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Coverage Pointers - Volume I, No. 19

Visit the HOT CASES section of the Federation of Insurance and Corporate Counsel website for cases covering a broad range of legal issues from other jurisdictions: www.thefederation.org.

03/16/00: GA INS. CO. OF NEW YORK v. SIMMES
New York State Supreme Court, Appellate Division, Third Department
Injured Party has Independent Right to give Notice of Accident and is not Vicariously charged with the Insured’s Delay
In 1995, Simmes was awarded a subcontract for a painting project and was issued an insurance policy for the period November 1995 to November 1996. The policy was canceled effective March 31, 1996, for nonpayment of premiums. In August 1996, Simmes was informed she was being sued for injuries allegedly caused by exposure to solvent or paint fumes in January 1996. Simmes, believing she had no insurance, did not notify her carrier concerning the suit. In January 1997, Simmes also received a letter from the injured person’s attorney advising Simmes of the claim and requesting she forward the letter to her insurance carrier. Simmes again did not notify her carrier. The carrier’s records demonstrate that on March 10, 1997, the general contractor’s insurer informed the attorney that it was Simmes' carrier. The attorney commenced an action against Simmes and, although Simmes received a summons and complaint, she never forwarded the papers to the carrier. In July 1997, the attorney forwarded copies of the pleadings to the carrier. The carrier then commenced this action against Simmes and the injured person seeking a declaration that it had no obligation to defend or indemnify Simmes pursuant to the policy. The court rejected the carrier’s contention that the victim’s notice to it was untimely as a matter of law. Insurance Law § 3420 (a) (4) creates "an independent right in the injured party to give notice of the accident . . . [and,] where the injured person proceeds diligently in ascertaining coverage and in giving notice, he is not vicariously charged with any delay by the assured". The notice required of an injured party to an insurer is measured less rigidly than the notice required of an insured -- "[t]he passage of time does not of itself make delay unreasonable. Promptness is relative and measured by circumstances". Therefore, Simmes’ failure to provide the carrier with timely notice did not preclude the injured person’s claim, but raised material questions of fact with respect to the sufficiency of the notice.

03/16/00: INGALSBE v. CHICAGO INS. CO.|
New York State Supreme Court, Appellate Division, Third Department
Professional Liability Coverage Lost for Failure to Report Potential Claim
Attorney maintained a "claims-made" professional liability policy with Home Ins. from 1984 through September 30, 1995, which was procured for the attorney through an insurance agency. In 1994, Home announced it would cease writing professional liability policies in New York and the agency placed the attorney’s coverage with Chicago Ins. The policy with Chicago covered the period from September 30, 1995 until September 30, 1997. During the summer of 1995, the attorney received information from the agency regarding the coverage provided and the necessity for extended reporting endorsements ("tail" coverage). In July 1997, the attorney was sued for legal malpractice for negligently allowing the statute of limitations to run on a wrongful death claim in February 1994. Both Home and Chicago disclaimed coverage under their respective policies and this declaratory judgment action ensued. The court concluded there was no coverage under the Home policy because plaintiff knew in 1994 he had missed the wrongful death statute of limitations and, as such, had a reasonable basis to report a potential claim to the carrier. Since the claim was not reported, there is no coverage. There was no coverage under the Chicago policy either because, while that policy provided coverage for claims arising during or prior to the policy period, the coverage was only afforded if the insured had no reasonable basis to believe he had breached a professional duty or to foresee a claim. The court rejected the attorney’s contention that the insurers were equitably estopped from denying coverage based on false assertions in the agency’s flyer that "tail" insurance was not necessary. The flyer specifically advised that potential claims should be reported immediately to the carrier if there is a belief one might surface for work done in the past.

