate expect to send them back to Buffalo heavily laden before the day is over.

Lexi’s Legislative Lowdown:

Dear Readers,

My dog’s favorite hobby is digging holes in the backyard. Unfortunately for me, it won’t stop raining, so this is starting to become part of our daily routine. I am hoping that the weather will clear up and the yard will dry out soon. I am not sure how many more daily baths I can handle.

This week we discuss Senate Bill S7576 related to powered bikes and storage batteries.

Thanks for reading,

Lexi
Lexi R. Horton
lrh@hurwitzfine.com

I Guess a Hat is Worth More than a Purse – 100 Years Ago:

The Buffalo News
Buffalo, New York
9 May 1925

PURSE SNATCHER FINED
AND SENTENCED TO PEN

Charged with snatching a purse containing $65 from Mary Forbes 1576 Hamburg Turnpike, Michael O’Grady, 28 years old, 1472 South Park Avenue, was fined $30 and sentenced to 60 days in the penitentiary by Judge Monaghan in Lackawanna City court Friday.

North of the Border:

This comment may appear to be totally random, but Canadians have just come out from the other side of a federal Canadian election. We heard political commentators speak about ‘bellwether’ ridings; where political tendencies match in microcosm those of a wider area, such that the result of an election in the former region might predict the eventual result in the latter.

I have, of course, also heard the word used in litigation managed through the MDL process in the United States. In MDL cases, it is not practical to prepare every case for trial. Several matters are, therefore, selected as ‘bellwether cases’ and prepared for trial. Those cases are then settled or tried, and the results are used to shape the process for addressing the remaining cases.

I was curious as to the etymology of the word “bellwether”. So, I asked Siri who asked ChatGPT, who directed me to a Wikipedia page.

I learned that “bellwether” has its origins in sheep herding. The term derives from the Middle English belle-weder, which referred to the practice of placing a bell around the neck of the lead wether (the castrated male sheep who is the ‘alpha’ in the flock). A shepherd could then note the movements of the animals by hearing the bell, even when the flock was not in sight. So, the bellwether is the leader, not the follower.

So, be a bellwether, not a sheep.

Until next time.

Heather
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
hasanderson@sanderson-law.com

Headlines from this week’s issue, attached:

KOHANE’S COVERAGE CORNER
Dan D. Kohane
ddk@hurwitzfine.com

Rhode Island Choice of Law Applies to Bad Faith Claim, Where Insured Is Resident of New York and Policy Issued There, Under Center of Gravity Approach
Party Is Entitled to Change Its Mind After Original Settlement Offer Is Rejected
Additional Insured Endorsement Which Required Written Contract, Did Not Require Privity to Trigger AI Coverage

PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
sep@hurwitzfine.com

Knowledge of Potential Subrogation Rights Precludes Party from Relying on Release from Insured/Subrogor
Underwriting Guidelines Do Not “Unequivocally” Forbid Insured Risk

LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
lss@hurwitzfine.com

See you in two weeks.

RUFFNER’S ROAD REVIEW
Kyle A. Ruffner
kar@hurwitzfine.com

Declaratory Judgment Issued in Favor of Insurer, Due to Default of Medical Provider Defendants and Claimants
Petition to Stay Arbitration Granted as No Agreement to Arbitrate the Respondent’s Claim Existed

RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
rpm@hurwitzfine.com

District Court Maintains Jurisdiction Over Insurance Dispute Following Uncontested Dismissal of Non-Diverse, Second-Layer Excess Insurer
District Court Without Jurisdiction Over Insurance Dispute Due to a Failure to Establish the Domicile of Individual Members of Plaintiff LLC

STORM’S SIU
Scott D. Storm
sds@hurwitzfine.com

The Court, Rather Than an Umpire, Is the Correct Adjudicator for Interpreting the Meaning of the Appraisal Award

FLEMING’S FINEST
Katherine A. Fleming
kaf@hurwitzfine.com

An Employee Operates a Non-Owned Auto “In Connection with Your Business” When Using the Vehicle While Engaged in the Employer’s Business

GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
edg@hurwitzfine.com

No coverage cases out of New Jersey this week; see you in two weeks

O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
rpo@hurwitzfine.com

Sugar Contamination in Vehicle Constituted “Use” of Automobile and Contamination Was First Instance of Property Damage, Not When Construction Defect Manifested

LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
ihl@hurwitzfine.com

Court Held Pothole Repair Did Not Classify as Landscaping Gardening, and Commercial General Liability Policy Did Not Provide Coverage Based on Business Description Limitation Endorsement
Causes of Action Sounding in Texas Substantive Law Dismissed, Based on Forum Selection and Choice of Law Clause Within Property Policy

LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
lrh@hurwitzfine.com

Senate Seeks to Set Requirements for the Sale, Lease, and Rental of Powered Bicycles and Mobility Devices

NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
hasanderson@sanderson-law.com

Exclusionary Words “Alleging, Arising Out Of, Based Upon or Attributable to, or in Any Way Involving, Directly, or Indirectly, Sexual Misconduct,” Apply to Remove the Obligation to Defend an Otherwise Covered Claim, if, Wholly or in Part, Sexual Misconduct Gave Rise to That Underlying Claim

That’s all there is and there is no more. See you in another fortnight

Hurwitz Fine P.C. is a full-service law firm providing legal services throughout the State of New York and providing insurance coverage advice and counsel in Connecticut and New Jersey.

NEWSLETTER EDITOR
Dan D. Kohane
ddk@hurwitzfine.com

ASSOCIATE EDITOR
Agnes A. Wilewicz
aaw@hurwitzfine.com

COPY EDITOR
Evan D. Gestwick
edg@hurwitzfine.com

INSURANCE COVERAGE/EXTRA CONTRACTUAL LIABILITY TEAM
Dan D. Kohane, Chair
ddk@hurwitzfine.com

Steven E. Peiper, Co-Chair
sep@hurwitzfine.com

Michael F. Perley

Agnieszka A. Wilewicz

Lee S. Siegel

Brian F. Mark

Scott D. Storm

Ryan P. Maxwell

Kyle A. Ruffner

Katherine A. Fleming

Evan D. Gestwick

Ryan P. O’Shea

Isabelle H. LaBarbera

Lexi R. Horton

Victoria S. Heist

FIRE, FIRST PARTY AND SUBROGATION TEAM
Steven E. Peiper, Team Leader
sep@hurwitzfine.com

Michael F. Perley

Scott D. Storm

NO-FAULT/UM/SUM TEAM
Dan D. Kohane
ddk@hurwitzfine.com

Ryan P. O’Shea
rpo@hurwitzfine.com

Kyle A. Ruffner
kar@hurwitzfine.com

APPELLATE TEAM
Jody E. Briandi, Team Leader
jeb@hurwitzfine.com

Topical Index

Peiper on Property and Potpourri
Lee’s Connecticut Chronicles

Ruffner’s Road Review

Ryan’s Federal Reporter

Storm’s SIU

Gestwick’s Garden State Gazette

Lexi’s Legislative Lowdown

KOHANE’S COVERAGE CORNER
Dan D. Kohane
ddk@hurwitzfine.com

05/06/25 Zurich American Insurance Co. v. Providence Capital LLC
Appellate Division, First Department
Rhode Island Choice of Law Applies to Bad Faith Claim, Where Insured Is Resident of New York and Policy Issued There, Under Center of Gravity Approach

The insured, Providence’s second counterclaim pleads a violation of Rhode Island General Laws § 9-1-33, entitled "Insurer's bad faith refusal to pay a claim made under any insurance policy," and alleges plaintiff's bad faith handling of a claim in connection with property damage to a showroom. Zurich, in an affirmative defense, alleged that the Rhode Island General Laws do not apply to this action.

The court determined that Rhode Island rather than New York applied. Under New York's "center of gravity" or "grouping of contacts" approach to choice of law questions in contract cases, Rhode Island has "the most significant relationship to the transaction and the parties. Providence Capital, the primary insured, is domiciled in Rhode Island, the place of contracting, and the policy covers many Rhode Island locations of Providence Capital's affiliate companies (id.). Providence Capital's domicile also weighs in favor of applying Rhode Island law, as Providence Capital affiliates are named insureds and are spread across several states, and the action therefore involves liability insurance covering multistate risks. In such a case, the state of domicile is the appropriate source of applicable law. Furthermore, the governmental interests at issue, taken in the aggregate, support applying the law of Providence Capital's domicile.

05/02/25 Garlow v. Cunningham
Appellate Division, Fourth Department
Party Is Entitled to Change Its Mind After Original Settlement Offer Is Rejected

This was a lawsuit arising from a collision between a motorcycle operated by plaintiff and a vehicle operated by defendant. The defense sought to enforce a “purported settlement agreement.

Defendant's insurance carrier offered to settle both the personal injury claim and the property damage claim for $100,000. The adjuster from the insurer sent a proposed release to plaintiff. Plaintiff signed the release but deleted all language referencing his property damage claim and inserted the clause "other than property damage." In other words, the release signed by plaintiff and returned to defendant's carrier was limited to his personal injury claim.

The insurer rejected that change.

A few months later, the parties settled the property damage claim for just over $7,000. The adjuster subsequently sent plaintiff another release in the amount of $100,000, but plaintiff refused to sign that release or a stipulation of discontinuance.

Defendant thereafter moved for an order enforcing the purported "settlement," contending that the modified release signed by plaintiff constituted a stipulation under CPLR 2104.

Not surprisingly, the court rejected that attempt. The plaintiff had changed his mind and there was no enforceable settlement. In response to the original offer of $1,000,000 to settle both claims, the plaintiff rejected the offer and counter offered to settle only the bodily injury claim. That was rejected by the adjuster.

So, there was no agreement, and the offer was off the table. Buyer’s remorse does not recreate an agreement that had been rejected.

04/29/25 Catlin Insurance Company v. Colony Insurance Company
Appellate Division, First Department
Additional Insured Endorsement Which Required Written Contract, Did Not Require Privity to Trigger AI Coverage

Sandy Clarkson is entitled to additional insured coverage under Colony's primary and excess policies issued to defendant Kingstone Builders Inc.

Colony's additional insured endorsement states: "Who Is An Insured is amended to include as an additional insured the person(s) or organization(s) shown in the Schedule [stating "All persons or organizations as required by written contract with the Named Insured"], but only with respect to liability for 'bodily injury' . . . caused, in whole or in part, by: 1. [Kingstone's] acts or omissions; or 2. The acts or omissions of those acting on [Kingstone's] behalf."

The "plain and ordinary meaning” of Colony's additional insured endorsement extends coverage to Sandy Clarkson because Sandy Clarkson was an organization required by written contract with Colony's named insured, Kingstone, to be named as an additional insured.

The written contract is the Kingstone subcontract with McAlpine, which requires Kingstone to name Sandy Clarkson and McAlpine as additional insureds. This endorsement's language is sufficiently broad to require coverage here despite there being no contract between Sandy Clarkson and Kingstone

The contract does not require that it be an agreement between Kingstone and Clarkson, only that there be a contract with Kingstone and “someone” requiring Clarkson to be named as an additional insured.

Colony's duty to defend is implicated because the allegations of the underlying complaint raise a reasonable possibility of coverage. Given Colony's policy, the duty to defend is on a primary and noncontributory basis with Catlin's coverage. As Colony's duty to defend on a primary basis has been triggered, plaintiffs are also entitled to reimbursement of defense costs.

It is premature to rule on indemnification, which must await a determination of liability in the underlying personal injury action.

PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
sep@hurwitzfine.com

05/01/25 State Farm Fire & Cas. Co. a/s/o K&B Global Corp. v. Moving & Storage, Inc.
Appellate Division, First Department
Knowledge of Potential Subrogation Rights Precludes Party From Relying on Release From Insured/Subrogor

In this matter, State Farm paid a fire loss that originated in an adjoining warehouse that was occupied by Moving & Storage. Moving & Storage was insured by Selective at the time of the loss. At the time State Farm paid the claim, it informed its insured, K&B, that it believed Moving & Storage was the responsible party. State Farm also noted that Selective was Moving & Storage’s insurer.

We are further advised that in addition to the claim with State Farm, K&B also pursued payment from Selective. The resolution of that claim resulted in a Release being issued by K&B in favor of Selective in 2021. In the Release, K&B purportedly agreed to also release claims that could have been commenced by any of K&B’s other insurers (i.e., State Farm). When State Farm eventually commenced a subrogation action, Moving & Storage immediately moved for summary judgment on the basis of the K&B/Moving & Storage settlement and release.

The trial court granted the application, and the instant appeal ensued. In reversing, the Appellate Division noted that State Farm raised triable issues of fact that Selective (and Moving & Storage) knew or should have known about State Farm’s prospective subrogation rights. If the alleged tortfeasor (and its insurer) were aware of the subrogation possibility, unilateral actions of insured/payee cannot destroy the subrogation claim. Because there was some evidence that all parties were aware that State Farm was involved in the claim, and likely would be making a subrogation claim, Moving & Storage had not met its burden. The matter was remanded to the trial court for further proceedings on whether knowledge of the State Farm subrogation right was known before or after the Release was signed.

04/25/25 Kearse v. Allstate Veh. and Prop. Ins. Co.
Appellate Division, Fourth Department
Underwriting Guidelines Do Not “Unequivocally” Forbid Insured Risk

Allstate denied and disclaimed coverage to plaintiff due to an alleged material misrepresentation. To prevail on a material misrepresentation defense, the carrier must come forward with evidence that “unequivocally” would have declined to accept the risk if there had been no misrepresentation during the application process. In the matter at hand, the Court found that there were questions of fact as to whether the underwriting guidelines specifically forbid the risk as underwritten. Further, the affidavit of a representative from Allstate was also insufficient to demonstrate that the alleged misrepresentation was material in that Allstate would not have underwritten the risk had there been no misstatement in the application.

LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
lss@hurwitzfine.com

See you in two weeks.

RUFFNER’S ROAD REVIEW
Kyle A. Ruffner
kar@hurwitzfine.com

03/18/25 Hereford Ins. Co. v. Advanced Life Services, Inc, et al
Supreme Court, New York County
Declaratory Judgment Issued in Favor of Insurer, Due to Default of Medical Provider Defendants and Claimants

The insurer in this declaratory judgment action alleged that the claimant defendants were passengers in the insured vehicle when it was struck by another vehicle, leading to a number of no-fault claims. Hereford moved for a default judgment pursuant to CPLR 3215 against the medical providers named in this action which allegedly provided treatment to the claimant defendants.

The court indicated that an application for a default judgment must be supported with proof of service of the summons and complaint, proof of the facts constituting the claim, proof of the default. In addition to furnishing proof of service, the plaintiff must offer some proof of liability to satisfy the court as to the prima facie validity of the uncontested cause of action. There, the insurer provided proof of service on the defaulting parties and submitted an affidavit of its no-fault claims supervisor in support of its motion.

The evidence submitted by the insurer in support of its motion indicated, among other things, that the Medical Provider Defendants have submitted thousands of dollars in No-Fault claims as the alleged assignees of the Claimants. The legitimacy of the claims was questionable as the alleged incident was a hit and run loss and the injuries appeared to be exaggerated compared to the severity of the accident, given one claimant treated far more extensively than the other. The insurer argued the circumstances surrounding the collision raised a strong possibility that the alleged injuries of the Claimants and any subsequent treatment by the Medical Provider Defendants were not causally related to the collision. Further, only one of the claimants appeared for an examination under oath, and her testimony raised further issues as to the legitimacy and medical necessity of the alleged medical treatments. Accordingly, Hereford denied all no-fault claims on the basis that the collision did not arise from an insured event.

Based on the defendant’s failure to file any opposition, and the insurer’s support for its meritorious position, the court granted the default judgment against the non-answering defendant’s, holding Hereford had no duty to pay the claims arising from the subject incident.

04/24/25 Matter of GEICO v. Liriano
Appellate Division, First Department
Petition to Stay Arbitration Granted as No Agreement to Arbitrate the Respondent’s Claim Existed

The Supreme Court had denied the insurers petition to permanently stay arbitration, dismissed the proceeding, and directed GEICO and respondent Rosa Pons De Liriano to proceed to arbitration. On appeal, the Appellate Division unanimously reversed the lower court, granted the petition, and permanently stayed the arbitration.

Even if not timely under CPLR 7503 (c), the petition, the court held the petition should stay should have been granted under the "no agreement to arbitrate" exception. Respondent De Liriano was not a party to any arbitration agreement permitting arbitration of her claim for uninsured motorist benefits under the policy issued by GEICO to nonparty Senasqueris Matos, the named insured. The court explained that GEICO's Supplementary Uninsured Motorists Coverage endorsement defined "insured" to include the named insured and his spouse and the relatives of either the named insured or his spouse. "Relative" was defined as a person related to the named insured who resides in his household. However, GEICO established that De Liriano was not an insured because, although she resided with the named insured, she was not his relative by either blood or marriage.

Therefore, there was never an agreement between De Liriano and GEICO to arbitrate. The court cited to Matter of Allstate Ins. Co. v Marke, 121 A.D.3d 1107, 1108 (2nd Dept 2014), where the Second Department similarly held “Since the respondent was not an insured under the SUM endorsement of the policy, no agreement to arbitrate her claim existed, and the 20-day period of limitations set forth in CPLR 7503 (c) did not apply.”

RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
rpm@hurwitzfine.com

05/05/25 Catlin Ins. Co. v. Champ Constr. Co.
United States District Court, SDNY
District Court Maintains Jurisdiction Over Insurance Dispute Following Uncontested Dismissal of Non-Diverse, Second-Layer Excess Insurer

In conjunction with a motion to dismiss for lack of subject-matter jurisdiction, defendant, Navigators Insurance Company, filed an affidavit and additional documentation showing that its principal place of business is in Hartford, Connecticut—the same as the plaintiff, Catlin Insurance Company—rendering the parties non-diverse under 28 U.S.C. §1332. That can be a real problem in federal court and district courts are sticklers for jurisdiction (Constitutionally speaking, of course).

Not to worry. Relying upon Federal Rule of Civil Procedure 21, Catlin conceded the lack of diversity but asked that Navigators alone be dismissed from the action as a dispensable party. Intrigued, and by Order to Show Cause, the SDNY asked the parties why it “should not dismiss Navigators without prejudice, preserving diversity jurisdiction.” No objections came and thus there was no argument that Navigators—a second-layer excess insurer for the insured defendant, which had two primary insurers and a first-layer excess insurer—was indispensable under Federal Rule of Civil Procedure 19. Thus “rendering a judgment in Navigators' absence will not prejudice the remaining defendants, and no defendant has argued it will.”

Navigators dismissed; the case can proceed.

Maxwell’s Minute: Obviously, I am kidding about being sticklers. District courts have an independent obligation to determine whether subject matter jurisdiction exists over a case under Article III of the Constitution.

A copy of this decision is available upon request.

04/25/25 1225 Randall Ave. LLC v. Hiscox Ins. Co. Inc.
United States District Court, EDNY
District Court Without Jurisdiction Over Insurance Dispute Due to a Failure to Establish the Domicile of Individual Members of Plaintiff LLC

Did I mention district courts are sticklers for jurisdiction under the Constitution? While the SDNY in Catlin above found diversity, the EDNY in this one did not.

On December 5, 2024, 1225 Randall Avenue LLC filed suit in Nassau County Supreme Court, seeking a declaratory judgment that Hiscox Insurance Company Inc. is obligated to indemnify 1225 Randall Avenue in a separate state court action. 1225 Randall Avenue served the Complaint on Hiscox Insurance Company Inc. on January 7, 2025, and Hiscox removed the matter to the EDNY.

Thereafter, the EDNY issued an Order to Show Cause why the matter should not be remanded to Nassau County Supreme Court for lack of subject matter jurisdiction. Specifically, while the amount in controversy exceeded the $75,000 threshold for diversity jurisdiction under 28 U.S.C. §1332 and Hiscox had established that it was a citizen of Illinois, the Notice of Removal

“failed to establish 1225 Randall Avenue's citizenship because: (1) ‘the Complaint does not allege the identity of all members of [1225 Randall Ave] or the citizenships of those members’ and (2) ‘the Notice of Removal's allegations as to [1225 Randall Avenue's] members' citizenship are made “upon information and belief.” ' "

In response, Hiscox provided the EDNY with, among other things, a

“document written in Hebrew, which [Hiscox] represents is a record from the Israeli Corporations Authority that ‘identify[ing]’ the members of Leviyor Investments, LLC ("Leviyor Investments"), which, in turn, is a member of 1225 Randall Avenue (Israeli Corporations Authority Record . . . [and also] identifies 1225 Randall Avenue's members as individuals Tamir Gayr, Erez Dasa, and Hillary Segal and the limited liability company, Leviyor Investments, whose members are Yoav Levinson, Gili Levinson, and Iris Levinson (the "Levinsons"). (Citation omitted). The Response represents that Gayr, Dasa, and Segal are ‘citizens of New York’ and that the Levinsons are citizens of Israel.”

The EDNY also noted that 1225 Randall Avenue filed a Corporate Disclosure Statement representing that:

"[t]he members of 1221 [sic] Randall are: Tamir Gayr, a citizen of the State of New York"; "Hilary Segal, a citizen of the State of New York"; "Erez Dassa, a citizen of the State of New York"; and "Leviyor Investments Ltd., an Israeli limited liability company whose members are all residents of Israel."

Not impressed, the EDNY found that Hiscox, as the party asserting jurisdiction, failed to carry its burden to establish 1225 Randall Avenue’s citizenship for purposes of diversity jurisdiction. To that end, Hiscox was required to establish that each individual member of 1225 Randall Avenue LLC was diverse from Hiscox and failed to sufficiently do so. While Hiscox established the identities of the 1225 Randall Avenue, it was unable to satisfy the EDNY as to the location of their individual citizenships.

The EDNY initially took issue with Hiscox’s reliance upon an untranslated Hebrew-language document relative to the members of Leviyor Investments. But even accepting Hiscox’s representations regarding the document’s contents, the EDNY also noted that the document merely, in conclusory fashion, states that the Levinsons are citizens of Israel. An email exchange with 1225 Randall Avenue’s counsel that was also submitted in support highlights this point, since that exchange makes clear that the Levinsons merely “reside” in Israel, which is insufficient to establish a member’s domicile for jurisdictional purposes. Specifically, domicile is more than just a residence, but rather “the place where a person has his true fixed home and principal establishment, and to which, whenever he is absent, he has the intention of returning.

Unsatisfied, the EDNY remanded the matter to Nassau County Supreme Court.

Maxwell’s Minute: Hiscox unfortunately “fell victim to one of the classic blunders—the most famous of which is ‘never get involved in a land war in Asia’—but only slightly less well-known is this:” never remove a matter involving an LLC until you have obtained sufficient evidence as to the identity of the individual LLC-members and their domicile (not just residence). “Inconceivable!”

At the end of the day, the case is certainly not over and there are worse fates than remand. After all, “[t]here's a big difference between mostly dead and all dead. Mostly dead is slightly alive.”

#ThePrincessBridePuns

I jest, but it could happen to you very well if you are not careful.

A copy of this decision is available upon request.

STORM’S SIU
Scott D. Storm
sds@hurwitzfine.com

04/29/25 Pilgrim Cathedral of Harlem Inc. v. Harleysville Worcester Ins. Co.
United States District Court, S.D. New York
The Court, Rather Than an Umpire, Is the Correct Adjudicator for Interpreting the Meaning of the Appraisal Award

Plaintiff owned a property insured by Defendant that was damaged by a burst pipe. The parties disagreed on the value of the loss and submitted the dispute to appraisal. An Appraisal Award was issued listing $520,644.11 for "Dwelling" and $173,378.62 for "Mitigation/Drying". Defendant paid $520,644.11 total, while Plaintiff claims it is owed $694,022.73.

Defendant reads the Appraisal Award to award a total of $520,644.11, construing the $173,378.62 for "Mitigation/Drying" as a line item included within the $520,644.11 total. Plaintiff reads the Appraisal Award to award a total of $694,022.73, construing the $173,378.62 for "Mitigation/Drying" to be an additional component of the award on top of the portion of the award that represents the cost to replace the other damage to the dwelling.

The question concerns who should resolve the instant dispute as to the meaning of the Appraisal Award: an umpire or the Court. Defendant argues that "[u]nder the plain terms of the Harleysville Policy, this dispute should be submitted to an umpire." Plaintiff responds that the appraisal has concluded, and the award delivered by the appraisers must now be enforced by the Court. The Court found the Plaintiff to have the better argument. The court denied Defendant's motion to compel appraisal and stay the litigation.

Pursuant to Section 7601 of the New York Civil Practice Law and Rules, appraisal agreements are to be enforced by the same methods as arbitration agreements.

The Court held that the dispute concerns interpretation of the appraisal award, not valuation of the loss, so it falls outside the scope of the policy's appraisal clause. Interpretation of an appraisal award is a legal question for the court, not a factual dispute for appraisers. The court must interpret the award based on its language and the record before the appraisers, not post-award statements. After issuing the Appraisal Award, the appraisers are divested of the authority to amend it or to opine upon its interpretation.

Under New York law, an appraisal may only decide a limited set of factual disputes, including the actual cash value, the replacement cost, the extent of the loss or damage and the amount of the loss or damage which shall be determined as specified in the policy. If an appraisal remains within the limits prescribed by statute, and if the panel substantially complies with the terms of the submission, the court may modify or vacate the award only on a showing of fraud, bias, or bad faith.

The interpretation of an appraisal award is a purely legal issue that cannot be determined by an appraisal, which is limited to factual disputes over the amount of loss for which an insurer is liable. An appraisal is not appropriate to resolve a dispute where the dispute concerns a matter other than the computation of the amount of loss. An appraisal is appropriate not to resolve legal questions, but rather to address factual disputes over the amount of loss for which an insurer is liable.

There is a well-established rule that arbitrators may not be deposed absent clear evidence of impropriety. While arbitrators may be deposed regarding claims of bias or prejudice, courts have refused to permit parties to depose arbitrators or other judicial or quasi-judicial decision-makers regarding the thought processes underlying their decisions.

Absent an agreement by the parties to the contrary, once arbitrators have finally decided the submitted issues, they are functus officio, meaning that their authority over those questions is ended. Even after rendering an award, an arbitrator retains limited authority to correct a mistake which is apparent on the face of the award. The exception for mistakes apparent on the face of the award is applied to clerical mistakes or obvious errors in arithmetic computation.

Because the instant case raises a question of law as to the proper reading of the Appraisal Award, the Court is the correct adjudicator. The further question of how to interpret the Appraisal Award—including whether the award is ambiguous and whether any ambiguities can be resolved through examination of the language of the award and of the record before the appraisers—remains for future proceedings.

FLEMING’S FINEST
Katherine A. Fleming
kaf@hurwitzfine.com

04/29/25 Cravens v. Montano
Arizona Supreme Court
An Employee Operates a Non-Owned Auto “In Connection With Your Business” When Using the Vehicle While Engaged in the Employer’s Business

On the date of loss, Montano, an employee of Casas Custom Floor Care, LLC, was scheduled to arrive at the company’s main yard, receive his assignment for the day, and travel in a work vehicle to the assigned jobsite. Montano was late and borrowed his mother’s truck. After work, while Montano driving to the main yard to correct his time sheet. He ran a red light and collided with Ms. Cravens’s vehicle, killing her.

Ms. Cravens’s husband (“Cravens”) sued Casas and Montano, alleging Montano negligently caused the wrongful death of his wife and that Casas was vicariously liable for Montano’s actions. Cincinnati Indemnity Company insured Casas under an auto policy, which extended coverage to Montano if he, in part, was using a “covered auto” “in connection with” Casa’s business.

Cincinnati defended Casas in the lawsuit but issued Montano a reservation of rights letter disputing its obligation to defend or insure him. Cincinnati argued that it was not required to provide coverage for Montano unless at the time of the accident he was driving in the course and scope of his employment for the business. Cincinnati refused coverage absent a court finding that Montano satisfied this condition. The superior court granted summary judgment in favor of Casas on the respondeat superior claim.

After Cincinnati reserved its rights, Montano and Cravens entered into a Morris Agreement. A Morris Agreement is named after a seminal Arizona case. The insured agrees with the plaintiff for judgment to be entered against it—only to be collected against the insurance policy proceeds—and to assign its rights under the policy.

Before Montano and Cravens filed this stipulated judgment with the court, Cincinnati intervened in the case, seeking a declaration that it had no duty to indemnify Montano and challenging the stipulated judgment as unreasonable. Cravens argued that Cincinnati breached its contractual obligation to indemnify Montano by denying coverage. Cravens moved for summary judgment on the coverage issue. The superior court agreed with Cravens that Montano had used his mother’s vehicle in connection with the business at the time of the accident. Cincinnati moved for summary judgment on the enforceability of the agreement. The superior court found the Morris Agreement was reasonable and enforceable. The appellate court affirmed the lower court’s rulings on coverage and the Agreement.

On appeal, the Arizona Supreme Court considered the meaning of the phrase “in connection with your business” as it relates to an employee’s use of a “non-owned” “covered auto.” Cincinnati argued that “in connection with your business” meant that an employee must be using a vehicle in the course and scope of employment at the time of the accident. Cravens argued that “in connection with your business” meant an association, link or relationship between the vehicle’s use and the business at the time of the accident even if the relationship with the business falls short of the necessary showing to establish liability under respondeat superior. The court concluded that both interpretations were reasonable based on the policy’s language, but the court rejected both parties’ interpretations.

Since Cincinnati explicitly used “course of employment” language elsewhere in the policy, the court assumed that the insurer intended a meaning other than acting within the course and scope of employment. However, the court did not want to broaden coverage by merely requiring an association, link, or relationship to the business. The court considered case law from other jurisdictions requiring a correlation between an employee’s vehicle use and a business purpose that falls short of scope of employment but exceeds a mere association, link, or relationship. The court held that an employee operates a non-owned auto “in connection with your business” when using the vehicle while engaged in the employer’s business. To qualify, an employee’s use of a vehicle must be directly involved with, or in furtherance of, an employer’s business purpose but does not include a routine commute to or from an employer’s office. The court also held that a contingent Morris agreement is enforceable if it otherwise meets the substantive requirements of such agreements to ensure against fraud, collusion, unfairness, or unreasonableness.

Accordingly, the court vacated the appellate court’s coverage ruling, affirmed the ruling concerning the Morris agreement, reversed the superior court’s judgment, and remanded for further proceedings.

GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
edg@hurwitzfine.com

New Jersey courts were quiet this week—hopefully, that means double cases for us next time around.

O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
rpo@hurwitzfine.com

05/01/25 Clear Blue Spec. Ins. Co. v. Landrieu Concrete & Cement Indus., LLC
United States Court of Appeals, Fifth Circuit
Sugar Contamination in Vehicle Constituted “Use” of Automobile and Contamination Was First Instance of Property Damage, Not When Construction Defect Manifested

A R&J employee mistakenly delivered a sand mixed with sugar mixture to a concrete plant owned by Landrieu. Landrieu used the sand-sugar mixture to produce defective concrete. The concrete failed to properly cure and had to be removed as well as replaced. Landrieu filed a claim with R&J’s commercial general liability carrier, Clear Blue. Clear Blue denied coverage applying the Auto Exclusion. Landrieu filed suit challenging the denial, among other claims. For purposes of this review, we look at the court’s approach to the Auto Exclusion.

The pertinent Auto Exclusion contained the typical language seen in general liability polices reads:

"[P]roperty damage" arising out of the ownership, maintenance, use or entrustment to others of any . . . "auto" . . . owned or operated by or rented or loaned to any insured. Use includes operation and "loading or unloading".

Same policy contained the usual definition of “physical damage,” that reads:

Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or
Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the "occurrence" that caused it.

The district court reasoned the Auto Exclusion applied for three reasons. First was that the damage occurred in the back of the truck when the sugar contaminated the sand. Second, was the lack of maintenance by R&J due to improper cleaning of the truck bed and the loading and unloading of the sand. Third and finally, R&J’s actions use of the vehicle caused the loss.

Landrieu contested that the property damage occurred the moment the concrete slabs cracked and failed to cure. Not when the sugar contaminated sand. Landrieu looked to Louisiana Law’s manifestation theory doctrine. Meaning that in the context of a construction defect case, the accident occurs when the defect manifests itself.

While Landrieu was correct that the weight of Louisiana authority holds the manifestation theory is the appropriate lens to determine the initial occurrence of property damage. The appellate court noted there is a lack of uniformity and have indeed found the theory inappropriate under certain facts.

The court identified the seminal case on the issue, Korossy v. Sunrise Homes, Inc., qualified its holding by stating ”under the facts of these cases.” It also looked at Orleans Parish School Board v. Scheyd, Inc., which reasoned that although the policy states property damage must occur during the policy period, the policy does not say the damage must become noticeable during the policy period. The court further quoted Scheyd’s reasoning that the manifestation theory is appropriately applied where there is no credible proof of when the damage actually occurs.

With that said, the court looked to Barry Concrete, Inc. v. Martin Marietta Materials, Inc. Which contained highly similar facts wherein sugar also contaminated a concrete mixture caused the slab to crack. That court reasoned that the failure to properly clean out the trucks constituted use and the continuous mixture of the sugar with the concrete aggregate was the continuous, repeated exposure. Thus, the sugar contamination was the “occurrence” of “property damage.” In applying Barry Concrete, the court determined the sugar contamination in the R&J vehicle was when the “property damage” occurred.

The appellate court rejected Landrieu’s argument that no “use” of the vehicle occurred. It did so by reiterating that the contamination occurred in the vehicle. It also dismissed Landrieu’s argument that washing a vehicle did not constitute “maintenance.” The court noted the term maintenance was not limited in the policy. And Bolin v. Safeco Insurance Cos., found periodic washing of a vehicle constituted maintenance.

Landrieu’s final contention is that there was no “property damage” because there was no physical damage to the sand, there was no loss of use. Clear Blue noted that one does not deal in single grains of sand, but rather large quantities. And one would expect if that large quantity of sand was not fit for its intended use, then a loss of use occurred. The court agreed and again applied Barry Concrete to determine the inability to apply to the sand to its intended purpose constituted a “loss of use” and thus, “property damage.”

LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
ihl@hurwitzfine.com

05/02/25 Security Natl. Co. v. Lynch Outdoor Servs. LLC
New York State Supreme Court, New York County
Court Held Pothole Repair Did Not Classify as Landscaping Gardening, and Commercial General Liability Policy Did Not Provide Coverage Based on Business Description Limitation Endorsement

Security National Insurance Company (“Security National”) issued a commercial general liability insurance policy to Lynch Outdoor Services LLC (“Lynch”), providing coverage for Lynch’s business, which was described on the Declarations page as “Landscaping Gardening.” The policy contained an endorsement, which identified that coverage was limited to the business description included in the Schedule. The endorsement contained a description of what was included within, “Landscaping Gardening” and what was specifically not included.

In March 2021, Courtney Jackson (the “Claimant”) commenced an action against Lynch for injuries sustained in a trip-and-fall. The Claimant alleged that the accident was caused by Lynch’s failure to maintain and repair the property in a reasonably safe and suitable condition and repair. The Claimant alleges she tripped over a pothole, which resulted in bodily injuries.

Lynch filed a claim with Security National seeking coverage. Security National disclaimed coverage, and issued a courtesy defense, subject to a resolution of the coverage dispute through a declaratory judgment action. Security National brought the instant action to determine whether the policy, providing coverage for Lynch’s Landscaping Gardening, applies to provide coverage for the Claimant’s claims.

The court determined that the clear language of the policy does not provide coverage for the specific maintenance work that is alleged to have caused the Claimant’s claims. The Security National policy contained an endorsement that coverage is limited to landscaping gardening work, and did not include coverage for pothole repair. The court identified that landscape and gardening work cannot be deemed to include pothole repair, nor can maintenance and gardening be deemed to include pothole repair.

As such, the court found that Security National has no duty to defend or indemnify Lynch in the underlying personal injury action.

04/21/25 Preferred Hosp. Leasing Muleshoe, Inc. v. Starr Surplus Lines Ins. Co.
New York State Supreme Court, Kings County
Causes of Action Sounding in Texas Substantive Law Dismissed, Based on Forum Selection and Choice of Law Clause Within Property Policy

Preferred Hospital Leasing Muleshoe, Inc. (“PHLM”) filed an action to recover damages from Starr Surplus Lines Insurance Company (“Starr”) under a property insurance policy after five properties located in Texas were damaged as a result of hail, wind, and rainstorm.

Both parties were domiciled and incorporated in the State of Texas. However, the policy contained a choice of law and forum selection clause identifying that any suit, action, or proceeding against Starr, must be brought solely and exclusively in a New York state court or a federal district court sitting within the State of New York. The laws of the State of New York shall solely and exclusively be used and applied in any such suit, action, or proceeding, without regard to choice of law or conflict of law principles.”

PHLM asserted fourteen theories of damages, in addition to a cause of action for breach of contract. Of note, PHLM asserted causes of action rooted in both Texas and New York law.

Starr moved to dismiss all causes of action other than the breach of contract claim asserted under New York law. PHLM did not oppose the arguments seeking dismissal of NY General Business Law §349, Breach of the Duty of Good Faith and Fair Dealing under New York law, and New York Insurance Law §2601. As such, the causes of action were dismissed by the court, without opposition.

In addressing the motion for summary judgment, to dismiss all causes of action under Texas Law, the court began its analysis under New York common law rules.

Under New York common law, matters of procedure are governed by the law of the forum. Substantive law falls to a choice of law analysis, and thus the courts must apply a contractual choice of law to substantive issues only. As such, New York courts do not engage in any conflicts analysis where the parties include a choice-of-law provision in their contract.

Here, the forum selection and choice of law clause evidenced an unambiguous intent to apply New York substantive law. As such, the court found that there are no triable issues of fact concerning PHLM’s causes of action under substantive law, and they must be dismissed.

Accordingly, the Court dismissed all causes of action, besides that sounding in New York law for breach of contract.

LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
lrh@hurwitzfine.com

05/09/25 New York Senate Bill S7576
New York State Senate
Senate Seeks to Set Requirements for the Sale, Lease, and Rental of Powered Bicycles and Mobility Devices

Senate Bill S7576, which was referred to Consumer Protection on April 22, 2025, seeks to set requirements for the sale, lease, and rental of powered bicycles, powered mobility devices, and storage of batteries for such devices.

S7576 would add a new section 391-ee to the general business law that would require that all sales of powered bikes, powered mobility devices, and storage batteries must be certified by an accredited testing laboratory with the safety standards established with the fire department. 391-ee would require a certification logo to be displayed on all bikes, batteries, and mobility devices.

The Bill provides that each violation would result in a civil penalty. The first violation would result in a zero-dollar fine, each violation after, within two years of the first, would result in a civil penalty of not more than $1,000.

NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
hasanderson@sanderson-law.com

The content of this column also appears in the ‘Liability & Insurance,” a monthly newsletter focusing on Canadian coverage and published by Heather Sanderson. Contact her for a subscription.

05/01/25 Crandall University v. AIG Insurance Company of Canada
New Brunswick Court of Appeal
Exclusionary Words “Alleging, Arising Out Of, Based Upon or Attributable to, or in Any Way Involving, Directly, or Indirectly, Sexual Misconduct,” Apply to Remove the Obligation to Defend an Otherwise Covered Claim, if, Wholly or in Part, Sexual Misconduct Gave Rise to That Underlying Claim

Moncton, New Brunswick, is a city known for its educational institutions, including Crandall University, which has evolved from its origins as Atlantic Baptist University to offer a range of degree programs. In 2015, Crandall hired Dr. John G. Stackhouse, Jr., a prominent Canadian theologian, as a Professor of Religious Studies and Dean of Faculty Development. At the time, Stackhouse was a well-regarded author and speaker, somewhat of a media maven, known for his expertise in theology, ethics, and the history of Christianity. He previously held a tenured position at Regent College in Vancouver.

In March 2023, an Instagram profile named “dobettercrandall” surfaced, alleging incidents of harassment linked to a specific professor at Crandall University. In response, Crandall hired labour lawyer, Joël Michaud, K.C., to conduct a workplace investigation, which concluded in November 2023. Based on the investigation's conclusions, Crandall decided to terminate Stackhouse who had been on leave since July 2023. Stackhouse sued Crandall, claiming that Crandall terminated his employment without just cause; that the investigation was flawed, and that the university wrongfully damaged his reputation and that he is wrongly accused of any form of sexual harassment. Dr. Stackhouse’s wife later joined her husband’s action, adding privacy-related torts to the claims.

Crandall’s defence stated that they were aware of Stackhouse’s inappropriate language with female students prior to March 2023 and that he had promised to change his behaviour. The investigation revealed that Stackhouse’s behaviour did not improve. A student provided 78 concerning emails from Stackhouse, many with sexual references. Stackhouse admitted the emails were inappropriate. Additionally, the defence claimed Stackhouse began a romantic relationship with a student while married and failed to disclose a previous investigation at Regent College during his hiring. Crandall asserted it had just cause to terminate Stackhouse, and that the termination aligned with Crandall’s Christian values.

Crandall held a “Not-For-Profit Risk Protector” insurance policy issued by AIG. The exclusion, titled “SEXUAL MISCONDUCT AND CHILD ABUSE EXCLUSION (D&O AND EPL COVERAGE SECTIONS),” was invoked by AIG to deny a duty to defend the Stackhouse wrongful dismissal claim. That exclusion read in part: “the Insurer shall not be liable to make any payment for Loss in connection with any Claim(s) (including but not limited to any derivative or representative class actions) made against any Insured(s) alleging, arising out of, based upon or attributable to, or in any way involving, directly or indirectly any Sexual Misconduct…”. "Sexual Misconduct" is defined to mean “… any licentious, immoral or sexual behavior, sexual abuse, sexual assault, or molestation intended to lead to or culminating in any sexual act against individual(s).”

The Trial Decision

Various arguments that the exclusion was ambiguous were advanced, but Crandall’s principal argument at trial was that the exclusion only applies when the institution and its insured agents are accused of sexual misconduct.

The trial judge disagreed and held that the exclusion unambiguously reflected an intention to exclude claims that involve indirect sexual misconduct. She concluded that the Stackhouse claims, including those of Mrs. Stackhouse, advanced such indirect claims and concluded that AIG correctly denied a duty to defend the action.

Crandall appealed to the New Brunswick Court of Appeal.

The Appeal Decision

On appeal, Crandall again argued that the exclusion was ambiguous. It was alleged that the ambiguity arose because the policy covered wrongful termination arising from the undefined term "sexual harassment" but excluded wrongful dismissal arising directly or indirectly from the defined term "sexual misconduct." That definition did not include “sexual harassment.” Crandall argued that the failure to include “sexual harassment” in the definition of “sexual misconduct” rendered the exclusion unclear and ambiguous.

The trial judge rejected this assertion, stating that the plain and ordinary meaning of "sexual harassment" is a form of sexual behavior, which falls under the broad definition of "sexual misconduct" as "immoral and sexual behavior". The judge concluded that the definition of "sexual misconduct" in the exclusion inherently includes "sexual harassment". The Court of Appeal agreed with the trial judge.

Finally, the Court of Appeal had no difficulty holding that the Stackhouses’ claims arise indirectly from the defined term “sexual misconduct.” The appeal decision discusses the level of connection required between a claim and the basis for exclusion in insurance policies. Words denoting a "strong connection" between the claim and the basis for exclusion, are "based upon or arising from". Some exclusion clauses use language that connotes a weaker or less direct connection, such as "arising out of or in connection with". In Crandall's case, the Sexual Misconduct Exclusion uses the phrase "in any way involving, directly or indirectly." This broad language reflected an intention to exclude claims with even a weak connection to sexual misconduct. The Stackhouses’ claim assert that sexual misconduct did not occur, and therefore Crandall did not have cause to dismiss Dr. Stackhouse. As a result, the trial judge’s determination that the Stackhouses’ claims arose “indirectly from the sexual harassment of a student by Dr. Stackhouse” cannot be disputed. Therefore, the Court of Appeal concluded that the trial judge correctly interpreted the claims as involving indirect sexual misconduct within the meaning of the exclusion.

Conclusion

The New Brunswick Court of Appeal dismissed Crandall University's appeal, affirming the application judge's interpretation of the Sexual Misconduct Exclusion meaning that AIG was not obligated to defend Crandall. The appeal was dismissed with costs of $2,500 awarded to AIG.

It is troublesome that at trial and on appeal the Statement of Defence was referred by both Courts in order to provide context to Crandall’s demand for a defence. The duty to defend is to be determined solely on the basis of the allegations against the insured party claiming a right to a covered defence. The additional context or colour offered by the refence to the defence was not required and ought to have been an appealable error.

There is limited precedent in New Brunswick for a court in a duty to defend application to look beyond the allegations against the insured to determine if the policy mandates a defence. In Royal & Sunalliance Insurance Co. of Canada v. Thorne 2003 NBCA 61, the insured punched an opposing player with a closed fist during a rec-league hockey game. That player sued the insured. The issue before the Court of Appeal was whether a CGL insurer, whose policy contained an intentional act exclusion with a self-defence exception, was required to defend. The claim against the insured alleged an intentional act with negligence in the alternative. The allegations of negligence were clearly derivative of the intentional act and subsumed within the allegation of intentional act. The insurer denied a duty to defend. The insured, Thorne, brought a duty to defend application supported by his own affidavit that explained that he acted in self-defence. That Court held that it was proper to admit that affidavit into evidence in the duty to defend application:

The pleading against Thorne did not contain any explanation as to why hethrew the punch; the Court stated “one would not expect that the element triggering coverage, namely justifiable self-defence, would percolate from the allegations set out in the pleadings issued against the insured. Logically, assertions in support of self-defence will surface only in pleadings formulated by the insured.”
Normally, the duty to defend cannot be determined on the basis of self-serving pleadings issued by the insured which can slant the allegations so they trigger the duty to defend; however, in the case of justifiable self-defence, if one were to rely solely on the claim against the insured, that insured would be deprived of a defence until self-defence was proven at trial; at that point the insured could apply for reimbursement of the defence costs; the defence agreement under the policy is not a ‘incur the cost and we will pay you later’ contract: “Few insured are capable of bearing, on an ongoing basis, the expense of competent legal representation. In any event, the Policy imposes a "duty to defend", not a conditional post-trial obligation to reimburse defence costs incurred by the insured.”

The insurer in Thorne was obligated to defend.

In a subsequent decision, Michaud v. Sécurité Nationale compagnie d'assurance, 2021 NBCA 39, the same Court evidenced an intention to restrict Thorne to its peculiar facts and the policy wording in issue as it refused to admit extrinsic evidence explaining the insured’s conduct in a duty to defend application. The decision in Crandall, cracks open that door once again, suggesting that ancillary pleadings can add context or colour to the allegations against the insured and are peripherally relevant to a duty to defend application. Doing so allows a duty to defend application to creep towards a trial within a trial – a situation that must be avoided.

At the end of the day, it seems that even if the process was flawed, the decision that AIG did not owe a defence to Crandall was correct, as the policy clearly excludes indirect allegations of the defined term “sexual misconduct” and those indirect allegations were present in the Stakehouses’ action against Crandall.

It took no small amount of courage on the part of the Crandall Board of Governors to terminate a professor who was once touted as a leading light that elevated Crandall’s academic star. Value-based termination carries risk as it can demonstrate how far an employee strayed from the corporate values while under that company’s supervision. Apparently, Regent College in Vancouver went the non-disclosure route when it terminated Stackhouse to avoid that negative publicity. Crandall’s decision to publicly terminate Stackhouse means that the case is being litigated in the courts of New Brunswick and in the court of public opinion.

Labor Law Pointers - Volume XIV, No. 6

Fri, 06 Jun 2025 19:05:26 +0000

Volume XIV, No. 6
Wednesday, May 7, 2025

Note from David R. Adams:

Do you have a situation? We love situations. Give us a call, send an email, drop by; we truly enjoy solving complex Labor Law and risk transfer issues.

Well, it’s May and that means summer is just around the corner. Many, or at least some of us, will remember when the summer was a time to get caught up on files and to have some time to relax. That ship has sailed and will never return. Now we have full calendars all year round, and the summer just means it looks nicer outside the window of the office.

With Marc out on paternity leave, our schedules are busy but remember that we always make time to answer your questions, your “situations”, as they relate to Labor Law and Risk Transfer.

In our first picture of the month, we have a situation where a worker's company was hired by the owner of a restaurant to change the wording on the sign. The worker’s, now plaintiff’s, employer provided him a ladder which was missing one of the feet and was very wobbly. He complained about the ladder to his boss who told him it was the only ladder he had and that he needed to use what they had to get the job done and done quickly. The plaintiff, while putting letters on the sign, fell when the ladder shifted under him and he was injured. § 240(1) case?

First we identify the prima facie case. The plaintiff was a person so employed and thus a valid plaintiff. Second, the owner of the sign is a valid defendant as the sign is made of component parts and thus a structure. Third, the injury was caused by an elevation differential and the effects of gravity thus qualifying. The problem for the plaintiff is that the overall job, that of changing the letters on the sign is not a covered activity. There is no category within which this activity falls which would qualify: there is no substantial alteration to the structure, no construction, no demolition and no repair. Summary judgment motion by the defendant owner would be successful.

In our second offering of the month, the owner of an apartment building hired a roofing company to repair the leaking gutters. The employee sent to the building discovered that the ladders he had brought did not reach the area that needed repair, so he looked in back of the building and saw a lull there. He discovered it was owned by a neighboring business, and he asked if he could borrow it. He also found several cinder blocks on the ground which he slid on the forks to stand on when he went to repair the gutter. Plaintiff has an OSHA 10 and knew that this would not be an OSHA approved method. When he was reaching to fix the gutter, the cinder block moved, and he fell. § 240(1)?

The plaintiff has a prima facie case as the plaintiff is a person so employed. The property owner is a valid defendant as the building is a commercial building, the project was a repair, and the protections of the Labor Law apply. Finally, the plaintiff was injured by an elevation differential and the effects of gravity. The defendant will make a summary judgment motion and claim that this is a sole proximate cause case. The five essential elements of the defense are 1) there must be an appropriate safety device which is 2) available which the plaintiff 3) fail to use or misuses when he 4) knew he was expected to use it and did so for 5) no good reason. In this case, the plaintiff was not provided with an appropriate safety device and thus the likely outcome is summary judgment for the plaintiff.

That’s it for this month. As always, please feel free to reach out to us with any questions Labor Law or risk-transfer related. Hope you learned something.

-David

Hurwitz Fine P.C.
The Liberty Building
424 Main Street, Suite 1300
Buffalo, New York 14202
Phone: 716.849.8900
Fax: 716.855.0874

Mederos v 147 Amsterdam LLC
April 1, 2025
Appellate Division, First Department

Plaintiff's ward (Vinicio) was injured in an accident involving a scaffold, although no one witnessed the accident itself, and Vinicio's injuries prevent him from recalling how the accident occurred. After hearing a sound, witnesses discovered Vinicio on the ground next to a collapsed/overturned scaffold. The Trial Court granted plaintiff’s motion for partial summary judgment on his Labor Law §240(1) claim.

The Appellate Division unanimously affirmed the motion court finding that the evidence was sufficient to establish plaintiff's prima facie entitlement to summary judgment on the Labor Law § 240 (1) claim as the evidence was sufficient to conclude that Vinicio fell from the scaffold, and that the absence of proper protection was at least a proximate cause of his accident.

PRACTICE POINT: Unlike pondering whether there is a sound if a tree falls in the woods and there is no one there to hear it, if a person falls from a scaffold, but no one sees it, there can be a Labor Law § 240(1) claim.

Cunningham v City of New York
April 3, 2025
Appellate Division, First Department

Plaintiff, an environmental inspector employed by the New York City Transit Authority (NYCTA). Plaintiff was taking samples from a subterranean electrical closet in downtown Manhattan in advance of a project to repair damage incurred during Superstorm Sandy. Those samples would be sent for testing, and then, only after the area was found clear of asbestos or an asbestos contractor engaged by NYCTA had performed mediation, would defendant TCE begin its contracted for work.

The Trial Court denied plaintiff motion for partial summary judgment on his Labor Law §240(1) and 241(6) claims and granted motion of the defendants dismissing plaintiff’s complaint.

The Appellate Division unanimously affirmed the motion court finding that Plaintiff's reliance on McNeill v LaSalle Partners (52 AD3d 407 [1st Dept 2008]) was misplaced. At the time he was injured, the plaintiff in McNeill was monitoring ongoing asbestos abatement in an active construction worksite, while, here, the work had not begun. Plaintiff's work as an environmental inspector was merely investigatory, terminating prior to the actual commencement of any subsequent asbestos removal work, and was not encompassed by the statute.

PRACTICE POINT: To be covered under the statute, the enumerated work must be underway. Activities like inspections or preliminary planning for a construction project, if not part of the actual construction work itself, are not covered. It is important to get specific details of what stage in the project the incident occurred and what activity the injured plaintiff was engaged in.

Labor Law § 200 and Common-Law Negligence (EDA)

The Appellate Division unanimously affirmed the motion court finding that Plaintiff was unpersuasive in arguing that, as an employee of NYCTA, he was under the supervision and control of NYCTA's contractors. The contracts also showed that NYCTA retained ultimate control over its property and employees. Neither TCE, a contractor, nor Liro, the construction manager, were permitted in the area until after asbestos sampling by NYCTA employees and asbestos remediation by other NYCTA contractors had been completed. The Court further held that the City was an out-of-possession landlord who cannot be liable under the facts here (see Arteaga v City of New York, 101 AD3d 454, 454 [1st Dept 2012]).

Hartrum v Montefiore Hosp. Hous. Section II Inc.
April 3, 2025
Appellate Division, First Department

Plaintiff laborer was employed by third-party defendant Electronic Services Solutions, Inc. (ESS), which was engaged in the decommissioning and removal of communications equipment owned by Flo TV Incorporated and Mediaflo USA, Inc. (collectively, Flo) that was located on the roof of a building owned by Monte Housing. The roof was leased by Monte Housing to collective defendants SBA Site Management, LLC, SBA Site Management, LLC, as successor-in-interest to AAT Communications Corp., and AAT Communications LLC (SBA), and SBA subleased space to Flo. When the sublease terminated, Flo engaged the services of general contractor KMB Design Group, LLC (KMB) to remove its equipment, and KMB subcontracted the work to third-party defendant ESS. While a piece of sheet metal was being hand-hoisted, without tag lines, from a penthouse bulkhead roof to the main roof 20 feet below, it began to swing wildly, striking plaintiff and causing significant lacerations to his arm. Plaintiff brought

The Trial Court denied plaintiff’s motion for partial summary judgment on his Labor Law §240(1), denied motions of Monte Housing, SBA, Flo & KMB for summary judgement on plaintiff’s claims, and denied summary judgment on asserted contractual indemnity claims made by Defendants Monte Housing, Flo, SBA, & KMB.

The Appellate Division unanimously affirmed the motion court finding that although Flo argued that the supervisor also testified to an inconsistent version of events plaintiff purportedly gave while in the hospital, that ambiguous description can be read consistently with the version on plaintiff's C-3 report and deposition testimony. Moreover, to the extent there were discrepancies, the purported alternate version would still lead to Labor Law § 240(1) liability. Thus, even assuming the conversation occurred and it was inconsistent, it was a distinction without a difference.

The Appellate Division also found SBA's claim that it is not a proper Labor Law defendant because it was effectively an out-of-possession lessor is unpersuasive. Although it was their sublessee that contracted with KMB for the equipment removal, SBA's lease with Monte Housing required it to ensure that the equipment was erected and maintained in a safe manner. Its sublease with Flo did not transfer all of its right in the property and SBA's workers continued to visit the site on an as needed basis to check equipment and read meters. Furthermore, SBA's manager coordinated the equipment removal project for Flo. Under these facts, the Appellate Division found that motion court correctly found that SBA was a statutory defendant.

PRACTICE POINT: A party may be vicariously liable as an agent of the owner for injuries where the party had the ability to control the activity which brought about the injury. When the work giving rise to the duty to conform to the requirements of Labor Law § 240(1) has been delegated to a third-party, that third-party then obtains the concomitant authority to supervise and control that work and becomes a statutory agent of the owner or general contractor. Where, as here, the party had such supervisory control and authority, they are an appropriate Labor Law defendant.

Labor Law § 200 and Common-Law Negligence (EDA)

The Appellate Division unanimously overruled the motion court finding that Plaintiff's Labor Law § 200 and common-law negligence claims should be dismissed against all defendants because the accident arose from the means and methods of the work being performed, i.e., the hoisting of sheet metal from the penthouse bulkhead roof to the main roof 20 feet below. There is no evidence that anyone exercised supervisory control over the means and methods of that activity other than the ESS foreman, who was also solely responsible for planning the hoisting.

Indemnity Issues in Labor Law (AMC)

The Appellate Division held that the Montefiore defendants are entitled to contractual indemnity from SBA as the indemnification provision in the lease was triggered by claims arising out of the use and occupancy of the leased premises by SBA or its subtenants.

The Appellate Division held that Monte Housing is entitled to indemnity from Flo as the indemnity provision in the sublease between SBA and Flo was triggered where a claim is brought as a result of removal of the equipment at the premises.

SBA is also entitled to indemnity from Flo pursuant to the terms of the lease. Although SBA is a proper Labor Law defendant and thus subject to statutory liability, there is no evidence that it was negligent. Thus, claims that indemnity is premature due to possible operation of General Obligations Law are unpersuasive.

Finally, the Appellate Division found that both Flo and KMB are entitled to conditional indemnification over KMB and ESS, respectively. Although the indemnification provisions are triggered, there has yet to be a jury finding as to the extent of ESS’s culpability; thus, conditional indemnification is appropriate.

Alonso v Cabgram Dev., LLC
April 8, 2025
Appellate Division, First Department

Plaintiff was struck by a wooden plank dropped by coworkers while constructing the second level of a 16-foot tall, wheeled scaffold and then was struck by the scaffold when it fell over and landed on top of him.

The Trial Court denied plaintiff's motion for summary judgment on liability on his Labor Law § 240(1) cause of action and denied the motion of defendant Cabgram Developer LLC for summary judgment dismissing the Labor Law §§ 240(1) and 241(6) causes of action.

The Appellate Division unanimously overruled the motion court finding that the collapse of a scaffold is one of those special hazards contemplated by the statute, and an accident caused by a scaffold collapse is prima facie evidence of a Labor Law § 240(1) violation. Cabgram's argument that summary judgment was not warranted because the scaffold was not defective is unpersuasive because plaintiff did not need to demonstrate that the scaffold was defective to establish his prima facie case.

PRACTICE POINT: A plaintiff is not required to demonstrate that a scaffold is defective to be entitled to summary judgment. A falling object, like the boards, striking the Plaintiff are objects either being hoisted or in need of securing.

Vivar v Citigroup Tech., Inc.
April 8, 2025
Appellate Division, First Department

Plaintiff was removing ductwork attached to the ceiling when a piece of duct that had been cut by a coworker fell, causing him to fall backwards off the ladder.

Trial Court denied plaintiff’s motion for summary judgment on his Labor Law §240(1) claim.

The Appellate Division unanimously overruled the motion court finding that the Plaintiff demonstrated prima facie entitlement to summary judgment through his deposition testimony that as he was removing ductwork attached to the ceiling, a piece of duct that had been cut by a coworker fell, causing him to fall backwards off the ladder. Furthermore, defendant's witness testified that when items were cut out of ceiling hangars, as the duct was, they normally were secured and did not fall freely. This testimony established that plaintiff's accident involved the application of the force of gravity to an object.

In opposition, defendant failed to raise a triable issue of fact. Defendant submitted the affidavit of its foreman, who averred that after the accident, plaintiff told him that he, plaintiff, fell from the ladder because he had jumped down several rungs. The Supreme Court admitted this statement under the excited utterance exception to the hearsay rule, finding that it raised a triable issue of fact sufficient to defeat summary judgment. The Appellate Division held this finding was error. According to the foreman, plaintiff was taking a break and told the foreman that he felt "fine" when he made the statement. Thus, there was no evidence that plaintiff made the purported hearsay statement "under the stress of excitement".

PRACTICE POINT: Where a plaintiff is the sole witness to an accident, an issue of fact may exist where he or she provides inconsistent accounts of the accident, his or her account of the accident is contradicted by other evidence, or his or her credibility is otherwise called into question with regard to the accident. If you recall our January commentary on this issue, inadmissible hearsay, still may still be considered on summary judgment when it is not the only evidence in the record, which was not the case here.

Cusumano v Super P57 LLC
April 15, 2025
Appellate Division, First Department

While Plaintiff was in the process of repositioning a chain fall, he was struck by a double-I beam weighing more than 1,000 pounds that was not secured to the dolly on which it was resting. Trial Court denied defendant’s motion for summary judgment on his Labor Law §240(1) claim, and granted plaintiff's cross-motion for summary judgment on that cause of action.

The Appellate Division unanimously affirmed the motion court finding that the Plaintiff established prima facie entitlement to summary judgment on his Labor Law § 240(1) cause of action on the facts. Contrary to defendants' argument, plaintiff repeatedly identified clamps as a readily available safety device that would have secured the double-I beam to the dolly. In opposition, defendants failed to raise an issue of fact as to whether plaintiff was the sole proximate cause of his accident. Even if plaintiff's accident occurred as he was attempting to move the double-I beam by himself, this would, at most, constitute comparative negligence, which is not a defense to a Labor Law § 240(1) cause of action.

PRACTICE POINT: This case is another example of the sole proximate cause defense. A defendant has no liability under § 240(1) when plaintiff: (1) had adequate safety devices available, (2) knew both that the safety devices were available and was expected to use them, (3) chose for no good reason not to do so, and (4) would not have been injured had he or she not made that choice. Here, plaintiff was entitled to summary judgment as defendants failed to raise a triable issue of fact as to the sufficiency of the equipment provided and whether plaintiff’s negligence was the sole cause of his injury.

Siguencia v City of New York
April 15, 2025
Appellate Division, First Department

On April 23, 2018, plaintiff was working at the PS 333 construction project in Manhattan, as a laborer for Hilt Construction, Inc. ("Hilt"). Plaintiff was not employed by defendants at the time of his alleged accident.

Plaintiff received instructions from the general foreman, "Mohammed", his supervisor also named Mohammed, and another supervisor, "Alfredo". All three of these gentlemen were employed by Hilt and provided plaintiff with his job duties as a laborer.

On the date of the alleged incident, plaintiff was instructed by his general foreman, Mohammed, to help one of the bricklayers. The bricklayer instructed plaintiff to take the planks from the ground level and move them to the scaffold platform on the fourth level.

Defendants allege, and plaintiff originally testified that plaintiff was never given specific instructions as to the manner by which to transport the planks onto the scaffolds. Plaintiff amended his deposition testimony to allege that a Bricklayer told him to carry the planks up the stairs. Plaintiff acknowledges a pulley/hoist was available for use and would have been the more appropriate manner in which to move the planks, but alleges it was on the other side of the school, and he followed the instructions of the bricklayer.

Trial Court denied defendant’s motion for summary judgment on Plaintiff’s Labor Law §240(1) claim.

The Appellate Division unanimously affirmed the motion court finding that the Supreme Court properly denied defendants' motion for summary judgment because defendants failed to establish that plaintiff was recalcitrant or the sole proximate cause of the accident for failing to use an available hoist or pulley. Even if hoists and pulleys were available on site, and plaintiff was aware of them, defendants did not submit any evidence establishing that plaintiff was instructed to use them. Instead, plaintiff's testimony conflicted as to whether his foreman or a bricklayer, whom his foreman instructed him to assist, told him to bring the plank up a scaffold staircase, which was an inadequate safety device for that work. Plaintiff's testimony regarding the instructions from his foreman and the bricklayer was not inadmissible hearsay because it was not offered for the truth of the matter asserted, but only to show that the statements were made.

PRACTICE POINT: This raises Sole Proximate Cause’s cousin, Recalcitrant Worker. Like Sole proximate cause, it is not enough to just have the appropriate safety equipment available, Plaintiff have been instructed to use it to successfully argue the recalcitrant worker defense.

Moore v Skanska USA Bldg., Inc.
April 17, 2025
Appellate Division, First Department

Plaintiff was caused to fall when the ladder upon which he was standing slipped out from under him. Defendants opposed his motion for summary judgment by submitting affidavits from Nelson's managers, who denied plaintiff's testimony that he was directed by one of them to fix the damper on an air conditioning unit on a rush basis.

The Trial Court denied plaintiff's motion for summary judgment on the Labor Law § 240(1) claim.

The Appellate Division unanimously affirmed the motion court finding that the Supreme Court properly denied Plaintiff’s motion for summary judgment. Plaintiff established his entitlement to summary judgment. Plaintiff testified that he was caused to fall when the ladder upon which he was standing slipped out from under him. In opposition, defendants raised triable issues of fact regarding plaintiff's version of events. Specifically, defendants raised issues of fact by submitting affidavits from Nelson's managers, who denied plaintiff's testimony that he was directed by one of them to fix the damper on an air conditioning unit on a rush basis. The managers also asserted that it was not physically possible for the accident to have occurred as described by plaintiff. Such conflicting accounts present issues of credibility that were for a jury to resolve.

PRACTICE POINT: The Court’s ruling demonstrates the importance of the scope of work, which goes to the “person so employed” element of the statute. Further, demonstrating through competent, admissible evidence that Plaintiff’s version is impossible can raise an issue of fact, even if there were no other witnesses to the incident.

LaGrippo v 95th & Third LLC
April 22, 2025
Appellate Division, First Department

Plaintiff sustained biceps and shoulder injuries while installing a heavy marble slab on a bathroom wall during a construction project. To install the marble slab, plaintiff and his coworker were required to lift the slab onto two 15-inch-high inverted buckets set up on opposite ends of the slab, then stand on the buckets and attach two suction cups to the slab to lift it to the height of the bathroom ceiling. Plaintiff’s injury occurred as he was standing in an awkward position, trying to maintain his balance, because the "buckets were wobbling." Plaintiff’s foreman had requested a baker scaffold but none was provided, although the foreman and a coworker averred a sturdy wooden bench could have been used to perform the job.

The Trial Court granted defendants’ motion for summary judgment dismissing the Labor Law §240(1) claim and denied plaintiff’s motion for summary judgment on liability on that claim.

The Appellate Division unanimously reversed the Supreme Court finding that Defendants failed to establish prima facie entitlement to summary judgment, as the record presented an issue of fact as to whether plaintiff was injured while trying to avoid falling from the bucket while lifting the marble slab, and whether the injury could have been prevented if defendants had provided an adequate protective device to enable him to accomplish his work at a height. The Court rejected defendants' argument that the 15-inch-tall bucket was not a "physically significant" elevation differential. The Court has found that an inverted bucket is an inadequate safety device to raise a worker to the height required to perform the work and presents a risk.

Defendants did not raise an issue of fact as to whether plaintiff was a recalcitrant worker as there was no evidence that he was expected to use a wooden bench instead of an inverted bucket, that anyone instructed him to use a bench, or that a bench was available.

PRACTICE POINT: Another case reminding us that it is impossible for a plaintiff’s negligence to be the sole proximate cause of an accident where, as here, it is shown that a violation of 240(1) was a concurrent cause of the accident. In this case, there was no evidence that an adequate safety device was even available to Plaintiff, let alone that he was instructed to use it.

D'Angelo v Legacy Yards Tenant LLC
April 24, 2025
Appellate Division, First Department

Plaintiff was ascending a steel ship's ladder when he slipped on an unknown grimy substance on the second rung from the top of the ladder, began to fall, and struck his head on a Kindorf rack while falling.

The Trial Court granted plaintiff's motion for summary judgment on the Labor Law § 240(1) claim and denied defendants ERY Tenant LLC (ERY) and Tutor-Perini Building Corp. (Tutor-Perini)’s motion for summary judgment dismissing the complaint.

The Appellate Division found that the Supreme Court properly granted plaintiffs summary judgment on the Labor Law § 240 (1) claim as against ERY, the property owner, and Tutor-Perini, the general contractor, and that defendants failed to establish that the claim should have been dismissed as against Hudson. Plaintiffs met their initial burden through plaintiff D'Angelo's testimony on the facts above. Defendants' argument that plaintiff merely struck his head as he was ascending the ladder, and not while falling after he slipped, was both belied by plaintiff's deposition testimony and unsupported by the record. Defendants' additional argument that plaintiff's version of events is contradicted by two accident reports was not persuasive, as those reports did not contradict plaintiff's testimony but merely do not mention plaintiff falling.

PRACTICE POINT: This decision brings to mind Lt. Daniel Caffee’s famous line, “It doesn't matter what I believe. It only matters what I can prove!” Here Defendants had a great theory, they just could not prove it. Further, an absence of a supporting statement is not a contradiction. Just because one version of the story does not mention a fact in Plaintiff’s version of the incident, it is not a contradiction that leads to a question of fact to defeat summary judgment.

Labor Law § 241(6) (TPW)

The First Department modified the underlying decision as it related to the Labor Law § 241 (6) claim against ERY, Tutor-Perini, and Hudson. First, Industrial Code (12 NYCRR) § 23-1.7 (d) did not apply because the ladder from which plaintiff fell "was not 'a floor, passageway, walkway, scaffold, platform or other elevated working surface'". Further 12 NYCRR 23-1.7 (e) (1) and (2) did not apply as there was no evidence that Thomas "tripped over any materials, debris or equipment". Last, 12 NYCRR 23-1.21 (b) (3) (iv) is limited to structural defects in ladders and does not apply to the slippery substance on the ladder in this case.

Labor Law § 200 and Common-Law Negligence (EDA)

The Appellate Division found that Defendants established their prima facie entitlement to summary judgment dismissing the Labor Law § 200 and common-law negligence claims as against ERY, Tutor-Perini, and Hudson. It was undisputed that plaintiff was instructed to do his work on the day of his accident by his own company's supervisor, and that plaintiff did not receive instructions or directions from anyone other than his own company. Thus, defendants established that they did not actually exercise supervisory control over the injury-producing work, which was caused by the equipment plaintiff used to perform the work, namely, the ladder allegedly containing a slippery and grimy substance, and plaintiffs failed to raise an issue of fact.

Santana v Port Auth. of N.Y. & N.J.
April 24, 2025
Appellate Division, First Department

Plaintiff was injured when he slipped and fell off the platform of a scissor lift he was operating on the 67th floor of a building under construction. The scissor lift had become wet from rain that had blown in through openings on the side of the building which were intended for an eventual window installation. When Plaintiff attempted to descend the lift's stairs, he moved his left foot down to place it on a step and his right foot slipped off the platform, causing him to fall.

The Trial Court granted plaintiff's motion for summary judgment on Labor Law §240(1) and 241(6), and denied defendants’ motion for summary judgment on those claims.

The Appellate Division unanimously affirmed the motion court finding that the Plaintiff's testimony established prima facie that his work exposed him to an elevation-related risk against which defendants failed to provide him with proper protection. Plaintiff was not required to show that the scissor lift was defective. In opposition, defendants failed to raise a triable issue of fact.

PRACTICE POINT: A plaintiff is not required to demonstrate that a device is defective to be entitled to summary judgment. Even if plaintiff misused the stairs or was negligent in using the wet stairs, this constitutes at most comparative negligence, which is not a defense under Labor Law § 240(1). The platform and stairs were not adequately guarded to provide safe use of the scissor lift.

Narvaez v Petrillo Contr., Inc.
April 2, 2025
Appellate Division, Second Department

On February 27, 2013, the plaintiff, an employee of the third-party defendant, Core Contracting of NY, LLC (hereinafter Core), allegedly was injured while working on a construction site when a hoisted cement barrier struck his wrist.

The plaintiff commenced this action to recover damages against the defendant, Petrillo Contracting, Inc., the general contractor for the project, alleging, inter alia, that the defendant violated Labor Law § 240(1). The defendant interposed an answer asserting various affirmative defenses, including that the plaintiff's claims against it were barred by the exclusivity provisions of the Workers' Compensation Law.

The defendant commenced a third-party action against Core, a subcontractor for the project. Thereafter, the plaintiff moved for summary judgment on the issue of liability on the cause of action alleging a violation of Labor Law § 240(1). The defendant cross-moved for summary judgment dismissing the complaint, contending that it was the plaintiff's special employer, thereby excluding it from liability for injuries sustained by the plaintiff under the Workers' Compensation Law.

The Trial Court denied the plaintiff's motion for summary judgment on the issue of liability on the cause of action alleging a violation of Labor Law § 240(1) and granted the defendant's cross-motion for summary judgment dismissing the complaint.

Labor Law § 240(1) (EDA)

The Appellate Division unanimously affirmed the Supreme Court’s denial of Plaintiff’s motion, but reversed the lower court’s dismissal of the complaint against defendant. Plaintiff made a prima facie showing that the defendant violated Labor Law § 240(1) by failing to provide the plaintiff with an adequate safety device. The plaintiff opined that the clamp used to secure the barrier failed while the barrier was being hoisted. However, viewing the evidence in the light most favorable to the defendant as the nonmovant, the transcript of the plaintiff's deposition testimony, submitted by the defendant in opposition to the plaintiff's motion, raised a triable issue of fact. His testimony was inconsistent and ambiguous as to whether he actually observed the cement barrier detach from the clamp prior to his injury and whether he knew what caused the barrier to strike his wrist.

The Appellate Division found that the Supreme Court should have denied the defendant's cross-motion for summary judgment dismissing the complaint. The defendant failed to establish, prima facie, that the plaintiff was its special employee at the time of the accident because it did not submit sufficient evidence to establish that it controlled and directed the manner, details, and ultimate result of the plaintiff's work.

PRACTICE POINT: A special employee is “one who is transferred for a limited time of whatever duration to the service of another,” and limited liability inures to the benefit of both the general and special employer. Although no one factor is determinative, a “significant” and “weighty feature” in deciding whether a special employment relationship exists is “who controls and directs the manner, details and ultimate result of the employee's work”—in other words, who determines “all essential, locational and commonly recognizable components of the [employee's] work relationship”. Principal factors in determining the existence of a special employment relationship, including control, direction, and supervision, payment of wages and furnishing of equipment, hiring and discharging, among others. Thus, courts have always looked to the underlying facts of the parties' relationship, and the same considerations govern a section 11 claim to immunity in other contexts, regardless of title. Fung v. Japan Airlines Co., 9 N.Y.3d 351, 359, 880 N.E.2d 845, 850–51 (2007)

Castillo v 37-25 12th St., LLC
April 16, 2025
Appellate Division, Second Department

On October 13, 2018, the plaintiff allegedly was injured while performing construction work within the scope of his employment at premises owned by the defendant 37-25 12th Street, LLC (hereinafter 37-25). The plaintiff commenced this action against 37-25, among others, asserting causes of action alleging common-law negligence and violations of Labor Law §§ 200, 240(1), and 241(6), identifying October 12, 2018, as the date of the plaintiff's accident. Before answering the complaint, 37-25 moved pursuant to CPLR 3211(a)(7) to dismiss the complaint insofar as asserted against it.

In an order entered January 28, 2019, the Supreme Court denied the motion. In January 2023, the plaintiff moved pursuant to CPLR 3025(b) for leave to amend the complaint to correct the date of the plaintiff's accident from October 12, 2018, to October 13, 2018, and 37-25 cross-moved for leave to renew its prior motion pursuant to CPLR 3211(a)(7) to dismiss the complaint insofar as asserted against it.

The Trial Court granted the plaintiff's motion for leave to amend the complaint and denied the cross-motion of the defendant 37-25 12th Street, LLC, for leave to renew its prior motion.

The Appellate Division unanimously affirmed the Supreme Court finding that 37-25 failed to demonstrate any prejudice or surprise or that the plaintiff's proposed amendment was palpably insufficient or patently devoid of merit. 37-25 also failed to establish any new facts that would change the prior determination of its prior motion. Whether the plaintiff's alleged accident occurred on October 12, 2018, or on October 13, 2018, was irrelevant to the issue of whether the plaintiff failed to state causes of action alleging common-law negligence and violations of Labor Law §§ 200, 240(1), and 241(6)

PRACTICE POINT: CPLR 3025(b) provides, “A party may amend his or her pleading, or supplement it by setting forth additional or subsequent transactions or occurrences, at any time by leave of court or by stipulation of all parties. Leave shall be freely given upon such terms as may be just ...”. The Court found that the one-day discrepancy did not result in unfair surprise to the defendants.

Cianciulli v Urban Found./Engg., LLC
April 16, 2025
Appellate Division, Second Department

In May 2014, Gramercy Group, Inc. signed a subcontract with 33 Bond GC, LLC to handle demolition and abatement work on a construction project in Brooklyn. 33 Bond GC was the general contractor. The property was owned by 33 Bond Street, LLC and managed by T.F. Cornerstone, Inc. The subcontract included an agreement for Gramercy to indemnify these parties under certain conditions.

Separately, 33 Bond GC also hired Urban Foundation/Engineering, LLC and Urban Foundation Company, Inc. to perform excavation and foundation work.

In April 2015, a dispute arose between Gramercy and 33 Bond GC over whether Gramercy had finished its work. To resolve it, both sides agreed to meet at the site. On April 15, 2015, Joseph Cianciulli, a project executive for Gramercy, arrived for the meeting, walked through the disputed area, and was allegedly hit by an excavator operated by an Urban employee.

In December 2015, Cianciulli and his wife filed a lawsuit claiming violations of New York Labor Law §§ 200 and 241(6), along with common-law negligence. They sued the Urban contractors, the Bond-related parties, and others involved with the project.

The sued parties then brought a third-party claim against Gramercy, seeking contractual indemnification.

The Trial Court granted those branches of the motion of the defendants third-party plaintiffs seeking summary judgment dismissing the causes of action alleging violations of Labor Law §§ 200 and 241(6) insofar as asserted against the defendants third-party plaintiffs Urban Foundation/Engineering, LLC, and Urban Foundation Company, Inc., and the causes of action alleging a violation of Labor Law § 200 and common-law negligence insofar as asserted against the defendant third-party plaintiff 33 Bond GC, LLC.

Labor Law § 241(6) (TPW)

The Second Department reversed the decision of the Supreme Court noting that it erred in granting that branch of the defendants' motion for summary judgment dismissing the Labor Law § 241(6) cause of action insofar as asserted against the Urban defendants. Defendants failed to demonstrate, prima facie, that the Urban defendants did not have the authority to control the activity bringing about the injured plaintiff's injuries. The defendants also failed to allege or submit any evidence establishing that the Urban defendants complied with 12 NYCRR 23-9.4(h)(4) or 23-9.5(c), the specific Industrial Code provisions the plaintiffs alleged were violated. Accordingly, the court should have denied that branch of the defendants' motion regardless of the sufficiency of the opposition papers.

Labor Law § 200 and Common-Law Negligence (EDA)

The Appellate Division found that The Supreme Court erred in granting the defendants' motion for summary judgment dismissing the Labor Law § 200 cause of action against the Urban defendants. The defendants failed to eliminate all triable issues of fact as to whether the Urban defendants supervised or controlled the injury-producing work.

It also found that the Supreme Court erred in granting the defendants' motion for summary judgment dismissing the Labor Law § 200 and common-law negligence claims against Bond GC. The defendants submitted the deposition testimony that certain Bond GC employees worked closely with the site-safety manager and retained the authority to "direct[ ] and instruct[ ]" anyone on the work site who was performing their work unsafely. He also testified that Bond GC's superintendent "heads all things that happen in the field or on site." The defendants thus failed to eliminate all triable issues of fact as to whether Bond GC had the authority to supervise and control the injury-producing work.

Lupo v Caruso
April 16, 2025
Appellate Division, Second Department

On November 23, 2020, the plaintiff Michael Lupo (hereinafter the injured plaintiff) allegedly was injured when, during the course of certain renovation work at the defendant's single-family home, he fell from a ladder that he allegedly borrowed from the defendant. The injured plaintiff, and his wife suing derivatively, commenced this action, alleging, among other things, a violation of Labor Law § 200 and common-law negligence.

The Trial Court granted those branches of the defendant's motion which were for summary judgment dismissing the causes of action alleging a violation of Labor Law § 200 and common-law negligence.

Labor Law § 200 and Common-Law Negligence (EDA)

The Appellate Division affirmed the Supreme Court finding that the defendant established, prima facie, that she did not create or have actual or constructive notice of the allegedly dangerous condition of the ladder. In opposition, the plaintiffs failed to raise a triable issue of fact.

Villalta v Tonka Realty On 5th, LLC
April 16, 2025
Appellate Division, Second Department

The plaintiff commenced this action to recover damages for personal injuries he allegedly sustained in connection with an accident that occurred while working on a demolition project at premises owned by the defendant Tonka Realty On 5th, LLC. At the time of the accident, the plaintiff was instructed to use a rubber-footed, metal ladder situated on plywood flooring to go from the first floor to the second floor of the worksite. As the plaintiff attempted to descend the ladder, upon finishing his work on the second floor, he fell from the ladder and sustained injuries.

The Trial Court denied plaintiff’s motion for summary judgment on the causes of action alleging violations of Labor Law §§ 240(1) and 241(6).

Labor Law § 240(1) (EDA)

The Appellate Division affirmed the Supreme Court. According to the plaintiff, he descended the ladder by putting his right foot on a rung of the ladder and, as he moved his left foot to the ladder, the bottom of the ladder "slipped back," which caused him to fall. According to the superintendent, as the plaintiff was bringing his left foot down to the second rung of the ladder, the plaintiff's left foot "missed the run[g] completely" and "went through the ladder," which caused the plaintiff to fall and take the ladder with him. The superintendent did not see the ladder move prior to the plaintiff's misstep. Where "credible evidence reveals differing versions of the accident," one under which a defendant would be liable and another under which it would not, questions of fact exist making summary judgment inappropriate.

PRACTICE POINT: When there are two different eyewitness accounts, there will be a question of fact as to which account to believe.

Labor Law § 241(6) (TPW)

The Second Department affirmed the decision of the Supreme Court. Specifically, the Labor Law § 241(6) cause of action was predicated on 12 NYCRR 23-1.21(b)(4)(i), which is sufficiently specific and requires, in part, that "[a]ny portable ladder used as a regular means of access between floors or other levels in any building . . . shall be nailed or otherwise securely fastened in place." However, the plaintiff's submissions failed to eliminate triable issues of fact as to whether 12 NYCRR 23-1.21(b)(4)(i) was violated or whether such violation was a proximate cause of his injuries. Accordingly, the Supreme Court properly denied the plaintiff's motion for summary judgment on the issue of liability on the Labor Law § 241(6) cause of action, regardless of the sufficiency of the defendants' opposition papers.

Zokir v Teller Owner, LLC
April 16, 2025
Appellate Division, Second Department

In 2020, the defendant Exotic Design & Wire, LLC, doing business as Empire State Contractors, was performing a renovation project at premises owned by the defendant Teller Owner, LLC. The plaintiff was employed by the third-party defendant Look Better NYC, Inc., and was responsible for various tasks on the project, including installing sheetrock, taping, and puttying. On February 22, 2020, while working on the project, the plaintiff allegedly fell from a 10-foot A-frame ladder and suffered injuries. The plaintiff was the sole witness to the fall

The Trial Court denied the branch of the plaintiff’s motion seeking summary judgment on the cause of action alleging a violation of Labor Law §240(1).

Labor Law § 240(1) (EDA)

The Appellate Division unanimously affirmed the Supreme Court finding that the plaintiff failed to demonstrate his prima facie entitlement to summary judgment on the Labor Law § 240(1). His deposition testimony, which included inconsistencies regarding certain repairs or modifications that he made to the ladder prior to the accident, places his own credibility in issue and presents triable issues of fact regarding how the accident occurred without regard to the sufficiency of any responding papers from the defendant.

PRACTICE POINT: Plaintiff’s diffing versions of the incident or relevant facts leading to it can create his own issue of fact precluding him from making his prima facie case and obtaining summary judgment.

Bittrolff v City of New York
April 23, 2025
Appellate Division, Second Department

While Plaintiff was walking through a room, he slipped upon and became tangled in a portion of a plastic tarp that was covering a pool table that extended past the table onto the floor, causing him to fall.

The Trial Court denied defendants’ motion for summary judgment under Labor Law §241(6) predicated upon violations of 12 NYCRR 23-1.7(d) and (e)(1) and (2).

The Second Department modified the order of the Supreme Court. The defendants moved, among other things, for summary judgment dismissing the cause of action alleging a violation of Labor Law § 241(6) predicated upon violations of 12 NYCRR 23-1.7(d) and (e)(1) and (2). It was held that the Supreme Court properly denied that branch of the defendants' motion predicated upon a violation of 12 NYCRR 23-1.7(d). Plaintiff's alleged injuries occurred in an area of a worksite in which construction, excavation, or demolition work was being performed and the accident occurred on a "floor" within the meaning of 12 NYCRR 23-1.7(d). Furthermore, the defendants' submissions failed to eliminate triable issues of fact as to whether the plastic tarp was a foreign substance or whether the tarp was integral to the work being performed. In addition, the Supreme Court properly denied summary judgment predicated upon a violation of 12 NYCRR 23-1.7(e)(2). The defendants failed to establish, prima facie, that the plaintiff's fall was not caused by a tripping hazard within the meaning of 12 NYCRR 23-1.7(e) or that the plastic tarp was integral to and consistent with the work being performed within the meaning of 12 NYCRR 23-1.7(e)(2).

However, the defendants established, prima facie, that 12 NYCRR 23-1.7(e)(1), which requires owners and general contractors, among other things, to keep all passageways free of obstructions that could cause tripping, is inapplicable, because the site where the plaintiff allegedly fell was not a passageway.

Buchanan v De Orio
April 23, 2025
Appellate Division, Second Department

Plaintiff was injured while performing the removal and reinstallation of the gutters on a home when he fell approximately 20 feet from one of the ladders onto the ground.

The Trial Court granted defendant’s motion for summary judgment under Labor Law §240(1).

The Appellate Division affirmed the Supreme Court. The defendants established, prima facie, that they did not direct or control the work and were subject to the homeowners exemption to Labor Law § 240(1). In opposition, the plaintiff failed to raise a triable issue of fact. The Appellate Division held that, contrary to the plaintiff's contention, the defendants did not "control the use of ladders" while the plaintiff was sealing the gutters by refusing to install scaffolding on the earlier related, but finished, project.

PRACTICE POINT: Under the homeowner’s exemption, owners of one and two-family dwellings who contract for but do not direct or control the work are exempt from Labor Law §§ 240(1) and 241(6).

Labor Law § 200 and Common-Law Negligence (EDA)

The Appellate Division affirmed the Supreme Court on this count as well, finding, again the defendants established, prima facie, that they did not exercise supervision or control over the performance of the work. In opposition, the plaintiff failed to raise a triable issue of fact.

Castellon v 38 E. 85th St., Inc.
April 23, 2025
Appellate Division, Second Department

Plaintiff was injured on a work site while moving an air compressor and sandblasting equipment when the discharge hose disconnected from the sandblaster, causing air and sand to strike him in the face.

The Trial Court denied plaintiff’s motion for summary judgment under Labor Law §241(6) based upon violations of 12 NYCRR 23-1.5(c)(3) and 23-1.8(a).

Labor Law § 241(6) (TPW)

The Second Department reversed the decision of the Supreme Court indicating it should have granted plaintiff's motion for summary judgment based upon violation of Labor Law § 241(6) as predicated on violations of 12 NYCRR 23-1.5(c)(3) and 23-1.8(a). Plaintiff demonstrated, prima facie, that the defendants violated Labor Law § 241(6) by failing to provide adequate eye protection equipment and to ensure that the plaintiff used safety equipment while working at the job site in accordance with 12 NYCRR 23-1.5(c)(3) and 23-1.8(a), and that those violations were a proximate cause of the accident. In support of his motion, plaintiff submitted, inter alia, a transcript of his deposition testimony. The plaintiff testified that only a broken full body mask was available for him to use at the work site at the time of the accident, with no other protective eyewear available. Moreover, the plaintiff submitted an affidavit from his expert, Herbert Heller, Jr., who opined, among other things, that the defendants' failure to provide adequate eye protection equipment to the plaintiff was a proximate cause of the plaintiff's injuries. In opposition, the defendants failed to raise a triable issue of fact.

Lopez v Classic Day Care Corp.
April 23, 2025
Appellate Division, Second Department

Plaintiff was injured while working on a construction project located at premises owned by the defendant Jevgenija Lobica (hereinafter the defendant).

The Trial Court denied plaintiff’s motion for summary judgment under Labor Law §240(1).

The Appellate Division affirmed the Supreme Court finding that the plaintiff established, prima facie, through his submission of the deed to the premises, that the premises was a three-unit building and therefore the homeowners exemption was not available to the defendant. Contrary to the determination of the Supreme Court, the defendant failed to raise a triable issue of fact regarding its contention that the premises, which consisted of two residential units and a commercial unit used as a daycare center, was a one- or two-family dwelling that would be exempt from liability under Labor Law § 240.

The plaintiff further established, prima facie, that the work he performed was an alteration protected by Labor Law § 240(1). However, the defendant raised triable issues of fact as to whether the work was actually a decorative modification and therefore not protected by Labor Law § 240(1).

PRACTICE POINT: Under the homeowner’s exemption, owners of one and two-family dwellings who contract for but do not direct or control the work are exempt from Labor Law §§ 240(1) and 241(6). This building had two residential units but also had a commercial use.

Also, decoration is not an enumerated activity (erection, demolition, repairing, altering, painting, cleaning, or pointing of a building)

Sisalima v Thorne Constr., Inc.
April 23, 2025
Appellate Division, Second Department

On January 4, 2019, the plaintiff allegedly was injured when he fell from the roof of a building while checking to make sure a tarp was properly placed and a gust of wind raised the tarp, which "threw" him from the roof. The plaintiff's company, JWS Construction and Remodeling Corp., had been hired by the defendant Limonejo's Framing Corp. (hereinafter Limoneio) to perform work on the building as part of an extension and remodeling project.

The Trial Court denied plaintiff’s motion for summary judgment under Labor Law §240(1) against Limoneio and denied Limoneio’s cross-motion for summary judgment based on its second and seventh affirmative defenses.

The Appellate Division unanimously affirmed the Supreme Court finding that, viewing the evidence in the light most favorable to the plaintiff, the defendant failed to eliminate triable issues of fact as to whether adequate safety devices were readily available to the plaintiff. Moreover, the defendant failed to demonstrate that the plaintiff was specifically instructed to use ropes while working on the roof and disregarded those instructions (. Thus, the defendant failed to establish, prima facie, that the plaintiff was the sole proximate cause of the accident or was a recalcitrant worker. Accordingly, the Appellate Division found that the Supreme Court properly denied the defendant's cross-motion for summary judgment on its second and seventh affirmative defenses, without regard to the sufficiency of the opposition papers

PRACTICE POINT: Our old friends Sole Proximate Cause and Recalcitrant Worker appear again. To establish the elements for either one, a defendant must show that adequate safety devices were readily available. If they fail to make even that showing, they will fail. If they can’t even raise an issue of fact on that issue, they may lose summary judgment to Plaintiff and also fail on their motion, as in this case.

Delcid-Funez v Seasons at E. Meadow Home Owners Assn.
April 30, 2025
Appellate Division, Second Department

Plaintiff fell from the roof of a condominium unit where he had been sent by his employer in response to a complaint by the unit owner of a snow-related ceiling leak. While shoveling snow off of the subject roof, the plaintiff slipped and slid off the roof, causing him to fall approximately 30 feet to the ground.

The Trial Court denied plaintiff’s motion for summary judgment under Labor Law §240(1) against defendants Seasons at East Meadow Home Owners Association, Inc., and Einsidler Management, Inc. and denied defendants cross-motions for summary judgment under Labor Law 240(1).

The Appellate Division unanimously affirmed the Supreme Court finding that, the evidence submitted by the defendants in support of their motion and by the plaintiff in support of his motion failed to eliminate triable issues of fact as to whether the plaintiff was engaged in an enumerated activity within the meaning of Labor Law § 240(1) and whether the plaintiff's actions were the sole proximate cause of his injuries.

PRACTICE POINT: This may be a case to watch. As noted above, the enumerated activities are erection, demolition, repairing, altering, painting, cleaning, or pointing of a building. Whether rooftop snow removal fits into any of these categories, cleaning in particular, will be interesting to see.

Freas v John W. Danforth Co.
March 14, 2025
Appellate Division, Fourth Department

Plaintiff slipped and fell at a construction site on September 2, 2016. Defendant-third-party plaintiff, John W. Danforth Company (Danforth), was the general contractor on the construction project and hired Rochester Davis-Fetch Corp. (Davis-Fetch) as a subcontractor third-party defendant who was also plaintiff's employer. Danforth commenced a third-party action against Davis-Fetch, stating causes of action for contractual indemnification and failure to procure insurance.

Danforth moved for partial summary judgment against Davis-Fetch, seeking an order of contractual indemnification. Davis-Fetch cross-moved for summary judgment dismissing the third-party complaint. The Trial Court granted Danforth’s motion and denied the cross motion.

Indemnity Issues in Labor Law (AMC)

The general contractor, Danforth, commenced a third-party action against plaintiff’s employer Davis-Fetch as a result of plaintiff’s slip and fall accident. The indemnification provision was not executed until after Plaintiff’s accident. According to the Appellate Division, the Trial Court improperly granted Danforth’s motion for contractual indemnification but properly denied Davis-Fetch's cross-motion.

In modifying the Trial Court’s order, the Appellate Division held that for an indemnification agreement to be applied retroactively, it must be established that (1) the agreement was made as of a date prior to the accident and (2) the parties intended the agreement to apply as of that prior date. Here, the subcontract was made as of a date prior to the accident, but there is a triable issue of fact whether the parties intended the indemnification provision of the subcontract to apply retroactively. Thus, neither party was entitled to summary judgment.

New York Industrial Code Regulations (EDA)

Regulation § 23–1.26 Lead fumes and dust from structural steel.

(2) All surfaces adjoining rivet holes and surfaces subject to heat from welding shall be so cleaned as to prevent the creation of toxic and noxious fumes during without or welding.

While there are no cases directly dealing with this subsection, its language is likely specific enough to form the basis of a Labor Law § 241(6) claim, however, while it prohibits the creation of toxic or noxious fumes, this may be too vague to sustain a § 241(6) claim.

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Premises Pointers - Volume VIII, No. 11

Wed, 30 Apr 2025 18:40:21 +0000

Volume VIII, No. 11
April 30, 2025
A Monthly Electronic Newsletter

NOTE FROM THE EDITOR:

Earlier this month, we sent out a Special Edition of Premises Pointers, highlighting a groundbreaking shift in New York law. On April 17, 2025, the New York Court of Appeals overruled its 2006 decision in Bard v. Jahnke, reinstating negligence as a viable cause of action in domestic animal injury cases. Rochester attorney Bradon Carlson provides insight into the implications of this pivotal ruling.

We’re also pleased to share a new national resource: Hurwitz Fine, in collaboration with the Harmonie Group’s Medical Malpractice Committee, recently contributed to a 50-State Wrongful Death Compendium. This guide offers a quick-reference overview of wrongful death statutes across the country, answering key questions about statutory language, recovery rights, and applicable limitations periods.

And on a celebratory note, we wrapped up Administrative Professionals Week last week with fun events each day to show appreciation for our incredible support staff—over 50 strong—across our Buffalo, Rochester, and Long Island offices.

As always, thank you for reading!

-Jody

Forward

Retail, Restaurant and Hospitality Happenings Around New York State and Beyond
By: Jody E. Briandi jeb@hurwitzfine.com

This month, while a retail case, the real issue is an attorney’s use of AI to conduct legal research, which resulted in fake cases being cited to the district court judge. The attorney was sanctioned by the court under Rule 11 of the Federal Rules of Civil Procedure.

04/24/2025 Benjamin v. Costco Wholesale Corp.
United States District Court, Eastern District of New York
One procedural mistake after the next in this retail case ultimately led to conduct that was sanctioned by the district court—Plaintiff’s counsel was sanctioned for citing fake cases to the court in support of a motion to remand.

Plaintiff commenced this action in New York State Court against Costco who removed the case to federal court. Thereafter, plaintiff filed a motion to remand back to state court. On January 6, 2025, defendant Costco filed an untimely opposition to the motion to remand. It was 4 days late.

According to the court, what followed “was a wholly unnecessary letter-writing campaign by the parties.” First, Costco wrote to the court on January 7, 2025 citing law office failure as the reason for Costco’s late submission consenting to an extension for plaintiff to submit a Reply. Next, plaintiff’s counsel filed a letter asking the court to disregard Costco’s late submission. The court deemed both submissions as motions—Costco’s submission was considered an after the fact motion for an extension and plaintiff’s letter was considered a motion to strike the untimely submission. The court denied both motions until after the required “meet and confer” took place. Plaintiff’s counsel continued to take an aggressive position opposing Costco’s extension request. On January 15, 2025, the court ultimately granted Costco’s request for an extension and ordered plaintiff to reply by January 17, 2025. Plaintiff did not seek an extension but did file a reply at 8:52 p.m. on the 17^th. It is this reply that is the subject of the sanctions order.

When the court began to review the pending motion to remand, five of the seven cases cited in the reply could not be located. Therefore, the court ordered plaintiff’s counsel to show cause and to furnish copies of the case cited in plaintiff’s reply. Since the cases were fake, plaintiff's counsel conceded she used an AI tool called ChatOn to generate them stating she had very little time to prepare the reply. A hearing was then held on April 16, 2025, at which time plaintiff’s counsel said she directed her paralegal to prepare the reply and that since the work product required substantial revision she turned to AI and phony case law was generated. Plaintiff’s counsel cut and pasted the content from ChatOn and made no effort to check the cases. Plaintiff’s counsel also conceded she made no effort to ask the court for an extension.

The court determined that the conduct constitutes subjective bad faith warranting sanctions under Rule 11. A monetary sanction of $1,000 was deemed appropriate for an attorney who submits fake AI-generated case citations but expresses remorse and takes remedial action.

04/01/2025 Kirbaran v. Target Corp.
United States Court of Appeals for the Second Circuit
On appeal, the Second Circuit affirmed the District Court’s grant of summary judgment to Defendant Taret rejecting Plaintiff’s argument that New York’s summary judgment standard applicable to slip and fall cases should be applied.

The plaintiff argued that the district court erred by applying the federal summary judgment standard instead of the New York standard. As stated by the court, under Rule 56, “the evidentiary burdens that the respective parties will bear at trial guide district courts in their determination of summary judgment motions." The issue of burden of proof is procedural. Therefore, in a diversity action federal procedural law applies. This is significant because in slip and fall cases, the question of notice to the defendant is often evidence plaintiffs do not have and as a result they often cannot oppose summary judgment motions that point to the lack of evidence on the issue of notice.

Labor & Employment for Retailers, Hospitality, and School District Litigation
By: Anastasia M. McCarthy amm@hurwitzfine.com

Dear Readers,

We continue to track changes affecting the workplace in New York State as well as at the federal level. If you require assistance navigating these various developments, please contact us.

Recently, in response to the Governor’s budget, the NY State Senate introduced its own one-house budget bills. Interestingly, the Senate’s legislation and budget includes extensive childcare funding intended to return parents to the workforce. Highlights include:

$500 million for a Child Care Workforce Stabilization fund—The fund is intended to expand the childcare workforce in order to make childcare more widely available.

$25 million for expanding non-traditional-hour childcare.

At the federal level, the EEOC has issued guidance and a press release related to corporate Diversity, Equity, Inclusion, and Belonging policies and programs. I am happy to help guide you should you require it.

Are You Fall Real? Slip and Fall/Snow and Ice/Storm in Progress/Espinal
By: Ashley M. Cuneo amc@hurwitzfine.com

Hi Readers,

Happy spring!

One of the cases this month deals with one of the exceptions to the Espinal Doctrine – launching a force or instrument of harm. The courts have previously held that merely salting does not launch an instrument of harm. However, the first case, from the Fourth Department, notes a distinction where liability can be imposed.

The second case deals with a holding we are all too familiar with. Absent specific information regarding cleaning and inspection practices and evidence of when an area was last cleaned or inspected, defendants are not entitled to summary judgment due to lack of notice.

04/25/2025 Crockett v Home Depot, et al
Appellate Division, Fourth Department
A question of fact exists as to whether a snow-removal contractor launched a force or instrument of harm when it used rock salt.

This case deals with a few different issues. However, this summary focuses on the one regarding JA Krantz’s motion for summary judgment, only.

Plaintiff filed suit after slipping and falling on ice in the parking lot on property owned by Home Depot USA and Home Depot Store #1287. Home Depot hired RWC Landscape Services Management to perform, in part, snow and ice removal; RWC subcontracted these serves to JA Krantz Landscape Design.

Plaintiff and Home Depot appeal from an order, from the Trial Court, granting RWC and JA Krantz’s motion dismissing plaintiff’s complaint against JA Krantz. The Appellate Division held that although JA Krantz met it’s burden of proof by establishing that plaintiff wasn’t a party to the contract, plaintiff through an expert affidavit created a question of fact demonstrating that in light of the temperature on the date of loss, rock salt would have caused the snow and ice to melt and then refreeze. The Appellate Division reinstated the complaint against JA Krantz.

04/23/2025 Ravello v Long Island RR
Appellate Division, Second Department
Information regarding general cleaning and inspection practices, and failure to provide information regarding when the loss location was last inspection or cleaned is insufficient to prove that defendant did not have notice of the alleged dangerous/defective condition.

While at the Hicksville train station, on the eastbound platform, plaintiff slipped and fell on black ice. The Trial Court granted defendant’s motion for summary judgment, dismissing plaintiff’s complaint. The Appellate Division, Second Department, revered the Trial Court and reinstated plaintiff’s complaint.

The Appellate Division held that defendant failed to establish a prima facie entitlement to summary judgment. Defendant’s station cleaner could only testify to his general cleaning and inspection practices, and did not specify when he last cleaned or inspected the area where plaintiff fell relative to the subject accident.

Slips, Trips, and Legal Shifts: The Latest Retail Slip and Fall New York State Case Updates

By: Elizabeth K. Ognenovski eko@hurwitzfine.com

Hello Readers,

Golf season is upon us and as golfers dust off their clubs and return to the fairways, a recent decision from the Court of Appeals reminds us that legal risks can be as much a part of the game as sand traps and water hazards. In a newly issued opinion, the court examines the application of the "assumption of the risk" doctrine for two (2) cases involving two (2) different types of incidents which occurred on a golf course and in the parking lot of a club.

04/15/2025 Katleski v. Cazenovia Golf Club, Inc.
New York State Court of Appeals
The primary assumption of risk doctrine may apply when "[a] person who chooses to participate in a sport or recreative activity consents to certain risks that are inherent in and arise out of the nature of the sport generally and flow from such participation. It is not necessary to the application of assumption of risk that the injured plaintiff have foreseen the exact manner in which [their] injury occurred, so long as [they are] aware of the potential for injury of the mechanism from which the injury results."

This action arises from an incident that occurred when the plaintiff was struck by a golf ball while in a golf tournament at a golf course owned and operated by the defendant Cazenovia Golf Club, Inc. During the third round, the plaintiff was riding in a golf cart on the seventh fairway looking for a ball when he was struck in the eye by the ball of another player that was teeing off from the third hole. The third hole ran roughly parallel to the seventh hole but in the opposite direction. The plaintiff commenced a negligence action and alleged that the golf course was negligently designed and operated.

At his deposition, the plaintiff testified that he had been a member of the golf club for eighteen (18) years. Prior to his incident, the plaintiff had played the golf course approximately 100 times and on the date of his incident, he played the course twice. He further testified that on the date of his accident, he mentioned to other golfers that the placement of the tee box “was dangerous due to the lack of a clear line of sight between that box and the seventh hole.” The defendant’s discovery indicated that the tee box that “was used to make the shot that injured the plaintiff (tee box "A") was installed approximately a decade prior to the accident to increase the difficulty of the third hole and was predominantly used in tournaments.” The layout of the golf course had been substantially the same since the time it was constructed in 1924.

The defendant golf club moved for summary judgment and argued the plaintiff voluntarily assumed the risk of being struck by a golf ball when he chose to be in the tournament. In support of his opposition, the plaintiff submitted an expert affidavit regarding the dangers of the golf course’s layout. The Madison County Supreme Court denied the defendant’s motion and held the plaintiff’s expert raised a triable issue of fact as to whether the risk was unreasonably enhanced. The defendant golf club appealed and the Third Department reversed and granted the golf club's motion in a split decision.

On appeal, the issue before the Court of Appeals was whether the plaintiff raised a triable question of fact that the placement of tee box A on the third hole unreasonably enhanced that risk. The Court held that it was not enough for the plaintiff to “to show that the layout of the course was less safe than it ideally could have been; he must show that the design enhanced the inherent risk of being struck by a ball beyond what is customary in the sport.” The plaintiff failed to rebut the defendant club’s argument and the defendant’s expert affidavit that it was common for golf courses to lack clear visibility and barriers between holes. The Court held there was no basis to conclude that the course’s design gave rise to an “enhanced” risk as there was no evidence in the record to infer the risks of the golf course exceeded the risks presented by comparable facilities.

The plaintiff failed to also raise a question of fact as to whether the “inherent risks of golf were unreasonably enhanced” by the course’s design. The Court explained that the defendant club presented “unrebutted evidence that the placement of tee box A served a competitive purpose—namely, increasing the difficulty of the third hole ‘to conform with more modern golf.’"

The Court of Appeals determined the that Third Department correctly held there was no question of fact as to whether the defendant club unreasonably enhanced the risk of players being struck by golf balls and thus the plaintiff must be deemed to have assumed that risk.

Mary E. Galante v. Robert G. Karlis et al.

The plaintiff commenced this action after she was injured in the parking lot at Elma Meadows Golf Course. On the date of her incident, the plaintiff was driving a golf cart in the defendant’s parking lot and went to obtain her golf clubs when her cart collided with a car. The plaintiff was ejected onto the pavement. The plaintiff moved to strike the County’s assumption of risk defense and the County cross-moved for summary judgment to dismiss the complaint based on the assumption of risk defense. The Fourth Department denied the plaintiff’s motion and explained that although the plaintiff was not actively engaged in golf at the time of her accident, her incident occurred “in a designated recreational venue.” The Fourth Department held that “the risk of being injured while driving a golf cart is inherent in the sport of golf and that plaintiff was aware of that risk and assumed it.”

On appeal, the Court of Appeals explained that “‘persons injured while traversing streets and sidewalks’ generally are not subject to the doctrine because this ‘would create an unwarranted diminution of the general duty of landowners—both public and private—to maintain their premises in a reasonably safe condition,’ potentially ‘swallow[ing] the general rule of comparative fault.’” The plaintiff’s accident occurred while driving a golf cart in the parking lot and thus she was not participating in an athletic activity at the time of her injury. The Court of Appeals reversed the Fourth Department’s decision as to plaintiff’s motion insofar as it sought to dismiss “the 11th affirmative defense on behalf of the County granted, and the case remitted to the Appellate Division for consideration of the issues raised but not determined on appeal to that Court.”

04/16/2025 Lisker v. Vue Catering, Inc.
Appellate Division, Second Department
New York Courts continue to emphasize and hold that to establish a lack of constructive notice, the defendant must offer some evidence as to when the area in question was last cleaned or inspected relative to the time when the plaintiff fell.

This action arises out of a slip and fall that occurred in February 2020. The plaintiff was attending a wedding at a facility that was owned by the defendant. She slipped and fell on flower petals. The defendant owner moved for summary judgment and argued that it did not create the alleged condition or have notice of the condition. The Kings County Supreme Court granted the defendant’s motion.

On appeal, the Second Department reversed. The Court held the deposition testimony and affidavit submitted by the defendant with respect to its general cleaning procedures were insufficient to establish a lack of constructive notice. The Second Department held that the defendant failed to meet its initial burden as the defendant did not submit any specific evidence regarding when the area in question was last cleaned or inspected “or any other affirmative proof to demonstrate how long the condition had existed.” The Court held the lower court should have denied the defendant’s motion for summary judgment to dismiss the complaint

Read Past Editions of Products Liability Pointers

Product Liability Pointers Volume III, No. 12

Thu, 12 Jun 2025 13:52:06 +0000

Volume III, No. 12
Monday, April 28, 2025
A Monthly Electronic Newsletter

About Hurwitz Fine P.C. | Our Practice Areas | Products Liability Team | Contact Us

WHAT PRODUCTS LIABILITY POINTERS COVERS

Negligence
Strict Products Liability
Design & Manufacturing Defects
Failure to Warn
Breach of Warranty
Medical Device Litigation
Governmental Agencies and Regulations
Toxic Torts, Asbestos and Lead Paint

NOTE FROM THE EDITOR:

For the past few years, we have been reporting on the three failed attempts by the New York Legislature to pass the Grieving Families Act, legislation that would completely overhaul wrongful death claims in New York by permitting recovery for emotional damages and expanding the class of persons who can seek recovery for a fatality.

To give some context on the state of law, we were happy to contribute to the Harmonie Group's 50-State Wrongful Death Compendium. This compendium provides a primer for each state that answers the following questions: what is the state's statutory language, who can recover and what can be recovered, and what is the state's statute of limitations for a wrongful death action.

Court of Appeals Issues Two Important Tort Decisions

While somewhat outside the strict products liability arena, there were two recent New York State Court of Appeals decisions in the past month impacting tort litigation, one involving a change in the state’s law regarding injuries caused by domestic animals (dog-bite cases), and another clarifying the scope of the “primary assumption of risk” doctrine.

In Flanders v. Goodfellow, the Court of Appeals overruled prior precedent on the “vicious propensities” strict liability standard and reverted to a more traditional negligence standard with a two-pronged approach for assessing liability for injuries caused by domestic animals. First, if an owner knew or should have known of the animal’s vicious propensities, the plaintiff may pursue a strict liability claim. In addition, or in the alternative, the plaintiff may assert a negligence claim, seeking to prove that the owner failed to exercise reasonable care under the circumstances regardless of whether or not their dog acted unreasonably in the past.

Further detailed analysis on this case from our Premises Liability team can be found here.

In Katleski v. Cazenovia Golf Club, Inc., the Court of Appeals sought to clarify the scope of two important limitations on the “primary assumption of risk” doctrine: its inapplicability to unreasonably enhanced risks and its confinement to cases involving participation in athletics and recreation. Two separate plaintiffs were injured in separate and very different accidents related to the sport of golf, one being struck by an errant golf ball while competing in a golf tournament, and the other struck by a car while riding in a golf cart in the parking lot of a golf course before she began to play the course.

The Court of Appeals found that the primary assumption of risk doctrine precludes for first negligence claim because the risk of being struck by a mishit ball while golfing is inherent in the game and there is no evidence that the design of the course unreasonably enhanced that risk. The second claim however, was reinstated because the primary assumption of risk doctrine has no application to a person who was not participating in a protected athletic or recreational activity at the time of their injury, and a golfer does not assume the risk of being hit by a car in the parking lot.

Not addressed by the court was whether the errant golfer was subject to liability for failure to warn by not yelling "fore!"

-VCP

V. Christopher Potenza ■ Member
Hurwitz Fine P.C.
The Liberty Building
424 Main Street, Suite 1300 ■ Buffalo, NY 14202
tel (716) 849-8900 ■ cell (716) 523-8941 ■ fax (716) 855-0874
Email: vcp@hurwitzfine.com
HF Website: http://www.hurwitzfine.com

Hurwitz Fine's Product Liability and Asbestos Team Continues to Grow

Jason A. Goodman has joined Hurwitz Fine as a Member of these practice areas. Throughout his over 15 years of defending toxic tort claims, Jason has represented a wide range of clients, including manufacturers of boilers, pumps, automotive products, construction materials, cosmetic talc, and premises exposures. Notably, he presented the defense position on General and Specific Causation in Asbestos Actions at the 2017 Upstate New York Asbestos Litigation Summit.

Additionally, Jason handles complex toxic tort, motor vehicle accident and medical transportation matters.

To reach out to Jason directly, please contact him here.

We're Growing: Join Our Product Liability & Toxic Tort Team!

Hurwitz Fine P.C. is expanding our nationally recognized Product Liability and Asbestos/Toxic Tort practice and looking for attorneys at all levels to join our team at our Buffalo headquarters. This is an exciting opportunity to be part of a well-established, collaborative firm that values innovation, mentorship, and client service.

If you are interested, please feel free to reach out to Chris Potenza in confidence.

Hurwitz Fine's Long Island Office Expands

We are excited to announce the continued growth of our Long Island office, marking a significant milestone in our firm’s expansion.

Due to increasing demand and our commitment to providing exceptional legal services, we have relocated to a larger, more modern office space to accommodate our growing team of attorneys and staff. This move reflects our dedication to serving clients throughout Long Island and the greater New York area. As we settle into our new space, we look forward to strengthening our presence in the region and continuing to provide high-quality legal representation.

For more information or to connect with our Long Island team, visit our website here.

Hurwitz Fine Opens Rochester Office

We’ve officially opened a brick & mortar Rochester office. We are fortunate to announce our two new attorneys, Elizabeth K. Ognenovski and Bradon S. Carlson. While we have had a Rochester presence for the past five years, we are excited about our expansion to further serve our clients.

Elizabeth K. Ognenovski joins Hurwitz Fine as Litigation Special Counsel. She focuses on retail & hospitality liability, premises liability, construction accidents/New York Labor Law, products liability, and property damage claims. With extensive experience in civil defense litigation, including appellate work, she has successfully represented corporations, small businesses, and individuals in both state and federal courts. Elizabeth is also highly skilled in risk management strategies, accident investigations, and regularly provides in-house legal training to retailers.
Bradon S. Carlson joins Hurwitz Fine as a Litigation Associate. Bradon focuses on premises liability, retail liability, product liability, automobile liability, and New York State Labor Law. With experience defending complex litigation matters, Bradon has a background in civil defense and is also dedicated to pro bono work, assisting tenants facing eviction and providing legal counsel on various matters.

The Harmonie Group's Wrongful Death Compendium

In collaboration with the Harmonie Group, we are proud to present a 50-State Wrongful Death Compendium. This compendium provides a primer for each state that answers the following questions: what is the state's statutory language, who can recover and what can be recovered, and what is the state's statute of limitations for a wrongful death action.

Click here to view this resource.

Don’t forget to subscribe to our other publications:

Coverage Pointers: This twice-monthly electronic newsletter summarizes important insurance law decisions from appellate courts in New York State with the occasional snapshot across borders. Contact Dan Kohane at ddk@hurwitzfine.com to subscribe.

Labor Law Pointers: Labor Law Pointers offers a monthly review and analysis of every New York State Labor Law case decided during the month by the Court of Appeals and all four Departments. Contact Dave Adams at dra@hurwitzfine.com to subscribe.

Medical & Nursing Home Liability Pointers: Medical & Nursing Home Liability Pointers provides the latest news, developments, and analysis of recent court decisions impacting the medical and long-term care communities. Contact Liz Midgley at emm@hurwitzfine.com to subscribe.

Premises Pointers: This monthly electronic newsletter covers current cases, trends and developments involving premises liability and general litigation. Contact Jody Briandi at jeb@hurwitzfine.com to subscribe.

NEWSLETTER EDITORS
V. Christopher Potenza
vcp@hurwitzfine.com

ASSISTANT EDITORS
Brian F. Mark
bfm@hurwitzfine.com
Mark S. Nemeth
msn@hurwitzfine.com
Stephen M. Sorrels
sms @hurwitzfine.com
Michael J. Williams
mjw@hurwitzfine.com

Hurwitz Fine P.C.

Buffalo
The Liberty Building
424 Main Street, Suite 1300, Buffalo, NY 14202
Phone: 716-849-8900, Fax: 716-855-0874

Long Island
25 Melville Park Road, Suite 260, Melville, NY 11747
Phone: 631-465-0700, Fax: 631-465-0313

Rochester
100 Office Park Way, Pittsford, NY 14534
Phone: 585-454-6850, Fax: 585-270-4572

Albany
518-641-0398

Additional Offices
Albion | Amherst | Hartford, CT | Englewood, NJ | Niagara Falls

www.hurwitzfine.com
© 2025, Hurwitz Fine P.C. All Rights Reserved

In some jurisdictions, newsletters such as this may be considered Attorney Advertising.

Coverage Pointers - Volume XXVI No. 23

Fri, 25 Apr 2025 13:21:17 +0000

Volume XXVI, No. 23 (No. 696)
Friday, April 25, 2025
A Biweekly Electronic Newsletter

In some jurisdictions, newsletters such as this may be considered Attorney Advertising.

If you know of others who may wish to subscribe to this free publication, or if you wish to discontinue your subscription, please advise Dan D. Kohane at ddk@hurwitzfine.com or call 716-849-8900.

You will find back issues of Coverage Pointers on the firm website listed above.

Dear Coverage Pointers Subscribers:

Do you have a situation? We love situations.

We welcome a slew of new subscribers from our PLRB presentation on Risk Transfer and the two presentations to a national carrier (totaled about 375 attendees) on New York Coverage Protocols and Writing a Coverage Letter in New York.

We always welcome the opportunity to offer educational programming.

Any Given Saturday, my new pal in Lexington Kentucky, is a 21-year-old horse that was born in 2004 and raced in 2007. He was sired by Distorted Humor out of the A.P. Indy mare Weekend In Indy. He was trained by Todd A. Pletcher and raced for , and was bred in Kentucky, United States by [Add Data]. Any Given Saturday has raced at Aqueduct, Belmont Park, Churchill Downs, Monmouth Park, Tampa Bay Downs with wins at Belmont Park, Monmouth Park, Tampa Bay Downs. His stakes wins include wins in the 2007 Brooklyn Handicap (G2), 2007 Haskell Stakes (G1), and the 2007 Sam F. Davis (LS).

Greetings from Lexington, where I’m attending the 84^th Annual Meeting of the Association of Defense Trial Attorneys, the ADTA. Great to be among so many friends and colleagues. Looking forward to tasting some good Kentucky bourbon and visiting a classic Kentucky horse farm. On Thursday, along with my colleague, Megan Coluccio, from Baker Sterchi in Seattle, we are presenting a program entitled “Masters of Marketing”.

Hurwitz Fine P.C., in collaboration with the Harmonie Group’s Medical Malpractice Committee, is proud to present a 50-State Wrongful Death Compendium. This compendium provides a primer for each state that answers the following questions: what is the state's statutory language, who can recover and what can be recovered, and what is the state's statute of limitations for a wrongful death action. Our own Chris Potenza spearheaded the project for the Harmonie Group.

The Harmonie Group's Wrongful Death Compendium provides a primer for each state that answers the following questions: what is the state's statutory language, who can recover and what can be recovered, and what is the state's statute of limitations for a wrongful death action. Entries are updated as of March 2025.

Click here to view this resource.

Disproving a “Grave Injury”

Often a problem to fight against in an underlying Labor Law action against an employer, because of a potential conflict of interest that may preclude defense counsel from moving to dismiss a claim with unlimited coverage, another court has crafted a remedy for the Employers Liability carrier – a separate declaratory judgment action. See my discussion of the NGM decision in this week’s issue.

Coverage Mediator

Give Me a Call – 716-849-8942

Coverage mediation is a thing! Subject matter expertise may be useful.

A growing percentage of my practice has been a mediator (and sometimes as an arbitrator) in insurance coverage, commercial, personal injury, and other disputes. With a robust national client base, I am regularly called on by friends and colleagues from around the country, folks who know me and trust me, to help resolve disputes. Often, particularly in mediated matters, I know the insurers and lawyers on both (or several) sides of the dispute. Since they all trust me as a fair dealer, they feel comfortable in having me try to help close the file (and avoid precedent). Just pick up the phone, 716.849.8942 or send an email to ddk@hurwitzfine.com and I’ll try to help.

What are the benefits of coverage mediation?

Time and Cost Efficiency

Mediation is generally much faster and more cost-effective than traditional litigation:
The process can typically be completed within weeks, compared to months or years for court cases.
It avoids expensive court fees, attorney costs, and other litigation-related expenses.

Control and Flexibility

Parties have more control over the outcome in mediation.
They can actively participate in crafting solutions tailored to their specific needs and circumstances.
There is flexibility to explore creative resolutions that may not be available through court proceedings.

Confidentiality

Mediation proceedings are typically confidential, which offers several benefits:
- Parties can discuss sensitive matters openly without fear of public disclosure.
- It avoids the publicity and public record associated with lawsuits and trials.

Relationship Preservation

The less adversarial nature of mediation can help maintain or improve relationships between parties.
It fosters open communication and collaboration.
This can be especially valuable in disputes involving ongoing business relationships.

Risk Mitigation

Mediation helps alleviate some of the risks associated with litigation.
It avoids precedent that may provide unfortunate results for parties – or for the industry – in the future.
It offers a compromise-based approach, reducing the "all-or-nothing" risk of a court decision.
Even if unsuccessful, the process can provide valuable insights into the strengths and weaknesses of each party's position.

Empowerment and Communication

Mediation empowers parties in ways that litigation often doesn't.
Clients have a more active role in the process and outcome.
It provides a forum for parties to tell their stories and feel heard4.

While mediation isn't suitable for every situation, these advantages make it an attractive option for resolving many insurance coverage disputes efficiently and effectively.

LinkedIn

Newsletters:

We have other firm newsletters to which you can subscribe by simply letting the editor (or me) know, including a new publication, which was created to advise on business and employment law questions:

Premises Pointers: This monthly electronic newsletter covers current cases, trends and developments involving premises liability and general litigation. Our attorneys must stay abreast of new cases and trends across New York in both State and Federal Court and will now share their insight and analysis with you. This publication covers a wide range of topics including retail, restaurant and hospitality liability, slip and fall accidents, snow and ice claims, storm in progress, inadequate/negligent security, inadequate maintenance and negligent repair, service contracts, elevator and escalator accidents, swimming pool and recreational accidents, negligent supervision, assumption of risk, tavern owner and dram shop liability, homeowner liability and toxic exposures (just to name a few!). Please drop a note to Jody Briandi at jeb@hurwitzfine.com to be added to the mailing list.
Labor Law Pointers: Hurwitz Fine P.C.’s Labor Law Pointers offers a monthly review and analysis of every New York State Labor Law case decided during the month by the Court of Appeals and all four Departments. This e-mail direct newsletter is published the first Wednesday of each month on four distinct areas – New York Labor Law Sections 240(1), 241(6), 200 and indemnity/risk transfer. Contact Dave Adams at dra@hurwitzfine.com to subscribe.
Products Liability Pointers: Whether the claim is based on a defective design, flawed manufacturing process, or inadequate instructions/warnings, product liability litigation is constantly evolving. Products Liability Pointers examines recent New York State and Federal cases as well as high court decisions from other jurisdictions, keeping our readers up to date with the latest developments and trends, and providing useful practice tips and litigation strategies. This monthly newsletter covers all areas of product liability litigation, including negligence, strict products liability, breach of warranty claims, medical device litigation, toxic and mass torts, regulatory framework and governmental agencies. Contact V. Christopher Potenza at vcp@hurwitzfine.com to subscribe.
Medical & Nursing Home Liability Pointers. Medical & Nursing Home Liability Pointers provides the latest news, developments, and analysis of recent court decisions impacting the medical and long-term care communities. Contact Elizabeth Midgley at emm@hurwitzfine.com to subscribe.

Women Don’t Vote – 100 Years Ago:

Buffalo Post
Buffalo, New York
25 April 1925

WOMEN IN POLITICS AND THE HOME.

Carrie Chapman Catt, president of the National American Woman Suffrage Association, wants to know why more women don’t vote. “Why aren’t there more women in the Legislature? Why aren’t women more effective in politics?” She asks.

Mrs. Catt is asking a question that women generally can answer if so inclined. Most women have no interest in politics. Their inclination and tastes lead them elsewhere. It is true that many of them wanted the ballot, just as a little boy wants a toy that is out of his reach. But when they got it they cast it aside as something of no values: Some women go to the polls with a clear understanding of what they are voting for and so cast an intelligent ballot. But how many of them let their husbands or brothers or fathers tell them what to do?

A woman’s taste is not to be regulated by law. She is not going to interest herself in politics if politics has no appeal to her. The club women and those who make a study of politics are relatively few compared with the total number.

But Mrs. Catt makes a mistake if she thinks that because women take no direct interest in the campaigns of the day they are not “effective in politics.” John Garibaldi Sargent, the new Attorney General, spoke to the members of the association upon they very topic and pointed out how immensely influential the mother is in the home in shaping the mind of the child and making potentially a good citizen of him.

“The women of America,” said Mr. Sargent impressively, “will make or break the nation by what they teach their children before the age of ten.” There is no objection to women taking an active part in politics and in governmental affairs, provided they do not neglect that far more important sphere of activity and usefulness, the rearing of children in the home.

The duties that nature has imposed upon women are far more important than those which have been thrust upon her by law.

Peiper on Property (and Potpourri):

Dear Readers,

We’ve all had them. Your author still laments a particular decision from the Appellate Division where the Court simply refused to acknowledge, address, or even reference, dispositive language in an SUM dispute. Troubling, indeed, when the same Court, reading the same language, and analyzing the same argument, reached an entirely different conclusion six months later.

That said, on the whole, the Appellate Division renders thoughtful, well analyzed, opinions weekly. Disagreement with a decision does not, necessarily, mean the Court (wherever it sat) was wrong. It’s a hard position, and deciding appeals by its very nature leaves one party disappointed in the decision.

On occasion, though, we come across decisions that leave us scratching our heads. This month we have such a decision. While we cannot believe that the Third Department intended to find an ambiguity in otherwise clear language because of where an Endorsement was placed in the policy, a casual reading of Catskill Barbeque could lead one to that conclusion. The Court appears to have fixated on the fact that an Endorsement changing coverage referenced in a Supplemental Declarations Page was not found until 73 pages later. One could read the opinion to suggest that where there is a span of pages between interacting policy provisions an ambiguity is created.

It is humbly submitted that contracts are contracts, and the Court of Appeals has dictated for decades that no court should strain to find ambiguity where it is not apparent on the face of the document. If this decision is to be believed on its face, it upends decades of precedent. Some BOP forms are nearly 50 pages long on their own. Is the Appellate Division suggesting that an Endorsement, found immediately after the primary policy form, is ambiguous because of a span of 50 pages? What gap, then, is permissible?

In reading the decision closely, however, you do see what the Court appears to have been driving at. Apparently, the carrier involved conceded that a portion of the Endorsement in question did not apply. The carrier then, however, argued another portion of the same Endorsement in controversy did, in fact, apply. If there is ambiguity, it is at least plausible that it is found in the wording, or application, of the Endorsement. We can appreciate that distinction, and hope this is what the Court meant.

If, however, one can manufacture ambiguity by arguing it does not need to apply an Endorsement because it is hard to find in the policy, we are in a very strange new world. As noted above, if we’re counting pages of a contract, and not analyzing the language employed therein, we have collectively lost the plot. I’ll assume this one is an anomaly and hope I don’t see it show up in my next summary judgment motion.

That’s it for this week. See you in two more.

Steve
Steven E. Peiper
sep@hurwitzfine.com

“To Be Your Contractually Wedded Wife …” – 100 Years Ago:

Buffalo Post
Buffalo, New York
25 April 1925

Marriage Contract Arranged By
Parents Not Binding, Court Rules

New York, April 25 (A.P.) – A contract of marriage made before a rabbi by the parents of a boy and girl is not binding upon either minor, Brooklyn Supreme Court Judge Fabor has ruled.

As a result of this ruling, made yesterday, a $25,000 breach of promise suit brought by Edna Popofsky 19, of Oskaloosa, Iowa, against Harry A. Finkelstein, 25, of Brooklyn, has been dropped.

Miss Popofsky and Young Finkelstein were formally matched by their parents, an agreement having been signed in September 1921, between the respective parents and before a rabbi here. The marriage was to have taken place September 6, 1933, but young Finkelstein, at that time, refused to go through with it because, he said, the families had quarreled since the signing of the agreement. Miss Popofsky promptly brought suit.

Though he would not honor as legal the agreement to marry, Judge Faber granted the girl $8,500, given to Finkelstein as dowry money at the time the agreement was signed.

Lee’s Connecticut Chronicles:

Dear Nutmeggers:

Well, if you’ve been following the saga of our renovation project, I can report that it is OVER! The work is done, the furniture delivered, and now all that’s left for us to do is learn to live in it. It took longer than we thought it would, it cost more than we budgeted, but the result is stunning. Now, we get to enjoy it all to ourselves for all of the next three weeks, until the college kids come home for the summer and ruin it.

On the litigation front, we report on two additional CUTPA pleading cases, again noting the varied standard across the state but confirming that generic, boilerplate allegations will not survive a motion to strike. However, the same allegations will make out a common law bad faith cause of action.

Until next time, keep keeping safe.

Lee
Lee S. Siegel
lss@hurwitzfine.com

Whiskey Talks, Nobody Walks – 100 Years Ago:

Dunkirk Evening Observer
Dunkirk, New York
25 April 1925

BATTLING BROTHERS
TAKEN BEFORE JUDGE

Moonshine Started War Between
Relatives Costing One $5 and
The Other $10 Fine.

Filled with moonshine which made them forget the fact that they were brothers, Steve and George Olyowski, both of 193 East Second Street started a fight with each other which eventually led them to jail and police court. Steve is older and bigger than George, so he got the better of him in the battle. George, seeking to be avenged, called the cops with the result that the two spent the remainder of the night in the Fredonia jail.

This morning the brothers pleaded not guilty to disorderly conduct; the charge preferred against them by Officer Clifford. Judge Anthony Johnson found them guilty, however, and as they have been a source of trouble lately. Steven drew a fine of $25 and George one of $10. Both fines were paid and the defendants released.

Ruffner’s Road Review:

Dear Readers,

Still anxiously waiting for Spring weather to arrive. Hopefully it warms up soon before golf and softball seasons begin. In the meantime, it’s a great time of the year for sports with NHL and NBA playoffs underway, even without any team in particular to root for since Pittsburgh and Buffalo aren’t involved (obviously I am accustomed to the latter with the Sabres).

I have one no-fault case this week, where the court considered the insurer’s summary judgment motion on the basis of their founded belief the alleged accident was intentional and the failure of multiple claimants to cooperate with the investigation. In the second case, the court determined that the insurer could seek subrogation from a Gentlemen’s club, based on alleged allegations of Dram Shop laws, for payments made due to an accident caused by a drunk driver.

Kyle
Kyle A. Ruffner
kar@hurwitzfine.com

Death Penalty for 15-Year-Old Boy – 100 Years Ago:

The Buffalo News
Buffalo, New York
25 April 1925

DEATH FOR A BOY OF 15?

Shall a boy of fifteen suffer the death penalty?

This question arises out of the conviction of Willie Cavalier by a jury in a Pennsylvania court of the murder of his grandmother. He was sentenced by the judge to die in the electric chair. The jurors, who returned the verdict, have petitioned the judge to have the boy examined by a lunacy commission. He, however, will neither reconsider his judgement nor appoint a commission.

The crime of which this boy was convicted was cold blooded and brutal. He killed his grandmother to get possession of a small sum of money. At that time, he was fourteen years old. The law does not regard a boy of this age as a competent and responsible person. This is true with respect to all civil commitments – as of his labor, property, what not. How, then, can he fairly be held responsible in this instance, and to the extent of paying for his offense with his life? Of course, he should be punished, and with all the severity consistent with the requirements for the proper safeguarding of society, Bu that should not take him to the electric chair.

Editor’s Note: The sentence to death was upheld by the state’s highest court but eventually commuted to life imprisonment by the Board of Pardons of the Commonwealth of PA, five days before his scheduled electrocution. He died of pulmonary tuberculosis in prison, at the age of 30.

Ryan’s Federal Reporter:

Hello Loyal Coverage Pointers Subscribers:

Another Little League season is upon us as this Saturday is officially park clean-up day at Central Amherst Little League. My oldest will be playing baseball by next week (weather permitting). No word yet on the shape of the fields, but at this time of year—they’re wet, without question.

This edition I have summarized a recent Southern District of New York decision involving Article III Standing relative to an alleged breach of an insurance policy by paying benefits to an insured’s lienholder, rather than directly to the insured. The court addresses just what it means to constitute an “injury in fact” in the context of a first-party insurance claim involving payments made to a third-party, rather than the insured directly, and precisely how such an injury might be redressed by the Court in the future.

Until next time,

Ryan
Ryan P. Maxwell
rpm@hurwitzfine.com

Pretty Good Salvage – 100 Years Ago:

The Buffalo News
Buffalo, New York
25 April 1925

INSURANCE CO. GETS
STOLEN MACK GEMS

Held by City, They Satisfy
$25,000 Judgment – Policy
Already Paid Owners

In a friendly suit growing out of the theft of valuable jewelry from the Delaware avenue home of Norman E. Mack, several months ago, judgment of $25,000 was taken by the Federal Insurance company of New York, Thursday, against Mayor Schwab, Police Chief Zimmerman, and Police Property Clerk James Mack. The judgment was advised and accepted by Assistant Corporation Counsel Andrew Ronan, in order that the insurance company might be protected in its title to a string of pearls recovered by the Cleveland police and surrendered to the insurance company through the office of Property Clerk James Mack. The insurance company has previously paid Mr. Norman E. Mack the full amount of a policy covering the loss of the jewels.

Part of the Mack jewels were recovered from men arrested in a Cleveland jewelry store. They denied having stolen the jewels, declaring they had won them in a crap game. The Cleveland police gave a Buffalo detective custody of a string of pearls which were brought to this city and placed in charge of Property Clerk Mack.

The insurance company having paid for the loss of the pearls asked the city authorities to surrender them to their representatives. Some question of law had arisen in the Ohio courts however, which it was feared might later involve title to the pearls, so Corporation Counsel Ronan advised insurance company lawyers to take judgment against the city for the value of the jewels. The judgment was satisfied Friday when the jewels were surrendered to the agents of the company.

Storm’s SIU:

Hi Team:

I hope you had a wonderful Easter and found all your Easter eggs! Four cases this week:

Material Misrepresentations in the Application; and the Mere Intention to Reside in the Premises in the Future is Insufficient to Satisfy the Policy's "Residence Premises" Requirement.
Issue of Fact Whether the Plaintiffs' Misrepresentations Regarding their Additional Living Expense Claim Were Material to the Insurer’s Investigation.
Case Transferred from the Southern District of New York to the District of Connecticut as the Locus of Operative Facts for this Fraud Case is Connecticut, Not New York.
Court Granted Insurer’s Motion to Amend its Answer to Include an Additional Affirmative Defense Based on Breach of the "Concealment, Misrepresentation or Fraud" Condition of the Policy.

See you in a fortnight.

Scott
Scott D. Storm
sds@hurwitzfine.com

Wondering if the Stats Have Changed – 100 Years Ago:

The Buffalo News
Buffalo, New York
25 April 1925

WOMEN ABSENT FROM
WORK MORE THAN MEN

BALTIMORE, April 23. – That women employees lose over twice as much time as men employes is shown by a research conducted by Harry W. Hepner of Syracuse university, to be reported in the next issue of the Journal of Personnel Research.

A large industrial concern in considering the equalization of salaries for their men and women office employees made an investigation of the relative amount of absence of men and women. It was found that over a period of three months the female employes lost over six per cent of their working time by absence while only slightly two per cent was lost by the male employes. Both sexes worked under exactly the same office conditions. As a result of the study this particular company decided that their salaried women employes did not deserve the same pay as men even when they hold the same kind of positions.

One interesting sidelight developed by the investigation was the fact that absence for both men and women was less on pay days than on other days. In one case 50 employes were absent on the day before pay day and only 6 on pay day.

Fleming’s Finest:

Hi Coverage Pointers Subscribers:

Hope you have been having a lovely Spring! As predicted, the weather has been warming up. I went for a run over the weekend and was surprised to see our cherry blossoms are not in bloom yet. Like the rest of us, maybe this warm weather is just what they need to reach their full potential.

This week’s case from the Iowa Supreme Court considers whether consumer fraud is an occurrence and constitutes property damage under a CGL policy.

Catch you later,

Kate
Katherine A. Fleming
kaf@hurwitzfine.com

A Polite and Appreciative Burglar – 100 Years Ago:

The Buffalo News
Buffalo, New York
25 April 1925

ODD BURGLARY INSURANCE
WORKS AFTER 7 YEARS

NEW YORK, April 24. – Alfred Bohm, a retired Brooklyn business man, has found his unique burglary insurance effective after seven years.

Bohm, fearing that burglars would break into his summer bungalow, at Grand View, in Rockland County, N.Y., and wreck its furnishings during the winter months when the colony is deserted, had left a $50 bill on the library table each fall. With the bill he has left a note reading:

“If you succeed in breaking in please accept this $50 and depart at once. Do not damage the furniture. There are no valuables in the house. Thanks. Alfed Bohm.”

For seven years the bill was not disturbed. But when Bohm visited the bungalow this year it was gone, nothing had been disturbed, and across the face of his note was scrawled a simple “Thanks.”

Gestwick’s Garden State Gazette:

Dear Readers:

I had a wonderful week away in Hilton Head, with trips to Charleston, Savannah, and Atlanta, with my fiancé and my soon-to-be in-laws. And it seems that I have brought the beautiful sunshine back to Buffalo with me! To make it even better, lacrosse playoffs are starting this weekend, with our Buffalo Bandits taking on the San Diego Seals. The Blue Jays are in action (albeit not too hot as of late), and spring is in the air. What a wonderful time of year it is.

I have a case for you this week discussing the proper procedure by which to cancel an auto insurance policy in the State of New Jersey. Read on for a cautionary tale.

That’s it for this week, see you in two.

Evan
Evan D. Gestwick
edg@hurwitzfine.com

They Won the Right to Vote – 100 Years Ago:

Democrat and Chronicle
Rochester, New York
25 April 1925

FIRST SUFFRAGE
GROUP DISBANDS

Pressing Miss Anthony’s
Claim to Hall of Fame
Niche is Urged

Washington, April 24. – The National Women Suffrage Association has formally ended its life of nearly seventy-five years devoted to the fight to obtain the vote for women. Mrs. Carrie Chapman Catt, president of the Association, presided at a meeting of its officers and other suffrage leaders, called here yesterday for the formal disbanding of the organization through which Susan B. Anthony and other suffrage pioneers started before the Civil war the movement which achieved its goal with the adoption of the Nineteenth amendment five years ago.

Addressing the meeting, Mrs. Catt urged more fighting spirit among women in politics.

“They say that women generally are disappointed in politics, that they don’t get the fun out of it that men do, because they haven’t got the fighting spirit,” Mrs. Catt said.

Tribute to the memory of Susan B. Anthony was paid in an address by Miss Helen M. Gardner, and Mrs. Raymond Brown asked women to urge the suffrage pioneer’s right to recognition for the Hall of Fame after the necessary lapse of twenty-five years from her death, which will be in 1931.

O’Shea Rides the Circuits:

Hey Readers,

Who has already mowed their lawn? Not this guy. Law-mowing and edging flower beds are on the agenda for this weekend. That and hopefully a playoff win from the Ottawa Senators.

This week I have a case regarding a pharmacy’s professional liability claim from the Sixth Circuit. It looks like the business did not properly coordinate its insurance. And no one read the professional liability policy.

Until Next Time,

Ryan
Ryan P. O’Shea
rpo@hurwitzfine.com

What Time is it? – 100 Years Ago:

Times Herald
Olean, New York
25 April 1925

Daylight Saving
Law Mixed Affair

NEW YORK, April 25. – More clocks the country over will be turned ahead one hour tomorrow morning, at 3 o’clock. When daylight saving time goes into effect for five months, then any other year since the world war when it was started, the merchants’ association estimated today.

New York city will be governed entirely by the hypothetical April to September time meridian, this being made mandatory by city ordinance.

This will accordingly embrace all business institutions within the city limits, and accounts for the principal financial and commodity markets, such as the stock consolidated, curb, cotton, coffee, sugar and produce exchanges.

The radius will be even wider than merchants’ association said because the Federal Reverse banks both here and at Buffalo, announce they will keep the new time, opening and closing an hour earlier, morning and evening.

LaBarbera’s Lower Court Library:

Dear Readers:

Hope everyone had a lovely Easter with friends and family. For Easter, my present included packets of Morning Glory Seeds. For those who know my boyfriend, Morning Glory vines are his worst nightmare. After asking every summer to add some to our backyard, this year I finally get my wish. I cannot wait to get them planted. In other news, I was pleasantly surprised to learn that my college roommate would be moving to Buffalo. Looking forward to having her close by again.

This week I have an interesting case brought by the National Football League and NFL Enterprises LLC against a variety of insurance carriers regarding an underlying action alleging conspiracy between the NFL and DirecTV. Hope you enjoy the read.

Until next time …

Isabelle
Isabelle H. LaBarbera
ihl@hurwitzfine.com

She’s Not My Mom, She’s My Wife! – 100 Years Ago:

The Afro-American
Baltimore, Maryland
25 April 1925

Mistaken Relationship

An elderly woman stood before the bar of justice in the Western Police Station Friday morning. A young man stood on the opposite side of the rail. The judge set in his accustomed place and looked knowingly at the pair.

“What’s the charge?” asked his honor.

The woman brushed away an unshed tear and informed the magistrate that the charge was non-support. “I hate to do it Georgie,” she said, “but I cannot live off nothing and you think I am able to work.”

The magistrate scowled at the robust young man, “Why don’t you work?” he blurted, “You are well and strong! How can you be so heartless as to neglect the poor old woman?”

“But your honor,” interrupted the young man,

“Not a word,” said the judge, casting a glance of sympathy at the woman who tucked a strand of gray hair under her hat.” “Sarah Hardman, where do you live?”

“222 Bowers Court. Judge, I don’t want to be hard of George, I think he will do right if you tell him.”

“That’s all right,” said the judge, “but I have no pity for a man who won’t support his dear old mother.”

“She’s not my mother,” interrupted George, “that’s my wife.”

The judge was so surprised he dismissed the case without further comment.

Lexi’s Legislative Lowdown:

Dear Readers,

This weekend I am beginning to prepare a section of my yard for a wildflower garden. I am not sure my fiancé is thrilled about losing some of the grass, but I am looking forward to testing my green thumb this summer!

This week we discuss a proposed bill that would prevent automobile insurers from cancelling or non-renewing policies during the pendency of disputed claims.

Lexi
Lexi R. Horton
lrh@hurwitzfine.com

Whipping the Defendant into Shape? – 100 Years Ago:

Brooklyn Eagle
Brooklyn, New York
25 April 1925

Magistrate Would Whip
Wife Beater at the Post

Magistrate Brown in the Flatbush Court today expressed a desire for the return of the days of the whipping post.

“And I’d like to take a slash at you myself,” he told Raymond Rodriguez, 31, of 23 Lefferts pl., who was before him to be sentenced on the charge of his wife, Winifred, that he had struck her in the face. A report of a probation officer showed that Mrs. Rodriquez, a frail, slim girl, had been working since their marriage and supporting husband and his child by a first marriage.

“You are a brute,” the Court declared. “And I am only sorry that I cannot deport you.” He placed him on probation for a year not to see or communicate with his wife.

Domenica’s Diary on Bad Faith:

Dear CP Readers,

It’s late April and finally feeling like spring! We are hopefully done with the big coats for a while. Enjoy the blooming of the season … truly one of my favorite times of the year.

This week I bring you a case that is a cautionary tale against getting too comfortable relying on Courts’ general leanings towards dismissing bad faith claims and suits against insurers.

Domenica
Domenica D. Hart
ddh@hurwitzfine.com

Wonder Whether She Married Him Anyway – 100 Years Ago:

Times Herald
Washington, District of Columbia
25 April 1925

ADVICE TO THE
LOVELORN

By Beatrice Fairfax
Taking a Great Risk

DEAR MISS FAIRFAX:

I am desperately in love with the dearest man in the world. But my parents don’t wish me to marry him. All they have against him is that he drinks.

He says if I marry him I can reform him. What would you advise me to do? ANXIOUS

Unless he reforms you haven’t a chance in the world for a happy married life with him. Thousands of drunkards do reform, thanks to the Giver of all Good. But wait until your own particular man has reformed before you marry him. If you can’t stop him from drinking now you’ll never in the world be able to stop him after you’re married to him.

Listen to your father and mother – put the man on probation – and see. That’s your only fighting chance for happiness.

North of the Border:

I am about to embark on my spring ritual: Heading to Toronto for the Canadian Defence Lawyers’ Insurance Coverage Symposium. In my opinion, this is where anyone interested in Canadian insurance coverage needs to be. It is clearly the case that others agree with me as the event is sold out. Again.

In the spirit of 4/20—whether you call it ‘Four Twenty,’ or just the world’s chilliest holiday—this week’s column (by cosmic coincidence) dives into yet another cannabis case.

Until next time.

Heather
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
hasanderson@sanderson-law.com

Purity Juries No More – 100 Years Ago:

Buffalo Courier
Buffalo, New York
25 April 1925

Banton to Ignore
Future Verdicts
Of “Play Juries”

System Lapses into Disuse
After Brief Activity

New York, April 25. – The play jury system, under which juries drawn in the district attorney’s office from a selected list of playgoers reviewed productions which were complained of as immoral, apparently has lapsed into disuse after a clean bill of purity to three productions alleged to be obscene, it was learned today.

District Attorney Banton, who prophesied failure for the experiment, is believed to have been dissatisfied with the results. He asserted when he agreed to give the play jury system a trial that the play jury seemed the only escape from “political censorship.” “That it may prove unsatisfactory is a probability.” He was quoted as saying, “But I believe in giving it a fair trial.”

Banton today asserted that his attitude toward a production which he regards as a violation of the law has never changed, and that if he is given evidence now which he regards as proving immorality within the meaning of the law he will place the matter before a grandy jury, regardless of the verdict of a play jury.

Headlines from this week’s issue, attached:

KOHANE’S COVERAGE CORNER
Dan D. Kohane
ddk@hurwitzfine.com

New Trend Continues. Employer’s Liability Carrier Establishes, in Declaratory Judgment Action, That Underlying Plaintiff Did Not Sustain a “Grave Injury” and Therefore Has No Duty to Defend Underlying Third-Party Action
Additional Insured Coverage to Contractor Only Available if There Is a Written Subcontract. Court Defines Subcontractor and Discusses Horizontal Exhaustion Rules. Court Embraces Horizontal Exhaustion

PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
sep@hurwitzfine.com

Thousands Flee - Third Department Finds Apparent Question of Fact on Enforceability of an Endorsement Because it is Hard to Find in the Policy

LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
lss@hurwitzfine.com

What Is Failure to Procure Insurance?
Another Court Grapples With the CUTPA Pleading Standard
Boilerplate Allegations Do Not Satisfy CUTPA Pleading Standard

RUFFNER’S ROAD REVIEW
Kyle A. Ruffner
kar@hurwitzfine.com

Insurer’s Motion for Summary Judgment Granted as to Claimant’s That Failed to Attend an EUO
Insurer Permitted to Seek Subrogation Under Dram Shop Act for Payments Made Due to Accident Caused by Intoxicated Driver

RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
rpm@hurwitzfine.com

Satisfaction of Lien Through Payment of Insurance Directly to Lienholder Instead of Insured at Less Than Full Value of Loss Is a Redressable Injury

STORM’S SIU
Scott D. Storm
sds@hurwitzfine.com

Material Misrepresentations in the Application and the Mere Intention to Reside in the Premises in the Future Is Insufficient to Satisfy the Policy's "Residence Premises" Requirement
Issue of Fact Whether the Plaintiffs' Misrepresentations Regarding Their Additional Living Expense Claim Were Material to the Insurer’s Investigation
Case Transferred from the Southern District of New York to the District of Connecticut as the Locus of Operative Facts for this Fraud Case Is Connecticut, Not New York
Court Granted Insurer’s Motion to Amend its Answer to Include an Additional Affirmative Defense Based on Breach of the "Concealment, Misrepresentation or Fraud" Condition of the Policy

FLEMING’S FINEST
Katherine A. Fleming
kaf@hurwitzfine.com

Consumer Fraud Not an Occurrence Under CGL Policy

GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
edg@hurwitzfine.com

New Jersey Appellate Division Adheres to Strict Statutory Requirements in Cancellation of Automobile Policies

O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
rpo@hurwitzfine.com

No Coverage for Professional Liability Claim Under CGL Policy Based on Exclusion and No Coverage Under Professional Liability Policy Based Amended Definition of Claim

LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
ihl@hurwitzfine.com

Partial Summary Judgment Granted to Insured Based on Declaration That Claim Was Deemed First Made During 2014-2015 Policy Period, and Not Excluded by Pending and Prior Litigation Exclusion

LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
lrh@hurwitzfine.com

Bill to Prohibit Cancellation, Non-renew or Conditional Renewal of Automobile Insurance When Dispute as to Pending Claim Exists

DOMENICA’S DIARY ON BAD FAITH
Domenica D. Hart
ddh@hurwitzfine.com

A Bad Faith Lawsuit Looms Over a Carrier a Decade after Its Failure to Tender Policy Limits Despite a Shooting Case That Presented Potentially Clear Adverse Liability and Financial Exposure of a “Ticking Time Bomb” within Months of the First Notice of Loss

NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
hasanderson@sanderson-law.com

A Criminal Act Exclusion in a Liability Policy That Excludes “Bodily Injury" or "Property Damage" Caused by Any Intentional or Criminal Act or Failure to Act by Any Person Insured by this Policy, Requires the Insurer to Prove that the Injury or Damage in Issue Was Caused by the Criminal Act, Even Though the Insured Did Not Intend the Injury or Damage

See you at home.

Dan

Hurwitz Fine P.C. is a full-service law firm providing legal services throughout the State of New York and providing insurance coverage advice and counsel in Connecticut and New Jersey.

NEWSLETTER EDITOR
Dan D. Kohane
ddk@hurwitzfine.com

ASSOCIATE EDITOR
Agnes A. Wilewicz
aaw@hurwitzfine.com

COPY EDITOR
Evan D. Gestwick
edg@hurwitzfine.com

INSURANCE COVERAGE/EXTRA CONTRACTUAL LIABILITY TEAM
Dan D. Kohane, Chair
ddk@hurwitzfine.com

Steven E. Peiper, Co-Chair
sep@hurwitzfine.com

Michael F. Perley

Agnieszka A. Wilewicz

Lee S. Siegel

Brian F. Mark

Scott D. Storm

Domenica D. Hart

Ryan P. Maxwell

Kyle A. Ruffner

Katherine A. Fleming

Evan D. Gestwick

Ryan P. O’Shea

Isabelle H. LaBarbera

Lexi R. Horton

Victoria S. Heist

FIRE, FIRST PARTY AND SUBROGATION TEAM
Steven E. Peiper, Team Leader
sep@hurwitzfine.com

Michael F. Perley

Scott D. Storm

NO-FAULT/UM/SUM TEAM
Dan D. Kohane
ddk@hurwitzfine.com

Ryan P. O’Shea
rpo@hurwitzfine.com

Kyle A. Ruffner
kar@hurwitzfine.com

APPELLATE TEAM
Jody E. Briandi, Team Leader
jeb@hurwitzfine.com

Topical Index

Peiper on Property and Potpourri
Lee’s Connecticut Chronicles

Ruffner’s Road Review

Ryan’s Federal Reporter

Storm’s SIU

Gestwick’s Garden State Gazette

Lexi’s Legislative Lowdown

KOHANE’S COVERAGE CORNER
Dan D. Kohane
ddk@hurwitzfine.com

04/16/25 NGM Insurance Company v. MGC Design & Construction Corp.
Appellate Division, Second Department
New Trend Continues. Employer’s Liability Carrier Establishes, in Declaratory Judgment Action, That Underlying Plaintiff Did Not Sustain a “Grave Injury” and Therefore Has No Duty to Defend Underlying Third Party Action

On November 24, 2017, Guichay, an employee of MGC Design & Construction Corp. (“MGC”) allegedly was injured when he tripped and fell while working at a construction site. Guichay sued Barr and IE Construction Management, LLC (“construction manager”), Thereafter, Barr commenced a third-party action against MGC, and the construction manager commenced a second third-party action against MGC (hereinafter together the underlying third-party actions), each seeking, among other things, indemnification in the underlying action.

MGC's insurer, the plaintiff, NGM Insurance Company, initially provided MGC with a defense in the underlying third-party actions. The plaintiff, however, reserved its right to seek a judgment declaring that it is not obligated to defend or indemnify MGC if the plaintiff determined that Guichay did not suffer a "grave injury" within the meaning of Workers' Compensation Law § 11(1).

On July 17, 2020, MGM commenced this action against, among others, MGC and the construction manager for a judgment declaring that the plaintiff is not obligated to defend or indemnify MGC or any other entity in the underlying action and the underlying third-party actions. MGM convinced the court that the underlying plaintiff did not sustain a grave injury and won its motion.

The construction manager argued that discovery may lead to relevant evidence on the issue of the defendants' liability, or that facts essential to opposing the motion were exclusively within the knowledge and control of the plaintiff. The Second Department rejected that argument -- the mere hope or speculation that sufficient evidence to defeat a motion for summary judgment may be uncovered during the discovery process is insufficient to deny the motion.

The construction manager did not meet its burden of establishing that further discovery might lead to relevant evidence or that facts essential to justify opposition to the motion were exclusively within the knowledge and control of the plaintiff.

An insurance carrier can be relieved of its duty to defend if it establishes, as a matter of law, that there is no possible factual or legal basis on which it might eventually be obligated to indemnify its insured under any policy provision. Workers' Compensation Law § 11 unambiguously shields employers from liability to third parties for contribution and indemnity except in limited circumstances," one of which is where the employee has sustained a "'grave injury'". In the absence of such proof, contribution and indemnification claims become extinguished by statute.

A "grave injury," as defined by Workers' Compensation Law § 11(1) includes, inter alia, "an acquired injury to the brain caused by an external physical force resulting in permanent total disability." "A 'permanent total disability' requires a showing that the injured employee is no longer employable 'in any capacity'" . Here, the NGM demonstrated its prima facie entitlement to judgment as a matter of law declaring that it is not obligated to defend or indemnify MGC or any other entity in the underlying action and the underlying third-party actions.

Editor Note: Normally, the issue of the existence of a “grave injury” is left for the underlying personal injury action. There have now been a couple of cases where the employer’s liability carrier, charged with defending the employer in claims seeking common law contribution or indemnity based on “grave injury,” attach the question in a separate declaratory judgment action.

04/15/25 Zurich American Ins. Co. v. Alterra America Ins. Co.
Appellate Division, First Department
Additional Insured Coverage to Contractor Is Only Available if There Is a Written Subcontract. Court Defines Subcontractor and Discusses Horizontal Exhaustion Rules. Court Embraces Horizontal Exhaustion

Alterra does not owe coverage to Baroco on the basis that Baroco did not enter a written contract with its subcontractor (Alterra’s insured_ Fine Line Carpentry & Renovations Inc. (“Fine Line”) as required for coverage under Alterra's Insurance Requirement endorsement. Zurich's argued that Fine Line was not Baroco's subcontractor.

The Court adopted the definition of "subcontractor" "as one who assumes performance of some part of the contract, so that labor or other service, and not merely the furnishing of materials, is involved" .

Alterra's obligation to provide additional insured coverage to RC Dolner is on an excess basis upon exhaustion of Zurich's policy because of the horizontal exhaustion rule). Zurich's argument that this issue is not ripe until a determination as to whether RC Dolner is entitled to contractual indemnification is unpersuasive.

Even if there is a subsequent finding that RC Dolner is entitled to indemnification from Baroco, the court still properly declared that Alterra's obligation is to provide additional insured coverage to RC Dolner on an excess basis upon exhaustion of Zurich's. The horizontal exhaustion is inapplicable where contractual indemnification entitlement has already been determined.

PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
sep@hurwitzfine.com

04/24/25 Catskill Barbeque, LLC v. Mid-Hudson Coop Ins. Co.
Appellate Division, Third Department
Thousands Flee - Third Department Finds Apparent Question of Fact on Enforceability of an Endorsement Because it is Hard to Find in the Policy

Plaintiff’s property sustained a covered fire loss, and coverage was accepted without incident by Mid-Hudson. Along with the damages to the property, Catskill also submitted a business interruption claim in excess of $2,000,000. Although the claim was covered under the policy, and coverage accepted, Mid-Hudson indicated that per the terms of the policy coverage was limited to only $175,000. Catskill sued, and this opinion resulted

On motion, Mid-Hudson submitted the policy which contained, as relevant, a Supplemental Declarations Page that provided business interruption coverage for up to 12 months. No sublimit was contained on the Declarations Page. Nevertheless, Mid-Hudson also produced an Endorsement to the business interruption coverage which provided that any previous coverage was deleted, and coverage was otherwise limited to 3 months and $175,000. There is no dispute, apparently, that the policy submitted by Mid-Hudson was true and accurate, and otherwise in admissible form. Nevertheless, for reasons we haven’t been able to discern, the trial court denied Mid-Hudson’s motion to dismiss.

On appeal, the Third Department noted that the operative Endorsement was found 73 pages after the Supplemental Declarations Page. In addressing this issue, the Appellate Division provided “[o]n the whole, it cannot be said that the policy -- insofar as it pertains to lost business income – is clear and unambiguous on its face, particularly when considering the fact that that some of the coverage language is buried deep within the lengthy contract, far removed from where such coverage is originally identified.” The Court went on to note that Mid-Hudson did not explain why it could not have simply noted the limitation on business interruption on the Supplemental Declarations Page.

In perhaps a final saving sentence, the Court also noted that Mid-Hudson apparently conceded that the Supplemental Declarations Page controlled the term of coverage (i.e., 12 months, as opposed the 3 months provided in the Endorsement). As such, the Court appeared to be noting the inconsistency in Mid-Hudson’s position, then, that the temporal limitation in the Endorsement did not apply but the monetary limit did.

If this is the basis for the holding, we can understand refusing to grant the motion but it’s still a reason It is not clear, however, that this is the reason for the decision.

Peiper’s Point - Let us start this discussion by assuming a rational basis for this decision. If there is an inconsistency in how the Endorsement was applied to the Supplemental Declarations Page, we can see how there might be a question of fact on ambiguity. Indeed, one could understand the Court’s point that picking and choosing which provision of an Endorsement is triggered leads to confusion. Ok. We get that point. We do not understand the argument that the contract (THE CONTRACT!!!!) is too confusing because it is too long. What 73 pages has to do with the enforceability of accepted terms and conditions is not clear from the Court, but it appears to be suggesting that if the Endorsement was included closer to the Supplemental Declarations Page maybe Mid-Hudson would have prevailed. Respectfully, this is difficult logic to accept.

And, further, the fact that Mid-Hudson could have simply altered the coverage in the Supplemental Declarations Page does not otherwise void the plain and ordinary meaning of contractual language. Feasibility is not a substitute for enforceability. If the Endorsement is unclear, on its face, the Court should simply have said so. Whether it could have been written differently, or placed in the policy differently, on placed on a different form, should have utterly no consequence on the enforceability of the language.

Editor’s Note: Would 70 pages be too far away? 50? 30? 10? Sheesh.

LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
lss@hurwitzfine.com

04/09/25 Chromik v. Cmty. Res. Inc.
Superior Court of Connecticut, Waterbury
What Is Failure to Procure Insurance?

Following the death of a foster child, the State of Connecticut tendered its defense and indemnity to Community Resources, Inc. which contracted to provide such services to the State. The contract documents required that CRI obtain CGL and professional liability coverage and that the State be added as an additional insured on the CGL policy. The CGL carried denied coverage to the State and the State brought a cross-claim against CRI for contractual and common law indemnification and for the failure to provide a defense. The State moved for summary judgment and CRI objected.

Initially, the court found that CRI’s acceptance of the State’s defense required the denial of that prong of the State’s motion. It did not matter that it was the insured and not the insurer paying for the defense.

Significantly in our world, the court denied the motion for failure to procure. It was evident that CRI purchased the insurance policies delineated in the contract and named the State as an AI on the CGL policy. The State’s motion focused on the failure of CRI to procure “appropriate” or “proper” insurance, however, no such qualifier was found in the contract documents. [It also hurt the State’s case that it failed to make the policies part of the summary judgment record.] “It is clear that the insurance company refused the State's demand for insurance coverage, however the State has not established that no genuine issues of material fact exist concerning whether or not CRI breached the contract in this regard.” The mere fact that the carrier denied coverage to the State did not mean, ipso facto, that CRI had breached its obligation to procure the insurance set forth in the contract.

While the court further denied the part of the State’s motion for breach of the duty to indemnify, it is unclear from the opinion whether there has been an award of damages against the State for which CRI refused to indemnify. It would seem to us that this claim was premature.

04/01/25 Smith v. Am. Strategic Ins. Corp.
Superior Court of Connecticut, Fairfield
Another Court Grapples With the CUTPA Pleading Standard

Here we go again. Another motion to dismiss (or strike in Connecticut parlance) statutory bad faith claims under CUTPA. This time the plaintiff claims that the insurer failed to pay a first-party water damage claim and, of course, tacked on causes of action for common law and statutory bad faith.

The court spilled a lot of ink before it struck the CUTPA claim (but let stand the common law bad faith claim). Noting “the variability in the approach by” Connecticut trial courts as to the level of specificity an insured must have in setting forth a CUTPA cause of action, the court launched into a detailed discussion of the balancing act between requiring a level of pleading specificity that is unfair to an insured against allowing mere conclusory allegations which amount to no standard at all.

Requiring a high level of specificity of prior incidents seemingly imposes an unreasonable burden on a claimant, the court observed. “A strict requirement of specific assertions of other instances of improper engagement in a similar practice would impose a pre-suit obligation on a plaintiff to identify other instances of improper conduct, without benefit of discovery.” But the court cautioned that allowing a plaintiff to merely cite other similar claims invites a level of circularity, especially if none of the cases have been decided in favor or the claimant. “Allowing an assertion of an unfair practice without any burden other than to type the words is tantamount to no burden to allege/assert a factual basis for the claim.”

So, how to balance the two sides in order to reach a fair pleading standard? The court believed that Judge Devine, in Labonne v. Hingham Mutual Fire Insurance Co., 2014 Conn. Super. LEXIS 4573, 2014 WL 2597802 (Super. 2012), got it right.

In this court's view, a plaintiff can satisfy the 'general business practice' requirement in one of two ways: (1) the plaintiff can comply with the strict line of cases by citing multiple specific instances of the insurance company engaging in similar misconduct with other claimants, or (2) the plaintiff can allege facts related only to his or her isolated claim if a reasonable inference can be drawn therefrom that the insurer's conduct "toward the plaintiff was part of its general business practices—in other words, the court must be able to reasonably infer that if the insurance company committed this misconduct against the plaintiff, they likely commit it regularly against other claimants as well. Therefore, even if a plaintiff cannot plead specific instances of similar prior misconduct by the insurer, circumstantial evidence of a general business practice derived from the insurer's handling of the plaintiffs isolated claim is sufficient to withstand a motion to strike." (Footnotes omitted.) Labonne, 2014 Conn. Super. LEXIS 4573 at *14-15.

Applying the test laid out in Labonne, the court struck the CUTPA claim. The court found that the complaint did not assert any prior violations by the carrier and did not provide any factual allegations upon which one could make a reasonable inference of an unfair practice.

The court quite wisely summed it up this way: “The mere fact of a denial is insufficient to allow an inference of an unfair practice, for the somewhat obvious reason that at least some claims rightfully might be denied, outright.”

Read on for the same result on the same basic pleading.

04/07/25 Rodko v. Am. Strategic Ins. Corp.
Superior Court of Connecticut, Ansonia-Milford
Boilerplate Allegations Do Not Satisfy CUTPA Pleading Standard

More or less the same facts as above and, not surprisingly, the same result.

Here, the covered property became uninhabitable due to toxic dust resulting from a flooring project, resulting in direct physical loss of and damage to the covered property, claimed the homeowners. ASIC, the plaintiffs claim, refused to timely adjust and/or pay the plaintiffs for remediation, repairs, and/or replacements of the covered property and its contents and failed and refused to pay the full insurance benefits. [At first blush, this does not even remotely sound like a covered cause of loss, but we digress.]

The plaintiffs sued for breach of contract and common law and statutory bad faith. ASIC moved, like it did in the case above, the strike the bad faith counts. This court allowed what, in our opinion, amounts to nothing more than boilerplate allegations to substitute for the required specificity of pleading.

The predicate factual claims to support the CUTPA cause of action included:

refusing to pay the plaintiffs' claims without conducting a reasonable investigation;
a failure to conduct an investigation based upon all available information;
failing to attempt in good faith to effectuate a prompt, fair and equitable settlement of the plaintiffs' claim in which liability has become reasonably clear;
wrongfully, willfully, and wantonly and with reckless indifferencefailing to pay the required proceeds of said insurance to the plaintiffs; and
a general business practice of deceptive practices.

While these allegations were adequate to establish a common law cause of action, the court found that they were too vague and conclusory to meet the CUTPA pleading standard. “[T]he plaintiffs in the present case do not go further than "merely [establishing] multiple acts of misconduct relating to a single insurance transaction." Therefore, the motion to strike the third count of the complaint is granted.”

RUFFNER’S ROAD REVIEW
Kyle A. Ruffner
kar@hurwitzfine.com

04/07/25 State Farm Fire and Casualty Company v. Active Care Chiro
Supreme Court, New York County
Insurer’s Motion for Summary Judgment Granted as to Claimants That Failed to Attend an EUO

After the subject motor vehicle accident, involving three occupants, bills from medical providers were submitted to State Farm, which investigated the incident and determined there was a strong possibility that the collision was an intentional act or that the alleged injuries of the Claimants did not arise from the accident. During the investigation, one claimant failed to appear for his EUOs on two or more occasions, another left in the middle of an EUO and did not return for another one or return her subscribed copy of the transcript, and another appeared for his EUO but did not return a subscribed copy of the transcript. In subsequent arbitration hearings on behalf of providers, multiple arbitrators held that State Farm had not established that the Accident was fraudulent.

State Farm brought this action against numerous providers seeking declaratory judgments that it owes no duty to pay the No-Fault benefits and claims of the defendants in relation to the Accident. The insurer argued it is entitled to summary judgment based on its fraud defense and the failure of claimants to cooperate with the investigation. Defenses raised by the medical providers included 1) the fraud defense is collaterally estopped; 2) there was no evidentiary proof of claimants’ failure to return for an EUO; and 3) the failure to return subscribed EUO transcripts is not a valid No-Fault defense.

With regards to the provider’s estoppel argument, based on prior arbitration hearings, State Farm argued there was not an identity of parties or issues between the hearings and this case and, in New York prior arbitration awards may be given preclusive effect in a subsequent judicial action. The court determined the result of those hearings raised an issue of fact that would bar summary judgment but did not preclude State Farm from bringing this motion, as it advanced other theories of why they do not have to provide No-Fault coverage for the Accident not addressed in arbitration. State Farm also asserted one claimant failed to complete her duly scheduled EUOs and another failed to appear for his duly scheduled EUO. Appearance at a duly scheduled EUO is a condition precedent to No-Fault coverage. Contrary to the providers argument, the court held that a failure to appear at an EUO may be established by submitting transcripts of the EUOs.

For the third claimant, State Farm sought summary judgment based on the failure to return subscribed EUO transcripts. A failure by a claimant to return a subscribed transcript is a violation of a condition precedent to coverage, however, the court determined the request for a return of the subscribed transcript was only sent to claimant’s counsel, not the claimant himself. Therefore, the motion for summary judgment was denied as to this claimant. Accordingly, the court held that State Farm had no duty to pay any no-fault benefits with respect to the claims of the two claimants who failed to attend an examination under oath and otherwise denied the motion.

04/16/25 Drive New Jersey Insurance Company v. RT Hospitality
Appellate Division, Second Department
Insurer Permitted to Seek Subrogation Under Dram Shop Act for Payments Made Due to Accident Caused by Intoxicated Driver

Drive New Jersey Insurance Company provided automobile insurance to Ironbound Fitness LLC, which owned the insured BMW. An individual who was visibly intoxicated after being served alcohol at Atlantis Gentleman's Club drove the BMW with two passengers and was involved in an accident in which all occupants were injured, and the vehicle was damaged. Drive Insurance paid out a total of $507,595.48 in medical payments for the occupants and for vehicle damage, then sued Atlantis Gentleman’s Club as subrogee of Ironbound Fitness under the Dram Shop Act to recover these payments.

The Dram Shop Act, General Obligations Law § 11-101(1), provides "[a]ny person who shall be injured in person, property, means of support, or otherwise by any intoxicated person, or by reason of the intoxication of any person, . . . shall have a right of action against any person who shall, by unlawful selling to or unlawfully assisting in procuring liquor for such intoxicated person, have caused or contributed to such intoxication." A Plaintiff may recover for personal injuries if there was a reasonable or practical connection between an illegal sale of alcohol and the plaintiff’s injuries. However, the Dram Shop Act does not create a cause of action for one injured as a result of their own intoxicated condition.

The court explained that the purpose of subrogation is to allocate responsibility for a loss to the party who should bear it, rather than allowing a wrongdoer to escape liability simply because the insured had insurance coverage. This allows an insurer to seek recovery from third parties whose wrongdoing caused a loss the insurer must reimburse. While Atlantis argued the Dram Shop Act did not expressly provider for subrogation, the court held there was no support in the statute for this argument, determining that allowing subrogation under the Dram Shop Act was consistent with public policy and the purpose of equitable subrogation. Therefore, subrogation did not improperly shift liability onto dram shops and was not precluded under the Dram Shop Act.

Here, Drive Insurance alleged that the individual responsible for the accident was visibly intoxicated at the time that Atlantis sold her alcohol. Accordingly, the Supreme Court properly determined that Drive Insurance was entitled to assert, as subrogee, a cause of action pursuant to the Dram Shop Act against Atlantis to recover payments made for medical payments and property damage. Therefore, the Appellate Division affirmed the order of the Supreme Court, which had denied the defendant's motion to dismiss Drive Insurance's cause of action under the Dram Shop Act.

RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
rpm@hurwitzfine.com

04/14/25 Narcisse v. Progressive Cas. Ins. Co.
United States District Court, Southern District of New York
Satisfaction of Lien Through Payment of Insurance Directly to Lienholder Instead of Insured at Less Than Full Value of Loss Is a Redressable Injury

Plaintiffs brought a class action individually, and as representatives of insureds in New York who made claims to Progressive Casualty Insurance Company for the loss of a totaled vehicle. In settling claims, Progressive had allegedly used valuation reports that applied an allegedly deceptive adjustment, a "Projected Sold Adjustment" ("PSA"), to reduce the actual cash value payable to the totaled vehicle's lienholder. It was further alleged that the plaintiffs had outstanding debt on their vehicles and owed more on their auto financing than they received in insurance benefits, such that all compensation paid by Progressive for the plaintiffs' benefits went directly to the totaled vehicles' lienholders.

Finding that it held Article III Standing at the threshold pleading stage, which is required for a district court to have subject matter jurisdiction, the SDNY noted that "the irreducible constitutional minimum of standing consists of three elements. . . . The plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision." Only the first two elements were at issue.

Here, the Amended Complaint alleges that Progressive paid less on Narcisse's claim than the parties had bargained for, and that Progressive thereby breached the insurance contract with [Plaintiffs], which is itself an “injury in fact” because Narcisse allegedly sustained a “deprivation of the full benefit of what that plaintiff bargained for,” regardless of whether “the benefits would accrue to third parties” such as lienholders.

This injury in fact is redressable by way of either compensatory or nominal damages. Plaintiffs injuries could eventually be redressed by awarding contractual benefits to which the participant is entitled, i.e. compensatory damages, or alternatively nominal damages due to Progressive’s purported completed violation of her contractual rights.

STORM’S SIU
Scott D. Storm
sds@hurwitzfine.com

03/17/25 Kahan v. Hyundai Mar. & Fire Ins. Co., Ltd.
Supreme Court, Kings County
Material Misrepresentations in the Application and the Mere Intention to Reside in the Premises in the Future Is Insufficient to Satisfy the Policy's "Residence Premises" Requirement

The court granted Hyundai’s motion to dismiss the plaintiffs' complaint. Plaintiffs purchased property in Brooklyn and obtained homeowners insurance from Hyundai. In the insurance application the plaintiffs attested that the premises: (a) was owner occupied, (b) was not a "[d]welling that is vacant or unoccupied," (c) was not a "[d]welling that is under renovation, remodeling or major repair," and (d) was not a "[d]welling without an operational smoke alarm". In addition, plaintiffs signed the section titled "Owner Occupancy" in which they confirmed that the "dwelling is owner occupied".

Hyundai's investigation found that the premises was vacant, and not owner occupied, at the time plaintiffs completed the application, the premises was undergoing renovations at the time of the fire, the plaintiffs admitted to its investigators that they never resided in the home prior to and during renovations, and the premises did not have an operational smoke alarm.

The Personal Lines Manager asserted that Defendant does not issue homeowners policies for any property that is not owner occupied, or which is vacant or unoccupied. Along with his affidavit, Hyundai submitted its underwriting guidelines which include as "ineligible exposures," a property that is "under renovation, remodeling or repair where permit is required by law" or "vacant or unoccupied for more than 30 continuous days after policy issuance". Since Plaintiffs made material misrepresentations, the policy was rescinded and all premiums paid were refunded. Even if the policy was not void ab initio, Hyundai contends that coverage is barred as a matter of law because Plaintiffs did not reside at the premises on the date of loss.

The court held that Hyundai was entitled to dismissal of the plaintiffs' complaint because the plaintiffs did not reside at the premises on the date of loss. The plaintiffs' mere intention to reside at the premises in the future was insufficient to satisfy the policy's "residence premises" requirement. The Second Department has consistently found that a disclaimer of coverage is proper where the insureds did not live at the covered property on the date of loss.

The court found the plaintiffs' occasional visits and intent to reside there in the future insufficient to meet the policy's "residence premises" requirement. The court distinguished this case from the Court of Appeals decision in Dean v. Tower Insurance, where the homeowner had a much more substantial presence on the property. The homeowner in Dean alleged that he was at the subject property at least five days a week, he would eat at the house every day, and he slept there on several occasions. Thus, the Court of Appeals found "issues of fact as to whether [the homeowner's] daily presence in the house, coupled with his intent to eventually move in with his family, is sufficient to satisfy the insurance policy's requirement.”

To establish its right to rescind an insurance policy, an insurer must demonstrate that the insured made a material misrepresentation. A misrepresentation is defined as a false statement as to past or present fact, made to the insurer by the applicant for insurance, at or before the making of the insurance contract as an inducement to the making thereof. A misrepresentation is material if the insurer would not have issued the policy had it known the facts misrepresented. Even innocent misrepresentations, if material, are sufficient to allow an insurer to defeat recovery under the insurance contract.