03/14/00: PAVARINI CONSTRUCTION CO., INC. v. LIBERY MUTUAL INS. CO.
New York State Supreme Court, Appellate Division, First Department
Application of Policy Exclusion for Injuries Caused by Additional Insured’s Negligence Subject to Liability Determination in Underlying Action
Insurer was obligated to defend an additional insured/general contractor under a policy issued to its subcontractor in an underlying labor law action brought by the subcontractor’s injured employee. The underlying complaint, which alleged bodily injury sustained by the insured’s employee when he fell down a stairwell, was within the general scope of the policy’s coverage. Whether the injuries fall within the policy’s exclusion for injuries caused by the additional insured’s negligence must await a determination of liability in the underlying action, since the complaint alleges a violation of Labor Law § 240 (1), under which additional insureds may be found liable without a showing of any negligence on their part.

03/13/00: WHALEN v. CITY OF NEW YORK
New York Supreme Court, Appellate Division, Second Department
Post-Judgment Modification of Policy Insufficient to Defeat Summary Judgment for Breach of Contract to Procure Insurance
Plaintiff/employee of subcontractor was injured while in the course of his employment at a construction site. He sued the property owner and general contractor, who in turn sued plaintiff’s employer/subcontractor for indemnification and breach of contract. The contract between the general contractor and subcontractor required that the subcontractor purchase insurance naming the owner and general contractor as additional insureds for all purposes except Workers Compensation. Since the subcontractor failed to obtain the insurance, the owner and general contractor were granted summary judgment for indemnification and breach of contract to procure the insurance. After plaintiff was awarded judgment in the main action against the owner and general contractor, the subcontractor sought reversal of the earlier grant of summary judgment because its insurer had later modified the policy to include the owner and general contractor as additional insureds. The modification, however, only provided coverage to them for damages awarded to plaintiff based on the subcontractor’s own negligence and, since the jury found the owner and general contractor were negligent, the insurer disclaimed coverage. The court denied the subcontractor’s motion to renew, finding the belated, and somewhat dubious, post-judgment modification of the policy insufficient to overcome summary judgment. The policy modification did not comport with contract requirements, which required that the subcontractor name the owner and general contractor as additional insureds for all purposes except workers compensation.

3/13/00: MELLA v. STATE FARM INSURANCE COMPANY
New York Supreme Court, Appellate Division, Second Department
Insurer has Strict Obligation to Inform Insured of Mandatory Photo Inspection and Provide List of Inspection Sites

In an action to recover proceeds of an insurance policy, the insurer claimed the auto’s physical damage insurance policy lapsed because the insured failed to make her vehicle available for photo inspection. The court held the policy did not lapse because the insurer failed to satisfy its "strict obligation" to inform its insured of the mandatory photo inspection requirement and to provide the insured with a list of inspection sites. The court dismissed the action against a co-defendant, however, because the statutory duty is imposed solely on insurance carriers.

03/13/00: SHENOROCK SHORE CLUB, INC. v. ROLLINS AGENCY, INC.
New York State Supreme Court, Appellate Division, Second Department

Agency’s Representations about Availability of Flood Insurance Raises Questions of Fact for Trial on Issue of Special Relationship
After a storm caused $2 million in damage to plaintiff’s property, plaintiff sued its insurance agency for negligence, breach of contract and negligent misrepresentation, based on representations by the agency that plaintiff was not entitled to additional primary federally-underwritten flood insurance, or any commercially-marketed excess flood insurance, on its clubhouse and associated bathhouses. Plaintiff also claimed that the agency sold it business interruption coverage with a high coinsurance requirement when similar insurance without coinsurance was available. Prior to trial, Supreme Court held that, as a matter of law, the agency had a special relationship with plaintiff and, therefore, a heightened duty to advise plaintiff regarding insurance coverage. A jury later returned a verdict in favor of the agency. The Appellate Division reversed and ordered a new trial. Supreme Court erred in ruling as a matter of law that there was a special relationship between plaintiff and the agency – whether the agency had assumed duties in addition to those at common law must be determined by the jury under the factual circumstances of the case. Moreover, Supreme Court erred in excluding testimony of plaintiff’s expert witnesses (two insurance brokers) regarding the availability of flood insurance the year of the storm, which the court held was an essential element of plaintiff’s claim. However, Supreme Court properly dismissed plaintiff’s claim to recover damages based on the agency’s failure to obtain adequate business interruption coverage, since plaintiff did not discuss that coverage with the agency and, thus, no "identifiable source of a special duty of care regarding them."