To establish materiality as a matter of law, the insurer must present documentation concerning its underwriting practices, such as underwriting manuals, bulletins, or rules pertaining to similar risks, which show that it would not have issued the same policy if the correct information had been disclosed in the application. Conclusory statements by insurance company employees, unsupported by documentary evidence, are insufficient to establish materiality as a matter of law.

03/31/25 Hanna v. Palisades Prop. & Cas. Ins. Co.
United States District Court, Eastern District of Pennsylvania
Issue of Fact Whether the Plaintiffs' Misrepresentations Regarding Their Additional Living Expense Claim Were Material to the Insurer’s Investigation

Plaintiffs' home was damaged by fire, rendering it uninhabitable. Palisades argued that the plaintiffs knowingly made false statements in their initial recorded interviews pertaining to their Additional Living Expense claim, including who was living with them and details about their lease agreement. The plaintiffs voluntarily corrected these misstatements 29 days later, before giving examinations under oath. They later withdrew the ALE claim. Palisades continued to investigate the claim for 4 months after receiving the corrections before ultimately denying coverage.

Pennsylvania courts have long held that a violation of the fraud and concealment provision of an insurance policy serves as a complete bar to the insured's recovery under the policy, effectively voiding it. An insurance company may refuse payment to an insured who violates the Concealment or Fraud provision of their policy where the insured has: (1) made a false representation, (2) knew the representation was false when they made it, and (3) the misrepresentation was material to the risk being assured.

Pennsylvania courts have repeatedly held that when an insurance company denies coverage based on alleged material misrepresentations made in the submission of the claim it need only prove that the insured made material misrepresentations in violation of the fraud and concealment provision by a preponderance of the evidence, proving the elements of falsity, knowledge, and materiality. This is the proper standard in the context of post-loss investigations, whereas the standard for proving material misrepresentation in the context of insurance applications is clear and convincing evidence.

The Court found Palisades has established the elements of falsity and knowledge by a preponderance of the evidence, and no reasonable jury could find for plaintiffs on this issue.

The question of materiality is generally considered one of fact and law, but if the facts are so obviously important that reasonable minds cannot differ on the question of materiality, then the question becomes one that the court can decide at the summary judgment stage. A misrepresentation is material if a reasonable insurance company, in determining its course of action, would attach importance to the facts misrepresented, and specifically in the context of a post-loss investigation, if the fact concerns a subject relevant and germane to the insurer's investigation as it was then proceeding. A misrepresentation is also material if it may be said to have been calculated either to discourage, mislead or deflect the company's investigation in any area that might seem to the company, at that time, a relevant or productive area to investigate.

While the plaintiffs knowingly made false statements, there is a genuine factual dispute about whether these misrepresentations were material to the insurance company's investigation. The misrepresentations did not concern how the loss occurred or relate to policy conditions. The insurance company continued its normal claims adjustment process after receiving the corrections. A reasonable jury could find that the statements were not material to the investigation, so summary judgment is not appropriate on this issue.

04/10/25 Gordon v. State Farm Fire & Cas. Co.
United States District Court, Southern District of New York
Case Transferred from the Southern District of New York to the District of Connecticut as the Locus of Operative Facts for This Fraud Case Is Connecticut, Not New York

The court granted State Farm's motion to transfer the case to the United States District Court for the District of Connecticut from the Southern District of New York under 28 U.S.C.S. § 1404(a). The locus of operative facts for the case is Connecticut, not New York.

The plaintiff purchased a policy from State Farm in Connecticut to cover the jewelry. While traveling in California, his jewelry was allegedly stolen. State Farm denied the claim alleging fraud. The plaintiff filed suit in New York.

28 U.S.C.S. § 1404(a) allows a district court to transfer a case for the convenience of parties and witnesses to any other district or division where it might have been brought if doing so is in the interest of justice. The court evaluates a potential transfer pursuant to § 1404(a) in two steps. First, the court must ask whether the case might have been brought in the proposed transferee district. An action might have been brought in the forum to which the movant seeks to transfer it if subject matter jurisdiction, personal jurisdiction, and venue would have been proper in the transferee court at the time of filing.

If the threshold inquiry is satisfied, the court proceeds to the second step and determines whether a transfer is appropriate. In doing so, the court considers the following factors to determine whether to grant the requested transfer: (1) the convenience of witnesses; (2) the convenience of the parties; (3) the locus of operative facts; (4) the availability of process to compel the attendance of the unwilling witnesses; (5) the location of relevant documents and the relative ease of access to sources of proof; (6) the relative means of the parties; (7) the forum's familiarity with the governing law; (8) the weight accorded to the plaintiff's choice of forum; (9) trial efficiency; and (10) the interest of justice, based on the totality of circumstances. The list of factors is not exhaustive. There is no rigid formula for balancing these factors, and no single one of them is determinative. Weighing the balance is essentially an equitable task left to the court's discretion. District courts have broad discretion in deciding, on a case-by-case basis, whether to transfer the venue of a given litigation based on notions of convenience and fairness.

A plaintiff's choice of forum is presumptively entitled to substantial deference. The plaintiff's choice of forum is entitled to substantially less deference here than usual because he resides in Connecticut, not New York.

In determining the locus of operative facts, a court must look at the site of the events from which the claim arises. For a breach of contract action, the court must consider (1) the location where the contract was negotiated or executed, (2) where the contract was to be performed, and (3) where the alleged breach occurred.

Trial efficiency and the interests of justice favor litigating the case in the jurisdiction with the strongest connection to the facts. The court determined that Venue is proper in Connecticut as the plaintiff resides there and a substantial part of the events took place there. The insurance policy was issued in Connecticut by a Connecticut agent. The policy contains Connecticut-specific language. State Farm's claim denial letter was sent to the plaintiff’s Connecticut address. Although not definitively ruled by the court, Connecticut state law likely governs the underlying insurance contract dispute. The locus of operative facts is Connecticut, as the contract was formed there, and the alleged breach occurred there. No witnesses or evidence are located in New York. Transfer will not significantly inconvenience the parties.

03/31/25 BR 10th St. Partners LLC v. Seneca Specialty Ins. Co.
Supreme Court, New York County
Court Granted Insurer’s Motion to Amend Its Answer to Include an Additional Affirmative Defense Based on Breach of the "Concealment, Misrepresentation or Fraud" Condition of the Policy

10th Street reported a fire loss to Seneca. Seneca inspected the property and found no evidence of a fire. There are conflicting reports about whether the sprinkler activation was due to a fire/smoke condition or a malfunction.

Seneca paid 10th Street the $250,000 sublimit coverage for water damage. 10th Street claims it is entitled to at least an additional $1,481,242.18 for building repairs, water remediation, and lost rent.

The court granted Seneca's motion to amend its verified answer to include the additional affirmative defense. The court found that 10th Street failed to show that Seneca's proposed amendment was palpably insufficient or patently devoid of merit. Both parties presented some evidence supporting their positions, so the court could not conclude that Seneca's defense was without merit.

The court rejected the application of Insurance Law § 3420(d)(2) because this provision only applies to death and bodily injury claims, not property damage claims.

FLEMING’S FINEST
Katherine A. Fleming
kaf@hurwitzfine.com

04/18/25 Dostart v. Columbia Ins. Grp.
Iowa Supreme Court
Consumer Fraud Not an Occurrence Under CGL Policy

A jury awarded the Dostarts compensatory and exemplary damages on their claims of consumer fraud against their general contractor and its owner. In the underlying action, the Dostarts sued the general contractor and owner for failure to complete construction of their custom-built, single-family residence. Columbia Insurance Group provided a commercial general liability insurance policy to the general contractor, defended under a reservation of rights, and declined to indemnify the judgment under the CGL policy. The Dostarts were unable to collect directly from the general contractor and owner, and the judgment remains unsatisfied.

The Dostarts commenced a direct action against Columbia for payment of the unsatisfied judgment. Columbia moved for summary judgment. In its motion, Columbia argued that consumer fraud was not accidental in nature and thus not a covered “occurrence,” the consumer fraud did not cause property damage, consumer fraud falls within the CGL policy’s intentional acts exclusion, and the CGL policy excluded punitive or exemplary damages. The district court granted the motion for summary judgment with respect to exemplary damages, but it determined that fact questions existed as to whether consumer fraud was an “occurrence” under the CGL policy, the jury’s award was for “property damage,” and the intentional acts exclusion applied.

The Iowa Supreme Court granted Columbia’s interlocutory appeal and transferred the case to the court of appeals. The court of appeals affirmed and noted there was no evidence in the record about the underlying dispute beyond the verdict form and relevant jury instructions.

On Columbia’s application for further review, the Iowa Supreme Court concluded that the record provided the facts needed to establish that the consumer fraud involved in the underlying action was not a covered “occurrence” under the CGL policy and that the alleged harm did not include covered “property damage” a defined in the policy. Reasoning by analogy based on case law involving claims for the repair of defective workmanship, the Court concluded that damages to complete construction of the very property the general contractor was hired to construct was not physical injury to tangible property contemplated by the CGL policy. Since the Court concluded that the consumer fraud was not an “occurrence” and that the underlying judgment was not for “property damage,” it did not consider whether any exclusions applied.

As a result, the Court vacated the court of appeals decision, reversed the district court order, and remanded the case for entry of summary judgment in favor of Columbia.

GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
edg@hurwitzfine.com

04/21/25 Marc Feder DMD, PC et al. v. N.J. Manufacturers Ins. Co.
New Jersey Superior Court, Appellate Division
New Jersey Appellate Division Adheres to Strict Statutory Requirements in Cancellation of Automobile Policies

On July 20, 2020, Marc Feder was driving an automobile registered to his business when he rear-ended another vehicle. Feder made a claim under his auto policy with the defendant, who denied the claim on the basis that his auto policy had been cancelled seven months prior for non-payment of policy premiums. Feder challenged the adequacy of the defendant’s notice of cancellation of the policy, and this action followed.

As the Court noted, insurers must comply with strict statutory requirements when cancelling auto insurance policies. N.J.S.A. 17:29C-10 governs the cancellation of auto policies issued within the State of New Jersey. That statute has two distinct requirements, providing that no cancellation (or refusal to renew) an auto insurance policy shall be effective unless: (a) it is either (i) sent by certified mail, or (ii) if sent by regular mail, the insurer obtains a date stamped proof of mailing showing the name and address of the insured from the post office at the time of mailing; and (b) the insurer retains a duplicate copy of the mailed notice, certified to be a true copy. N.J.S.A. 17-29C-10(a-b).

As the Court explained, New Jersey case law has expounded upon the types of evidence that is sufficient to establish compliance with each part of the statute. New Jersey courts have noted that subsection (a) can be satisfied either by a certified mailing or by the insurer’s obtaining of a date-stamped certificate of mailing from the post office. Another appellate court found that while a “master list” of cancellation letters that an insurer brought to the post office for mailing was insufficient to comply with subsection (a), but that a certificate of mailing issued by the post office to show that each piece of mail was indeed mailed out would be sufficient.

New Jersey courts that have analyzed compliance with subsection (b) have ruled that this subsection is the “sine qua non” of an effective cancellation, and that non-compliance with that subsection can almost never be forgiven. These courts have explained that the requirement of the insurer to retain a duplicate copy of the mailed notice is meant to ease the carrier’s proof of mailing burden by providing a simple, expedient, and effective alternative to relying on the carrier’s standard business practices in sending cancellation notices.

The defendant (“NJM”) contended that after Feder went into arrears on his policy premium, it sent him a final request for payment on November 30, 2019. According to NJM, this correspondence was sent to Feder’s home address (the one he maintained on file with NJM) with a warning that if payment was not received within seven days from the date of that letter, his policy would be cancelled.

After no payment was received from Feder, NJM issued a notice of cancellation on December 13, 2019, to the same address. The December 13, 2019, correspondence advised that payment of the amount owed ($378.00) would keep the policy current. In support of the present motion, NJM submitted a certification from the employee that accounted for the mail on December 13, 2019. That employee testified that on that day, each piece of mail listed on the register (147 pieces) was accounted for and was then taken to the post office by another NJM employee. As part of its motion, NJM submitted a proof of mailing obtained from the post office on that same day, reflecting payment for mailing of 147 pieces of mail on behalf of NJM.

In opposition to the motion, Feder made three arguments on why NJM’s cancellation of his policy was ineffective: (1) NJM did not establish that Feder actually received the notice of cancellation; (2) NJM did not comply with part (a) of the cancellation statute; and (3) NJM did not comply with part (b) of the cancellation statute.

The Court rejected Feder’s first argument—that NJM did not establish that Feder actually received the notice of cancellation. New Jersey courts have long held that actual receipt of the notice of cancellation is not required in order for the notice to be effective, provided that the statutory proof of mailing has been satisfied.

The Appellate Division also held that NJM complied with subsection (a) of the statute, since the certifications and exhibits submitted in support of NJM’s motion showed that NJM sent the notice via regular mail and obtained a proof of mailing from the post office.

However, the Appellate Division held that NJM failed to comply with subsection (b) of the statute, and that the policy’s cancellation was therefore invalid. Subsection (b) requires the insurer to provide a duplicate copy of the mailed notice, certified to be a true copy. While NJM provided a copy of the notice of cancellation bearing a typewritten certification, that certification was unsigned and undated. Therefore, as the Court reasoned, NJM’s submission fell short of the standard articulated in subsection (b). The Court reasoned further that none of the certifications made by the NJM employees (the mailroom employee and in-house claims counsel) explained either how the certified copy was made or obtained, nor did either of them attest to any routine practices of the company concerning them. New Jersey courts have held that the duplicate copy required by subsection (b) be a true copy contemporaneously certified with the preparation and mailing of the original; not at any later point in time.

The Appellate Division affirmed the holdings of the trial court that NJM was not required to prove that Feder actually received the letter and that NJM complied with subsection (a) of the statute but vacated the ruling of the trial court that NJM also complied with subsection (b) of the statute. The Appellate Division remanded the case back to the trial court for further proceedings on the issue of a true certified copy of the notice of cancellation.

O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
rpo@hurwitzfine.com

04/14/25 Singh, Rx, PLLC v. Selective Ins. Co. of S.C.
United States Court of Appeals, Sixth Circuit
No Coverage for Professional Liability Claim Under CGL Policy Based on Exclusion and No Coverage Under Professional Liability Policy Based Amended Definition of Claim

SRX is a pharmacy that possessed a general liability policy with Selective and a professional liability policy with American Casualty. Janssen, a Johnson & Johnson subsidiary, sued SRX in the Eastern District of New York for the alleged sale of counterfeit Janssen branded HIV medication. Both Selective and American denied the claim.

Selective’s asserted the alleged trademark infringement suit did not involve a bodily injury, property damage, or personal and advertising injury. And also argued the policy’s exclusions for failure to render medical services, along with intellectual property claims applied to terminate coverage. American Casualty denied coverage because its policy covered claims only brought by natural persons.

The appellate court found the Selective policy did not provide coverage for Janssen’s claims. But not because of the scope of coverage, instead the court focused on the professional services exclusion. Michigan law broadly interprets professional liability exclusion to encompass acts reasonably related to the overall provision of professional services. The alleged procurement and sale of counterfeit medication implicated SRX’s professional services because it is a pharmacy. SRX asserted the procurement and sale was merely administrative, but the court disagreed. It reasoned that conduct triggered a pharmacist’s specialized knowledge to select drugs for specific conditions.

SRX’s American Casualty professional liability policy also failed to provide coverage. The policy’s coverage applied to professional liability arising out of any act, error, or omission in providing professional services that results in injury or damages. Included within the policy’s list for covered claims was intellectual property. However, the policy contained an endorsement that amended the definition of “claim” to apply to natural persons only.

Since Janssen is a company and not a natural person, the American Casualty policy did not provide coverage. SRX contested that Michigan law requires the use of the more specific definition in the base policy. Indeed, under Michigan Law where two contractual terms conflict, the more specific term controls. But the endorsement at issue deleted and replaced the base policy’s definition of “claim.” Thus, only a single contractual term defined “claim,” and it applied to natural persons only. The court also rejected an illusory coverage argument since natural persons routinely make professional liability claims.

LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
ihl@hurwitzfine.com

04/03/25 National Football League v. U.S. Specialty Ins. Co.
Supreme Court of the State of New York, New York County
Partial Summary Judgment Granted to Insured Based on Declaration That Claim Was Deemed First Made During 2014-2015 Policy Period, and Not Excluded by Pending and Prior Litigation Exclusion

The National Football League and NFL Enterprises LLC (“NFL Insureds”) brought a declaratory judgment action against U.S Specialty Insurance Company, Freedom Specialty Insurance Company, Starr Indemnity & Liability Company, Ironshore Indemnity Inc., and Everest National Insurance Company (the “Insurers”). The questions posed to the court involve whether the Insurers owe the NFL Insureds coverage under a 2014-2015 D&O insurance policy in connection with a 2015 antitrust litigation suit filed involving their Sunday Ticket product (“Sunday Ticket Litigation”).

The Sunday Ticket Litigation concerned certain agreements between the NFL Insureds and DirecTV executed in 2009, 2013, and 2014. In the agreements, the NFL Insureds granted DirecTV the exclusive right to distribute out-of-market packages of NFL Sunday games, and control over the composition, pricing, and marketing of such subscription packages. In June 2015, the NFL Insureds and DirecTV were named as defendants in a number of antitrust lawsuits alleging that licensing contracts that giving DirecTV exclusive rights to distribute out-of-market NFL games violated antitrust laws. The Sunday Ticket Litigation alleged violations of the Sherman Act, insofar as the agreements allowed the NFL and DirecTV to charge supercompetitive monopoly prices.

In the coverage action, the NFL Insureds made a partial summary judgment motion, seeking (1) a declaration that the Sunday Ticket litigation is a Claim first made during the 2014-2015 policy period; (2) declaring that the Claim is not excluded by Pending and Prior Litigation exclusions; and (3) dismissing various affirmative defenses made by the Insurers defendants.

The NFL Insureds had a claims-made D&O insurance policy with National Liability & Fire Insurance Co. (the “Primary Policy”). In addition, the NFL Insureds had five layers of excess coverage. Each excess policy implicated in the declaratory judgment action followed form to the Primary Policy.

The Insurers’ policies only provided coverage for a Claim, “first made against the Insured Person during the Policy Period for a Wrongful Act and reported to the Insurer as required by this Policy.” A Claim was defined as, “proceeding against an Insured, which shall be deemed first made upon…the service of a complaint or similar pleading upon the Insured.”

The Primary Policy contained a condition related to Related Wrongful Acts, which was defined as “all Wrongful Acts that are logically or causally connected by any fact, circumstance, situation, event, transaction, cause or series of related facts, circumstances, situations, events, transactions, or causes.” The condition identified that if a Claim involved the same or related wrongful acts, the claim is first deemed made at the earliest date on which any claim was first made or reported. The Primary Policy additionally contained a Pending and Prior Litigation clause, which stated that the insurer was not liable to make a payment for claims alleging, arising out of, based upon, or attributable to, pending or prior litigation.

The Insurers allege that the Sunday Ticket Litigation has origins in a 1997 class action lawsuit filed against the NFL on behalf of consumers who purchased the NFL Sunday Ticket. The 1997 class action lawsuit alleged that in 1994, the NFL Defendants offered a package for purchase of all regular season Sunday afternoon games to residential and commercial satellite dish owners, which induced consumers to enter into an agency agreement. According to the allegations, the NFL and DirectTV entered into an agreement, where DirecTV and other satellite distributors acted as authorized agents of the NFL to sell and distribute NFL Sunday Ticket packages, and were compensated based on commission on all sales of the packages. It was alleged that the NFL determined the pricing and composition of the packages, and had control over the advertising, marketing, and promotion. It was alleged that the football clubs contracted and agreed to restrict output of broadcasts of their games, agreed to jointly sell broadcast rights to purchasers of satellite television at supra-competitive pricing, and agreed to allocate amongst themselves the proceeds of the sale in violation of the Sherman Acts. As a result, the 1997 Plaintiffs paid extremely higher prices to view all NFL Sunday afternoon games. The 1997 litigation ultimately settled in October 2021.

However, the NFL Insureds assert that the Pending and Prior Litigation exclusion is not applicable, because the 1997 Litigation and the Sunday Ticket Litigation are not a single claim under the policies at issue.

The Court began their analysis by looking only at the plain language of the policies and comparing the allegations in the 1997 Litigation and Sunday Ticket Litigation.

The Court identified that while Related Wrongful Acts is defined rather broadly in the policies, there must be a relatedness and a sufficient factual nexus. The Court noted that the 1997 Litigation was filed 18 years prior to the Sunday Ticket Litigation, which is sufficient to show that the claims were temporally separate.

Second, the Court made note that the claims do not involve the same transactions. The 1997 Litigation focuses on the NFL Insureds and the NFL teams conspiracy to sell broadcast rights to DirecTV. However, the Sunday Ticket Litigation challenges a separate agency agreement between the NFL Insureds and DirecTV. The Court acknowledges that the Sunday Ticket Litigation references a conspiracy between the NFL and the NFL teams but instead focuses its grounds for relief on the DirecTV agreements.

The Court wrote that even if the wrongdoings complained of in both actions were part of a larger scheme to eliminate competition, this alone is insufficient to combine otherwise distinct claims.

Based on this analysis, the Court granted the NFL Insureds partial motion for summary judgment and declared that the Sunday Ticket Litigation was a “Claim” first made during the 2014-2015 policy period and was not excluded by the Pending and Prior Litigation exclusions within the policies.

LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
lrh@hurwitzfine.com

04/25/25 New York Senate Bill S3776
New York State Senate
Bill to Prohibit Cancellation, Non-renewal, or Conditional Renewal of Automobile Insurance When Dispute as to Pending Claim Exists

Senate Bill S3776, introduced on January 29, 2025, seeks to amend insurance law § 3425 to prohibit an insurer from cancelling or refusing to renew or condition its renewal of automobile insurance policies solely on the bases that there is a pending complaint filed by the insured, or that a claim filed by the insured with the insurer is in dispute.

The justification for the bill provides that currently § 3425(f) allows insurers to non-renew up to two percent of their non-commercial motor vehicle policies per year. Insurers have abused this two percent provision by using it in cases where insureds have disputed claims or filed complaints with DFS. The legislation seeks to prevent such conduct to allow consumers to openly dispute claims.

The Bill provides:

AN ACT to amend the insurance law, in relation to prohibiting an insurer from cancelling or refusing to renew or condition its renewal of auto-mobile insurance policies in certain cases.

THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

Section 1. Section 3425 of the insurance law is amended by adding a new subsection (t) to read as follows:

(T) No insurer shall cancel or refuse to renew a policy covering a private passenger automobile, or to condition its renewal upon change of limits or elimination of any coverages solely on the basis that a claim filed by the insured with the insurer is in dispute, or that a complaint by the insured against the insurer resulting from the disputed claim is pending with the department.

DOMENICA’S DIARY on BAD FAITH
Domenica D. Hart
ddh@hurwitzfine.com

04/18/25 Kinsale Ins. Co. v. Pride of St. Lucie Lodge 1189, Inc.
United States Court of Appeals for the Eleventh Circuit
A Bad Faith Lawsuit Looms Over a Carrier a Decade After Its Failure to Tender Policy Limits Despite a Shooting Case That Presented Potentially Clear Adverse Liability and Financial Exposure of a “Ticking Time Bomb” Within Months of the First Notice of Loss

On Sunday, March 1, 2015, the Pride of St. Lucie Lodge 1189, Inc. (the "Lodge") was being used a as a club and bar while hosting a social event. A fight broke out on the dance floor around 1:00 am, March 2^nd, between two groups of female guests at the Lodge. They were removed from the Lodge through separate exits. The groups congregated in the Lodge's back parking lot and the fight continued, resulting in Tanya Oliver being shot in the forehead 10 to 15 minutes later. She died from her injuries the following year. The Estate of Oliver sued the Lodge in August 2016 on a theory of negligent security. Kinsale Insurance Company was the insurer for the Lodge. After the conclusion of the trial in August 2019, a jury found the Lodge liable for Oliver’s injuries and awarded damages exceeding $3.3 million, far exceeding Kinsale’s $50,000 policy Assault and Battery sublimit.

Prior to the Estate’s suit, filed on August 5, 2016, The Estate sent Kinsale a Letter of Representation in November 2015. Kinsale assigned the claim investigation to a Senior Claims Examiner who described the claim as "a shooting in the rear parking lot of insured property arising out of an argument that began inside the club." The examiner read two local news articles about the shooting. The articles both stated that Oliver had been shot in the head in the early hours of Monday, March 2, 2015, after two assailants fired from vehicles. Articles also said that Oliver remained in critical condition in the ICU after being shot. On December 2, 2015, Kinsale received a detailed police report from the night of the shooting with the description that Oliver was found “unconscious but breathing in the front passenger’s seat of the vehicle after having suffered a gunshot wound to her forehead.” Mount Vernon Fire Insurance Company, the Lodge’s liquor liability carrier, retained an independent investigation. Mount Vernon shared the factual results of the investigation as it progressed with Kinsale. The initial report, on December 30, 2015, detailed the events of that night. A month later, Kinsale’s examiner put a January 30, 2016, article in the claims file containing a statement, which the examiner underlined in red, that Oliver remains unable to speak or walk after she was shot in the head earlier that year. On July 5, 2016, Oliver died from her injuries. On August 5, 2016, the Estate filed suit against the Lodge for negligent security. Six days after receiving the complaint, Kinsale tendered its $50,000 Assault and Battery sublimit to the Estate (Kinsale had a general liability limit of $1,000,000). The Estate rejected the tender. After trial, the jury verdict in August 2019 found 70% liability on the Lodge with the final judgment of over $3.3 million.

In February 2021, Kinsale filed an action in the United States District Court for the Southern District of Florida seeking a declaratory judgment that the policy’s $50,000 Assault and Battery sublimit applied. The Lodge and the Estate countersued for common law bad faith pursuant to Florida law. They alleged Kinsale breached its duty of good faith by failing to make a settlement offer within the policy limits before the Estate's suit was filed. The District Court granted summary judgment to Kinsale based upon a finding that Kinsale had no duty to initiate settlement negotiations because, viewed in the light most favorable to the non-moving parties, no reasonable jury could find that this was a case of "clear liability." This Appeal followed.

The Court of Appeals disagreed with the District Court, finding that a jury should decide the bad-faith issue. Pursuant to Florida law, an insurer is held to the standard of a “reasonably prudent person” meaning it should use the same degree of care and diligence as a person of ordinary care and prudence should in its own business. Although the totality of circumstances must be analyzed, reasonable diligence and ordinary care are material in the determination of bad faith. That determination is an objective one, based on what the insurer at the time knew or reasonably should have known. This Court looked at the facts that liability was potentially clear in this case and the injuries were so serious that a judgment in excess of the policy limits was likely. The Court recognized that where substantial injuries and potential liability of the insured is obvious, failure to offer policy limits constitutes bad faith even if there is no assurance that the action can be settled. The financial exposure to Kinsale was a “ticking time bomb” and any delay in making an offer could be viewed by a factfinder as evidence of bad faith.

Although Kinsale argued that there was evidence uncovered during the investigation that made liability unclear as a matter of law, the Court dismissed that argument. The Court focused on facts in the record. The Lodge, a private clubhouse for fraternal organization, operates as a club and bar on weekends between 6:00 p.m. and 2:00 a.m. The Lodge is staffed by a bartender and “a couple of security guys to help manage the crowds." The Lodge has no paid employees, and the security personnel are volunteers, which helps them secure membership at the Lodge. At least one fight had occurred on the Lodge's property since January 2015, less than two months prior to the shooting . The Lodge's rear parking lot was dark and unmonitored. The Lodge's leadership had previously expressed concerns about the volunteer security guards’ practices, as well as the parking lot. The Court also focused on the security guards’ actions in escorting the groups of women outside. At least one of the security guards admitted he was aware that the best practice was not to let the two conflicting groups outside together. It is also unclear if the security guards saw the initial fighting outside and did nothing.

In addition to the above, one of the appellant’s expert witnesses’ reports described Kinsale’s file notes and correspondence from November 23, 2025, to December 3, 2015, to have presented a case where negligent security premises liability is clear. The expert opined that the facts with which Kinsale was presented amounted to a classic case of bar liability and the failure to appreciate the Lodge’s exposure as a seven-figure verdict was “inexplicable.” Another expert opined that based on what Kinsale knew, there was nothing else that would have been necessary to know for a determination that the $50,000 policy sublimit should have been offered.

The Court reversed and remanded the District Court’s grant of summary judgment stating that “All told, a jury could reasonably find Kinsale acted in bad faith in failing to tender its policy limits prior to the Estate” filing suit.

NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
hasanderson@sanderson-law.com

04/14/25 McGregor et al. v. Wawanesa Mutual Insurance Company
Alberta Court of King’s Bench
A Criminal Act Exclusion in a Liability Policy That Excludes “Bodily Injury" or "Property Damage" Caused by Any Intentional or Criminal Act or Failure to Act by Any Person Insured by This Policy, Requires the Insurer to Prove That the Injury or Damage in Issue Was Caused by the Criminal Act, Even Though the Insured Did Not Intend the Injury or Damage

The Alberta Court of King’s Bench issued a judgment on a homeowners’ insurance claim arising from an explosion and fire in a detached garage owned and insured by Mr. McGregor, of Calgary, Alberta. On October 6, 2017, Mr. McGregor was an owner of a single-family residence located on Pinemill Road. That evening, Mr. McGregor was using butane to make cannabis oil in his garage, when a lit cigarette ignited the butane fumes, causing an explosion and fire. The fire, directly caused by the illegal production process, resulted in significant damage to the garage and injuries to Mr. McGregor and two visitors. At no point had Mr. McGregor disclosed to his insurer that he would be producing cannabis oil on the property.

Following the incident, Mr. McGregor pled guilty to criminal charges under s. 436(1) of the Criminal Code of Canada for causing bodily harm by fire and under section 4(1) of the Controlled Drugs and Substances Act for the unlawful possession of cannabis.

The central legal issue in this case was whether the homeowners’ insurer was obligated to defend and indemnify Mr. McGregor in a lawsuit brought by one of the injured visitors and provide indemnity to Mr. McGregor for the property damage caused by the explosion and fire.

This scenario, with its dangerous shed, injured guests, and the ever-present Mr. McGregor, brings to mind the classic tale of Peter Rabbit. In Beatrix Potter’s story, Peter, despite his mother’s stern warnings, sneaks into Mr. McGregor’s Garden—a place already notorious for peril, as Peter’s father had previously met a grim fate there. Like the visitors to Mr. McGregor’s garage, Peter finds himself in sudden danger after venturing where he ought not to go. He loses his shoes and jacket in a frantic escape, is chased into a tool shed, and narrowly avoids capture by the ever-watchful Mr. McGregor.

Both stories serve as cautionary tales about the risks of entering forbidden territory—whether it’s a fenced garden or a garage where cannabis oil is being processed—and the unexpected consequences that can follow. If Peter, after being injured in Mr. McGregor’s shed, demonstrates that he had legal personality and was able to bring a claim against Mr. McGregor, the question of whether the homeowner’s insurer of the fictional Mr. McGregor would be required to defend and indemnify is a discussion for another day.

But in this real-world instance, this Mr. McGregor was facing an uphill fight for insurance coverage … the property portion of the policy excluded loss or damage caused by or resulting from the intentional or criminal acts; there was also a marijuana exclusion that read “loss or damage arising directly or indirectly from the growing, cultivating, harvesting, processing, manufacturing, distribution or sale of any drug or narcotic or illegal substance, whether or not "you" have knowledge of such activity”; the liability portion excluded “bodily injury" or "property damage" caused by any intentional or criminal act or failure to act by any person insured by this policy.”

The issue of entitlement to insurance coverage was heard by summary trial. At the outset of the trial, Mr. McGregor withdrew his claim for property damage. The claim of entitlement to liability coverage remained.

The insurer argued that the bodily injury claims were caused by Mr. McGregor's criminal acts and are therefore excluded. They argue that it is irrelevant to inquire if he had any intention of causing the fire and the resulting injuries. Alternatively, the insurer argued that Mr. McGregor’s failure to disclose the illegal and dangerous production of cannabis oil is both a material misrepresentation and a material change in risk which, together or separately, voids the liability coverage.

Counsel for Mr. McGregor argued that the criminal act exclusion is not applicable as the insurer has not established Mr. McGregor subjectively intended to cause the fire or any harm to Mr. Coffin. Further, section 533 of the Alberta Insurance Act states that a contravention of the criminal law itself will not render unenforceable a claim for indemnity except where the contravention was committed by the insured with the intent to bring about the loss or damage. Therefore, it was argued that Mr. McGregor is entitled to a defence and possible indemnity for the Coffin Action.

The issue before the court was whether an unintentional criminal act is excluded under the Policy. Put another way, to apply the exclusion, is the insurer required to prove that the insured committed a criminal act; that the loss or damage for which coverage is being claimed was caused by that criminal act; and that while committing that criminal act, the insured intended that injury or damage?

The Court held that Section 533(2) of the Insurance Act protects an insured's right to indemnity in cases where a criminal act is committed without the intention to cause the loss or damage. But it also permits an insurer to provide otherwise and exclude the claims for indemnity for loss caused by any criminal act, whether the act was intentional or not. That is what the insurer did in this case. The criminal act exclusion excludes claims arising from bodily injury or property damage caused by any criminal acts that are committed by the insured. The language of the exclusion is disjunctive: An act of an insured that causes injury is clearly excluded when it is either an intentional act, or a criminal act. Therefore, it is irrelevant that the insured did not intend the injury or damage that arose from the criminal act. The exclusion will apply if the insurer proves that the criminal act was the cause of the injury.

In this case, Mr. McGregor plead guilty to a charge under the Criminal Code that he caused a fire that resulted in injury to Mr. Coffin and Mr. McIntosh. Therefore, the Court concluded “In light of this admission, the essential facts necessary to trigger the exclusion exist and relieve the ...[insurer]… of its obligations to indemnify…[Mr. McGregor).” As the criminal act exclusion applied, the Court did not find it necessary to consider whether the liability coverage was rendered void as a result of a misrepresentation or a failure to disclose a material change in risk.

Premises Pointers - Special Edition: A Change in Season: Court of Appeals Overrules Bard, Reinstates Traditional Negligence Standard for Dog Bites

Wed, 23 Apr 2025 17:13:45 +0000

SPECIAL EDITION:
A Change in Season: Court of Appeals Overrules Bard, Reinstates Traditional Negligence Standard for Dog Bites
April 22. 2025
A Monthly Electronic Newsletter

NOTE FROM ROCHESTER ATTORNEY BRADON S. CARLSON:

You all know what they say about April showers—brighter skies are on the horizon. Just like the changing weather, the legal landscape in New York is constantly shifting; this time with a significant development in the state’s law regarding injuries caused by domestic animals.

As background, for almost 140 years, the New York Court of Appeals recognized two distinct avenues for recovery when personal injuries were caused by domestic animals: negligence and strict liability. But in 2006, the Court of Appeals broke with other jurisdictions, creating a bright line standard by holding that when such injuries are caused by domestic animals, only strict liability applies—thus barring common-law negligence causes of action. On nearly 19 years to the day since Bard took effect, the Court of Appeals reversed course again.

Below is a closer look at the Court’s pivotal change.

04/17/25 Flanders v. Goodfellow
New York State Court of Appeals
A Change in Season: Court of Appeals Overrules Bard, Reinstates Traditional Negligence Standard for Dog Bites

On December 8, 2018, Rebecca Flanders (the plaintiff), a postal worker, arrived at Stephen and Michelle Goodfellow’s (the defendants) house to deliver mail but found their mailbox missing. As she approached the house to leave a package on the porch, she heard a dog barking. She had not seen a warning that the Goodfellows had a dangerous dog either at the post office or on the scanner given to postal carriers, and she did not see a "beware of dog" sign on the property.

Before exiting her vehicle, she took a moment to confirm that the dog was not outside. Once this was confirmed, she exited her vehicle and approached the defendant’s porch. The defendant Stephen Goodfellow opened the front door to greet the plaintiff. As the plaintiff was handing the defendant the package, the defendant’s dog slipped through the doorway and lunged at the plaintiff’s neck. The plaintiff raised her hand to cover her face and neck and was bitten on the shoulder. The defendant broke the dog’s grip from the plaintiff’s shoulder, and the plaintiff hurried back to her vehicle. The plaintiff later learned that the bite had caused a "snap tear" in her shoulder muscle, which required several surgical procedures and resulted in scarring.

The plaintiff introduced affidavits from two postal workers who had previously delivered mail to the defendants' residence. Both witnesses testified that the dog had displayed aggressive behavior, including baring its teeth, snarling, barking, and biting at the window in what appeared to be an attempt to attack them. Both believed the dog was dangerous, and that the defendants should have been aware of the dog’s aggressive behavior but had failed to report it as required by the work rules of the Postal Service. Contrarily, the defendants testified that the dog was not aggressive, and that they never received prior complaints regarding the dog’s behavior.

Following discovery, the defendants moved for summary judgment, which the Supreme Court granted. As to strict liability, the court concluded that the evidence did not raise a triable issue of fact regarding whether the defendants had actual or constructive knowledge of their dog’s alleged vicious propensities. As to negligence, the court dismissed the claim based on New York precedent, which forecloses negligence liability in dog bite cases.

The plaintiff appealed, arguing (1) that the defendants knew or should have known of the dog’s vicious propensities, and (2) that the negligence claim represented a good faith argument for the modification or reversal of existing law. In support of the latter, the plaintiff contended that landowners have a duty to maintain their property in a reasonably safe condition under the circumstances—including consideration of the likelihood and seriousness of potential injuries, as well as the burden of avoiding the risk. The plaintiff asserted that it was foreseeable that the defendants’ failure to properly secure their dog would result in injury, and that this failure constituted negligence.

In response to the plaintiff’s negligence argument, the defendants relied on longstanding New York precedent, emphasizing that negligence causes of action are precluded in dog bite cases.

The Fourth Department affirmed the Supreme Court’s decision, holding that the defendants neither knew nor had reason to know of the dog’s alleged vicious propensities, and that the negligence claim was properly dismissed. The plaintiff was subsequently granted leave to appeal.

On appeal to the Court of Appeals, the plaintiff urged the Court to overturn Bard v. Jahnke, the 2006 decision in which the Court held that when harm is caused by a domestic animal, its owners’ liability is determined solely by the application of strict liability.[1]

In Bard, the plaintiff, a carpenter, was injured by a free-roaming breeding bull while repairing cow mattresses in a barn. He asserted both negligence and strict liability claims, alleging that the defendant was negligent in failing to restrain the bull and in failing to warn him of its presence. The plaintiff’s expert opined that bulls, particularly breeding bulls, are generally dangerous. The Court, however, rejected the argument for applying a negligence standard based on the general dangerous nature of bulls, holding that liability depends on the defendant’s specific knowledge of the animal’s vicious propensities.

The plaintiff here argued that the Bard rule was unworkable and inconsistent with general modern tort principles, which require individuals to act reasonably to prevent foreseeable injuries to others.

In further support of her argument, the plaintiff emphasized New York’s longstanding pre-Bard history of permitting simultaneous negligence and strict liability claims against domestic animal owners. She argued that the two causes of action are complementary, each serving distinct public policy goals. Strict liability, she asserted, discourages the harboring of dangerous animals, since “even the most elaborate and extensive measures [would] not avoid strict liability.”[2] However, strict liability alone fails to incentivize precautionary measures by the animal’s owner. The prospect of negligence liability, by contrast, encourages owners to exercise reasonable care to protect the public from unnecessary danger posed by domestic animals.

The defendants, represented by Michael F. Perley of our office as appellate counsel, countered that the Bard rule is consistent with prior New York case law and comports with general tort principles by imposing strict liability on owners who have notice of their animal’s dangerous propensities. In other words, even if the owner was not negligent, liability still attaches upon such notice.

Turning to the plaintiff’s negligence claim, the Court first considered whether principles of stare decisis supported continued adherence to Bard. The first factor was whether Bard was well reasoned and consistent with tort jurisprudence. The Court emphasized that tort law seeks to deter harm by imposing a duty of care. It noted that in other areas, such as operating a motor vehicle, riding a bicycle, or manufacturing machinery, individuals are expected to exercise due care. The Bard rule, the Court found, was inconsistent with these principles because it shifted both the burden of care and the costs of injury from animal owners to those harmed by the animals. It also failed to incentivize owners to learn of their animals’ dangerous propensities and take reasonable steps to prevent injury.

The second stare decisis factor considered was whether subsequent legal developments had undermined Bard. The Court observed that later decisions had carved out exceptions to the rule, gradually eroding Bard’s original bright-line approach.

Lastly, the Court emphasized that the Bard rule proved to be unworkable in the lower courts and an obstacle in the “path of justice.”[3]

For these reasons, the Court overruled Bard and adopted a two-pronged approach to liability for injuries caused by domestic animals. First, if an owner knew or should have known of the animal’s vicious propensities, the plaintiff may pursue a strict liability claim. In addition, or in the alternative, the plaintiff may assert a negligence claim, seeking to prove that the owner failed to exercise reasonable care under the circumstances regardless of whether or not their dog acted unreasonably in the past.

Accordingly, the Court reversed the Appellate Division’s decision, which had dismissed the plaintiff’s negligence claim based solely on Bard and denied the defendants’ motion for summary judgment.

[1] 6 NY3d at 599.

[2] Colarusso v Dunne, 286 AD2d 37, 39-40 [2d Dept 2001].

[3] Woods v Lancet, 303 NY 349 [1951].

Hurwitz Fine P.C.

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Coverage Pointers - Volume XXVI No. 22

Fri, 11 Apr 2025 13:44:44 +0000

Volume XXVI, No. 22 (No. 695)
Friday, April 11, 2025
A Biweekly Electronic Newsletter

In some jurisdictions, newsletters such as this may be considered Attorney Advertising.

If you know of others who may wish to subscribe to this free publication, or if you wish to discontinue your subscription, please advise Dan D. Kohane at ddk@hurwitzfine.com or call 716-849-8900.

You will find back issues of Coverage Pointers on the firm website listed above.

Dear Coverage Pointers Subscribers:

Do you have a situation? We love situations

Happy Easter. Happy Passover. And for those of you who prefer the obscure, Happy National Pet Day. Happy Barbecue Quartet Day and most importantly, Happy International Louie Louie Day (so selected because Richard Berry, its composer, celebrates his birthday on April 11)

It’s been a busy couple of weeks. Steve and I did presentations at the PLRB Claims Conference in Indianapolis (thanks to those who came by to say “hello”). One of the nice surprises was gifts brought to me from my good friends at Island Insurance in Honolulu. In July 2018, I was asked to speak to their claims staff, and my wife and I spent two wonderful days on Waikiki Beach. Claims folks from Island were at the conference in Indy and delivered some delightful treats from the Island paradise. Thanks.

My presentation was on my favorite topic, Risk Transfer – Additional Insured Coverage and Contractual Indemnity. For those who attended, or even those who did not, we can reprise that presentation for your claims team, via Zoom, should there be an interest.

The ups and downs of the stock market have surely presented some challenges over the past week or so. Luckily, I have no plans on soon retiring.

Ryan Maxwell and I also were honored to be part of the New York Insurance Association Insurance Roundtable, where we talked about the recent First Department decision on car rental insurance. If you are unaware of the implications of the Second Child decision out of the First Department, you can read my article in the New York Law Journal on April 14.

Need a Mediator for an Inter-Company Dispute?

Coverage mediation is a thing! Subject matter expertise may be useful.

Let me help mediate your disagreement to see if there is some mutual agreement, we can reach that will not box us into a corner. Reach out to me. I will be pleased to mediate your dispute.

You don’t want adverse precedent that will bite you next time you might have a slightly different view on coverage issues. You don’t want to spend tens of thousands of dollars to litigate a coverage issue before a motion judge or appellate justice that knows as much about insurance coverage as you do about nuclear physics. For those in the Western District of New York, I am certified by the Court and on the WDNY Mediation Panel as are Mike and Ann.

Try mediation.

President TR’s Sons ….

In case you were keeping track, James Simpson-Roosevelt Asiatic Expedition, sponsored by the Field Museum of Natural History and organized by Kermit Roosevelt and his brother, Theodore Roosevelt Jr. (that was the late President’s son who was also first cousin to Eleanor), departed from New York City on 11 April 1925 aboard SS Leviathan for the purpose of collecting wildlife specimens from mountainous regions in Asia, particularly in the Pamir Mountains and the Tian Shan Mountains. It would return with over 2,000 specimens of small mammals, birds and reptiles, and 70 large mammals, including the Ovis Poli, the great wild sheep. They followed in their dad’s footsteps.

LinkedIn:

One Hundred Years Ago:

You may have heard something about tariffs over the last few weeks. So, you know, history has a habit of repeating itself. You’ll see that in some of this year’s 100 years ago stories.

Newsletters:

We have other firm newsletters to which you can subscribe by simply letting the editor (or me) know, including a new publication, which was created to advise on business and employment law questions:

Premises Pointers: This monthly electronic newsletter covers current cases, trends and developments involving premises liability and general litigation. Our attorneys must stay abreast of new cases and trends across New York in both State and Federal Court and will now share their insight and analysis with you. This publication covers a wide range of topics including retail, restaurant and hospitality liability, slip and fall accidents, snow and ice claims, storm in progress, inadequate/negligent security, inadequate maintenance and negligent repair, service contracts, elevator and escalator accidents, swimming pool and recreational accidents, negligent supervision, assumption of risk, tavern owner and dram shop liability, homeowner liability and toxic exposures (just to name a few!). Please drop a note to Jody Briandi at jeb@hurwitzfine.com to be added to the mailing list.
Labor Law Pointers: Hurwitz Fine P.C.’s Labor Law Pointers offers a monthly review and analysis of every New York State Labor Law case decided during the month by the Court of Appeals and all four Departments. This e-mail direct newsletter is published the first Wednesday of each month on four distinct areas – New York Labor Law Sections 240(1), 241(6), 200 and indemnity/risk transfer. Contact Dave Adams at dra@hurwitzfine.com to subscribe.
Products Liability Pointers: Whether the claim is based on a defective design, flawed manufacturing process, or inadequate instructions/warnings, product liability litigation is constantly evolving. Products Liability Pointers examines recent New York State and Federal cases as well as high court decisions from other jurisdictions, keeping our readers up to date with the latest developments and trends, and providing useful practice tips and litigation strategies. This monthly newsletter covers all areas of product liability litigation, including negligence, strict products liability, breach of warranty claims, medical device litigation, toxic and mass torts, regulatory framework and governmental agencies. Contact V. Christopher Potenza at vcp@hurwitzfine.com to subscribe.
Medical & Nursing Home Liability Pointers. Medical & Nursing Home Liability Pointers provides the latest news, developments, and analysis of recent court decisions impacting the medical and long-term care communities. Contact Elizabeth Midgley at emm@hurwitzfine.com to subscribe.

Tariffs? – 100 Years Ago:

The Buffalo News
Buffalo, New York
11 April 1925

SWISS AROUSED AT
U.S. TRADE TACTICS

Diplomats May Take Up Issue
Of Cost Probes by American
Treasury agents

GENEVA, April 11. – A cry of protest against the United States is spreading throughout manufacturing circles in Switzerland ever the system of establishing special treasury agents here who, under the new American tariff law are authorized to insist upon examination of the books of manufacturers to determine the cost of the articles they produce. This information is sought by the Americans, as a help in fixing tariff schedules when goods exported from Switzerland arrives at American ports.

The impression exists here that the affair has gone so far, and both the Swiss and merchants’ authorities have become so aroused, that the question may cause serious diplomatic difficulties between Berne and Washington, unless a way is found for relief.

According to information given out at Berne, the United States has already exercised the embargo prerogative in the case of a shipment of Swiss dyestuffs to New York.

Peiper on Property (and Potpourri):

We bring this first issue of April to you through the swirling snowflakes that are outside my window. For all of you about to depart for a week in Florida, we envy you. Please return to the Northeast with sunshine.

Not too much to report on this week. We do have an interesting decision where the Third Department tries to explain that a vacant building is not vacant under the terms of the policy. Ok, so maybe it’s not quite that simple, but it’s not too far from it. Do take a moment to review in the Property column this week.

Speaking of property, a big thank you to the folks at PLRB who welcomed me to speak at last week’s annual claims conference in Indianapolis. And, perhaps even more importantly, an especially big thank you to those of you brave enough to sit through an hour and a half discussion on construction defect coverage issues. Not even a yawn was seen, by the way. A testament to the quality of professionals attending PLRB events, and their engagement in the discussion.

That’s it for this week. See you again in two more. In the meantime, Happy Easter and/or Passover to those who celebrate.

Steve
Steven E. Peiper
sep@hurwitzfine.com

Tariffs? – 100 Years Ago:

The Grand Rapids Press
Grand Rapids, Michigan
11 April 1925

FORDNEY’S VISIT
TO WHITE HOUSE
OCCASIONS TALK

Michigan Man Sees No
Reason to Revise
Tariff

BACKED BY BUSINESS

Flexible Provisions Are Taking Levy Program out of Politics

Washington, April 11. – Presence of former Congressman Joseph W. Fordney in Washington and his call at the White House shortly after President Coolidge spoke before he convention of the National Cotton Manufacturers’ association have occasioned a lot of tariff talk. The textile manufacturers are avowedly favorable to a revision of the tariff and were greatly disappointed that the president gave them no encouragement along this line.

Mr. Fordney declared while here that he saw no reason for a revision of the tariff by the next congress. Even if there are inequalities in the schedules, he said he did not think this was the time for tariff-tinkering. He said the present law was as good as can be written at this time, and that the next congress would have all it can do to consider tax revision, railroad legislation and other pressing matters.

Move Held Unwise

Business interests of the country are likely to share the opinions of the president and Mr. Fordney that any tariff revision now is unwise. The present law is the realization of the hope of a lifetime for Mr. Fordney, and he can be pardoned in desiring to see it remain in the statute books indefinitely. Wholly aside from that fact, however, many of those who opposed the bill at the time it was enacted, and see many inequalities and crudities in the schedules, are set against changes now.

Lee’s Connecticut Chronicles:

Dear Nutmeggers:

Well, it seems another two weeks have passed by unnoticed. I’m writing this column as our esteemed editor is breathing down my neck to finish. It reminds me of my college newspaper days, typing furiously against deadline pressure as we approached press time. Fun times.

This edition’s case is a doozy. The unfortunate insureds were arrested and held captive by the Iranian Revolutionary Guard for six years and only released after more than $2 million of back-channel payments and State Department maneuvering. Terrible, you say, but how does this impact insurance coverage? Well, the insureds had some unique coverages, but the carriers ran into some basic rules of construction problems. Undefined terms that are key to coverage need to be defined, especially in unique policies and circumstances. Please read on for some interesting facts and arguments.

Until next time, keep keeping safe and bring on Spring!

Lee
Lee S. Siegel
lss@hurwitzfine.com

More Tariffs – 100 Years Ago:

The Austin American
Austin, Texas
11 April 1925

HIGH TARIFF
ADVOCATED BY
TEXAS GINNERS

Traditional Democratic Policy
Is Ditched by State
Association

“OLD GUARD” FIGHTS

Minority in Gathering at Dallas
Vigorously Opposed
Protectionists.

DALLAS, April 10. – A protective tariff on vegetable oils was advocated here today by the Texas Cotton Ginners’ association for the first time since the organization was founded 16 years ago. This action and the election of J.T. Andres of Waxahachie as president featured the closing session of the association’s two-day convention.

W.V. Angell of Hillett was elected vice president and C.B. Hunt of Dallas was re-elected secretary. The tariff question caused the only division in the convention many members resisting the action on the ground that it was undemocratic, that it would lead the organization into politics, and because free trade has been the traditional principle of the democratic party.

Ruffner’s Road Review:

Dear Readers,

March Madness has come to a close, with the Florida Gators taking home a National Championship. Due to my extensive college basketball expertise (I watched no college basketball until this tournament), I had picked them to win in multiple brackets, leading to a first-place finish in the one where I had Houston in the final, and second place in the Hurwitz Fine bracket. In other sports news, less than a week after Alex Ovechkin set a new NHL record for most career goals, the Buffalo Sabres have officially extended an NHL record of their own, missing the playoffs for the 14^thstraight season. Quite a feat considering half of the teams in the league make the playoffs each year…

I have two no-fault cases this week, both addressing the failure of an insured to attend an examination under oath or medical examination, leading the insurer to deny coverage. In the first case, the Appellate Court denied the insurer’s motion for summary judgment, holding an objective justification for the examination under oath was not established. In the next case, the insurer’s motion was granted, as the court held the IME was properly noticed and the failure to attend was a non-precludable defense to coverage.

Kyle
Kyle A. Ruffner
kar@hurwitzfine.com

Good Choice – 100 Years Ago:

The Buffalo Times
Buffalo, New York
11 April 1925

Says Girls Want
Equal Rights Over Cigarettes

CHICAGO, April 11. – Co-eds of Northwestern University in objecting to the rule forbidding them smoking declare it is not because they want to smoke, but because it is discriminatory against woman and creates a distinction.

Such is the gist of an editorial in the Daily Northwestern, written by Miss Ellen Cole Fetter, ’25.

“There is no reason for a double standard of morals so far as smoking is concerned,” Miss Fetter declared.

Ryan’s Federal Reporter:

Hello Loyal Coverage Pointers Subscribers:

The University at Buffalo Bulls Women’s Basketball team are WNIT Champions! While I was not part of the broadcast this year, it was amazing to see the growth exhibited by the program from losing to Monmouth in the first-round last year, to taking the crown in front of a sold-out home crowd in Alumni Arena. That place was built for events like this. Hopefully, we will see more big games in the years to come.

In this edition of Coverage Pointers, my column contains a Second Circuit decision that touched upon the interplay between priority of coverage and “insured contracts”.

Until next time,

Ryan
Ryan P. Maxwell
rpm@hurwitzfine.com

Advice to the Lovelorn – 100 Years Ago:

The Kansas City Post
Kansas City, Missouri
11 April 1925

Dear Miss Fairfax – I have read the kind advice you have given to so many others so I wish you would answer a few questions for me.

1. What time do you think a girl at the age of 16 should get in at night?

2. Should she be allowed to go to the dances if accompanied by an older sister?

3. Is it better to go with one boy, at that age, or several?

4. I have a friend who is considered tough and is tough around boys but is a real friend to me. Do you think it right for me to run around with her?

5. How many nights should a girl at the age of 16 get to go out with boys? – Mickey

1. It depends entirely upon where you are and what you are doing.

2. If she behaves properly, I should think she might go with her sister.

3. Be friendly with the boys, why single out one and exclude the other? But, of course, you cannot be a sweetheart to all of them.

4. You are judged and influenced by the company you keep, Therefore, the only sane thing you can do is to choose your friends from among nice girls and boys.

5. No certain number. It depends on the entertainments and parties to which you are invited. A girl of 16 should not be out very often.

Storm’s SIU:

Hey Team:

Three cases for this edition of CP:

Court Granted Insurer’s Motion to Compel Appraisal During Litigation on the Amount of Business Income and Extended Business Income Loss.
Insurer’s Use of Software by Xactimate, Known as "New Construction," and its Labor Efficiency Setting to Estimate the Repair Costs for Fire Damage to the Plaintiffs' Home, was Not Bad Faith Manipulation of the Xactimate Estimating Application" or Bad Faith for Use of the Appraisal Process.
A Signature is Whatever the Signatory Says it is, but a Notarial Signature Must be Consistent with the Signature Affixed Upon the Oath of Office Filed with the Licensing County Clerk's Office.

So happy baseball is back in season. Hope for warm weather ahead.

We appreciate the opportunity to team with you!

More case digests in two weeks.

Scott
Scott D. Storm
sds@hurwitzfine.com

Never Mind … – 100 Years Ago:

The Buffalo Times
Buffalo, New York
11 April 1925

AREN’T WOMEN FUNNY.

LONDON. – Miss Olive Fry, who won $2,500 with a letter advocating that women remain single, got married the next week.

Fleming’s Finest:

Hi Coverage Pointers Subscribers:

Now that we are in Spring, as I watch snowflakes fall, I can’t help but wonder when the warmer weather will arrive. We have been faked out a few times, but I remain hopeful that this will be the last week of cold weather.

This week’s case from the South Dakota Supreme Court considers whether an “owned but not insured” exclusion to UIM coverage was against public policy when used to deny coverage to an insured under the circumstances. The decision discusses the public policy behind UM/UIM coverage.

Shoutout to the UConn Huskies on the big W. See you in a fortnight.

Kate
Katherine A. Fleming
kaf@hurwitzfine.com

A Kiss is But a Kiss – 100 Years Ago:

Buffalo Courier Express
Buffalo, New York
11 April 1925

Cruel Caresses of
Original Caveman
Result in Divorce

Chicago, Ill., April 10 (A.P.). – What he called “cruel caresses” were named by Judge Sabath as grounds for divorce granted by him today to Mrs. Tessie Menza Fritz. The woman said her husband gave her kisses so intense her lips became numb and even bled, and that his hugs were so arduous they bruised her ribs.

Gestwick’s Garden State Gazette:

Dear Readers:

Congratulations to the other Evan who works in our office, Evan Bussiere, for winning our Firm’s March Madness bracket. CP’s own Kyle Ruffner came in second. Alabama’s loss was the fall of my fiancé’s reign, and Duke and Auburn both losing is what took out yours truly.

The case I have for you this week is full of good tidbits. A cause of action for a declaratory judgment can only be sustained if the declaration sought is to define the rights and obligations of the parties in anticipation of some future conduct; not to declare present liabilities. And that cause of action will be dismissed if duplicative of an accompanying breach of contract cause of action. A cause of action for bad faith will also be dismissed as duplicative of a breach of contract cause of action if the former is based on the same conduct as the latter. This does not change even if the breach of contract claim is also dismissed, like it was here.

See you in two weeks.

Evan
Evan D. Gestwick
edg@hurwitzfine.com

Car Insurance? Hey, it’s a Good Idea – 100 Years Ago:

Dunkirk Evening Observer
Dunkirk, New York
11 April 1925

EVERY DAY – The Papers Say –

Another Automobile Accident – Cars Collided – Some One Injured – Perhaps fatally – People Found in Garages Overcome by Fumes – Cars Stolen – Others Found – Some Burned.

IF YOU OWN A CAR –

– You can’t afford to be without protective insurance. A serious accident might result in the loss of your home or other property if you are not insured.

Why not let an insurance company assume the risks that they are willing to carry for a comparatively small annual premium? It pays to be protected – Ask anyone who has had an accident. Those whose names figure in today’s reports, yesterday thought they never would have one.

For Liability, Property Damage, Collision, Fire, Theft or
Automobile Personal Accident Insurance, See
L. F. HUMPREY
310 Washington Avenue
INSURANCE – ALL KINDS

O’Shea Rides the Circuits:

Readers,

This week Spring is hitting and so is the winter coat blowout. No, not at Burlington Coat Factory, rather both of my dogs are shedding their winter coats. So, that’s a few hours of brushing the dogs out this past weekend. As a side note, if my hair starts looking fuller, please do not ask any questions . . .

This week I have a couple of cases involving Texas law from the Fifth Circuit. Both involve first party property claims, both involve appraisal rights, and both involve unlucky insureds.

Until Next Time,

Ryan
Ryan P. O’Shea
rpo@hurwitzfine.com

Tariffs! – 100 Years Ago:

The San Bernardino County Sun
San Bernardino, California
11 April 1925

TARIFF TINKERING NOT
WANTED

TOTAL of $830,000,000 was provided by congress for the fiscal year 1926 to meet the interest on the public debt. Congress also authorized $485,000,000 for the “sinking fund and other public debt retirement funds.” The Republican tariff law is yielding something like $550,000,000 annually. The average rate on all imports is about 15 per cent; on dutiable imports alone, about 35 per cent. The rates per cent were 14.88 and 37.6, respectively, the first year the Democratic tariff law was in force – 1914. Last year 58 per cent of our imports were free of duty. Importations of partly and wholly manufactured foodstuffs and artifacts totaled about $1,930,000,000. Or more than $100,000,000 greater than our entire imports in 1914. Imports from Europe totaled $895,000,000 in 1914, and $1,096,000,000 last year – they totaled $780,000,000 for the eight months ended February last.

Rob Reaches the Threshold:

Hello Friends,

Welcome to The Masters week. For all you golf fans out there, like me, this is one of the best weeks of the year. We get to enjoy all the best golfers as they come together for the first time of the year at one of the best venues in all of sports. Last year, I was fortunate enough to visit Augusta for one of the tournament's practice rounds – and it was an incredible experience. As I now look back and reminisce, I realize that one of the best 'traditions' that contributes to the wonder of The Masters is that no patron is allowed to bring a cell phone in. Just thousands of people in the moment, enjoying golf and the course and the experience. It really is a tradition unlike any other.

The lull in any cases from the Appellate Division on Serious Injury Threshold continues this time around, so no article from me. We will try again in two weeks.

In the meantime, please enjoy the articles from my colleagues.

Rob
Robert J. Caggiano
rjc@hurwitzfine.com

A Penny-Ante Robbery – 100 Years Ago:

Buffalo Courier Express
Buffalo, New York
11 April 1925

Two Burglars Bind
Aged Woman to Bed
And Steal 32 Cents

Beacon, April 10 (A.P.). – police today sought two burglars who last night bound an aged woman to her bed before robbing her of all the money in her purse. – 32 cents. Mrs. Mary Husted, 70 years old, who lives alone, reported the robbery after her assailants had made good their escape with the “loot” and she had worked free from her bonds.

LaBarbera’s Lower Court Library:

Dear Readers:

Been a busy bee last few weeks. With the weather getting warmer (hopefully soonish), we are trying to push through some projects inside before we begin to tackle the outside. Based on how the weather is acting here in Buffalo, it seems like we may have more time than expected.

This week I am reporting on a New York County decision. Upon a motion to renew, the court took a second look at a special proceeding brought by a carrier to dismiss an arbitration award procured by corruption, fraud, and misconduct. This case takes a look at what steps can be taken, after a fraud case is fully investigated, for carriers to dispute past, potentially fraudulent claims.

Until next time…

Isabelle
Isabelle H. LaBarbera
ihl@hurwitzfine.com

Daylight Savings Time Controversial Even Then – 100 Years Ago:

Daily Sentinel
Rome, New York
11 April 1925

TOPICS TREATED BY
THE MAN ABOUT TO WIN

Daylight Saving – Liked by the
City Man and Disliked
By the Farmer.

Rome, April 11. – The daylight-saving period approaches, and those interested in saving daylight for various purposes are active in behalf of the movement. Different periods are advocated by different people. Some want five months, some four months and some three months, but I believe that the majority favor five months. They desire to have the clocks set forward an hour on the first Sunday in May, the 3d, and set back again on the last Sunday in September, the 27^th. This is the same period that was observed here last year, and it seemed to meet the requirements very well. The daylight-saving proposition is very popular with the people of Rome, who a year ago last fall at the regular election voted for it by a large majority. The same sentiment prevails in the other cities of the state. Last year I believed only two cities failed to observe daylight saving, and they were Rochester and Syracuse, and it is believed that if the matter were put to a vote of the people of those cities the daylight-saving proposition would be carried out. In Syracuse, a great deal of dissatisfaction was expressed because the Common Council refused to pass a daylight-saving ordinance, and people there are demanding that the matter be put to a popular vote.

Editor’s note: Daylight savings time started during WW I. We may see the end of it this year.

Lexi’s Legislative Lowdown:

Dear Readers,

It was difficult to willingly return to the cold, snowy Rochester, New York, after a beautiful weekend in Charlston, South Carolina. Nonetheless, I am here, back in my winter coat.

This week we discuss changes to Insurance Law § 3420(g) effective March 26, 2025, regarding the issuance of supplemental spousal liability insurance.

Stay warm. Thanks for reading.

Lexi
Lexi R. Horton
lrh@hurwitzfine.com

Was it Worth it? – 100 Years Ago:

Buffalo Post
Buffalo, New York
11 April 1925

Woman Saves Husband’s Life
In Fire; Dies Saving Jewels

Endicott, April 11. – Mrs. Leila M. Teetsal of this city was burned to death today when she returned to her burning apartment to save her valuables after she had carried her crippled husband, Richard M. Teetsal, to safety. Mr. Teetsal was seriously burned.

The couple were trapped by the fire in a bedroom off the kitchen of their second-floor apartment. Teetsal, with both legs severed above the knees, was powerless to save himself. His wife took him in her arms and fighting her way through the flames, she carries him downstairs to safety.

She returned before anyone could restrain her to obtain valuable left in the apartment. She did not reappear and when the fire was extinguished thirty minutes later her charred body was found on the kitchen floor.

Domenica’s Diary on Bad Faith:

Dear Readers,

As I celebrated my “29th” birthday last week, I return to wondering how fast time flies. I am grateful for every year, but it needs to slow down. There are many things on my constantly evolving bucket list!

This week’s Pennsylvania case focuses on how an insurer’s diligent and reasonable handling of a UIM claim, including constant communication with Plaintiffs’ counsel for medical records and making reasonable settlement offers pre-litigation, can defeat a bad faith claim by Plaintiff.

See you in two weeks!

Domenica
Domenica D. Hart
ddh@hurwitzfine.com

Bring Your Easter Bonnet – 100 Years Ago:

The Ithaca Journal
Ithaca, New York
11 April 1925

North of the Border:

The world news makes it difficult to muster the strength to push back the covers and face another day … markets are in turmoil; coupled with the near certainty that prices will continue to rise while our shrinking asset base pushes the dream of retirement further out of reach … but in my three-foot world, the brown fields are starting to green up. The sun is warm. Our puppy still chases his ball in the morning with wild abandon. Our granddaughter reached up her tiny arms and said ‘Grandma’. We are resilient.

My column this week discusses a case where a failure to correct errors in policy drafting resulted in a denial that was overturned on appeal.

Until next week.

Heather
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
hasanderson@sanderson-law.com

Headlines from this week’s issue, attached:

KOHANE’S COVERAGE CORNER
Dan D. Kohane
ddk@hurwitzfine.com

Bond Carrier’s Obligation to Indemnify for Third Party Claims Preserved
Question of Fact as to Whether Employer’s Liability Was a Proximate Cause of the Plaintiff’s Injuries BUT Any Culpability on the Part of the Plaintiff Would Be Imputed to the Employer When Making That Determination

PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
sep@hurwitzfine.com

Sporadic Presence at Building Creates Question of Fact on “Occupancy” and “Vacancy” Issues
Trial Transcripts are Recoverable as Taxable Costs After Successful Appeal of Trial Verdict
Lack of Negligence Results in Dismissal of Common Indemnity/Contribution Claims

LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
lss@hurwitzfine.com

Lack of Defined Terms Sink Coverage Defenses

RUFFNER’S ROAD REVIEW
Kyle A. Ruffner
kar@hurwitzfine.com

Summary Judgment Denied as Premature as Insurer Did Not Give Provider an Objective Justification for Requesting Examination Under Oath
Failure to Attend IME is Non-Precludable Defense Applicable to All Claims

RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
rpm@hurwitzfine.com

While Policy is Primary for Liability Assumed Under “Insured Contract,” Court Finds it Co-Excess Due to Direct Insurer-Insured Relationship

STORM’S SIU
Scott D. Storm
sds@hurwitzfine.com

Court Granted Insurer’s Motion to Compel Appraisal During Litigation on the Amount of Business Income and Extended Business Income Loss
Insurer’s Use of Software by Xactimate, Known as "New Construction," and its Labor Efficiency Setting to Estimate the Repair Costs for Fire Damage to the Plaintiffs' Home Was Not Bad Faith Manipulation of the Xactimate Estimating Application or Bad Faith Use of the Appraisal Process
A Signature Is Whatever the Signatory Says it Is, but a Notarial Signature Must Be Consistent with the Signature Affixed Upon the Oath of Office Filed with the Licensing County Clerk's Office

FLEMING’S FINEST
Katherine A. Fleming
kaf@hurwitzfine.com

Parents Entitled to UIM Benefits After Child’s Death in VMA With Uninsured Motorist. Exclusion Against Public Policy Under the Circumstances

GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
edg@hurwitzfine.com

Court Dismisses Declaratory Judgment and Bad Faith Claims as Duplicative of Breach of Contract Claim, and in Turn Dismisses Breach of Contract Claim Upon a Finding of No Coverage

O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
rpo@hurwitzfine.com

Texas’ Concurrent Cause Doctrine Bars Coverage Where Insured was Unable to Segregate Covered and Non-Covered Portions of Claim
Payment of Appraisal Award Precludes Bad Faith Claim Absent Independent Tort or Breach

ROB REACHES the THRESHOLD
Robert J. Caggiano
rjc@hurwitzfine.com

Still a lull in any cases on serious injury threshold from the Appellate Division. We will try again in two weeks.

LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
ihl@hurwitzfine.com

Court Grants Motion to Renew Petition and Vacates Master Arbitration Award, Based on Recent December 2023 Plea Allocution Finding Fraud, Corruption, and Misconduct

LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
lrh@hurwitzfine.com

Amendments Made by Chapter 356 of the Laws of 2024 to Insurance Law § 3420(g), Effective March 26, 2025

DOMENICA’S DIARY ON BAD FAITH
Domenica D. Hart
ddh@hurwitzfine.com

An Insurer’s Low Offer, Failure to Conduct an IME, Failure to Settle a Claim Within Full Reserve Authority, and Disputed Causation Do Not Support a Finding of Bad Faith Where the Insurer Acted Reasonably

NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
hasanderson@sanderson-law.com

The Reference to the Wrong Statute in a Marijuana Exclusion Found in a Homeowners’ Policy Introduced Ambiguity as to Whether That Exclusion Applied to the Cultivation of Marijuana for Medical Purposes Under License; In View of That Ambiguity, This Exclusion Did Not Apply to Exclude a Fire Loss

Enjoy the holiday season.

Dan

Hurwitz Fine P.C. is a full-service law firm providing legal services throughout the State of New York and providing insurance coverage advice and counsel in Connecticut and New Jersey.

NEWSLETTER EDITOR
Dan D. Kohane
ddk@hurwitzfine.com

ASSOCIATE EDITOR
Agnes A. Wilewicz
aaw@hurwitzfine.com

COPY EDITOR
Evan D. Gestwick
edg@hurwitzfine.com

INSURANCE COVERAGE/EXTRA CONTRACTUAL LIABILITY TEAM
Dan D. Kohane, Chair
ddk@hurwitzfine.com

Steven E. Peiper, Co-Chair
sep@hurwitzfine.com

Michael F. Perley

Agnieszka A. Wilewicz

Lee S. Siegel

Brian F. Mark

Scott D. Storm

Domenica D. Hart

Ryan P. Maxwell

Kyle A. Ruffner

Katherine A. Fleming

Evan D. Gestwick

Ryan P. O’Shea

Isabelle H. LaBarbera

Lexi R. Horton

Victoria S. Heist

FIRE, FIRST PARTY AND SUBROGATION TEAM
Steven E. Peiper, Team Leader
sep@hurwitzfine.com

Michael F. Perley

Scott D. Storm

NO-FAULT/UM/SUM TEAM
Dan D. Kohane
ddk@hurwitzfine.com

Ryan P. O’Shea
rpo@hurwitzfine.com

Kyle A. Ruffner
kar@hurwitzfine.com

APPELLATE TEAM
Jody E. Briandi, Team Leader
jeb@hurwitzfine.com

Topical Index

Peiper on Property and Potpourri
Lee’s Connecticut Chronicles

Ruffner’s Road Review

Ryan’s Federal Reporter

Storm’s SIU

Gestwick’s Garden State Gazette

Lexi’s Legislative Lowdown

KOHANE’S COVERAGE CORNER
Dan D. Kohane
ddk@hurwitzfine.com

04/09/25 Malan v. QPS 23-10 Development, LLC
Appellate Division, Second Department
Bond Carrier’s Obligation to Indemnify for Third Party Claims Preserved

Under a contract (the “original contract”) QPS 23-10 Developer, LLC (“QPS”) hired New Millennium Structures, LLC (“NMS”) to undertake concrete work for a construction project in Long Island City. Under the original contract, NMS agreed to indemnify QPS for any liability for personal injury sustained as a result of the performance of the concrete work.

In October 2014, as permitted by the terms of the original contract, QPS assigned the original contract to the defendant QPS 23-10 Development, LLC (“QPS Development”). That same month, General Casualty Company of Wisconsin (“General Casualty” |”) issued a performance bond and established itself as the surety with respect to the concrete work.

In June 2015, QPS Development declared that NMS had defaulted on its obligations under the original contract. Thereafter, QPS Development and General Casualty entered into a surety takeover agreement (the “takeover agreement”) whereby General Casualty undertook "to cause the performance of each and every one of the terms, covenants and conditions of the [original contract]." In August 2015, General Casualty, as surety, entered into a completion contract with Alpha/Omega Concrete Corp. (“AO Concrete”) to complete the concrete work.

On October 8, 2015, Malan, an employee of AO Concrete, allegedly sustained injuries when he fell at the construction site. In December 2015, the plaintiff commenced this personal injury action against the defendants, including QPS Development.

In January 2016, QPS Development submitted a claim to General Casualty in the sum of $12,580,506.56 for damages allegedly relating to New Millennium's default under the original contract. QPS Development and General Casualty settled that claim pursuant to a settlement agreement and release (“settlement agreement”) and an associated assignment of General Casualty's rights and obligations under the completion contract to QPS Development.

In March 2019, QPS Development commenced a second third-party action against General Casualty, asserting, inter alia, a cause of action for contractual indemnification. In its answer, General Casualty asserted a counterclaim against QPS Development for contractual indemnification.

QPS Development demonstrated its prima facie entitlement to judgment as a matter of law on the cause of action for contractual indemnification against General Casualty, and General Casualty failed to raise a triable issue of fact in opposition.

QPS Development submitted, the original contract, the takeover agreement, the settlement agreement, and the assignment. The original contract contains a broad indemnification provision obligating New Millennium to "defend, indemnify and hold harmless" QPS Development, as assignee of QPS Developer's rights under the original contract, with respect to "all losses [and] claims . . . arising out of or in connection with," inter alia, any personal injury sustained as a result of the performance of the concrete work. The takeover agreement incorporates the original contract by reference except in the case of conflict or inconsistencies, in which case the terms of the takeover agreement would "supersede and amend" the original contract. Further, the takeover agreement requires General Casualty to ensure that AO Concrete procured insurance, naming QPS Development and affiliated entities as additional insureds.

General Casualty contended that its indemnification obligation to QPS Development with respect to the plaintiff's personal injury claim was extinguished by the settlement agreement and the assignment. This contention is without merit.

Paragraph 8 of the settlement agreement expressly exempts from release "any claims by third parties for personal injury for which [General Casualty] is liable." This exception to the general release provisions is a specific provision that overrides the general release language. A contrary interpretation would nullify the personal injury exception contained in paragraph 8 of the settlement agreement. Under relevant principles of interpretation, the language of the settlement agreement demonstrates the parties' intent to preserve General Casualty's obligation to indemnify QPS Development with respect to the plaintiff's personal injury claim.

04/03/25 Structure Tone, Inc. v. Merchants Preferred Insurance Co
Appellate Division, First Department
Question of Fact as to Whether Employer’s Liability Was a Proximate Cause of the Plaintiff’s Injuries BUT Any Culpability on the Part of the Plaintiff Would Be Imputed to the Employer When Making That Determination

Old Republic's motion for summary judgment was properly denied because there are questions of fact as to whether the negligence of its named insured, Port Morris Tile & Marble Corp. (“Port Morris”), was a proximate cause of the underlying accident, thus triggering indemnification by Old Republic. The Court found, however, that If the injured plaintiff in the underlying action is found to have been a proximate cause of his accident, then respondeat superior would impute that culpability to Port Morris, his employer. Additionally, Port Morris's foreman testified that Port Morris was responsible for ensuring proper lighting and safety for its employees, which also raises a question of fact as to whether Port Morris may be found negligent.

Where two or more insurers bind themselves to the same risk and one pays the whole loss, the paying insurer has a right of action against his coinsurers for a ratable portion of the amount paid". However, even looking past the issue of whether Old Republic and Scottsdale bound themselves to the same risk, the two are not coinsurers because Old Republic's "other insurance" provision makes it primary, sharing pro rata with other primary policies, while Scottsdale's provision makes it excess. Therefore, "the coverage under Scottsdale's policy containing the excess clause does not come into play, and [its] duty to defend is not triggered, until the coverage under Old Republic's policy containing the pro rata clause has been exhausted".

Editor’s Note: The issue of whether the plaintiff’s culpable conduct – then the plaintiff is an employee – can be imputed to his or her employer is one that has been the subject of debate. If you can impute that liability, can a court ever find that the employer’s liability did not cause the accident, in whole or in part? I don’t like that decision.

PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
sep@hurwitzfine.com

Property

04/03/25 Lok-N-Logs v. Leatherstocking Coop. Ins. Co.
Appellate Division, Third Department
Sporadic Presence at Building Creates Question of Fact on “Occupancy” and “Vacancy” Issues

Plaintiff is the owner of a commercial warehouse facility in Sherburne, New York. The premises were damaged when individuals broke into the premises and stripped out the copper and brass within the building. Plaintiff then presented a claim for coverage under his commercial property policy with Leatherstocking. During the investigation, Leatherstocking confirmed that the second and third floors of the building were classified as vacant, and the last tenants to occupy the first floor of the premises left in December of 2019. As a result, Leatherstocking denied the claim on the basis of the vandalism exclusion which applies where the premises are vacant for more than 30 days prior to the loss and a second exclusion which removes coverage where the premises are vacant or unoccupied for more than 60 days.

In addressing Leatherstocking’s arguments, the Court noted that although unoccupied is undefined “it is the regular presence of inhabitants that makes occupancy.”

With respect to the vacancy exclusion, the Court noted that the policy is classified as “Cold Storage, Warehouse.” Here, plaintiff testified that although there were no active tenants in the building, he did store building materials in the premises as part of his construction business. On balance, the Court noted that a jury could find that the building was used for storage by the owners’ business and, therefore, was not “vacant.”

In addressing whether the building was “unoccupied,” the Court noted that plaintiff’s employees performed maintenance checks two times per week, occasionally stored items in the building and, perhaps even more occasionally, held garage sales at the building. However, the electric was disconnected, and no one was assigned to the premises, by plaintiff, on a regular basis. Thus, as with “vacancy,” the Court concluded a question of fact existed as to whether the building was “unoccupied.”

Potpourri

04/02/25 Thandi v. Otsego Mut. Fire Ins. Co.
Appellate Division, Second Department
Trial Transcripts Are Recoverable as Taxable Costs After Successful Appeal of Trial Verdict

After a successful appeal, defendant sought to tax all appropriate costs under CPLR 8301. This included, inter alia, the costs of trial transcripts. On application to the Queens County Clerk, the Clerk’s Office struck the costs for trial transcripts but entered the judgment on the remaining taxable costs and disbursements.

Defendant appealed, and the Second Department modified the judgment accordingly. Simply, under CPLR 8301, a party is entitled to the cost of trial transcripts because they were necessary for the preparation of the Record on Appeal.

04/01/25 Lora v. Manhattan Interiors, Inc.
Appellate Division, First Department
Lack of Negligence Results in Dismissal of Common Indemnity/Contribution Claims

Co-Defendant Owner attempted to maintain its crossclaim for common law indemnification and/or contribution against Remigio. However, the trial court already determined that Remigio bore no share of the negligence leading to plaintiff’s injuries. Where, as here, there is no active negligence attached to Remigio, it follows that he cannot be responsible for indemnity or contribution claims brought against him. There must be some finding of negligence before risk can be transferred via contribution principles.

LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
lss@hurwitzfine.com

03/28/25 Tahbaz v. Vigilant Ins. Co.
United States District Court, District of Connecticut
Lack of Defined Terms Sink Coverage Defenses

The Tahbazs purchased a Masterpiece Homeowners Insurance policy from Vigilant and umbrella coverage from Chubb. He sued the insurers for breach of contract and bad faith for failing to provide various coverages when he was captured by the Islamic Revolutionary Guard Corp of Iran for espionage.

In January 2018, the plaintiffs were traveling in Iran as part of wildlife conservation efforts in support of the Persian Wildlife Heritage Foundation, an organization co-founded by Mr. Tahbaz, dedicated to protecting endangered species in Iran. On January 10, 2018, Mr. Tahbaz was wrongfully arrested and detained by the IRGC on falsified espionage charges. The IRGC asserted that Mr. Tahbaz's "efforts to photograph endangered species were a guise to illegally access and collect information within numerous sensitive sites in Iranian territory," and accused Mr. Tahbaz of coordinating and funding the efforts of others engaged in similar activities. That same day, IRGC agents ransacked the plaintiffs' temporary residence in Iran and subjected Mrs. Tahbaz—who was present at the residence—to threats of violence.

A show trial was conducted in the IRGC's Revolutionary Courts at which Mr. Tahbaz was not permitted to present evidence or witnesses. Despite his demonstrable innocence, Mr. Tahbaz was convicted and sentenced to prison for ten years and a $600,000 monetary judgment. On September 18, 2023, following nearly six years of wrongful detention by the IRGC, Mr. Tahbaz was released as part of a diplomatic agreement, and both Plaintiffs were permitted to leave Iran and return to Connecticut.

Before, during, and after the IRGC Show Trial, Mr. Tahbaz was held at the notorious Evin prison, where he was "subjected to torture, prolonged solitary confinement, death threats, and other extreme techniques for interrogation and punishment." As a result, Mr. Tahbaz suffered numerous physical and psychological injuries. While Mr. Tahbaz was detained, Mrs. Tahbaz was contacted by anonymous individuals—believed to be IRGC agents—who offered to ransom Mr. Tahbaz's freedom in exchange for money. Mrs. Tahbaz was also wrongfully prohibited from leaving Iran for the duration of Mr. Tahbaz's detention and was further "subjected to other mistreatment by the IRGC."

Mr. Tahbaz incurred more than $100,000 in legal fees. Moreover, Mr. Tahbaz's extensive post-conviction relief efforts resulted in additional defense costs in excess of $2.2 million. Additionally, "[d]ue to their wrongful detention, Mr. and Mrs. Tahbaz lost income exceeding [$4 million] and incurred substantial medical and psychiatric expenses."

Plaintiffs sought coverage for these costs under the Policies. Despite timely notice, the carriers denied coverage, asserting, inter alia, "that trade and economic sanctions imposed by the Office of Foreign Assets Control ('OFAC') against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of the United States barred all coverage for [Plaintiffs] because their wrongful detention occurred in Iran." Defendants were advised that their position was inconsistent with OFAC guidance. Defendants’ refusal to provide coverage resulted in additional injuries to Plaintiffs, such as delayed compensation, psychological distress, and litigation costs.

The insured sued, claiming (1) breach of contract (Personal Liability coverage); (2) breach of contract (Kidnap Expenses coverage); (3) breach of contract (Family Protection coverage); (4) breach of contract (Uninsured/Underinsured liability coverage); (5) breach of the duty of good faith and fair dealing; and (6) unfair and deceptive practices in violation of the Connecticut Unfair Insurance Practice Act ("CUIPA") and the Connecticut Unfair Trade Practices Act ("CUTPA"). The carriers moved to dismiss.

The Court analyzed the motions as a multi-layered coverage dispute arising from the plaintiffs’ wrongful detention. First, the Court addressed whether the insured was entitled a defense for the Iranian Guard trial. The carriers argued that the espionage trial was not a “suit,” and it did not seek damages for personal injuries. Ultimately, the Court found the term “suit” ambiguous, as these covers did not define “suit.” The Court found the plaintiffs’ argument that the undefined term suit encompasses foreign criminal trials was reasonable; the carriers could cite to no contrary caselaw.

Next, the Court found that the policies’ term “damages” included the $600,000 Iranian monetary penalty. "Damages" was defined as a "sum that is paid or is payable to satisfy a claim . . . resolved by judicial procedure." The Court found that the judgment fit squarely within the definition, especially as the policies failed to include any exclusion for fines, penalties, and non-injurious damages.

Finally, the Court agreed with the insureds that the claims against them involved allegations of “wrongful entry” under the personal injury coverage. Though "wrongful entry" itself is not defined, the Court acknowledged that "it is a basic principle of insurance law that policy language will be construed as laymen would understand it . . ." R.T. Vanderbilt Co., 273 Conn. at 462-63. The insureds allege that the Revolutionary Guard’s allegations against Mr. Tahbaz—in particular, that he "engaged in acts of espionage, including illegally accessing and collecting information within numerous sensitive sites in Iran"—constitute "wrongful entry" within its ordinary meaning. In seeking dismissal, the insurers emphasized that "the gravamen of the charge is espionage—not wrongful entry," and argue that "under no reasonable interpretation can this charge be 'accurately characterized' as a suit for 'wrongful entry.'" In response, Plaintiffs contended that it is the facts alleged by the IRGC, not the title of the charge, that dictate Defendants' obligations under their duty to defend, and that here, the crux of the IRGC's allegations were that Mr. Tahbaz entered property where he was not permitted and engaged in misconduct on that property.

The Court agreed with the plaintiffs and refused to dismiss this claim of breach of contract. [It seems that the insureds should have cross-moved, as the Court has found that there was a duty to defend and indemnify the espionage trial.]

The Court then evaluated the KNR coverage claims. Here, the coverage afforded (a) "expenses incurred as the result of the actual or alleged wrongful taking of a covered person that includes a demand for ransom payment and occurs 'anywhere in the world except those places listed on the United States State Department Bureau of Consular Affairs Travel Warnings list at the time of the occurrence'"; and (b) "expenses incurred as a result of an unlawful act of violence or threat of violence to a covered person by a person who unlawfully entered the covered person's temporary residence while a covered person was present.” The plaintiffs argued that they were kidnapped and held for ransom and were entitled to insurance coverage.

The carriers argued that the “civil authority” and the Travel Warnings exclusions bar coverage. The crux of the coverage is whether the Iranian Revolutionary Guard is a “civil authority” within Iran. Since the term was undefined, the Court held that under these circumstances it is ambiguous. Factual disputes, however, precluded the Court from ruling on the Travel Warning exclusion. The Court noted that every country in the world appears, at some level, on the Travel Advisory system. “But even accepting that Iran was on the Travel Warnings list before it was phased out, Defendants seemingly ignore that under the updated Travel Advisory system, every country in the world is listed and assigned a "Level" between 1 and 4, with "Level 4" meaning "Do Not Travel." In this regard, assuming the Travel Advisory system was in place when Mr. Tahbaz was kidnapped, coverage could arguably be excluded altogether under the Policies, regardless of whether the events occurred in Iran or some comparatively safer country for travel, e.g., Canada.”

Because the policies listed an antecedent travel warning system, the Court would not allow the carriers to “summarily re-write the policies.” This prong of the motion to dismiss was also denied.

The Court, however, granted the motion to dismiss the UM/UIM claim under the umbrella policy. The umbrella coverage, apparently, had no ties to auto liability but rather paid those amounts that a covered person is “legally entitled to receive from an uninsured or underinsured negligent person.” The insureds claimed that there were legally entitled to damages for their mistreatment by the Iranian agents. The carriers argued that the pleading did not establish a right to damages and that the Court lacked jurisdiction over the Iranian Revolutionary Guard agents. The Court held that the Complaint did not allege the particular "applicable statutes and regulations" which entitle the insureds to recovery from the IRGC agents. Because of the pleading deficiency, that count was dismissed. [Presumably, the insureds will be able to replead with specificity.]