03/13/00: BAGHALOO-WHITE v. ALLSTATE INS. CO.
New York State Supreme Court, Appellate Division, Second Department
Insurer’s Defenses Based on Insured’s Lack of Cooperation Properly Dismissed in the Absence of Evidence; Sanctions may be imposed for Frivolous Appeal
In this action for breach of an insurance policy, plaintiff sought and was granted dismissal of the insurer’s affirmative defenses based upon the insured’s lack of cooperation. Without discussion of the underlying facts, the court reiterated that, to effectively deny insurance coverage based on lack of cooperation, the insurer must demonstrate that (1) it acted diligently in seeking to bring about the insured’s cooperation; (2) the insurer’s efforts were reasonably calculated to obtain the insured’s cooperation; and, (3) the insured’s attitude, after cooperation was sought, was one of willful and avowed obstruction. Since the insurer failed to demonstrate an issue of fact in this regard, the defenses were properly dismissed. Moreover, the court observed that the insurer’s appeal was apparently intended merely to delay the litigation, and directed the parties to file affirmations on whether sanctions and costs should be imposed for prosecuting a frivolous appeal.

03/09/00: CITY OF AMSTERDAM v. LAM
New York State Supreme Court, Appellate Division, Third Department
Municipality has no Claim against Property Insurer for Cost of Extinguishing Fire under Theory that Insurer "Over-Insured" the Property Inducing Insured to Commit Arson
Plaintiff commenced this action to recover its expenses for extinguishing a fire and remediating the fire scene. It also sought punitive damages against the insurer of the property, asserting that its issuance of a policy for amounts far exceeding the value of the property induced the insured to commit arson. Alleging causes of action in negligence, conspiracy, intentional tort and breach of contract (as third-party beneficiary), the insurer responded with a motion for summary judgment seeking dismissal of the complaint by contending that it owed no duty to plaintiff. The court determined that the insurer had no duty to the insured – the policy limited its responsibility to $1000 for fire department costs.

03/09/00: BIJAN DESIGNER FOR MEN v. FIREMAN’S FUND INS. CO.
New York Supreme Court, Appellate Division, First Department
Policy Term "Manufactured by You" Unambiguously Refers to Actual Physical Production, not Conception, Design or Selection of Materials used in Manufacture of the Product
The insured, a designer and retailer of high-fashion men’s clothing, sustained extensive damage to inventory from a fire on its premises. The inventory consisted primarily of clothing it had designed. In a dispute regarding valuation of the inventory, the insured argued the inventory was finished goods it had manufactured and it was therefore entitled to recover the price for which the goods could have been sold if there had been no loss. The insured argued it had manufactured the clothing because it conceived and designed the clothing, selected the material to be used and provided detailed specifications. The insured offered expert testimony that within the fashion industry the insured is considered the manufacturer because the most significant activity in the manufacture of fashion merchandise is conception and specification of the garment. The insurer argued that the inventory was finished goods purchased from others and the insured was therefore limited to recovery of replacement cost. While the insured designed the clothing, another company physically produced them. Further, title did not pass to the insured until it received and accepted the finished product with the accompanying invoice. The court rejected the insured’s argument that it was the manufacturer and held the policy term "manufactured by you" unambiguously referred to the actual physical manufacturing of the stock, which the insured admittedly did not perform. The inventory was finished goods purchased from others and the insured’s recovery was limited to replacement cost accordingly.