The Court dismissed the bad faith counts, holding that the allegations were purely conclusory, failing to plausibly allege bad faith. The unique nature of these claims doomed the CUTPA/CUIPA claim, because the insureds relied entirely on the claims in this matter to try to plead an unfair business practice. This is insufficient under the pleading requirements.

RUFFNER’S ROAD REVIEW
Kyle A. Ruffner
kar@hurwitzfine.com

04/03/25 State Farm Mut. Auto. Ins. Co. v. Lifeline Med. Imaging, P.C.
Appellate Division, First Department
Summary Judgment Denied as Premature as Insurer Did Not Give Provider an Objective Justification for Requesting Examination Under Oath

State Farm sought a declaration that it was not obligated to provide no-fault coverage for claims submitted by Lifeline, a medical provider. State Farm argued that the provider failed to meet a condition precedent to coverage by failing to appear for duly scheduled examinations under oath (EUOs) and by refusing to produce an individual who could provide the information needed to verify Lifeline's claims. The Supreme Court granted State Farm’s motion for summary judgment declaring that State Farm had no obligation to pay bills submitted by the provider. However, the Appellate Division reversed, denied the summary judgment motion, and vacated the Supreme Court’s declaration.

The Appellate Court held the motion should have been denied as premature, because State Farm failed to offer Lifeline an objective justification for requesting the EUOs, as required by the governing no-fault regulations (see Country-Wide Ins. Co. v. Alicea, 214 AD3d 530, 531 [1st Dept 2023]; Country-Wide Ins. Co. v. Delacruz, 205 AD3d 473, 473 [1st Dept 2022]). The Court explained that the criteria by which State Farm decided that an EUO was required is essential for Lifeline to oppose State Farm's summary judgment motion, and those criteria are exclusively within the State Farm's knowledge and control (11 NYCRR 65-3.5[e]). In addition, despite State Farm's assertion, it did not fully respond to Lifeline's discovery request for a copy of the objective standards relied upon when the EUO was scheduled.

Accordingly, because State Farm's rationale for requesting the EUOs had not been determined, the issue of whether State Farm's no-coverage defense is subject to preclusion could not yet be determined.

04/01/25 Nationwide Gen. Ins. Company v. Raheem Gaines, et al
Appellate Division, First Department
Failure to Attend IME is Non-Precludable Defense Applicable to All Claims

The Supreme Court denied the insurer’s motion for summary judgment declaring that they have no obligation to pay no-fault benefits to defendant medical providers in connection with the underlying motor vehicle collision. The Appellate Division reversed, holding the insurer was entitled to summary judgment because they established that the injured claimant failed to attend properly noticed independent medical examinations (IMEs), which precluded coverage under the policy.

In support of its motion, the insurer submitted the affidavit of an employee from the company that scheduled the IMEs, who stated that he sent two IME notices to the claimant and that the claimant failed to appear on either date. Nationwide also submitted the affirmations of the IME doctor, which were consistent with the scheduling employee's affidavit in that claimant failed to appear for the examinations.

The Court held that the medical providers' argument that the IMEs were untimely was unpersuasive. Where an insurer sends notices scheduling IMEs prior to the receipt of claims, the notification requirements for verification requests under 11 NYCRR 65-3.5 and 65-3.6 do not apply (citing Hereford Ins. Co. v. Lida's Med. Supply, Inc., 161 AD3d 442, 443 [1st Dept 2018]). Further, the Court held that the failure to attend a properly noticed examination is a non-precludable coverage defense, which applies to all claims and is not determined on a bill-by-bill basis. As such, the Court rejected the defendant’s argument that the insurer was required to establish timely disclaimer of coverage in light of claimant's failure to attend the medical examinations.

RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
rpm@hurwitzfine.com

04/07/25 Cnty. of Ulster v. All. of Nonprofits for Ins. Risk Retention Grp.
United States Court of Appeals, Second Circuit
While Policy Is Primary for Liability Assumed Under “Insured Contract,” Court Finds It Co-Excess Due to Direct Insurer-Insured Relationship

While Barbara Hyde, a Jewish Family Services of Ulster County ("JFS") volunteer, was driving Joyce Northacker to a medical appointment through the County of Ulster’s Senior Transportation Program, Hyde lost control of the car and collided head on with a County-owned bus. Hyde died and Northacker was injured. Northacker sued the County, JFS, and the bus driver to recover for her injuries.

The County separately sued Alliance of Nonprofits for Insurance Risk Retention Group (“ANI”), insurer for JFS, seeking a declaratory judgment that ANI Policy covers the County's liability in the Northacker action. Following cross-motions, the district court granted summary judgment for the County.

The Second Circuit agreed with the County that at the time of the accident, Hyde was an insured JFS volunteer for purposes of the ANI Policy and that, accordingly, the ANI Policy treats the County as an insured to the extent of its liability resulting from Hyde's conduct. Specifically, the ANI Policy provided that the definition of "insured" includes "[a]nyone volunteering services to [JFS] . . . while using a covered 'auto' [JFS doesn't] own, hire or borrow to transport [JFS] clients or other persons in activities necessary to [JFS's] business." The Court found that an Agreement for Professional Services (the "Agreement") between the County and JFS was in effect and that the Agreement unambiguously establishes that drivers like Hyder were JFS volunteers, regardless of whether they also acted as volunteers for the County.

Since Hyde qualified as an insured, the Second Circuit also found that, under the ANI Policy, the County was too. This was because the policy includes as an omnibus insured “[a]nyone liable for the conduct of an insured described above but only to the extent of that liability.” While ANI argued that Hyde was an insured by way of an endorsement, rather than those categories of insureds literally “described above” on the form, the Second Circuit noted that Hyde was an insured by way of an endorsement expressly adding JFS volunteers to the definition of “Who is an insured,” placing it “on the same footing with the other categories of insureds” that were “described above.”

Now for the good stuff.

It was undisputed that Hyde’s personal auto insurance provided the first layer of coverage. However, the County was insured by New York Municipal Insurance Reciprocal (“NYMIR”) and the question became “whether the ANI Policy provides the next layer of coverage, or whether it is co-excess with the NYMIR Policy.” The district court found the former. The Second Circuit disagreed.

Finding the policies co-excess, the Second Circuit noted that while “[t]he ANI Policy and the NYMIR Policy contain nearly identical ‘other Insurance’ clauses, except that the ANI Policy ‘is primary for any liability assumed under an “insured contract,”’” ANI’s coverage was not applicable due to liability assumed under such a contract. While the Second Circuit

“agree[d] that if the ANI coverage applied by virtue of the indemnification provision in the Agreement, the ANI coverage would be primary [,] . . . [here,] the County is an ‘insured’ under the terms of the ANI Policy itself; its status as an ‘insured’ under the ANI Policy is independent of any potential right of indemnification from JFS pursuant to the Agreement. Because the liability at issue doesn't involve ‘liability assumed under an “insured contract”’ that is part of an agreement ‘other’ than the ANI Policy, the ANI Policy and the NYMIR Policy are co-excess.”

Maxwell’s Minute: Note the importance of this last issue. The ANI Policy expressly provides that its coverage will pay before NYMIR does, so long as ANI’s named insured, JFS, is found liable under an “insured contract.” This in turn means that NYMIR will need to insist upon the continued pursuit of claims by the County against JFS under the Agreement, so that contractual liability remains on the table. That said, the underlying action was discontinued in January 2024, and it is unclear to me whether that issue was preserved by NYMIR or the County leading up to the discontinuance.

STORM’S SIU
Scott D. Storm
sds@hurwitzfine.com

03/31/25 Erenrich v. Cincinnati Ins. Co.
United States District Court, W.D. Pennsylvania
Court Granted Insurer’s Motion to Compel Appraisal During Litigation on the Amount of Business Income and Extended Business Income Loss

Cincinnati Ins. invoked an appraisal provision in the policy with its insured Weatherizer, Inc., on the amount of business income and extended business income loss. Weatherizer refused to participate in the appraisal process. Weatherizer insists that Cincinnati's motion is procedurally defective, untimely, and prejudicial and that the meaning of business income under the Policy is beyond the scope of appraisal.

Cincinnati's Motion to Compel Appraisal was granted. Weatherizer was ordered to appoint a competent and impartial appraiser and proceed with the appraisal process.

The case initially involved additional claims and parties, but only Weatherizer's loss of business income and related bad faith claims remain after a partial settlement. Cincinnati has issued payments exceeding the amount it subsequently determined to be the actual loss.

The Court found that all conditions precedent for appraisal had been met, and that Cincinnati's appraisal demand complied with the policy's procedure. The timing of the appraisal demand was reasonable, coming shortly after a court-mandated mediation session and within a reasonable time after discovery. Cincinnati demanded appraisal only eight days after the parties' court-mandated mediation session, a session during which the parties settled part of the litigation. Prior to this settlement, the case involved both additional claims and parties. Post-settlement, only Weatherizer's loss of business income and related bad faith claims remain. The appraisal demand also came within a reasonable time after discovery that included analysis of the loss of business claim and deposition testimony.

The Court relied on precedent from Pennsylvania courts and other jurisdictions to determine that disagreements over valuation methodology fall within the scope of business loss and is appropriate for appraisal. The appraisal provision does not restrict the appraiser's methodology or prohibit calculating business loss based on forensic accounting principles. As Cincinnati explains, methodology determinations pertain to the value of the business loss, not whether the loss was covered, and, thus, are appropriate topics for appraisal.

The well-established public policy of Pennsylvania encourages the settlement of disputes about the amount of loss by appraisal. A condition precedent to appraisal is that the insurer admits coverage and disputes only the dollar value of the loss. A coverage dispute, improper for appraisal, occurs when an insurance company claims an exclusion of a loss under the terms of the insurance policy. A mere disagreement over the extent of damage or whether a covered peril is the cause of certain damage is a dispute regarding the amount of loss and is proper for appraisal.

The Court emphasized the public policy favoring appraisal in Pennsylvania, even after the commencement of insurance coverage litigation.

03/25/25 Belotti v. State Farm Fire & Cas. Co.
United States District Court, M.D. Pennsylvania
Insurer’s Use of Software by Xactimate, Known as "New Construction," and Its Labor Efficiency Setting to Estimate the Repair Costs for Fire Damage to the Plaintiffs' Home Was Not Bad Faith Manipulation of the Xactimate Estimating Application or Bad Faith Use of the Appraisal Process

The Court granted State Farm's motion for summary judgment on all claims. The plaintiffs' motion for class certification and State Farm's motion to exclude expert testimony were denied as moot.

The plaintiffs' home was damaged by fire. The plaintiffs had a homeowners insurance policy with State Farm. State Farm estimated repair costs using Xactimate software with a "new construction" labor efficiency setting. The action challenges State Farm's use of software by Xactimate, known as "new construction," and its labor efficiency setting to estimate the repair costs for fire damage. The plaintiffs argue that the defendant was contractually obligated under the Policy to use a specific estimate setting when estimating the value of their losses. The plaintiffs further contend that when the defendant used a "new construction" setting, rather than its "repair/reconstruction" model, the defendant breached its contract. The defendant has moved for summary judgment on this claim, arguing that it had no contractual duty to use a particular setting when estimating losses and it did not breach its loss settlement obligations.

The adjuster selected the "new construction" labor efficiency because the plaintiffs' home would not be occupied during the repair work, and because once demolition was completed and the wall finishes removed, the repair work would essentially be new construction. The public adjuster’s estimate was substantially higher and prepared using Xactimate estimating software, but with the application of the "Restoration/Service/Remodel" labor efficiency setting. The parties disagreed on the amount of the loss and went through an appraisal process. The final appraisal award was higher than State Farm's initial estimate but closer to its estimate than the public adjuster’s. The appraisal award was not prepared using Xactimate and did not use either Xactimate's "new construction" or "Restoration/Service/Remodel" labor efficiency settings.

The Court held that the insurance policy did not contractually obligate State Farm to use a particular estimation method when calculating repair costs. The Policy unambiguously imposes no contractual duty to use a particular estimate when estimating losses under the provisions, and thus, concludes the defendant did not breach any contractual obligation in creating its estimate.

State Farm did not act in bad faith under the Pennsylvania bad faith statute (42 Pa. C.S.A. § 8371) by initiating the appraisal process or in its handling of the claim and the plaintiffs failed to prove the elements required for a claim under the Pennsylvania Unfair Trade Practices and Consumer Protection Law. An insurer, however, does not need to show correct estimations, but rather a reasonable basis for its decision to deny benefits.

The plain language of the insurance policy did not require State Farm to use any particular estimation method, so there was no breach of contract. State Farm promptly paid the initial estimate and the additional amount after appraisal, showing no bad faith in claim handling. The appraisal process was valid under the policy terms and not evidence of bad faith.

In asserting a bad faith claim, the plaintiffs make allegations of State Farm's bad faith throughout the appraisal process. The Court finds, however, that the plaintiffs have failed to identify any evidence of any frivolous or unfounded refusal to pay proceeds of a policy as required by a bad faith claim. The record shows that State Farm provided a check to the plaintiffs for its estimated damages the same day it provided the plaintiffs with an estimated cost of repairs. Moreover, it is undisputed that State Farm paid an additional $66,690.45, the difference between State Farm's estimate and the ultimate appraisal award, promptly after the conclusion of the appraisal process. The Court agrees that the fact the parties' appraisers ultimately assigned a higher value to the claim than State Farm's estimate does not mean State Farm acted in bad faith. That is, after all, what the appraisal process is for—settling disputes about the value of a claim.

04/01/25 Med. Supply of NY Corp. v. State Farm Mut. Auto. Ins. Co.
New York State Supreme Court, County of Kings
A Signature Is Whatever the Signatory Says it Is, but a Notarial Signature Must Be Consistent With the Signature Affixed Upon the Oath of Office Filed With the Licensing County Clerk's Office

The task of signing with a uniquely scripted flourish of an individualized signature, whether for informal correspondence or legally binding documents, is generally taken for granted until consequences of its unlawful reproduction arise. A signature is whatever the signatory says it is, but a notarial signature must be consistent with the signature affixed upon the oath of office filed with the licensing county clerk's office.

Plaintiff submitted the Kuperman Affidavit in opposition to Defendant's Motion for Summary Judgment in a No-Fault case. The notarial acknowledgment on the Kuperman Affidavit contained the proper statutory stamp and language, but the signature line above "Notary Public" was written as "February" instead of the notary's name. Plaintiff's counsel, who was also the notary public, claimed at oral argument that "February" was his signature. Defendant did not object to the admissibility of the Kuperman Affidavit in its reply but raised the issue at oral argument.

The purpose of notary public laws is to provide certitude of authentication by a licensed governmental official. N.Y. Exec. Law 135-C deems a notary public's electronic signature reliable if it meets standards approved by the secretary of state, including being unique to the notary public, capable of independent verification, retained under the notary public's sole control, attached to the electronic record, and linked to the data in a manner that detects and may invalidate subsequent alterations. N.Y. Exec. Law 135-C and 137 imply that a notary's signature should be unique, capable of independent verification, not easily alterable or reproducible, and consistent with the signature affixed upon the oath of office provided to the licensing County Clerk.

While the intent of the principal signatory to the substance of the document may be an element in determining whether an adopted marking is indeed their signature, this is not the case for a notary public. The defect in the notarial signature on the Kuperman Affidavit is considered a technical defect that can be disregarded in the absence of substantial prejudice to the defendant. The defendant waived its right to object to the defect by not raising the issue in its reply.

The Court found that while a signature can be whatever the signatory claims it to be for a lay person, a notary public's signature must be consistent and verifiable. The use of "February" as a signature was inconsistent with the notary's oath of office and therefore defective. However, the Court determined that this defect was technical in nature and could be disregarded, citing precedents where similar defects were not considered fatal to the admissibility of documents. The Court reasoned that the defendant was not unduly prejudiced by the consideration of the Kuperman Affidavit, as it had a full opportunity to challenge its contents in its reply.

Courts have held that a notary's failure to sign a document is considered a technical defect that may be disregarded or cured by subsequent affidavit if the defect is not jurisdictional and does not cause undue or substantial prejudice to a substantial right. N.Y. C.P.L.R. Law 2001 allows courts to disregard such defects in the absence of substantial prejudice to the defendants.

The Court also held that the defendant waived its right to object to the form of the affidavit by not raising the issue in its reply, pursuant to CPLR § 2001.

The Court granted the Defendant's Motion for Summary Judgment to the extent that Defendant was found to have timely issued its Denials. However, the Court also found that Plaintiff had established a triable issue of fact regarding Outstanding Verification Requests, thus partially denying summary judgment on that issue.

FLEMING’S FINEST
Katherine A. Fleming
kaf@hurwitzfine.com

03/26/25 Earll v. Farmers Mut. Ins. Co.
South Dakota Supreme Court
Parents Entitled to UIM Benefits After Child’s Death in VMA With Uninsured Motorist. Exclusion Against Public Policy Under the Circumstances

The Earlls’ daughter was killed in a motor vehicle accident when an underinsured motorist (Pigg) ran a stop sign and crashed into her vehicle. The daughter had a policy with Farmers Mutual covering her vehicle that included $100,000 in UIM coverage. Pigg had a policy with Progressive Insurance with limits of $25,000. The Earlls were appointed as co-personal representatives of their daughter’s estate. Progressive tendered the $25,000 to the Earlls and to the Estate. Farmers Mutual gave permission to settle the claim without jeopardizing the UIM claim and paid $75,000 in UIM benefits under the daughter’s policy, offsetting the amount received from Progressive.

The Earlls sought a further $250,000 in UIM benefits under a separate motor vehicle policy they purchased from Farmers Mutual, which provided coverage for two vehicles owned by the Earlls that were not involved in the accident. The policy included UIM coverage for “insureds.” The policy defined an “insured” to include a “relative.” A “relative” was further defined as “a person related to you or your spouse by blood . . . who lives with you.” At the time of the accident, Rebecca lived with her parents and qualified as an insured for the purpose of UIM coverage under the policy.

Farmers Mutual denied UIM coverage to the Earlls based on an “owned by not insured” exclusion in the policy because the daughter was driving a vehicle that was not listed in the declarations of her parents’ policy at the time of the accident. The Earlls commenced a declaratory judgment action, seeking a declaration that they were entitled to UIM benefits for all claims and liability arising from the accident up to the policy limits and that the exclusion violated public policy and was unenforceable. Farmers Mutual argued there were reasonable exclusions from UIM coverage. By contrast, the Earlls argued that the South Dakota Supreme Court has held that similar exclusions violate public policy in the context of uninsured motorist coverage (UM). Due to the shared statutory purpose of UM and UIM coverage and the mandatory requirement both types of coverage, the Earlls argued that the exclusion violated public policy by abrogating the statutorily mandated coverage that is personal to each insured.

The circuit court agreed with Farmers Mutual and granted its motion for summary judgment, acknowledging the purpose of UM/UIM coverage is to protect the injured parties due to the negligence of an uninsured/underinsured motorist. Nevertheless, the circuit court included the exclusion was enforceable based on the South Dakota Supreme Court’s decision in De Smet Insurance Company of South Dakota v. Pourier.

On appeal, the South Dakota Supreme Court noted the public policy of the Legislature for UM and UIM coverage was clear. When read together, the statutes for UM and UIM mandate coverage in every motor vehicle liability insurance policy and require an insurer to pay UM and UIM benefits to any insured who has not fully recovered against an uninsured or underinsured driver. UIM coverage follows the insured and not the insured vehicle. Because the South Dakota Supreme Court’s decision in Pourier had overlooked the public policy underlying UIM coverage and improperly tied the mandatory UIM coverage to the insured vehicle rather than the insured person, the Court found the decision had led to a fragmented application of the law, had created uncertainty in subsequent cases, and was inconsistent with the reasoning in prior and subsequent decisions.

Accordingly, the Court reversed its decision in Pourier and the circuit court’s grant of summary judgment, holding that the “owned but not insured” exclusion to UIM coverage in motor vehicle policies violated South Dakota public policy when used to deny coverage to an insured individual under similar circumstances.

GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
edg@hurwitzfine.com

03/29/25 Vincent Cusumano Architect P.C. v. Berkshire Hathaway Direct Ins. Co.
United States District Court, District of New Jersey
Court Dismisses Declaratory Judgment and Bad Faith Claims as Duplicative of Breach of Contract Claim, and in Turn Dismisses Breach of Contract Claim Upon a Finding of No Coverage

The plaintiff, a licensed architect, purchased a professional liability insurance policy to replace one from another carrier that was expiring. Plaintiff alleged that, prior to purchasing the policy, Berkshire Hathaway assured that the policy would provide coverage on a claims made basis for potential claims arising out of the plaintiff’s prior operations.

The policy plaintiff purchased included a provision providing that the policy would cover claims of negligence, errors, or omissions in providing professional services, as well as claims against directors or officers of the named insured arising from their actions taken on behalf of the insured. For those kinds of claims, the policy continued, if the named insured first learns about the claim during the policy period, and previously had continuous insurance coverage that would have covered the claim, Berkshire agreed to cover that claim even though it is not the result of an occurrence during the stated policy period. (Emphasis Supplied).

The policy was issued approximately three months after the plaintiff’s prior professional liability policy terminated.

Later, once the Berkshire policy was in effect, plaintiff was sued over a renovation job gone wrong. Berkshire denied coverage under the above-referenced provision, which the District Court calls the “continuous gap provision.” Berkshire then moved to dismiss a handful of the plaintiff’s several causes of action. This decision followed.

The District Court dismissed the plaintiff’s first cause of action, seeking a declaratory judgment that they were owed coverage. The District Court began by noting that declaratory judgment actions commenced (or in this case, removed to) federal court are governed by the federal declaratory judgment act. That act requires there to be an actual controversy allowing the federal court to declare the rights and other legal relations of the parties. The District Court noted that a declaratory judgment is appropriate where the declaration itself would terminate the controversy giving rise to the proceeding. On the other hand, a declaratory judgment is inappropriate under the federal declaratory judgment act where it calls upon the Court to decide present liabilities of one party to another, or where the cause of action is duplicative of any others asserted in the same case.

In this case, the Court dismissed the plaintiff’s cause of action seeking a declaratory judgment, on the basis that it was duplicative of the plaintiff’s breach of contract claim, since both claims arose out of the very same conduct and sought the same relief. The Court also noted that rather than asking the Court to decide upon legal rights and obligations of the parties in anticipation of some future conduct (which the federal declaratory judgment act requires), the plaintiff was using this cause of action to ask the Court to declare Berkshire’s present obligations. Since the underlying action in which the plaintiff was sued was already ongoing, the Court ruled that a declaratory judgment would be inappropriate as the claim was no longer prospective.

Next, the Court examined the above continuous gap provision in assessing the plaintiff’s breach of contract claim. The Court held that the provision on its face barred coverage for the plaintiff’s claim, since there was a three-month gap in coverage between plaintiff’s prior policy and the Berkshire policy. The Court was unpersuaded by the plaintiff’s argument that Berkshire’s representation that the policy would cover the plaintiff for prior work performed, on a claims made basis, since that was a pre-contractual communication, while a breach of contract claim looks only to what is provided by the contract itself.

Lastly, the Court dismissed the plaintiff’s bad faith claim. Under New Jersey law, to sustain a claim against an insurance carrier for bad faith, the plaintiff must show that the carrier had no “fairly debatable” reason for failing to pay the claim, and that the carrier knew and/or disregarded its lack of reasonable basis in denying the claim. The test to determine whether a carrier has a “fairly debatable” reason for not paying a claim is to ask whether the insured could have established a right to summary judgment as a matter of law on its claim at the time of the alleged bad faith conduct. Because the language of the policy on its face barred coverage for the plaintiff’s claim, plaintiff was unable to meet this standard. Also, the Court noted that if a bad faith claim is based on the same conduct as the breach of contract claim, the bad faith claim must be dismissed as supplicative of the breach of contract claim as a matter of law.

O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
rpo@hurwitzfine.com

03/24/25 Mitchell v. Praetorian Ins. Co.
United States Court of Appeals, Fifth Circuit
Texas’ Concurrent Cause Doctrine Bars Coverage Where Insured Was Unable to Segregate Covered and Non-Covered Portions of Claim

In September 2020, Mitchell filed a claim with Praetorian, her homeowner’s insurance company. Mitchell’s claim involved damage to her roof, ceilings, walls, and floors. Praetorian initially concluded that her covered loss fell below her deductible and closed the claim. Through further inspection, Praetorian issued a payment on Mitchell’s claim. Additional payments followed. Mitchell claimed the losses were caused by wind, while Praetorian determined the losses were caused by improper tarping and bathtub water spillover, which fell within exclusions.

Eventually, Mitchell invoked her appraisal rights in October 2021. The appraisal process fell apart as Mitchell contested the proposed scope of settlement. Mitchell then filed suit. After prior motion practice Mitchell’s only remaining claims were her breach of contact claim and statutory bad faith under Texas Code § 541.060(a)(3). Praetorian then moved for summary judgment on the concurrent-causation doctrine. In opposition Mitchell relied upon a report that contained her estimated repair costs.

On appeal, the Fifth Circuit explained Texas’s concurrent-causation doctrine. The doctrine applies when covered and excluded events combine to cause a loss and are inseparable, then the policy’s exclusions apply, and no coverage is afforded. It is the insured’s burden to segregate the damage and an inability to do so is fatal to an insured’s claim.

Under this standard, Mitchell failed to segregate the damages. The report she submitted in opposition contained an estimate of repair costs only. What the report did not do was opine on the causes of loss for any damage claimed. So, Mitchell was left with Praetorian’s expert reports that concluded the loss was either excluded or a combination of both covered and non-covered losses that could not be separated.

Editor’s Note: For those wondering, New York does not follow the concurrent cause doctrine. Instead, New York looks to the dominant proximate cause of a loss to determine coverage. (Greenberg v Privilege Underwriters Reciprocal Exch., 169 AD3d 878 [2d Dept 2019]). Meaning if the dominant proximate cause of a loss is an excluded peril, then the exclusion applies. The inverse is also true.

03/24/25 First Baptist Church Daisetta Tex. v. Church Mut. Ins. Co.
United States Court of Appeals, Fifth Circuit
Payment of Appraisal Award Precludes Bad Faith Claim Absent Independent Tort or Breach

First Baptist submitted claim for to Church Mutual for wind and hail damage. Church Mutual found the claimed damage was below the policy’ deductible. First Baptist then enforced its appraisal rights. Church Mutual then paid the appraisal award. Not happy, First Baptist filed a bad faith suit under Texas Code § 541 and violations of § 542 of Texas’s Insurance Code. Section 542 is Texas’s Prompt Payment of Claims Act.

Texas law holds that when an insured seeks only actual damages are policy benefits already paid via appraisal, then an insured cannot recover for bad faith. First Baptist’s acceptance of the appraisal award was fatal because it failed to present any evidence supporting an independent tort or breach of any duty. For this reason, the Court of Appeals affirmed the grant of Church Mutual’s motion for summary judgment.

ROB REACHES the THRESHOLD
Robert J. Caggiano
rjc@hurwitzfine.com

Still a lull in any cases on serious injury threshold from the Appellate Division. We will try again in two weeks.

LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
ihl@hurwitzfine.com

03/20/25 American Tr. Ins. Co. v. Rutland Med., PC
Supreme Court of the State of New York, New York County
Court Grants Motion to Renew Petition and Vacates Master Arbitration Award, Based on Recent December 2023 Plea Allocution Finding Fraud, Corruption, and Misconduct

In 2018, Denisha Walls allegedly sustained injuries in an auto accident, and filed a first party no-fault claim with American Transit Insurance Company (“American Transit”). In relation to the claim, Rutland Medical PC (“Rutland”) sought reimbursement for treatment to Wells, which American Transit denied.

The claims were submitted to arbitration in 2022, and Rutland was issued an award in its favor. American Transit filed a petition to vacate the award, arguing it was procured by corruption, fraud, and misconduct. American Transit submitted a Federal indictment in support of the petition, alleging that the owners of Rutland participated in a criminal scheme to exploit insurance programs designed to protect victims from 2008 through 2021. The indictment alleges that Respondent’s owners used medical professional corporations they owned to bill insurance companies for unnecessary and excessive medical treatments and falsifying clinical findings of injuries.

The original petition was denied on the grounds that the indictment itself was no proof of fraud.

American Transit subsequently moved to renew the petition, submitting a December 18, 2023, allocution in the Federal action against Rutland’s owners. The plea allocution submitted confirmed that the owner pled guilty and agreed “not to dispute” that from 2008 – 2021 the “defendant…unlawfully own[ed] and r[a]n clinics…including…Rutland Medical.” The plea additionally detailed the scheme perpetrated by Rutland’s owners to fraudulently bill insurance companies in relation to No-Fault benefits, and for coaching medical practitioners to lie under oath during Examinations under Oath.

To succeed on a motion to renew, a party must show that there is (1) new facts not offered on the prior motion or (2) there has been a change in the law that would change the prior determination and offer a reasonable justification for the failure to present such facts in the initial motion.

The Court found that American Transit satisfied the requirements of making a motion to renew. The guilty plea and allocution occurred after the underlying arbitration awards were issued and the original petition was filed. As such, American Transit could not have previously relied on the information to make an argument previously.

Based on the recent evidence submitted, American Transit’s motion to renew was granted. Upon renewal, the Court vacated the prior decision, and vacated the arbitration award dated July 22, 2022, and the master arbitration award dated October 25, 2022.

LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
lrh@hurwitzfine.com

04/11/25 N.Y. Insurance Law § 3420(g) and 11 NYCRR 60-1
New York State Department of Financial Services
Amendments Made by Chapter 356 of the Laws of 2024 to Insurance Law § 3420(g), Effective March 26, 2025

Previously, motor vehicle liability insurers were required to provide supplemental spousal insurance unless the named insured elected in writing to decline or refuse the insurance in the policy.

Chapter 356 of the Laws of 2024 (“Chapter 356”) amended Insurance Law § 3420(g) to require that motor vehicle liability insurers automatically provide supplemental spousal liability insurance only where the first named insured has indicated that they have a spouse on the insurance application.

Insurers are not required to automatically add or remove supplemental spousal liability (“SSL”) insurance from a policy when the named insured’s marital status changes after policy issuance. The named insured must request the addition or removal of SSL insurance in writing.

If a motor vehicle liability policy does not include SSL insurance, the insurer must notify the first named insured at least once a year that SSL coverage is available. The notifications must be contained on the front of the premium notice in boldface type and include an explanation of the SSL insurance and the premium of SSL insurance. The notification must notify the insured that SSL insurance is included in the policy or available.

DOMENICA’S DIARY on BAD FAITH
Domenica D. Hart
ddh@hurwitzfine.com

04/04/25 Ockford, et al v. Encompass Ins. Company
United States District Court for the Eastern District of Pennsylvania
An Insurer’s Low Offer, Failure to Conduct an IME, Failure to Settle a Claim Within Full Reserve Authority, and Disputed Causation Do Not Support a Finding of Bad Faith Where the Insurer Acted Reasonably

On December 16, 2022, Plaintiffs, Ockford and Herbst, were struck by a car, while walking across the street in Newtown, PA. The tortfeasor had liability limits of $25,000. Plaintiffs had an auto policy with Encompass Insurance, providing $100,000 per person in UIM coverage, stacked by two vehicles, for a total of $200,000 per person in UIM benefits. Plaintiffs reported the accident to Encompass on December 22, 2022, and Encompass opened a UIM claim on January 3, 2023. Beginning on January 9, 2023, Encompass periodically contacted Plaintiffs' counsel for information concerning Plaintiffs' injuries, treatment, treatment plans, wage loss, and photographs. Plaintiffs were still treating through September 2023. Upon consent by Encompass, Plaintiffs settled with the tortfeasor for its limits in November 2023. On December 7, 2023, Encompass received emergency room medical records from Plaintiff and was advised further medical records were forthcoming. Based on the medical evidence provided, Encompass made an offer, subtracting the tortfeasor’s payment, to Plaintiffs on December 11, 2023. Further medical records were sent to Encompass in January and March 2024. Encompass made 2 more offers to settle in January and March.

In April 2024, Plaintiffs filed suit in state court claiming breach of contract and bad faith, pursuant to 42 Pa. C.S.A. § 8371. The case was removed to Federal Court. In January 2025, while litigation was pending, Mr. Herbst's UIM claim was resolved. Encompass filed a motion for partial summary judgment, seeking dismissal of the Plaintiffs’ bad faith claims.

Recovery for bad faith under PA statutory law requires a plaintiff must show (1) that the defendant did not have a reasonable basis for denying benefits under the policy; and (2) that the defendant knew or recklessly disregarded its lack of reasonable basis in denying the claim. Absent a definition in the statute, PA has defined bad faith to be any frivolous or unfounded refusal to pay proceeds of a policy. Bad faith is a high burden to meet. It must be proven by clear and convincing evidence and not merely insinuated. The Court, citing to Bostick v. ITT Hartford Grp., 56 F. Supp.2d 580, 587 (E.D. Pa. 1999), noted “[T]his heightened standard requires the insured to provide evidence ‘so clear, direct, weighty and convincing as to enable a clear conviction, without hesitation’ about whether or not the defendants acted in bad faith”. Ockford v. Encompass Ins. Co. at 9.

To defeat bad faith, a reasonable basis for an insurer’s actions or omissions is needed. The Court found Encompass’ reasonable basis for its actions and omissions and addressed each of Plaintiffs’ allegations. Plaintiffs first alleged Encompass’ initial offer of $3,000 and $10,000 respectively to each Plaintiff was highly unreasonable. The Court disagreed. A low offer is not treated as bad faith if there is a reasonable relationship to the insured’s loss. The Court found the initial offer reasonable considering the medical records received as of the offer date. Plaintiffs also argued that Encompass’ increase in the offers to $32,000 and $91,000 respectively, despite no significant changes with Plaintiffs' medical conditions, were arbitrary. Distinguishing two cases Plaintiffs cited wherein allegations of bad faith were sufficient to deny summary judgment, the Court found that there was a precipitating event to explain the increased offers. Encompass increased the offers when it received additional information involving Plaintiffs' medical treatment and wage losses. The Court also dismissed Plaintiffs’ arguments that the offers were lower than the reserves. Failure to settle a claim within the full authority of the reserves is not bad faith. The court indicated its reluctance to set a rule requiring an insurer to make an offer reflecting the reserves when set.

Plaintiffs next argued Encompass failed to require Plaintiffs to submit IMEs prior to litigation to better understand Plaintiffs' injuries and the value thereof. Under Federal and PA law, failure to timely obtain an IME is not bad faith. Given the limited medical records Encompass received initially, it had little, if any, time to schedule an IME or EUO. An Encompass representative set forth, when asked about the failure to schedule an IME, that an IME based on ER records and lien information, without treatment records, would not have been fruitful. Encompass was diligent about making offers and following up on medical records. After the latest offer, Encompass asked for further medical records, wage loss information and all radiological reports and films. Encompass advised Plaintiff that it may request EUOs and IMEs in the future to assist in an evaluation. Plaintiff filed suit in April 2024 without providing any additional information.

Finally, Plaintiffs argued that Encompass acknowledged conflicting testimony as to whether Ms. Ockford suffered a herniated disc in response to Plaintiff’s’ expert report indicating that Ms. Ockford suffered lumbar herniations because of the accident. Addressing well-settled law, the Court held a disagreement on causation or value is not sufficient to establish bad faith.

NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
hasanderson@sanderson-law.com

03/14/25 Busato v. Gore Mutual Insurance Company
British Columbia Court of Appeal
The Reference to the Wrong Statute in a Marijuana Exclusion Found in a Homeowners’ Policy Introduced Ambiguity as to Whether That Exclusion Applied to the Cultivation of Marijuana for Medical Purposes Under License; In View of That Ambiguity, This Exclusion Did Not Apply to Exclude a Fire Loss

Anthony Edward (“Tony”) Busato suffers from chronic, debilitating, spinal and shoulder pain – the result of five surgeries that he underwent between 2006 and 2013. In June 2013 Health Canada gave him a license to cultivate marijuana for personal/medical use. He could cultivate up to 73 plants and possess up to 450 gms. The initial license was extended in March 2014 “until the Court otherwise orders”.

Until 2018, marijuana was listed as a controlled substance in Schedule (Section 2) of the Narcotic Control Regulations, C.R.C., c. 1041 (2017), enacted under the Controlled Drugs and Substances Act, S.C. 1996, c. 19 [CDSA].

In 2017, Mr. Busato lived on Vernon Avenue in Peachland, British Columbia. His home was a single storey, well-kept bungalow, situated on a terrace overlooking Lake Okanagan, about a half hour by car south of Kelowna, and about 20 minutes north of Summerland.

On Sunday, April 23, 2017, a fire started accidentally in Mr. Busato’s kitchen that rapidly engulfed his home. He lost everything.

Mr. Busato insured his home with Gore Mutual Insurance Company. The policy was originally issued in 2014 and renewed annually through the fire. Gore investigated and determined that the fire did indeed start in the kitchen. But that investigation also revealed his licensed marijuana grow operation, consisting of about 25 plants. On May 16, 2017, Gore denied coverages for all losses arising from the fire on the basis of the following exclusion:

We do not insure direct or indirect loss or damage, in whole or in part: [. . .]

to dwellings or detached private structures or unscheduled personal property contained in them, used in whole or in part for the cultivation, harvesting, processing, manufacture, distribution or sale of marijuana or any product derived from or containing marijuana or any other substance falling within Schedule (Section 2) of the Controlled Drugs and Substances Act Narcotic Control Regulations; regardless of any other cause or event that contributes concurrently or in any sequence to the loss or damage

The exclusion refers to substances listed in the “Controlled Drugs and Substances Act Narcotic Control Regulations”. There is not now, nor was there at the time of the fire, a statute or regulation with this title. The Regulations are enacted under the CDSA.

Following the discovery of the legal grow op, Gore did not void the policy and refund the premium.

Mr. Busato retained counsel who filed an action against Gore. Gore defended on the basis that the exclusion covered a class of property that it did not agree to insure; that is, property used for the cultivation, harvesting, or processing of marijuana.

The action was heard under summary trial procedure on November 15, 2021.

The Trial Judgment

The parties and the Court relied on a 2010 Ontario trial judgment, Pietrangelo v. Gore Mutual Insurance Company, that was upheld on appeal, where the Court in that case interpreted an identically worded exclusion issued by the same insurer. In that case, the insured owned a rental property. The trial judge described the tenant as “… a person of questionable character and of even more dubious entrepreneurial ability.” The tenant decided to use part of his stash to make marijuana resin. He used several canisters of butane gas and tubing to heat the marijuana and turn it into a liquid. Instead of producing resin, he caused an explosion, and “… in the ensuing fire [the tenant] and his friend … were badly burned, and the house destroyed.” The tenant pleaded guilty to two criminal offences: intentionally or recklessly causing damage by fire or explosion to a dwelling house and unlawfully producing cannabis resin. The insured was unaware of the tenant’s activities. The insured were described by the trial judge as a diligent and innocent landlord. Citing the marijuana exclusion set out above, Gore denied coverage. That court held:

On a plain and simple reading, the Marijuana Exclusion can be seen to consist of three separate and distinct elements: the first relating to marijuana; the second relating to any product containing or derived from marijuana; and the third relating to any other scheduled substance. These distinct elements are not conjunctive; each is set off by the disjunctive “or.” Thus, the excluded property includes: (a) property used for the processing, manufacture, or sale of marijuana, or (b) any product derived from or containing marijuana, or (c) “any other substance falling within Schedule (Section 2) of the Controlled Drugs and Substances Act Narcotic Control Regulations.” Mr. Arquette’s activity is caught by the second of these disjunctive elements. Any ambiguity arising from the unclear, inaccurate wording in the third element does not and cannot reasonably be seen to derogate from the clear meaning of the first or second element. Because the elements are disjunctive, the meaning of one is not modified or altered by another.

Mr. Busato argued in this case that the marijuana exclusion is lengthy, poorly drafted, inherently confusing, and ambiguous. The trial judge disagreed, holding that the exclusion is not ambiguous: citing Pietrangelo, the poorly worded third category does not implicate the other two clear instances where the exclusion applies.

Mr. Busato then argued that the exclusion is ‘clearly’ directed at illegal marijuana cultivation. The trial judge disagreed, stating that on a plain reading, it excludes all marijuana-related uses of insured property, whether the uses are legal or illegal. To restrict it to illegal marijuana uses would be an unduly narrow and inconsistent interpretation of the plain wording of the Exclusion.

Mr. Busato then argued that for the exclusion to apply, the fire must have arisen from marijuana cultivation. The trial judge again disagreed, holding that it was not persuaded that the Exclusion requires the insured’s marijuana-related activities to have caused the fire. Rather, citing Pietrangelo, the exclusion removes from coverage all dwellings, used in whole or in part, for any marijuana-related activities, regardless of the cause of the loss.

Mr. Busato then argued that he was entitled to relief from the forfeiture of his insurance, citing s. 32 of the British Columbia Insurance Act that it is unjust and unreasonable for the Court to apply an exclusion that is not causally related to the loss:

The trial judge held that the Supreme Court of Canada stated in a decision known as Marche that is not necessary for a breach of condition to be casually related to the loss and therefore Mr. Busato’s argument failed.

For these reasons, the trial judge held that Gore was entitled to rely upon the exclusion to deny coverage for the loss.

The Appeal

Mr. Busato appealed the trial judgment to the British Columbia Court of Appeal. The Court of Appeal found that the exclusion is ambiguous and cannot be relied upon to deny the fire loss.

With reference to Pietrangelo, the Court of Appeal stated that Gore is relying upon the first and third categories excluded by the marijuana exclusion. The third category was found to be “unclear, inaccurate” in Pietrangelo. This creates an ambiguity that cannot be resolved using general rules of construction: “It surely cannot be said that the average person would instinctively read the exclusion as containing “… three distinct subcategories of excluded coverage; each … separated by the disjunctive ‘or.’ Nor can it be said that the average person would be capable of correctly parsing a reference to incorrectly cited legislation and its accompanying regulations and schedules.”

Mr. Busato’s argument that the marijuana exclusion is aimed at limiting the risks associated with the cultivation of illegal drugs demonstrates this ambiguity as that is an alternative, reasonable interpretation of the exclusion. The Court of Appeal then stated: “I accept that …[Mr. Busato]… did not give evidence about his expectations but it is reasonable for an insured party to expect that an exclusion, which is drafted in a way that targets illegal activity, would not apply to their legal use of property.”

The ambiguity must be resolved against Gore who had the opportunity since 2010 when the Pietrangelo decision was issued to modify the marijuana exclusion to remedy the confusion generated by the inaccurate statutory references. When reading contra proferentum in this fashion, the exclusion does not apply to exclude Mr. Busato’s fire loss.

The Court of Appeal elected to provide comment on the relief from forfeiture argument, even though it was not required to do so, given the findings on ambiguity. In that regard, that Court stated that Marche stands for the proposition that the relief from forfeiture provisions apply where the terms or conditions produce unjust or unreasonable results: Marche at paras. 10–11. Unjust or unreasonable results may flow from the operation of an exclusion clause as well as a breach of condition, and, therefore, these ameliorating provisions that exist in all common law provinces apply to both exclusions and conditions. However, this is an equitable remedy. It is contrary to the principles of utmost good faith to apply relief from forfeiture principles where there has been deliberate concealment by the insured of material changes to risk.

In this case, the trial judge erred as she considered the exclusion in the abstract and did not consider whether the operation of the exclusion, in these circumstances, resulted in an unjust or unreasonable result for Mr. Busato. Gore did not offer evidence of the underwriting intent as to why the marijuana exclusion should apply to licensed and therefore legal marijuana grow operations. The trial judge improperly relied on the Pietrangelo decision to justify her decision not to extend relief from forfeiture. Here “… [Mr. Busato] … was using medicinal marijuana to relieve chronic and debilitating pain experienced following back surgery. He sought and obtained a license that permitted him to grow up to 73 marijuana plants. He had 25 plants at the time of the fire. While not determinative, the cause of the fire had nothing to do with his marijuana plants, and, as the trial judge found, and there was no suggestion that the appellant misled or misrepresented the insurer in any way… In my view, these circumstances support a finding that it would be unjust or unreasonable to give effect to the exclusion.” (emphasis added). The Court of Appeal concluded by stating that “, if it were necessary to do so, I would grant relief from forfeiture under s. 32 of the Act.”

Comment

There was no discussion at trial or on appeal as to whether Mr. Busato had told his broker that he grew licensed medical marijuana. The Court of Appeal stated that there was no suggestion that Mr. Busato misled or misrepresented that fact to his insurer – however, there does not seem to be an evidentiary reference to that conclusion.

The Court of Appeal seemed to be particularly frustrated by Gore Mutual's failure to correct the statutory reference in the marijuana exclusion clause, despite the nearly seven years that had elapsed following the issuance of the Pietrangelo judgment which highlighted the error and the confusion it caused. This appeared to motivate the Court of Appeal to identify ambiguity in the clause, ultimately leading to a reversal of the trial court's decision. A secondary issue was the fact that Gore failed to distinguish between licensed, legal, marijuana grow operations and those that are illegal and failed to provide any evidence as to why, from an underwriting perspective, they should have the same level of exclusion.

Labor Law Pointers - Volume XIV, No. 5

Fri, 06 Jun 2025 19:04:41 +0000

Volume XIV, No. 5
Wednesday, April 2, 2025

Note from David R. Adams:

Do you have a situation? We love situations. Give us a call, send an email, drop by; we truly enjoy solving complex Labor Law and risk transfer issues.

Let me start this edition by congratulating Sarah Schulz on the birth of her daughter Caroline Jane. She now has to care for two babies, Caroline and Marc, as well as a 3-year-old. Marc Schulz will be out for a while on daddy duty but will be back soon.

This month, we have three cases which are the direct offspring of the Wilinski decision, and I have a soft place in my heart for that case. It was that case that started Labor Law Pointers in our First Edition. I had always read and analyzed every Labor Law case for myself, but that decision caused me to write up my thoughts and send them to clients and carriers. It was very well received and thus, on November 2, 2011, 13 ½ years ago and only eight days after the decision, the first edition of Labor Law Pointers came out to a vast audience of about 30 people who had requested to be included.

We now have a lot more readers, and I have a lot more help. However, in the end, it is still all of us on the Labor Law team here at Hurwitz Fine reading and discussing every single New York Labor Law and risk-transfer associated case to stay ready to address any and all issues, or at least be as prepared as anyone can be, in this ever-changing world of New York Labor Law.

Interestingly, the second case I analyzed was the Court of Appeals decision in Grove v Cornell which would wind up on my desk just about a week later after the court reinstated the § 240(1) clam against Cornell.

In our video offering this month, we have an office building being demolished to allow for the building of a new store. The driver of the front loader, hereinafter the plaintiff, worked for a company which was hired to knock down the building. He intended to tie a chain around the central pillar and back away to take down the building. When he went to get the chain, he discovered that the chain was all the way on the other side of the building where he had accidentally left it that morning on the low boy. Not wanting to waste time going to get it he thought, incorrectly as it turns out, that he could give the pillar a quick bang with the bucket and back out quickly. The result is visible below. Plaintiff sustains a nasty back injury, § 240(1) case?

Well, if we start with the prima facie requirements, the injured worker was a person so employed and thus a valid plaintiff, the building owner is a valid defendant, he was engaged in demolition so the overall job is a covered activity, and the plaintiff was injured by a falling object even though it did not hit him. The defendant will claim sole proximate cause and the elements there are 1) that an appropriate safety device be supplied and that 2) the device be available to the plaintiff and 3) the plaintiff must know he is expected to use that safety device and 4) the plaintiff must either fail to use the safety device or misuse the device 5) for no good reason. Here the chain would have been the appropriate safety device which was available. The plaintiff knew he was to use the chain, but he did not want to waste time getting it, so he also failed to use it. Should be summary judgment for the defendant on this one.

Remember that we are always here to answer any questions or to just talk an issue through. Please feel free to ask if you and/or your team want a refresher on Labor Law or Risk Transfer opportunities, we are happy to help.

That’s it for this month. As always, please feel free to reach out to us with any questions Labor Law or risk-transfer related. Hope you learned something.

-David

Hurwitz Fine P.C.
The Liberty Building
424 Main Street, Suite 1300
Buffalo, New York 14202
Phone: 716.849.8900
Fax: 716.855.0874

Email: dra@hurwitzfine.com

Labor Law Pointers is published the first Wednesday of each month. If you know of others who may wish to subscribe to this free publication, please feel free to forward it. If you wish to subscribe or unsubscribe, please send an e-mail to dra@hurwitzfine.com or call the Editor/Labor Law Team Leader David R. Adams directly at (716) 849-8916.

Don’t forget to subscribe to our other publications:

Coverage Pointers: This twice-monthly electronic newsletter summarizes important insurance law decisions from appellate courts in New York State with the occasional snapshot across borders. Coverage Pointers, the electronic newsletter that started it all, continues to offer guaranteed publication every other Friday, and a read-at-a-glance summary of important decisions as they happen. Contact Dan Kohane at ddk@hurwitzfine.com to subscribe.

Medical & Nursing Home Liability Pointers: Medical & Nursing Home Liability Pointers provides the latest news, developments, and analysis of recent court decisions impacting the medical and long-term care communities. Contact Liz Midgley at emm@hurwitzfine.com to subscribe.

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Products Liability Pointers: This monthly newsletter covers all areas of products liability litigation, including negligence, strict products liability, breach of warranty claims, medical device litigation, toxic and mass torts, regulatory framework and governmental agencies. Contact Chris Potenza at vcp@hurwitzfine.com to subscribe.

Cruz v PMG Constr. Group LLC
March 4, 2025
Appellate Division, First Department

Plaintiff, a metal and glass worker, was injured when a 225 to 250 pound, 4' x 10' glass window tipped over and struck the back of his legs. Prior to the accident, the window had been leaning against a stack of approximately four other windows, all similar in size and all of which were propped up against the wall. Plaintiff had just removed a suction cup carrier from the window and had taken only three to four steps towards a nearby A-frame dolly when the window fell on him. Plaintiff commenced an action against defendants, alleging violations of Labor Law §§ 240(1), 241(6), and 200. The Trial Court denied defendants’ motion for summary judgment dismissing the complaint.

Labor Law § 240(1) (DRA)

The Appellate Division unanimously affirmed the Supreme Court holding that it properly denied defendants' motion for summary judgment because the parties submitted conflicting expert opinions raising triable issues of fact. Defendants' expert engineer opined there was a de minimis elevation risk because the window could not generate sufficient force as it toppled over and fell a short distance to the floor. Therefore, the window did not require additional securing devices. In opposition plaintiff's expert opined, based on empirical data, industry standard, and witness testimony, that the weight, length, and height of the glass window, when toppled, created a significant, harmful force, even over the course of a relatively short descent, that warranted securing for the purpose of the undertaking (see Wilinski v 334 E. 92nd Hous. Dev. Fund Corp., 18 NY3d 1, 10 [2011]; Lopez v 106 LPA LLC, 222 AD3d 526, 527 [1st Dept 2023]; Grigoryan v 108 Chambers St. Owner, LLC, 204 AD3d 534, 534 [1st Dept 2022]).

PRACTICE POINT: Conflicting expert opinions preclude the court from rendering a decision as to the § 240(1) claim as the defendant expert opines that the glass does not need securing as the window could not generate sufficient force to injure, and the plaintiff’s expert opines the opposite. Sounds like a true question of fact but a bit of a head scratcher as the plaintiff is claiming injury, and thus, it would seem to me that it did generate sufficient force to injure unless the plaintiff was not actually injured in the accident.

Labor Law § 241(6)

The First Department held that the lower court should have dismissed plaintiff's Labor Law § 241(6) claim predicated upon Industrial Code (12 NYCRR) § 23-2.1(a)(1). The Industrial Code regulation requires that materials not obstruct a passageway, walkway, stairway, or other thoroughfare. Plaintiff failed to raise an issue of fact as to whether there was a violation because the evidence shows that "the materials were not . . . obstructing a passageway".

Labor Law § 200 and Common-Law Negligence (EDA)

The Appellate Division unanimously reversed the Supreme Court finding that Plaintiff testified at his deposition that he received his work instructions only from his employer, a glass subcontractor. There was no evidence that defendants supervised and controlled the means and methods of plaintiff's injury-producing work. The Court reiterated that the general authority of certain defendants to stop the work for safety reasons is insufficient to raise a factual issue (see Villanueva v 114 Fifth Ave. Assoc. LLC, 162 AD3d 404, 406-407 [1st Dept 2018]).

Rivera v 454 W. 57th St. Holding LLC
March 11, 2025
Appellate Division, First Department

Plaintiff and his coworkers were replacing a drainpipe at a building owned by defendants when a section of the drainpipe allegedly fell and struck plaintiff in the face, injuring him. The Trial Court granted plaintiff’s motion for partial summary judgment on his Labor Law § 240(1) claim.

The Appellate Division unanimously affirmed the Supreme Court holding that Plaintiff established that the pipe "required securing for the purposes of the undertaking" (Rivas v Seward Park Hous. Corp., 219 AD3d 59, 64 [1st Dept 2023]). It further rejected the argument that the pipe could not be considered a permanent part of the building, given that it was installed by plaintiff and his coworkers just moments before it fell on him.

PRACTICE POINT: A falling object which was in need of being secured but which is not properly secured such that it falls and causes injury, will be a § 240(1) case with summary judgment for the plaintiff in most cases.

Harnisch v City of New York
March 18, 2025
Appellate Division, First Department

On the day of the accident, Plaintiff was employed by non-party, Outfront Media as a working foreman, billboard erector and/or installer assigned to a project located at or near the Major Deegan Expressway, South of Van Cortlandt Park, near West 234th Street, Bronx County. He was instructed by his supervisor to assess the integrity and safe access to an outdoor advertising billboard at the site and tasked to hang an advertisement.

Plaintiff testified that he previously completed a refurbishment of the subject billboard structure, which included permanently affixing a safety cable to the structure and removing steel that deteriorated or was damaged. On the date of the accident, the plaintiff was tasked to assess and inspect the damage to the steel and tag for future structural repairs.

Upon arrival at the job site, plaintiff and a coworker set up a 24-foot-long fiberglass and aluminum Werner extension ladder owned by plaintiff's employer. The ladder was then secured to the billboard's "catwalk" (about 19-feet high) with hooks and a strap. He inspected the ladder before using it and believed it was in good working order and in "usable condition”. He also testified that he knew how to check the ladder for cracks in the fiberglass rails; that the rungs were securely attached; and that the safety locks were in working order. Plaintiff and his fellow coworkers climbed the subject ladder to the structure one at a time to perform their assigned tasks. At the time of the accident, the plaintiff unclipped his lanyards from the billboard structure to permit him to descend from said structure. When the plaintiff got onto the extension ladder to descend, the ladder suddenly and without warning retracted and caused him to fall to the ground and sustain injury.

CSX Transportation, Inc. (“C-CSX”) and EIB Riverdale Crossing LLC (“EIB”) moved for summary judgement dismissing plaintiff’s § 200, 240(1), and 241(6) Labor Law claims against then. Plaintiff moved for summary judgment pursuant to Labor Law § 240(1) and 241(6).

The Trial Court denied C-CSX and EIB’s motion for summary judgment as to plaintiff’s 240(1), 241(6) and § 200 claims, and denied plaintiff’s motion for summary judgment.

The Appellate Division unanimously affirmed the Supreme Court finding that Plaintiff's work replacing a billboard advertisement without changing the structure of the billboard was "more akin to cosmetic maintenance or decorative modification than to altering for the purposes of Labor Law § 240(1). Further he was not "effect[ing] a significant physical change to the configuration or composition" of the billboard. (Castaneda v Amsterco 67, LLC, 220 AD3d 406, 406 [1st Dept 2023]

PRACTICE POINT: The changing of the face of a billboard is not a change to an actual structure and thus does not qualify under § 240(1). In an aside, where an addition is added to the actual billboard then the structure was altered, and a § 240(1) case is valid.

Labor Law § 241(6)

The First Department held that because "no construction, excavation, or demolition was ongoing at the time of plaintiff's accident," plaintiff's Labor Law § 241(6) claim was not viable.

Labor Law § 200 and Common-Law Negligence (EDA)

The Appellate Division unanimously reversed the Supreme Court finding that it should have granted the dismissal of the Negligence and Labor Law § 200 claims. Plaintiff's claim arose “from the method of work, involving an inadequate ladder," but CSX and EIB neither supplied the ladder nor exercised supervisory control over the work, therefore, no liability attaches under Labor Law § 200 or common law negligence. Yousuf, 219 AD3d at 1186; see also Breslin v Macy's, Inc., 211 AD3d 569, 569-570 [1st Dept 2022]).

Lucas v City of New York
March 18, 2025
Appellate Division, First Department

Plaintiff was working as a journeyman electrician installing wall thermostats for a renovation project at Columbia's Mudd Hall when a stack of 8 to 10 pieces of plexiglass tipped over and struck his feet, injuring him. Each plexiglass panel was approximately 9 feet tall, 46 inches wide, ½-inch thick, and weighed between 200 to 300 pounds. Plaintiff testified that the stacked panels were resting lengthwise on the ground against a wall, reaching the approximate height of his waist.

Columbia owned the premises and ACC Construction was the general contractor on the project. Nonparty DirectAire subcontracted the Schneider defendants to supply the thermostat components and related software. The Schneider defendants subcontracted plaintiff's employer to install the thermostats. ACC Construction subcontracted Workwell to install demountable partitions and Workwell in turn hired third-party defendant American Storage & Transportation, Inc. to deliver Workwell's materials to the site, including the glass panels at issue.

The Trial Court denied Columbia and ACC Construction’s motion for summary judgment dismissing plaintiff’s Labor Law §200 and common-law negligence claims, and their motion for partial summary judgment on contribution and common-law indemnification against Workwell. The Trial Court also granted plaintiff’s cross-motion for summary judgment on Labor Law § 240(1), and granted Schneider defendants motion for summary judgment dismissing the third party complaint against then,

The Appellate Division unanimously affirmed the Supreme Court. Initially the court found that defendants’ argument the cross motion was untimely unavailing because plaintiff's cross-motion sought nearly identical relief as Columbia's and ACC Construction's motion for summary judgment on the same claim. Further, it found that plaintiff established prima facie entitlement to summary judgment through deposition testimony and photographs. The unrebutted opinion of plaintiff's expert established that even though the load was positioned on the same level as plaintiff and only fell a short distance, the weight of the plexiglass panels was capable of generating extraordinary force such that securing devices of the kind enumerated in Labor Law § 240(1) were needed to stabilize the load and make the worksite safe (see Wilinski v 334 E. 92nd Hous. Dev. Fund Corp., 18 NY3d 1, 10 [2011]. Columbia and ACC Construction failed to raise a triable issue of fact, and also as a result fail to prove their sole proximate cause argument.

PRACTICE POINT: We have been preaching for years that experts help. In this case, unlike the Cruz case above, only the plaintiff retained an expert to opine that even though the load was positioned on the same level as plaintiff and only fell a short distance, the weight of the plexiglass panels was capable of generating extraordinary force such that securing devices of the kind enumerated in Labor Law § 240(1) were needed to stabilize the load and make the worksite safe”. (Language from the Wilinski decision from the Court of Appeals.)

Labor Law § 200 and Common-Law Negligence (EDA)

The Appellate Division unanimously affirmed the Supreme Court’s denial of the motion to dismiss these claims against ACC and Columbia because there was evidence that ACC Construction instructed Workwell where to stage the glass panels at the worksite. Moreover, there was evidence that ACC Construction's staging instructions differed from the regular practice of Workwell's delivery subcontractor, raising triable issues of fact as to whether ACC Construction supervised the means and methods of the injury producing work or had a part in creating a hazardous staging condition.

Indemnity Issues in Labor Law (PCSM)

The Appellate Division found that the lower court properly denied Columbia’s and ACC’s motion for partial summary judgment on their causes of action for contribution and common-law indemnification against Workwell. The Appellate Division found triable issues of fact as to whether Workwell was non-negligent in the cause of plaintiff's accident and held that ACC, as the indemnitee, must show that it was non-negligent and neither caused the accident nor supervised and controlled the injury-producing work. The Appellate Division also found triable issues of fact as to whether ACC was negligent and contributed to the happening of plaintiff's accident by directing the placement of the glass panels and by directing that the staging take place while other trades were working in the area.

The Appellate Division also found that the lower court properly denied Columbia's and ACC's motion for summary judgment against Workwell for breach of contract for failure to procure insurance. The Appellate Division noted that Columbia and ACC were required to show via testimonial or documentary evidence from Workwell's insurer that they were not named as insureds on any policies issued and held that Columbia's and ACC's unsubstantiated statements that Workwell lacked the requisite insurance did not meet their prima facie burden.

Argueta v 39 W 23rd St. LLC
March 25, 2025
Appellate Division, First Department

Plaintiff was injured when a metal post which was 9 to 11 feet long and weighed approximately 150 pounds and was leaning against a truck, fell on him as he was kneeling to adjust other posts. The Supreme Court granted plaintiff's motion for summary judgment on the Labor Law § 240(1) claim as against defendants 39 W 23rd Street LLC and Pizzarotti LLC.

The Appellate Division unanimously affirmed the Supreme Court finding that Given the weight and length of the post and the distance it fell, Plaintiff’s testimony established that plaintiff was exposed to an elevation-related risk. In opposition, defendants failed to submit evidence to raise a triable issue of fact. Defendant proffered unsworn statements that the posts weighed 30-50 pounds, which were hearsay and were offered for their truth, did not raise an issue of fact.

Plaintiff also established that the failure to secure the post with an adequate safety device was a proximate cause of his injuries. In opposition, defendants failed to establish that the posts were purposely not tied off because they were in the process of being loaded onto the truck, as they did not submit any evidence to support this assertion

PRACTICE POINT: Wilinski again, heavy post falls from ground level onto plaintiff, causes injury, plaintiff wins. We knew that Wilinski was going to be an important case, and bad for us, from the day it came out.

Velez v LSG 105 W. 28th, LLC
March 27, 2025
Appellate Division, First Department

Plaintiff fell from an elevation of five feet. He was not provided with an adequate safety device and was instructed by his foreman to climb a concrete form to complete his assigned task. The Supreme Court granted plaintiff's motion for summary judgment on his Labor Law § 240(1) claim against defendants/third-party plaintiffs LSG 105 West 28th, LLC and Flintlock Construction Services LLC, denied LSG and Flintlock's motion for summary judgment dismissing the Labor Law § 240(1) claim and for summary judgment on their third-party claims for contractual indemnification, common-law indemnification, and contribution as against third-party defendant Construction & Realty Safety Group, Inc. (CRSG), and granted CRSG's motion for summary judgment dismissing the third-party complaint,

Labor Law § 240(1) (DRA)

The Appellate Division unanimously affirmed the Supreme Court. Plaintiff established his prima facie case by submitting proof that he fell from an elevation of five feet, that he was not provided with an adequate safety device — namely, a ladder or harness — and that he was instructed by his foreman to climb a concrete form to complete his work. Plaintiff testified that his employer's general practice was to climb the concrete forms, rather than using a ladder, and that his foreman followed this practice. Plaintiff's testimony also established that even though ladders were generally available, he was not instructed to use one, nor did he know if any ladders were in the location he was working on the day of the accident.

In opposition, defendants failed to raise a triable issue of fact as to whether plaintiff was the sole proximate cause of his injuries or a recalcitrant worker because he did not use a harness or ladder. Although ladders and harnesses were generally available on site, defendants failed to show that plaintiff knew that he was expected to use them or that he decided not to use the safety equipment for no good reason.

PRACTICE POINT: This case points out the not-so-subtle point that even if you tell your employees that they must always use a safety device, here a ladder, but allow then to do the task without the safety device, here climbing the form instead of using the ladder, you have provided tacit approval for not using the safety device. In the instant case it is even worse, the employer is alleged to have actually directed the employee not to use the safety device, and therefore never had a chance in opposing the summary judgment motion.

Indemnity Issues in Labor Law (PCSM)

The Appellate Division found that the lower court properly denied summary judgment in favor of LSG and Flintlock as to their third-party claims for contractual indemnification, common law indemnification and contribution against CRSG. The Appellate Division noted that the contractual indemnification provision in the parties' agreement had a requirement that CRSG be negligent for the indemnification provision to be triggered and there was no evidence of negligence in the record. Likewise, the Appellate Division also found that the common-law indemnification and contribution claims were also properly dismissed as they also require a finding of negligence.

Ramirez-Gomez v Empire Today, LLC
March 5, 2025
Appellate Division, Second Department

Plaintiff was performing construction work at a property in New Jersey owned or controlled by the defendants when he was injured by a falling radiator. Plaintiff brought an action alleging violations of Labor Law § 200, 240(1), and 241(6). The Trial Court granted defendants Empire Today, LLC (“Empire”) and Kennedy All Flooring, LLC’s (“Kennedy”) motions to dismiss plaintiff’s common-law negligence claims against them.

Labor Law § 200 and Common-Law Negligence (EDA)

The Appellate Division unanimously reversed the Supreme Court’s dismissal of these claims against Empire and Kennedy for failure to state a claim holding that while "the protection afforded to New York employees by the Labor Law, including Labor Law §§ 200, 240(1) and 241(6), has no application to an accident that occurs outside New York State, even where all parties are New York domiciliaries" (Osborn v 56 Leonard LLC, 138 AD3d 624, 624, the inapplicability of the Labor Law to the case at bar is not a proper ground, standing alone, to dismiss the cause of action sounding in common-law negligence.

Ramos v Kent & Wythe Owners, LLC
March 5, 2025
Appellate Division, Second Department

In September 2016, the plaintiff allegedly was injured while working as a laborer for the third-party defendant R & M Repairs and Maintenance, Inc. (hereinafter R & M), a subcontractor hired by the defendant L & M Builders Group, LLC (hereinafter L & M Builders), to perform cleaning services at a building under construction. On the date of the accident, the plaintiff was using an A-frame cart to move sheetrock across an unfinished concrete floor at the construction site. The plaintiff allegedly was injured when the A-frame cart turned over and fell, along with the sheetrock, trapping the plaintiff's legs and waist.

The plaintiff commenced this action against the defendants, Kent & Wythe Owners, LLC, L & M Kent & Wythe Managers, LLC, Congress Builders, LLC, and L & M Builders (hereinafter collectively the L & M defendants) to recover damages for personal injuries. The L & M defendants thereafter commenced a third-party action against R & M, inter alia, for indemnification.

The Trial Court denied plaintiff’s cross-motion for summary judgment on his Labor Law § 240(1) claims, denied plaintiff’s motion for leave to amend the bill of particulars, and granted third-party plaintiffs and third-party defendant’s motions for summary judgment dismissing the complaint.

The Appellate Division unanimously affirmed the Supreme Court holding that L & M defendants and R & M established, prima facie, that the plaintiff's injuries were not caused by an elevation-related or gravity-related risk within the scope of Labor Law § 240(1). In opposition, the plaintiff failed to raise a triable issue of fact.

PRACTICE POINT: Welcome to the Second Department. Unlike the First Department decisions above citing Wilenski, the second held that a cart full of sheet rock which tips over and lands on the plaintiff. Now there are two possibilities that I can see for the decision, as none are specifically provided by the court. The easy one would be that the cart was mobile and thus could not be secured against tipping over. The other is that this is the Second Department, and they put more responsibility on the plaintiff for his or her actions. I get it, it is likely the first reason, but a man can hope, can’t he?

Labor Law § 241(6)

In affirming the grant of that portion of defendants’ motions for summary judgment, the Second Department reiterated that "Labor Law § 241(6) imposes a nondelegable duty upon owners and contractors to provide reasonable and adequate protection and safety to construction workers" … "to establish liability under Labor Law § 241(6), a plaintiff must demonstrate that his or her injuries were proximately caused by a violation of an Industrial Code provision that is applicable under the circumstances of the case."

Defendants established that the Industrial Code provisions relied upon by plaintiff were inapplicable to the facts of this case. In particular, the evidence showed that the accident did not occur in a "passageway" as contemplated by 12 NYCRR 23-1.7(e)(1). Moreover, the alleged grooves in an unfinished concrete floor at the construction site, which were described as having a depth of approximately one inch, were not the type of hazard regulated by 12 NYCRR 23-1.7(e)(2). In opposition, plaintiff failed to raise a triable issue of fact as to the applicability of the Industrial Code provisions upon which he relied.

Labor Law § 200 and Common-Law Negligence (EDA)

The Appellate Division reversed the Supreme Court finding it erred in dismissing the Labor Law § 200 claim. L & M defendants and R & M failed to establish, prima facie, that the plaintiff had the means necessary to safely move the sheetrock on the day of the accident, that the L & M defendants did not have the authority to exercise supervision and control over the subject work, or that the accident did not arise out of a dangerous condition at the premises, that the condition involving grooves in the unfinished concrete floor was trivial as a matter of law. As such, the sufficiency of Plaintiff’s papers was irrelevant.

Bayron Chay Mo v Ultra Dimension Place, LLC
March 12, 2025
Appellate Division, Second Department

The plaintiff alleged that in 2019, he fell through a hole in a roof while employed by an unnamed subcontractor as a day laborer. The plaintiff asserted causes of action alleging common-law negligence and violations of Labor Law §§ 200, 240(1), and 241(6). The defendants moved to dismiss the complaint, plaintiff did not submit opposition to the motion, and the Trial Court granted defendant’s Motion dismissing the complaint. Thereafter, plaintiff moved to vacate the order and deny defendants motion to dismiss. The Trial Court denied plaintiff’s motion and did not vacate the prior order.

Labor Law § 240(1) (DRA)

The appellate Division reversed the Supreme Court and found that the plaintiff provided a reasonable excuse for his failure to submit timely opposition to the defendants' motion pursuant to CPLR 3211(a)(7) to dismiss the complaint. Moreover, on appeal, the defendants did not contest that the plaintiff established a reasonable excuse for his default in opposing their motion. Additionally, it found that the plaintiff demonstrated that the defendants' motion should be denied. Because this was a motion to dismiss for failure to state a claim, the Court found that plaintiff alleged that his fall through the roof was the result of an elevation-related hazard caused by the failure to keep necessary safety devices in place and identified the defendants as the owners of the premises. Therefore, the plaintiff sufficiently pleaded a cause of action alleging a violation of Labor Law § 240(1).

PRACTICE POINT: Where, as here, the plaintiff falls through a hole in the roof, while working on the roof and has no safety devices, it is a tough defense, and none was available here. This is where risk transfer options, early liability assessment, and communication leading to early resolution are the key. The only thing defending liability will do is drive up legal expenses.

Labor Law § 241(6)

As with Labor Law § 240(1) above, The Second Department concluded that plaintiff sufficiently pleaded a cause of action alleging a violation of Labor Law § 241(6) in that plaintiff alleged that he was employed in an area where construction was being performed and that his injuries were proximately caused by the failure to comply with applicable statutes, ordinances, rules, and regulations.

Labor Law § 200 and Common-Law Negligence (EDA)

The appellate Division reversed the Supreme Court. As noted above, the plaintiff alleged that the defendants failed to provide a safe place to work and that the defendants controlled and supervised the work at issue. Therefore, the plaintiff sufficiently pleaded causes of action alleging a violation of Labor Law § 200 and common-law negligence.

Lopes v County of Suffolk
March 19, 2025
Appellate Division, Second Department

The defendant County of Suffolk contracted with the defendant Gibson & Cushmane Contracting, LLC (hereinafter Gibson), to complete a bridge reconstruction project, and Gibson subcontracted with the plaintiff's employer to perform certain painting work, among other things. The plaintiff allegedly was injured during the course of performing this work on the project. According to the plaintiff, at the time of his accident, he was using a scaffold, which he had not set up and which was not equipped with any railings, when his vision became obscured by dust. The plaintiff stepped backwards and fell off of the scaffold, sustaining injuries.

Plaintiff moved for summary judgment based on a violation of Labor Law § 240(1), and the Trial Court granted plaintiff’s motion.

The Appellate Division unanimously affirmed the Supreme Court finding that the plaintiff met his prima facie burden of demonstrating a violation of Labor Law § 240(1) and that this violation was a proximate cause of his injuries, through his deposition testimony that the scaffold that was set up for him did not have any safety railings, thus allowing him to fall backwards off the scaffold. In opposition, Gibson failed to raise a triable issue of fact. Additionally, Gibson's evidence failed to raise a triable issue of fact as to whether the plaintiff was recalcitrant in the sense that he knew that he was expected to use a safety harness, a man lift, or a scaffold different from the one already set up and deliberately chose, for no good reason, not to do so as the affidavit proffered was vague as to the instructions given to the plaintiff and the affiant lacked personal knowledge of the instructions.

PRACTICE POINT: Remember that the defense is sole proximate cause, and the word “sole” has meaning. Pointing out additional reasons for the accident, when at least one of them is not the plaintiff’s own actions, does not ever make the actions of the plaintiff the sole proximate cause of the accident. Here the failure to install a railing will always be a proximate cause, and thus, nothing else can ever be the sole proximate cause.

Marmolejo-Cuellar v Spar Knitwear Corp.
March 19, 2025
Appellate Division, Second Department

The plaintiff Ana Marmolejo-Cuellar (hereinafter the injured plaintiff) allegedly was injured when, while walking inside an office, she tripped and fell on loose, two-by-four pieces of wood, which had been temporarily placed on the floor. The office was located in a building owned by the defendant Spar Knitwear Corp. (hereinafter Spar) and was leased to the third-party defendant, Melcon General Contractors, LLC (hereinafter Melcon). On the date of the accident, the injured plaintiff was employed by Melcon as a secretary to perform clerical work within the office. The injured plaintiff also occasionally performed clerical work within the office for the defendant Southern Contractors, LLC (hereinafter Southern). Melcon and Southern are owned by the same principal.

Southern, Tamkat Building Corp., Spar, and Orkat Realty, Ltd. moved for summary judgment dismissing plaintiff’s complaint against them. The Trial Court dismissed plaintiff’s Labor Law § 200, 240(1), and 241(6) claims against all moving defendants, and dismissed the common-law negligence claim asserted against Spar.

The Appellate Division unanimously affirmed the Supreme Court’s dismissal of the claim finding that Southern and the building defendants each established, prima facie, that the injured plaintiff was not within the class of persons subject to the protections of the Labor Law. In support of their respective motions, Southern and the building defendants submitted, among other things, a transcript of the deposition testimony of the injured plaintiff and of Eric Mendoza, the principal of both Melcon and Southern, which demonstrated that the injured plaintiff had not been retained to perform any repairs or construction work at the premises and was not engaged in the performance of any such work at the premises. In opposition, the plaintiffs failed to raise a triable issue of fact.

PRACTICE POINT: “A person so employed” is the definition in § 240(1). That person so employed must, however, be engaged in the work being done and not simply employed is some other capacity. The example I always used was the coffee truck that arrives on every construction site every day. If a beam fell from above and struck the driver of the truck and a welder on the site, the welder would have a case; however the driver would not have a § 240(1) case. To be clear, the negligence case for the driver would be very strong if the identity of who dropped the beam could be ascertained.

Labor Law § 200 and Common-Law Negligence (EDA)

The Appellate Division unanimously affirmed the Supreme Court’s dismissal of the Labor Law § 200 and common-law negligence claims. The building defendants established, prima facie, through the submission of the lease agreement and transcripts of the deposition testimony of certain parties, that Spar was an out-of-possession landlord that was not bound by contract or a course of conduct to maintain the interior of the premises where the injured plaintiff allegedly was injured. In opposition, the plaintiffs failed to raise a triable issue of fact.

Rahmonov v Purves Dev., LLC
March 19, 2025
Appellate Division, Second Department

In January 2017, the plaintiff allegedly was injured while working at a construction project at certain property owned by the defendant Purves Development, LLC (hereinafter the owner). At the time of the accident, the plaintiff was employed as a window installer by the third-party defendant V & P Altitude Corp. (hereinafter V & P). V & P was a sub-subcontractor on the project pursuant to a subcontract (hereinafter the V & P subcontract) it entered into with nonparty Pioneer Window Manufacturing Corp. (hereinafter Pioneer). Pioneer had been retained by the defendant S2 Construction, LLC (hereinafter the general contractor), to install windows at the property.

Plaintiff commenced an action for violations of Labor Law § 200, 240(1), and 241(6), against the owner, general contractor, and Silvercup Properties, LLC. Defendants commenced a third-party action against V & P asserting a cause of action for contribution, common-law indemnification, contractual indemnification, and breach of contract for failure to procure insurance. V & P moved for summary judgment dismissing the third-party complaint against it, which the Trial Court granted.

Indemnity Issues in Labor Law (PCSM)

The Appellate Division also found that V & P failed to establish its prima facie entitlement to the dismissal of the third-party claims for breach of contract for failure to procure insurance. The Appellate Division reasoned that by failing to submit the "Contract Documents," which included the subcontract between Pioneer and the general contractor, incorporated by reference into the insurance procurement provisions of the V & P subcontract, V & P failed to eliminate a triable issue of fact as to whether those contract documents contained provisions requiring it to obtain additional insured coverage for the benefit of the defendants.

Freas v John W. Danforth Co.
March 14, 2025
Appellate Division, Fourth Department

Indemnity Issues in Labor Law (PCSM)

The Appellate Division found that the lower court erred in granting Danforth’s motion and properly denied Davis-Fetch’s cross-motion seeking dismissal of the third-party claims as there was no agreement prior to plaintiff’s accident for Davis-Fetch to indemnify Danforth or to procure insurance for Danforth’s benefit. The Appellate Division noted that an indemnification agreement that is executed after a plaintiff's accident may be applied retroactively, but only where it is established that (1) the agreement was made prior to the accident and (2) the parties intended the agreement to apply as of that prior date. In the case at bar, two of Davis-Fetch's executives claimed that there was no discussion between Danforth’s representatives and Davis-Fetch’s representatives about the terms of the subcontract, including any indemnification provision, prior to signing the subcontract. On the other hand, there was evidence that the parties had worked together on a prior project that included a similar subcontract that was also signed after its effective date. As such, the Court found that neither party was entitled to summary judgment on the contractual indemnification claim and that Davis-Fetch was not entitled to summary judgment dismissal of the breach of contract for failure to procure insurance claim.

New York Industrial Code Regulations (EDA)

Regulation § 23–1.26 Lead fumes and dust from structural steel.
(c) Cleaning coated surfaces.
(1) Removal of paint from rivet holes shall be performed by means of reaming or other suitable method.

While there are no cases directly dealing with this subsection, its language is likely specific enough to form the basis of a Labor Law § 241(6) claim, however, while “reaming is specified, “suitable method would be too vague to sustain a § 241(6) claim.

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Premises Pointers - Volume VIII, No. 10

Fri, 11 Apr 2025 19:56:31 +0000

Volume VIII, No. 10
March 31, 2025
A Monthly Electronic Newsletter

NOTE FROM THE EDITOR:

This month we are thrilled to welcome three new attorneys to Hurwitz Fine’s Buffalo office:

Jason A. Goodman has joined Hurwitz Fine P.C. as a Member in the firm’s Litigation Department. Jason handles complex toxic tort, asbestos defense, motor vehicle accident, medical transportation and products liability matters. He has experience defending litigated matters from inception through trial, including post-trial motions and appeals, for corporate and insurance clients. Jason earned his Bachelor of Science from SUNY College of Environmental Science and Forestry and his Master of Studies in Environmental Law as well as Juris Doctor from Vermont Law School.

Carly D. Brown has joined Hurwitz Fine P.C. as Special Counsel in the firm’s Economic Development and Business Services practice areas. Carly represents a diverse range of clients, including industrial development agencies, local development corporations, and businesses. She earned her Juris Doctor from Brooklyn Law School and holds a master’s degree in social work as well as a bachelor’s degree from the University at Buffalo.

Michael L. Lieberman has joined Hurwitz Fine P.C. as an Associate in the firm’s Litigation Department. His practice encompasses a wide range of litigation matters, including premises liability, school district representation, motor vehicle accidents, medical malpractice, and nursing home litigation. Mike earned his Juris Doctor from the University at Buffalo School of Law, where he graduated magna cum laude. He received his undergraduate degree from SUNY Binghamton, graduating summa cum laude with a Bachelor of Arts.

Welcome, Jason, Carly and Mike!

We are also excited to announce the continued growth of our Long Island office, marking a significant milestone in our firm’s expansion. Due to increasing demand and our commitment to providing exceptional legal services, we have relocated to a larger, more modern office space to accommodate our growing team of attorneys and staff. This move reflects our dedication to serving clients throughout Long Island and the greater New York area. As we settle into our new space, we look forward to strengthening our presence in the region and continuing to provide high-quality legal representation. For more information or to connect with our Long Island team, visit our website here.

Lastly, in Premises Pointers news, columnist Marc A. Schulz, who covers Homeowner Liability, Recreational Accidents and Discovery Angles, recently welcomed a baby girl with his wife. Congratulations to Marc and his growing family!

-Jody

Retail, Restaurant and Hospitality Happenings Around New York State and Beyond
By: Jody E. Briandi jeb@hurwitzfine.com

This month, a Los Angeles jury awarded Michael Garcia 50 million dollars in damages after he suffered severe burns when a scalding hot tea spilled onto his lap at a Starbucks drive-through in 2020. According to court papers, the plaintiff entered the drive-through, ordered hot drinks, and proceeded to the pickup window. The allegation is Starbucks failed to prevent the hot beverages from spilling onto the customer and had a duty to properly secure the drinks in the tray before handing them to the customer. Specifically, it is claimed that when the barista handed the plaintiff the order, a venti-sized “medicine ball” hot tea fell out and onto the plaintiff, who sustained third-degree burns that required extensive treatment. After failed settlement negotiations and a denied motion for summary judgment, the case proceeded to trial, and the jury deliberated for 40 minutes. The surveillance video was a key piece of evidence presented during the trial. An appeal will undoubtedly be filed based on the amount awarded. Click here for more details about the case.

3/06/2025 Wang v. Omni Hotels Mgmt .Cort
United States District Court, District of Connecticut
Defendant’s motion to compel medical records is granted.

Plaintiff Hui Wang slipped and fell in the lobby of Omni's hotel in New Haven on September 25, 2018 around 7:40 pm. It had been raining that day since at least 2:30 pm. Omni had placed a "Caution Wet Floor" sign in the lobby around 2:30 pm as a precaution. There is dispute over whether the floor was actually wet where plaintiff fell and whether Omni's safety measures were adequate. Since this case was removed based on diversity, Connecticut premises liability law applied but, federal summary judgment standards under Federal Rule of Civil Procedure 56 controlled. The court stressed that while the moving part must show that there are no genuine issues of fact, the non-movant must also set forth specific facts and affirmative evidence in order to defeat a properly support summary judgment motion. Under that standard, the court found that Plaintiff provided sufficient evidence that included her testimony and video evidence of others slipping to create a factual dispute over whether a dangerous wet condition existed on the floor. The court further found there is conflicting evidence on whether Omni had actual or constructive notice of the alleged wet condition, making summary judgment inappropriate on this issue. The effectiveness of Omni's warning sign and whether the condition was "open and obvious" were also factual issues that a jury should decide based on the disputed evidence. There were also questions noted regarding whether Omni regularly and continuously inspected the lobby.

3/04/2025 Duczinski v. Kohl’s, Inc.
United States Court of Appeals for the Second Circuit

On appeal, the Second Circuit reversed the District Court’s grant of summary judgment to defendant Kohl’s finding that whether a condition is not open and obvious is not dispositive of the entire claim.

The plaintiff, who is 5 feet tall, visited a Kohl's store and tried unsuccessfully to reach a spatula hanging 7 feet and 4 inches above the floor. After briefly looking for assistance, Dudzinski jumped to try to reach the spatula, fell, and suffered a severe leg injury. The Court agreed with plaintiff that the open and obvious nature of the spatula display's dangers is not dispositive of her premises liability claim against Kohl's in its entirety. The Court specifically noted that at oral argument defendant Kohl's conceded the existence of a duty of care distinct from a duty to warn and the existence of a fact question with respect to whether it breached the former duty to maintain the premises in a reasonably safe condition.

Labor & Employment for Retailers, Hospitality, and School District Litigation
By: Anastasia M. McCarthy amm@hurwitzfine.com

Dear Readers,

We continue to track changes affecting the workplace in New York State as well as at the federal level. If you require assistance navigating these various developments, please contact us.

Recently, in response to the Governor’s budget, the NY State Senate introduced its own one-house budget bills. Interestingly, the Senate’s legislation and budget includes extensive childcare funding intended to return parents to the workforce. Highlights include:

$500 million for a Child Care Workforce Stabilization fund—The fund is intended to expand the childcare workforce in order to make childcare more widely available.

$25 million for expanding non-traditional-hour childcare.

At the federal level, the EEOC has issued guidance and a press release related to corporate Diversity, Equity, Inclusion, and Belonging policies and programs. I am happy to help guide you should you require it.

Are You Fall Real? Slip and Fall/Snow and Ice/Storm in Progress/Espinal
By: Patrice C.S. Melville pcsm@hurwitzfine.com

Hi Readers,

Happy spring! As the weather begins (albeit slowly) to warm up and we emerge from hibernation, let’s all be mindful to not get “tripped up” along the way. This month’s offering highlights two cases; one case commenced against a property owner for a condition within the sidewalk and the other against a tenant commenced by an Airbnb guest tripped on an exterior staircase. Enjoy the warmer days ahead and be sure to keep a proper lookout!

3/19/2025 Brown v. 1133 E., LLC
Appellate Division, Second Department
An Abutting Owner Must Establish that It Did Not Create A Dangerous Condition, Did Not Perform Negligent Repairs, and Did Not Cause a Condition to Exist Due to Special Use of the Area In Order to Establish Entitlement to Summary Judgment Dismissal of a Plaintiff’s Complaint for Conditions Not Considered to Be A Part of the Sidewalk.

The plaintiff tripped and fell on a round, metal circle on the sidewalk in front of a commercial property in Brooklyn, New York. The round, metal circle was the remnant of a metal bicycle rack that had been removed from the sidewalk. The plaintiff commenced this action to recover damages for personal injuries against the abutting property owner. The abutting property owner moved for summary judgment dismissing the complaint and all crossclaims against it. The Supreme Court denied the motion, and the abutting property owner appealed.

On appeal, the Second Department reasoned that while Administrative Code of the City of New York § 7-210 shifts tort liability for injuries arising from a defective sidewalk from the city to the abutting property owner and imposes a duty upon the property owner to maintain the sidewalk in a reasonably safe condition, it does not impose civil liability on property owners for conditions such as city-owned tree wells and sign posts on the sidewalk. The Court further reasoned that liability may only be imposed on the abutting property owner in such instances only where the property owner has affirmatively created the dangerous condition, negligently made repairs to the area, or caused the dangerous condition to occur through a special use of that area.

Here, the Court held that the abutting property owner established that a bicycle rack was not part of the sidewalk for the purposes of section 7-210. However, the Court determined that the property owner failed to establish that it was not the entity that removed the bicycle rack that had been in the area of the subject accident, leaving the round, metal circle on which the plaintiff allegedly tripped. Therefore, the Court held that the property owner failed to establish that it did not cause or create the allegedly dangerous condition that caused the plaintiff's fall, affirming the lower Court decision.

03/24/2025 Vasquez v. Tapbrobane, LLC
Supreme Court, New York County
A Tenant May Not Be Responsible for Maintaining Common and/or Public Areas Unless the Lease Agreement States Otherwise.