03/09/00: KRISTEL v. MITCHELL
New York Supreme Court, Appellate Division, Third Department
Serious Injury Threshold not satisfied where Plaintiff lacked Competent Medical Evidence of Brain Injury and Mental Impairment
Plaintiff commenced this action for personal injuries following two auto accidents. Her primary complaint was head injury and mental and emotional impairment. Defendants sought summary dismissal on the ground that plaintiff did not sustain "serious injury" as required by Insurance Law § 5102 (d) and, in support of the motion, submitted an affidavit of the physician who conducted an independent neurological examination. This doctor found no objective neurological findings to support plaintiff’s claim of brain injury. In opposition, plaintiff submitted an affidavit of a psychologist who concluded that plaintiff suffered from intellectual impairments and opined that plaintiff’s condition was caused by the accidents. The affidavit of the psychologist was found to be lacking, as it failed to provide an adequate assessment of how the alleged injuries were related to either or both accidents. The court also rejected an affidavit by plaintiff’s own physician, submitted on a motion to renew, because the doctor’s contemporaneous notes of his initial evaluation contained no objective findings that explained her symptoms, but suggested instead they were psychological. The complaint was dismissed accordingly.

03/07/00: MAKASTCHIAN v. OXFORD HEALTH PLANS, INC.
New York State Supreme Court, Appellate Division, First Department
Class Action Properly Certified in Declaratory Judgment Action;
Insurers’ Policy Cancellations without Notice Violated Terms and may Constitute Deceptive Practices
Plaintiffs, subscribers to a health care policy offered by defendant/insurers, commenced this class action for declaratory and injunctive relief on theories of breach of contract, negligent misrepresentation, fraud, promissory estoppel, waiver, and deceptive trade practices. Plaintiffs alleged the policy required insurers to invoice insureds for premiums 15 days before they were due; that in the event the premiums were not timely paid, the insurers were required to send insureds a termination notice with a 30-day grace period for paying the premium; that the insurers regularly failed to give advance notice of cancellation, instead mailing out retroactive notices of termination; that termination notices were sent out even when insurers previously supplied the insured with billing statements reflecting no outstanding premiums and when the insurers had pre-certified medical procedures for the period of the retroactive termination; and that the insurers frequently mailed out erroneous billing statements that caused insureds to go into default, and then retroactively terminated the policies of defaulting insureds. First, the court held class certification was proper because the predominate issue concerned the insurers’ general practice of terminating policies for nonpayment of premium without notice, which affects all policyholders (many thousands). Given the declaratory nature of the relief requested, questions relating to individual reliance, causation and damages are insignificant, if not irrelevant. On the merits, the court held the insurers’ practice of terminating policies without 30-days notice is in violation of policy terms – despite alleged typographical errors in the policy. Moreover, the insurers may have engaged in deceptive practices that would cause subscribers to believe they still had coverage when it had already been terminated. Finally, while the court held questions of fact remain regarding claims predicated on misrepresentation, waiver, and estoppel, it observed that these claims are subsumed under the breach of contract claim, and do not state an independent basis for recovery or seek compensation distinct from the contract claim.

03/06/00: WARD v. ELRAC, INC. d/b/a ENTERPRISE RENT-A-CAR
New York Supreme Court, Appellate Division, Second Department
VTL § 388 does not Preclude Enforcement of Indemnification Clause in Car Rental Agreement
Plaintiff/pedestrian was injured when struck by a vehicle driven by defendant and rented from ELRAC by Seaton. The rental agreement between ELRAC and Seaton provided that Seaton, as lessee of the rental vehicle, would indemnify ELRAC for all claims arising out of use of the vehicle. The court granted ELRAC summary judgment on its claim for contractual indemnification, rejecting Seaton’s contention that ELRAC, as a self-insurer, was required to provide at the least the minimum coverage under VTL §388. Since ELRAC sought indemnification for sums it may become obligated to pay plaintiff, enforcement of the clause did not undercut the policy underlying VTL §388.

ACROSS BORDERS

From time to time we highlight significant cases of interest from other jurisdictions. This week we offer decisions from Washington and Florida:

03/09/00: TYRRELL v. FARMERS INS. CO. OF WASHINGTON
Washington Supreme Court
Tripping while Exiting a Camper Attached to Pick-up Truck does not an Auto Accident Make
Respondent brought an action against his carrier requesting a declaratory judgment that his tripping while exiting a camper attached to his pickup truck was a 'motor vehicle accident' covered under the personal injury provisions (PIP) of his automobile insurance policy. The Washington Supreme Court held that a 'motor vehicle accident' occurs only when the covered motor vehicle is being operated as a motor vehicle. These injuries were not caused by a 'motor vehicle accident.

03/09/00: U.S. SECURITY INS. CO. v. CIMINO
Florida Supreme Court
Absent Valid Reason for Denial, Insured has Right to Videotape PIP Examination by Insurer's Independent Medical Examiner
Resolving conflicts between lower courts, the Supreme Court of the State of Florida has sanctioned the insured's decision to videotape independent medical exams performed by doctors in the PIP arena. Since a carrier can use such an examination to restrict or deny benefits, the Court determines that the insured should be allowed to capture the examination on tape, despite the doctor's dislike or refusal to conduct the examination under those conditions.

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REPORTED DECISIONS

SHENOROCK SHORE CLUB, INC. v ROLLINS AGENCY, INC.

In an action to recover damages for negligence, breach of contract, and negligent misrepresentation, the plaintiff appeals from a judgment of the Supreme Court , Westchester County (Nastasi, J.), entered November 27, 1998, which, upon a jury verdict, is in favor of the defendant and against it, dismissing the complaint.

ORDERED that the judgment is reversed, on the law, and a new trial is granted, with costs to abide the event.

The plaintiff, Shenorock Shore Club, Inc. (hereinafter Shenorock), is a private beach and tennis club located in Rye on a peninsula between Milton Harbor and Long Island Sound. The defendant, Rollins Agency , Inc. (hereinafter Rollins) is an insurance brokerage agency which had been arranging Shenorock's assorted insurance needs since 1986. During a meeting between officers of Shenorock and Rollins in June 1992, various aspects of Shenorock's insurance were discussed. According to Shenorock, Rollins represented that Shenorock was not eligible for any additional primary Federally-underwritten flood insurance, or any commercially-marketed excess flood insurance, on its main Clubhouse and associated bathhouses. Shenorock also claims that Rollins failed to advise it to insure various other structures on its property, and that Rollins sold Shenorock $500,000 in business interruption coverage with a high coinsurance requirement , when similar insurance without coninsurance was available. On December 11, 1992, a storm damaged Shenorock 's property, causing approximately $2 million in damages, of which its insurance covered roughly half . Shenorock sued Rollins for the sums its insurance did not cover, alleging breach of contract, negligence , and negligent misrepresentation.

Prior to trial the Supreme Court ruled, as a matter of law, that Rollins had a special relationship with Shenorock, and therefore it had a heightened duty to advise Shenorock regarding its insurance coverage (see, Murphy v Kuhn, 90 NY2d 266). After a trial on the issue of liability, the jury returned a verdict in favor of Rollins. We reverse and order a new trial.

The Supreme Court erred in refusing to allow testimony by Shenorock's expert witnesses, two insurance brokers, regarding the availability of additional flood insurance in 1992 - an essential element of Shenorock's case (see, e .g., Edgewater Apts. v Flynn, 216 AD2d 53). In addition, the Supreme Court should have granted Shenorock the two-day continuance it requested to present its new underwriting expert, whom Shenorock had been required to retain in midtrial because of the unexpected ruling by the court disqualifying Shenorock' s expert witnesses (see, e.g., Romero v City of New York, 260 AD2d 461; Evangelinos v Reifschneider, 241 AD2d 508; Balogh v H.R.B. Caterers, 88 AD2d 136).