The plaintiff claimed that she tripped and fell while descending an exterior stairwell from the first floor to a garden-level apartment of a premises. Plaintiff claimed that the step-risers were unevenly spaced, the stairwell lacked a proper handrail, and that the stairwell was dimly lit. Plaintiff commenced suit against the property owner and tenants, arguing that they had a collective duty to ensure the premises were maintained, operated and controlled in a reasonably safe manner, and thus breached that duty.

The tenants moved for summary judgment, arguing they owed plaintiff no duty and therefore could not be held liable for her injuries. The tenants further argued that plaintiff was unaware of the location of the accident and that any negligence claim is speculative. Additionally, tenants argued that because they owed no duty to plaintiff, the owner’s claims for indemnification or breach of contract must be dismissed. Plaintiff opposed the tenants’ motion arguing that the tenants owed her a duty to maintain the premises safely because they were leaseholders of the apartment and operated the Airbnb that plaintiff was visiting on the night of the incident. Plaintiff further contends that tenants’ motion is premature due to incomplete discovery. In reply, tenants maintained they owed plaintiff no duty because the incident occurred on an exterior staircase, not within the leased apartment. They also argued that plaintiff failed to demonstrate how further discovery would yield relevant information.

Here, the Court determined that the lease agreement between tenants and property owner gave tenants possession of the apartment and did not delegate any responsibility to maintain any public space or area outside of the leased unit. The Court held that because tenants were not contractually obligated to maintain the exterior staircase where plaintiff fell, and the lease specifically restricted their use of public space, they were not liable for any alleged structural deficiency to the exterior of the premises or any injury resulting therefrom. The Court held that tenants failed to meet their summary judgment burden in seeking the dismissal of the owner’s claims for indemnification as the lease agreement was ambiguous as to whether the tenants would be liable to the owners for any accident and related injury to tenants’ subtenants or guests, which would include the plaintiff.

Slips, Trips, and Legal Shifts: The Latest Retail Slip and Fall New York State Case Updates

By: Elizabeth K. Ognenovski eko@hurwitzfine.com

Hello Readers,

The end of March is here, and with it comes one of the most exciting and nerve-wracking times of the year – March Madness! Whether you are in it for the upsets, the buzzer-beaters, or just the pure madness of it all, March has a way of creating moments that are both exhilarating and anxiety-inducing. This year, I am putting my faith in Duke to take it all the way and cut down the nets!

The below cases discuss the Second Department's decisions on a trivial defect issue and an abutting property owner's liability under New York City Administrative Code § 7-210.

3/19/2025 Brown v. Heron Flatbush, LLC
Appellate Division, Second Department
In determining whether a defect is trivial, the court must examine all of the facts presented, including the width, depth, elevation, irregularity, and appearance of the defect along with the time, place, and circumstance of the injury.

The plaintiff commenced an action after she allegedly tripped and fell in a 7-Eleven parking lot due to a "hole" from a fuel cap in the ground. The defendant Heron Flatbush, LLC ("owner"), owned the premises, and the defendant 7-Eleven, Inc. ("tenant"), was the tenant pursuant to a written lease. The plaintiff claimed, in part, that the defendants were negligent in their ownership and maintenance of the premises. The defendant owner and defendant tenant moved for summary judgment on the basis that the alleged condition was either trivial in nature or was open and obvious and not inherently dangerous. The defendant owner also argued it was an out-of-possession landlord. The Kings County Supreme Court granted the defendant owner and defendant tenant's motions.

On appeal, the Second Department reversed the lower court's decision and explained that injuries as a result of trivial defects, not constituting a trap or nuisance, are not actionable. "In determining whether a defect is trivial, the court must examine all of the facts presented, including the width, depth, elevation, irregularity and appearance of the defect along with the time, place and circumstance of the injury. There is no 'minimal dimension test' or per se rule that a defect must be of a certain minimum height or depth in order to be actionable." The Second Department held that the evidence submitted by the defendant owner and defendant tenant which included photographs of the allege condition was "inconclusive as to whether the condition alleged was trivial." Below are some of the photographs that were submitted which depicted the alleged condition:

The Court further determined that the defendant owner and defendant tenant failed to establish that the alleged condition was open and obvious and not inherently dangerous. They also failed to "show that the defendant owner was an out-of-possession landlord who relinquished control over the parking lot area and was not contractually obligated under the lease to repair the parking lot."

3/19/2025 Brown v. 1133 E., LLC, et al.
Appellate Division, Second Department
When an alleged dangerous condition is found to not be part of the "sidewalk" for purposes of New York City Administrative Code § 7-210, liability may be imposed on the abutting landowner only where she/he has affirmatively created the dangerous condition, negligently made repairs to the area, or caused the dangerous condition to occur through a special use of that area.

This personal injury action arises from an alleged trip and fall that occurred on a round, metal circle that was on the sidewalk in front of 1133 Eastern Parkway in Brooklyn, New York. This round piece of metal was believed to have been hardware that was used to secure a bicycle rack to the sidewalk. The plaintiff commenced an action against various defendants including 1133 Eastern, LLC d/b/a McDonalds ("McDonalds"). The plaintiff alleged, amongst other things, that McDonalds created the alleged condition and violated Section 7-210 of the New York City Administrative Code. This section, "shifts tort liability for injuries arising from a defective sidewalk from the city to the abutting property owner and imposes a duty upon the property owner to maintain the sidewalk in a reasonably safe condition." The defendant McDonalds moved for summary judgment to dismiss the complaint and argued: (1) McDonalds did not own, control, repair, or maintain the bike rack over which the plaintiff tripped; and (2) the bike racks were not part of the sidewalk pursuant to Administrative Code § 7-210. The Kings County Supreme Court denied McDonalds' motion for summary judgment.

On appeal, the Second Department affirmed the lower court's decision. The Court explained that Administrative Code § 7-210 "does not impose civil liability on property owners for, inter alia, City-owned tree wells and sign posts on the sidewalk. 'Thus, liability may be imposed on the abutting landowner in such instances only where she or he has affirmatively created the dangerous condition, negligently made repairs to the area, [or] caused the dangerous condition to occur through a special use of that area.'" (quoting Marcano v. City of New York, 224 AD3d 829, 830 (2d Dep't 2024)). The Second Department held that although McDonalds established that the subject bike rack was not part of the sidewalk under Administrative Code § 7-210, McDonalds failed to prove that it was not the entity that removed the bike rack and left the round, metal circle which allegedly caused the plaintiff to trip over. The Court further determined that McDonalds failed to establish, prima facie, that it did not cause or create the allegedly dangerous condition that caused the plaintiff to fall.

Protecting Lives through the Rule of Law

Coverage Pointers - Volume XXVI No. 21

Fri, 28 Mar 2025 15:05:16 +0000

Volume XXVI, No. 21 (No. 694)
Friday, March 28, 2025
A Biweekly Electronic Newsletter

In some jurisdictions, newsletters such as this may be considered Attorney Advertising.

If you know of others who may wish to subscribe to this free publication, or if you wish to discontinue your subscription, please advise Dan D. Kohane at ddk@hurwitzfine.com or call 716-849-8900.

You will find back issues of Coverage Pointers on the firm website listed above.

Dear Coverage Pointers Subscribers:

Do you have a situation? We love situations.

My cover note will be a little different than most. Let me reflect on a situation more important than an insurance coverage..

For the past 26+ years, I have written a column in this newsletter, where I speak of insurance coverage, family matters, promotions, CE and CLE programs, etc. In all that time, I have steadfastly avoided political commentary and surely, partisan opinion. However, I hope you will indulge or forgive me for my comments here.

I am a lawyer. I am proud of what I do. I am humbled to be part of a legal system that is designed to protect our citizens. I am committed, as a lawyer, to honor our Constitution and to protect the rule of law. I am very concerned about the broadside attacks on our judges, our constitution, and our legal system. This is not a Democrat or Republican question. It is surely not a partisan issue; it is an American issue.
The ongoing assault on the judiciary—an undeniable and deeply concerning reality—has now reached a level so severe that it has compelled the Chief Justice to issue a public statement. This is not a development we can afford to overlook or dismiss lightly. Judicial independence is the bedrock of a functioning democracy, and any attempt to undermine it is, in effect, an attack on the fundamental principles that sustain the rule of law.

As lawyers, regardless of our political beliefs or partisan affiliations, we have a solemn duty to remind our fellow citizens that the judiciary is not a political instrument but a guardian of justice. To erode its independence is to erode the very framework that ensures fairness, accountability, and the protection of rights for all.

In 2020, I had the privilege of addressing 140 state appellate judges at the National Foundation for Judicial Excellence's annual symposium, where I spoke about the profound impact that the rule of law has had on my own family's journey from Nazi Germany. The lessons of history serve as stark reminders of what can happen when the rule of law is compromised or manipulated for political ends. I was honored to reprise this message at the ADTA annual meeting the following year, emphasizing the crucial role that judges and lawyers play in upholding and defending our legal system.

If you have any interest in reading my remarks, entitled Protecting Lives through the Rule of Law they are available. I urge you to remember, Democrat or Republican or Independent, we are Americans first.

Today, I offer these reflections, once again, as a sobering reminder: the responsibility to protect judicial independence does not rest solely with the judiciary—it belongs to all of us who believe in justice, fairness, and democracy. Now more than ever, we must stand vigilant in defense of the rule of law.

New York Rental Car Companies Celebrate "BYOI": Bring Your Own Insurance!

On March 13^th, the First Department, in Second Child v. Edge Auto, Inc, 2025 NY Slip Opn 01432, has turned car rental insurance on its head, upending a quarter century of precedent. I reported on that decision in the most recent issue of this newsletter. However, I wanted to expand my thoughts on it.

Imagine you're a customer at the Happy Car Rental counter at JFK Airport, and the clerk asks, "Would you like liability insurance for $6.00 per day?" Knowing the law, you confidently decline, citing to the bewildered counter clerk, the 2001 Court of Appeals decision in ELRAC v. Ward, which mandates rental companies to provide at least the minimum liability coverage required under Vehicle & Traffic Law Section 370:

The language of section 370 [of the Vehicle & Traffic Law] is plain and precise. Common carriers, including rental car companies, are required to obtain insurance for their vehicles. For passenger cars, such as the ones rented here, the insurance must provide minimum liability coverage of $ 25,000 for bodily injury and $ 50,000 for death. Furthermore, the policy must "inure to the benefit" of any permissive user of the vehicle … A renter is, of course, a permissive user. Thus, section 370 clearly requires the rental company to provide the renter with this minimum level of coverage.

ELRAC, Inc. v. Ward, 96 N.Y.2d 58, 73 (2001).

How much clearer can that be? The rental company is required to provide the renter with the minimum level of coverage.

The 2005 Graves Amendment changed the tort liability landscape by exempting rental and leasing companies from vicarious liability unless the accident resulted from vehicle defects or owner negligence. The federal statute was enacted in response to state statutes around the country – like New York Vehicle & Traffic Law Section 388 – that imposed vicarious liability on vehicle owner for the negligent acts of permissive users. Those states – including Section 388 – applied not only to personal autos, but also to rental and leased vehicles. Congress determined that those companies in the business of renting and leasing vehicles should not be subject to vicarious liability and would only be responsible for accidents if the vehicle proved defective and the defect, or some act of owner negligence, caused on contributed to the accident. The statute provided:

49 U.S. Code § 30106 - Rented or leased motor vehicle safety and responsibility

(a) In General.—An owner of a motor vehicle that rents or leases the vehicle to a person (or an affiliate of the owner) shall not be liable under the law of any State … by reason of being the owner of the vehicle .. harm to persons or property that results or arises out of the use, operation, or possession of the vehicle during the period of the rental or lease, if—

(1) the owner …is engaged in the trade or business of renting or leasing motor vehicles; and

(2) there is no negligence or criminal wrongdoing on the part of the owner …

Since that statute was adopted, judicial decisions throughout the country have dismissed car rental and leasing companies from lawsuits, in the absence of negligence on the part of the vehicle owner.

That answered the question about tort liability.

What about insurance obligations? The Graves Amendment contained. what has been known as the “savings clause”:

(b) Financial Responsibility Laws.—Nothing in this section supersedes the law of any State or political subdivision thereof—

(1) imposing financial responsibility or insurance standards on the owner of a motor vehicle for the privilege of registering and operating a motor vehicle; or

(2) imposing liability on business entities engaged in the trade or business of renting or leasing motor vehicles for failure to meet the financial responsibility or liability insurance requirements under State law.

Simply stated, state statutes that imposed insurance requirements on vehicle owners would remain untouched by the Graves Amendment. So, if a statute-imposed insurance requirements on the owner of a motor vehicle – a consideration separate and distinct from tort responsibility – those insurance obligations would remain.

As the Court of Appeals said in ELRAC v Ward, Section 370 does just that – it is a state statute that imposes insurance obligations on motor vehicle owners, including car rental agencies. It should be noted that ELRAC preceded the Graves Amendment.

Nevertheless, the First Department's recent decision in Second Child introduces a drastic shift. The court found that while Vehicle & Traffic Law § 370, requiring rental companies to carry minimum insurance coverage, remains valid, the law is preempted by the Graves Amendment when it attempts to make rental companies provide primary insurance coverage for renters. The court reasoned that any requirement forcing rental companies to provide primary insurance essentially reinstates vicarious liability, which the Graves Amendment expressly prohibits.

“[R]equiring rental car companies to primarily insure and indemnify plaintiffs' damages is the precise result barred by the Graves Amendment.”
The renters argued that the Graves Amendment only supersedes statutes imposing vicarious liability, not statutes mandating primary coverage. The court holds this to be "a distinction without a difference". Rental car companies "shall not be liable" under New York State law for damages incurred by renters. The form in which state law attempts to impose vicarious liability, whether under vicarious liability statutes or under primacy of insurance coverage statutes, does not matter. The First Department opined that to “hold otherwise would rescue every vicarious liability claim up to statutory minimum insurance amounts and render the Graves Amendment's preemption clause a nullity”.

This decision has introduced significant uncertainty. Historically, rental companies provided primary coverage, with personal auto policies offering excess coverage. Now, personal insurers like Risky Business Insurance Company may become primary, releasing rental agencies from initial (actually, any) responsibility.

So. imagine that customer at the JFK rental car counter has his personal auto policy with Risky Business Insurance Company and rents a car. It had been the rule, practice, and understanding, under the 2001 ELRAC decision, that if she or he had an accident, the Happy Car Rental Company would through its insurer or by itself, if self-insured, provide the defense and first layer of liability insurance coverage. Now, according to the First Department, that responsibility has been punted to Risky Business, the customer’s personal auto carrier.

This ruling raises serious concerns, especially for renters without personal auto insurance. Previously, rental agencies would cover minimum liability, but under this new interpretation, such coverage may vanish. Crash victims could be forced to rely on their own uninsured motorist (UM) coverage, or if uninsured, turn to the Motor Vehicle Accident Indemnification Corporation (MVAIC) for compensation.

The author believes the First Department misinterpreted the Graves Amendment's savings clause. Until further clarification from the Court of Appeals, confusion is likely to persist as rental companies and personal auto insurers navigate these uncharted and shark-infested waters.

This author suggests that the First Department’s decision misreads the “savings clause” in the Graves Amendment. But, in the meantime, stay tuned for confusion, as rental car agencies and personal auto companies duel this one out.

Law Firm Sanctioned $1,000,000 for Failing to Disclose all Available Coverage – Lawyers, Pay Attention.

A Washington State judge sanctioned a well-respected law firm $1 million for its failure to timely disclose two excess policies. A reminder to all who read this – the duty to inquire and disclose other primary, excess, umbrella, additional insured, or contingent coverage rests with the party and the law firm and the lawyer understand coverage well enough to know where to look and what questions to ask and be persistent enough to secure the information from the carrier that retained the firm and from their client (the insured). Not all coverage for an accident is necessarily provided by the same carrier that has primary responsibilities.

For lawyers who are reading this, ask yourself: are we adequately training our trial lawyers to understand insurance coverage and effectively inquire about it? Any lawyer reviewing this decision who does not promptly meet with their trial attorneys to discuss the obligation to disclose coverage, the necessity to inquire thoroughly, and the correct methods for identifying coverage, is risking potential sanctions.

Litigators, particularly those with less experience, often assume that the insurance carrier assigning a file will provide comprehensive information regarding primary and excess coverage. This assumption is frequently incorrect. Sometimes carriers fail to inform firms even about their own excess policies. Additionally, carriers might be unaware of other existing excess, umbrella, primary, or co-primary policies.

Consider a basic scenario: an ambulance accident involving another vehicle. The attorney representing the ambulance service might be dealing with multiple policies, including professional liability, owned auto, non-owned auto, additional insured, personal auto coverage for the driver, as well as excess and umbrella coverages.

Read what the court held the firm did and did not do and then read it to your lawyers.

Newsletters:

We have other firm newsletters to which you can subscribe by simply letting the editor (or me) know, including a new publication, which was created to advise on business and employment law questions:

Premises Pointers: This monthly electronic newsletter covers current cases, trends and developments involving premises liability and general litigation. Our attorneys must stay abreast of new cases and trends across New York in both State and Federal Court and will now share their insight and analysis with you. This publication covers a wide range of topics including retail, restaurant and hospitality liability, slip and fall accidents, snow and ice claims, storm in progress, inadequate/negligent security, inadequate maintenance and negligent repair, service contracts, elevator and escalator accidents, swimming pool and recreational accidents, negligent supervision, assumption of risk, tavern owner and dram shop liability, homeowner liability and toxic exposures (just to name a few!). Please drop a note to Jody Briandi at jeb@hurwitzfine.com to be added to the mailing list.
Labor Law Pointers: Hurwitz Fine P.C.’s Labor Law Pointers offers a monthly review and analysis of every New York State Labor Law case decided during the month by the Court of Appeals and all four Departments. This e-mail direct newsletter is published the first Wednesday of each month on four distinct areas – New York Labor Law Sections 240(1), 241(6), 200 and indemnity/risk transfer. Contact Dave Adams at dra@hurwitzfine.com to subscribe.
Products Liability Pointers: Whether the claim is based on a defective design, flawed manufacturing process, or inadequate instructions/warnings, product liability litigation is constantly evolving. Products Liability Pointers examines recent New York State and Federal cases as well as high court decisions from other jurisdictions, keeping our readers up to date with the latest developments and trends, and providing useful practice tips and litigation strategies. This monthly newsletter covers all areas of product liability litigation, including negligence, strict products liability, breach of warranty claims, medical device litigation, toxic and mass torts, regulatory framework and governmental agencies. Contact V. Christopher Potenza at vcp@hurwitzfine.com to subscribe.
Medical & Nursing Home Liability Pointers. Medical & Nursing Home Liability Pointers provides the latest news, developments, and analysis of recent court decisions impacting the medical and long-term care communities. Contact Elizabeth Midgley at emm@hurwitzfine.com to subscribe.

Aging Waterfall – 100 Years Ago:

Buffalo Courier Express
Buffalo, New York
28 Mar 1925

Figures Age Of Niagara Falls As 40,000 Years

Chicago Professor Claims Falls originally were at Lewiston and Queenston, Retreating 7 ½ miles.

Chicago, Ill., Marcj 27.- Niagara Falls came into being in the year 26935 B.C., at Lewiston, according to professor J. Harlen Bertz, University of Chicago geologist, who has been probing into the birth record of the famous falls.

Based on careful study of the falls, the gorge and the Great lakes, it is estimated that the falls began 30,000 to 40,000 years ago and have been working steadily ever since.

“Nature left a record – if we can read it right -,” said professor Bretz “showing how long ago in years the Northern States were covered by a glacier. Niagara falls are wearing away the rock over which they tumble. They are undercutting this rock at the rate of about 4 ½ feet a year. The falls are maintained by undercutting, but they are moving upstream. And as they move they lengthen the gorge below the great cataract. That is how the gorge was formed – by the retreat of the falls. The gorge is about 7 ½ miles long. The falls were originally at Lewiston and Queenston. They took origin when the ice sheets retreated from the northern part of the Great Lakes country.

“For a long time only the waters of Lake Erie spilled over the falls, lakes superior, Michigan and Huron basins were discharging down the Ottawa river to Lake Ontario directly.”

Peiper on Property (and Potpourri):

Greetings, and welcome to baseball season. If the games are really counting, Spring must be right around the corner. Doesn’t it?

The road show loads up again this weekend, as we’re headed to Indianapolis for PLRB’s annual meeting and claims conference. Indianapolis is close to everyone, it seems, yet not an easy trip for us from Buffalo. We hope to see you there, where your author will be presenting on how to read the CGL policy in the context of a construction defect/products liability claim. Our editor, by popular demand, will be presenting on risk transfer and tenders.

Before we go this week, we’d be remiss if we didn’t point out the Appellate Division’s decision in Dersam as reported in the Property Column. In our humble opinion, the Court appears to be conflating first and third-party bad faith standards. This is part of a consistent trend which, intentionally or unintentionally, is eroding the long-established rules set forth by the Court of Appeals in NYU v. Continental Cas. Co.

Be warned and be ready to explain why Pavia doesn’t mix with Romanova in your next motion.

That’s it for now. See you in two weeks. And go O’s.

Steve
Steven E. Peiper
sep@hurwitzfine.com

Don’t Spead It All In The Same Place – 100 Years Ago:

Buffalo Courier Express
Buffalo, New York
28 Mar 1925

Chicago Orchestra Members to Receive World’s Highest Pay

Chicago, Ill, March 27 (A.P.) – The 82 members of the Chicago Civic Opera company’s orchestra have become the highest paid musicians in the country, if not in the world, James Petrillo, president of the musicians’ union, said today with the signing of a new wage agreement.

The players were given a wage increase of $8 a week, bringing the minimum wage to $119 a week. In addition, the agreement provided for $5 for each practice, adding $35 or $40 a week. The average salary will be close to $155 a week during the 22 weeks of the opera season, Petrillo said.

Lee’s Connecticut Chronicles:

Dear Nutmeggers,

Busy couple of weeks, with three out of the four kids having overlapping spring breaks and, believe it or not, wanting to spend some time with dear old mom and dad. Moving to the beach was the best decision we ever made!

More Nutmeggers’ news for you next edition. Oh, and check out our cases this week – a $5,000 issue that’s gonna add up to a lot of money for the industry if carriers don’t change their UM/UIM set-off language.

Until next time, keep keeping safe.

Lee
Lee S. Siegel
lss@hurwitzfine.com

Wife Just Ain’t Worth That Much – 100 Years Ago:

The Buffalo News
Buffalo, New York
28 Mar 1925

JUDGE SETS ASIDE $1000 AWARD MADE BY JURY

The verdict of a Supreme court jury in favor of Merle Austin, 333 Potomac avenue, was set aside Thursday by Justice Brown. The judge ruled that the $1000 compensation awarded Austin for loss of his wife’s services was excessive and declared that unless Austin accepted $500 he would give the D.J. Perry corporation and Gladys Ferrin, secretary to President Edward B. Germain of the Dunlop Tire & Rubber Co., co-defendants, a new trial.

The jury also awarded Austin’s wife, Hazel 20, $750 damages for injuries, suffered when the car in which she and Miss Ferrin were riding, was struck by a Perry corporation truck last April.

Ruffner’s Road Review:

Dear Readers,

Happy Spring, although it certainly doesn’t feel like it yet with 30-degree weather and snow falling. In sports news, March Madness is finally here, and for once my brackets are actually off to a pretty good start. We will check back in a few days to see if that is still the case!

I have a case of first impression from the Second Department this week, regarding whether distinct arbitration awards can be treated as a single arbitral award under Insurance Law and the No-Fault law for the purposes of determining whether the requisite $5,000 threshold has been met to allow for a de novo review of claims for no-fault insurance benefits. The court held that the plain language and intent of the statutes did not contemplate such interpretation (even though the insurance company, medical provider, and injured person were the same in each arbitration) and reversed the Supreme Court’s ruling. In the second case, the court determined that the insurer was not required to pay no-fault claims, as it properly established a founded belief that the claimed injuries were not caused by the subject accident.

Until next time,

Kyle
Kyle A. Ruffner
kar@hurwitzfine.com

Nobody Invited Me! – 100 Years Ago:

The Kingston Whig-Standard
Kingston, Ontario, Canada
28 Mar 1925

Petting Parties

I am twenty and a member of a girl’s quartet. Last summer we played in small towns, and the girls treated me coolly because I refused to go to petting parties and bathing parties at night. Did I do right? – C.R.

You made no mistake in the stand you took. Petting parties alone with a man are always objectionable. Swimming at night with a comparative stranger is also objectionable.

Ryan’s Federal Reporter:

Hello Loyal Coverage Pointers Subscribers!

It’s a GIRL! My wife and I welcomed our beautiful baby daughter into the world on March 1 (six-weeks early), and she is the perfect complement to our two boys, who are now five and almost eight. While she does not yet crawl, talk, or play, she can certainly eat, sleep, and poop with the best of them. Our family is now five and it’s an amazing feeling.

This issue, I tackle a Second Circuit decision concerning coverage for Strikes, Riots, and Civil Commotion. The takeaway is a practical tip for your next grapple with off-beat language.

Until next time,

Ryan
Ryan P. Maxwell
rpm@hurwitzfine.com

He Wheeled His Wheelbarrow, Through Streets Broad And Narrow – 100 Years Ago:

Lebanon Daily News
Lebanon, Pennsylvania
28 Mar 1925

WHEELBARROW WAS RETURNED

Through the article in Thursday’s letter concerning the wheelbarrow that disappeared from the tool house on the Union cemetery, the return of the missing article was brought about. It turned out that it was not stolen but only borrowed by someone in need of it, who, knowing it would be inconvenient to ask Morris Batdorff, the caretaker of the cemetery about it, took the wheelbarrow without that formality, and had forgotten to return it until his attention was called to the matter by the article.

Storm’s SIU:

Hi Team:

Just getting back from some vacation time in sunny Florida. Mickey says, “Hi Folks”!

Five cases this week:

Coverage Denial for Untimely Sworn Statement in Proof of Loss Upheld on Presumption of Receipt of Mailing.
Denial of Assignee Medical Provider’s Claim Upheld Due to Insured’s Failure to Attend EUO.
Case Survives Motion to Dismiss Whether Insurer Must Pay Sales Tax for Total Loss Leased Vehicles.
In Staged Accident case, Evidence from Third-Party Sources like Accurint Reports, CarFax Reports and Information from the Other Vehicle's Event Data Recorder Deemed Inadmissible Hearsay.
Anti-Concurrent Causation Clause Applies if Any Excluded Cause Contributes to the Loss, Even if Other Covered Causes are also Involved.

Have a great two weeks until we talk again!

Scott
Scott D. Storm
sds@hurwitzfine.com

What Is A “Baby Party,” Anyway? – 100 Years Ago:

The Kansas City Post
Kansas City, Missouri
28 Mar 1925

LID ON STUDENTS

Texas University Faculty Ready to Clamp ON Drastic Rules.

AUSTIN, TEX., Marcj 28. – While the socially elect of Texas university thronged to another formal dance at the Country club last night, the faculty administrative counsel met to consider stringent restrictions on students’ social affairs.

Prohibition of all dances off the campus, enactment of an 11 o’clock curfew for social nights and a curtailed social calendar, were among measures discussed, according to L. H. Hubbard, dean of students.

“The investigation of the alleged ‘baby’ party is progressing as fast as could be expected,” Hubbard declared. Taking of testimony has been slow and no disciplinary action will be announced for several days.

The dean denied reports that six students had been told privately to withdraw from the school to avert scandal.

Fleming’s Finest:

Hi Coverage Pointers Subscribers:

This week’s case from the Rhode Island Supreme Court considered whether or not to vacate an appraisal award based on the interest of the defendant’s appraiser. The court vacated the award because the defendant’s appraiser had been assigned the insured’s interest in the claim and was also the contractor performing the restoration work.

Happy Spring!

Kate
Katherine A. Fleming
kaf@hurwitzfine.com

Stop The Flow Of Immigrants Into The US – Then, It Was The Irish – 100 Years Ago:

The Tablet
Brooklyn, New York
28 Mar 1925

IRISH “HEART” CASE CAUSES INQUIRY

Letters Continue to Back Up N.C.W.C Bureau’s Charge of Injustice

Washinton, March 20. – Results in the N.C.W.C. Bureau of Immigration’s check-up on the flood of debarments of Irish immigrants, continue to bear out the Bureau’s contention that serious injustice is being done these immigrants, the Bureau declared this week.

Letters containing doctors’ certificates of stalwart health, and testifying to their employment at good wages, with full ability to work, are still coming in from Irishmen who were admitted only after providing bond that they would not become public charges, says the Bureau. The preponderance of debarments and ultimate deportations or demands for bond came after diagnoses of heart disease.

Gestwick’s Garden State Gazette:

Dear Readers:

Well, MLB opening day is upon us, and so is the Sweet Sixteen of March Madness. One of my favorite times of the year. With the Blue Jays’ off-season acquisitions (Anthony Santander and Max Scherzer, to name a few), I am excited to see if we can turn the corner. Kudos to my fiancé and CP’s own Kyle Ruffner, who are currently neck-and-neck for first place in the Hurwitz Fine March Madness bracket. I am a bit below those two.

I have a Coverage B case for you this week. For those who don’t know, Coverage B is part of many liability insurance policies. Unlike Coverage A, which covers for bodily injury and property damage liabilities, Coverage B protects against “personal and advertising injury,” a defined term that includes many things, including claims of disparagement, slander, and libel. However, a common Coverage B exclusion is one for personal and advertising injury that is caused intentionally (in my view, it is somewhat akin to the typical Coverage A exclusion for expected or intended injury). This week’s case focuses on whether the carrier has a duty to defend against a claim for tortious interference arising out of defamation-esque allegations, and all the allegations such a claim entails. Enjoy!

Until next time,

Evan
Evan D. Gestwick
edg@hurwitzfine.com

Twins Born 24 Hours Apart – 100 Years Ago:

The Brooklyn Daily Times
Brooklyn, New York
28 Mar 1925

Twins in 4 Generations Makes Family Record. Born 24 Hours Apart

James Cain, a salesman, of 604 Humboldt street, is today acting as nurse to his wife, Frances, who presented him with twins Thursday. The babies were born twenty-four hours apart. According to Cain, mother and babies are doing nicely.

The most interesting feature of the case is that Mrs. Cain is one of twins, her mother, Mrs. Theresa Bruetsch, was also one of twins and her grandmother, who is dead, was also one of twins. Thus, the birth of a pair this week completes a series of twins for four generations.

Both of the present babies are girls. One was born at 9:30 P.M. Tuesday, and the other at 10 P.M. Wednesday. This length of interval between the arrival of twins is in itself very rare.

O’Shea Rides the Circuits:

Hey Readers,

This week I was ready to attend the Sabres – Senators game. However, a colleague determined my presence was unneeded. Perhaps it was my fanaticism for Jake Sanderson or not agreeing with his theoretical trades for Brady Tkachuk. One will never know. I jest, my ticket was usurped for an admirable reason, a game with his father.

In other news, I am bracing for the landscaping season. I am not the green thumb of the house, just the manual laborer. Once the ground is thawed, the spade will be ushered into my hand. I can’t wait.

For this issue I have a matter that involved some creative lawyering. Essentially, a party tried to extend the insuring agreement found within a base auto policy to the policy’s supplemental uninsured/underinsured endorsement.

See You in Two,

Ryan
Ryan P. O’Shea
rpo@hurwitzfine.com

Drill Baby Drill (Or Not) – 100 Years Ago:

Buffalo Courier
Buffalo, New York
28 Mar 1925

ATTORNEY GENERAL STARTS DRIVE ON QUACK DENTISTS

New York, March 27. – The state attorney general’s office here is conducting a drive against quack dentists, it became known today when William Gerny of Manhattan pleaded guilty to illegal practice and was fined $200 in general sessions.

Deputy Attorney General Ullman said he would hereafter seek severe sentences in all such cases.

Rob Reaches the Threshold:

Dear Readers,

This edition of Coverage Pointers happens to come out on a beloved national holiday - Opening Day. Cheers to all you baseball fans out there who, like me, look forward to their team taking the diamond with aspirations of a brand-new season. Although I'm sure our diverse readers are fans of various different teams, we can all unify under one purpose - stopping the Dodgers. Happy Holiday to you all.

Unfortunately, there has been a lull in decisions from the Appellate Division on Serious Injury Threshold, so no case analysis from me this time. We will try again in two weeks.

In the meantime, please enjoy the articles from my colleagues.

Rob
Robert J. Caggiano
rjc@hurwitzfine.com

So Forward! – 100 Years Ago:

The Kingston Whig-Standard
Kingston, Ontario, Canada
28 Mar 1925

DEAR MISS FAIRFAX:

I have been going about with a young man for the past year. About four months ago he asked me whether he could see me twice a week, Wednesdays and Sundays. I consented because I love him dearly. He is always telling me how much he cares for me.

I would like to know whether it would be proper for me to ask his intentions. A.S.

Let him take the initiative. You will gain nothing by asking him the question you suggest, and you may lose his friendship. But don’t let him take up so much of your time and thoughts.

If I were you I would encourage other young men friends to call now and then, even on the nights you’ve formerly set aside for him. A little competition will do no harm.

Besides, you can’t in any way count on his proposing marriage to you and it’s therefore unwise to allow him to monopolize you.

LaBarbera’s Lower Court Library:

Dear Readers:

It was maple weekend recently in Western New York. I discovered, despite years of denial, that I do indeed love maple candies. Excited for some more weekend adventures as the weather continues to warm up.

Another New York County decision to report on this week. The Court held that Southwest Marine & General Insurance Company had a duty to defend an additional insured, based on the allegations in a Third-Party Complaint, which the Court acknowledged was “self-serving.”

Until next time…

Isabelle
Isabelle H. LaBarbera
ihl@hurwitzfine.com

What Kind Of Degree? – 100 Years Ago:

The Buffalo News
Buffalo, New York
28 Mar 1925

BURGLARY SCHOOL COMES TO GRIEF

PARIS, March 28. – Running a burglary school in the best style of Fagin brought disaster yesterday to Pere Mousset, because he allowed his pupils to begin practical application of their studies before they had mastered the course. The instructor and three young women and three young men students were jailed after a series of 40 burglaries with which they are charged.

Mousset gave careful lessons and distributed skeletons keys and jimmies, urging his pupils to do a little homework. This resulted in the turning over to the school of various objects valued at 30,000 francs.

The police tracked the pupils and their instructor. Since they have not mastered the jail-breaking lesson, all are behind the bars.

Lexi’s Legislative Lowdown:

Dear Readers,

Next weekend I am heading to Charleston, South Carolina, to run a 10k and visit a friend from college. It looks like it will be around 80 degrees the entire weekend, and I cannot wait for the warm weather!

This week we discuss a proposed bill that seeks to regulate the increases in policy premiums for homeowners’ policies.

Thanks for reading,

Lexi
Lexi R. Horton
lrh@hurwitzfine.com

Now There’s Something We Don’t See Every Day – 100 Years Ago:

The Buffalo News
Buffalo, New York
28 Mar 1925

GOVERNOR SIGNS BILL TO CUT INCOME TAX

ALBANY, March 28. – Governor Smith today signed the bill providing for a 25 per cent. Reduction in the state income tax. The governor was filmed in the act of affixing his signature.

Assemblyman Phelps of New York, introducer of the measure, was present and received the pen used by the governor.

Domenica’s Diary on Bad Faith:

Dear Readers,

This week’s column diverges from the typical Bad Faith to address Attorney-Client Privilege and the Work-Product Doctrine. As lawyers in the insurance arena, we rely heavily on these privileges and this case highlights the chance for unintended waiver of these privileges, guiding us to be prudent with sensitive documents and information. Until next time!

Domenica
Domenica D. Hart
ddh@hurwitzfine.com

Monthly Floggings – 100 Years Ago:

Brooklyn Eagle
Brooklyn, New York
28 Mar 1925

MONTHLY FLOGGINGS FOR ALL CRIMINALS IN 2D TERM URGED

Revise Criminal Insanity Laws
Also, Dr. E. E. Hicks Tells
Flatbush Exchange Club.

Criminal and Criminal insanity and the most effective methods of dealing with these problems was the subject which Dr. Edward E. Hicks, Brooklyn alienist, discussed last night at the dinner of the Flatbush Exchange Club. The dinner was held at the Union League Club of Brooklyn, 122 Kenmore pl.

Dr. Hicks advocated three methods of handling criminal cases in which the question of sanity enters. He said that, in the first place, the laws should be changed so that every person charged with a capital crime will be tried for the particular crime without the question of sanity entering into the trial. After being tried, the mental condition of the prisoner should be considered.

“If found sane, the guilty person would be sent to jail,” he said, “and if insane, sent to a criminal asylum.”

He said that in this manner much of the usual scandal and injustice connected with the trial of wealthy criminals will be done away with.

Secondly, he advocated that all “repeaters” in penal institutions, or persons who have served a previous term, be given the lash once a month.

North of the Border:

In the early morning before sitting down at my desk, I take my 10-year-old arthritic golden retriever and our 10-month-old golden retriever puppy to the dog park for a romp. Lately, I have been bringing along our Chuckit! Ball Launcher and an orange ball.

Our puppy erupts with unbridled excitement the moment the Chuckit! ball launcher appears; his entire body quivering with anticipation. His dark amber eyes lock onto the bright orange rubber ball; nothing else matters. With each launch, he bounds across the field of emerging grass and melting snow, ears flying and paws barely touching the ground, tracking the ball with laser-focused intensity. He retrieves it with a triumphant leap and a proud trot back, eyes sparkling with the simple, profound pleasure of the game. Every throw is a celebration; every catch a moment of canine ecstasy that radiates from his very being—this is a puppy experiencing the most elemental and wonderful kind of happiness.

I marvel at his wholehearted commitment. When playing his entire being is dedicated to the moment, there are no half-measures, no distractions. Every muscle, every sense is focused on the ball, on the game. In our often-fragmented human experience, where our attention is constantly divided by screens, worries, and multiple responsibilities, he reminds me of the profound satisfaction that comes from being fully present, from engaging completely with the task or joy at hand.

A great way to start the day.

My column this week is on the important issue of whether counsel appointed to prosecute a subrogated claim has a traditional solicitor client relationship with the insured.

Until next time.

Heather
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
hasanderson@sanderson-law.com

Headlines from this week’s issue, attached:

KOHANE’S COVERAGE CORNER
Dan D. Kohane
ddk@hurwitzfine.com

Fall in Parking Lot Triggers Tenant’s Carrier’s Duty to Defend, Even Though Lease was Only for the “Dentist Office”. Late Notice Excused because of Lack of Prejudice. Late Disclaimer Doom Disclaimer, in Any Event
An Indemnity Agreement in a Construction Contract, Signed After an Accident Can be Effective if the Parties Intended it to be Effective Retroactively. In this Case, a Question of Fact on that Issue
Southern District Holds that an Insurer is Not Estopped from Withdrawing a Defense to an Additional Insured Where the Insurer Did Not Control Defense; Court also Rules that a Finding in a Trial Court of No Proof of a Written Contract for Contractual Indemnification Purposes Collaterally Estops Additional insured from Re-litigating the Existence of a Written Contract in Insurance Dispute [Guest Editor: Sherri Pavloff]

PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
sep@hurwitzfine.com

Two Year Suit Limitation Clause Enforceable Where Clearly Attaches Two Years After the Occurrence Giving Rise to the Claim
Court Denies Motion of Late Proof of Loss Where there No Proof the Form was Attached to Email; Applies Pavia Standard to Companion First Party Bad Faith Claim
Entry of Final Order Terminates Appellate Rights Attached to Intermediated Orders

LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
lss@hurwitzfine.com

Failure to Cooperate Nullifies Homeowner’s Coverage
Medical Payments Coverage is Not a Set-off to UM

RUFFNER’S ROAD REVIEW
Kyle A. Ruffner
kar@hurwitzfine.com

In a Case of First Impression, Court Holds that Health Care Providers who Treat No Fault Patients, May Charge at Rates Great Than Workers Compensation Schedule Once $50,000 Basic Economic Loss Ceiling has Been Reached
Separate Arbitration Awards May Not Be Combined to Meet the Jurisdictional Threshold for De Novo Review of No-Fault Claims
Insurer Had No Duty to Pay No-Fault Claims Due to Founded Belief the Claimant’s Injuries Did Not Arise Out of the Accident

RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
rpm@hurwitzfine.com

Remand Ordered to Permit Consideration of Extrinsic Evidence Submitted by Insurer in Support of its Interpretation of Policy Wording

STORM’S SIU
Scott D. Storm
sds@hurwitzfine.com

Coverage Denial for Untimely Sworn Statement in Proof of Loss Upheld on Presumption of Receipt of Mailing
Denial of Assignee Medical Provider’s Claim Upheld Due to Insured’s Failure to Attend EUO
Case Survives Motion to Dismiss Whether Insurer Must Pay Sales Tax for Total Loss Leased Vehicles
In Staged Accident case, Evidence from Third-Party Sources like Accurint Reports, CarFax Reports and Information from the Other Vehicle's Event Data Recorder Deemed Inadmissible Hearsay
Anti-Concurrent Causation Clause Applies if Any Excluded Cause Contributes to the Loss, Even if Other Covered Causes are also Involved

FLEMING’S FINEST
Katherine A. Fleming
kaf@hurwitzfine.com

Appraisal Process Could be Equated With Arbitration. Appraisal Award Vacated Due to Evident Partiality of Defendant’s Appraiser

GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
edg@hurwitzfine.com

Appellate Division Rules Tortious Interference Claim Intrinsically Includes Allegations of Intent, Barring Coverage Under Policy’s Personal and Advertising Injury Exclusion

O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
rpo@hurwitzfine.com

Insured Cannot Extend Auto Policy’s Insuring Agreement in Liability Part Regarding an Insurer’s Right to Investigate a Claim to the Policy’s Uninsured/Underinsured Motorist Endorsement

ROB REACHES the THRESHOLD
Robert J. Caggiano
rjc@hurwitzfine.com

Nothing notable recently from the Appellate Division on Serious Injury Threshold. Check back in two weeks.

LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
ihl@hurwitzfine.com

Court Finds Third-Party Complaint Triggers Duty to Defend Additional Insured

LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
lrh@hurwitzfine.com

Act to Amend Insurance Law to Prohibit Increases in Rates of Homeowners’ Insurance in Excess of Twenty-Five Percent Per Year

DOMENICA’S DIARY ON BAD FAITH
Domenica D. Hart
ddh@hurwitzfine.com

Attorney-Client Privilege and Work-Product Doctrine Can be Waived by Failure to Use Reasonable Steps to Rectify an Inadvertent Disclosure

NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
hasanderson@sanderson-law.com

A Lawyer Prosecuting a Subrogated Claim for an Insurer Does Not have a Retainer with the Insured and Therefore is Not in Conflict Should that Same Lawyer Act Against the Insured in a Coverage Action on the Same Policy that Generated the Subrogated Claim.

That’s all there is and there is no more.

Stay safe and stay focused on what is important.

Hurwitz Fine P.C. is a full-service law firm providing legal services throughout the State of New York and providing insurance coverage advice and counsel in Connecticut and New Jersey.

NEWSLETTER EDITOR
Dan D. Kohane
ddk@hurwitzfine.com

ASSOCIATE EDITOR
Agnes A. Wilewicz
aaw@hurwitzfine.com

COPY EDITOR
Evan D. Gestwick
edg@hurwitzfine.com

INSURANCE COVERAGE/EXTRA CONTRACTUAL LIABILITY TEAM
Dan D. Kohane, Chair
ddk@hurwitzfine.com

Steven E. Peiper, Co-Chair
sep@hurwitzfine.com

Michael F. Perley

Agnieszka A. Wilewicz

Lee S. Siegel

Brian F. Mark

Scott D. Storm

Domenica D. Hart

Ryan P. Maxwell

Kyle A. Ruffner

Katherine A. Fleming

Evan D. Gestwick

Ryan P. O’Shea

Isabelle H. LaBarbera

Lexi R. Horton

Victoria S. Heist

FIRE, FIRST PARTY AND SUBROGATION TEAM
Steven E. Peiper, Team Leader
sep@hurwitzfine.com

Michael F. Perley

Scott D. Storm

NO-FAULT/UM/SUM TEAM
Dan D. Kohane
ddk@hurwitzfine.com

Ryan P. O’Shea
rpo@hurwitzfine.com

Kyle A. Ruffner
kar@hurwitzfine.com

APPELLATE TEAM
Jody E. Briandi, Team Leader
jeb@hurwitzfine.com

Topical Index

Peiper on Property and Potpourri

Lee’s Connecticut Chronicles

Ruffner’s Road Review

Ryan’s Federal Reporter

Storm’s SIU

Gestwick’s Garden State Gazette

Lexi’s Legislative Lowdown

Read Our Additional Newsletters

KOHANE’S COVERAGE CORNER
Dan D. Kohane
ddk@hurwitzfine.com

03/19/25 523 BWAY, LLC v. Erie and Niagara Insurance Association
Appellate Division, Second Department
Fall in Parking Lot Triggers Tenant’s Carrier’s Duty to Defend, Even Though Lease was Only for the “Dentist Office”. Late Notice Excused because of Lack of Prejudice. Late Disclaimer Doom Disclaimer, in Any Event

Berson leased dental office space (“premises”) from the plaintiff, 523 BWAY. Erie and Niagara Insurance Association (“ENIA”), issued a policy of insurance to Berson for premises for the period from June 15, 2016, to June 15, 2017. The policy listed 523 BWAY as an additional insured.

In November 2016, Pacheco, who was employed by Berson, slipped and fell in a parking lot at the subject property while walking to her car. Pacheco sought to recover damages in an underlying personal injury action entitled Pacheco v Kasey Realty, LLC (the “underlying action”).

523 BWAY's insurance carrier, Merchants Mutual, sought additional insured coverage from ENIA under Berson's policy. ENIA disclaimed coverage to 523 BWAY on the grounds, among others, that the parking lot at the subject property was not included in Berson's lease and, therefore, was not covered by ENIA's policy, that 523 BWAY failed to timely provide notice of the occurrence as soon as practicable, and that the additional insured endorsement of the policy excluded coverage for 523 BWAY's direct liability.

523 BWAY commenced this action for a judgment declaring that ENIA is obligated to defend and indemnify 523 BWAY as an additional insured in the underlying action.

An insurer's duty to defend its insured is 'exceedingly broad’ and additional insured is a recognized term in insurance contracts . . . and the well-understood meaning of the term is an entity enjoying the same protection as the named insured. If any of the claims against an insured arguably arise from covered events, the insurer is required to defend the entire action.

"The phrase 'arising out of' . . . requires 'only that there be some causal relationship between the injury and the risk for which coverage is provided'" with . . . premises for which the insurer has not evaluated the risk and received a premium'".

Here, ENIA failed to establish its prima facie entitlement to judgment as a matter of law. ENIA's policy unambiguously provided that 523 BWAY, as an additional insured, was entitled to coverage for "liability arising out of the ownership, maintenance or use of that part of the premises designated below leased, rented or loaned to the named insured," which premises were defined as "dentist office."

Although the lease only described the subject property as "approximately 2,350 square feet . . . comprising approximately one-half (½) of the building" located on the subject premises, it is undisputed that the subject property was utilized pursuant to the lease as a dental office for a dental practice. Therefore, even though the parking lot was not expressly included as part of the subject property, it appears that the subject property had at least a license to use the parking lot, since Pacheco testified in the underlying action that she parked in the parking lot when she came to work. Moreover, the photographs from the investigation report prepared for ENIA by VanKleeck-Winne Adjusters, Inc., established that the premises was designed in such a way that anyone seeking access to the subject property must pass through the parking lot). Under these unique circumstances, Pacheco's injury arose out of the use of the subject property.

Here, the only way to access the subject property was to cross over the parking lot, whereas in Atlantic Ave., there appeared to have been multiple ways to access the leased premises. Moreover, in a different case, the leased premises were expressly identified in the additional insured endorsement as the unit of the building leased by the lessee. Here, however, the additional insured endorsement defined the designated premises as the less-precise "[d]entist office."

The Late Notice/Late Disclaimer Issue

Pursuant to Insurance Law § 3420(c)(2)(A), "[i]n any action in which an insurer alleges that it was prejudiced as a result of a failure to provide timely notice, the burden of proof shall be on: (i) the insurer to prove that it has been prejudiced, if the notice was provided within two years of the time required under the policy; or (ii) the insured, injured person or other claimant to prove that the insurer has not been prejudiced, if the notice was provided more than two years after the time required under the policy."

Here, the insurance policy stated that "[i]n case of an occurrence or if you become aware of anything that indicates there might be a claim under this policy, you must give us or our agent notice (in writing if requested) as soon as practicable." It is undisputed that the injury occurred in November 2016, and the underlying action was commenced in January 2018. 523 BWAY first informed ENIA of the claim on April 16, 2020, more than 3½ years after the accident date and more than 2 years after the underlying action was commenced. Under these circumstances, it was 523 BWAY's burden to establish, prima facie, that ENIA was not prejudiced by the late notice of the claim.

Insurance Law § 3420(c)(2)(C) provides that "[t]he insurer's rights shall not be deemed prejudiced unless the failure to timely provide notice materially impairs the ability of the insurer to investigate or defend the claim." Here, 523 BWAY established, prima facie, that shortly after receiving notice of the claim, ENIA opened an investigation and performed a full review of the claim. Accordingly, 523 BWAY established, prima facie, that ENIA's rights were not prejudiced, and that 523 BWAY's failure to timely provide notice did not materially impair ENIA's ability to investigate or defend the claim.

Here, 523 BWAY established that in a letter dated April 16, 2020 (hereinafter the April 2020 letter), addressed to ENIA, Merchants Mutual Insurance Company, on behalf of 523 BWAY, "tender[ed] their defense and indemnification and additional insured coverage to Gary Berson, DDS," ENIA's insured. The April 2020 letter also provided the caption and parties to the underlying action, the facts underlying that action, and a copy of the lease agreement and the complaint in the underlying action, which contained the date and location of the accident.

Therefore, as of April 2020, ENIA "was on notice of the underlying accident several months before it disclaimed coverage."

Moreover, the record discloses that by letter dated April 17, 2020, ENIA informed Berson of the additional insured claim, indicating that ENIA had immediately opened an investigation into the underlying claim discussed in the April 2020 letter. ENIA did not disclaim coverage until September 22, 2020, several months later. Such a delay is unreasonable as a matter of law.

03/14/25 Freas v. John W, Danforth Company
Appellate Division, Fourth Department
An Indemnity Agreement in a Construction Contract, Signed After an Accident Can be Effective if the Parties Intended it to be Effective Retroactively. In this Case, a Question of Fact on that Issue

Freas commenced a Labor Law claim after when he slipped and fell at a construction site on September 2, 2016. John W. Danforth Company (Danforth), was the general contractor and hired as a subcontractor Davis-Fetch who was plaintiff's employer, eventually a third-party defendant. stating causes of action for contractual indemnification and failure to procure insurance.

Davis-Fetch contended that there was no agreement prior to plaintiff's accident for Davis-Fetch to indemnify Danforth or to procure insurance for Danforth's benefit. The Fourth Department agreed.

The subcontract included both an indemnification provision and a provision requiring Davis-Fetch to procure insurance coverage and add Danforth as an additional insured. The subcontract was dated July 19, 2016, but it was not signed by Davis-Fetch and Danforth until September 13, 2016, and September 21, 2016, respectively.

"An indemnification agreement that is executed after a plaintiff's accident . . . may only be applied retroactively where it is established that (1) the agreement was made as of a date prior to the accident and (2) the parties intended the agreement to apply as of that prior date". Here, the subcontract was made as of a date prior to the accident, but there is a triable issue of fact whether the parties intended the indemnification provision of the subcontract to apply retroactively.

Two of Davis-Fetch's executives testified that prior to signing the subcontract, there was no discussion between Danforth's representatives and Davis-Fetch's representatives concerning the terms of the subcontract, including any indemnification provision. There was evidence, however, that the parties had worked together before on a project that included a subcontract with an indemnification provision, and that subcontract, like the one at issue here, was also signed after its effective date.

Accordingly, there was a question of fact which must be resolved by a fact finder.

03/10/25 Utica National Assurance Company v. Amazon.com Services et. al.
Southern District of New York
Southern District Holds that an Insurer is Not Estopped from Withdrawing a Defense to an Additional Insured Where the Insurer Did Not Control Defense; Court also Rules that a Finding in a Trial Court of No Proof of a Written Contract for Contractual Indemnification Purposes Collaterally Estops Additional insured from Re-litigating the Existence of a Written Contract in Insurance Dispute

Guest Editor (and successful lawyer on the case): Sherri Pavloff – note contact information at the bottom of this summary.

Amazon hired Bond, a subcontractor, to perform work in connection with a construction project. Deljanin, an employee of Bond, fell from a scaffold while performing Bond’s work, and sued Amazon alleging violations of Labor Law §§240, 241(6), and 200. Amazon filed a third-party action against Bond seeking contractual indemnification based upon a Purchase Order between Amazon and Bond, and Terms and Conditions to the Purchase Order.

Amazon also tendered its defense and indemnification in the underlying suit to Utica National, Bond’s insurer, based upon the same documents, contending that the Terms and Conditions required Bond to procure insurance naming Amazon as an additional insured. Utica National agreed to defend, indemnify and provide additional insured coverage to Amazon, without reservation, based upon an additional insured endorsement which triggered coverage where required by a written contract between Bond and the additional insured, for injuries “caused in whole or in part” by Bond. Amazon refused to allow Utica National to appoint its own counsel. Utica National agreed to allow Amazon its choice of counsel and to pay 50% of Amazon’s defense costs. Amazon controlled its own defense but reported it to Utica National regularly.

During the discovery and depositions in the underlying suit, Amazon could not establish that the Purchase Order or the Terms and Conditions applied to the work being performed at the time of the accident. As a result, the court in the underlying action granted Bond’s motion for summary judgment, dismissing Amazon’s contractual indemnification claim against Bond.

When Utica National learned that Amazon could not prove that the Purchase Order or the Terms and Conditions applied to the work being performed (but before the summary judgment motions were decided in the underlying suit), Utica National withdrew from Amazon’s defense and filed a declaratory suit seeking a declaration that it owed no coverage to Amazon for the underlying suit. Amazon counterclaimed and the parties’ filed motions for judgment on the pleadings based upon the documents and testimony exchanged in the underlying suit.

Amazon argued in its motion that Bond knew that the Purchase Order and Terms and Conditions controlled the work based upon a prior course of dealing between the two. The Southern District rejected this argument, ruling that Amazon was collaterally estopped from re-litigating the issue of whether there was a written contract requiring additional insured coverage even though the decision issued by the court in the underlying action was an interlocutory decision, based upon well-established Second Circuit and New York state law.

The Southern District also rejected Amazon’s argument that Utica National was estopped from denying coverage, explaining that Amazon and not Utica National, controlled Amazon’s defense in the underlying action, and that Amazon had not shown any other prejudice as a result of Utica National’s conduct. Amazon argued that because it provided reports to Utica National and because Utica National also defended Bond in the underlying suit, albeit with different counsel, Amazon was “presumptively” prejudiced by Utica National’s withdrawal of a defense that Utica National provided for over four years. The Southern District disagreed, explaining that Amazon failed to provide any evidence that Utica National influenced Amazon’s defense in any way. The Southern District therefore upheld Utica National’s denial of coverage.

Editor’s Note: Thanks, and congratulations to my friend and superb coverage lawyer, Sherri Pavloff of Stonberg, Hickman & Pavloff, LLP, for her victory in this one and for authoring this summary. If you want a copy of the decision, you can contact Sherri or me. Her email address is Sherri.Pavloff@shplawyers.com.

PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
sep@hurwitzfine.com

Potpourri

03/18/25 Tamm Consulting v. Cincinnati Ins. Co.
Appellate Division, First Department
Two Year Suit Limitation Clause Enforceable Where Clearly Attaches Two Years After the Occurrence Giving Rise to the Claim

Plaintiff commenced this action seeking recovery for damages under a Commercial Property policy issued by Cincinnati. Cincinnati moved to dismiss based upon the two-year suit limitation clause found within the insuring agreement. Here, the insurer was able to demonstrate that claims for advanced under the First and Third Causes of Action, respectively, were commenced more than two years from the occurrence date of the fire. Because the language of the policy was clear and unambiguous, and tied directly to the occurrence of the loss, the Appellate Division found that Cincinnati had met its burden.

However, with respect to certain coverage for fine arts and valuable papers, the Court noted that the applicable two-year suit limitation clause was slightly different. Essentially, the clause applicable to this discrete coverage was measured as two years from the date of discovery of the loss. On the Record submitted to the Appellate Division, it was unclear when plaintiff discovered damage which fell within the fine arts/valuable papers coverage. Accordingly, that portion of the claim was remanded back to the trial court for further proceedings.

03/14/25 Dersam v. Ontario Ins. Co.
Appellate Division, Fourth Department
Court Denies Motion of Late Proof of Loss Where there No Proof the Form was Attached to Email; Applies Pavia Standard to Companion First Party Bad Faith Claim

Plaintiffs submitted a claim for fire loss to Ontario Insurance Company. During the course of the investigation/adjustment of the loss, the claims professional handling the file for Ontario sent an email to Ms. Dersam. Attached to that email, apparently, was a blank Proof of Loss form. When the form was not returned within sixty days, as per the requirement of the policy and statute, Ontario denied the claim. And, upon the filing of the instant lawsuit, Ontario immediately moved to dismiss.

The trial court granted dismissal for Ontario on the basis of long-established principles that failure to timely proffer a Proof of Loss is an absolute defense. The Appellate Division reversed, however, on the narrowest issue of fact. As noted by the opinion, the Proof of Loss form was attached to an email sent to Ms. Dersam. Although the email may have constituted proper notice, Ontario’s motion failed because it was unable to conclusively establish that the Proof of Loss was attached to it upon receipt by Ms. Dersam.

The Appellate Division did affirm dismissal of plaintiffs’ Second Cause of Action which sought a Declaratory Judgment. The Court noted that the relief sought was duplicative of the breach of contract claim asserted in the First Cause of Action.

With regard to the Third Cause of Action, the Appellate Division intervened to modify the trial court’s decision granting dismissal to Ontario. This particular cause of action, asserting a breach of the duty of good faith and fair dealing, was revived where the plaintiff asserted that Ontario acted unreasonably when it refused to extend the time to complete the aforementioned Proof of Loss form and a claim made by plaintiffs’ presumed public adjuster which argued that Ontario “deviated industry practices” when handling the claim.

Based on these assertions, which the Court advised it was compelled to accept as true on a motion to dismiss, the Appellate Division explained here plaintiffs had pleaded a claim which appropriately alleged “the insurer’s conduct constituted a ‘gross disregard’ of the insured interests- that is, a deliberate or reckless failure to place on equal footing the inters of the insured with the insurer’s own interests.” The Court goes on to equate a breach of the duty of good faith and fair dealing with bad faith when it stated “[i]n the context of a cause of action for breach of the duty of good faith and fair dealing, in order to establish a prima facie case that an insurer acted in bad faith…”

Finally, in addressing the dismissal of plaintiffs’ Fourth Cause of Action, the Court opined that there was no independent tort action for bad faith where an insurer allegedly does not perform its obligations.

Peiper’s Point: This matter is the latest in a series of decisions over the past five to seven years which conflate the First Party Bad Faith Standard expressed by the Court of Appeals in NYU v. Continental Casualty Corp. and the long-understood standard governing Third Party Bad Faith claims as set forth in Pavia v. State Farm.

This is a troubling trend from the Appellate Division because decisions like Dersam are eroding, if unintentionally, long established, binding precedent from the Court of Appeals.

Potpourri
03/14/25 Prusik v. Liberty Mutual Insurance Group, Inc.
Appellate Division, Fourth Department
Entry of Final Order Terminates Appellate Rights Attached to Intermediated Orders

Plaintiff filed an appeal from an intermediate order which granted defendant’s Motion to Strike the Note of Issue and reopen discovery. However, thereafter, a final order was granted which effectively superseded the order upon which appellate relief was sought. Accordingly, plaintiff’s appeal was dismissed as not properly before the Court.

LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
lss@hurwitzfine.com

03/24/25 Billie v. Plymouth Rock Assur. Corp.
United States District Court, D. Connecticut
Failure to Cooperate Nullifies Homeowner’s Coverage

The District Court made a rare finding that the insured’s systematic and unexcused noncompliance with Plymouth Rock's document requests was substantial and material, breaching the "Duties After Loss" provision of the insurance policy.

Plymouth Rock issued a homeowners policy to Caribe D. Billie, for a residence in Waterbury, Connecticut. Within one month of the issuance of the policy, the house was damaged in a fire. In July 2019, Billie bought the property at a tax auction for $16,000. Billie intended to renovate the property but instead installed his cousin and others as tenants. Billie moved to North Carolina, because Connecticut was too cold, so he never actually lived in the premises, although he claimed that he would stay at the property on occasion when traveling to Connecticut for business.

In September and October 2020, Billie obtained building permits. He obtained the Plymouth Rock coverage at the same time, incepting on October 30, 2020, with dwelling limit of $302,000. The structure failed its electrical inspection and service to the home was terminated. Days later, a fire of unknown human origin substantially damaged the home. Billie put in a claim for $226,991.45 for damage to the structure [a substantial return on a $16,000 investment!].

Plymouth Rock issued an ROR and launched an investigation, finding that this was Billie’s fourth fire loss (two homes and one vehicle). The carrier requested documents, including financial records, such as tax and banking information. Despite 18 months of follow-ups, Billie did not provide the documents. Plymouth Rock took Billie’s EUO, even though it did not have the responsive documents. A final 30-day letter was sent seeking the outstanding documents. Billie did not reply, and Plymouth Rock denied the claim for breach of the duty to cooperate. This lawsuit followed (actually preceding the denial letter by one day).

In the action, removed to federal court, Billie never responded to its discovery obligations, nor did he propound discovery. Plymouth Rock moved for summary judgment to which Billie did not oppose. The court found that the carrier was entitled to summary judgment because the insured breached his “Duties After Loss.” The provision states that Plymouth Rock has no duty to provide coverage if the policyholder's failure to comply with certain duties is prejudicial to Plymouth Rock Home. Plaintiff failed to comply with: (1) his duty to cooperate in the investigation of the claim; and (2) his duty to provide requested records and documents.

The court found that the breach of the duty prejudiced Plymouth Rock’s ability to investigate the claim. “Plymouth Rock Home needed Plaintiff's financial and tax records in order to investigate "whether he and his family were experiencing financial distress that might raise questions regarding an unexplained fire and subsequent insurance claim."” Additionally, the court struck the plaintiff’s CUTPA/CUIPA claims.

03/06/25 Bottass v. United Ohio Ins. Co.
Superior Court of Connecticut, Waterbury District
Medical Payments Coverage is Not a Set-off to UM

Danielle Bottass was severely injured in a motor vehicle accident by an uninsured driver. When United Ohio did not settle her claim, she sued for breach of contract. Following a jury trial, she was awarded $2 million, reduced to $1.7 million for her comparative negligence.

On post-trial motions, United Ohio sough remittitur of the jury’s award to the policy limits of $500,000 and sought a $5,000 credit for medical payments previously paid by United Ohio. The court found that, pursuant to CGS § 38a-336, the plaintiff’s recovery was statutorily capped at the amount of uninsured motorist coverage. “[T]he plaintiff contracted with the defendant for $500,000 of uninsured-underinsured motorist coverage. Accordingly, pursuant to § 38a-336(b), the plaintiff was not entitled, under any circumstance, to recover more than $500,000 in policy benefits.”

The court, upon construing the United Ohio policy, refused to reduce the award by the amount of medical payments, finding that it did not follow Connecticut regulations. The policy provided that, “No one will, be entitled to receive duplicate payments for the same elements of loss under this coverage and Part A [liability coverage] or Part B [medical payments coverage] of this policy." The uninsured motorist policy also provides, "We will not make duplicate payment under this coverage for any element of loss for which payment has been made by or on behalf of persons or organizations who may be legally responsible."

However, the court found the duplicate payment provisions did not limit the additional coverage because the terms of the policy did not correspond with the regulations in all material respects. Because the UM/UIM coverage does not provide for any additional reduction in the limit of liability paid or payable to the insured person under the medical payments coverage part of the policy, the carrier cannot seek a reduction in limits on this basis.

[Ed. Note: United Ohio has appealed the decision. I guess $5,000 aggregated over many claims makes the cost worth the effort.]

RUFFNER’S ROAD REVIEW
Kyle A. Ruffner
kar@hurwitzfine.com

03/25/25 Morrobel v. Alicea
Appellate Division, First Department
In a Case of First Impression, Court Holds that Health Care Providers who Treat No Fault Patients, May Charge at Rates Great Than Workers Compensation Schedule Once $50,000 Basic Economic Loss Ceiling has Been Reached

This appeal sought to reduce a verdict rendered in an auto accident lawsuit and modify an interest award, a verdict of $625,000 for past pain and suffering and $1.53 million for future. The court found that the verdicts did not deviate materially from what would be reasonable compensation and upheld the verdict.

The interesting question from a No-Fault coverage perspective was whether a doctor charged for services was limited to the WC/NF rate once the $50,000 limit for Basic Economic Loss was exhausted.

The defense argued that according to Insurance Law § 5108, charges for health services provided as a result of motor vehicle accident injuries, both as a part of and in excess of basic economic loss, may not exceed the charges permissible under Workers' Compensation Board schedules (see Insurance Law § 5102[a][1]).

Thus, defendants concluded, Insurance Law § 5108 limits the damages that plaintiff may recover for future medical expenses.

In a case of first impression, apparently, the First Department disagreed holding that Insurance Law § 5108, as part of New York's No-Fault Law, applies only to claims for first-party benefits. Specifically, health service providers who accept an assignment of first party (no-fault) benefits but continue treating the covered person beyond the exhaustion of those benefits do not limit the right of recovery for economic loss in excess of basic economic loss in actions by covered persons for personal injuries arising out of negligence in the use or operation of a motor vehicle.

Furthermore, the jury's award for future medical expenses was not excessive. Plaintiff's treating physicians testified to each of the treatments that plaintiff would require, explained why she would require them, and approximated their cost. This testimony, which was within the jury's province to credit, established plaintiff's future medical expenses with the requisite degree of reasonable certainty.

The court did modify the interest award from 9% to 3% because the defendant was the NYC Transit Authority, and it is subject to a lower interest rate.

03/12/25 American Transit Insurance Company v. Comfort Choice Chiropractic, P.C.
Appellate Division, Second Department
Separate Arbitration Awards May Not Be Combined to Meet the Jurisdictional Threshold for De Novo Review of No-Fault Claims

The issue on appeal, an issue of first impression before the Court, was whether, under certain circumstances, separate and distinct arbitral awards can be treated by a court as a single arbitral award under Insurance Law § 5106(c) and pursuant to 11 NYCRR 65-4.10(h)(1)(ii) for the purposes of determining whether the requisite $5,000 threshold establishing subject matter jurisdiction has been met, in order to allow for a de novo review of claims for no-fault insurance benefits.

American Transit Insurance Company commenced this action pursuant to the above statutes to seek de novo review of four separate arbitral awards issued by a master arbitrator. The four awards were issued by the same master arbitrator, following separate arbitration proceedings upon the plaintiff's denial of payment for medical services performed by the defendant for the claimant who was injured while she was a passenger in a taxi insured by the plaintiff. The arbitration proceedings arose upon the denial of the four claims submitted by the same provider for a repeated course of chiropractic treatment. After each of the four arbitration proceedings, the master arbitrator issued an arbitral award in favor of the defendant. American transit sought de novo review. The supreme court held that the four arbitral awards, in effect, constituted a single arbitral award and also denied the defendant's request pursuant to 11 NYCRR 65.4.10(j)(4) for an award of attorney's fees. The defendant appeals.

Upon a review of the applicable statutes, the court stated that Insurance Law § 5106(c) provides, in relevant part that “The award of a master arbitrator shall be binding except for the grounds for review set forth in article seventy-five of the civil practice law and rules, and provided further that where the amount of such master arbitrator's award is five thousand dollars or greater, exclusive of interest and attorney's fees, the insurer or the claimant may institute a court action to adjudicate the dispute de novo.” Similarly, pursuant to subdivision (h)(1) of 11 NYCRR 65-4.10, a decision of a master arbitrator is final and binding except … where a master arbitrator's award is $5,000 or greater, exclusive of interest and attorney's fees, a court may conduct a de novo adjudication of a no-fault insurance claim.

The court determined that the use of the singular in the statute and the regulation, "arbitrator's award" in Insurance Law § 5106(c) and "the award" in 11 NYCRR 65-4.10(h)(1)(ii), means one, single award, not a combination or collective group. The Legislature did not opt to use the plural, and there is no other language in either the statute or the regulation that would allow for the singular to be interpreted as encompassing the plural. Therefore, the court found that the plain language contained in both statutes did not allow a court to treat separate arbitral awards as, in effect, a single, combined arbitral award for the purposes of meeting the subject matter jurisdictional threshold for de novo review. This is the case even where, as here, the service provider was the same in each circumstance, the insurance company was the same, the service recipient was the same, and the services that were provided were the same.

Since the language of the statute and the regulation is plain and unambiguous, it is unnecessary to consider the legislative history. Nonetheless, as set forth herein, the history underpinning the legislation at issue, which was implemented to relieve the burden of these types of cases on the courts, lends further support to our conclusion that the singular language in the legislation referring to "award" was deliberate and that the Legislature did not contemplate that courts would invoke their authority to exercise discretion to treat multiple arbitral awards as, in effect, a singular arbitral award to meet the $5,000 statutory threshold.

Accordingly, given the plain language of Insurance Law § 5106(c) and 11 NYCRR 65-4.10(h)(1)(ii), the legislative intent of the statute, and related persuasive authority, it was not proper for the Supreme Court to expand the scope of the legislation by construing it to allow for multiple arbitral awards to be treated as, in effect, one, or as a single, combined arbitral award in order to meet the requisite threshold.

03/20/25 Unitrin Safeguard Insurance Company v. Jermail Manuel et al.
Appellate Division, First Department
Insurer Had No Duty to Pay No-Fault Claims Due to Founded Belief the Claimant’s Injuries Did Not Arise Out of the Accident

In this case, the Supreme Court granted the insurer’s motion for summary judgment declaring that it had no duty to pay no-fault insurance claims to defendant medical providers arising out of the underlying accident, unanimously affirmed, without costs. The defendant claimants claimed they were passengers in a covered vehicle when they sustained injuries and notified the insurance company that they intended to submit claims for no-fault benefits. However, claimants never answered the insurers declaratory judgment complaint or appeared in this action, and plaintiff obtained a default judgment against them. The remaining defendants are medical providers that submitted no-fault claims as assignees of the claimants.

The Appellate Court determined the Supreme Court properly granted the insurer’s summary judgment declaring that it had no duty to pay no-fault claims to defendant providers, as it demonstrated a founded belief that claimants' injuries did not arise out of the accident as required by Central Gen. Hosp. v. Chubb Group of Ins. Cos., 90 NY2d 195, 199 (1997). The insurer submitted an affidavit from a claims investigator detailing the circumstances of the accident that led to the investigation, including the absence of any claims for damage to the vehicle and the lack of a police report, as well as affidavits from occupants of the other vehicle, who characterized the accident as a bumper "tap" resulting in no visible damage to the covered vehicle or injury to the driver, and asserted they saw no passengers in the vehicle. There were also several red flags in the claimants' examinations under oath which undermined the credibility of their claims.

In opposition, defendant providers failed to raise an issue of fact, as they did not submit an affidavit of someone with personal knowledge of the legitimacy and circumstances of the accident or any other admissible evidence to rebut plaintiff's showing. Therefore, insofar as claimants asserted in their EUOs that they were passengers in the vehicle at the time of the accident, the court properly construed claimants' default as an admission that their EUO statements were false, and their injuries were not the result of the accident.

RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
rpm@hurwitzfine.com

03/17/25 Navigators Insurance Company v. Goyard, Inc.
United States Court of Appeals, Second Circuit
Remand Ordered to Permit Consideration of Extrinsic Evidence Submitted by Insurer in Support of its Interpretation of Policy Wording

On appeal, Navigators Insurance Company argued that the district court erred in finding coverage for the lost goods of its insured, Goyard, Inc., due to Strikes, Riots, and Civil Commotion (“SS&RC”), as well as its application of a ten percent add-on to the claimed loss amount by failing to construe the lost goods as raw materials, supplies in storage, and/or used goods within the meaning of the Policy. Specifically, Navigators argued that:

the district court erred by (1) interpreting the Policy, and its attached endorsements, to unambiguously include SS&RC coverage for the lost retail goods; (2) considering some but not all of the extrinsic evidence available when interpreting the Policy, including evidence relating to the Policy negotiations, customs and practices in the insurance industry, and Navigators’ expert’s testimony; and (3) applying the rule of contra proferentem in reading ambiguities in the Policy against Navigators, the insurer.

The Second Circuit avoided addressing (2) and (3) above, by finding instead that the district court had erred in finding that the Policy unambiguously provided SS&RC coverage for the lost retail goods.

The parties agreed that “pursuant to Endorsement No. 1, goods in transit were insured for losses attributable to SR&CC,” but the question was “whether the goods at Goyard’s store . . . were similarly insured.” Goyard identified three potential sources of coverage for these goods, including “(1) the Policy Binder; (2) the Declarations Page of the Policy; and (3) Endorsement No. 4.

Quickly dispelling number (1) above, the court noted that in accordance with New York Court of Appeals precedent, “the Policy Binder ‘terminate[d] when [the] [P]olicy [] issued’ and could not provide any coverage, much less SR&CC coverage, at the time of Goyard’s loss.”

Moving to (2), the Second Circuit noted that “[w]hile portions of the Declarations Page reference SR&CC coverage . . . , the Policy later explains that ‘[r]isks of [] strikes, riots and civil commotions are included in the rates detailed on the attached Policy Declarations . . . so long as the separate . . . strikes, riots, and civil commotions endorsement remain[s] in force.’”

Given the above, and turning to (3), the Second Circuit advised that “the SR&CC coverage contemplated in the terms of the Declarations Page hinges on the existence of the SR&CC endorsement i.e., Endorsement No. 1.” But after discussing the parties competing interpretations of whether any coverage extended included losses attributable to SR&CC under Subsection 9(E) of Endorsement No. 4, the court found that “it is impossible to say that one interpretation is unambiguously correct. Both are reasonable.” And that is a problem.

Specifically, “because the Policy terms are ambiguous, the district court should have admitted and considered relevant extrinsic evidence to resolve the ambiguity.” And “while the district court found that ‘[e]xtrinsic evidence provides further support for summary judgment in Goyard’s favor,’ its assessment took place against the backdrop of its prior independent finding that the text of the Policy unambiguously extended SR&CC coverage to the retail goods.” Accordingly, the Second Circuit remanded the matter to the district court in order for it “to conduct a more thorough examination of the extrinsic evidence to resolve the ambiguity.”

Maxwell’s Minute: This case raises an important issue that is often missed in practice. While it is true that a court may apply the doctrine of contra preferentum in favor of coverage, it should only do so absent relevant extrinsic evidence submitted in support of one interpretation of ambiguous language versus another Many choose to simply ignore potentially supportive extrinsic evidence altogether in favor of an all or nothing argument that a policy provision is unambiguous in their favor. While that may be true, courts are not to consider extrinsic evidence until an ambiguity is found. Submitting extrinsic evidence should not be viewed as a sign of weakness. While we tend to favor our arguments over the other guys, try to avoid wearing blinders or you may very well and rather avoidably paint yourself into a contra preferentum corner the next time around.

STORM’S SIU
Scott D. Storm
sds@hurwitzfine.com

03/19/25 Pager v. Greater N. Ins. Co.
United States Court of Appeals, Second Circuit.
Coverage Denial for Untimely Sworn Statement in Proof of Loss Upheld on Presumption of Receipt of Mailing

Plaintiffs had an insurance policy with Greater Northern covering their residential property in Brooklyn. On 4/29/21 the plaintiffs discovered that their floating dock and gangway had allegedly disappeared. The plaintiffs maintained approximately fifteen surveillance cameras at their home, but none were operational at the time of the incident, having been shut off several days earlier for upgrades. Plaintiffs did not alert the police of the missing dock and gangway. Greater Northern sent the plaintiffs a letter on 6/24/21 requesting that they submit sworn proof of loss statement within 60 days and enclosed blank proof of loss forms. The plaintiffs did not submit the proof of loss. Greater Northern denied the claim.

An insured's failure to file a proof of loss statement within the required period after receiving written notice and a suitable form from the insurer is an absolute defense to an action on the policy, absent waiver or estoppel. Greater Northern established a presumption of receipt by providing evidence of its regular office procedures for mailing the notice and forms, and the plaintiffs failed to rebut this presumption. The mere denial of receipt does not rebut the presumption that notice was received when proof of proper mailing has been provided.

Although plaintiffs claimed to have not received the proof of loss forms, their statements did not amount to a categorical denial of receipt of the mailings, let alone provide some proof that the regular office practice—which was to include the proof of loss forms in the mailing—was not followed or was carelessly executed so the presumption that notice was mailed becomes unreasonable. On the contrary, the exhibits depicting the letters as they were mailed clearly demonstrate that the proof of loss forms were included.

Other record evidence further bolsters this presumption of receipt. Plaintiffs do not point to any evidence which disputes that the 6/24/21 letter constituted Greater Northern's attorney’s first correspondence with plaintiffs, and there is no evidence that the attorney sent any further correspondence to plaintiffs before they responded to him on 7/29/21. Plaintiffs offer no alternative explanation for how they would have known to contact the attorney but for that letter of 6/24/21. It is beyond genuine dispute that plaintiffs received written notice of Greater Northern's request for proof of loss and a suitable form to provide such proof.

03/13/25 State Farm Fire & Cas. Co. v. Aviles
Supreme Court, New York County
Denial of Assignee Medical Provider’s Claim Upheld Due to Insured’s Failure to Attend EUO

State Farm issued an auto policy to Carrion. Aviles was allegedly driving the vehicle on 6/24/22 when involved in an accident. Aviles failed to appear for two EUOs on 9/9/22 and 10/4/22. State Farm disclaimed coverage. State Farm sought summary judgment against medical providers who were assignees of Aviles.

The court held that the failure to appear for two timely requested EUOs is a breach of a condition precedent to coverage and voids the insurance policy ab initio, which applies to assignees of an insured. An EUO request mailed three days after receiving a bill for treatment is timely.

The arguments that the EUO requests were untimely are contrary to First Department precedent and insufficient to defeat Plaintiff's motion. Nor do the arguments about the need for discovery preclude summary judgment as they fail to provide an affidavit from any individual with personal knowledge of the facts underlying the claim regarding what discovery, if any, is necessary to oppose the motion. The opposing defendants rely solely on an attorney affirmation to oppose the motion.

03/12/25 Shiloah v. GEICO
United States District Court, W.D. New York.
Case Survives Motion to Dismiss Whether Insurer Must Pay Sales Tax for Total Loss Leased Vehicles

Plaintiff brings this putative class action against GEICO, asserting breach of contract based on GEICO's failure to pay sales tax for total loss vehicles that are leased. GEICO has moved to dismiss the complaint pursuant to Fed. R. Civ. P. 12(b)(6).

The Court finds that Plaintiff's proffered interpretation of the policy is not unreasonable—to require actual cash value to include the payment of sales tax on a leased vehicle. As a result, the motion to dismiss must be denied. Even if New York law is correctly interpreted as argued by GEICO to not require the payment of sales tax on leased total loss vehicles, this does not mean that GEICO was prohibited from contractually agreeing to pay sales tax. Plaintiff's proffered interpretation of the policy as requiring the payment of sales tax is not unreasonable -- contending that the policy's definition of "actual cash value" as "the replacement cost of the auto or property less depreciation or betterment" is reasonably interpreted to include sales tax.

03/07/25 State Farm v. Quinones
Supreme Court, New York County
In Staged Accident case, Evidence from Third-Party Sources like Accurint Reports, CarFax Reports and Information from the Other Vehicle's Event Data Recorder Deemed Inadmissible Hearsay

Quinones, Burgos and Gonzalez were allegedly involved in an automobile collision. State Farm sought to disclaim coverage for medical treatment provided. Quinones failed to appear for EUOs on multiple dates. State Farm alleged the collision was staged based on various inconsistencies and suspicious circumstances.

The court granted State Farm’s motion in part, declaring no obligation to pay claims submitted by a certain medical provider based on Quinones's failure to appear for his EUOs. However, its motion for summary judgment on the basis that the collision was staged is denied.

State Farm has established its compliance with 11 NYCRR 65-3.5 through an affidavit attesting to plaintiff's mailing of the EUO scheduling letters prior to receiving the subject bills in conformity with standard office procedure, copies of the EUO scheduling letters with affidavits of service attesting to their mailing, contemporaneous statements by plaintiff's counsel on the record at those EUOs recording Quinones's failure to appear, and the denial of claim sent to plaintiff.

State Farm failed to meet the "heavy burden" of proving the collision was staged, as inconsistencies in EUO testimony did not pertain directly to the nature of the collision itself. Furthermore, evidence from third-party sources like Accurint reports, CarFax reports and information from the other vehicle's Event Data Recorder, was deemed inadmissible hearsay.

03/11/25 Eloise Holdings, LLC v. Mt. Hawley Ins. Co.
United States District Court, S.D. New York.
Anti-Concurrent Causation Clause Applies if Any Excluded Cause Contributes to the Loss, Even if Other Covered Causes are also Involved

Eloise Holdings owns a commercial building in Tampa, Florida that was insured by Mt. Hawley. A storm on 3/15/22 allegedly damaged the building's roof, causing interior water damage. The roof had been improperly constructed, with a modified bitumen membrane installed over the original gravel roof. Experts agreed this improper installation made the roof more susceptible to damage. Mt. Hawley denied the claim based on the policy's anti-concurrent causation clause. The court granted Mt. Hawley's motion for partial summary judgment regarding the claims for interior water damage and post-storm roof tarping.

The policy's anti-concurrent causation clause unambiguously excludes coverage for the claimed interior water damage, as the damage was contributed to or made worse by faulty workmanship and inadequate repairs to the roof. The anti-concurrent causation clause applies if any excluded cause contributes to the loss, even if other covered causes are also involved. The undisputed evidence shows the roof's improper construction and inadequate repairs constituted "faulty, inadequate or defective workmanship" that contributed to or worsened the claimed damage. Even if wind also contributed to the damage, the policy excludes coverage because faulty workmanship was a contributing factor.

The policy also excludes coverage for the post-storm roof tarping, as it was a consequence of the excluded interior water damage.

FLEMING’S FINEST
Katherine A. Fleming
kaf@hurwitzfine.com

03/20/25 Vermont Mut. Ins. Co. v. New England Prop. Servs. Grp, LLC
Rhode Island Supreme Court
Appraisal Process Could be Equated With Arbitration. Appraisal Award Vacated Due to Evident Partiality of Defendant’s Appraiser

The plaintiff, Vermont Mutual Insurance Company appealed from a Superior Court order denying its petition to vacate an appraisal award and granting the defendant’s, New England Property Services Group, LLC, cross-petition to confirm the appraisal award. Vermont Mutual argued that the Superior Court justice erred in failing to vacate the award because there was evident partiality by the defendant’s appraiser.

Vermont Mutual issued a homeowners policy for Rhode Island property that sustained windstorm damage. After retaining an independent adjuster and roofing expert to inspect the property, Vermont Mutual paid the claim. Vermont Mutual was later informed that the insured had engaged NEPSG to complete the restoration work. The contractor was the sole owner and operator of NEPSG. Vermont Mutual learned of additional damages claimed and reinspected the property. The contractor disagreed with the scope of the assessment of the additional damage. Vermont Mutual issued an additional clam payment. The insured assigned her insurance claim to NESPG in exchange for its work on the property. NESPG demanded appraisal, and the contractor was named as an appraiser on behalf of NESPG. Vermont Mutual objected to the contractor acting as an appraiser because he was not disinterested, and it reserved its right to dispute the award.

Vermont Mutual filed a petition to vacate the appraisal award, noting that under the Arbitration Act, the Superior Court had jurisdiction to vacate, modify, or correct an award. NESPG filed a response and cross-petition to confirm the award, in which it requested the court grant the cross-petition for the award to be confirmed pursuant to the Arbitration Act. Vermont Mutual argued that the Arbitration Act requires an award be vacated if there is evident partiality or corruption on the part of the arbitrators. The insurer asserted that the contractor had a direct financial interest in the appraisal award because his company was assigned the claim from the policy holder and was contracted to perform the claimed repairs to the home. NESPG argued that the policy only required a competent appraiser, and that the contractor’s interest did not have a causal nexus to the award that was issued. The Superior Cour denied the petition to vacate and granted the cross-petition to confirm the award.

On appeal, Vermont Mutual contended that the hearing justice erred by failing to apply the relevant standard in determining whether the appraisal award should have been vacated due to the presence of evident partiality. Specifically, Vermont Mutual disagreed with NEPSG’s argument that the appraisal did not constitute arbitration, so the Superior Court did not have “subject matter jurisdiction.” The Rhode Island Supreme Court noted that the Superior Court acted properly, and NEPSG did not object to Vermont Mutual filing its petition to vacate pursuant to the Arbitration Act; moreover, it admitted to the Superior Court’s jurisdiction under the Arbitration Act in its response and cross-petition to confirm the appraisal award. The Court also determined that the appraisal process could be equated with arbitration, and NEPSG did not object to the applicability of the Arbitration Act.

Next, the Court considered whether the defendant’s appraiser was evidently partial. First, the appraiser had a direct financial interest in the award. The defendant’s appraiser was the sole owner and operator of NESPG and the assignee of the insured’s insurance claim. NESPG acted as its own appraiser with the entire award being payable to the appraiser. Second, there was a causal nexus between the appraiser’s conduct and the final appraisal award. The Court did not believe it was irrational to suggest that the appraiser’s inflated amount was potentially motivated by his direct financial interest in the award. As a result, the Court vacated the order and remanded for further proceedings.

GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
edg@hurwitzfine.com

03/21/25 State Farm Fire & Cas. Co. v. Hole
New Jersey Superior Court, Appellate Division
Appellate Division Rules Tortious Interference Claim Intrinsically Includes Allegations of Intent, Barring Coverage Under Policy’s Personal and Advertising Injury Exclusion

State Farm’s insured, Dr. Hole, was accused by a colleague, Dr. Russonella, of making false statements regarding Dr. Russonella’s alleged misconduct at their shared place of employment, a hospital. After amendment of pleadings and preliminary motion practice, Dr. Russonella’s tortious interference claim was the only one left standing. State Farm brought this declaratory judgment action, seeking a declaration that it had no duty to indemnify Dr. Hole against this claim. The trial court granted State Farm’s motion for summary judgment, finding that the policy’s personal and advertising injury exclusion applied, and that State Farm therefore had no duty to defend or indemnify Dr. Hole against the tortious interference claim. This appeal followed.

In New Jersey, a tortious interference claim must allege that the interference was done intentionally, and with malice. New Jersey courts have ruled that “malice,” as used here, means that the harm must have been inflicted intentionally, and without justification or excuse. Indeed, in Dr. Russonella’s amended pleadings, he alleged that Dr. Hole fabricated allegations, made misrepresentations, and intentionally interfered with Dr. Russonella’s business relationships.

Meanwhile, the State Farm policy contained a “personal and advertising injury” exclusion for “personal and advertising injury” caused by or at the direction of the insured, with knowledge that the act would violate the rights of another and would inflict “personal and advertising injury.” The same exclusion also barred coverage for “personal and advertising injury” arising out of oral or written publication of material when done by or at the direction of the insured with knowledge of its falsity.