Shenorock was also improperly prevented from impeaching the credibility of Rollins when the court precluded it from cross-examining employees of Rollins regarding their efforts to obtain additional flood insurance for Shenorock shortly after the December 1992 storm (see, Hill v Arnold, 226 AD2d 232; see also, People v Wise, 46 NY2d 321, 327; People v Bazalar, 211 AD2d 839)

The Supreme Court erred in ruling, as a matter of law, that there was a special relationship between Shenorock and Rollins. At the new trial, the Supreme Court should submit to the jury the issue of whether, under the factual circumstances of this case, Rollins had a special relationship with Shenorock, such that it assumed or acquired duties in addition to those fixed at common law (see, e.g., Murphy v Kuhn, supra; M & E Mfg. Co. v Frank H. Reis, Inc., 258 AD2d 9; see also, Kimmell v Schaefer, 89 NY2d 257, 260).

The Supreme Court, however, properly dismissed Shenorock's causes of action to recover for damage to buildings other than the clubhouse and the north and south bathhouses, and its cause of action to recover damages based upon the failure of Rollins to obtain adequate business interruption coverage. Shenorock's officers admittedly did not discuss those items of coverage with Rollins. Accordingly, there is no "identifiable source of a special duty of care" regarding them (Murphy v Kuhn, supra, at 270).

BRACKEN, J.P., McGINITY, LUCIANO, and FEUERSTEIN, JJ., concur.

BAGHALOO-WHITE v ALLSTATE INSURANCE COMPANY

In an action to recover damages for breach of an insurance policy, the defendant appeals from so much of an order of the Supreme Court, Nassau County (Phelan, J.), dated January 25, 1999, as granted that branch of the plaintiff's motion which was for summary judgment dismissing the fifth and sixth affirmative defenses in its answer.

ORDERED that the order is affirmed insofar as appealed from, with costs; and it is further,

ORDERED that counsel for the respective parties are directed to show cause why an order should not be made and entered imposing such sanctions and/or costs, if any, against the appellant and its attorney pursuant to 22 NYCRR 130-1.1(c), as this court may deem appropriate, by filing an original and four copies of their respective affirmations or affidavits on that issue in the office of the Clerk of this court and serving one copy of the same on each other on or before April 13, 2000; and it is further,

ORDERED that the Clerk of this court is directed to serve counsel for the respective parties with a copy of this decision and order, with notice of entry, by regular mail.

"To effectively deny insurance coverage based upon lack of cooperation, an insurance carrier must demonstrate (1) that it acted diligently in seeking to bring about the insured's cooperation, (2) that the efforts employed by the carrier were reasonably calculated to obtain the insured's cooperation, and (3) that the attitude of the insured, after his cooperation was sought, was one of willful and avowed obstruction" ( Physicians' Reciprocal Insurers v Keller, 243 AD2d 547, 547; see also, Thrasher v United States Liab. Ins. Co., 19 NY2d 159; Commercial Union Ins. Co. v Burr, 226 AD2d 416; Pawtucket Mut. Ins. Co. v Soler, 184 AD2d 498). Here, the plaintiff made out a prima facie case for summary judgment dismissing the defendant's fifth and sixth affirmative defenses. The Supreme Court properly held that the defendant failed to demonstrate the existence of an issue of fact, and properly dismissed the defendant's fifth and sixth affirmative defenses.

Based on the record it appears that the appellant's purpose in pursuing this appeal was to delay the litigation. The appellant and/or its attorneys may be subject to sanctions and/or costs pursuant to 22 NYCRR 130.1-1(a) for their conduct in pursuing a frivolous appeal. Accordingly, the parties are directed to file affirmations on the issue of the appropriate sanctions or costs, if any, to be imposed on the appellant and/or its attorneys.

BRACKEN, J.P., JOY, THOMPSON, GOLDSTEIN, and FEUERSTEIN , JJ., concur.

PAVARINI CONSTRUCTION CO., INC. v. LIBERTY MUTUAL INS. CO.