Once the tortious inference claim was the only one left standing, State Farm brought this declaratory judgment action, seeking to withdraw from Dr. Hole’s defense in and deny indemnity for the Russonella action. State Farm pointed out that the Russonella pleadings alleged that Dr. Hole “intentionally” interfered with his business relationships, in making “untrue” and “malicious” statements “targeted to injure” Dr. Russonella.

The trial court granted State Farm’s motion for summary judgment, holding that the remaining allegations in the Russonella action fell wholly into State Farm’s “personal and advertising injury” exclusion. The trial court also ruled that the exclusion was unambiguous and did not violate public policy.

On appeal, Dr. Hole argued that the exclusion did not exclude the entirety of Dr. Russonella’s allegations and was ambiguous and void against public policy in any event. Dr. Hole further argued that summary judgment was improperly granted, as there was a material issue of fact regarding his subjective intent to cause injury.

The Appellate Division disagreed. The Court noted that, under New Jersey law, the duty to defend is governed by the pleadings as compared to the language of the insurance contract. Turning to whether the tortious interference claim fell within the policy’s “personal and advertising injury” exclusion, the Court mentioned that, under New Jersey law, a tortious interference claim, when properly pled, includes a claim that the interference was done intentionally and maliciously.

Because Dr. Russonella’s tortious interference claim “require[s] an intentional inference,” the Court continued, such a claim “intrinsically includes an intent to harm.” Meanwhile, Dr. Russonella alleged that Dr. Hole made the false statements with knowledge that his acts would indeed cause such harm.

Holding that the policy’s “personal and advertising injury” exclusion barred coverage for the Russonella action, the Court reasoned that Dr. Hole’s subjective intent was irrelevant. The Court explained that an inquiry into subjective intent is only required when the damages are not the probable outcome of the alleged tort. Here, because Dr. Hole’s intent to harm was an essential element of the tortious interference claim, and by definition required malice or intent, the Appellate Division held that the trial court did not err in not considering Dr. Hole’s subjective intent in making the statements.

The Court then addressed Dr. Hole’s argument that the policy’s “personal and advertising injury” exclusion violated public policy. Dr. Hole argued that coverage should be extended to claims arising from the same conduct that otherwise would have been covered (likely referring to other causes of action that were pled previously and subsequently no longer part of the case). Dr. Hole went on to assert that because State Farm initially agreed to provide coverage for the Russonella action (under reservation of rights), he should be entitled to coverage against the amended pleadings.

The Court was unpersuaded by Dr. Hole’s public policy argument. It reasoned that just because State Farm initially provided a defense for the Russonella action (again, that was done under a reservation of rights), does not compel it to defend Dr. Hole against any subsequently amended pleadings.

The Court also briefly addressed Dr. Hole’s argument that the exclusion was ambiguous. However, the Court deemed that argument waived on the ground that Dr. Hole’s brief did not flesh out the issue, other than citing a few cases discussing ambiguity generally.

Editor’s Note: Would the result have been different if Dr. Russonella’s pleadings were broader?

O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
rpo@hurwitzfine.com

03/21/25 Wolf v. Riverport Ins. Co.
United States Court of Appeals, Seventh Circuit
Insured Cannot Extend Auto Policy’s Insuring Agreement in Liability Part Regarding an Insurer’s Right to Investigate a Claim to the Policy’s Uninsured/Underinsured Motorist Endorsement

Riverport issued Wolf’s employer a commercial general liability policy. Wolf was insured in a motor vehicle accident which resulted in her suffering several pelvic fractures. She collected the other driver’s auto policy limit of $100,000. After this, she filed claims with her personal auto carrier and Riverport. Wolf’s personal auto insurer settled her claim for $150,000, which left Riverport as the last insurer standing.

Four years later, Riverport and Wolf settled the claim in arbitration. At arbitration, Wolf received an award of $905,000 against the Riverport policy limit of $1,000,000. After deducting the $250,000 Wolf received from the other carriers, Riverport paid the outstanding balance. Unhappy with Riverport’s conduct, Wolf filed an action shortly after Riverport’s payout. Riverport promptly moved to dismiss the complaint after it removed the state court action.

Wolf sought relief under Sec. 155 of the Illinois Insurance Code only. That statute permits recovery of attorney’s fees, costs, and statutory damages for an insurer’s unreasonable delay in settling a claim or paying a claim. However, the statute does not create a cause of action, rather it supplements the remedies available for a breach of contract or other tort.

So, Wolf needed to allege more than a vexatious or unreasonable delay under in settling her claim. The Court of Appeals noted Wolf needed to allege facts containing a possible breach of another right, thus enabling her to the relief of Sec. 155. Wolf asserted that contract law creates rights under a breach of contract theory. Thus, the appeal looked at whether Riverport breached the policy at issue.

Wolf’s theory centered on the policy’s business auto coverage form, which obligated Riverport to indemnify an insured for third-party liability. She looked at the standard liability insuring agreement that conferred Riverport with the right to investigate and settle claims regarding actions brought a third-party. Which she felt extended to the policy’s uninsured motorist endorsement.

This theory was rejected. Because that language applies only to defending an insured from other parties, not in a suit brought by an insured. Indeed, Wolf herself was a qualified insured under the Riverport policy. While Riverport possessed discretion over the investigation of Wolf’s claim, that discretion was beyond the policy’s liability insuring agreement. The proper relief for Wolf would have been to sue Riverport for the policy’s proceeds prior to settling her claim. By settling her claim, she mooted that potential form or relief. And for those reasons, the Court of Appeals affirmed Riverport’s motion to dismiss.

ROB REACHES the THRESHOLD
Robert J. Caggiano
rjc@hurwitzfine.com

Nothing notable recently from the Appellate Division on Serious Injury Threshold. Check back in two weeks.

LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
ihl@hurwitzfine.com

03/04/25 Certain Underwriters at Lloyd’s, London v. Southwest Mar. & Gen. Ins. Co.
New York Supreme Court, New York County
Court Finds Third-Party Complaint Triggers Duty to Defend Additional Insured

This declaratory judgment action stems from an underlying Labor Law complaint, alleging injuries to two individuals at a construction site.

Certain Underwriters at Lloyd’s, London (“Certain Underwriters”) insured Arsenal Scaffold Inc. (“Arsenal”), who was hired to build a sidewalk shed at the construction site. Arsenal subsequently subcontracted all work at the site to JGR Services, Inc (“JGR”). The Certain Underwriters policy issued to Arsenal contained a clause identifying the policy was excess to any coverage available to Arsenal as an additional insured.

Certain Underwriters commenced an action against Southwest Marine & General Insurance Company (“Southwest”), the primary liability carrier for JGR. Certain Underwriters filed a partial motion for summary judgment, seeking a declaration that Southwest owes an obligation to provide Arsenal with a defense in relation to the underlying action.

Southwest cross-moved, seeking an order to stay the declaratory judgment action pending a completion of discovery in the underlying action, insisting that Certain Underwriter’s motion is premature. Southwest contended that JGR did not perform any work which contributed to the injuries alleged in the underlying action. In addition, Southwest argues that there is no contract between JGR and Arsenal requiring additional insured status, and thus the additional insured endorsement within the policy was not triggered.

In the discussion, the Court began its analysis by looking at the contract between Arsenal and JGR, which specifically requires JGR to acquire insurance and name Arsenal as an additional insured. The Court then turns to the additional insured endorsement in the Southwest policy, which provides additional insured coverage to, “all entities required by written contract to be included as additional insureds but only with respect to operations performed by the Named Insured or on their behalf.”

The Court identified that in its view, the additional insured endorsement was clearly triggered based on the language of the contract between JGR and Arsenal.

Next, the Court turned to the pleadings in the underlying Labor Law action. In the Labor Law action, the injured parties did not bring a suit against JGR directly. Instead, Arsenal commenced a third-party action against JGR. The Court acknowledged that the third-party complaint was “self-serving.”

However, the Court pointed to the fact that Southwest did not cite any case law for the proposition that a third-party complaint can be ignored, for the purposes of determining whether a defense obligation arises. The Court instead cites to case law, in the First Department, identified by Certain Underwriters, which held allegations in a third-party complaint can be sufficient to trigger a duty to defend.

The Court further wrote that, “[t]his Court’s role is not to perform its own evaluation of the evidence and make a factual determination about liability for the underlying plaintiffs’ injuries.” Further, the Court found it was not dispositive that no direct suit against JGR was commenced for defense obligations to exist under the Southwest policy.

Accordingly, the Court granted Certain Underwriters’ motion for summary judgment and denied Southwest’s motion in its entirety. The Court declared that Southwest must defend Arsenal in connection with the underlying action on a primary and noncontributory basis.

Interestingly, there is no discussion in the decision regarding the decision that coverage would apply on a primary and noncontributory basis under the Southwest policy. A review of the online docket shows that Southwest did not address this point in the papers. Instead, Southwest argues that the contract is not legally enforceable, as it does not specify the work JGR was required to perform at the construction site in question.

LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
lrh@hurwitzfine.com

03/28/25 New York Senate Bill S8481
Act to Amend Insurance Law to Prohibit Increases in Rates of Homeowners’ Insurance in Excess of Twenty-Five Percent Per Year

Senate Bill S8481 seeks to add a new section, section 2351-a, to insurance law which provides that no insurer shall increase the rate of homeowners’ insurance more than twenty-five percent of the same policy from one year prior unless agreed to by the policyholder prior to being issued, renewed, modified, altered, or amended.

The bill justification provides that the escalating rates of homeowners’ insurance have posed a severe financial burden on individuals. This legislation is part of the important goal of ensuring that insurance premiums remain stable and accessible to those who rely on it. Further, by establishing a reasonable limit, homeowners will be able to plan their budgets more effectively.

Section 1 of Bill S8481 reads:

The insurance law is amended by adding a new section 2351-a to read as follows:

§ 2351-a. Homeowners' insurance policies; rate increases. (A) for the purposes of this section, "homeowners' insurance" means a contract of insurance insuring against the contingencies described in subparagraphs (A), (B) and (C), or (B) and (C) of paragraph two of subsection (A) of section three thousand four hundred twenty-five of this chapter and which is a "covered policy" of personal lines insurance as defined in such paragraph; provided, however, that the coverages provided under such subparagraphs (B) and (C) shall not apply where the natural person does not have an insurable interest in the real property, or a portion thereof, or the residential unit in which such person resides.

(B) No insurer shall increase the rate of homeowners' insurance such that the rate is more than one hundred twenty-five percent of the rate of the same policy from one year prior unless agreed to by the policyholder prior to the policy being issued, renewed, modified, altered or amended.

DOMENICA’S DIARY on BAD FAITH
Domenica D. Hart
ddh@hurwitzfine.com

03/21/25 Gross v. Scottsdale Insurance Company, et al.
United States District Court for the Northern District of California, San Jose Division
Attorney-Client Privilege and Work-Product Doctrine Can be Waived by Failure to Use Reasonable Steps to Rectify an Inadvertent Disclosure

Plaintiff, Terry Gross, asserts claims for breach of contract, breach of the implied covenant of good faith and fair dealing and bad faith against Scottsdale Insurance Company based on Scottsdale’s alleged breach of obligation to defend and indemnify two former directors of the now defunct company, Flora Biosciences, Inc. in connection with a state court lawsuit. In the coverage action, a common discovery dispute arose dealing with attorney-client privilege and work-protect doctrine.

In December 2018, counsel for Mr. Gross (a Flora Shareholder) sent a letter to Flora’s Board of Directors demanding the company pursue legal action against Flora’s former CEO. Flora tendered the demand letter to Scottsdale, its insurer. Scottsdale retained an attorney, Joseph Breen, to represent the company for the purpose of investigating the allegations in the demand letter. Breen conducted an investigation and provided a report (“Breen Report”) to Scottsdale and Flora’s Board of Directors on May 21^st, 2019. Mr. Gross became a member of Flora’s Board of Directors on May 22, 2019, but resigned three weeks later in June 2019. Subsequently after resigning, another member of the Board of Directors, Mr. Vergas, shared the Breen Report with Mr. Gross., At Breen’s deposition in February 2025, Scottsdale objected to the Breen Report being used as an exhibit at the deposition, asserting both Attorney-Client Privilege and Attorney Work Product Production.

The Attorney-Client Privilege is governed by state law. Under Cal Evidence Code § 952, if a confidential communication between lawyer and client exists, the client has the privilege against disclosure, and the attorney has an obligation to refuse disclosure until otherwise instructed by the client. CA recognizes the “tripartite relationship” among the insured, the insurer, and defense counsel retained by the insurer for the insured. Absent any conflict, an attorney retained by the insurer to defend its insured under the insurer’s contractual obligation owes a fiduciary duty to both the insurer and the insured. The Work Product Doctrine is governed by federal law here. Rule 26(b)(3), shields from discovery materials that are prepared by or for parties in anticipation of litigation and protects discovery of legal strategies and mental impressions of the party’s counsel.

Scottsdale had the burden of proving that both the privilege and doctrine applied. At the time of the Breen Report preparation and delivery to the Board of Directors, the Court found Breen, Flora and Scottsdale had a “tripartite relationship”, finding the report was subject to the Attorney-Client Privilege. However, both the privilege and doctrine may be waived. Waiver is governed by Fed R. Evid 502(f). Fed R. Evid 502(b), provides in part: The disclosure of the communication or information covered by the attorney-client privilege or the work product protection does not operate as a waiver in a federal or state case if:(1) the disclosure is inadvertent;(2) the holder of the privilege or protection took reasonable steps to prevent disclosure; and (3) the holder probably took reasonable steps to rectify the error.

The court found that Scottsdale waived both the Attorney-Client Privilege and the Work Product Protection. The Breen Report was disclosed to shareholders that were not entitled to it and Scottsdale failed to take prompt action to retrieve the report, or asset privilege, after knowledge of the disclosure. Also, Gross publicly disclosed portions of the Breen Report in the underlying Complaint, filed in 2013. Scottsdale took no action to protect the privileges for over a year after the public disclosure. Simply objecting to disclosure of the report “now” was not sufficient.

NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
hasanderson@sanderson-law.com

02/11/25 Sniper Pressure Services Ltd v Northbridge General Ins. Co.
Alberta Court of King’s Bench
A Lawyer Prosecuting a Subrogated Claim for an Insurer Does Not have a Retainer with the Insured and Therefore is Not in Conflict Should that Same Lawyer Act Against the Insured in a Coverage Action on the Same Policy that Generated the Subrogated Claim.

The Alberta Court of King’s Bench has issued a decision as to whether counsel appointed by a subrogating insurer is in a conflict if that counsel also defends a coverage action on the same policy that generated the subrogation.

Background

Sniper Pressure Services Ltd. is a privately owned oilfield service company that operates in north central Alberta. Sniper owns a fleet of 100 oilfield service trucks, and, as well, stores and sells oilfield chemicals out of Whitecourt, Grande Prairie, Hinton, Edson, Fox Creek and Swan Hills, Alberta.

Sniper’s facility in Whitecourt, Alberta was visited by a streak of bad luck. The roof collapsed on March 4, 2020. Sniper was insured by Northbridge Financial who replaced the roof. The roof collapsed again on January 17, 2022.

The Legal Actions

Sniper on its own account sued the alleged tortfeasors for about $5 million. Northbridge paid Sniper about $2 million. Northbridge then sued (apparently naming the same parties as defendants) to recover its subrogated interest. Sniper then sued Northbridge saying that it is owed about $650,000 of additional funds under its policies.

Northbridge retained Ken Haluschak of Bryan & Company in Edmonton on all files involving Sniper’s roof collapse(s). That meant that Haluschak was defending Northbridge against Sniper on the coverage claim and, concurrently acting as plaintiff counsel in Sniper’s name to prosecute the subrogated claim.

The Issue

Sniper objected to Haluschuk’s retainer asserting in this application to the Alberta Court of King’s Bench that Haluschak has a conflict of interest and, as a consequence, should be disqualified from acting for Northbridge in the coverage case and the subrogated claim.

Sniper argued that because Ken Haluschak is Counsel on the subrogated claim that Sniper is properly characterized as its client and, therefore, he cannot act as Counsel in defence of this claim against Northbridge. Haluschak who argued this application, took the opposite view stating that when counsel is retained by an insurer on a subrogated claim that it is incorrect to characterize that retainer as creating a solicitor client relationship between that counsel and the insured.

The Decision

The application Judge clearly wanted to address the duplication of actions arising from the collapse of the roofs. However, the parties were clear that the issue before the court was whether Ken Haluschak had a conflict of interest - the duplication of actions is an issue for another day.

The application to remove Haluschak as counsel was supported by an affidavit sworn on behalf of Sniper. There was a cross examination on that affidavit. The wording of the affidavit is not disclosed by the court in this decision but apparently Sniper objected to Haluschak acting as Plaintiff Counsel in the subrogation as he would be ‘privy’ to Sniper’s confidential information which creates a conflict given that Haluschak was also defence counsel in the coverage case.

Haluschak conducted the cross examination and asked for particulars of what information would be confidential or privileged. The deponent of the affidavit refused to answer the question. Haluschak filed an application to the court to compel an answer. The application judge ordered Sniper to answer the question. The answer was, apparently, generic “…without actual production or satisfactory description of specific information of concern.” The Court in this application stated, “I have no basis to conclude that the concern is valid or warranted.”

The Court held that there are three actions in play: Sniper has sued the tortfeasors for the two instances of roof collapse for about $5 million; Sniper is a nominal plaintiff in the subrogated claim against the same parties for about $2 million; Sniper has sued its insurer Northbridge for additional monies under the coverage that applies to the two instances of roof collapse. The Court held that as Sniper is the nominal plaintiff in the subrogated claim, then Sniper is a “nominal client’ of Haluschak. Northbridge is entitled to bring the action and is entitled to select its counsel to do so. Although it will be awkward for the principals of Sniper to work with Haluschuk, he can continue to act as counsel for Northbridge on the subrogated claim and on the defence of the coverage action as there was no retainer between Sniper and Haluschak.

Coverage Pointers - Volume XXVI No. 20

Fri, 14 Mar 2025 14:32:27 +0000

Volume XXVI, No. 20 (No. 693)
Friday, March 14, 2025
A Biweekly Electronic Newsletter

As a public service, Hurwitz Fine P.C. is pleased to present its biweekly newsletter, providing summaries of and access to the latest insurance law decisions from the New York and Connecticut appellate courts and Canadian appellate courts. The primary purpose of this newsletter is to provide timely educational information and commentary for our clients and subscribers.

In some jurisdictions, newsletters such as this may be considered Attorney Advertising.

If you know of others who may wish to subscribe to this free publication, or if you wish to discontinue your subscription, please advise Dan D. Kohane at ddk@hurwitzfine.com or call 716-849-8900.

You will find back issues of Coverage Pointers on the firm website listed above.

Dear Coverage Pointers Subscribers:

Do you have a situation? We love situations.

DRI Insurance Roundtable

I am back from Chicago where I was fortunate enough to be asked to participate in one of the nation’s most impressive insurance programs, the DRI Insurance Roundtable. Along with my colleague and friend Matt Foy from the Gordon Rees firm, in place of my great pal John Trimble, who was unable to attend, we discussed how the insurance industry and the defense/coverage attorney community, can work together to transition the business and practices into the future. Both the industry and the legal profession face challenges, financial and otherwise, and we each want the other to expand and thrive. These are challenging times and it’s great that we can break bread and have frank and honest discussions on these very compelling topics/

New York Car Rental Coverage – Important First Department Decision

This one is, in my opinion, one of the most significant judicial decisions involving rental car coverage in many years. On Thursday, March 13^th, the First Department handed down a decision which is reported in column, in a matter called Second Child v. Edge Auto. You will find a lengthy discussion of the case and a link to the decision in in the attached issue of Coverage Pointers.

The Court overturned, in part, based on the Graves Amendment, a section of the Vehicle & Traffic Law (Section 370) and distanced itself from an earlier decision from our high court in ELRAC v. Ward, by holding that the federal statute preempts the requirement that rental car companies need to provide at least the minimum New York limits of liability insurance. $25,000/$50,000/$10,000, to those who rent cars in New York.

This is a perfect case for high court review, but it will have to be done on motion for leave to appeal.

Primary carriers beware – you may have believed that when your insureds rented cars and had accidents, your policies would provide excess, non-owned coverage. If this case becomes the law of the land, you will now have primary responsibility to defend and indemnify your insureds. And for those renters who don’t have their own auto coverage, we can expect a rise in uninsured motorists claims and claims under MVAIC.

Wyoming Sanctions Case Settles

For those who have followed the Morgan and Morgan case which included sanctions to lawyers in that firm for submitting hallucinated cases in support of a motion in liminie, that case was sent to the jury for final consideration on Wednesday, March 13. The parties settled the case during deliberations.

I have no additional information.

The case involved an allegedly defective hoverboard which was said, by the plaintiffs, to have started a fire, leading to injuries to children in the home. The defense blamed the fire on cigarettes in a smoking shed. And so, it goes.

LinkedIn

Need a Mediator or Arbitrator, Give a Call

A growing percentage of my practice has been a mediator (and sometimes as an arbitrator) in insurance coverage, commercial, personal injury, and other disputes. With a robust national client base, I am regularly called on by friends and colleagues from around the country, folks who know me and trust me, to help resolve disputes. Often, particularly in mediated matters, I know the insurers and lawyers on both (or several) sides of the dispute. Since they all trust me as a fair dealer, they feel comfortable in having me try to help close the file (and avoid precedent). Just pick up the phone, 716.849.8942 or send an email to ddk@hurwitzfine.com and I’ll try to help.

First Department Rules on Interrelated Wrongful Acts in Sexual Assault Arena

There’s another interesting case in my column on the question of interrelated wrongful acts in a claims made, Errors and Omissions policy. If you work in that space, it’s surely worth a read.

Maxwell Gets a Pass

Kudo to Lorraine and Ryan Maxwell on the birth and safe arrival at home of their beautiful daughter, Eliza Sofia. She joins big brothers Phillip and Logan, and the dogs, in a wider family menagerie. Eliza showed up a few weeks earlier than expected after TLC at the hospital, has finally made it home. Ryan gets a pass on this week’s CP, as a result. But ONLY this week!

Newsletters:

We have other firm newsletters to which you can subscribe by simply letting the editor (or me) know, including a new publication, which was created to advise on business and employment law questions:

Premises Pointers: This monthly electronic newsletter covers current cases, trends and developments involving premises liability and general litigation. Our attorneys must stay abreast of new cases and trends across New York in both State and Federal Court and will now share their insight and analysis with you. This publication covers a wide range of topics including retail, restaurant, and hospitality liability, slip and fall accidents, snow and ice claims, storm in progress, inadequate/negligent security, inadequate maintenance and negligent repair, service contracts, elevator and escalator accidents, swimming pool and recreational accidents, negligent supervision, assumption of risk, tavern owner and dram shop liability, homeowner liability and toxic exposures (just to name a few!). Please drop a note to Jody Briandi at jeb@hurwitzfine.com to be added to the mailing list.
Labor Law Pointers: Hurwitz Fine P.C.’s Labor Law Pointers offers a monthly review and analysis of every New York State Labor Law case decided during the month by the Court of Appeals and all four Departments. This e-mail direct newsletter is published the first Wednesday of each month on four distinct areas – New York Labor Law Sections 240(1), 241(6), 200 and indemnity/risk transfer. Contact Dave Adams at dra@hurwitzfine.com to subscribe.
Products Liability Pointers: Whether the claim is based on a defective design, flawed manufacturing process, or inadequate instructions/warnings, product liability litigation is constantly evolving. Products Liability Pointers examines recent New York State and Federal cases as well as high court decisions from other jurisdictions, keeping our readers up to date with the latest developments and trends, and providing useful practice tips and litigation strategies. This monthly newsletter covers all areas of product liability litigation, including negligence, strict products liability, breach of warranty claims, medical device litigation, toxic and mass torts, regulatory framework, and governmental agencies. Contact V. Christopher Potenza at vcp@hurwitzfine.com to subscribe.
Medical & Nursing Home Liability Pointers. Medical & Nursing Home Liability Pointers provides the latest news, developments, and analysis of recent court decisions impacting the medical and long-term care communities. Contact Elizabeth Midgley at emm@hurwitzfine.com to subscribe.

The Gold Revolver – 100 Years Ago:

Times Union
Brooklyn, New York
14 Mar 1925

One Manhattan Gun-Toter
Pleads Guilty in Court
After Pal Is Convicted

In the County Court today before Judge Reuben L. Haskell two more young Manhattan gunmen learned that, for their kind, Brooklyn is not an attractive place in which to tarry.

The two prisoners from the other side of the Bridge were David Reiner, 20 years old, of 241 East Houston street, and Morris Gold; 20 of 207 Stanton Street. They are old offenders, and they were brought before Judge Haskell on charges of possessing a loaded revolver as a felony, Reiner went to trial before Judge Haskell and a jury, with Assistant District Attorney Bernard Becker in charge of the prosecution. He was found guilty. With the verdict returned against his pal, Gold concluded he had no chance of escape, so he entered a plea of guilty. Judge Haskell remanded the pair to Raymond street jail until Tuesday when he will sentence them.

Reiner and Gold were arrested by Detectives Harry Beck, William Donelly and Henry Reif. On the morning of Jan. 28 last, as they walked along Thatford Avenue, the three detectives saw Gold, Reiner and three pals of their own age come from a Turkish bathhouse on Thatford Avenue, between Belmont and Sutter avenues. Recalling Gold and Reiner as two old offenders and suspicious of their presence in the neighborhood at that hour, the detectives crossed the street, walking toward the men. On the approach of the detectives. Reiner, with a sweeping motion of his arm behind his back, threw away a loaded revolver. On Gold, concealed behind the waistline of his trousers, was found a loaded revolver, The revolver thrown away by Reiner was recovered.

Peiper on Property (and Potpourri):

Returning from Chicago where I attended the DRI Insurance Coverage and Claims Institute. All is well and I’ll see you in a couple of weeks. He offered you this vista:

Steve
Steven E. Peiper
sep@hurwitzfine.com

Full of Bologna – 100 Years Ago:

Times Union
Brooklyn, New York
14 Mar 1925

DETECTIVES GUARD GOBEL HOME; CHILDREN OUT

The beautiful residence of the late Adolph Gobel, Bologna manufacturer, at 279 Highland Boulevard, is being guarded today by private detectives while the widow, who is now Mrs. Sigwar John Reid, the wife of an artist, is living at the Pennsylvania Hotel. The guards at the house, according to reports, are to keep out the eldest daughter Ottillie, Mrs. Claude Earl Moore, who is reported to have had a disagreement with her mother, when she returned from her honeymoon to find that her mother had married again.

According to neighbors, Adolph, Jr., joined in the quarrel, with the result that he is living now at the Gobel country estate at Annabelle, N.J.

Lee’s Connecticut Chronicles:

Dear Nutmeggers:

Spring is in the air. How do I know this, you ask? Well, it’s not from the still bone-chilling cold temperatures and howling winds blowing off Long Island Sound. Nope, instead it’s the annoying itching feeling in my ears telling me that it’s time to start up the allergy meds again. There’s no surer sign of spring than that. So, forget about Punxsutawney Phil and just ask me if my ears are itchy—then you’ll know spring is around the corner.

Also, it seems that policyholders in Connecticut are itching for some CUTPA/CUIPA action but keep under-pleading their claims. This edition we present another couple of cases in which the courts again dismiss CUTPA/CUIPA causes of action for the policyholders’ failure to adequately plead a general business practice (or lack of standing). It’s become clear that mechanically pleading generic allegations, or even specific case-related allegations, are not enough to meet the pleading standards.

Until next time, keep keeping safe.

Lee
Lee S. Siegel
lss@hurwitzfine.com

Sleeping Man Confesses Infidelity – 100 Years Ago:

Times Union
Brooklyn, New York
14 Mar 1925

To Argue Legality
Of Sleep Talk Evidence
In Suit for Divorce

Interesting argument is expected in the Chancery Court in Jersey City next Friday in the action for divorce brought by Dr. Emil Posner, formerly of Butler, N.J., against his wife, Eleanor, of Jersey City, before Vice Chancellor Griffin.

The interest centers on whether or not the court will permit in evidence statements alleged to have been made by Posner during his sleep in which the other girl was mentioned. The papers filed by the wife made this allegation.

Mrs. Posner, opposing the suit, is represented by V, McDonald an attorney of Essex County, and the husband has engaged Julius Lichtenstein, of Hoboken.

Ruffner’s Road Review:

Dear Readers,

I celebrated my (29^th) birthday last week ... hard to believe 30 is less than a year away! Went to another Sabres game earlier in the week, lost any hope of a miraculous playoff run as they got blown out by the worst team in the NHL, enjoyed a good Hibachi birthday dinner and time with family and friends.

In this week’s case, the respondent moved to vacate an arbitration award pursuant to CPLR §7511(b)(1)(iii), as well as a default judgment, arguing that as a foreign corporation not authorized to do business in New York it could not be subject to any arbitration in New York. The court denied the motion, because while personal jurisdiction is required for the exercise of the state's judicial power over a party, arbitration is a form of dispute resolution almost wholly independent of the court systems. Further, the insurer did not produce its policy to examination for a determination of whether it permitted or possibly required arbitration.

Kyle
Kyle A. Ruffner
kar@hurwitzfine.com

Guilty Conscience – 100 Years Ago:

Buffalo Courier
Buffalo, New York
14 Mar 1925

Holds Up Grocery Store.
Refused to Take Loot;
Gives Self Up to Cops

New York, March 13. – Saying that his conscience bothered him because he had held up a grocery store last night, Arther Prohaska of Dedham, Mass., surrendered to the police today, although the holding up yielded him only $1, which he had turned back to the astonished grocer.

He was held in $3,500 bail to await grand jury action on charges of attempted robbery and carrying concealed weapons.

Prohaska said he left a bride of eight months in Dedham when he came to New York last week. Last night he walked into the grocery store of Michael Hackadorian on West Sixty-first street, drew a pistol and ordered the grocer to open the cash register. The grocer complied, said Prohaska, but there was only $1 in the register and this the would-be bandit declined to take.

Ryan’s Federal Reporter:

Nothing from me this time (but next time I'll have some extra hands).

Ryan
Ryan P. Maxwell
rpm@hurwitzfine.com

My Kingdom for a Stamp – 100 Years Ago:

Buffalo Courier
Buffalo, New York
14 Mar 1925

ORDER BILLION OF NEW STAMPS

Washington, March 13. – Requests for 1,400,000,000 of the new one and a half cent postage stamps bearing President Harding’s picture already have been received from postmasters for use on third class mail when the new rates go into effect April 15.

Storm’s SIU:

Hi Team:

Next time we speak, it will be Spring! Can’t come soon enough.

A couple interesting cases this edition:

“For Hire” Exclusion not Effective to UM/SUM Coverage; Not Enough Proof That the TNC Exclusion Applied.
Where Insured’s Expert Identifies Six Possible Causes of Loss, it is Not Enough for Summary Judgment for the Insurer to Argue One Cause is Excluded from Coverage Based on the Anti-Concurrent Causation Language Without Evidence the Excluded Peril Accounted for Some of the Damage.

Have a great two weeks until we talk again!

Scott
Scott D. Storm
sds@hurwitzfine.com

Hope My Wife Doesn’t Turn Me In For Annoying Her – 100 Years Ago:

Buffalo Courier
Buffalo, New York
14 Mar 1925

ANNOYS WOMAN. GETS 4 MONTHS.

Maryan Kaczmarek, No. 1396 Broadway, was sent to the penitentiary for four months by Judge Woltz in city court yesterday for annoying Mrs. Mary Krudziel of the same address.

Fleming’s Finest:

Hi Coverage Pointers Subscribers:

This week’s case from the Iowa Supreme Court considers whether a policy provided coverage for damage from a partial roof collapse but also the restoration of load-bearing walls for the entire building based on the policy’s ordinance or law provision. The Iowa Supreme Court held that the insurer only had to pay for the partial roof collapse due to an exception for pre-existing code violations.

Looking forward to enjoying the warmer weather this weekend!

Catch you later,

Kate
Katherine A. Fleming
kaf@hurwitzfine.com

Sound Like the Right Conference to Attend – 100 Years Ago:

Buffalo Courier Express
Buffalo, New York
14 Mar 1925

DRUGGISTS WILL ATTEND NARCOTIC CONFERENCE

At the invitation of Richard H. Templeton, federal district attorney, the Erie County Pharmaceutical association will be represented at the first narcotic conference on Monday afternoon by three delegates. The men named by the druggists’ society are George P. Bigham, T. F, Williams, and Sidney James.

Members of the Erie County Medical society, Health Commissioner Fronczak and Bishop Brent will also attend.

Gestwick’s Garden State Gazette:

Dear Readers:

I tried making corned beef jerky for the first time this past weekend, using my food dehydrator. Apparently, corned beef needs to be sliced thicker than one would slice regular top round for jerky-making purposes (either that, or it takes less time to dehydrate than regular beef). Either way, may I interest you in a corned beef chip? Because that is what I ended up with. Good thing this was only my “test run,” as I signed up to make the same for our firm’s St. Patrick’s Day potluck lunch on Monday. Perhaps this weekend will yield better results.

I have two cases for you this week. The first involves a rescission of a policy where the insured misrepresented its use of subcontractors on construction sites. The insured said it did not use any, and yet, went right ahead and hired (at least) one. The Court, having been duly satisfied that the carrier would not have issued the policy as it did have it known that its insured does, in fact, use subcontractors (at least sometimes), upheld the rescission.

The second case is far more interesting, in my opinion. A man was incarcerated after intentionally burning down his home. While incarcerated, he received a notice of arbitration from the subrogee which had previously compensated the law enforcement officers injured in dealing with the aftermath of his misdeed. Miscues during the arbitration proceeding, and more miscues in the mail room, led to a very interesting decision.

That’s all, folks! See you in two weeks.

Evan
Evan D. Gestwick
edg@hurwitzfine.com

A Kiss is But a Kiss – 100 Years Ago:

Anderson Daily Bulletin
Anderson, Indiana
14 Mar 1925

KISSING BURGLAR.

London, March 14. – A “kissing burglar” has been busy in one section of London recently. After robbing the house, he kisses any girls he finds in bed and makes his escape.

O’Shea Rides the Circuits:

Hey Readers,

I was unprepared for the posting of a dogs photo in this week’s edition. Looks like I will have to follow up in the next edition. Since the last edition, Josh Norris left the pristine rivers and waters of Ottawa for the Metropolis of Buffalo. In exchange, Dylan Cozens and local product, Dennis Gilbert, traveled to Ottawa. Time will tell how this trade plays out. While I wish Norris well, I hope he does not cause resent and regret within the years to come among us Sens fans.

This week I have another circuit case from the Eleventh Circuit. This time the court looks to whether an insured has standing to reform a policy before the submission of a claim and the breadth of a construction exclusion.

On another note, I disagree with the First Department’s decision in Second Child. The Graves Amendment was enacted to prevent limitless liability against automobile manufactures and rental car companies. What the statute also contains is a carve out for a State’s Financial Responsibility Laws imposing minimum insurance limits. New York VTL Sec. 370 imposes a minimum limit for property damage and bodily injury coverage.

The Appellate Term Decision , 37 S. Fifth Ave. Corp. v Dimensional Stone & Tile, 58 Misc 3d 56, 59 (App Term 2017), similarly identified the carve out in Graves. And found VTL Sec. 370 does not operate to impose vicarious liability. So VTL Sec. 370 imposes mandatory minimums of insurance coverage with no vicarious liability. Sure, seems like a financial responsibility law to me that falls within Graves’s carve out.

Until Next Time,

Ryan
Ryan P. O’Shea
rpo@hurwitzfine.com

It Was a Simpler Time – 100 Years Ago:

The Miami Herald
Miami, Florida
14 Mar 1925

KISSING WOMEN COSTS PRISONER SIX MONTHS

TAMPA, Fla., March 13. – Kissing his women passengers, who were being smuggled into the United States, cost Emilio Leara an extra six months in the Federal prison at Atlanta, government officials in Federal Court here intimated. Leara, as far as the court’s sentence of 18 months is concerned, was not informed that his reported amorous attentions toward the women in question had anything to do with the difference between one year and 18 months in prison.

Several of the women, all aliens testified through an interpreter, that Leara brought a boat load of the aliens from the schooner Almendares last year, into shallow water near shore but refused to land the women until they kissed him. One, Maria Lisjak, admitted she paid the extra charge, being anxious to be put ashore.

Rob Reaches the Threshold:

Dear Readers,

We are now in March - one of my favorite months of the year for many reasons. As I write this, the Players Championship is underway down in Florida. Next week, the March Madness tournament begins. Conveniently, that madness will take us right into Opening Day for MLB and my beloved Yankees (who are dropping like flies in Spring Training, and I am NOT OKAY about it). In better news, I just celebrated my birthday earlier in the week, and it will be near 70 degrees in Buffalo this weekend with some golf courses opening. March is great.

For this installment, we review a First Department decision that analyzes pre-trial rulings on motions in limine regarding testimony from respective experts. Since the jury ultimately found that the plaintiff did not sustain a serious injury pursuant to Insurance Law Section 5102(d), the lower Court's rulings on these motions were crucial.

Hope you all enjoy the read.

Rob
Robert J. Caggiano
rjc@hurwitzfine.com

Can’t Talk About it – 100 Years Ago:

Buffalo Courier Express
Buffalo, New York
14 Mar 1925

JUROR SAID TO HAVE DISCUSSED VERDICT EXCUSED

Trial of issue in suit will be completed with eleven men in box.

Conrad J. Moschel, whose name is caried on the jury list as a livestock dealer, No. 165 Jewett Parkway, was excused from service as a juror in the suit of David Paul of No. 332 North Ogden street against Harry Lieberman of No. 63 Traymore Street, after all the testimony had been heard and the opposing attorneys were about to sum up yesterday afternoon. County Judge Conable directed that the case be decided by the remaining eleven jurors.

During a recess one of the eleven jurors claimed that he heard Moschel make a remark indicating that he was in favor of awarding a verdict to the plaintiff. The court and the attorneys decided it would be best to excuse Moschel so as to remove any suspicion that he had prejudged the case.

Paul sought to recover $1,900 that he claimed as his portion of the profits of a farm owned by Liberman that Paul agreed to work on a share basis.

LaBarbera’s Lower Court Library:

Dear Readers:

My puppy has a habit of bringing things outside with her into the backyard. Toys, socks, garbage, you name it. If she can carry it, she must take it with her. Unfortunately, she does not have the same desire to bring things back in. After a few days of warmth, the snow at my house melted away. I finally found out where her favorite toys, my favorite socks, and all of her bones went.

This week I found an interesting case discussing an insured’s motion for class certification. The court denied the motion as premature and ordered the parties to conduct limited discovery regarding the class certification requirements.

Until next time…

Isabelle
Isabelle H. LaBarbera
ihl@hurwitzfine.com

Cancelled Taxes – 100 Years Ago:

The Buffalo News
Buffalo, New York
14 Mar 1925

CARGO TAXES CANCELLED BY CANTON GOVERNMENT

CANTON, China, March 14. – The provisional government, officially announcing the death of its head, Dr. Sun Yat-Sen, who died Wednesday in Peking, cancelled the recently imposed taxes on cargo boats, which caused a strike of cargo boat and cartage coolies and threatened to provoke a general strike throughout the city. There is much jubilation among the workers, who are resuming work.

There is, however, much uneasiness here, owing to military activities in the city and throughout the province of Kwang Tung as a result of the reported ambition of General Chen Chiung-Ming, as opponent of the government, to gain control.

As a sign of mourning for Dr. Sun, the government has ordered the closing for a week of all cinemas and theaters and the cessation of fireworks displayed and other amusements. All government officials and employees have been ordered to wear a band of crepe on the left sleeve.

Lexi’s Legislative Lowdown:

Dear Readers,

This week’s column talks about pet insurance. As a person who has two wild pups and is the holder of two pet insurance policies, I am always interested in reading about proposed legislation that would regulate the pet insurance industry.

Here is a picture of my dogs, May, and Knox, who keep me busy every single day!

Have a nice weekend.

Lexi
Lexi R. Horton
lrh@hurwitzfine.com

Fire Safety – 100 Years Ago:

Buffalo Courier
Buffalo, New York
14 Mar 1925

TOSSES CIGARETTE INTO POWDER KEG.

GATHER REMAINS

Jonquieres, Que., March 13. – James McLaughlin of Manchester, N.H., was killed instantly today when he tossed a lighted cigarette into a keg of powder beside a bow of dynamite on which he was seated. The dynamite also exploded.

Domenica’s Diary on Bad Faith:

Dear CP Readers,

Happy almost spring! The weather is getting warmer, which makes me happy. My morning walks with my Dachshund, Charlie, will now be livelier as the abundant neighborhood chipmucks and squirrels tempt Charlie almost as much as Reese’s Peanut Butter Cups tempt me. It’s a challenging time of year for us both!

Short on bad faith in New York this week, I bring you a Pennsylvania case that highlights the high burden on an insured to prove bad faith by an insurer. The high burden is seen in many jurisdictions around the country.

Domenica
Domenica D. Hart
ddh@hurwitzfine.com

Dear Ms. Fairfax – 100 Years Ago:

The Kansas City Post
Kansas City, Missouri
14 Mar 1925

ADVICE TO THE LOVELORN
By Beatrice Fairfax

Miss Fairfax – As you have helped me before with your advice, I come again asking your kind advice. I know I am dreadfully ignorant as to some of the ways of society but know you will help me.

What is the correct etiquette concerning the wearing of an engagement ring? I notice so many college girls wearing the ring on the right hand while other wear it on the left. Is it the custom for the bridegroom to furnish his with a completely new wardrobe after their marriage? Thanking you in advance for your advice. – L.H.

The custom has been for years and years to wear the engagement ring on the third finger of the left hand, but girls are changing the entire order of things now and I imagine one may do as one pleases about wearing engagement rings.

Brides usually have enough clothes to last a year, that is, enough of the principal garments. Of course, little things like hose and accessories must be purchased from time to time even during the first year.

North of the Border:

We just had our two grandsons over for the weekend. They are almost five and three and full of life. They played in the monstrous puddles outside our house; built Duplo creations and knocked them down; raced around the house on push vehicles and didn’t stop eating. When I suggested to the oldest that he needed to finish his main course before having a cookie, he said “that spoils my happiness,” forcing me to lamely say, “that’s the way it is.”

I recommend being a grandparent.

My column this week discusses the cross-border litigation regarding Vale Canada’s claims for coverage for pollution events arising from its worldwide nickel production facilities.

See you next time.

Heather
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
hasanderson@sanderson-law.com

Headlines from this week’s issue:

KOHANE’S COVERAGE CORNER
Dan D. Kohane
ddk@hurwitzfine.com

This One Is Big. First Department Holds That Graves Amendment Supersedes Vehicle & Traffic Law Section 370, insofar as It Requires Rental Car Companies to Provide Minimum Limits of Coverage for Its Drivers. Thousands Flee.
Law Firm Loses Coverage Under Claims Made E&O Policy When It Had Prior Knowledge of Facts That Could Constitute Claims and Failed to Disclose Same in Policy Application. First Department Provide Primer on This Area of Law
Later Acts of Sexual Harassment to a Different Victim Is Sufficiently Connected to Earlier Harassment to Be Considered an Interrelated Wrongful Act

PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
sep@hurwitzfine.com

Settlement Against Potential Joint Tortfeasor in a Foreign Jurisdiction Does Not Support Res Judicata Dismissal of Second, Independent Lawsuit

LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
lss@hurwitzfine.com

Berkley Knocks Out CUTPA/CUIPA but Falls Short on Dismissing Bad Faith Claim
CUTPA Claim Dismissed For Want of Standing
Negligent Infliction of Emotional Distress Claim Survives Against Carrier
Carrier Cannot Rely on Home Improvement Act as a Defense to Payment, Among Other Issues

RUFFNER’S ROAD REVIEW
Kyle A. Ruffner
kar@hurwitzfine.com

Motion to Vacate Default Is Denied, as Respondent Did Not Produce Its Policy to Establish Whether It Permitted or Required Arbitration

RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
rpm@hurwitzfine.com

Nothing from me this time (but next time I'll have some extra hands).

STORM’S SIU
Scott D. Storm
sds@hurwitzfine.com

“For Hire” Exclusion Not Effective to UM/SUM Coverage; Not Enough Proof That the TNC Exclusion Applied
Where Insured’s Expert Identifies Six Possible Causes of Loss, It Is Not Enough for Summary Judgment for the Insurer to Argue One Cause is Excluded From Coverage Based on the Anti-Concurrent Causation Language Without Evidence the Excluded Peril Accounted for Some of the Damage

FLEMING’S FINEST
Katherine A. Fleming
kaf@hurwitzfine.com

Insurer Must Only Pay to Repair the Damage from the Partial Roof Collapse but Not the Cost to Remedy the Longstanding Deterioration in Other Areas of the Building Unaffected by the Collapse

GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
edg@hurwitzfine.com

Insurer Entitled to Rescind Policy Where Misrepresentations Were Made as to the Use of Subcontractors on Construction Projects
Appellate Division Affirms Waiver of Incarcerated Individual’s Right to Contest Arbitration Award, and Finds the Thirty-Day Rule to Apply in Any Event

O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
rpo@hurwitzfine.com

Insured Possesses Article III Standing to Bring Reformation Claim on Undamaged Buildings and Broad Course Of Construction Exclusion Applies to Entire Construction Project

ROB REACHES the THRESHOLD
Robert J. Caggiano
rjc@hurwitzfine.com

First Department Unanimously Affirms Order Which Included Trial Rulings on Motion in Limine Where Plaintiff’s Application to Preclude Defendant’s Biomechanical Engineer Expert From Testifying Was Denied and Defendant’s Application to Limit Plaintiff’s Treating Physician’s Testimony Was Granted

LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
ihl@hurwitzfine.com

Court Denies Motion for Class Certification as Premature, and Orders the Parties to Conduct Limited Discovery

LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
lrh@hurwitzfine.com

Proposed Act to Provide Guidelines for the Issuance of Pet Insurance in New York State

DOMENICA’S DIARY ON BAD FAITH
Domenica D. Hart
ddh@hurwitzfine.com

Long Periods of Time Between a Demand and a Settlement Does Not on Its Own Constitute Bad Faith; Delays Attributable to Necessary Investigation or Even Simple Negligence Will Not Satisfy the Burden

NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
hasanderson@sanderson-law.com

Unless There is a Choice of Law Clause Specifying a Jurisdiction Other than Ontario, the Ontario Courts have Jurisdiction to Hear Coverage Disputes under Policies that were Brokered and Issued to Insureds at an Address Outside of Ontario, Where the Issuing Insurers are Registered and Licensed to Transact Business in Ontario; the Insured Does Business in Ontario; and, the Policies Relate Largely, but not Exclusively to the Insured’s Operations in Ontario
The Sudden and Accidental Pollution Exception to the Pollution Exclusion Contains a Temporal Element that is Met by the Discharge, Abruptly or Within a Short Time Span, of a Significant Quantity of the Pollutant Sufficient to Have Some Potentially Damaging Environmental Effect

That all we have for this week. See you in two.

Hurwitz Fine P.C. is a full-service law firm providing legal services throughout the State of New York and providing insurance coverage advice and counsel in Connecticut and New Jersey.

In addition, Dan D. Kohane is a Foreign Legal Consultant, Permit No. 0119144, issued by the Law Society of Upper Canada, and authorized to provide legal advice in the Province of Ontario on matters of New York State and federal law.

NEWSLETTER EDITOR
Dan D. Kohane
ddk@hurwitzfine.com

ASSOCIATE EDITOR
Agnes A. Wilewicz
aaw@hurwitzfine.com

COPY EDITOR
Evan D. Gestwick
edg@hurwitzfine.com

INSURANCE COVERAGE/EXTRA CONTRACTUAL LIABILITY TEAM
Dan D. Kohane, Chair
ddk@hurwitzfine.com

Steven E. Peiper, Co-Chair
sep@hurwitzfine.com

Michael F. Perley

Agnieszka A. Wilewicz

Lee S. Siegel

Brian F. Mark

Scott D. Storm

Domenica D. Hart

Ryan P. Maxwell

Kyle A. Ruffner

Katherine A. Fleming

Evan D. Gestwick

Ryan P. O’Shea

Isabelle H. LaBarbera

Lexi R. Horton

Victoria S. Heist

FIRE, FIRST PARTY AND SUBROGATION TEAM
Steven E. Peiper, Team Leader
sep@hurwitzfine.com

Michael F. Perley

Scott D. Storm

NO-FAULT/UM/SUM TEAM
Dan D. Kohane
ddk@hurwitzfine.com

Ryan P. O’Shea
rpo@hurwitzfine.com

Kyle A. Ruffner
kar@hurwitzfine.com

APPELLATE TEAM
Jody E. Briandi, Team Leader
jeb@hurwitzfine.com

Topical Index

Kohane’s Coverage Corner
Peiper on Property and Potpourri
Lee’s Connecticut Chronicles
Ruffner’s Road Review
Ryan’s Federal Reporter
Storm’s SIU
Fleming’s Finest
Gestwick’s Garden State Gazette
O’Shea Rides the Circuits
Rob Reaches the Threshold
LaBarbera’s Lower Court Library
Lexi’s Legislative Lowdown
Domenica’s Diary on Bad Faith
North of the Border

KOHANE’S COVERAGE CORNER
Dan D. Kohane
ddk@hurwitzfine.com

03/13/25 Second Child v. Edge Auto, Inc.
Appellate Division, First Department
This One Is Big. First Department Holds That Graves Amendment Supersedes Vehicle & Traffic Law Section 370, insofar as It Requires Rental Car Companies to Provide Minimum Limits of Coverage for Its Drivers. Thousands Flee.

Plaintiffs, a company and its driver, (collectively referred to as “Second Child”) (by the way, Second Child is a corporation, not the second son or daughter of Mr., and Mrs., Child) rented a vehicle from its owner Edge Auto, Inc. A nonparty commenced an action against Second Child seeking damages arising out of a traffic accident involving their operation of the rented vehicle.

Second Child filed a third-party complaint against Edge Auto and its insurer seeking a judgment declaring, among other things, that Edge Auto was statutorily obligated to provide insurance to Second Child on a primary non-contributory basis pursuant to Vehicle and Traffic Law § 370; that Edge Auto or its insurance company were required to undertake the defense and indemnity obligations of plaintiffs in the underlying action; and that Edge Auto was prohibited from seeking indemnification from plaintiffs or their insurer for amounts up to the statutory minimums imposed by Vehicle and Traffic Law § 370.

Vehicle and Traffic Law § 370 provides that rental car companies "shall file with the commissioner of motor vehicles . . . evidence of . . . a corporate surety bond or policy of insurance. Any such bond or insurance policy shall inure to the benefit of any person legally operating the motor vehicle". The Court of Appeals has determined, in previous cases, that this section obliges rental car companies to provide coverage to their drivers, renters up to the minimum liability limits provided by the statute

The U.S. Congress enacted the Graves Amendment (49 USC § 30106) in 2005. The Graves Amendment's operative provision, the preemption clause, states:

"An owner of a motor vehicle that rents or leases the vehicle to a person . . . shall not be liable under the law of any State . . . , by reason of being the owner of the vehicle . . . , for harm to persons or property that results or arises out of the use, operation, or possession of the vehicle during the period of rental or lease, if — (1) the owner . . . is engaged in the trade or business of renting or leasing motor vehicles; and (2) there is no negligence or criminal wrongdoing on the part of the owner . . . ." (49 USC § 30106[a]).

The Amendment contains a savings clause, titled "Financial responsibility laws," which provides:

"Nothing in this section supersedes the law of any State . . . — (1) imposing financial responsibility or insurance standards on the owner of a motor vehicle for the privilege of registering and operating a motor vehicle; or (2) imposing liability on business entities engaged in the trade or business of renting or leasing motor vehicles for failure to meet the financial responsibility or liability insurance requirements under State law" (49 USC § 30106[b]).

Second Child argued that the Graves Amendment does not supersede Vehicle and Traffic Law § 370 and concedes that the plain language of the preemption clause bars liability against Edge Auto. Their argument instead rests on the savings clause, contending that Vehicle and Traffic Law § 370, as interpreted by Ward, is a financial responsibility law and thus not superseded (see 49 USC § 30106[b]).

The court holds that the Graves Amendment does not supersede Vehicle and Traffic Law § 370 insofar as it is a state law that requires car rental companies to carry a specified minimum amount of insurance for each of their vehicles.

However, the court finds that Vehicle and Traffic Law § 370 is superseded to the extent it requires a rental car company to "provide primary insurance to their renters up to the minimum liability limits provided by the statute". Requiring rental car companies to primarily insure and indemnify plaintiffs' damages is the precise result barred by the Graves Amendment.

Plaintiffs argue that the Graves Amendment only supersedes statutes imposing vicarious liability (see e.g. Vehicle and Traffic Law § 388; Hernandez v Sanchez, 40 AD3d 446, 447 [1st Dept 2007]), not statutes mandating primary coverage. This is a distinction without a difference. Rental car companies "shall not be liable" under New York State law for damages incurred by renters (49 USC § 30106[a]). The form in which state law attempts to impose vicarious liability, whether under vicarious liability statutes or under primacy of insurance coverage statutes, does not matter (see Brown, 446 F Supp 3d at 553). To hold otherwise would rescue every vicarious liability claim up to statutory minimum insurance amounts and render the Graves Amendment's preemption clause a nullity (see Dimensional, 58 Misc 3d at 59-60; see generally Garcia v Vanguard Car Rental USA, Inc., 540 F 3d 1242, 1248 [11th Cir 2008]).

Editor’s Note: Nah. Just wrong. The carve out in the Graves Amendment allows Section 370 to be operative.

03/13/25 Allied World Assurance Company v. Golenbock Eiseman, et al.
Appellate Division, First Department
Law Firm Loses Coverage Under Claims Made E&O Policy When It Had Prior Knowledge of Facts That Could Constitute Claims and Failed to Disclose Same in Policy Application. First Department Provide Primer on This Area of Law

The Golenbock law firm (“law firm”) represented nonparty Workspace, Inc. regarding certain real estate sales from 2015-2017. One of the properties, a unit in 106 Spring Street in Manhattan, sold in 2015, and by virtue of the sale the purchaser became a shareholder in Workspace.

In November 2017, the purchaser sued Workspace (the “Spring Street action”) alleging that Workspace, by concealing certain documents and facts both during the sale and thereafter, acted to deprive the purchaser of significant monetary benefits in the pending sale of another of Workspace's properties at 93 Mercer Street. The 93 Mercer Street transaction never closed due to, among other things, the pendency of the 106 Spring Street Action, resulting in an alleged loss to Workspace's shareholders of more than $18 million.

In 2018, Workspace and the law firm entered into a tolling agreement, which set forth that Workspace believes that it may hold claims against [defendant] . . . and wishes to preserve the Claims — if any — until the final adjudication of the [106 Spring Street Action]. The tolling agreement also provided that defendant "believes that it may hold claims against Workspace for unpaid legal fees," and that "[t]he parties desire to avoid litigation at this time." Finally, the parties entered into the agreement "to toll the statute of limitation on their claims against one another at this time."

Years later, Allied World (“AWAC”) issued a claims-made policy to the law firm for the period of August 1, 2021, to August 1, 2022. The policy expressly defined a "claim" to include "a request to toll or waive a statute of limitations made to or against any Insured seeking to hold such insured responsible for any Wrongful Act."

The policy defines a Legal Services Wrongful Act as "any actual or alleged act, error or omission committed by any Insured, solely in the performance of or failure to perform Legal Services." Finally, the "No Prior Knowledge" condition precedent to coverage required that "prior to August 1, 2019, no Insured had any basis (1) to believe that any Insured had breached a professional duty; or (2) to foresee that any fact, circumstance, situation, transaction, event, or Wrongful Act [*2]might reasonably be expected to be the basis of a Claim against any Insured." Defendant did not disclose the tolling agreement or the related 106 Spring Street Action to plaintiff prior to the policy's issuance.

On August 3, 2021, Workspace initiated an action against defendants for legal malpractice allegedly committed from 2015 through 2017 in connection with the 106 Spring Street sale and the ultimately aborted 93 Mercer Sale (the Workspace Action). The law firm requested coverage in the Workspace Action from plaintiff, and on August 27, 2021, plaintiff agreed to provide a defense while reserving its rights. During its investigation of the Workspace Action, plaintiff subsequently learned that defendant had entered, and failed to disclose, the tolling agreement in August 2018. On August 16, 2022, AWAC denied coverage to the law firm on the grounds that the claim pre-dated the policy, and that the policy's no prior knowledge condition was not satisfied.

It is undisputed that defendant and Workspace, its former client, entered into the tolling agreement prior to the policy period, and defendant's argument that the tolling agreement is ambiguous or otherwise insufficient to constitute a "claim" is unavailing. The policy specifies that a tolling agreement seeking to hold defendants responsible for "any Wrongful Act" (including acts constituting legal malpractice) establishes a claim.

AWAC also properly denied coverage due to defendant's failure to satisfy the policy's "No Prior Knowledge" requirement. When analyzing "prior knowledge" provisions in professional liability insurance cases, New York courts apply a two-step subjective/objective knowledge. The Court must first determine whether the insured has subjective knowledge of relevant facts or circumstances indicating a potential claim prior to the policy's effective date. Second, the Court must determine whether a reasonable attorney "might expect such facts to be the basis of a claim."

The tolling agreement establishes that defendant had both subjective and objective knowledge of a potential legal malpractice claim sufficient to trigger an obligation to disclose such fact to plaintiff under the policy.

03/11/25 Zurich American Insurance Co. v. Giorgio Armani Corporation
Appellate Division, First Department
Later Acts of Sexual Harassment to a Different Victim Is Sufficiently Connected to Earlier Harassment to Be Considered an Interrelated Wrongful Act

This appeal arises out of three lawsuits and two insurance policies. One of the insurance policies was issued by Hiscox Insurance Company. This is a rare, signed decision out of the First Department, from Justing Singh. The other was issued by plaintiff Zurich American Insurance Company (ZAI). Both were issued to defendant Giorgio Armani Corporation (GAC).

The lawsuits allege that GAC employee Javier Herrera used his position to sexually harass, and assault women and that GAC made no effort to deter or punish his misconduct. There were three lawsuits. Hiscox acknowledged coverage for two of them. Third, the Christin act, Hiscox denied claiming it as outside the policy period and within ZAI’s.

Hiscox acknowledged coverage of the Loreto-Hays and Oberloh actions. It denied coverage of the Christin action, which it asserted was filed outside the policy period. The parties eventually agreed to litigate their dispute in New York. Both ZAI and Hiscox moved for summary judgment, each asserting that the other's policy covered the Chrstin action.

The Hiscox policy covered the period in which the first two lawsuits were filed. The Loreto, Hays, and Oberloh actions were filed. It is not disputed that these actions and the Christin action constitute Claims under the Hiscox policy.

The Hiscox policy provides that once notice of a Claim is given, "any Claim which is subsequently made against the Insureds and reported to the Insurer . . . alleging any . . . Related Wrongful Act to that alleged in the Claim of which such notice has been given, shall be considered made at the time such notice was originally given." Related Wrongful Act(s) is defined as:

"Wrongful Act(s) as defined in the applicable Coverage Part which are the same, repeated or continuous to other Wrongful Act(s) as defined in the same applicable Coverage Part."

"Related Wrongful Act(s) shall also mean Wrongful Act(s) as defined in the applicable Coverage Part which arise from a common causal connection or cause the same or related damages, or a common nexus or nucleus of facts to other Wrongful Act(s) as defined in the same applicable Coverage Part."

"Claims can allege Related Wrongful Act(s) regardless of whether such Claims involve the same or different claimants, Insureds or legal causes of action."

The ZAI policy covered the later period in which the Christin action was filed. Again, it is undisputed that all three actions constitute Claims under this policy. The ZAI policy provides that "[a]ll Claims . . . which arise out of the same Wrongful Act and all Interrelated Wrongful Acts of Insureds shall be deemed one Claim," which "shall be deemed to be first made on the date the earliest of such Claims is first made against any Insured, regardless of whether such date is before or during the Policy Period." Interrelated Wrongful Acts are defined as "all Wrongful Acts that have as a common nexus any fact, circumstance, situation, event, transaction, cause or series of causally connected facts, circumstances, situations, events, transactions or causes."

The Actions

In these first of the two lawsuits, the plaintiff alleges that in 2015, while she was providing janitorial services to a GAC store, Herrera sexually assaulted her. She alleges that she reported the sexual assault to GAC, which took no action to protect her from Herrera. She further alleges that GAC knew or should have known that Herrera posed a danger to others.

In the second action. It is alleged that GAC and its employees, including Herrera, discriminated against her on the basis of her race and sex. As relevant here, she alleges that she learned Herrera had been sexually harassing three women and later learned that he had sexually assaulted a coworker. She alleges that she reported both to GAC, that it knew women felt uncomfortable in the workplace because of Herrera, and that it did nothing. Allegedly, the women eventually quit because of Herrera's behavior, and Oberloh herself was fired on March 27, 2018.

In the Christin action, five women allege a variety of harassment by Herrera from 2013 until 2018. One plaintiff alleges that she was sexually assaulted by Herrera many times over a period of almost two years. The complaint alleges that, in response to complaints against him, Herrera was transferred to another store. He then allegedly subjected the remaining plaintiffs, who worked at that store, to years of unwelcome and degrading sexual contact.

The Christin complaint also alleges that GAC knew of Herrera's wrongdoing against women other than the plaintiffs. Among the misconduct alleged is that against the two women in the first two actions.

The court finds that the Christin action shares "a common nexus or nucleus of facts" with the earlier actions, and whether it "[has] as a common nexus" with them "any fact, circumstance, situation, event, transaction [or] cause." This is a broad test, which should not be "read [] . . . narrowly at the expense of applying its plain language. Applying this test, the court finds that the Christin action should be treated as made no later than the filing date of the Oberloh action.

Nothing in the language of either policy restricts Related or Interrelated Wrongful Acts to those harming the same plaintiff. Rather, Herrera's actions and GAC's response — or lack of response — to them may present the common nexus or nucleus of fact.

The Oberloh and Christin complaints share allegations that Oberloh learned Herrera was sexually harassing three women employed by GAC, that Oberloh reported this harassment to GAC, that all three women eventually quit because of Herrera's misconduct, and that GAC took no action to punish Herrera or prevent repetition. Two of those women were plaintiffs in the Christin action. Furthermore, all three complaints allege that Herrera sexually assaulted the women from the first two lawsuit and GAC did nothing. The allegations "originate from" and have "some causal relationship" with the allegations in the earlier actions (id.).

The court finds that the Christin action is a Related Wrongful Act under the Hiscox policy and an Interrelated Wrongful Act under the ZAI policy. It is thus covered by the Hiscox policy.

PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
sep@hurwitzfine.com

03/06/25 Kirby v. David Fabricators of NY, Inc.
Appellate Division, First Department
Settlement Against Potential Joint Tortfeasor in a Foreign Jurisdiction Does Not Support Res Judicata Dismissal of Second, Independent Lawsuit

Plaintiff commenced this action in New York seeking damages as a result of exposure to asbestos products while working in pizza kitchens from the 1960s through the 1980s. Plaintiff alleged that his exposure was caused by certain stone boards which were manufactured by defendant David and incorporated into ovens manufactured by Bakers Pride. An action was previously commenced in Illinois against Bakers Pride, and was ultimately discontinued, with prejudice, as part of a settlement agreement.

David moves to dismiss the subsequent action, filed in New York, under res judicata grounds. The Appellate Division rejected David’s argument because David was neither a party to the Illinois lawsuit, the Illinois settlement, nor was David in privity with Bakers Pride. The existence of a potential indemnity obligation running in favor of Bakers Pride also does not create a bar to plaintiff’s new action in New York.

Finally, David’s argument that Bakers Pride was a “necessary party” to the New York action was also dismissed by the Court. It is black letter law in New York that joint tortfeasors are “necessary parties.”

LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
lss@hurwitzfine.com

02/26/25 Natarajan v. Berkley Ins. Co.
Superior Court of Connecticut, Stamford
Berkley Knocks Out CUTPA/CUIPA but Falls Short on Dismissing Bad Faith Claim

The insured sued Berkley for breach of a homeowner’s policy, claiming that the carrier wrongly denied coverage for a sewer backup loss. The policyholder also alleged that Berkley’s denial was in bad faith, under common law and statutory theories.

Interestingly, the policy covered sewer backup damage, but only for drains “located within the fully enclosed perimeter of the foundation of the building.” The insured alleged that the loss was caused by a drain “located immediately outside the interior of the dwelling. Critically, the drain was located within the fully enclosed perimeter of the foundation of the building.”

Berkley moved to strike the bad faith causes of action but was only one for two. The insured alleged that the denial was in bad faith because Berkley, among other things, failed to properly apply the terms of the Policy; ignoring the terms of the Policy; disregarding the facts surrounding the Loss; disregarding documentation provided by Plaintiffs; disregarding Connecticut law; disregarding the law of policy interpretation; improperly attempting to, in effect, delete, nullify or neutralize terms contained in the Policy; failing to timely and promptly respond to communications from Plaintiffs; misrepresenting its intentions; misrepresenting when it would respond to communications; misrepresenting the terms of the Policy; misrepresenting the facts; and failing to conduct a thorough investigation into the facts, foundation and footing design, application of the Policy and applicable law.

The court, based on these allegations, refused to strike the cause of action. “The facts alleged about the coverage dispute, taken as true on this motion to strike, describe conduct calculated to deprive plaintiffs of the benefits of the insurance contract, which suffices to state a claim of bad faith conduct violative of the implied covenant of good faith and fair dealing.”

Berkley, however, fared better on the CUTPA/CUIPA claim. While the court was sympathetic to a more lenient pleading approach, the allegations did not meet the lessened standard. The court noted that the insured’s allegations did not assert a general business practice in violation of CUIPA. “The preceding paragraphs, however, just alleged acts experienced by plaintiff from which no inference of a general business practice may be derived. No facts are alleged to show that Berkeley's settlement practices experienced by plaintiff were part of its general business practices.”

02/25/25 Cummings v. Alexander
Superior Court of Connecticut, Tolland
CUTPA Claim Dismissed for Want of Standing

The court dismissed the plaintiff’s CUTPA action against GEICO. Because the plaintiff was not a party to the insurance contract or an intended beneficiary of the insurance contract, he lacked standing to bring a CUTPA claim.

Cummings alleges that he got into a motor vehicle accident with Alexander, who was insured by GEICO. Cummings claimed that GEICO had not acted promptly to settle the property damage claim, in violation of CUTPA. The plaintiff, however, did not assert a CUIPA claim. Connecticut precedent establishes that an insured must allege a CUIPA violation in order to sustain a CUTPA claim. The Connecticut Supreme Court has held "that individuals may bring an action under CUTPA for violations of CUIPA. In order to sustain a CUIPA cause of action under CUTPA, a plaintiff must allege conduct that is proscribed by CUIPA.”

Ultimately, the court dismissed the claim because of a lack of standing. Because the plaintiff is not the insured, not a third-party beneficiary, and not a subrogee of the insured, he lacked standing to bring a CUTPA claim against GEICO.

02/26/25 Cummings v. Liberty Mut. Fire Ins.
Superior Court of Connecticut, Tolland
Negligent Infliction of Emotional Distress Claim Survives Against Carrier

Mr. Cumming returns to us (see above), with claims against Liberty Mutual. For the same reasons, the court struck plaintiff’s CUTPA claim against Liberty for lack of standing. This time, however, Cummings fared better on his claim that Liberty negligently inflicted emotional suffering on him. The opinion is sparse in detail; however, the court denied the motion to strike on the carrier’s claim of a lack of standing.

There is no requirement that a plaintiff be in contractual privity to bring a tort claim against a party. “The court rejects the defendant's argument that the plaintiff's claim for negligent infliction of emotional distress is legally insufficient because the plaintiff fails to allege that he has subrogation rights under the insurance policy or that there has been a judicial determination of the insured's liability.”

A copy of this decision is available upon request.

02/27/25 Rising Star Roofing, LLC v. Gen. Ins. Co. of Am
Superior Court of Connecticut, Hartford
Carrier Cannot Rely on Home Improvement Act as a Defense to Payment, Among Other Issues

The Pazdas are homeowners who suffered insurable damage to their roof. They hired Rising Star to complete the repairs and assigned their rights against General for the cost of repairs to Rising Star. General paid the contractor over $28,000 for the damage, but Rising Star claimed it was due additional compensation.

The carrier moved for summary judgment claiming that the assignment was invalid, the contractor was paid in full under the terms of the insurance contract, and the contractor’s Xactimate estimates did not provide adequate support for its claim. General also argued that the repair contract was void for failure to comply with CGS § 38a-313a which requires that a contractor provide a written scope of work, estimated price, and that in at least 12-point type apprising the homeowner of the right to be a joint payee. And, of course, the parties fought over the right to appraisal.

First, the court held that there was a question of fact as to whether the homeowner had apparent authority to sign the assignment to the contractor on behalf of his wife. Second, the court held that the construction contract did not preclude a claim for additional compensation. The contract between Rising Star and the Pazdas provided that, "Final project cost will equal the carrier's final agreed scope and estimate of damages.” The court found that caselaw finding that additional compensation was prescribed by such language was inapplicable because it was in the context of mechanic’s lien. Third, while the court was skeptical that an Xactimate estimate was sufficient proof of the actual and necessary repair costs incurred, the evidence raises a triable issue of fact.

Fourth, and significantly, the court held that the insurer cannot assert the Home Improvement Act as a defense to payment. “The act is for the benefit of the consumer, and compliance with its terms may be waived by the consumer, either explicitly or by nonassertion. Thus, the . . . insurer, cannot interpose noncompliance with the act as a defense to its own insured's claim for replacement cost coverage.”

Lastly, the court indicated that a post-litigation appraisal is not precluded or waived. “although appraisal is an option available to either party, it is not mandatory. For this reason, the court further concludes that it would be inappropriate to determine, as a matter of law, that every failure to request appraisal prior to initiating suit ipso facto results in a waiver of appraisal rights. Instead, the court concludes that whether Rising Star waived its right to appraisal in this case presents a genuine issue of material fact.” However, the court refused to order appraisal because Rising Star did not allege a right to appraisal in its complaint or otherwise seek such relief.

RUFFNER’S ROAD REVIEW
Kyle A. Ruffner
kar@hurwitzfine.com

03/03/25 In re St. Farm Mut. Auto. Ins. Co. a/s/o Soblevsky v. Prime Prop. & Cas. Ins., Inc.
Civil Court of the City of New York, Queens County
Motion to Vacate Default Is Denied, as Respondent Did Not Produce Its Policy to Establish Whether It Permitted or Required Arbitration

State Farm’s insured was involved in an accident with a vehicle operated by a driver for Prime Property’s insured, JLP Express Corp. State Farm commenced an arbitration proceeding seeking loss transfer reimbursement pursuant to Insurance Law §5105 and upon the default of the respondent was awarded $44,892.39. The petitioner then commenced this action seeking to confirm the arbitration award and another action, as subrogee of its insured seeking reimbursement of $49,800 in No-Fault payments paid by State Farm. The respondent moved to vacate the award pursuant to CPLR §7511(b)(1)(iii), as well as the default judgment, arguing that as a foreign corporation not authorized to do business in New York it could not be subject to any arbitration in New York.

To vacate a default the movant must present a reasonable excuse for the default and a potentially meritorious defense. There were no disputes between New York courts that lack jurisdiction over whether a party does not transact business in New York or is not licensed to transact business in New York (see, CPLR 302) or that a vehicle insured out of state that is involved in an accident within the state is insufficient, standing alone, to confer jurisdiction. However, the lack of jurisdiction that does not mean a party cannot be subject to an arbitration in New York. The court referenced the case of American Independent Insurance Company v. Art of Healing Medicine P.C., 104 AD3d 761, 961 NYS2d 240 [2d Dept., 2013] as instructive to this case, explaining that "while personal jurisdiction is required for the exercise of the state's judicial power over a party, arbitration is a form of dispute resolution almost wholly independent of the court system" and that other than a few basic guarantees "personal jurisdiction is not required for arbitration that is controlled by the parties' agreement". The issue is whether the arbitrator has authority under the insurance contract to award no-fault benefits to the applicant. The court held that the lack of personal jurisdiction over the respondent would not bar any arbitration proceedings over the same respondent. In prior cases, motions of out of state insurers to vacate a default on the grounds that the insurer did not conduct business in the state have been denied where the insurer failed to submit its policy to determine whether an arbitration clause existed.

In addition, the court pointed out that the existence of an out-of-state insurance clause within respondent's policy would subject respondents to the financial liability No-Fault laws of New York, where an insured becomes subject to those laws by driving in that state. Therefore, without the ability to review the insurance policy the respondent failed to present sufficient evidence warranting the vacatur of the arbitration award.

The respondent cited multiple cases to support its contention the court had no jurisdiction over it. For example, in GEICO Indemnity v. Prime Property & Casualty, Index Number 603953/2021 (Supreme Court Nassau County 2023) and New York State Insurance Fund v. Prime Casualty & Realty, Index Number 803471/2023 (Supreme Court Erie County 2024) the courts held that arbitrations could not proceed against the respondent in this action, Prime Property and Casualty Insurance Inc., because the respondent was not licensed to do business in New York and was thus not a covered person pursuant to Insurance Law §5102(j). However, neither decision discussed American Independent Insurance Company v. Art of Healing Medicine P.C. which held that whether a party must submit to arbitration is not in any way connected to the jurisdictional requirements of state courts and failed to consider whether the insurance policy of the respondent contained an `out-of-state insurance clause' which would subject the respondent to arbitration and any subsequent state court action to confirm any eventual award.

Therefore, the only factor in determining whether the respondent could be subject to arbitration is whether its policy contained procedures regarding arbitration. However, this would require an examination of the policy itself. The court determined an affidavit from an employee of respondent, the vice president of the claims department, establishing that the respondent was not authorized to do business in New York and did not conduct business in New York, did not address whether the respondent's policy permitted, and perhaps required, arbitration.

Therefore, the court held the respondent failed to submit its insurance policy for review and thus has failed to present a meritorious defense necessary to vacate the default judgement. As such, the motion seeking to vacate the arbitration award was denied.

RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
rpm@hurwitzfine.com

Nothing from me this time (but next time I'll have some extra hands).

STORM’S SIU
Scott D. Storm
sds@hurwitzfine.com

02/10/25 Matter of State Farm Mut. Auto. Ins. Co. v. Rympel
Supreme Court, Kings County
“For Hire” Exclusion Not Effective to UM/SUM Coverage; Not Enough Proof That the TNC Exclusion Applied

State Farm commenced a special proceeding to permanently stay arbitration. State Farm's insured, Dalusma, had a policy that excludes coverage for "for hire" and TNC vehicles. Rympel hailed Dalusma's vehicle on the street, recognizing it as a taxicab, without pre-arranging the trip. Dalusma was allegedly working for "Mex Express Car Service" at the time of the accident.

The Court held that the "for hire" exclusion in the policy may be effective regarding the general liability aspects of the policy, but the exclusion does not apply to UM/SUM coverage as a matter of public policy to ensure innocent victims of motor vehicle accidents are compensated for their injuries and losses.

The Transportation Network Company exclusion does not apply in this case as the vehicle was not being used as a TNC vehicle at the time of the accident. The undisputed affidavit of Rympel said, "Prior to the accident, I was walking toward the bus stop when I saw Mr. Dalusma's vehicle. I hailed Mr. Dalusma's vehicle on the street as I recognized it to be a taxicab. Mr. Dalusma stopped and accepted me as a passenger. I did not otherwise contact anyone to pre-arrange this trip." The affidavit of Mr. Dalusma makes general statements that the driver was working for "Mex Express Car Service" at the time of the accident but the court said it does not tell us the circumstances as to Ms. Rympel's pick-up.

02/21/25 SC Austin Holdings LLC v. Mt. Hawley Ins. Co.
United States District Court, S.D. New York
Where Insured’s Expert Identifies Six Possible Causes of Loss, It Is Not Enough for Summary Judgment for the Insurer to Argue One Cause Is Excluded From Coverage Based on the Anti-Concurrent Causation Language Without Evidence the Excluded Peril Accounted for Some of the Damage
Mt. Hawley Ins. Co. insured SC Austin Holdings covering a hotel in Daytona Beach. Hurricane Ian flooded the hotel and damaged almost every room. The hotel was closed for months. Mt. Hawley denied coverage and sought summary judgment on SC Austin's claims as to 1) damage on the hotel's second through seventh floors based on an "anti-concurrent cause" exclusion in the policy, and 2) business-income losses caused by the hotel's closure.

The court held that as an "all-risk" policy, it is Mt. Hawley's burden to prove that the damage is excluded. Once the insured shows that a loss has occurred, the insurer has the burden of demonstrating that the loss claimed is excluded. The court says that Mt. Hawley fails to meet this burden. Mt. Hawley pointed to one of six possible explanations for water damage identified in SC Austin's expert’s report saying it was excluded under the policy and relying on the anti-concurrent causation language but failed to provide evidence that this theory definitively accounted for some or all of the damage.

FLEMING’S FINEST
Katherine A. Fleming
kaf@hurwitzfine.com

03/07/25 Waterloo Comm. Sch. Dist. v. Vermont Mut. Cas. Co.
Iowa Supreme Court
Insurer Must Only Pay to Repair the Damage From the Partial Roof Collapse but Not the Cost to Remedy the Longstanding Deterioration in Other Areas of the Building Unaffected by the Collapse

After a heavy snowstorm, part of the roof of an aged elementary school building collapsed into a second-floor classroom during a snow day. Several feet of snow had already fallen, and the heavy snow accumulated on the roof of the school. Investigations into the cause of the collapse determined that the roof failed under the weight of the snow and because of pre-existing, hidden deterioration of mortar in the load-bearing walls supporting the roof. The longstanding deterioration was found in the load-bearing walls throughout the school, and local authorities deemed the entire building unsafe for occupancy. The school district was unaware of the deterioration of the mortar within the concealed, load-bearing layer of the walls. Both the school district and the insurer hired experts to investigate the cause of the collapse, and both experts agreed that the deterioration of the load-bearing wall was a contributing factor for the partial collapse due to long-term water infiltration.

The school district demanded that the insurer pay to restore the load-bearing walls for the entire building to comply with the building code because it had purchased additional Ordinance or Law coverage. However, the insurer agreed to pay only for the area of the collapse based on the Ordinance or Law provision’s exception for failure to comply with the code before the collapse. The parties disagreed about whether the exception applied because the school district was unaware of the deteriorated mortar that made the building unsafe before the collapse. The school district sued for the cost to restore the deteriorated mortar throughout the entire building. The district court granted summary judgment for the insurer, concluding that the school district could only recover for the damage physically caused by the collapse. The district court applied the exception for pre-existing code violations and found that the policy’s exclusion for decay and deterioration barred coverage.

The school district applied for interlocutory review. The Iowa Supreme Court agreed with the insurer that the Ordinance or Law coverage’s exception applied to the pre-existing code violations and defeated the school district’s claim for the deteriorated mortar outside the area of the collapse. The court reasoned that the Ordinance or Law coverage was designed to pay for the costs of a code upgrade where the building code excused owners of older buildings from complying with current code requirements until an event necessitated major renovations. By contrast, the provision does not provide coverage for pre-existing code violations that the school district had been obligated to address. Accordingly, the Supreme Court held the district court correctly applied the Ordinance or Law exception, and there was no coverage for the cost to replace deteriorated walls outside the area of the partial roof collapse. A contrary holding would have turned the policy into a general maintenance contract.

GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
edg@hurwitzfine.com

03/03/25 Midvale Indem. Co. v. Plaster Pro Masonry Contractors et al.
United States District Court, District of New Jersey
Insurer Entitled to Rescind Policy Where Misrepresentations Were Made as to the Use of Subcontractors on Construction Projects

Midvale issued an insurance policy to Plaster Pro. On the application for that policy was a question that asked whether Plaster Pro used any subcontractors on any of its projects, to which Plaster Pro responded “no.” While the policy was in effect, an accident occurred at one of Plaster Pro’s job sites. Through investigation, Midvale learned that Plaster Pro had hired Cumbicos, a subcontractor, in connection with the project. Midvale agreed to defend Plaster Pro in the resulting tort action under a reservation of rights, and brought this declaratory judgment action seeking declarations that it is entitled to rescind the policy based on Plaster Pro’s material misrepresentation, and that it has no duty to defend or indemnify Plaster Pro in the tort action.

The Court noted that, under New Jersey law, an insurance carrier is entitled to rescind an insurance policy based on a material misrepresentation made by the insured. To prove its entitlement to do so, the insurer must establish that the misrepresentation existed at the time of the application for the policy, and that the insurer either would not have issued the policy at all or would have issued the policy on different terms (e.g., at a different premium) had it known of the misrepresentation at the time of the policy’s application.

The Court, having found that Midvale satisfied its burden of showing both the misrepresentation and that it would not have issued the same policy had it been aware of the misrepresentation at the time of Plaster Pro’s policy application, held that Midvale was entitled to rescind the subject insurance policies.

02/28/25 Burlington Cnty. Mun. Joint Ins. Fund a/s/o Ettinger v. Smith
Superior Court of New Jersey, Appellate Division
Appellate Division Affirms Waiver of Incarcerated Individual’s Right to Contest Arbitration Award, and Finds the Thirty-Day Rule to Apply in Any Event

Smith intentionally set fire to his home and was eventually incarcerated. Several members of the Pemberton Police Department entered the burning structure in an attempt to rescue elderly individuals and were injured in the process. The Burlington County Municipal Joint Insurance Fund (the “Fund”), a joint insurance fund established to insure the municipality against various risks, initially compensated the injured municipal workers for their injuries, and became subrogated to the rights of the workers, allowing the Fund to stand in their shoes to collect directly from Smith.

Under the New Jersey rules of court (New Jersey’s civil procedure rules), all actions for personal injury not arising out of the operation, ownership, maintenance, or use of an automobile are to be submitted to arbitration. If a party is unsatisfied with the arbitration award, it may file a notice of rejection of the award and demand a trial within 30 days of the award.

After the conclusion of discovery, the Court scheduled the parties for arbitration on May 4, 2023. Smith, having received his prison sentence almost a year and a half prior to the arbitration date, was incarcerated at the time of the arbitration hearing. Smith attended the arbitration hearing by phone but, according to him, had technical difficulties. The arbitrator entered an award in favor of the Fund and against Smith, providing that Smith “refused” to attend the hearing by phone, and “was advised that the court wanted the arbitration to go forward,” and that Smith “stated he wanted his attorney and hung up.”

On May 8, 2023, four days after the arbitration, the Fund mailed the arbitration award to Smith at the correctional facility (as required by the rules). On June 13, 2023, the Fund filed and served a notice of motion seeking to confirm the arbitration award with the Court. On July 10, 2023, the Court, noting that no opposition was filed in connection with the confirmation of the arbitration award, confirmed the award and entered judgment in favor of the Fund. The July 10, 2023, order was sent to Smith at the correctional facility. On July 24, 2023, Smith signed an acknowledgement of receipt of the judgment.

On August 16, 2023, Smith filed a motion rejecting the arbitration award and seeking a trial of all issues. Smith’s basis was that he never received notice of the arbitration award, and that although he tried to attend the hearing, the video and audio were inadequate.

The trial court denied Smith’s motion, finding that the June 13, 2023, mailing (the notice seeking to confirm the arbitration award) was sent to the same address that was listed as the return address on both items of correspondence received from Smith. As a result, the Court concluded that Smith was beyond the 30 days to reject the award and demand a trial. This appeal followed.

The Appellate Division affirmed the judgment of the trial court, finding that Smith had notice of the arbitration hearing, and indeed was given an opportunity to participate. No evidence suggested that the telephonic hearing was inadequate. The Appellate Division noted that, by voluntarily disconnecting from the proceeding, Smith waived his right to reject the arbitration award and seek a trial, notwithstanding the 30-day rule.

The Appellate Division continued that, even if Smith had not waived his right to reject the award by voluntarily disconnecting from the proceeding, his rejection of the award was untimely. The Court, like the trial court, was satisfied by the proof of service of the award, finding that it demonstrated that the award was sent to the same address as the return address listed on Smith’s various items of correspondence.

Editor’s Note: The opinion also says that Smith requested his lawyer before he disconnected from the arbitration proceeding. Indubitably, Smith is entitled to a lawyer at all criminal proceedings. Does that extend to civil proceedings while incarcerated? What about if the civil proceeding is connected to the crime for which he is incarcerated? Sounds like a question that could appear on a final exam in a constitutional law course.

O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
rpo@hurwitzfine.com

03/05/25 Liberty Surplus Ins. Co. v. Kaufman Lynn Cons. Inc.
United States Court of Appeals, Eleventh Circuit
Insured Possesses Article III Standing to Bring Reformation Claim on Undamaged Buildings and Broad Course of Construction Exclusion Applies to Entire Construction Project

JM Family Enterprises hired Kaufman Lynn Construction to construct JM’s new corporate campus in South Florida. The campus buildings were to include three office buildings, a training and conference center, a sports and recreation building, a dining hall, an amphitheater, an energy plant, a parking garage, and various landscaping features. Kaufman procured a commercial general liability policy from Liberty Surplus.

Kaufman completed the energy plant, parking garage, office buildings, and dining hall by October 2020. At that time JM began to relocate staff to the new campus. On November 8, 2020, Tropical Storm Eta hit the campus and caused a water leak. Which amounted to about $3.3 million in damage. When this occurred, the remaining buildings were yet to be completed. JM claimed Kaufman was responsible for mitigating the damage. Kaufman then sued its various subcontractors and also filed a claim with Liberty.

Liberty denied coverage on the policy’s Course of Construction Exclusion, which barred coverage for “[a]ny ‘property damage’ at or to any project insured under this policy during the course of construction until the project is completed.” Liberty then filed a coverage action to enforce its coverage position. Among other defenses, Kaufman asserted a counterclaim for reformation of the policy.

Kaufman’s reformation claim was based upon a mutual mistake. According to Kaufman, the policy’s description of the project differed from what Kaufman provided Liberty at the time of binding, failed to include several buildings, and failed to identify the project was to proceed in two phases. Liberty eventually received a grant of summary judgment and dismissed Kaufman’s reformation claim for a lack of standing.

On appeal, we look at the reformation claim and the application of the exclusion itself. Standing in the sphere federal practices requires (i) a cognizable injury; (ii) a concrete and particular injury; and (iii) a ripe claim. The Appellate Court broke with the lower court and found Kaufman met each standing requirement.

The district court found a lack of standing for the following reasons (i) there was no cognizable injury because Kaufman was not pursuing claims for omitted buildings under the policy and even if reformed the exclusion would apply; (ii) Kaufman faced no injury from the incorrect premium; and (iii) the reformation claim was unripe because Kaufman might not face hardship if adjudication was withheld.

There is a cognizable injury since, if proven, Kaufman would have received a different policy than bargained for and paid a premium insufficient for the coverage sought. Kaufman’s injury was also concrete and particular because it was affected by the policy itself, and thus, sought reformation. The mere fact Kaufman did not seek damages did not lessen the injury. Finally, the reformation claim was ripe because it is not turn on a future event because a mistake occurred in the past formation of the policy. Thus, Kaufman possessed standing to bring a reformation claim regarding the unfinished portion of the project, as well as the finished building. Because the policy may not reflect the actual bargained for agreement.