Order, Supreme Court, New York County (Jane Solomon, J.), entered March 4, 1999, which, in a declaratory judgment action involving whether defendant insurer, under a policy it issued to defendant subcontractor naming plaintiffs general contractor , owner and lessee as additional insureds, is obligated to defend and indemnify plaintiffs in an underlying action for personal injuries brought by the subcontractor’s employee, granted plaintiffs’ motion for summary judgment to the extent of declaring that the insurer is obligated to defend plaintiffs in the underlying action, unanimously affirmed, with costs.

"An insurer’s duty to defend is broader than the duty to indemnify and arises where the allegations of the complaint against the insured fall within the scope of the risks undertaken by the insurer." (79th Realty Co. v X.L.O. Concrete Corp., 247 AD2d 256). The underlying complaint, which alleges bodily injury sustained by the primary insured’s employee when he fell down a stairway, clearly falls within the general scope of the policy’s coverage for bodily injury arising out of the primary insured’s work for the additional insureds (see, id.; Tishman Constr. Corp. v CNA Ins. Co., 236 AD2d 211). Whether the underlying plaintiff’s injuries come within the policy’s exclusion for injuries caused by the additional insureds’ negligence is a question that must await a determination of liability in the underlying action, since the underlying complaint sets forth claims pursuant to, for example, Labor Law § 240(1), under which each of the additional insureds could be held liable despite no showing of any negligence on their part contributing to the allegedly defective stairway. We note that the motion court did not rule on defendant’s obligation to indemnify, that defendant did not cross move for summary judgment declaring that it has no obligation to indemnify and accordingly, defendant’s arguments on appeal bearing upon whether it has an obligation to indemnify the additional insureds are not properly before this Court.

BIJAN DESIGNER FOR MEN, INC. v. FIREMAN’S FUND INS. CO.

FRIEDMAN, J.

The question presented by this appeal concerns the meaning of the phrase "manufactured by you" in the context of a commercial insurance policy. We conclude that under the terms of the policy plaintiff did not manufacture the clothing destroyed by a fire, notwithstanding that a designer such as plaintiff may be loosely considered a manufacturer within the parlance of the fashion industry.

Plaintiff (Bijan) is a designer and retailer of high-fashion men's clothing. It operates two retail stores, one at the St. Regis Hotel in Manhattan and the other in Beverly Hills, California. On June 1, 1996, a fire at the St. Regis location caused extensive damage to Bijan’s inventory, an inventory consisting primarily of clothing it designed.

At the time of the fire, Bijan was insured under a commercial insurance policy (the policy) issued by defendant (Fireman’s Fund), which covered this loss. During the adjustment of Bijan’s claim, a dispute arose concerning the valuation of Bijan’s stock. This dispute was centered around paragraph K.3 of the policy, which provides the following.

Stock will be valued as follows:

a. Stock that is supplies or raw materials will be valued at Replacement Cost.

b. Stock that is work-in-progress will be valued at the cost of materials, labor, supplies, and overhead incurred.

c. Stock that is finished goods and manufactured by you will be valued at the price for which it could have been sold if there had been no loss, less discounts and unincurred expenses [emphasis added].

d. Stock that is finished goods that you have purchased from others for resale will be valued at Replacement Cost [emphasis added].

* * *

According to Bijan, its stock constituted finished goods that Bijan, itself, had manufactured. Therefore, Bijan claimed entitlement to approximately $10,000,000, which, pursuant to subparagraph c, is the price for which the goods could have been sold had there been no loss. Fireman’s Fund, on the other hand, argued that, while the damaged stock constituted finished goods, the stock was purchased by Bijan from others for resale, not manufactured by it. Hence, pursuant to subparagraph d, Fireman’s Fund asserted that it was only required to pay Bijan the replacement cost, namely, $1,600,000. Fireman’s Fund paid such amount and then commenced this action seeking a declaration that the stock destroyed in the fire was not manufactured by Bijan. In turn, Bijan asserted counterclaims seeking to recover the resale value of the stock.1