As for the exclusion itself, the court looked at the distinction between a general liability policy and a builder’s risk policy. A builder’s risk policy provides protection for buildings in the process of construction. Whereas a general liability policy protects the insured from liability arising from property damage or bodily injury during the construction. Since the Liberty policy is a general liability policy, the court properly analyzed the exclusion within the sphere of a liability policy.

The dispositive language at issue was “until the project is completed.” Neither project nor completed were defined within the policy. But an undefined term itself does not create an ambiguity. In looking to the dictionary definition of both terms, the Eleventh Circuit agreed with the district court on this issue. The exclusion barred coverage until the entire project was completed. Even agreeing with Kaufman’s belief that there were two distinct phases, the entire project was still incomplete. To support its reasoning, the court identified that under Kaufman’s interpretation the entire project’s start and end date remained the same. Thus, while the project may have been split into two phases those two phases were apart from a single, overarching construction project.

Kaufman suggested the policy’s “products-completed operations hazard” could be used to define “complete” within the exclusion. But that argument was rejected. The court noted the “products-completed operations hazard” applied to the “your work” definition also found within the policy. However, “your work” was not included in the exclusion’s language. Since “your work” was not included in the exclusion’s language, the court reasoned the policy simply does not read with Kaufman’s interpretation. The Court cited Liberty’s argument to this point. It noted Kaufman’s interpretation conflicts with the exclusion itself. Because Kaufman would receive coverage for each building completed, when the exclusion broadly applies to the entire project and not single buildings.

An amicus brief was submitted by several contractors and builders who argued such an exclusion would insurance policies themselves unreliable. But the Liberty policy was procured through a contractor-controlled insurance program (“CCIP”). A program used by a general contractor to provide liability insurance to all participants in the project. And while JM procured a builder’s risk policy, it was never entered into the record to determine a potential gap in coverage. So, the exclusion applied to the claimed water damage.

Editor’s Note: There is another portion of the decision concerning attorneys’ fees. But I limited this review to the coverage aspects only.

ROB REACHES the THRESHOLD
Robert J. Caggiano
rjc@hurwitzfine.com

02/27/25 Drapper v. Horan, et al
Appellate Division, First Department
First Department Unanimously Affirms Order Which Included Trial Rulings on Motion in Limine Where Plaintiff’s Application to Preclude Defendant’s Biomechanical Engineer Expert From Testifying Was Denied and Defendant’s Application to Limit Plaintiff’s Treating Physician’s Testimony Was Granted

This case stems from a July 17, 2013, motor vehicle accident where a vehicle owned and operated by Plaintiff, Dwight Drapper, collided with a vehicle owned and operated by Defendant, Andrew John Horan, in Greenburgh, New York. As a result of this accident, Plaintiff alleged significant injuries to his left shoulder, cervical spine, lumbar spine, and a traumatic brain injury. He claimed that these injuries met the Serious Injury Threshold under numerous categories of Insurance Law § 5102(d).

By way of motion practice, liability was determined against Defendant as of August 12, 2014. Notably, unlike certain Appellate Divisions (i.e., Fourth Department), a finding of ‘liability’ in First Department venues does not include the finding that a plaintiff sustained serious injury under § 5102(d). Many years later, the matter moved to jury trial on the issue of damages only in July 2022. Prior to the trial, the Supreme Court, Bronx County, denied Plaintiff’s motion in limine seeking to preclude the Defendant’s biomechanical engineering expert from testifying. It further granted Defendant’s motion in limine which sought to limit Plaintiff’s treatment of physician from testifying about imaging records taken of Plaintiff after a prior motor vehicle accident. Following the trial, the jury found that Plaintiff did not sustain a serious injury under § 5102(d) and thus did not award non-economic damages – but did award economic damages for lost wages and medical expenses incurred. Plaintiff then sought appeal, which included review of the Court’s rulings on pre-trial motions in limine.

On review, the First Department agreed with the lower Court’s pre-trial rulings. Regarding granting of Defendant’s motion in limine, it was found that Plaintiff’s treating physician was properly limited in his testimony. Specifically, the Court permitted the physician to testify about his observations during surgery he performed on the Plaintiff’s shoulder and his treatment reports, but he was precluded from testifying about MRI imaging done of Plaintiff’s shoulder after a prior motor vehicle accident. The First Department found this limitation proper since the physician had not reviewed the prior MRI before the trial nor referenced it in any treatment report – therefore the Defendant had no prior notice that the physician would give such testimony at trial.

Further, the First Department agreed that the lower Court properly denied Plaintiff’s motion in limine and allowed the Defendant’s biomechanical engineering expert to testify. Specifically, expert was presented to offer an opinion as to whether the accident could have created the mechanisms required for Plaintiff’s claimed injuries. The expert had reviewed specifications and crash data from both involved vehicles and cited peer-reviewed documentation in support of his analysis. Plaintiff’s motion for preclusion was based upon the expert not having medical training – but the First Department cited prior case law that states that such lack of training does not render the expert unqualified to offer an opinion that the force of the accident could not have caused the alleged injuries.

Accordingly, the First Department unanimously affirmed the Order of Supreme Court, Bronx County, without costs.

LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
ihl@hurwitzfine.com

03/04/25 Hudson v. Allstate Veh. & Prop. Ins. Co.
New York State Supreme Court, New York County
Court Denies Motion for Class Certification as Premature, and Orders the Parties to Conduct Limited Discovery

Allstate Vehicle & Property Insurance Company (“Allstate”) issued a Condominium or Coop Owners Policy to Stephen Hudson (the “Plaintiff”), for the period from June 10, 2023, to June 10, 2024 (the “Policy”). Plaintiff submitted a claim to Allstate under the Policy, alleging that in June 2023, and January 2024, there were two discrete and sudden instances of smoke wafting from the apartment below. The Plaintiff stated that as a result of the smoke, Plaintiff’s apartment was declared to be temporarily uninhabitable, requiring significant cleaning.

Allstate denied coverage for the loss, stating that the Policy did not provide coverage for the Plaintiff’s claim for tobacco/nicotine smoke damage, because the loss was not a sudden and accidental direct physical loss. After the denial, the Plaintiff commenced a declaratory judgment action against Allstate, seeking coverage for the claim.

After Allstate appeared, the Plaintiff filed a motion for class certification, seeking to expand the class of plaintiffs to cooperative/condominium apartment residents who experienced second-hand smoke intrusion from a neighboring property over the last six years, while insured by Allstate or its subsidiaries under a homeowners’ or renters’ policy.

Pursuant to CPLR 901(a), a court may certify a proposed class only if (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common; (3) the claims or defense of the representative parties are typical of the claims and defenses of the class; (4) the representative parties will fairly and adequately protect the interest of the class; and (5) the class action is superior to other available methods for the fair and efficient adjudication of the controversy. After all requirements are met, the court must then assess the feasibility considerations listed in CPLR 902.

In deciding the motion, the Court found that the motion was premature. Plaintiff provided no evidence to support any of the requirements, outlined above. The only evidence attached to Plaintiff’s motion was (1) a screenshot of the US Census data and estimate of the number of condominium and cooperation housing unit owners in NYS; and (2) a screenshot of a pamphlet from the American Lung Association, titled, “Is Secondhand Smoke Infiltrating Your Apartment or Condominium.”

The Court wrote that the documents and general statistics are insufficient to establish any element of class certification.

However, the Court did exercise its discretion to require limited pre-certification discovery to develop the record of the elements required under CPLR 902(a). In doing so, the Court identified that based on the nature of the Plaintiff’s claims, there is potential for certification following limited pre-certification discovery. The Court reasoned that the Policy was a “form” insurance policy and has potential impact on many other Allstate customers.

LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
lrh@hurwitzfine.com

03/14/25 New York Assembly Bill A1433
New York State Assembly
Proposed Act to Provide Guidelines for the Issuance of Pet Insurance in New York State

Assembly Bill A1433 proposed on January 9, 2025, seeks to amend insurance law by providing guidelines regarding the issuance of pet insurance in New York State.

The Bill seeks to amend Insurance Law to include Section 3463 to provide certain definitions for terms relevant to the pet insurance industry including veterinarian, veterinary expenses, waiting period, and wellness program. If an insurer uses the terms outlined in the proposed Subsection (A) of § 3463, then the insurer must use the definitions provided in that subsection.

The Bill would further require that an insurer transacting pet insurance shall disclose to the consumers among other things, the following:

If the policy excludes coverage due to any of the following:
A preexisting condition.

(ii) A hereditary disorder.

(iii) A congenital anomaly or disorder; or

(iv) A chronic condition

(b) If the policy includes any other exclusions, the following statement: "other exclusions may apply. Please refer to the exclusions section of the policy for more information."

Any policy provision that limits coverage through a waiting or affiliation period, a deductible, coinsurance, or an annual or lifetime policy limit.

(d) Whether the insurer reduces coverage or increases premiums based on the insured's claim history, the age of the covered pet or a change in the geographic location of the insured.

DOMENICA’S DIARY on BAD FAITH
Domenica D. Hart
ddh@hurwitzfine.com

03/04/25 Pipik v. State Farm Mut. Auto. Ins. Co.
United States District Court, Western District of Pennsylvania
Long Periods of Time Between a Demand and a Settlement Does Not on Its Own Constitute Bad Faith; Delays Attributable to Necessary Investigation or Even Simple Negligence Will Not Satisfy the Burden

Pipik alleges that, on November 2, 2020, her vehicle was sideswiped by another motorist, and she sustained injuries. Pipik maintained automobile insurance with State Farm that provided for UIM coverage.

Pipik gave notice of her UIM claim to State Farm “shortly before January 5, 2022.” Between June 2023 and October 2004, investigation took place, including obtaining Pipik’s demand, medical records, Social Security Disability documentation, and State Farm’s request for proof of the offer of $15,000.00 from the tortfeasor. Plaintiff’s EUO and IME were also conducted. Pipik alleged that, since October 2024, State Farm had not yet extended an offer on her UIM claim. Prior to settlement, in December 2024, Pipik filed suit against State Farm for statutory bad faith under 42 Pa.C.S. § 8371 and breach of contract. State Farm moved to dismiss the Bad Faith count.

Pipik alleged State Farm’s motion should be denied because her Complaint’s timeline demonstrated an “inexcusable delay” which violated State Farm’s duty to fairly and promptly investigate the UIM claim. State Farm countered with allegations of Pipik’s delay in furnishing her Social Security Disability file and her attorney’s delay who withheld the proof of the tortfeasor’s settlement offer.

Like neighboring states, the Court recognized the high burden recognizedto prevail on a bad faith action. Pipik had to present clear and convincing evidence that State Farm did not have a reasonable basis for delaying benefits under the policy and State Farm knew of or recklessly disregarded its lack of a reasonable basis. The Court found that Pipik did not meet this burden. The Court highlighted an insurer’s right to investigate and evaluate UIM claims and emphasized that a long period of time between a demand and settlement does not on its own constitute bad faith. If the delay is attributed to the need to investigate further, or even simple negligence, there is no bad faith. The Court’s findings that Pipik delayed filing the UIM demand until several months after the accident and her counsel’s delay in obtaining proof of settlement from the tortfeasor were significant factors in its decision. It also highlighted the delays beyond the parties’ control, i.e., production of the Social Security Disability File. Given the totality of circumstances, the Court found State Farm conducted an ongoing investigation on par with the timing and substance of information it received. The Court granted State Farm’s motion to dismiss the Bad Faith count.

NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
hasanderson@sanderson-law.com

For the last 80 years, International Nickel Company of Canada Limited, later re-named Inco Limited, was the world’s leading producer of nickel. Throughout its existence, Inco has been headquartered in Toronto, Ontario, with satellite offices throughout the world. In a deal that took place in 2007, Inco was purchased by the Brazilian company, Vale S.A., resulting in a change of name to Vale Canada Limited.

Over the past 20-30 years, Inco/Vale Canada incurred environmental remediation costs for damage caused by its operations in relation at 26 sites around the world. Of those sites, 22 are in Canada with 19 of them in Ontario. It also incurred remediation costs at sites operated through subsidiaries in Japan, Indonesia, New Jersey, and Wales.

Over several decades, 24 separate primary and excess insurers issued a total of 92 policies to Inco/Vale to cover the worldwide environmental liabilities in issue. Inco/Vale initiated claims for coverage under all 92 policies for the remediation costs incurred at its worldwide sites.

The claims advanced by Inco/Vale and its subsidiaries under the insurance policies relate predominantly, but not exclusively, to environmental expenditures incurred in Ontario that were generated by its Ontario operations. All of Vale Canada’s information and documents about all the insurance claims for environmental expenditures is in Ontario. Witnesses about the expenditure claims are in Ontario (except for four people in Manitoba and one person in New Jersey).

Vale sought to negotiate its claim for insurance coverage. The negotiations broke down, and Travelers Casualty & Surety Company brought an action in the Supreme Court, New York County, New York, against Vale, and the many insurers with respect to whether it was obligated to indemnify Vale.

Vale has an office in New York. One or more policies were brokered and underwritten in New York and issued to Vale Canada at its New York address. Notice of claims on those policies was to be given in New York.^[1]

The Ontario Action
12/09/22 Vale Canada Limited v. Royal & Sun Alliance Ins. Co. of CA
Ontario Court of Appeal

Unless There Is a Choice of Law Clause Specifying a Jurisdiction Other Than Ontario, the Ontario Courts Have Jurisdiction to Hear Coverage Disputes Under Policies That Were Brokered and Issued to Insureds at an Address Outside of Ontario, Where the Issuing Insurers Are Registered and Licensed to Transact Business in Ontario; The Insured Does Business in Ontario; and the Policies Relate Largely, but Not Exclusively to the Insured’s Operations in Ontario

Soon after, Inco/Vale and Royal & Sun Alliance Insurance Company of Canada (RSA), one of Inco/Vale’s primary insurers, issued an identical action in Ontario. Vale and RSA took the position that the action they commenced should continue in Ontario. Travelers and several other insurers took the position that the Ontario action either cannot, or should not, proceed. Each side accused the other of gamesmanship and forum shopping.

Inco/Vale and RSA brought an application within the Ontario action to have Ontario declared the appropriate forum to hear the coverage action. The motions court agreed with Inco/Vale and RSA that Ontario was the appropriate forum. In a decision released December 9, 2022, the Ontario Court of Appeal affirmed the decision of the Motions Court. The Court of Appeal stated:

A comprehensive general liability insurer, underwriting primary or excess insurance coverage for Ontario risks, connects itself to Ontario for jurisdictional purposes and thus commits itself to defending, in Ontario, claims arising out of those risks. No other outcome is commercially reasonable in the operation of the international insurance market and consistent with the principles of comity. There is no place that enjoys universal jurisdiction.

The common law principles of comity underpin the doctrines of jurisdiction simpliciter and forum non conveniens and stand against forum shopping and the notion that the race should go to the swiftest, for good reason, as we will explain. These principles ensure that Vale, an Ontario-based international miner, can sue its primary, comprehensive general liability insurer RSA, an Ontario-based insurer, in respect of environmental liabilities largely incurred by Vale for polluting Ontario properties, in Ontario’s Superior Court of Justice. These principles also entail the conclusion that Vale and RSA can sue the insurers who provided additional or excess insurance, largely follow-form, for the same type of risks, significantly but not exclusively tied to Ontario, in the same court.

The interesting finding in this case is that Ontario is the appropriate jurisdiction for the coverage disputes implicating the follow-form excess insurers. The follow-form policies did not contain a choice of law / jurisdiction clause meaning that the common law determines the issue of what is the appropriate jurisdiction to hear coverage disputes. The motion court and the Court of Appeal pointed out that the insurers were licensed and registered to undertake insurance in Ontario; the policies were issued to an insured doing business in Ontario; that was sufficient connection to Ontario for the Ontario courts to assume jurisdiction. One of the insurers, North River Insurance Company, argued that it was not licensed to undertake insurance in Ontario.

The Court held that the record before it did not contain that evidence but that even if it did, North River would have had a reasonable expectation at the time its excess policy was issued in a tower where RSA was the primary, that its liabilities would be acted upon in Ontario and therefore it was subject to the jurisdiction of the Ontario courts.

North River filed an application for leave to appeal to the Supreme Court of Canada. That application was dismissed December 9, 2022.

As the Ontario Court of Appeal judgment was not appealed, it is final and binding. Vale’s claims for coverage are continuing in Ontario.

The New York Action

02/26/25 Travelers Casualty & Surety Company v. Vale Canada Limited
Supreme Court, New York County

The Sudden and Accidental Pollution Exception of the Pollution Exclusion Contains a Temporal Element That Is Met by the Discharge, Abruptly or Within a Short Time Span, of a Significant Quantity of the Pollutant Sufficient to Have Some Potentially Damaging Environmental Effect

In the meantime, Vale and RSA applied in the New York Courts to have the New York action commenced by Travelers dismissed on the basis that the Ontario courts have jurisdiction to hear the coverage disputes. On May 10, 2022, their application was denied, and the New York action was allowed to continue.

On February 26, 2025, the New York Supreme Court, sitting in New York County, released its judgment on a motion filed by Travelers Casualty and Surety Company, North River Insurance Company, and United States Fire Insurance Company for summary judgment seeking a declaration that a Pollution Exclusion that was common to all policies issued by these insurers unambiguously bars recovery for any of Vale Canada's insurance claims.

Those claims arise from 27 sites. The parties agreed that four of those sites are representative of the 27 for purposes of discovery and for the Court’s review. Vale picked the Pipe Mine in Manitoba and the Chicago Mine site which is in Ontario. The insurers picked The Copper Cliff Smelter in Sudbury and the Thompson Complex in Manitoba.

The operative policies issued by these insurers contained the same pollution exclusion which excluded property damage caused by pollution, except where the damage arises from the "sudden and accidental" discharge (the ‘sudden and accidental exception’) of the pollution or other contamination, including any waste materials.

The insurers argued that the Pollution Exclusion contained in each of the Policies clearly and unambiguously bars recovery for any of Vale Canada's coverage claims for the Test Sites because it is undisputed that the pollutant damage for which Vale Canada claims coverage arise out of the gradual discharge, release, or dispersal of pollutants over the course of many decades such that it cannot be said that the pollution was "sudden" within the meaning of the sudden and accidental exception.

The controlling case in New York on the ‘sudden and accidental’ exception is Northville Industries Corp. v National Union Fire Insurance Co., 89 NY2d 621, According to that case, the sudden and accidental exception is based on the "initial release of the pollutant, not on the length of time the discharge remains undiscovered, nor the length of time that damage to the environment continued as a result of the discharge, nor on the timespan of the eventual dispersal of the discharged pollutant in the environment" As such, the exception "cannot be established merely by showing that the release of the pollutant had its onset at some particular point in time and, in that sense, the discharge could be said to have begun abruptly". "Rather, the temporal aspect of the sudden discharge element would only be met by the discharge, abruptly or within a short time span, of a significant quantity of the pollutant sufficient to have some potentially damaging environmental effect."

Based on this authority, the Insurers argued that they are entitled to summary judgment dismissing Vale Canada’s claims for coverage as there is no dispute as to the gradual nature of the pollution events for which coverage was demanded.

Vale Canada opposed this position stating that the law of Ontario applies to the policies. Under Ontario law, there is no temporal element to the application of the sudden and accidental exception.

The first order of business therefore was for the court to decide whether the policies are subject to the law of Ontario (which was Vale Canada’s position) or the law of New York State (which was the insurer’s position) However, under New York law, if there is no conflict between the applicable law of Ontario and New York on the subject, then there is no need to decide ‘the law of the policies’.

The onus was on Vale Canada to demonstrate the lack of a temporal element regarding this exception under Ontario law creating a conflict with New York law. Vale Canada retained Gordon Hilliker, K.C., a noted policyholder Canadian coverage lawyer and author based in Vancouver as their expert on Ontario law. The insurers retained Chris Paliare, a respected, general commercial litigator out of Toronto.

The New York Court found that Vale Canada’s expert, Mr. Hillicker, did not say that the law on the topic is settled in Ontario and further, he did not say that there is no temporal element to the application of the exception. The New York Court then delved further into Ontario law. The judgment discusses two inconsistent trial level decisions on the exception. Of those, the most recent case (B.P. Canada Inc. v. Comco Service Station Const. & Maintenance Ltd,) was found to be consistent with New York law. Canadian principles of horizontal stare decisis dictate that the New York court is bound to follow BP. However, even if that was not the case, the earlier Ontario case (Zatko v. Patterson Spring Service Ltd.) states that the exception does not apply to pollution damage that occurs after the insured becomes aware of the polluting event. Vale Canada seeks coverage for pollution damage at the Copper Cliff Smelter that is the consequence of a surface pollution event that occurred in 1974 and subsequently spread to the groundwater. Under Zatko, the earlier Ontario decision, this would not be covered.

As no conflict was found between the law of Ontario and the law of New York on this exception to the Pollution Exclusion, there was no need to engage in a conflict of law analysis. Even if it did, under both the law of Ontario and the law of New York, the insurers had established their case for summary judgment and accordingly, Vale Canada’s demands for coverage at the Test Sites were dismissed.

Time will tell if there is an argument as to the application of the decision regarding these test sites to the remaining claims.

[1] This information is mentioned in the Ontario proceedings and specifically referred to in Travelers Cas. & Sur. Co. v. Vale Can. Ltd., unpublished opinion, Borrok, J., May 10, 2022

Medical & Nursing Home Liability Pointers - 03/07/2025

Fri, 07 Mar 2025 20:17:41 +0000

March 7, 2025

A Note from Liz Midgley:

I don’t know about all of you, but 2025 is moving at lightning speed for us in (still) snowy Buffalo! Our Medical Malpractice and Nursing Home Liability team has had some very busy months since our last newsletter. I had the honor of speaking to the Pre-Law students at my alma mater, SUNY Geneseo (I can’t believe how much the campus has changed!), and the team has presented at so many seminars and webinars for various clients, The Harmonie Group, RISE Professionals, the Bar Association of Erie County, and more. We really appreciate the opportunities we get to share insight and connect with others!

We are excited to officially welcome new associate attorney Noah C. Neale, Esq., to the Medical Malpractice and Nursing Home Liability team! Noah was a summer associate at Hurwitz Fine during law school and joined us full time after taking – and passing! – the Bar Exam. He has now been admitted to practice as an attorney in New York State, and we could not be more excited! Noah hit the ground running, already handling appearances, motions, and depositions, and he has authored this month’s case updates, below. Prior to law school, Noah was a licensed EMT and performed pediatric research in association with the PLAN study at the University of Rochester Medical Center, which makes him a perfect addition to our team. Welcome, Noah!

In firmwide news, we have officially opened a brick & mortar Rochester office! We are fortunate to announce our two new litigation attorneys, Elizabeth K. Ognenovski and Bradon S. Carlson. While we have had a Rochester presence for the past five years with NYS Labor Law Attorney Tim Welch, we are excited about our expansion to further serve our clients.

Trusts & Estates Attorney Melissa A. Pezzino recently discussed the role of Irrevocable Trusts in estate planning, and how they can be used to safeguard your wealth. This is the #1 question that Melissa receives from clients, so she took a deeper dive into the benefits, legal considerations and potential drawbacks in “Are you protecting your wealth from rising nursing home costs?”

We are also excited to announce that Andrea Schillaci, Chair of the Business & Commercial Litigation Department, has been elected President of The Harmonie Group, an international network of elite and vetted law firms that holds events for attorneys and industry members across the country. In addition, Chris Potenza has been elected Co-Chair of the Harmonie Group's Litigation Practices Committee. Congratulations to both Andrea and Chris!

NY Governor Vetoes Grieving Families Act for Third Time

In December, New York Governor Kathy Hochul, for the third straight year, vetoed the Grieving Families Act, legislation that would completely overhaul wrongful death claims in New York by permitting recovery for emotional damages and expanding the class of persons who can seek recovery for a fatality.

Notably, the proposed legislation continued to omit a cap on damages, nor did it carve out an exception for medical malpractice claims. The expansion of damages was the same as passed in the prior legislation, and while the legislature limited retroactivity, it did not eliminate it. As predicted, these modest revisions did not address the Governor’s prior concerns in any meaningful way. For more analysis of this issue, click here.

Want to see us address something in a future Pointers? Send us an email!

Medical Malpractice and Nursing Home Negligence Case Updates

October 15, 2024       Gomez v. Mt. Sinai Hospital
Appellate Division, First Department
First Department confirms that statutory savings period deadline prevails over informal judicial deadline.

A plaintiff, following the death of her parent, sought to sue the defendant hospital for medical malpractice and wrongful death. In an effort to commence the action before the expiration of the statute of limitations, plaintiff filed her summons and complaint prior to being appointed as the administrator of decedent’s estate. When the trial court granted defendant’s motion to dismiss for lack of standing on grounds that plaintiff did not yet have her administration papers, it “permitted plaintiffs to ‘restore the action at any time within one year’” after plaintiff was properly appointed. Exactly one year after the dismissal, having been named administrator, plaintiff moved to restore the action. The trial court denied the motion, citing CPLR 205(a), which establishes a savings period of 6 months for a plaintiff to restore an action that was dismissed for lack of administration papers. On appeal, the First Department affirmed, opining that the trial court’s comment that plaintiff could refile within a year did not constitute law of the case and did not trump the savings period established in CPLR 205(a).

December 11, 2024 Butler v. Wyckoff Heights Medical Center
Appellate Division, Second Department
Second Department finds plaintiff’s allegations that he should have been assessed as a higher fall risk sound in medical malpractice rather than ordinary negligence.

A 71-year-old patient suffered a fall while unattended in a bathroom at the defendant medical center and subsequently commenced a suit. Although plaintiff initially characterized his complaints as negligence claims, defendant argued that the claims sounded in medical malpractice, and were consequentially subject to a shorter period of limitations, which had expired. The trial court determined that plaintiff’s allegations consisted of some negligence claims and some medical malpractice claims, dismissing the malpractice claims as untimely. On appeal, the Second Department reiterated that a claim sounds in negligence when jurors can use their everyday experience to assess whether the standard of care was breached, as opposed to those for medical malpractice, which require a consideration of professional skill and judgment. As a result, plaintiff’s claims that he should have been assessed as a higher fall risk constituted medical malpractice claims, because analyzing them required the application of medical judgment, while plaintiff’s other injury claims were ordinary negligence.

January 2, 2025           DeRusso v. Home of the Good Shepard at Highpointe
Appellate Division, Third Department
Third Department finds that Public Health Law § 2801-d, which provides a private right of action by residents of “residential health care facilities,” does not extend to claims against assisted living facilities.

Plaintiff, a resident of defendant’s assisted living facility, commenced a suit alleging issues with his care. Plaintiff asserted, among other things, a cause of action alleging violations of Public Health Law § 2801-d. Defendant moved to dismiss the Public Health Law claim, arguing that § 2801-d granted a cause of action for patients at a “residential health care facility”, and that defendant’s assisted living facility did not qualify. Plaintiff conceded that defendant is an assisted living facility but argued that § 2801-d nevertheless applied because the facility provided health-related services within the meaning of Public Health Law article 28. The trial court sided with defendant, and on appeal, the Third Department did so as well. In so doing, it noted that Public Health Law article 46-B deals with assisted living facilities and specifically delineates that assisted living facilities “shall not include . . . residential health care facilities or general hospitals licensed under [Public Health Law article 28].” The Third Department observed that this issue has also been reviewed by the Second and Fourth Departments; the Third Department’s view is consistent with that of the Second, and can be distinguished from the Fourth Department, which has a line of cases suggesting that § 2801-d might be applied to assisted living facilities.

January 16, 2025        Guthier v. DiPreta
Appellate Division, Third Department
Third Department evaluates battling experts and finds no issue of fact when one expert’s opinion is conclusory and ignores causation.

After two years of conservative treatment for foot and ankle pain, plaintiff saw defendant surgeon for placement of hardware. Plaintiff later suffered an infection, alleging that defendant caused plaintiff’s injuries by failing to diagnose and properly treat the infection. On motion for summary judgment, both parties provided an expert affidavit, and the trial court, finding that the affidavits raised an issue of fact, denied the motion. On appeal, the Third Department reversed. The court concluded that there was no issue of fact because plaintiff’s expert’s assertions that defendant breached the standard of care were either conclusory or failed to respond to the opinion of defendant’s expert that any alleged deviations did not cause plaintiff’s injury.

January 31, 2025        Mylar v. Niagara Falls Memorial Medical Center
Appellate Division, Fourth Department
Fourth Department splits over whether expert who denies any negligence may properly opine as to whether there was causation.

Defendant doctor diagnosed plaintiff’s daughter with pink eye and recommended a next-day follow up with an ophthalmologist. The doctor did not set up the appointment herself, advising plaintiff to do so. Weeks later, plaintiff’s daughter was seen by an ophthalmologist and diagnosed with a very rare eye disease that left her almost entirely blind. Plaintiff claimed defendant breached the standard of care by diagnosing pink eye and by not personally making an appointment with an ophthalmologist.

The lower court denied summary judgment on the grounds that defendants did not meet their burden with respect to either the deviation from the standard of care or causation. On appeal, the Fourth Department affirmed. The court determined that defendants’ expert affirmation did not satisfy the burden on causation because the expert said that “at all times, defendant was not negligent”; in the court’s view, the expert could not have properly testified that there was no causation, because if you do not acknowledge, or at least assume for sake of argument, that some act or omission breaching the standard occurred, then you cannot render an opinion as to causation.

Two judges dissented, opining that defendants did satisfy their burden with respect to causation, since the expert said that even if defendant had tried to make an appointment with an ophthalmologist immediately, the appointment wouldn’t have happened until at least the next day. In the dissent’s view, the expert established that there was no causation because regardless of defendant’s conduct, the fastest that an ophthalmologist’s appointment could have been made would have been the next day, whether it was the defendant who made it or plaintiff.

Hurwitz Fine's Medical Malpractice & Nursing Home Defense Team
is here to answer your questions:

Elizabeth M. Midgley, Esq. (emm@hurwitzfine.com)
V. Christopher Potenza, Esq. (vcp@hurwitzfine.com)
Stephen M. Sorrels, Esq. (sms@hurwitzfine.com)
Patrick B. Curran, Esq. (pbc@hurwitzfine.com)
Ashley M. Cuneo, Esq. (amc@hurwitzfine.com)
Noah C. Neale, Esq. (ncn @hurwitzfine.com)
Gabrielle D. Markle, Esq. (gdm@hurwitzfine.com)

Coverage Pointers: This twice-monthly electronic newsletter summarizes important insurance law decisions from appellate courts in New York State with the occasional snapshot across borders. Contact Dan Kohane at ddk@hurwitzfine.com to subscribe.

Labor Law Pointers: Labor Law Pointers offers a monthly review and analysis of every New York State Labor Law and construction accident case decided during the month by the Appellate Courts. Contact Dave Adams at dra@hurwitzfine.com to subscribe.

Premises Pointers: This monthly electronic newsletter covers current cases, trends and developments involving premises liability and general litigation. Contact Jody Briandi at jeb@hurwitzfine.com to subscribe.

Products Liability Pointers: This monthly newsletter covers all areas of products liability litigation, including negligence, strict products liability, breach of warranty claims, medical device litigation, toxic and mass torts, regulatory framework and governmental agencies. Contact Chris Potenza at vcp@hurwitzfine.com to subscribe.

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Labor Law Pointers - Volume XIV, No. 4

Fri, 06 Jun 2025 19:02:31 +0000

Volume XIV, No. 4
Wednesday, March 5, 2025

Note from the Editors:

Do you have a situation? We love situations. Give us a call, send an email, drop by; we truly enjoy solving complex Labor Law and risk transfer issues.

While it is Marc’s month for the cover note, I need to announce the first one to correctly name the band who developed the “Wall of Sound” as displayed in last month’s edition. As luck would have it, Elizabeth Ognenovski was the first to point out that it was the Grateful Dead that developed the distortion free “Wall of Sound”, designed by Owsley “Bear” Stanley in 1973. It was used for less than a year in 1974 due to its size, difficulty transporting it and the time necessary to set it up. It had over 600 speakers and 48 amplifiers producing 28,800 watts of power.

A bit more on Elizabeth--she was not just a random Deadhead who recognized the photo and name, but in addition she just happened to be an attorney who was in the process of joining Hurwitz Fine, as we recently opened a brick and mortar office in Rochester. We are happy to add Elizabeth to Hurwitz Fine along with Bradon Carlson rounding out our Rochester office, joining Labor Law team member Tim Welch. Think of us for your central New York needs.

- David

In the ever-illuminating world of Labor Law § 240(1), we often find ourselves navigating the fine line between "repair" and "routine maintenance." Let’s brighten our understanding with our first photograph that just might light up your day.

Imagine this electrician is tasked with replacing a flickering lightbulb atop a 12-foot unsecured ladder outside a commercial building. Armed with his towel and a new bulb, the worker ascends the ladder, humming “Blinded by the Light.” Alas, as he unscrews the old bulb, the ladder decides it’s time for a break, leading to an impromptu meeting between the worker and the ground. Does this worker have a § 240(1) case?

Labor Law § 240(1), often dubbed the “Scaffold Law,” is designed to protect workers from elevation-related hazards during covered activities such as construction, demolition or repair work. However, courts distinguish between repair, which is covered, and routine maintenance, which is not. While this worker’s fall is unfortunate, his activity of changing a light bulb falls squarely into the routine maintenance category. This hypothetical case serves as a bright reminder that not all elevation-related tasks are created equal in the eyes of the law because changing a light bulb is routine maintenance, which is not a covered activity under Labor Law § 240(1).

In our next photograph, let’s imagine a painter is tasked with adding a fresh coat to a ceiling. Lacking a scaffold, he leans his unsecured ladder against the wall and climbs to the top to begin his work, as shown below.

Now let’s assume this painter falls, claiming that the lack of adequate safety devices (a scaffold) led to his accident. The defense argues that this painter’s decision to use an unsecured ladder was the sole proximate cause of his incident and injuries. Who prevails on the inevitable summary judgment motions?

Labor Law § 240(1) mandates that owners, contractors and their agents provide appropriate safety devices to protect workers from elevation-related risks. In this photograph, the absence of a secured ladder or alternative safety measures, such as a scaffold or harness, indicates a failure to comply with the statute. Courts have consistently held that when inadequate or no safety devices are provided, liability under § 240(1) established, resulting in summary judgment in favor of the injured worker.

That’s it for this month. As always, please feel free to reach out to us with any questions Labor Law or Risk-Transfer related. Hope you learned something.

-David dra@hurwitzfine.com
-Marc   mas@hurwitzfine.com

Hurwitz Fine P.C.
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Labor Law Pointers is published the first Wednesday of each month. If you know of others who may wish to subscribe to this free publication, please feel free to forward it. If you wish to subscribe or unsubscribe, please send an e-mail to dra@hurwitzfine.com or call the Editor/Labor Law Team Leader David R. Adams directly at (716) 849-8916.

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Jagdeo v Borden House Condominium
February 11, 2025
Appellate Division, First Department

Plaintiff was injured when a coworker, who was on a ladder installing metal “Z clips,” dropped the clips on plaintiff’s head while working on a renovation of a single-family apartment in a condominium building. Plaintiff was not wearing a hard hat. The trial court granted summary judgment dismissing plaintiff’s Labor Law §§ 240(1) and 241(6) claims against all defendants and granted summary judgment dismissing the Labor Law § 200 and common-law negligence claims against certain defendants.

Labor Law § 240(1) (MAS)

The First Department unanimously affirmed the trial court’s decision to dismiss the Labor Law §§ 240 and 241(6) claims against Caceres and Michael Novogratz. As owners, they demonstrated their entitlement to the homeowners’ exception by showing that they did not direct or control plaintiff’s work. Plaintiff’s hearsay evidence that Caceres gave his supervisors instructions, was insufficient to raise a triable issue of fact.

The Court also properly dismissed the claims against the Condo defendants, who established that plaintiff’s accident occurred within the apartment and that plaintiff was not working on common elements of the building. The Condo defendants also established that they did not have authority to supervise or control the job and thus were not liable as an agent of the owner.

PRACTICE POINT: Under the homeowner’s exemption, owners of one and two-family dwellings who contract for but do not direct or control the work are exempt from Labor Law §§ 240(1) and 241(6).

Labor Law § 241(6)

The First Department also dismissed the Labor Law § 241(6) claims as against Caceres and Michael Novogratz because of the homeowner's exemption as owners of the apartment who did not control the construction. Further, the remaining defendants did not have authority to supervise or control the job and thus were not liable as agents of the owner.

Labor Law § 200 and Common-Law Negligence (EDA)

The First Department unanimously affirmed the trial court’s decision, finding that there were no issues of fact as to whether Caceres directed or controlled plaintiff's work. It also affirmed the dismissal of the claims against Condo defendants because they did not exercise supervisory control over the activity that brought about plaintiff's injury.

Konstantinovic v Finch Apt. Corp.
February 13, 2025
Appellate Division, First Department

Plaintiff, an employee of Finch, allegedly was injured while working in the boiler room at a building owned by Finch, after he fell from a ladder. Plaintiff alleges that Finch hired Abilene, a boiler installation and repair company, to work on the boiler before the accident and that Abilene was responsible for maintaining the boiler and boiler room in a reasonably safe and suitable condition and in good repair. The trial court denied Abilen’s motion seeking dismissal of the Labor Law §§ 240, 241 and 200 claims.

Labor Law § 240(1) (MAS)

The First Department unanimously affirmed the trial court’s decision, finding that Abilene failed to establish its entitlement to judgment as a matter of law. The affidavit of Abilene’s principal failed to address plaintiff’s central allegation that he fell and emails attached Abilene’s motion established that it had worked in the boiler room where plaintiff fell that day of his incident. Additionally, the motion was premature because plaintiff demonstrated that facts essential to oppose the motion – including invoices, work orders, proposals, and other evidence of Abilene’s work before plaintiff’s incident – were in Abilene’s exclusive control.

PRACTICE POINT: When moving for summary judgment, you must address the central allegations against you and your motion will be denied, like here, without regard to the sufficiency of your opponent’s opposition papers.

Mannino v Waldorf Exteriors, LLC
February 13, 2025
Appellate Division, First Department

Plaintiff was injured while working on a construction project in a building owned by the City and occupied by FIT. TDX was the construction manager for the project. Plaintiff's employer, nonparty general contractor Vanguard, retained Waldorf and Calvin as the demolition subcontractors. On the day of his injury, plaintiff was tasked with chipping cement encasements from two-story, steel vertical columns located in the lobby of the building. Plaintiff was going up in a scissor lift when he was struck by a 200-to-300-pound piece of cement that fell from the middle tier of a column.

The trial court denied plaintiff's motion for summary judgment on liability on his Labor Law §§ 240(1) and 241(6) claims, granted the motion of The Board of Trustees of Fashion Institute of Technology, FIT, the City of New York, and the New York City Department of Education (together, the City), and TDX for summary judgment dismissing the Labor Law §§ 240(1) and 241(6) claims against them, and granted the cross-motion of Waldorf Exteriors and Calvin for summary judgment dismissing the Labor Law §§ 240(1) and 241(6) claims against them.

Labor Law § 240(1) (MAS)

The First Department reversed the trial court’s decision, reinstated plaintiff’s § 240(1) claim and granted summary judgment in plaintiff’s favor as he demonstrated that he was injured by falling cement from an area on a vertical column, and that at the time of the accident he was not otherwise engaged in actual cement removal. Moreover, shoring or bracing of the cement casing on the columns could have been accomplished by wire mesh or other means without making the work impossible to complete. In opposition to plaintiff’s motion, the Court held that FIT and the City failed to show how adequate safety measures would interfere with or preclude plaintiff from completing his assigned demolition task.

However, questions of fact remain as to whether TDX was a statutory agent of FIT because of testimony that TDX could stop the work to enforce safety practices, as well as testimony that TDG was the “eyes and ears” of FIT during the renovation project. Questions of fact are also raised as to whether Walforf and Calvin were statutory agents, as the evidence indicates that their supervision over earlier demolition work on the columns could reasonably have destabilized the cement encasements.

PRACTICE POINT: A party may be vicariously liable as an agent of the owner for injuries where the party had the ability to control the activity which brought about the injury. When the work giving rise to the duty to conform to the requirements of Labor Law § 240(1) has been delegated to a third-party, that third-party then obtains the concomitant authority to supervise and control that work and becomes a statutory agent of the owner or general contractor. Where, as here, the party had such supervisory control and authority, they are an appropriate Labor Law defendant.

Saula v Harlem Urban Dev. Corp.
February 13, 2025
Appellate Division, First Department

Plaintiff slipped on the top, first rung of a wet ladder while descending and suffered injuries. The trial court granted plaintiff’s motion for partial summary judgment on his Labor Law §§ 240(1) and 241(6) claims.

Labor Law § 240(1) (MAS)

The First Department unanimously affirmed the trial court’s decision. Plaintiff established entitlement to partial summary judgment under § 240 based on the uncontested testimony that he slipped on the top, first rung of a wet ladder while descending, and that defendants did not require him to use fall protection gear when using the ladder. The evidence also showed that the wet ladder, the only means of access between the first and second floors, lacked slip protection and a tie-off point, in violation of § 240.

As plaintiff established that his injury was causally related to a violation of Labor Law § 240(1), the court also properly dismissed defendants’ affirmative defense asserting that plaintiff was the sole proximate cause of his accident.

PRACTICE POINT: If a statutory violation of § 240(1) is a proximate cause an injury, then plaintiff cannot be solely to blame for it.

Rossi v Doka USA, Ltd.
February 18, 2025
Appellate Division, First Department

Plaintiff, an employee of the concrete subcontractor Roger & Sons, was injured while using a ratchet to move a reusable concrete formwork system used to construct concrete walls. The concrete formwork system was supplied by Doka, which also trained the Roger & Sons employees on how to use the system and the ratchets. The trial court denied the cross-motion of Doka for summary judgment dismissing the complaint and all crossclaims against it.

Labor Law § 241(6)

The First Department unanimously affirmed the trial court’s denial of Doka’s motion for summary judgment. Doka failed to establish that it was not a "statutory agent" under Labor Law § 241(6). Based on Doka's contract with Roger & Sons and testimony that a Doka employee remained on site after training the Roger & Sons employees on the formwork system, issues of fact existed as to whether Doka had the authority to supervise and control plaintiff's work with the formwork system.

Labor Law § 200 and Common-Law Negligence (EDA)

The First Department unanimously found that Doka failed to establish that it is not a "statutory agent" under Labor Law § 200. Based on Doka's contract with Roger & Sons and testimony that a Doka employee remained on site after training the Roger & Sons employees on the formwork system, issues of fact exist as to whether Doka had the authority to supervise and control plaintiff's work with the formwork system. The authority to supervise and control is the key issue.

Indemnity Issues in Labor Law (AMC)

The First Department upheld the trial court’s decision denying Doka’s cross-motion for summary judgment for contractual indemnification against Roger & Sons. The trial Court found, and the First Department agreed that Doka failed to establish it was not negligent.

Suazo v 501 Madison-Sutton LLC
February 18, 2025
Appellate Division, First Department

Plaintiff was engaged in wall plastering work atop an A-frame ladder, that he held plaster material in one hand and his spreading knife in the other as he worked, and that the ladder suddenly toppled, causing him to fall. The trial court granted plaintiff’s motion for partial summary judgment on his Labor Law §§ 240(1) and 241(6) claims.

Labor Law § 240(1) (MAS)

The First Department unanimously affirmed the trial court's decision. Contrary to defendants’ argument, none of the alleged inconsistencies in plaintiff’s testimony as to the ladder’s height, the ceiling height, the stability of the ladder as he stood on it, or even whether the ladder had moved before it toppled, undermine plaintiff’s proof warranting summary judgment. The Court also rejected defendants’ sole proximate cause argument as there was no evidence that plaintiff was reaching or leaning at the time the ladder toppled, and to assume as much would be speculative. In any event, it is “conceptually impossible”

PRACTICE POINT: Another case reminding us that it is “conceptually impossible” for a plaintiff’s negligence to be the sole proximate cause of an accident where, as here, it is shown that a violation of 240(1) was a concurrent cause of the accident.

Traub v Basketball City N.Y. LLC
February 18, 2025
Appellate Division, First Department

Plaintiff was one of a team of 60 stagehands belonging to a union hired to erect a temporary stage for an awards show at Pier 36 in Manhattan. During the day prior to the show, plaintiff performed a number of construction tasks including going up in a "genie" lift to fix a malfunctioning speaker and helping the carpenters install decking and staging. Plaintiff was then tasked with wiring the audio system for a rolling drum riser to be used during the show. While backstage retrieving necessary audio cables for the riser, plaintiff was holding onto the stage's railing to guide himself when the lights were turned off and on during a lighting test, causing him to become disoriented and fall off the stage because part of the railing was missing and was injured.

The trial court granted plaintiff’s motion for partial summary judgment under Labor Law § 240(1), and denied defendant’s cross-motion for summary judgment and the BBC defendants’ common-law indemnification claims against NGPI.

Labor Law § 240(1) (MAS)

The First Department unanimously affirmed the trial court’s decision granting summary judgment to plaintiff under Labor Law § 240(1). BBC’s contention that the activity engaged in at the exact moment of injury is determinative of liability is belied by this Court’s jurisprudence that a full assessment of the work being performed is required. On this record, the Court held it was clear that plaintiff was engaged in construction-related activity covered by the Labor Law as plaintiff participated in the construction of the stage and the riser throughout the project, including on the day of the accident, in service of a union that was performing a contract to carry out construction activities clearly covered under the statute. Moreover, plaintiff’s task of wiring the drum apparatus for use in the show was ultimately part and parcel of the stage’s overall construction. That plaintiff’s discrete task of fetching the cables neither involved the physical construction of the stage itself, nor its attached rigging and electronics fails to compel a different result.

PRACTICE POINT: Courts rejected defendant’s argument that the court should limit its analysis of plaintiff’s activity to the moment of the injury, instead analyzing the totality of work plaintiff performed on the project because it is neither pragmatic nor consistent with the spirit of the statute to isolate the moment of injury and ignore the general context of the work.

Indemnity Issues in Labor Law (AMC)

The First Department upheld the trial court’s decision denying BBC’s cross-motion for summary judgment for common-law indemnification against New Games Productions. The trial Court found, and the First Department agreed, that BBC failed to establish its freedom from negligence regarding the lighting conditions.

Williams v McAlpine Contr. Co.
February 18, 2025
Appellate Division, First Department

Plaintiff was injured when he fell while walking on raised curbing that was in the middle of a pathway leading to his employer's shop at a construction site. Sandy 350 was the owner, McAlpine Contracting was the general contractor, and Bedrock, a subcontractor, was plaintiff's employer. The trial court denied defendants’ motion seeking dismissal of plaintiff’s Labor Law § 241(6) claim based on 12 NYCRR 23-1.7(e), denied plaintiff’s motion for summary judgment under Labor Law § 200, granted defendants’ motion to dismiss the § 200 and common-law negligence claims, and denied defendants’ motion for summary judgment seeking contractual indemnification and breach of contract against Bedrock.

Labor Law § 241(6)

Defendants established entitlement to summary judgment dismissing the Labor Law § 241(6) claim predicated on an alleged violation of Industrial Code § 23-1.7(e)(1), which pertains to tripping hazards, because plaintiff admitted he did not trip on the raised curbing or any debris. In opposition, the Court held that plaintiff did not raise a triable issue of fact. The opinion of plaintiff's expert that plaintiff tripped on the raised curbing was not supported by admissible evidence in the record and was contradictory to plaintiff's own testimony.

Labor Law § 200 and Common-Law Negligence (EDA)

The First Department unanimously found issues of fact that precluded summary judgment to either plaintiff or defendants on the Labor Law § 200 and common-law negligence claims as it was based on a dangerous condition on the site, not from the means and methods of plaintiff's work. Defendants' witness acknowledged that workers were not supposed to walk on the pathway with the raised curbing, which was to become part of the final structure. McAlpine Contracting's superintendent testified that it would be against the rules for a worker to use the pathway as a shortcut. However, the record contained conflicting evidence as to whether defendants knew or should have known that workers continued to use the pathway, despite a plywood barrier, which according to testimony could easily be removed. There was also an issue of fact as to whether plaintiff's fall was caused by a dangerous condition of the curbing, or whether he lost his footing as he was stepping off the curbing.

Indemnity Issues in Labor Law (AMC)

The First Department held that because there are questions of fact as to whether the defendants’ (McAlpine Contracting and Sandy 350) negligence, they are not entitled to summary judgment on their contractual indemnification claim against Bedrock.

Castro v Brito
February 20, 2025
Appellate Division, First Department

Defendants hired plaintiff to repair the garage roof of a two-unit home. Plaintiff was injured when the wooden ladder he was using collapsed as he descended from the roof. He alleged that defendants provided a defective, unsecured ladder causes of action for negligence and violations of Labor Law §§ 240(1), 241(6), 200 and common-law negligence. The trial court granted plaintiff’s motion for summary judgment on the § 240(1) claim against Tito and denied Villavicencio’s cross-motion for summary judgement, while denying defendants’ cross-motion for summary judgment dismissing plaintiff’s Labor Law § 200 claims.

Labor Law § 240(1) (MAS)

The First Department unanimously affirmed the trial court’s decision. Villavicencio was not entitled to the homeowners’ exemption. Although he was the spouse of the owner, Brito, Villavicencio was not a legal owner of the property where plaintiff worked and thus lacked any legal interest in the property that would have entitled him to the exemption. Plaintiff also established that Villaviencio is a statutory agent, who acted as the owner’s agent by hiring plaintiff with Brito’s authorization and providing materials and tools for the garage roof repair.

Plaintiff further established entitlement to summary judgment by showing he was provided with an old, unstable wooden ladder that was too short to reach the roof. The court rejected Villaviencio’s sole proximate cause argument because even if a metal ladder shown in a photograph of the garage was available on the date of the accident, defendants’ failed to establish that plaintiff knew that the taller ladder was available for his use; he was expected to use the taller ladder for his work; he chose for no good reason not to do so; and, he refused to follow a specific instruction to use the taller ladder for his work.

PRACTICE POINT: Remember the four essential elements of the sole proximate cause defense under Labor Law § 240(1): (1) plaintiff had adequate safety devices available; (2) plaintiff knew both that the safety devices were available and that he or she was expected to use them; (3) plaintiff chose, for no good reason, not to do so; and (4) would not have been injured had he or she not made that choice. Without all four elements, this defense will not succeed, as in this case.

Labor Law § 200 and Common-Law Negligence (EDA)

The First Department unanimously affirmed the dismissal of the Labor Law § 200 and common-law negligence claims, finding that the evidence established that defendants exercised supervisory control over the means and methods of the work, such as by providing the ladder.

Lopez v 18-20 Park 84 Corp.
February 27, 2025
Appellate Division, First Department

Plaintiff fell from a ladder while in the course of his employment with Dowd as a painter. Plaintiff was performing renovation work in an apartment at premises owned by 18-20 Park, which apartment was leased by Marissa Reese. The trial court granted plaintiff’s motion for partial summary judgement on the Labor Law § 240(1) claim against 18-20 Park, and denied Dowd’s motion for summary judgment claims for common-law indemnification and contribution.

Labor Law § 240(1) (MAS)

The First Department affirmed the trial court’s decision to grant plaintiff summary judgment as plaintiff met his burden that the ladder on which he was standing moved from under him for no apparent reason. To the extent that plaintiff was required to identify a safety device that would have prevented the incident, the Court held that plaintiff established that he was provided with a safety device, i.e., a ladder, but that the ladder proved inadequate.

PRACTICE POINT: A plaintiff is not required to demonstrate that a ladder is defective to be entitled to summary judgment. Even if plaintiff misused the ladder by standing on its fifth rung, this constitutes at most comparative negligence, which is not a defense under Labor Law § 240(1). Moreover, plaintiff is entitled to summary judgment although he was the only witness as nothing in the record controverts his account of the accident or calls his credibility into question.

Indemnity Issues in Labor Law (AMC)

The First Department reversed the trial court’s decision denying Dowd’s motion for summary judgment seeking to dismiss the common law indemnification claims, finding that Dowd established plaintiff did not suffer a “grave injury” within the meaning of Workers Compensation § 11 and defendants and Reese failed to raise a question of fact.

Martinez v Nader Enters., LLC
February 5, 2025
Appellate Division, Second Department

Plaintiff was employed by Sunfar, who was the general contractor at a construction site owned by defendant. Plaintiff was injured while cutting a cement block with a grinder without a blade guard when the grinder kicked back and cut plaintiff's leg. Sunfar owned and provided the subject grinder. Plaintiff commenced an action asserting violations of Labor Law §§ 241(6) and 200. The trial court granted plaintiff’s cross-motion for summary judgment on Labor Law § 241(6) predicated on a violation of 12 NYCRR 23-1.5(c)(3) and denied Sunfar’s motion for summary judgment seeking dismissal of the Labor Law § 200 and common-law negligence claims.

Labor Law § 241(6)

The Second Department reversed the trial court’s decision. Industrial Code (12 NYCRR) § 23-1.5(c)(3), provides that “[a]ll safety devices, safeguards and equipment in use shall be kept sound and operable, and shall be immediately repaired or restored or immediately removed from the job site if damaged." Here, the Court held that plaintiff failed to eliminate all triable issues of fact as to whether defendant had notice of any defect or unsafe condition in the subject grinder and the trial court should have denied plaintiff's cross-motion, regardless of the sufficiency of defendant's opposition papers.

Labor Law § 200 and Common-Law Negligence (EDA)

The Second Department unanimously reversed the trial court’s decision and dismissed the Labor Law § 200 claim, finding that it did not have the authority to supervise or control the manner and method of plaintiff's work. Defendant's submissions established that it did not interact with Sunfar's employees during the construction and that it did not provide any equipment or tools to Sunfar's employees. In opposition, the Court held that plaintiff failed to raise a triable issue of fact.

Magistro v New York City Hous. Auth.
February 13, 2025
Appellate Division, Second Department

Plaintiff was injured while working as a plumber on a project involving the replacement of an underground leaking water pipe by plaintiff's employer, Richard's Plumbing., at premises owned by New York City Housing Authority (hereinafter NYCHA). To access the pipe, part of the sidewalk had to be broken up, and a hole four feet deep was created using an excavator. At the time of the incident, plaintiff and a coworker were manually loading pieces of broken concrete from the hole into the excavator bucket, which was on the ground level near the hole. Plaintiff was standing "waist high" in the hole, while his coworker was on the ground level. The slabs varied in size, with the largest measuring two feet by two feet. While plaintiff put a piece of concrete into the bucket, his coworker "slammed" a two-feet-by-one-foot piece of concrete into the bucket directly on top of plaintiff's right hand, causing him to sustain injuries.

The trial court granted the motion of NYCHA for summary judgment dismissing the complaint against it and denied plaintiff’s motion for leave to amend his bill of particulars and for summary judgment on violations of Labor Law §§ 240(1) and 241(6) against NYCHA.

Labor Law § 240(1) (MAS)

The Second Department reversed the trial court and denied NYCHA's motion as premature, with leave to renew after the completion of discovery, because discovery, some of which were exclusively in the knowledge of NYCHA, was necessary to oppose the motion. For the same reason, the trial court should have denied that branch of plaintiff’s motion seeking partial summary judgment on liability under Labor Law 240(1) against NYCHA.

PRACTICE POINT: A party should be afforded a reasonable opportunity to conduct discovery prior to the determination of a motion for summary judgment. A party opposing summary judgment is entitled to obtain further discovery when it appears that facts supporting the opposing party’s position may exist but cannot then be stated. A party contending that a summary judgment motion is premature must demonstrate that discovery might lead to relevant evidence or that the facts essential to justify opposition to the motion were exclusively within the knowledge and control of the movant. In this case, plaintiff was able to this meet this burden.

Labor Law § 241(6)

The Second Department affirmed that branch of NYCHA's motion for summary judgment dismissing the Labor Law § 241(6) claim insofar as asserted against it and properly denied that branch of plaintiff's motion for summary judgment on the issue of liability on that claim against NYCHA. "To prevail on a cause of action alleging a violation of Labor Law § 241(6), a plaintiff must establish the violation of an Industrial Code provision that sets forth specific, applicable safety standards, and that his or her injuries were proximately caused by such Industrial Code violation". Here, NYCHA established that the Industrial Code provisions relied upon by plaintiff were either not applicable to the facts of this case or not sufficiently specific to support a Labor Law § 241(6) cause of action. In opposition, plaintiff failed to raise a triable issue of fact.

Labor Law § 200 and Common-Law Negligence (EDA)

The Second Department unanimously reversed the trial court’s decision, finding that NYCHA's summary judgment motion should have been denied as premature, with leave to renew upon the completion of discovery. The motion was made before written discovery was exchanged and before any depositions were taken. Further, plaintiff demonstrated that NYCHA's motion was premature with respect to the Labor Law § 200 and common-law negligence claims, as discovery with respect to several relevant issues, some of which were exclusively within the knowledge of NYCHA, was necessary to oppose those branches of the motion.

Martinez v Shore Oaks, LLC
February 26, 2025
Appellate Division, Second Department

Defendant McNulty Development Corp. (MDC) was retained by Shore Oaks as a construction manager to manage the construction and to arrange for the coordination and scheduling of construction of a single-family residence. Shore Oaks hired and paid the contractors on the project, including Castro. On January 7, 2021, plaintiff was employed as a carpenter by Castro when he fell 18 feet to the ground from the roof of the house while putting up windows and molding using an air gun. The trial court denied MDC’s motion seeking dismissal of plaintiff’s Labor Law §§ 240(1) and 241(6) claims.

Labor Law § 240(1) (MAS)

The trial court reversed the trial court’s decision and dismissed the Labor Law §§ 240(1) and 241(6) claims. MDC established entitlement to judgment as a matter of law through the testimony of plaintiff and the contractual agreement between itself and Shore Oaks, that MDC did not have the authority to control or supervise plaintiff's work. In opposition, the Court rejected plaintiff’s contentions that MDC was contractually responsible for reviewing and coordinating the safety programs of the contractors on the project site, yet failed to ensure compliance, and was required to coordinate the activities of all the contractors and report and deficiencies to Shore Oaks.

PRACTICE POINT: Although a construction manager of a work site is generally not responsible for injuries under Labor Law §§ 240(1), 241(6) or 200, when it functions as an agent of the properly owner or general contractor in circumstances where it has the ability to control the activity which brough about plaintiff’s injury, responsibility will attach. An agent’s liability is limited to those areas and activities within the scope of the work delegated or, in other words, to the particular agency created.

O'Connor v S&S Constr. of W. N.Y., Inc.
February 7, 2025
Appellate Division, Fourth Department

The trial court granted in part S&S’s cross-motion for summary judgment by determining Frey’s insurance carrier had a duty to defend S&S in a Labor Law and third-party case. The trial court also denied the cross-motion of Frey seeking summary judgment dismissing the second amended third-party complaint. While the appeal was pending, the third-party action proceeded to trial and a jury rendered a verdict in Frey’s favor.

Indemnity Issues in Labor Law (AMC)

The Fourth Department unanimously dismissed the appeal. Frey’s contention that the trial court improperly determined that the insurer had a duty to defend S&S against plaintiff’s claims in the first-party action is not properly before the Court. Frey has no direct interest in the controversy between the insurer and S&S, and the trial court’s order to that extent has no binding effect on Frey or its rights. Therefore, Frey is not aggrieved by that part of the order.

Frey also contends that the trial court erred in denying its cross-motion and that the order should be modified to that extent despite the jury verdict. Even if the judgment has not yet been entered in this case, the Fourth Department held that this appeal is moot. Courts are generally precluded from considering questions which, although once live, have become moot by passage of time of change in circumstances. Here, because the third-party complaint has already been dismissed pursuant to the jury’s verdict, the Court’s decision will have no immediate or practical consequences to the parties, rendering any decision moot.

New York Industrial Code Regulations (EDA)

Lead fumes and dust from structural steel.

(b) Hot riveting or welding.

Where such hot riveting or welding is to be performed in confined spaces, the contact surfaces, exterior surfaces and the rivet holes of field joints to be hot riveted shall be free from any compound containing lead or from any other substance which may create toxic fumes when heated.

While there are no cases directly dealing with this subsection, its language is likely specific enough to form the basis of a Labor Law § 241(6) claim.

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Premises Pointers - Volume VIII, No. 9

Mon, 03 Mar 2025 16:40:29 +0000

Volume VIII, No. 9
February 28, 2025
A Monthly Electronic Newsletter

NOTE FROM THE EDITOR:

For those of you who also subscribe to Coverage Pointers, and received Dan’s most recent issue, you heard about the FDCC meeting that we just returned from in Charleston. It was a fabulous week of education with friends and colleagues from across the country. Our FDCC convention chair Jeff Kelsey and program chair Dan McGrath went above and beyond in every way to organize and execute a phenomenal event in beautiful Charleston. The programming ranged from a panel of Federal Court judges who provided an insider’s view of what they expect from lawyers practicing in their courtrooms to a timely and informative discussion on navigating the current Executive Orders on DEI, a topic that Premises Pointers columnist and Hurwitz Fine attorney Anastasia McCarthy has been following and helping clients understand. We also had some fun (as you saw from our picture at the South Carolina Aquarium shared by Dan) and enjoyed amazing restaurants and sites. If anyone is interested in joining the organization or getting more information about FDCC, which stands for the Federation of Defense and Corporate Counsel, I would also be happy to chat with you. We have a mix of both defense attorneys and insurance industry professionals which makes for a wonderful exchange of ideas and information on what’s happening in the practice of law. Our next meeting is this summer in Park City, Utah, which is sure to be another great event.

Now, onto what’s happening in Premises Pointers and HF firm news.

Last month, we announced our expansion into Rochester, and this month, we are thrilled to have one of our new Rochester attorneys, Elizabeth K. Ognenovski as a Premises Pointers columnist! Be sure to read her column called Slips, Trips, and Legal Shifts: The Latest Retail Slip and Fall New York State Case Updates.

In our Trusts & Estates department, Attorney Melissa A. Pezzino recently discussed the role of Irrevocable Trusts in estate planning, and how they can be used to safeguard your wealth. According to Melissa, this is the #1 question she receives from clients, so she took a deeper dive into the benefits, legal considerations and potential drawbacks in “Are you protecting your wealth from rising nursing home costs?”

Lastly, in firm news, I am excited to announce that Andrea Schillaci, Chair of the Business & Commercial Litigation Department, has been elected President of The Harmonie Group, an organization that many of you may have attended events of across the country. Andrea has been an active member of The Harmonie Group for over 20 years. She has served on the board of directors and currently co-chairs the Professional Liability Committee. Congratulations, Andrea, on this terrific accomplishment!

With February winding down here in Buffalo, we are anxiously waiting for Spring’s arrival and hope to be turning the corner soon. Hopefully by the time our next issue comes out, we will have seen the last of the snow!

-Jody

Retail, Restaurant and Hospitality Happenings Around New York State and Beyond
By: Jody E. Briandi jeb@hurwitzfine.com

This month we are covering several summary judgment decisions—all from the 2^nd Circuit. Of the three retail defendants, two prevailed on summary judgement and one did not.

2/20/2025 Gomez v. Target Corporation
United States District Court, Eastern District of New York
Court ruled a period of two minutes and thirty-eight seconds between a spill and a fall is insufficient, as a matter of law, to provide a reasonable opportunity to correct or warn.

On January 10, 2021, plaintiff slipped and fell on a broken jar of pickles in a Target store. Surveillance video verified the jar broke at 4:50:19 p.m. and plaintiff fell at 4:52:57 p.m., a span of 2 minutes and 38 seconds. No Target employee was seen on surveillance footage entering or passing by the aisle during this time. Plaintiff claims a Target employee told her after the fall that they were aware of the spill, which the employee denies. The court reasoned that even if the defendant had actual notice of the spill, the 2 minutes and 38 seconds between the spill and the fall was insufficient time, as a matter of law, to provide a reasonable opportunity to correct or warn about the hazard. The defendant's motion for summary judgment was granted, and the case was closed.

2/13/2025 Russo v. Costco Wholesale Corp.
United States District Court, Southern District of New York

Defendant Costco’s motion for summary judgment was denied even though Costco argued plaintiff was unable to identify the cause of her fall.

Plaintiff, Andrea Russo, slipped and fell at a Costco store in Yonkers, New York on January 16, 2022. Russo testified that she saw a round plastic object on the floor after her fall that she believed caused her to slip. Surveillance video shows Russo's shopping cart potentially coming into contact with a cup lid on the floor just before her fall. The parties dispute whether the video shows Russo's cart contacting the lid and whether this caused her fall. The court ultimately denied the motion reasoning that a plaintiff does not need explicit personal knowledge of the cause of her fall to survive summary judgment, but can rely on circumstantial evidence from which negligence and causation may be reasonably inferred. Russo provided testimony about seeing a plastic object and video evidence that could show her cart contacting a lid, which is sufficient for a jury to potentially infer causation. The surveillance video is subject to conflicting interpretations, creating genuine issues of fact that must be resolved by a jury, not the court on summary judgment. Defendant Costco's motion for summary judgment is denied.

2/12/2025 Mahoney v. Whole Foods.
United States District Court, Eastern District of New York

The court grants summary judgment to the defendant because defendant did not have actual or constructive notice of the hazardous condition that caused plaintiff's fall even with the presence of a "Caution: Wet Floor" sign approximately 16 feet from where plaintiff fell.

Plaintiff slipped and fell in defendant's Whole Foods store in Albany, NY on July 21, 2019. She did not see any water on the floor before falling but noticed clear water after falling. A "Caution: Wet Floor" sign was present in the seafood department about 16 feet from where plaintiff fell. Defendant's maintenance records show the area was inspected and found clear of hazards about 10-11 minutes before plaintiff's fall. In deciding to grant the motion, the court ruled plaintiff failed to provide evidence that defendant had actual notice of water on the floor where she fell. The "Caution: Wet Floor" sign 16 feet away was insufficient to establish notice of the specific hazardous condition. Plaintiff failed to show constructive notice because she provided no evidence that the water was visible and apparent or present for a sufficient length of time prior to her fall. Defendant's general awareness that the floor near seafood displays could get wet is legally insufficient to constitute notice of the particular condition that caused plaintiff's fall. The court granted defendant's motion for summary judgment on plaintiff's negligence claim.

Labor & Employment for Retailers, Hospitality, and School District Litigation
By: Anastasia M. McCarthy amm@hurwitzfine.com

Dear Readers,

We continue to monitor the NY state budget process as well as federal litigation and agency guidance impacting employers. If you need assistance or guidance navigating the rapidly changing employment space, please feel free to give me a call.

THE EEOC VOWS TO INVESTIGATE AND LITIGATE EMPLOYMENT PRACTICES EVINCING AN ANTI-AMERICAN BIAS

On February 19^th, the EEOC’s new Acting Chair, Andrew Lucas issued a Press Release “vow[ing] to protect American workers from anti-American bias.” Specifically, the EEOC announced: “The EEOC is putting employers and other covered entities on notice: if you are part of the pipeline contributing to our immigration crisis or abusing our legal immigration system via illegal preferences against American workers, you must stop. The law applies to you, and you are not above the law. The EEOC is here to protect all workers from unlawful national origin discrimination, including American workers.”

The press release went on to explain that the EEOC will assist the federal government’s efforts to “deter illegal migration and reduce the abuse of legal immigration programs by increasing enforcement of employment antidiscrimination laws against employers that illegally prefer non-American workers, as well as against staffing agencies and other agents that unlawfully comply with client companies’ illegal preferences against American workers.” As noted in the EEOC’s press release, national original nondiscrimination of any kind (including practices evincing employment preferences for or against American workers) is illegal under Title VII. Acting Chair Lucas and the EEOC are now stating their commitment “to ensuring employers and workers better understand the even-handed protections provided to all workers by Title VII’s prohibition against national origin discrimination.”

The press release then explicitly addresses common justifications for preferring non-American workers—explaining that these are NOT legally permissible exceptions to Title VII:

lower cost labor (whether due to payment under the table to illegal aliens, or exploiting rules around certain visa-holder wage requirements, etc.);
a workforce that is perceived as more easily exploited, in terms of the group’s lack of knowledge, access, or use of wage and hour protections, antidiscrimination protections, and other legal protections;
customer or client preference;
biased perceptions that foreign workers are more productive or have a better work ethic than American workers.

Rooting out anti-American bias is but one of Lucas’s priorities for her tenure. Other priorities include:

“[r]estoring evenhanded enforcement of employment civil rights laws for all Americans. In recent years, this agency has remained silent in the face of multiple forms of widespread, overt discrimination. Consistent with the President’s Executive Orders and priorities, my priorities will include rooting out unlawful DEI-motivated race and sex discrimination; protecting American workers from anti-American national origin discrimination; defending the biological and binary reality of sex and related rights, including women’s rights to single‑sex spaces at work; protecting workers from religious bias and harassment, including antisemitism; and remedying other areas of recent under-enforcement.”

Homeowner Liability, Recreational Accidents, and Discovery Angles
By: Marc A. Schulz mas@hurwitzfine.com

Hello Subscribers,

This month’s edition continues with another conditional order of dismissal that was unopposed by plaintiff, under CPLR 3126, to strike the complaint unless plaintiff provided certain discovery responses and authorizations. Recall that pursuant to CPLR 3126(3), “[i]f any party … refuses to obey an order for disclosure or willfully fails to disclose information which the court finds ought to have been disclosed [,] the court may make such orders with regard to the failure or refusal as are just,” including, an order “dismissing the action.” This statute “broadly empowers a trial court to craft a conditional order,” which imposes a sanction “unless within a specified time the resisting party submits to the disclosure.” If a party fails to comply with the order by the specified date, “the conditional order becomes absolute.”

A party seeking to vacate an order entered on his or her default in opposing a motion must demonstrate a reasonable excuse for the default a potentially meritorious opposition to the motion. Although a court has the discretion to accept law office failure as a reasonable excuse (see CPLR 2005), law office failure does not constitute a justifiable excuse where there is a pattern of willful default and neglect, or where allegations of law office failure are conclusory, undetailed, and unsubstantiated.

Until next issue, here’s hoping the temperature continues hovering above 40°

Marc

2/13/2025 Adams v 161 Ct. St., LLC
Appellate Division, Second Department
Plaintiff failed to demonstrate a reasonable excuse for his default, and his vague and unsubstantiated proffered excuse of law office failure was not supported by a detailed and credible explanation of the default.

The trial court denied plaintiff’s motion to vacate an order conditionally granting defendant’s unopposed motion to strike the complaint unless plaintiff provided outstanding discovery. In support of plaintiff’s motion, he submitted, among other things, an affirmation from his counsel, who stated that plaintiff defaulted in opposing defendants’ motions due to calendaring errors.

The Second Department affirmed the trial court’s decision. Plaintiff failed to demonstrate a reasonable excuse for his default, and his vague and unsubstantiated proffered excuse of law office failure was not supported by a detailed and credible explanation of the default. Since plaintiff failed to proffer a reasonable excuse for his default, the Court declined to consider whether he demonstrated a potentially meritorious opposition to defendants’ motions. Accordingly, the trial court properly denied plaintiff’s second motion, pursuant to CPLR 5015(a) as procedurally improper, and plaintiff was precluded from making a second motion to vacate the conditional order on the same grounds raised in the prior motion.

Are You Fall Real? Slip and Fall/Snow and Ice/Storm in Progress/Espinal
By: Ashley M. Cuneo amc@hurwitzfine.com

Hi Readers,

Hope everyone has had a great start to the New Year and are sticking with those resolutions. I love nothing more than checking things off on a list, gives me the motivation to work on that next task.

This has been quite an interesting winter with temperatures ranging from the teens to the 50’s. I certainly am looking forward to those beautiful spring, warm days – playing outside with my puppy and taking long walks without my nose freezing off.

2/7/2025 Otero v Rochester Broadway Theatre League, Inc.
Appellate Division, Fourth Department
Duty of an easement holder is the same as that owed by a landowner.

The Appellate Division, Fourth Department reversed the Trial Court’s decision granting defendant/easement holder summary judgment.

Plaintiff filed suit after slipping and falling on snow and ice in the parking lot at 875 East Main St., City of Rochester, NY. Defendant filed summary judgment arguing that it “had absolutely no involvement with” the parking lot where plaintiff fell. The theatre submitted: (1) an affidavit from its COO stating that it did not own, use, occupy, control or maintain the parking lot; and, (2) evidence that the parking lot is owned by a nonparty. In reply to plaintiff’s opposition, defendant submitted, for the first time, a “Parking Agreement” with the nonparty owner that says the nonparty owner agreed to keep the parking lot "reasonably clear of ice and snow."

In addition to finding that defendant introduced a new argument, upon which the Trial Court relied on to grant defendant’s motion, the Appellate Division held that an easement is more than a personal privilege to use another’s land, it is an actual interest in the land, and the easement holder has the same duty as that of the landowner.

Thus, the owner of the easement (the theatre) had a duty to clear the snow and ice from the subject parking lot where plaintiff fell.

Slips, Trips, and Legal Shifts: The Latest Retail Slip and Fall New York State Case Updates

By: Elizabeth K. Ognenovski eko@hurwitzfine.com

Hello Readers!

I recently joined Hurwitz Fine as part of their expansion into Rochester. This is an exciting chapter in my career, and I am honored to be working with such an incredible and respected team. A little bit about myself - I am from Rochester, New York (Pittsford). I attended undergrad at the University at Buffalo and graduated from Albany Law School.

Prior to joining Hurwitz Fine, I was an avid reader of Premises Pointers and frequently applied the information and cases presented to my practice. I am thrilled to be contributing a column and look forward to sharing my insights on recent retail slip and fall cases around the State of New York.

2/05/2025 Hernandez v. Malchus B’Chesed, LLC
Appellate Division, Second Department
An out-of-possession landlord is not liable for injuries that occur on its premises unless the landlord has retained control over the premises and has a duty imposed by statute or assumed by contract or a course of conduct.

The plaintiff commenced a personal injury action after he tripped over broken and mis-leveled concrete on a loading dock of the supermarket at which he worked. The third-party defendant supermarket Hatzlacha Supermarket, Inc. leased the premises from the defendant landlord Malchus B’Chesed, LLC pursuant to a lease agreement. The defendant landlord moved for summary judgment to dismiss the complaint and argued in part that it was an out-of-possession landlord. The Kings County Supreme Court held there were issues of fact as to: (1) what caused the plaintiff’s incident; (2) whether the supermarket or the defendant landlord had notice of the alleged defect; (3) whether the defendant landlord had a duty to repair the alleged defect as an out-of-possession landlord; and (4) whether the alleged defect constituted a significant structural issue.

On appeal, the Second Department explained that since the complaint “sounds in common-law negligence and the pleadings do not allege a violation of a statute, the defendant landlord could not be held liable unless it owed a duty assumed by contract or a course of conduct.” The Court held the defendant landlord failed to demonstrate that it did not have an obligation by contract or a course of conduct to maintain the loading dock. The language of the lease was ambiguous and the deposition testimony of the supermarket’s general manager contradicted the deposition testimony of the landlord regarding who was responsible for repairing the concrete surface of the loading dock. The Second Department further determined that the landlord failed to establish that it relinquished control over the premises to such a degree as to extinguish any duty it owed to maintain the premises.

2/13/2025 Rubin v. Sivan Merrick, LLC
Appellate Division, Second Department
A defendant seeking dismissal of a complaint on the basis that the alleged defect is trivial must make a prima facie showing that the defect is: (1) under the circumstances, physically insignificant; and (2) that the characteristics of the defect or the surrounding circumstances do not increase the risks it poses.

The plaintiff allegedly sustained injuries when he tripped and fell in a hole in a parking lot owned by the defendant Sivan Merrick, LLC and leased by the defendant Metro Franchising Commissary, LLC, d/b/a Dunkin. The defendants asserted contribution and indemnification cross-claims against each other. Both defendants moved for summary judgment to dismiss the complaint and the cross-claims. The defendants argued in part that the alleged defect was trivial. The Nassau County Supreme Court denied both motions.

On appeal, the Second Department affirmed the lower court’s holding. The Court explained that there is no minimal dimension test or per se rule that the condition must be of a certain height or depth in order to be actionable. “In determining whether a defect is trivial as a matter of law, the court must examine all of the facts presented, including the width, depth, elevation, irregularity, and appearance of the defect along with the time, place, and circumstance of the injury.” Photographs may be used to demonstrate that a defect is trivial if they are acknowledged to fairly and accurately represent the accident site.

The Second Department held that the defendants failed to establish that the alleged defect was trivial and not actionable as a matter of law. The Court explained that the plaintiff testified that the hole was approximately 5 inches deep and 18 inches wide and the defendants failed to submit any measurements of the dimensions of the hole. In addition, it was not possible to determine from the photographs submitted as to whether the alleged defect was trivial. With regard to constructive notice, the defendants failed to produce evidence as to when the parking lot was last inspected prior to the plaintiff’s incident.

With regard to the cross-claims, the defendant landlord failed to demonstrate that it was an out-of-possession landlord that did not have a contractual duty under the lease to maintain the parking lot. Thus, the defendant landlord’s motion with regard to dismissing the cross-claims asserted against it was denied.

Hurwitz Fine P.C.

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Coverage Pointers - Volume XXVI No. 19

Mon, 02 Jun 2025 16:17:43 +0000

Volume XXVI, No. 19 (No. 692)
Friday, February 28, 2025
A Biweekly Electronic Newsletter

In some jurisdictions, newsletters such as this may be considered Attorney Advertising.

If you know of others who may wish to subscribe to this free publication, or if you wish to discontinue your subscription, please advise Dan D. Kohane at ddk@hurwitzfine.com or call 716-849-8900.

You will find back issues of Coverage Pointers on the firm website listed above.

Dear Coverage Pointers Subscribers:

Do you have a situation? We love situations.

Happy Birthday to my son, Jacob, who turns 40 years old today.

Lots of good stuff in this week’s issue – highlights at the end of this note. Here are some other tidbits of interest.

DRI Insurance Roundtable – March 11-12, 2025, in Chicago, IL

I’m delighted to be a speaker at this year’s DRI Insurance Roundtable. There is still an opportunity to register!

Secure your Golden Ticket to this premier and exclusive opportunity to network and brainstorm with leaders of the insurance industry and defense bar. This program is designed to pair industry representatives with outside counsel on a one-to-one basis, allowing for maximum networking opportunities for all parties involved. Discuss and debate important and significant challenges facing the industry and forge synergistic relationships with your peers.

What to Expect during the Program:

Participate in transparent discussions and debates addressing issues that shape the relationship between insurers and outside counsel.
Explore how artificial intelligence is likely to impact privacy issues, the claims process, and defense lawsuits.
Develop strategies for protecting the human equation and addressing mental health and wellness challenges in the insurance and legal industries.

Managing and growing insurer-outside counsel relationships to build the next generation of coverage professionals and outside counsel.

Expand Your Network By:

Attending a networking reception, dinner dine-arounds, and breakfast with industry and outside counsel leaders.
Sharing your knowledge and learning from others during interactive roundtable and lunchtime sessions.

Registering for the Insurance Claims and Coverage Institute which begins immediately after the Insurance Roundtable in Chicago

FDCC Winter Meeting

This issue comes to you in transit, as I am returning from the Federation of Defense & Corporate Counsel winter meeting in lovely Charleston, South Carolina. Jody Briandi, our president and managing partner, and an FDCC Board Member, led a great panel on succession planning. There were other excellent CLE programs, great restaurants, and wonderful people. It’s a great organization. It was my 70^th consecutive meeting, and I was honored with a pair of beautiful Waterford martini glasses. They will come in good use. For those who want to learn more about the FDCC or who may be interested in being considered for membership (vetting is a critical part of our membership criteria), you can either contact me or visit the website, www.thefederation.org.

Dead Experts and Artificially Created Hallucinated Cases

If you don’t follow me on LinkedIn, you may have missed some robust discussions over the last week. Follow me on LinkedIn if you don’t already.

For those of you who follow me on LinkedIn, we had over 120,000 views and hundreds of postings on two topics over the last week, The first was the Morgan and Morgan hallucinated, fake citations created by Artificial Intelligence and submitted to a Wyoming federal court in a motion in limine which led to sanctions which I considered light. For the lawyer who submitted the seven imaginary cases, $3,000 and loss of pro hac vice status. For the two lawyers who also signed the submission, $1,000 each. My comment, when interviewed by national media, was a simple one: “The court had an opportunity here to send a message to lawyers in a way that would remind my colleagues around the country that artificial intelligence is not a substitute for real intelligence."

The second case involved a Texas federal judge’s motion for sanctions against by an attorney named Dick for allegedly submitting an affidavit from an expert who died about a year before he signed it. Here’s a link to the article that quoted me as delivering a simple message, “Even in Texas, dead men should not be signing affidavits.”

Newsletters:

We have other firm newsletters to which you can subscribe by simply letting the editor (or me) know, including a new publication, which was created to advise on business and employment law questions:

Premises Pointers: This monthly electronic newsletter covers current cases, trends and developments involving premises liability and general litigation. Our attorneys must stay abreast of new cases and trends across New York in both State and Federal Court and will now share their insight and analysis with you. This publication covers a wide range of topics including retail, restaurant, and hospitality liability, slip and fall accidents, snow and ice claims, storm in progress, inadequate/negligent security, inadequate maintenance and negligent repair, service contracts, elevator and escalator accidents, swimming pool and recreational accidents, negligent supervision, assumption of risk, tavern owner and dram shop liability, homeowner liability and toxic exposures (just to name a few!). Please drop a note to Jody Briandi at jeb@hurwitzfine.com to be added to the mailing list.
Labor Law Pointers: Hurwitz Fine P.C.’s Labor Law Pointers offers a monthly review and analysis of every New York State Labor Law case decided during the month by the Court of Appeals and all four Departments. This e-mail direct newsletter is published the first Wednesday of each month on four distinct areas – New York Labor Law Sections 240(1), 241(6), 200 and indemnity/risk transfer. Contact Dave Adams at dra@hurwitzfine.com to subscribe.
Products Liability Pointers: Whether the claim is based on a defective design, flawed manufacturing process, or inadequate instructions/warnings, product liability litigation is constantly evolving. Products Liability Pointers examines recent New York State and Federal cases as well as high court decisions from other jurisdictions, keeping our readers up to date with the latest developments and trends, and providing useful practice tips and litigation strategies. This monthly newsletter covers all areas of product liability litigation, including negligence, strict products liability, breach of warranty claims, medical device litigation, toxic and mass torts, regulatory framework, and governmental agencies. Contact V. Christopher Potenza at vcp@hurwitzfine.com to subscribe.
Medical & Nursing Home Liability Pointers. Medical & Nursing Home Liability Pointers provides the latest news, developments, and analysis of recent court decisions impacting the medical and long-term care communities. Contact Elizabeth Midgley at emm@hurwitzfine.com to subscribe.

Judge Decries Non-Religious Marriages – 100 Years Ago:

Buffalo Courier Express
Buffalo, New York
28 Feb 1925

Civil Marriages, Cosmetics
Are Scored By Judge Tierney

Ninety per cent of municipal ceremonies end in divorce court, he says: women try to improve God’s work

New York, Feb. 27 (A.P.) – Denunciation of civil marriage ceremonies and advocacy of religious rites as a sanction to marriage were made in court today by Supreme Court Justice Tierney, who declared that from many years’ experience on the bench he had found that 90 per cent of the marriages performed in the municipal building terminate in the divorce court before many weeks.

“I do not have any faith in these civil marriages,” Judge Tierney declared, when Mrs. Ruth Cantor appeared before him to ask divorce from Samuel Cantor, whom she married in the municipal building on August 3, 1923. They separated a year later.

“If you marry again,” Justice Tierney counseled her, “don’t forget to ask the blessing of God on your marriage and have a religious ceremony performed.”

Justice Tierney also lectured Mrs. Cantor for the use of Beautifying devices.

“What silly things women are when they are not satisfied with the beauty they were born with and try to change the harmony of their faces. God gave women beauty and when they try to undo it by giving their hair an unnatural color and penciling their eyebrows, they are trying in vain to improve on the work of the Great Artist.”

Peiper on Property (and Potpourri):

Sorry for my absence last week. Although the column was quiet, I usually have something to say in this space. At the time Our Editor went to print, I was securely locked inside an aluminum tube on my way home from Southern California. I sent a note to be included, but the internet failed me. Rather than getting to its intended destination, my weekly missive was left to flounder in my outbox.

I was in Southern California after attending the IADC Mid-Year meeting where I had the pleasure of attending a number of very insightful programs. In addition to substantive legal topics, I particularly appreciated the discussion on recognizing and addressing “burnout” among our colleagues. We all, I’d posit, suffer from burnout from time to time. For us Rust Belters, the lack of any basic sunshine from December to April only leads to the challenges of keeping a positive outlook and healthy mental hygiene. It’s nothing, though, that a few days of sun out of the office can’t help but remedy. When it is more serious, however, no trip to a beach will return us back to the factory setting. So be aware of your health and take time for yourself. A short-term investment in your well-being is far superior to the much more serious impact of neglecting the day-to-day pressures of our daily lives.

On a much more fun topic, I am currently in the midst of co-coaching a high school mock trial team with my partner, Jody Briandi. Our fact pattern is a civil defamation case, and it has been a lot of fun helping our team learn basic evidence rules, craft openings, directs, crosses and closings.

We’re 1-0 so far, but please if you have any suggestions or pointers, we would certainly welcome some assistance.

That’s it for this week. See you in two more.

Steve
Steven E. Peiper
sep@hurwitzfine.com

Immigration Isn’t So Bad – 100 Years Ago:

The Herald Statesman
Yonkers, New York
28 Feb 1925

AN ASSIMILATION
AT REO WORKS

Factory Employes Are Either
Native Or Naturalized Citizens And Every One Of
Them Speaks In English

Most recent immigration laws produced by the legislative mill of the United States have been condemned by many as acts liable to offend the people of other nations. At least in spirit, however, they are admitted to be worthy measure, for one of their chief aims is not to bar the foreign born from America, but to admit them only in such numbers as can be assimilated into American life.

Among the principal advantages to be gained by the people of foreign lands who come to this country are higher standards of living and greater opportunities for education. It seems though, that these advantages are gained only when the immigrants actually become a part of the American communities.

Where they band together in colonies, speak their native tongues, and continue to live according to the same standards they were accustomed to before setting out to find their new homes, the greatest of the advantages are lost to them.

It is true, however, that many of the immigrants have their greatest opportunity for contact with American customs and standards through their work, the companies they work for, and the men and women they work with. Unless, in places of employment, they learn to like American customs and the American ways of living, they are apt to never take kindly to the social forces that would make them Americans.

Lee’s Connecticut Chronicles:

Dear Nutmeggers:

It’s been a difficult two weeks – I had surgery, took a week off and then had another surgery. Both were minor procedures (no overnights required) and, most importantly, both resulted in clean bills of health. I’m feeling great and am back to work, keeping the world safe for insurance companies everywhere.

Lee
Lee S. Siegel
lss@hurwitzfine.com

Who Can Imagine an Eight Hour Workday? – 100 Years Ago:

The Buffalo News
Buffalo, New York
28 Feb 1925

LAKE ENGINEERS TO HEAR
ABOUT 8-HOUR LAW

The proposed eight-hour work law for marine engineers will be explained to members of the Buffalo Marine Engineers’ Beneficial association by William S. Brown of Washington D.C., international president of the organization, at a special meeting Saturday night.

Marine engineers now work 12 hours a day. They want congress to limit their working time to eight hours. A bill to this end has been drawn for introduction at the next congress, according to William J. Garret, lake business manager of the association.

Ruffner’s Road Review:

Dear Readers,

While it has been just over ten years since I played hockey competitively, and I haven’t followed the Sabres closely in quite some time, the Four Nations tournament and two great USA v. Canada matchups have re-sparked my interest. I attended a nice comeback win this Tuesday, which has me (temporarily) excited to see if the Sabres can make an unlikely playoff push this year and even have the urge to get back on the ice myself.

I have two cases to report this week: In the first, the court granted a defendant’s motion to vacate a default judgment in a no-fault case, accepting law office failure as a reasonable excuse and a default judgment in an underlying declaratory judgment case, declaring the subject incident was the result of an intentional act and the insurer had no coverage obligation. In the next case, the court applied Second Department precedent in holding that the exhaustion of policy benefits did not preclude the insurer from having to render payment on an earlier claim that they denied if such denial was found to be improper or unsubstantiated.

Kyle
Kyle A. Ruffner
kar@hurwitzfine.com

Huge Increase in RR Fares– 100 Years Ago:

The Buffalo News
Buffalo, New York
28 Feb 1925

8-CENT FARE STARTS
SUNDAY AT MIDNIGHT

The new eight-cent fare on lines of the International railway will go into effect at midnight Sunday. This announcement was made by President Tulley of the traction company, following a conference Ralph K. Robertson and Public Service Commissioner William R. Pooley.

At the conclusion of the conference President Tulley said he was sending the new tariff schedule to Albany by special messenger Saturday afternoon and hat it will be filed at the offices of the public Service commission at 7 o’clock.

Under the decision of the public service commission the increased fare rate could be put into effect 24 hours after the filing of application, but the traction company had decided to withhold the change until Sunday midnight, Mr. Tulley said.

In the operation of the new rate, passengers will be carried for one token plus one cent, until all tokens are exhausted, the traction company announced. The tokens then will be replaced by tickets, which will be sold for eight cents each, or two for 15 cents.

Assistant Corporation Counsel Robertson made an effort to confer with Mayor Schwab relative to the advisability of an immediate appeal from the fare increase order, but was informed the mayor was in Syracuse and would not return to this city until Monday.

Ryan’s Federal Reporter:

See you in two weeks.

Ryan
Ryan P. Maxwell
rpm@hurwitzfine.com

Be Careful Who You Date – 100 Years Ago:

Times Union
Brooklyn, New York
28 Feb 1925

BABB AWARD UPHELD
WITHOUT COMMENT

Appellate Division Endorses
$28,000 Verdict in Alienation Suit.

The Judgment of $28,000 recovered by Charles J. Babb, of 353 Linden avenue, against Clyde E. Black, a wealthy elderly manufacturer of knit wear, for the alienation of the affections of young Mrs. Ada Babb, wife of the plaintiff, was sustained yesterday by the Appellate Division.

The case was tried last March before Supreme Court Justic Carswell in Queens County and was one of the most sensational ever tried there. The jury brought in a verdict of $46,000 for Babb, which was reduced to $28,000.

Babb, a chemist, and his wife were married Aug. 17, 1918, and lived together four years. Babb testified that his wife did not leave him until after she met Black, who had taken up his residence around the corner from the Babb apartment at 1289 St. Johns place. Finally, Babb said, his wife left him and became an artist’s model. He said she refused to return to him and said he could not give her the “good times” Black could give her.

Babb contended that he was in moderate circumstances and that Black turned his wife’s head by lavishing money and luxuries on her. Mrs. Babb, a witness for Black, testified she lost her love for her husband before she became friendly with the elderly manuf. The Appellate Division wrote no opinion in upholding the judgment.

Storm’s SIU:

Hi Team:

Three case synopses for you this week:

Homeowners Policy Does Not Cover Replacement Siding for Undamaged Portions of the Home, Even if New Siding on Damaged Portions Does Not Match Existing Siding.
Complaint Demanding $70,000 in Damages for Breach of Contract and Unspecified Amounts for Attorney's Fees, Consequential Damages, Consequential Losses, and Punitive Damages, Does Not Satisfy the Jurisdictional Threshold of $75,000 for Federal Diversity Jurisdiction.
Court Grants Insurer’s CPLR § 3211(a)(1) Motion to Dismiss Due to the Insured’s Breach of the Suit Limitation Condition.

Can’t wait for spring! Busy week, back to work…

Let’s talk again in two weeks.

Scott
Scott D. Storm
sds@hurwitzfine.com

It Only Took Another 23 Years – 100 Years Ago:

Brooklyn Eagle
Brooklyn, New York
28 Feb 1925

TALK ON PALESTINE.

William Mazer, who recently returned from nine months in Palestine, spoke on the significance of that place to the Jews at a meeting of Young Israel of Flatbush on Thursday evening at Coney Island Ave. and Ave. Y. Adolph Flam outlined plans for a new building for the organization.

Fleming’s Finest:

Hi Coverage Pointers Subscribers:

Now that it is the end of February, we are so close to Spring! The weather has finally started to warm up, so I am looking forward to running more outdoors.

This week’s case from the Kentucky Supreme Court considered whether a minor child in the sole legal custody of one parent qualifies as a “resident relative” under the custodial parent’s insurance policy if the child is staying elsewhere at the time of an automobile accident. The court found the term ambiguous based on the facts of the case.

Catch you later,

Kate
Katherine A. Fleming
kaf@hurwitzfine.com

Eight Bit Theft Lands Two in Jail – 100 Years Ago:

Daily News
New York, New York
28 Feb 1925

JAIL FOR 2 IN $1 THEFT

Judge William Allen in General Sessions yesterday sentenced Rose Cohen, 27, of 740 Fox St, and Anna Brown, 30, of 640 Cauldwell Ave., Bronx, to the penitentiary for the theft of $1.

Gestwick’s Garden State Gazette:

Dear Readers:

I have returned from a very enjoyable trip to the Big Apple with my fiancé. I have been more times than I care to admit, usually on business. It was my fiancé’s first experience, though. She was mesmerized by the bright lights in Times Square, the allure of the Statue of Liberty, and the hustle and bustle of the city.

The case I have for you this week discusses whether an insurer’s refusal to consent to a settlement was reasonable. At first glance, some may think not. I encourage you to read the policy exclusion at play before reading anything else, and then decide for yourself (or, read it last—up to you).

That’s it for two weeks. Take care in the meantime.

Evan
Evan D. Gestwick
edg@hurwitzfine.com

GW Bridge in the Offing – 100 Years Ago:

Daily News
New York, New York
28 Feb 1925

Senate bill authorizing construction of four new bridges linking New York and New Jersey is passed by house and sent to President Coolidge for O.K. One span would cross Hudson, between Fort Lee, N.J., and point between 170^th and 180^th Sts.

O’Shea Rides the Circuits:

Readers,

I take issue with unprompted theoretical trade talk for Brady Tkachuk move to the Buffalo Sabres. The Sabres simply possess no assets for such a trade. Fingers crossed he is an Ottawa Senator for life.

This week I have a follow-up case from a previous edition. This case again looks to the 11^th Circuit’s interpretation of Florida Law and a policyholder’s attempt to incorporate a Florida state statute into all policies within the state.

Until Next Time …

Ryan
Ryan P. O’Shea
rpo@hurwitzfine.com

Trial Lawyers Chastised for Overcoats – 100 Years Ago:

Times Union
Brooklyn, New York
28 Feb 1925

O’Neill Flays Lawyers
Who Wear Overcoats
Trying Cases in Court

Lawyers who persist in wearing their overcoats while pleading cases in Brooklyn magistrate’s courts were severely criticized by Magistrate James T. O’Neill, in Gates avenue court yesterday, when he ordered two attorneys to remove their wraps.

“In my opinion, it is not in accord with the ethics of the legal profession for you attorneys to wear your overcoats while trying cases,” asserted the magistrate. “You are not showing the proper respect for the court. Some of you act here the same as you would on a street corner or in a club.

“Lawyers should realize that our police courts are in a measure more important than our higher courts, for it is here that people of the rank and file, many of them foreigners get their initial impression of American institutions.”

Magistrate O’Neill expressed the opinion that attorneys possessing reputations as “good lawyers” conduct themselves better in the courtroom than do some of the attorneys who are not so well known.

Rob Reaches the Threshold:

Dear Readers,

Although the last couple of days have been warmer in Western New York, I am sure ready for winter to end. Last week, I was lucky enough to find some sunshine in Florida, as I enjoyed attending a family member's wedding. While I sat in 75 degrees and sunshine hours before my flight back to snow-covered Buffalo, I contemplated life. Here's hoping we warm up in March for good.

In the meantime, the Appellate Divisions have certainly warmed up, as there were multiple decisions on Serious Injury Threshold to comb over this time. I landed on writing about a decision out of the First Department, which contains a nice refresher on many points.

Hope you all enjoy the read.

Rob
Robert J. Caggiano

A Kiss is But a Kiss – 100 Years Ago:

The Brooklyn Daily Times
Brooklyn, New York
28 Feb 1925

Your Kisses Are Cheap

Dear Miss Chester:

I love a young man two years my senior. He told me he loved me and asked for a kiss which I gave him. It was because I love him. Now he does not look at nor speak to me. I love him. Kindly give me advice. He is always on the car when I come home.

I have met another young man whom I like very much but not half as much as the first. The last young man asked me to go to a party with him. He said it in a joking way. I asked him whose party. He said I knew her, but he would not say her name. I said I would tell him by Friday, so kindly give me advice as to what to do by then, also as to the one I love most.

BROKEN LOVE

My Dear Broken Love:

You cheapened yourself when you made it easy for the young man to kiss you. Perhaps that is why he passed you by now. You have not yet realized, my dear Broken Love, that the things one treasures are the things for which one has to fight. Hold your kisses priceless and they will be treasured when it is time for you to give them. And I am old-fashioned enough to believer that you should give them only to the young man to whom you are engaged.

By all means if you know the girl who is giving the party and wish to attend it, go with the young man who asked you.

SUSAN CHESTER

LaBarbera’s Lower Court Library:

Dear Readers:

Thankfully, the weather seems to have taken a turn here in Buffalo. What was snow for the past few months has quickly turned to rain. Before we know it, the Spring flowers will be blooming.

This week I will discuss a Bronx County Supreme Court case, dismissing an action based on a suit limitation provision contained in a homeowners insurance policy. The court found that the action was required to be brought within two years of the date of loss, using the statutory requirement to supersede the policy language, which was measured from the date of the property damage.

Until next time…

Isabelle
Isabelle H. LaBarbera
ihl@hurwitzfine.com

Overpaid, Even Then – 100 Years Ago:

Mount Vernon Argus
White Plains, New York
28 Feb 1925

“ALIBI” STATEMENTS

Washington, Feb, 28. – (INS) – While President Coolidge deliberated today over whether to approve congress’ raising its own salary from $7,500 to $10,000 a year, a veritable barrage of “alibi” statements flooded the Congressional Record.

Lexi’s Legislative Lowdown:

Dear Readers,

I am happy to be heading into March and hopefully some warmer weather!

This week we discuss a bill proposed that would allow for electronic delivery of certain notices in property/casualty insurance transactions.

Have a nice weekend!

Lexi
Lexi R. Horton
lrh@hurwitzfine.com

One Across – 100 Years Ago:

The Buffalo News
Buffalo, New York
28 Feb 1925

PUZZLE WIZARD IN JAIL,
PAL, STUCK, ASKS KEY

Fails, However, to Crash Four-letter Word Meaning Barrier.

A well-dressed young man walked into the Pearl street police station early Saturday morning and asked to be locked up in a cel with an acquaintance of his whom he knew only as “John,” so that they could work out a crossword puzzle together.

“I hear you have John locked up here,” he said. “He’s a shark at words and I want to finish the puzzle.”

Police declined to grant his request. They did not get his name. The police blotter showed that the only man named John who was locked up for the night was John Dwyer, 31 years old, who was arrested on a charge of passing a bad check at the Ford hotel, where he has been stopping. There being no crossword enthusiasts at the station, none bothered to inquire of Dwyer, as to his prowess with verticals and horizontals.

Domenica’s Diary on Bad Faith:

Dear Readers,

I spent a wonderful seven days since the last newsletter in beautiful Finland, chasing the Northern lights, visiting Santa’s house, snowmobiling, and sledding with dogs and reindeer in a peaceful, snowy village of log cabins and igloos. Great memories and new friends were made.

I have an interesting case for you this week. Read on to find out more.

Until next time,

Domenica
Domenica D. Hart

Big Bang Banks Bitty Bucks – 100 Years Ago:

The Buffalo News
Buffalo, New York
28 Feb 1925

TWO SAFES BLOWN AT
FALLS, ONT., $50 TAKEN

NIAGARA FALLS, Ont., Feb. 27. – The office to Smith Brothers, contractors, this city, was entered today by burglars, who blew the safe and took $50. The office of the Concrete Coal & Stone company, a short distance away, was also entered and the safe blown. It contained only books.

North of the Border:

Over this past weekend, I was briefly in Charleston, S.C. to attend the FDCC Board and Administrative Meetings and had an opportunity to catch up with several FDCC members including Dan. Great to see him in person. Unfortunately, I couldn’t stay for the Winter Meeting but had to return to my desk in Calgary.

This week’s article deals with whether an insured waives solicitor client privilege over legal advice shared with a broker during the placement of complex insurance for a complex project.

‘til next time.

Heather
Heather A. Sanderson
Sanderson Law
Calgary, Alberta, Canada
hasanderson@sanderson-law.com

Headlines from this week’s issue, attached:

KOHANE’S COVERAGE CORNER
Dan D. Kohane
ddk@hurwitzfine.com

Despite Unexcused Three Years Late Notice of Lawsuit, No Material Prejudice Established So Late Notice Defense Fails

PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
sep@hurwitzfine.com

Loss of Product During Third-Party Bankruptcy Covered by Policy
Affidavit of General Counsel Does Not, by Itself, Erode Attorney/Client Privilege
Counsel’s Questioning About Status of Subsequent Lawsuit Was Prejudicial to Plaintiff and Resulted in Mistrial

LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
lss@hurwitzfine.com

See you in two.

RUFFNER’S ROAD REVIEW
Kyle A. Ruffner
kar@hurwitzfine.com

Defendant Demonstrated Reasonable Excuse and Meritorious Defense Sufficient to Vacate Default Judgment
Exhaustion of the Policy After Denial of Plaintiff’s Claim Did Not Preclude Later Payment of Claim Under Second Department Precedent

RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
rpm@hurwitzfine.com

Nothing from me this edition. See you next time.

STORM’S SIU
Scott D. Storm
sds@hurwitzfine.com

Homeowners Policy Does Not Cover Replacement Siding for Undamaged Portions of the Home, Even if New Siding on Damaged Portions Does Not Match Existing Siding
Complaint Demanding $70,000 in Damages for Breach of Contract and Unspecified Amounts for Attorney's Fees, Consequential Damages, Consequential Losses, and Punitive Damages, Does Not Satisfy the Jurisdictional Threshold of $75,000 for Federal Diversity Jurisdiction
Court Grants Insurer’s CPLR § 3211(a)(1) Motion to Dismiss Due to the Insured’s Breach of the Suit Limitation Condition

FLEMING’S FINEST
Katherine A. Fleming
kaf@hurwitzfine.com

Physical Presence Not Sole Controlling Factor Regarding Whether Minor Child Qualifies as a Resident Relative Under Parent’s Insurance Policy

GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
edg@hurwitzfine.com

New Jersey’s High Court Agrees to Hear Appeal of Intermediate Appellate Court Decision Holding an Insurer’s Refusal to Settle Was Reasonable in Light of Dual Capacity Exclusion

O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
rpo@hurwitzfine.com

Insureds Try to Incorporate Statutory Interest Provision Into All Florida Policies, Circuit Court Rejects that Argument Because It Would Circumvent the Statute and Policy Terms Themselves

ROB REACHES the THRESHOLD
Robert J. Caggiano

First Department Unanimously Affirms Order Which Granted Defendants’ Respective Summary Judgment Motions Dismissing Plaintiff’s Complaint on the Basis He Did Not Sustain Serious Injury Within the Meaning of Insurance Law § 5102(d) Where Plaintiffs Submissions in Opposition Failed to Raise Triable Issues of Fact

LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
ihl@hurwitzfine.com

Insured’s Action Dismissed Based on Suit Limitation Provision Superseded by Insurance Law §3404

LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
lrh@hurwitzfine.com

Act to Amend Insurance Law to Allow for Certain Notices to Be Delivered by Electronic Means

DOMENICA’S DIARY on BAD FAITH
Domenica D. Hart

Bad Faith Claim Against Insurance Broker Survives Motion to Dismiss

NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
hasanderson@sanderson-law.com

An Insured Did Not Waive Solicitor Client Privilege over Legal Advice It Received Regarding the Insurance Requirements for a Complex Project when It Shared that Advice with a Broker Charged with Placing that Unique and Specialized Coverage.

Until next issue, our warmest regards.

Hurwitz Fine P.C. is a full-service law firm providing legal services throughout the State of New York and providing insurance coverage advice and counsel in Connecticut and New Jersey.

NEWSLETTER EDITOR
Dan D. Kohane
ddk@hurwitzfine.com

ASSOCIATE EDITOR
Agnes A. Wilewicz
aaw@hurwitzfine.com

COPY EDITOR
Evan D. Gestwick
edg@hurwitzfine.com

INSURANCE COVERAGE/EXTRA CONTRACTUAL LIABILITY TEAM
Dan D. Kohane, Chair
ddk@hurwitzfine.com

Steven E. Peiper, Co-Chair
sep@hurwitzfine.com

Michael F. Perley

Agnieszka A. Wilewicz

Lee S. Siegel

Brian F. Mark

Scott D. Storm

Domenica D. Hart

Ryan P. Maxwell

Kyle A. Ruffner

Katherine A. Fleming

Evan D. Gestwick

Ryan P. O’Shea

Isabelle H. LaBarbera

Lexi R. Horton

Victoria S. Heist

FIRE, FIRST PARTY AND SUBROGATION TEAM
Steven E. Peiper, Team Leader
sep@hurwitzfine.com

Michael F. Perley

Scott D. Storm

NO-FAULT/UM/SUM TEAM
Dan D. Kohane
ddk@hurwitzfine.com

Ryan P. O’Shea
rpo@hurwitzfine.com

Kyle A. Ruffner
kar@hurwitzfine.com

APPELLATE TEAM
Jody E. Briandi, Team Leader
jeb@hurwitzfine.com

Topical Index

Peiper on Property and Potpourri

Lee’s Connecticut Chronicles

Ruffner’s Road Review

Ryan’s Federal Reporter

Storm’s SIU

Gestwick’s Garden State Gazette

Lexi’s Legislative Lowdown

KOHANE’S COVERAGE CORNER
Dan D. Kohane
ddk@hurwitzfine.com

02/18/25 Wesco Insurance Company, Inc v. Kookmin Best Insurance Co.
Appellate Division, First Department
Despite Unexcused Three Years Late Notice of Lawsuit, No Material Prejudice Established So Late Notice Defense Fails

Wesco's ability to seek reimbursement from KBIC for the costs of defending any given claim turns on whether Wesco provided notice of that claim to KBIC within a reasonable time under all circumstances. Although justifiable ignorance of insurance coverage may excuse a delay in giving notice of an occurrence if it made reasonably diligent efforts were made to ascertain whether coverage existed. Wesco did not give notice to KBIC until more than three years after its insured, the underlying defendant building owner (owner), was served with the summons and furthermore, Wesco failed to establish what it did during that three-year period to uncover whether the owner had other insurance.

Nonetheless, despite the late notice, KBIC was not prejudiced because Wesco promptly began investigating and defending the owner and a codefendant commercial tenant from the onset of the underlying personal injury litigation and was fully prepared to share its information relating to its investigation and defense. Moreover, KBIC failed to point out "how Wesco's defense of the [underlying] matter materially prejudiced it".

However, under its plain policy language, KBIC is only required to provide excess coverage to the named insured and any additional insured only after Wesco's primary coverage has been exhausted but has no duty to defend or reimburse Wesco its defense costs.

Editor’s Note: The only problem I have with this decision is this statement: KBIC failed to point out "how Wesco's defense of the [underlying] matter materially prejudiced it”. If notice is more than two years late, it would have been Wesco’s burden to prove that KBIC was not prejudiced, not KBIC’s proof to demonstrate that it wasn’t prejudiced.

PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
sep@hurwitzfine.com

02/18/25 Endurance Am. Ins. Co. v. StoneX Commodity Solutions, LLC
Appellate Division, First Department
Loss of Product During Third-Party Bankruptcy Covered by Policy

It appears that defendant, StoneX, lost a certain amount of soybeans it had stored at a premises owned by non-party, Express Grain Terminals (“EGT”). EGT, while in possession of the soybeans, filed for bankruptcy. It is alleged that StoneX only recovered a portion of the beans in EGT’s possession, and a claim for damages was subsequently made under the Endurance policy.

Endurance denied the claim because it maintained that StoneX could not produce evidence of exactly how many/how much soy beans were lost. StoneX maintained that reports from EGT showed that it held enough beans to cover StoneX’s inventory. Importantly, an Endorsement to the Endurance policy provided that coverage would be triggered if the insured could provide receipts that proved the storage facility maintained sufficient quantity to cover the insured’s deposits.

Endurance countered that there were not enough beans at the particular EGT warehouse. The Appellate Division rejected this argument by noting that the Endorsement was not limited to one particular location but rather could be read to mean the quantity of beans in all EGT locations.

Finally, the Court ruled that the date of loss was the date EGT filed for bankruptcy and was, thusly, dispossessed of its soybeans.

Potpourri

02/13/25 Certain Underwriters v. NL Industries, Inc.
Appellate Division, First Department
Affidavit of General Counsel Does Not, by Itself, Erode Attorney/Client Privilege

Underwriters were served with an affidavit of defendant’s general counsel wherein counsel made various statements related to factual issues in the case. In light of such disclosure, Underwriters made an application seeking to compel defendant to produce internal documentation related to statements presented by general counsel. Essentially, Underwriters argued that the preparation of the affidavit constituted a waiver of attorney/client and/or work product privileges.

In affirming the trial court, the First Department noted that many of the statements were not even “legal” in nature but instead amounted to nothing more than factual assertions. Further, if there were indicia of legal theory/work in the affidavit, Underwriters’ application failed to demonstrate that an “invasion of the privilege” was necessary.

02/13/25 Drayton v. Putman Hospital Center
Appellate Division, Second Department
Counsel’s Questioning About Status of Subsequent Lawsuit Was Prejudicial to Plaintiff and Resulted in Mistrial

In a motion to set aside the jury’s verdict dismissing plaintiff’s cause of action, the Appellate Division found reversable error and remanded the matter back to the trial court for further proceedings.

Plaintiff initially challenged that the jury verdict must be set aside as inconsistent with the facts adduced a trial. However, where there was conflict testimony between plaintiff and a nurse who witnessed the accident, the Court ruled that it was within the jury’s province to determine which version of the events it believed to be accurate.

Nevertheless, the trial was still irreparably harmed by the decision to permit defense counsel to question the plaintiff on a pending lawsuit wherein plaintiff was being sued for non-payment of a medical procedure. Because there had been no finding of fault in that suit, only allegations, the court found that the line of questioning was of no probative value to the jury. What is more, counsel’s further statement that plaintiff (or at least the veiled allusion to plaintiff) had accepted $250,000 in insurance proceeds to which he was not entitled was deemed overtly prejudicial. On that basis, where the prejudice was caused by questioning that otherwise had no probative connection to the dispute at trial, the Court found reversible error.

LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
lss@hurwitzfine.com

On the mend; be back in two weeks.

RUFFNER’S ROAD REVIEW
Kyle A. Ruffner
kar@hurwitzfine.com

02/14/25 Trinity Med., P.C. a/a/o Lewi v. Nat’l Gen. Ins. Co.
Supreme Court, Appellate Term, Second Department
Defendant Demonstrated Reasonable Excuse and Meritorious Defense Sufficient to Vacate Default Judgment

Plaintiff commenced this action to recover assigned first-party no-fault benefits for services rendered to its assignor as a result of a motor vehicle accident. The summons and complaint were served on December 22, 2020, but defendant did not serve an answer. Therefore, the plaintiff applied for a default judgment, and mailed defendant a copy of the application, on October 28, 2021.

On November 17, 2021, the defendant moved, pursuant to CPLR 3012 (d) and/or 2001, to open its default and to compel plaintiff to accept its late answer on the grounds that defendant had a reasonable excuse for its delay in answering as well as a meritorious defense to the action. Defendant submitted the affidavit of an employee at defendant's attorney's office who was responsible for serving the answer, stating the answer was timely prepared but she failed to serve it, amounting to law office failure. Defendant argued this failure should be excused by the Civil Court, as there was no evidence that it was willful or that plaintiff had been prejudiced by the default. As a meritorious defense, defendant asserted that the subject action was barred by res judicata or collateral estoppel pursuant to a declaratory judgment stating there was no duty to provide coverage for claims as the subject accident was the result of an intentional act.

Plaintiff cross-moved for summary judgment, arguing the defendant only provided vague details leading to the oversight in serving an answer and that mere neglect was not a reasonable excuse. Further, plaintiff argued the declaratory judgment did not have preclusive effect because it involved different parties and causes of action and was not fully litigated due to the default. However, the Civil Court granted the defendant’s motion to open the default. Plaintiff appealed.

On appeal, the court confirmed that in order to open its default and obtain an order compelling plaintiff to accept a late answer, defendant had to provide a reasonable excuse for the delay in answering and demonstrate a potentially meritorious defense to the action. The determination of what constitutes a reasonable excuse lies within the trial court's discretion, and courts may accept law office failure as a reasonable excuse (CPLR 2005) where there is a lack of evidence of willfulness or neglect. Here, the law office failure resulted from an isolated, inadvertent mistake, not from repeated neglect and plaintiff did not demonstrate any prejudice caused by defendant's default.

Defendant also demonstrated a potentially meritorious defense to the action, as the declaratory judgment was a conclusive final determination that defendant was not obligated to provide coverage or reimbursements for any and all no-fault related services submitted by plaintiff and plaintiff's assignor for the subject motor vehicle accident and, thus, the instant action should be barred by res judicata. Accordingly, the order vacating the default and compelling plaintiff to accept a late answer was affirmed.

02/13/25 N. Queens Surgical Ctr. a/a/o Armand v. Lancer Ins. Co.
Supreme Court, Appellate Term, Second Department
Exhaustion of the Policy After Denial of Plaintiff’s Claim Did Not Preclude Later Payment of Claim Under Second Department Precedent

In an action by a provider to recover assigned first-party no-fault benefits, the parties stipulated that: (1) plaintiff had established its prima facie case; (2) defendant had timely denied plaintiff's claim on the ground of lack of medical necessity; and (3) after defendant denied plaintiff's claim, the insurance policy limits were exhausted due to the insurer’s payment of claims it received after denying the claim at issue. The insurer’s sole argument at trial was that the insurance policy limits had been exhausted after denial of the subject claim. The District Court found in favor of plaintiff, holding the denial of claim based on medical necessity was not proper, awarding the principal sum of $7,582.15.

The insurer appealed, asserting, that it need not pay the claim at issue because, after the denial of this claim, subsequent payments exhausted the available coverage. However, the court applied Second Department precedent established in Alleviation Med. Servs., P.C. v. Allstate Ins. Co., 55 Misc 3d 44 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]. In that case, the court interpreted the requirement in 11 NYCRR 65-3.8 [b] [3] that fully verified claims are to be paid in the order they are received also applies to claims that were denied, which implicitly declares the claim was fully verified. Therefore, the argument that an insurer need not pay the present claim because the subsequent payment of other claims exhausted the policy lacked merit. Therefore, the District Court’s holding was affirmed.

In contrast, Harmonic Physical Therapy, P.C. v. Praetorian Ins. Co., 47 Misc 3d 137[A], 2015 NY Slip Op 50525[U] [App Term, 1st Dept 2015]) the Appellate Term, First Department, held that claims which are timely denied by an insurer do not hold a place in the priority-of-payment queue ahead of subsequently filed claims that were paid by the insurer, thus exhausting available coverage.

RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
rpm@hurwitzfine.com

Nothing from me this edition. See you next time.

STORM’S SIU
Scott D. Storm
sds@hurwitzfine.com

01/30/25 Grote v. Am. Economy Ins. Co.
United States District Court, Eastern District of Pennsylvania
Homeowners Policy Does Not Cover Replacement Siding for Undamaged Portions of the Home, Even if New Siding on Damaged Portions Does Not Match Existing Siding

A windstorm caused a tree to fall on the Grotes' home, damaging some siding and possibly the roof. The Grotes filed an insurance claim with AEIC under their homeowners policy. AEIC agreed to cover replacement of damaged siding but not undamaged siding or the shingled roof. The parties dispute whether the entire siding should be replaced and whether the roof was damaged. The Grotes allege the replacement siding AEIC proposes for the damaged siding is not "of like kind and quality," or of "equivalent construction," so AEIC is required to replace all of the siding on the property.

The Court held that the policy does not cover replacement siding for undamaged portions of the home, even if new siding on damaged portions does not match existing siding. The policy language clearly and unambiguously covers only damaged property and includes an exclusion for matching undamaged siding that AEIC "will not pay for the cost to replace and/or match any undamaged siding . . . due to any mismatch between the existing undamaged siding . . . and any new materials used to repair or replace the damaged siding . . . because of . . . obsolescence or unavailability of materials." Therefore, regardless of whether replacement materials are of "like kind and quality" or "equivalent construction," the Policy does not cover replacement siding on undamaged portions of the home.

Other Pennsylvania courts have rejected similar arguments seeking coverage for undamaged portions to achieve matching, “because the language of the contract ‘clearly and unambiguously requires [the insurer] to pay the replacement cost of the part of the building damaged.’" The Court said that “Reading the Policy to mandate the replacement of siding not damaged by the storm would allow the Grotes to ‘exploit their losses and use them as an opportunity to remodel their home at the insurer's expense’”.

However, there was an issue of fact whether the windstorm caused damage to the shingled roof, precluding summary judgment on that issue. There is conflicting evidence from experts regarding whether the storm caused damage to the shingled roof, creating a factual dispute.

A public adjuster who possesses skill or knowledge greater than the average layperson may be qualified to opine on causation.

02/06/25 Deswert v. Travelers Commercial Ins. Co.
United States District Court, Northern District of New York
Complaint Demanding $70,000 in Damages for Breach of Contract and Unspecified Amounts for Attorney's Fees, Consequential Damages, Consequential Losses, and Punitive Damages, Does Not Satisfy the Jurisdictional Threshold of $75,000 for Federal Diversity Jurisdiction

Plaintiff owns property in New York and is a citizen of Pennsylvania. Defendant Travelers is a citizen of Connecticut and issued a policy to Plaintiff. The Plaintiff alleges a plumbing leak caused water damage to his property. Count One of the complaint demands $70,000 in damages for breach of contract. Count Two alleges that Defendant "engaged in bad faith claims handling" and "engaged in bad faith in the investigation and adjustment of the claim and improperly denied the claim." It seeks unspecified attorney fees, and unspecified consequential damages, consequential losses, and punitive damages.

In order to remove a case from state court to federal court based on diversity jurisdiction the removing party must establish that: (1) there is complete diversity of citizenship of the parties; and (2) the amount in controversy exceeds $75,000, exclusive of costs and interest.

Defendant's Notice of Removal describes the Complaint's allegations as follows:

Upon information and belief, Plaintiff seeks an amount in excess of $75,000. In addition to the $70,000 specified by Plaintiff for the first cause of action for breach of contract, Plaintiff seeks additional ["]consequential losses, consequential damages, and punitive damages" in relation to the second cause of action for bad faith. [Defendant] reasonably believes that the amount sought by Plaintiff for the second cause of action exceeds $5,000.

Generally, there is a rebuttable presumption that the face of the complaint is a good faith representation of the actual amount in controversy. However, this presumption may be rebutted when there is a legal certainty that the amount recoverable does not meet the jurisdictional threshold. “In a diversity case, if a court makes a face-of-the-complaint determination that the $75,000 amount in controversy cannot be recovered 'to a legal certainty,' the case is dismissed for lack of subject matter jurisdiction." In addition, conclusory allegations and boilerplate pleadings are insufficient to establish the amount in controversy.

The Court found that Count Two alleging bad faith is duplicative of Count One alleging breach of contract, as it does not allege violation of any duty independent of the insurance contract. “[U]nder New York law, if ‘the basis of a party's claim is a breach of solely contractual obligations, such that the plaintiff is merely seeking to obtain the benefit of the contractual bargain through an action in tort, the claim is precluded as duplicative’”. “Under New York law, because 'every contract contains an implied covenant of good faith and fair dealing,' a 'cause of action alleging a breach of good faith is duplicative of a cause of action alleging breach of contract.'"

As such, the Court held that there is a "legal certainty" that the $70,000 stated on the face of the Complaint does not exceed the $75,000 jurisdictional threshold. The case was remanded to New York State Supreme Court for lack of subject matter jurisdiction.

02/13/25 Aguasvivas v. Mtn. Val. Indem. Co.
Supreme Court, Bronx County
Court Grants Insurer’s CPLR § 3211(a)(1) Motion to Dismiss Due to the Insured’s Breach of the Suit Limitation Condition

Plaintiff purchased a homeowner's policy from defendant that insured his property in the Bronx. On April 28, 2022, the property sustained damage from a fire. The Plaintiff filed a claim, which defendant denied on February 2, 2023. The Plaintiff commenced this law on July 3, 2024, alleging breach of contract and fraud. The policy contained a condition requiring any action to be started within one year after the date of loss.

The court held that while the policy prescribed a one-year statute of limitations, Insurance Law § 3404 supersedes this with a mandatory two-year period for fire insurance claims. The cause of action accrued on the date of the fire, so the plaintiff had until April 28, 2024, to file the lawsuit. Since the lawsuit was filed on July 3, 2024, it was outside the two-year statute of limitations and, therefore, time barred.

The court rejected the plaintiff's argument that the policy language was ambiguous, finding that "date of loss" clearly referred to the date of the fire in the context of the policy. In interpreting the phrase “date of loss”, the Court held that “while the policy does not define date of loss, to the extent that the policy, in relation to both dwelling and personal property coverage, states that it covers ‘direct loss . . . only if that loss is physical loss to property,’ it is clear that the date of loss referenced in section 11 is that prescribed by law, namely the date of the event giving rise to coverage under the policy, i.e., the date [the property] was damaged in a fire, such that plaintiff sustained a physical loss to portions of [the property]”. The suit limitation condition also applied to the fraud cause of action.

FLEMING’S FINEST
Katherine A. Fleming
kaf@hurwitzfine.com

02/20/25 Hill v. State Farm Mut. Auto. Ins. Co.
Kentucky Supreme Court
Physical Presence Not Sole Controlling Factor Regarding Whether Minor Child Qualifies as a Resident Relative Under Parent’s Insurance Policy

Hill suffered injuries and lost a pregnancy when her vehicle was struck by another car driven by a seventeen-year-old. The teen, pursuant to a family court order, was in the sole legal custody of his father for nine uninterrupted years prior to the collision. The mother had not been exercising custody. The teen’s driver’s license, court documents, and employment records listed his father’s address as his own, and he was listed as a dependent on his father’s income taxes. However, the teen had not been physically staying with his father for three months when the accident occurred. Instead, he had been staying at his aunt’s house or with friends. The accident occurred when the teen was driving his aunt’s vehicle as a permissive user.

Hill sued for damages from the collision. The coverage question was whether the teen qualified as a resident relative under the father’s policy with State Farm. The policy defined “resident relative” as one who “resides primarily” with the named insured. The policy did not define the terms “resident,” “resides” or “primarily.” In Kentucky, an unemancipated minor cannot be without a home or guardian. In order to determine whether there was coverage, the issue was whether residency as used in the insurance policy meant legal domicile or actual physical residence. The trial court granted summary judgment in favor of State Farm’s denial of coverage. The Court of Appeals affirmed, finding the policy’s language clear and unambiguous and reasoning that the teen was not living at his father’s house.

The Kentucky Supreme Court disagreed with the appellate court’s reasoning that physical presence was the controlling factor without considering the teen’s status as a minor or the family custody orders. The Court found the term “resident relative” was ambiguous under these circumstances. For the vast majority of the last nine years, the teen had lived with his father, and the other facts of the case created a strong argument that the teen was “primarily” residing with his father. Accordingly, the Court reversed and remanded.

GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
edg@hurwitzfine.com

02/20/25 Mist Pharms., LLC v. Berkley Ins. Co.
New Jersey Supreme Court
New Jersey’s High Court Agrees to Hear Appeal of Intermediate Appellate Court Decision Holding an Insurer’s Refusal to Settle Was Reasonable in Light of Dual Capacity Exclusion

Last year, the New Jersey intermediate appellate court overturned a trial court ruling that found that an insurer’s refusal to settle an underlying action was unreasonable. The intermediate appellate court held that because the global settlement package represented the separate interests of several entities that were not insureds under the policy, the insurer’s refusal to settle the claim was reasonable in light of the policy’s dual capacity exclusion.

The underlying facts are these. Several “Mist” entities were sued by a company called CelestialRx, which alleged that Mr. Krivulka, a director of Akrimax Pharmaceuticals, engaged in a scheme of self-dealing which defrauded Celestial. Specifically, Celestial asserted that Krivulka inserted various other entities that he controlled and/or invested in (including Mist) as intermediaries in deals between Akrimax and other pharmaceutical companies. The “middlemen” in these deals would receive a cut of the revenue from the deal.

At the same time as serving as a director of Akrimax, Krivulka chaired Mist’s Board of Directors and held over 90% of Mist’s company. Krivulka also controlled other Mist entities other than Berkley’s named insured (which was only Mist Pharmaceutical).

Mist Pharm. had a directors and officers policy with Berkley, written on a claims made and reported basis. The policy contained a dual capacity exclusion, which provided that Berkley was not liable to make payment for claims based on any wrongful act of any “insured person” serving in their capacity as a director or officer of any entity other than an “insured entity.”

After the underlying action was commenced, Berkley issued a reservation of rights letter, explaining that coverage for Krivulka would be limited to claims against him in his capacity as chairman of Mist Pharmaceutical, and that there would be no coverage for claims arising out of his roles with any other entity. Since, according to Berkley, the vast majority of the claims against Krivulka were brought in his capacity as director of other non-insured organizations, it offered to contribute 10% toward defense costs.

The underlying action was eventually set down for mediation. Leading up to mediation, Berkley wrote to Mist again, highlighting the dual capacity exclusion. In response, Mist brought this declaratory judgment action, seeking coverage from Berkley.

While this DJ was pending, the parties to the underlying case continued their settlement negotiations. Eventually, Mist sought Berkley’s consent to settle and again asked for indemnification. In doing so, Mist expressed its opinion that because the underlying plaintiff sought joint and severally liability against the various defendants, the legal fees and expresses would be generally the same across all defendants. Berkley again refused the request, on the ground that more information was needed.

Months later, Mist reached a $12 million global settlement, agreeing to bear 25% liability (still without having obtained consent from Berkley). After Berkley refused to indemnify Mist for its share of the settlement, summary judgment motions were filed in the DJ.

The trial court ruled that Berkley was required to fund the settlements. In so holding, the trial court relied upon Fireman’s Fund Ins. Co. v. Sec. Ins. Co. of Hartford, 72 N.J. 63 (1976), which held that an insurer has a duty to not unreasonably without consent to settle. The trial court held that Berkley’s refusal to consent to the settlement was unreasonable under Fireman’s Fund because Mist’s allocation of the global settlement was in excess of the Berkley policy limit and was below the potential liability Mist faced. Appeal was taken.

The Appellate Division reserved the order of the trial court, on the ground that it never considered the application of the dual capacity exclusion. While the trial court was correct in that Mist’s allocation of the global settlement went beyond its policy limit and was below its potential liability exposure, and Berkley withheld consent to settle, the intermediate appellate court held that Berkley’s refusal to consent was still reasonable.

Among the factors considered by the intermediate appellate court was the fact that the global settlement represented the interests of multiple entities, most of which were not insured under the Berkley policy. Also, the intermediate appellate court found that Berkley reserved its right to rely upon its dual capacity exclusion from the very inception of the claim to the extent Krivulka was held liable in capacities other than those for which he was insured.

This past week, New Jersey’s high court agreed to review the decision of the intermediate appellate division. We will monitor the developments closely.

O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
rpo@hurwitzfine.com

02/21/25 Riley v. Heritage Prop & Cas. Ins. Co.
United States Court of Appeals, Eleventh Circuit
Insureds Try to Incorporate Statutory Interest Provision Into All Florida Policies, Circuit Court Rejects That Argument Because It Would Circumvent the Statute and Policy Terms Themselves

You may recall I previously discussed Safont v. State Farm Fla. Ins. Co. in the January 31, 2025. Well, this matter is a follow up to that decision that reiterates the core concept of insurance policies, a policy’s plain terms control the insurer’s obligations to an insured.

This matter involved a consolidated appeal of breach of contract actions brought against two insurers for the failure to pay interest on untimely payments. In 2017, Hurricane Irma damaged the insureds’ respective properties and each failed to agree on the damage in value in each case. The insureds each received an appraisal award which the insureds claim was paid in a timely manner, thus requiring Fla. Stat § 627.70131(5)(a)’s interest payment provision to apply.

In Safont and Tyler v. State Farm Fla. Ins. Co. the Appellate Court held that while Fla. Stat § 627.70131(5)(a) did not create a private right of action, a standalone provision to provide interest within an insurance policy does. The trouble for the Riley appellants is that the respective policies at issue contained no such standalone promise to pay interest. So, the Riley appellants attempted to incorporate the statute’s language into the policies themselves. For reference, the statute reads:

“Any payment of an initial or supplemental claim ... made 90 days after the insurer receives notice of the claim, or made more than 15 days after there are no longer factors beyond the control of the insurer which reasonably prevented such payment, which-ever is later, bears interest at the rate set forth in s.55.03. Interest begins to accrue from the date the insurer receives notice of the claim. The provisions of this subsection may not be waived, voided, or nullified by the terms of the insurance policy ... However, failure to comply with this subsection does not form the sole basis for a private cause of action. (emphasis added).

Notably, the statute itself states there is no private cause of action for a failure to comply with its obligations. The Appellants homed in on “this subsection may not be waived, voided, nullified by the terms of the insurance policy” to support their incorporation argument. They paired this language with Fla. Stat. § 627.418(1), which requires policies not in compliance with the State’s Insurance Code to be construed as if in full compliance with the code. While creative, the court found that position lacked legal merit.

In using the pair of statutes, the Court found that reasoning would render 627.70131(5)(a)’s bar on private actions superfluous. Indeed, § 627.418(1)’s compliance obligation applies only to policies in direct conflict with the Florida Insurance Code. Here, the policies in question did not conflict with the Code nor did the policies contain an interest provision at all.

ROB REACHES the THRESHOLD
Robert J. Caggiano

02/11/25 Krmic, et al v. Corrie, et al
Appellate Division, First Department
First Department Unanimously Affirms Order Which Granted Defendants’ Respective Summary Judgment Motions Dismissing Plaintiff’s Complaint on the Basis He Did Not Sustain Serious Injury Within the Meaning of Insurance Law § 5102(d) Where Plaintiffs Submissions in Opposition Failed to Raise Triable Issues of Fact

This case stems from a 2016 motor vehicle accident where a vehicle owned and operated by Plaintiff, Nikola Krmic, collided with a vehicle operated by Defendant Andrew J. Corrie, owned by Defendant Charlie Xavier Salamanca Roman. As a result of this accident, Plaintiff Nikola alleged an injury to his cervical spine. He claimed that these injuries met the Serious Injury Threshold under the following categories of Insurance Law § 5102(d): permanent consequential limitation of use, significant limitation of use, and 90/180 day. Plaintiff’s spouse, Ana Krmic, also joined the suit in a derivative nature claim loss of consortium.

Both Defendants made motions for summary judgment seeking to dismiss the complaint, arguing that the injured Plaintiff did not sustain a serious injury as alleged. In support of these motions, Defendants submitted an expert radiologist report and IME neurologist report. The Supreme Court, Bronx County, granted both Defendants’ motions and dismissed the complaint – prompting appeal by Plaintiffs.

On review, the First Department agreed with the lower court’s findings. Specifically, Defendants’ expert radiologist opined that findings in post-accident imaging were degenerative and preexisting, and thus not causally related to the subject accident. The IME neurologist also opined as to similar findings. Further, although the IME neurologist found certain range of motion limitation of plaintiff’s cervical spine during the exam, the physician highlighted that Plaintiff’s own reviewed medical records in months after the accident showed plaintiff to have normal range of motion. The First Department found these submissions sufficient to meet the prima facie burden for Defendants on their motions, subject to Plaintiffs’ ‘significant’ and ‘permanent’ § 5102 claims.

In opposition, Plaintiffs did not raise a triable issue of fact. Notably, Plaintiffs only submitted one piece of evidence which was in admissible form – a report of a consulting orthopedic surgeon the injured Plaintiff only once, six years after the accident. The First Department found such an exam too far removed from the subject accident to raise an inference that any limitations were causally related to the collision. Additionally, that physician did not reconcile why any limitations at that time differed from Plaintiff’s normal range of months closer to the accident or the degenerative findings. Lastly, it was noted that the lack of causation defeats the ‘90/180 day claim’ – but nevertheless Plaintiff testified that he returned to work as a cleaner two weeks after the accident.

Accordingly, the First Department unanimously affirmed the Order of Supreme Court, Bronx County, granting Defendants’ respective motions dismissing the complaint on the grounds that Plaintiff Nikola Krmic’s injuries did not meet the serious injury threshold of Insurance Law § 5102(d).

LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
ihl@hurwitzfine.com

02/13/25 Aguasvivas v. Mountain Val. Indem. Co.
New York State Supreme Court, Bronx County
Insured’s Action Dismissed Based on Suit Limitation Provision Superseded by Insurance Law §3404

Wanny Aguasvivas brought an action against Mountain Valley Indemnity Company (“Mountain Valley”) on July 3, 2024, asserting fraud and breach of contract. The plaintiff had purchased a homeowners insurance policy. The property covered under the policy was damaged by a fire on April 28, 2022. On February 2, 2023, Mountain Valley denied coverage, after plaintiff appeared for an examination under oath.

Mountain Valley made a pre-answer motion to dismiss based upon documentary evidence. The policy contained a Suit Limitation provision, which stated:

Suits Against Us. No action can be brought unless the policy provisions have been complied with and the action is started within one year after the date of loss.

Case law in New York is clear, where the parties set down their agreement in writing, the clear, complete document should be enforced according to its terms. Courts refrain from interpreting agreements in a manner that implies something not included by the parties. If a contract is not reasonably susceptible to multiple meanings, the court is not free to alter it.

It is well-settled in New York that parties to an insurance policy can agree to a shorter limitation of actions than that provided in the general Statute of Limitations. However, it is important to note the requirements under statutory law Insurance Law §3404, which governs policies providing coverage for fire damage. Insurance Law §3404 states:

[n]o suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless all the requirements of this policy shall have been complied with, and unless commenced within twenty-four months next after inception of the loss.

The statutory language cited above represents the shortest period parties may contract amongst themselves to limit when lawsuits may be brought. As such, courts in New York interpreting suit limitation provisions will use the statutory limitation cited above, to supersede the language of fire damage policies attempting to shorten the period for a time less than two years. The Mountain Valley policy did not abide by the statutory requirements, and therefore, the court looked to the statute to supersede the plain language of the policy, to comply with New York law.

The court additionally discussed the date where the cause of action begins to accrue based on the language of the policy. Under an insurance policy a claim for breach of contract begins to accrue on the date of the loss. Here, both causes of action in the complaint, regarding fraud and disclaiming coverage for the loss, stem from Mountain Valley’s failure to provide coverage for a fire which occurred on April 28, 2022.

In this case, the plaintiff commenced the lawsuit on July 3, 2024. However, the date of the fire loss was April 28, 2022. Since Mountain Valley’s evidence conclusively established that the action was not commenced for two years and three months after the loss, it was time-barred. As such, the action was dismissed in its entirety.

LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
lrh@hurwitzfine.com

02/28/25 New York Senate Bill S3352
Act to Amend Insurance Law to Allow for Certain Notices to Be Delivered by Electronic Means

Introduced on January 8, 2025, Bill S3352 seeks to amend insurance law and the vehicle and traffic law to allow electronic delivery of certain notices.

The Bill seeks to amend Insurance Law § 3458 (b) to allow for any notice of document required under this chapter to be delivered by paragraph (C) of Section Three Hundred of the Vehicle and Traffic Law in a property/casualty insurance transaction may be delivered by electronic means so long as it meets the requirements of Article three of the state technology law.

Further, Section 313 of the Vehicle and Traffic Law would be amended to include:

(C) An electronic notice that complies with section three thousand four hundred fifty-eight of the insurance law shall be sufficient for the purposes of this section.

DOMENICA’S DIARY on BAD FAITH
Domenica D. Hart

02/19/25 Frydman v. Endurance American Insurance Company
Appellate Division, Second Department
Bad Faith Claim Against Insurance Broker Survives Motion to Dismiss

The plaintiff commenced this action to recover amounts due and payable under an insurance policy. The plaintiff alleged that the policy was fully paid for but never delivered to him.

Alliant Insurance Services, Inc. (“Alliant”), is the successor to Crystal & Company, the insurance broker that allegedly was supposed to obtain a policy from the defendant Endurance American Insurance Co. (“Endurance”) The plaintiff asserted causes of action to recover damages for breach of contract and breach of the implied covenant of good faith and fair dealing.

The broker, Alliant, moved to dismiss the cause of action pleading breach of the implied covenant of good faith and fair dealing insofar as asserted against it.

The implied covenant of good faith and fair dealing embraces a pledge that neither party shall do anything that will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract and is breached when a party acts in a manner that deprives the other party of the benefits of the contract. For a complaint to state a cause of action alleging breach of an implied covenant of good faith and fair dealing, the plaintiff must allege facts which tend to show that the defendant sought to prevent performance of the contract or to withhold its benefits from the plaintiff. Here, the plaintiff alleged facts tending to show that Alliant's predecessor sought to prevent performance of an agreement with the plaintiff or to withhold the benefits of that agreement from the plaintiff.

Any claim for breach of contract or breach of the covenant of good faith and fair dealing accrued on the date of the breach. Accepting the allegations in the amended complaint as true, the plaintiff requested a copy of the operative policy by email on October 23, 2016. He alleged that he did not receive a response to that email. The statute of limitations for the breach of the covenant of good faith and fair dealing is six years. The plaintiff first asserted its claims against Alliant in September 2022, less than six years after the alleged breach.

NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
hasanderson@sanderson-law.com

02/14/25 Irving Shipbuilding Inc. v. Beazley Syndicates AFB 2623
Nova Scotia Supreme Court
An Insured Did Not Waive Solicitor Client Privilege Over Legal Advice It Received Regarding the Insurance Requirements for a Complex Project When It Shared That Advice with a Broker Charged With placing That Unique and Specialized Coverage

In 2014, the Government of Canada committed to the acquisition of six Arctic and Offshore Patrol Ships (AOPS) for the Royal Canadian Navy. Designated the Harry DeWolf - class in honour of Vice-Admiral Harry DeWolf, a Canadian wartime naval hero, the vessels are being delivered through the AOPS project, under the National Shipbuilding Strategy. Five of the ships have been built and delivered and the sixth is on schedule for delivery in August 2025. Irving Shipbuilding Inc. (ISI) was appointed as the prime contractor to build these new vessels.

The negotiations that led to the issuance of this contract to ISI began in 2011. At that time, Beazley issued a ‘made-to-order’ insurance policy for the AOPS project. The policy was put in place with the assistance of ISI’s broker, Integro.

ISI had a dispute with a sub-contractor, Odense Maritime Technology (OMT), and that entity’s design subcontractor that went to arbitration. OMT defended and counterclaimed. Beazley funded OMT’s defence and counterclaim but refused to pay ISI’s claim expense to launch its claim. Beazley also refused to pay the costs incurred by ISI to defend the OMT counterclaim.

As a result of the arbitral proceeding, OMT was ordered to pay about C$170 million in damages to ISI. Both OMT and ISI sought coverage under the Beazley policy. Beazley stated that its liability to pay was limited to $25 million. Both ISI and OMT disputed this position. That dispute gave rise to this coverage action. This decision does not explain the basis of that dispute, rather, it deals with whether ISI rightfully claimed solicitor client privilege over documents and correspondence between itself and its broker during the negotiation and drafting of the policy.

Both ISI and Beazley agreed that those documents and that correspondence was relevant to the coverage dispute. The issue was whether ISI waived any solicitor client privilege and common interest privilege over the documents when it shared them with the broker.

Privilege Was Waived

ISI’s internal counsel and its external counsel, Stewart McKelvey/McCarthy Tétrault, received and reviewed the Government of Canada’s strict and specialized instructions for the insurance to be placed on the AOPS project. ISI shared that legal advice with its broker, Integro. ISI claimed that “it brought Integro into the tent” so that Integro, who had a common interest with ISI in placing the policy, could understand the insurance requirements. Therefore, solicitor client privilege was not waived.

For its part, Beazley argued that ISI's lawyers never provided legal advice to the insurance brokers, nor did the brokers provide any legal advice to ISI. Further, any privilege was waived when it was disclosed to a third party.

The Court’s Decision

Much of this very long and involved judgment is dedicated to a useful discussion of solicitor client privilege and common interest privilege. The court then discussed the role that Integro played in placing this insurance with Beazley.

The court stated that Integro was to broker a very specific type of insurance coverage for the Project, one which met the Canadian Government’s specifications in every aspect. In some instances, it had to negotiate directly with Beazley on ISI’s behalf, as Beazley acknowledges. To do so, Integro needed complete familiarity with the legal advice that ISI had received, so that it could understand whether what was under discussion met the Government’s exacting specifications. In addition, Integro advised ISI’s lawyers in advising ISI throughout the period of time that the Policy was being negotiated and drafted. Specifically, the Court stated:

“The purpose, or role being fulfilled by Integro throughout the time interval relevant to the generation of the documents and communications at issue was essential to the operation of the solicitor-client relationship of ISI and its internal and external counsel. It required that this advice be made available to Integro. Further, the specialized nature of the Policy necessitated the very integrated and cohesive roles shared by ISI, Integro, and all of the legal counsel involved, as the Policy was negotiated and implemented with Beazley. Such cooperation was needed not only to obtain the Policy, but to manage and maintain it in accordance with ISI’s needs.”

In view of this unique relationship, ISI established, on a prima facie basis: first, that the communications between itself and its counsel with respect to its insurance requirements are privileged and second, that this privilege was not waived when the information respecting that advice was provided either by ISI personnel to those of Integro, or when particulars of that advice were discussed by ISI’s counsel directly with Integro personnel, or, thirdly, when personnel of Integro, or those of ISI, discussed that advice amongst themselves.

In the eyes of the Court, Beazley failed to demonstrate that the privilege should be disregarded. However, the door was left open for Beazley to demonstrate that privilege ought to be disregarded if further information is obtained from the discovery process. In the meantime, Beazley must pay ISI’s court costs to respond to its motion for production.

Coverage Pointers - Volume XXVI No. 18

Mon, 02 Jun 2025 16:15:44 +0000

Volume XXVI, No. 18 (No. 691)
Friday, February 14, 2025
A Biweekly Electronic Newsletter

In some jurisdictions, newsletters such as this may be considered Attorney Advertising.

If you know of others who may wish to subscribe to this free publication, or if you wish to discontinue your subscription, please advise Dan D. Kohane at ddk@hurwitzfine.com or call 716-849-8900.

You will find back issues of Coverage Pointers on the firm website listed above.

Dear Coverage Pointers Subscribers:

Do you have a situation? We love situations.

Happy Valentine’s Day

This publication has been around for a long time. This story is from our February 7, 2008, Valentine’s edition, Volume IX, No. 16, and a tale that Steve Peiper has always appreciated:

Happy Valentine’s Day:

How do you celebrate Valentine's Day? Do you do it the modern way and send cards, candy, flowers, and gifts? I hope not. I thought a little history of the holiday would help you recreate a more traditional approach, steeped in history.

During the third century in Rome, Emperor Claudius II who was only emperor for two short years, by the way (August 268 to January 270) was preparing to fight the Goths. [Editor's note: who wouldn't fight the Goths, given the opportunity?]

Anyway, he decided that single men would be better soldiers than married ones, so he outlawed marriage for young men. However, one young priest, Valentine, believing that the Emperor's decree was unjust, continued to perform weddings. Rumor had it that he had a financial interest in a chapel and later moved to Vegas. Claudius learned of Valentine's defiance and had him imprisoned. While in jail, he fell in love with the jailer's daughter and it is said that before his death, he wrote her a love letter, which he signed "From your Valentine."

Valentine's feast day was set to commemorate his death in February 270, and that was also used to make it into a Christian holiday, the pagan Lupercalia Festival, which also celebrated the beginning of spring. That Festival involved the sacrifice of a goat for fertility and a dog for purification. The goat hide would be sliced into strips, dipped in sacrificial blood, and taken to the streets by young men who would slap women with the strips, apparently making the women more fertile. Pope Gelasius, seeking to end the pagan holiday but continue the tradition, declared February 14 as St. Valentine's Day around 496 A.D. So, there you go. Forget the card, forget the candy, and forget the flowers. Chase your sweetheart around the room and slap him or her with dried goat strips dipped in blood, and you'll be celebrating the holiday the right way.

Just don't tell the PETA people.

Artificial Intelligence v. Human Intelligence – A Word to the Wise

Many of you are familiar with the case of the New York lawyers who were sanctioned because they submitted citations for non-existing cases, which were created by artificial intelligence. One would think that the message would be clear – don’t submit cases to a court, generated by artificial intelligence (or otherwise), without reading them.

But it happened again, this time in Wyoming federal court. The judge was not happy and ordered Morgan & Morgan to show cause why they should not be sanctioned. If you want to read the law firm’s first response to the court order, it’s here. Both Mr. Morgan and the local attorney who was hired to work on the case, filed declarations indicating that they had nothing to do with the filing, leaving the responsibility to the lawyer who actually filed the legal memorandum. The lawyer who did the actual submission just filed his explanation on Thursday, and you can find that here.

We can expect the court to file its decision on sanctions very shortly.

The message is clear. Do not think, for a moment, that artificial intelligence will always trump real intelligence. It is a compelling lesson, as my partner Larry Ross just said to me, for those who use these tools.

When an Employer Liability Carrier is Sued for Coverage, is the Lack of Grave Injury a Coverage Defense? This one will be of interest only to real coverage nerds.

There’s an interesting case in my column this week, involving, in part, a claim made for coverage under a New York Employer’s Liability policy. In most cases, unless the plaintiff has sustained a “grave injury”, a third-party action for contribution against an employer that provided Workers Compensation cannot be maintains (a small number of exceptions, notwithstanding). In this case, the employers liability carrier was able to get the declaratory judgment action dismissed on the ground that the plaintiff did not sustain a grave injury and therefore the EL coverage would never trigger. Normally, the issue the underlying tort action, not a coverage action.

First 45 Years Completed

Forty-five years ago, on February 12, Ann Evanko and I were sworn in as lawyers at the Appellate Division, Fourth Department. Our classmate and my law partner, Larry Ross, were admitted around the same time, downstate. That’s a long time to do anything. It’s been a fun ride and I’m still up on the horse.

Need a mediator for an insurance dispute? Coverage mediation is a thing! Subject matter expertise may be useful.

I’ve been doing a considerable amount of mediation all over the state (and country). Reach out.

Newsletters:

We have other firm newsletters to which you can subscribe by simply letting the editor (or me) know, including a new publication, which was created to advise on business and employment law questions:

Premises Pointers: This monthly electronic newsletter covers current cases, trends and developments involving premises liability and general litigation. Our attorneys must stay abreast of new cases and trends across New York in both State and Federal Court and will now share their insight and analysis with you. This publication covers a wide range of topics including retail, restaurant, and hospitality liability, slip and fall accidents, snow and ice claims, storm in progress, inadequate/negligent security, inadequate maintenance and negligent repair, service contracts, elevator and escalator accidents, swimming pool and recreational accidents, negligent supervision, assumption of risk, tavern owner and dram shop liability, homeowner liability and toxic exposures (just to name a few!). Please drop a note to Jody Briandi at jeb@hurwitzfine.com to be added to the mailing list.
Labor Law Pointers: Hurwitz Fine P.C.’s Labor Law Pointers offers a monthly review and analysis of every New York State Labor Law case decided during the month by the Court of Appeals and all four Departments. This e-mail direct newsletter is published the first Wednesday of each month on four distinct areas – New York Labor Law Sections 240(1), 241(6), 200 and indemnity/risk transfer. Contact Dave Adams at dra@hurwitzfine.com to subscribe.
Products Liability Pointers: Whether the claim is based on a defective design, flawed manufacturing process, or inadequate instructions/warnings, product liability litigation is constantly evolving. Products Liability Pointers examines recent New York State and Federal cases as well as high court decisions from other jurisdictions, keeping our readers up to date with the latest developments and trends, and providing useful practice tips and litigation strategies. This monthly newsletter covers all areas of product liability litigation, including negligence, strict products liability, breach of warranty claims, medical device litigation, toxic and mass torts, regulatory framework, and governmental agencies. Contact V. Christopher Potenza at vcp@hurwitzfine.com to subscribe.
Medical & Nursing Home Liability Pointers. Medical & Nursing Home Liability Pointers provides the latest news, developments, and analysis of recent court decisions impacting the medical and long-term care communities. Contact Elizabeth Midgley at emm@hurwitzfine.com to subscribe.

Valentine’s Cards for those Behind Bars – 100 Years Ago:

The Buffalo News
Buffalo, New York
14 Feb 1925

SEVERAL PRISONERS AT
JAIL RECEIVE VALENTINES

“Two Gun” Cotter Gets Tender
Sentiments – Jailer Expectant.

Valentine’s day was observed at the jail Saturday. George W. Bittle, who is awaiting a second trial on a charge of murder in connection with the killing of Rufus Eller, clerk in a Genesee street jewelry store, was the recipient of a Valentine from his wife and one from an unknown sender. Stella Mackowska, who was also implicated in the Eller murder and who is also awaiting a second trial, was not remembered.

A federal prisoner, who is charged with alien smuggling, received a handsome lace paper token of affection, and one with the forbidding title of “Two Gun” Cotter was sent some tender sentiments.

Up to noon, Jailer Charlie Leib had not received the annual comic that always comes to him. Mr. Leib is of simple proportions and always receives a Valentine which “spoofs” at his size. Somehow, he felt confident that it would arrive before the day was over.

Peiper on Property (and Potpourri):

Just returning from a wonderful IADC conference in California and heading from the sun to the frigid east. See you in two.

Steve
Steven E. Peiper
sep@hurwitzfine.com

Young Love – 100 Years Ago:

The Buffalo News
Buffalo, New York
14 Feb 1925

MISSING SCHOOL GIRL
RETURNS AS BRIDE

SYRACUSE, N.Y., Feb. 13. – Police search for Eileen Page, 14, pretty 7^th grade grammar school student who had been missing from her home two days, ended at noon today when she returned home, the bride of William “Wild Bill” Rook, motorcycle driver, with whom she eloped to Rochester.

The girl had been destined to go to a convent in Ohio, Thursday, sent there by her parents, who were opposed to her romance. She stole away from her home at midnight Wednesday, met Rook for what was to have been their last meeting, and they decided upon the elopement.

Lee’s Connecticut Chronicles:

Dear Nutmeggers:

The final mile is the longest mile—at least when it comes to home renovations. The saga of our kitchenless-life continues. There is, however, progress to report. We now have a sink with running water, countertops, and a backsplash. You have no idea what not having a kitchen sink has been like for the last four months. We’ve been washing our handful of kitchen tools in the powder room sink; a vessel not designed for washing things like a coffee pot. So, now it looks like a kitchen but it’s nothing more than a tease, because we still can’t use it like a kitchen. But the finish line is in sight, with electricians and carpenters set to return next week. Soon we should be in the punch list phase. I don’t dare ask how long that will take.

Not much in the case reporting department this week but read on for details on a broker’s post-procurement responsibility to the insured and what satisfies the obligation to exhaust the tortfeasor’s coverage before bringing a UIM claim. It’s not as simple as it sounds.

By the way, COVID is on the upswing (it got me—again), the norovirus is making the rounds, and there’s a measles outbreak in Texas. So, keep keeping safe.

Lee
Lee S. Siegel
lss@hurwitzfine.com

Not A Lucky Day – 100 Years Ago:

The Buffalo News
Buffalo, New York
14 Feb 1925

13 PRISONERS ON WAY
TO JAIL ON FRIDAY, 13

DETROIT, Feb. 13. – Richard Labelle, federal deputy marshal, left Detroit today in charge of thirteen prisoners destined to Fort Leavenworth. Transportation arrangements were made before authorities noticed the date or Mr. Labelle declared he would not tempt fate to start with thirteen on Friday the thirteenth.

Ten of the prisoners violated the narcotic law, two robbed post offices, and the thirteenth, John Singstook, violated the prohibition enactment, for which the judge sentenced him to thirteen months.

Ruffner’s Road Review:

Dear readers,

Hope everyone enjoyed the Superbowl... while it is sad to see football season come to a close (and to have the Bills fall just short of the big game) it was a small consolation to see Kansas City lose in blowout fashion.

I have two no-fault cases to discuss this week. In the first, the insurer moved for summary judgment asserting it properly denied the subject claims pursuant to material misrepresentation in the insured’s application for insurance. However, while the court determined the misrepresentations were “material” the insurer did not submit documentary proof of its underwriting practices and procedures to meet its burden for summary judgment. In the next case, the court determined the insurer was entitled to summary judgment on the basis that the defendant did not comply with proper post-EUO verification requests.

Until next time,

Kyle
Kyle A. Ruffner
kar@hurwitzfine.com

Could Have Been a Nice Swim – 100 Years Ago:

The Daily News
Lebanon, Pennsylvania
14 Feb 1925

5,000 Gals. Moonshine
Emptied Into River

Wilkes-Barre, Pa., Today – The receding Susquehanna river which reached a flood stage here two days ago, had something more than ice and water in it today. Federal prohibition agents emptied 5,000 gallons of moonshine and 250 barrels of beer in the stream. The stuff had been confiscated in raids. Besides destroying the liquor, the authorities also burned and demolished five truckloads of stills.

Ryan’s Federal Reporter:

Hello Loyal Coverage Pointers Subscribers:

Tough day at the Maxwell residence. Water in the basement. Nothing like spending money on fixing things.

This edition, I have a Second Circuit decision involving standing as a mortgage lender—or former mortgage lender.

Until next time…

Ryan
Ryan P. Maxwell
rpm@hurwitzfine.com

Axe Murderer Executed – 100 Years Ago:

Buffalo Courier
Buffalo, New York
14 Feb 1925

Slayer Walks to Death
Cheerfully Hands Over
Confession of Crimes

Wheaton, Ill., Feb. 13. – With a cheerfulness, in contrast with the surliness that marked his imprisonment, John Kammerer, walked to his death on the gallows today. With his own life he paid for the lives of five members of the family of Otto Eder, his “only friend.”

Before stepping on the trap, Kammerer handed a detailed confession of how he wiped out the Eder family, one by one, with an axe.

“There is nobody I’d change places with,” Kammerer said, “and I want to get it over with. I’ve made my peace with God.”

Storm’s SIU:

Hi Team:

Happy Valentine’s Day!

Three interesting cases in this edition:

Court Grants Insurer’s Motion to Amend its Answer to Include a Fraud Affirmative Defense Based on Evidence of the Insured Claiming Damage Not Actually Damaged, Concealing Pre-existing Damage Reports, and Instructing Engineers to Alter Reports to Remove References to Uncovered Damage.
Property Policy Void Ab Initio Due to Material Misrepresentations in the Application as the Insured Failed to Disclose the Existence of an Illegal Basement Apartment.
Because the Forged Documents Were Not Financial Instruments, the Insured's Losses Were Not Covered Under the Forgery Provision of the Policy.

“Oh, here’s an idea let’s make pictures of our internal organs and give them to other people we love on Valentine’s Day. That’s not weird at all.” ~ Jimmy Fallon

“Love is being stupid together”. ~ Paul Valery

“Valentine’s Day is a love-note to the rest of the year. Graciously, it comes at a perfect time to be savored – that period of calm between winter holiday commotion and spring enticements” ~ Jo Lighfoot

“To be brave is to love someone unconditionally, without expecting anything in return. To just give.” ~ Madonna

Let’s talk again in two weeks!

Scott
Scott D. Storm
sds@hurwitzfine.com

Warming Up to Marriage – 100 Years Ago:

Buffalo Courier
Buffalo, New York
14 Feb 1925

Weather Affects Love, Damsels
In Sunny Climes, Marry Young

Sacramento, Cal., Feb. 13. – Weather affects love. Sunshine and moonlight evenings make California girls easy prey for romance and takes them to the altar at an earlier age than maidens in other states of the union.

L. E. Ross, director of the state bureau of vital statistics, holds this a reasonable theory based on marriage statistics for three years. They show that the average California daughter marries between the ages if fifteen and twenty, while the American marrying age generally is between twenty and twenty-four years.

The figures show that over thirty-nine per cent of all the 1924 brides in California were under twenty years. Girls under the age of twenty-five made up fifty-four per cent of the marriage total for the last twelve months.

Fleming’s Finest:

Hi Coverage Pointers Subscribers:

This edition’s case comes from the Massachusetts Supreme Judicial Court. The SJC considered whether part 4 of the 2016 edition of the standard Massachusetts automobile insurance policy excludes coverage for “inherent diminished value” (IDV) of a third-party claimant's vehicle after an accident. The SJC also addressed whether the third-party claimants had standing to bring a direct action against the insurer without first obtaining a final judgment against the insured tortfeasors (very important).

Go Birds and Happy Valentine’s Day. Catch you later.

Kate
Katherine A. Fleming
kaf@hurwitzfine.com

Drunken Son – 100 Years Ago:

Buffalo Courier
Buffalo, New York
14 Feb 1925

MOTHER HAS SON JAILED
THIRTY DAYS FOR “SPREE”

“Make it as long as possible,” requested the mother of Michael Sieperski, thirty-two years old, No. 94 Gatchell street, when asked by Judge Hartzell in city court yesterday to name the punishment she wanted imposed upon her son charged with drunkenness.

The court decided that thirty days in the penitentiary would be sufficient to make Siepierski mend his ways. He was arrested on the complaint of his mother.

Gestwick’s Garden State Gazette:

Dear Readers:

Nice to see the Chiefs lose in blow-out fashion. The Bills would have done it better, but hey, a Chiefs loss is the next best thing to a Bills win.

I am preparing to take my fiancé to the Big Apple next week. I have been tens of times, due to our office’s heavy presence in the boroughs. My fiancé, however, has never had the pleasure. We’re going to see the High Line, World Trade Center memorial and observatory, Times Square, and all the other tourist attractions. Maybe we’ll even have the fortune of brushing shoulders with a Coverage Pointers subscriber!

The case I have for you this week is about a follow-form personal auto excess policy. The primary carrier tendered its $500,000 liability limit, which was insufficient to cover the full extent of the damage. The primary carrier’s UIM coverage endorsement excluded coverage for family members of the named insured. Does this exclusion apply to the UIM endorsement in the excess policy? Read on to find out!

See you in two weeks.

Evan
Evan D. Gestwick
edg@hurwitzfine.com

The History of Valentine’s Day – 100 Years Ago:

Elmira Star-Gazette
Elmira, New York
14 Feb 1925

THE WHY OF VALENTINE’S DAY

Two Valentine’s Days are really crowded into one – the lovers’ festival and the religious side. The ancients believed that the birds selected their mates on February 14. Hence this date was observed as lovers’ day among the Romans, some 2000 years ago.

As a lovers’ festival, Valentine’s Day reached its greatest popularity in England five centuries ago. The custom of sending valentines likely started with the ancient practice of putting names of unmarried young men and women in a box.

Then there was a “Love’s Lottery,” in which the names were drawn out in pairs on Valentine’s Day. Thus, affinities were discovered and became each other’s valentines for a year – until the next lottery.

Early in the history of the Christian church, February 14 acquired the religious significance. There were eight saints and martyrs named Valentine, in various parts of the world. The greatest of the Valentine’s were a priest in Rome and a bishop in Umbria, who lived about 1700 years ago.

The first valentine sold in America was patterned after one received from England in 1519 by Easther Howland, daughter of a Worcester (Mass.) stationer.

O’Shea Rides the Circuits:

Hey Readers,

The Ottawa Senators are maintaining a playoff spot as the February break sets in. At this point, the Four Nations Cup is being played, and fingers crossed our players come out unscathed.

This week I have a couple of duty to defend cases. One involves corporate espionage and the other involves the intentional concealment of a murder weapon.

Until next time,

Ryan
Ryan P. O’Shea
rpo@hurwitzfine.com

Retribution – 100 Years Ago:

Press and Sun-Bulletin
Binghamton, New York
14 Feb 1925

MOTHER’A DEATH
CAUSES GIRL TO
LEAD RUM RAID

15-Year-Old Child Informs
Philadelphia Police Her
Parent Obtained Pint of
Liquor from Saloon Before
She Died

VENDOR IS HELD

Philadelphia, Feb. 14 – Finding her mother dead in bed, a 15-year-old girl early today led a police raid on a saloon, where, she said, her mother had obtained a pint of liquor last night.

The bartender was arrested and held pending analysis of the liquor. Police said the proprietor of the saloon is serving a 30-day sentence for illegal sale of liquor.

Coroner Patton, who ordered an inquest, declared that should death be found due to alcoholism, the vendor of the liquor would be held for murder.

Rob Reaches the Threshold:

Dear Readers,

So . . . Watching the Eagles beat down Mahomes and the Chiefs was kind of fun? However, overall, it was a pretty boring Superbowl given the dominate performance from Philly. Once the parade ends and my (insufferable) friends who are Eagles fans simmer down, we begin the long drought of football-less days. Coincidentally, this is the same time my own (probably also insufferable) Yankee fandom kicks into gear as Spring Training is right around the corner. But I just remembered that the DODGERS LITERALLY SIGNED EVERYONE BECAUSE MONEY IS FAKE IN BASEBALL. I am ready to hurt again come October.

For this installment, we have a rare appearance from the Fourth Department, who issued a decision in related accident cases which highlights the importance of defendant IME submissions in support of summary judgment motion practice seeking to dismiss a complaint on the ground that a plaintiff did not sustain a serious injury under Insurance Law § 5102(d).

Hope you all enjoy the read.

Rob
Robert J. Caggiano

Woman Business Leader has Little Confident about Women in Business – 100 Years Ago:

Democrat and Chronicle
Rochester, New York
14 Feb 1925

Women Cannot Supplant Men in
Business, Says Society Matron
Qualified as Financial Advisor

New York. Feb. 13. – Women cannot take the places of men in the business world, Mrs. William Laimbeer, society matron who is to become head of a woman’s department of the National City Bank after 12 years’ experience, said to-day.

“Men are all right.” She added. “I worry little about women’s rights, never vote and am not interested in politics. Women get what they are worth in business.”

She was reminded that men have been saying woman’s place was in the home.

“For most women, it probably is,” she answered. “But there are places for those who are compelled to make their own way and for those with an aptitude for special work. Besides, no girl’s future is secure, and every girl should be trained to care for herself if necessary.

“I think it gives women self-respect to earn their own living. It makes better waives, happier mothers.”

Mrs. Laimbeet entered business after her husband’s death. At her desk she still appears more as the hostess than the business executive. She wears a string of pearls, parts her auburn hair in the middle and knots behind it. Her new job will be advising women about their financial problems.

LaBarbera’s Lower Court Library:

Dear Readers:

It’s unhappy to report that after nearly six years of going uninjured, I am limping around in a boot. I was too ambitious at rec-league soccer and now must pay the price. Thankfully, we got a little bit of warm(ish) weather this week, and some of the ice on the road has melted away.

This week I am reporting on a New York County decision, granting the insurer’s motion for summary judgment and default in its entirety. The court discusses the reasonable, ongoing investigation taken by the insurer to investigate the facts and circumstances of the loss, and the applicability of the exclusion. There is also discussion regarding a privity-based additional insured endorsement. Hope you enjoy reading, I certainly did!

Until next time…

Isabelle
Isabelle H. LaBarbera
ihl@hurwitzfine.com

A Little Assault and Battery in School is Ok– 100 Years Ago:

Poughkeepsie Eagle-News
Poughkeepsie, New York
14 Feb 1925

Exonerate Teacher
Of Hurting Pupil

New York, Feb. 13. – The conviction of Miss Genevieve Collier, principal of the Central School at Port Chester, N.Y., of assault in the third degree for striking Frank Fugilisi, a 12-year-old pupil, with a rubber hose was reversed today by the appellate division in Brooklyn. A fine of $20 imposed on Miss Collier was remitted and the complaint against her dismissed.

“The prosecution,” the appellate court read, “failed to establish a reasonable doubt that the force used by the defendant in correcting the pupil was unreasonable in manner and immoderate in degree.”

Lexi’s Legislative Lowdown:

Dear Readers,

I am looking forward to a weekend full of skiing. I haven’t been in a couple of years so hopefully my muscle memory kicks in.

This week we discuss the reintroduction of the wrongful death bill, Senate Bill S4433. We will continue to follow this Bill through the 2025-2026 Legislative Session.

Thanks for reading,

Lexi
Lexi R. Horton
lrh@hurwitzfine.com

Two Wives OK in Singapore – 100 Years Ago:

Press and Sun-Bulletin
Binghamton, New York
14 Feb 1925

CHINESE GIRL WINS
HEART BALM SUIT

Singapore, Feb. 14 – The first Chinese breach of promise action ever known here was brought when Miss Wee Ohkiah sued a wealthy married businessman, Oel Teowbeng, who refused to take her as his secondary wife.

The defense was that breach of marriage was impossible in view of the fact that the man was already married, or, alternatively, that the second wife must be approved by the first.

The chief justice ruled that, although the obedience of the second to the first wife was the custom, the approval of the first was unnecessary for the marriage of the second. In support of the Chinese recognition of polygamy, he quoted the precedent of a Chinese who left six widows. Damages of £650 were awarded to Miss Wee.

Domenica’s Diary on Bad Faith:

I may be scorned for this opinion, but I am happy football season is over. NJ is Giant and Jet country, and my boyfriend is a die-hard Dallas Cowboy fan, so as you can imagine, it can get “loud” on Sundays in my corner on NJ. I will enjoy the next several months of peace and quiet.

This week I report on a Southern District case involving a carrier’s denial of a class action suit involving claims of failing to pay wages on public works contracts. The carrier denied coverage to its insured 3 times and a coverage action by the insured followed. The Court’s findings on the lack of bad faith are not new, but it reminds us that healthy disagreements on coverage should not be avoided based on a fear of Bad Faith.

Domenica
Domenica D. Hart

Two Wives, One Too Many, in Michigan– 100 Years Ago:

Press and Sun-Bulletin
Binghamton, New York
14 Feb 1925

WED WHILE DRUNK,
HE GETS TWO YEARS

Paw Paw, Mich., Feb. 14 – Being drunk while getting married is a more serious offense than drunk driving, John Lebeau of Detroit learned in circuit Court here when he was sentenced to serve from one to 14 years in the State Prison at Jackson on a bigamy charge.

Lebeau, a magazine solicitor, of Detroit, pleaded guilty to a charge made by Margaret Mildred Linge DeMonthe of Paw Paw, to whom he was married the day after he met her at an Armistice Day ball here. Later it was learned here that he had a wife and three children in Detroit.

Lebeau explained to the court that he was drunk at the Armistice ball when he proposed to his dancing partner and had not sobered up by the time the ceremony was performed the next day.

North of the Border:

Dear Readers:

It has been cold. Very cold. With some breaks (not lasting long enough) and with windchill, it has been hovering around -35C /-31F when I take the dogs to the dog park in the morning. I have to say though that there is a beauty to the world when it gets that cold. There are sometimes ice crystals in the air that refract the light when the sun shines through them. The sky is a beautiful blue and snow cover dazzles. But its still cold. Very cold. And the groundhog did not see his shadow. There will be more of it. I know.

My column this week discusses a case that held that undefined words in an insurance policy will be given their ordinary meanings. Something like the meaning to be given to “international border,” being the demarcation between two sovereign nations, such as the United States and Canada, the opposite of an imaginary line. An interesting historical factoid about that border: There are six airports, and eleven seaplane bases whose runways straddle the Canada/United States border. Such airports were built before the U.S. entry into World War II to legally transfer American built aircraft, such as the Lockheed Hudson, to Canada under the provisions of the Lend-Lease Act. Before the attack on Pearl Harbour in December 1941 and in the interest of maintaining neutrality, U.S. military pilots were forbidden to deliver combat aircraft to Canada. As a result, the aircraft were flown to the border, where they landed, and then, overnight, they were towed on their wheels over the border by tractors or horses. The next day, the planes were crewed by Royal Canadian Air Force pilots and flown to other locations, typically airbases in Eastern Canada and Newfoundland, from where they were flown to the United Kingdom and deployed in the Battle of Britain. That’s how sovereign nations cooperate.

See you in two weeks.

Heather
Heather A. Sanderson
Sanderson Law
Calgary, Alberta, Canada
hasanderson@sanderson-law.com

Headlines from this week’s issue, attached:

KOHANE’S COVERAGE CORNER
Dan D. Kohane
ddk@hurwitzfine.com

Interesting Decision, This One. Employers Liability Exclusion Applied to Eliminate CGL Coverage. That Was the Easy One. Court Finds That Employers Liability Coverage Not Available Because No Grave Injury. As a Purist, Court Should Have Dismissed Third-Party Action Rather Than Rule on Coverage on EL Policy
Tenant’s Carrier Had No Obligation to Provide Additional Insurance Coverage to Landlord for Fall on Sidewalk, in Area Outside of Tenant’s Maintenance Obligations
Named Insured Is Not Aggrieved by Order Requiring Its Insurer to Defend an Additional Insured. Query: Is That a Surprise?
Lots of Good Stuff in This One. Where Alleged Child Molester Was an Employee of a Religious institution, He Was Not an Insured Because His Acts Were Not in Furtherance of His Employer’s Business, Nor Was His Conduct Accidental. Since the Claims Are Outside of the Grant of Coverage, No Need to Timely Disclaim. However, the Institutional Claims Are Accidental and Timely but Insufficiently Specific Disclaimer Letter Is Worthless and a Follow Up Disclaimer, Even Though Specific Enough, Was Sent 56 Days Later and Thus Untimely and Ineffective

PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
sep@hurwitzfine.com

Nothing from me this time; see you in two weeks

LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
lss@hurwitzfine.com

Insured’s Broker Owes No Duty Post-Procurement
Disputed Existence of Other Auto Policy Defeats UIM Carrier’s Motion

RUFFNER’S ROAD REVIEW
Kyle A. Ruffner
kar@hurwitzfine.com

Insurer’s Summary Judgment Motion Denied, as Documentary Evidence of Underwriting Practices Were Not Submitted to Establish Material Misrepresentation
Insurer’s Summary Judgment Motion Is Granted on the Basis That Defendants Failed to Comply with Post-EUO Requests

RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
rpm@hurwitzfine.com

Former Mortgage Lender Lacks Standing Under Insurance Policy

STORM’S SIU
Scott D. Storm
sds@hurwitzfine.com

Court Grants Insurer’s Motion to Amend Its Answer to Include a Fraud Affirmative Defense Based on Evidence of the Insured Claiming Damage Not Actually Damaged, Concealing Pre-existing Damage Reports, and Instructing Engineers to Alter Reports to Remove References to Uncovered Damage
Property Policy Void Ab Initio Due to Material Misrepresentations in the Application as the Insured Failed to Disclose the Existence of an Illegal Basement Apartment
Because the Forged Documents Were Not Financial Instruments, the Insured's Losses Were Not Covered Under the Forgery Provision of the Policy

FLEMING’S FINEST
Katherine A. Fleming
kaf@hurwitzfine.com

Third Party Claimants Lacked Standing In Direct Action Against Insurer and Were Not Entitled to IDV Damages to Their Vehicles

GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
edg@hurwitzfine.com

Exclusions and Definitions in Primary Auto Policy Are Deemed Included in Follow-Form Excess Policy

O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
rpo@hurwitzfine.com

Extrinsic Evidence Establishes Exclusion but Not Duty to Defend
Intentional Infliction of Emotional Distress Is Not an “Occurrence” and Pennsylvania Law Bars Insuring Criminal Acts

ROB REACHES the THRESHOLD
Robert J. Caggiano

Fourth Department Modifies Orders in Related Cases Which Granted Defendants’ Summary Judgment Motions Dismissing Plaintiff’s Complaints on the Basis That She Did Not Sustain Serious Injury Within the Meaning of Insurance Law § 5102(d) Where the Evidence Presented by the Defendants Did Not Meet the Initial Prima Facie Burden

LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
ihl@hurwitzfine.com

Court Held Insurer Was Not Obligated to Provide Coverage Based on Privity-Based Endorsement and Upheld Disclaimer of Coverage Based on Employee Exclusion Issued 62 Days After Tender

LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
lrh@hurwitzfine.com

The Grieving Families Act has been reintroduced as Bill S4433

NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
hasanderson@sanderson-law.com

Plain, Undefined Words in an Insurance Policy Will Be Given Their Ordinary Meaning

Hurwitz Fine P.C. is a full-service law firm providing legal services throughout the State of New York and providing insurance coverage advice and counsel in Connecticut and New Jersey.

NEWSLETTER EDITOR
Dan D. Kohane
ddk@hurwitzfine.com

ASSOCIATE EDITOR
Agnes A. Wilewicz
aaw@hurwitzfine.com

COPY EDITOR
Evan D. Gestwick
edg@hurwitzfine.com

INSURANCE COVERAGE/EXTRA CONTRACTUAL LIABILITY TEAM
Dan D. Kohane, Chair
ddk@hurwitzfine.com

Steven E. Peiper, Co-Chair
sep@hurwitzfine.com

Michael F. Perley

Agnieszka A. Wilewicz

Lee S. Siegel

Brian F. Mark

Scott D. Storm

Domenica D. Hart

Ryan P. Maxwell

Kyle A. Ruffner

Katherine A. Fleming

Evan D. Gestwick

Ryan P. O’Shea

Isabelle H. LaBarbera

Lexi R. Horton

Victoria S. Heist

FIRE, FIRST PARTY AND SUBROGATION TEAM
Steven E. Peiper, Team Leader
sep@hurwitzfine.com

Michael F. Perley

Scott D. Storm

NO-FAULT/UM/SUM TEAM
Dan D. Kohane
ddk@hurwitzfine.com

Ryan P. O’Shea
rpo@hurwitzfine.com

Kyle A. Ruffner
kar@hurwitzfine.com

APPELLATE TEAM
Jody E. Briandi, Team Leader
jeb@hurwitzfine.com

Topical Index

Peiper on Property and Potpourri

Lee’s Connecticut Chronicles

Ruffner’s Road Review

Ryan’s Federal Reporter

Storm’s SIU

Gestwick’s Garden State Gazette

Lexi’s Legislative Lowdown