Prior to trial, Fireman’s Fund moved for summary judgment asserting that the stock at issue had not been manufactured by Bijan. Fireman’s Fund pointed to Bijan’s essentially uncontroverted role in the production of its clothing line. Thus, Bijan conceives and designs the clothing it sells, selects the materials from which such clothing is made, and provides detailed specifications for the manufacture of the clothing. However, the actual physical production of the clothing is carried out, not by Bijan, but by Italian clothing factories with which Bijan contracts, although Bijan’s personnel sometimes visit the factories to provide oversight. It is further undisputed that title to the goods does not pass to Bijan until it receives and accepts, in the United States, the finished product, with the accompanying invoice. Therefore, Fireman’s Fund argued that under the unambiguous terms of the insurance policy, Bijan was only entitled to recover the replacement value, not the resale value of the stock.

Bijan opposed the motion based on the opinion of Professor Irwin A. Kahn of the Fashion Institute of Technology, who maintained that Bijan is considered to be a "manufacturer" of clothing as that term is colloquially used in the fashion and apparel business. In this connection, he noted that "the most significant activity related to the manufacture of fashion merchandise is conception and specification of garment styles ...".

Professor Kahn further relied on two textbooks used to teach courses at the Fashion Institute. By way of example, one textbook indicated that, although the U.S. Census classified apparel manufacturers as businesses that buy fabric and assemble garments in factories that they own, in reality today few large firms commonly considered apparel manufacturers would qualify as such under the census terminology (Jarnow & Dickerson, Inside the Fashion Business, [Merrill/Prentice Hall, 6th Ed. 1997] at 495).

Fireman’s Fund countered that it is irrelevant whether or not Bijan may be loosely characterized as a manufacturer in the fashion industry. The term used in the relevant contractual provision, that is K.3c of the policy, was "manufactured by you," and that term unambiguously referred to the physical manufacturing of the stock, which Bijan admittedly did not perform.

Supreme Court declined to decide the summary judgment motion. Instead, the court announced that it would reserve decision on the motion until after hearing the trial testimony of Bijan’s expert on the meaning of the term manufacturer as used in the apparel industry. At the close of the evidence, which included testimony by industry experts for both parties, Supreme Court denied Fireman’s Fund's motion for summary judgment, as well as its motion for a directed verdict. In so doing, Supreme Court determined that paragraph K.3c was ambiguous as to whether the term "manufactured by you" was a reference to manufacturing in its commonly understood sense, or a reference to manufacturing in the sense advocated by Bijan.

The sole interrogatory submitted to the jury at the conclusion of the trial, which had been bifurcated into liability and damage phases, asked, "Was the stock damaged in the fire in [Bijan’s St. Regis] location manufactured by Bijan ...?" The jury answered "Yes." After the verdict was rendered, Fireman’s Fund moved for judgment in its favor as a matter of law, or, in the alternative, for a new trial, pursuant to CPLR 4404(a). This motion, like the summary judgment motion and motion for a directed verdict, was denied.

We conclude that Supreme Court erred and that judgment, as a matter of law, should have been entered in favor of Fireman’s Fund based upon the unambiguous terms of the insurance policy.

It has long been the rule that a "contract must be read as a whole in order to determine its purpose and intent, and . . . single clauses cannot be construed by taking them out of their context and giving them an interpretation apart from the contract of which they are a part ( Atwater & Co. v Panama R.R. Co., 246 NY 519; Becker v Frasse & Co., 255 NY 10). Words considered in isolation may have many and diverse meanings. In a written document the word obtains its meaning from the sentence, the sentence from the paragraph, and the latter from the whole document ..." ( Eighth Ave. Coach Corp. v City of New York, 286 NY 84, 88-89). Bearing these fundamental principles in mind, it is evident that the ambiguity perceived by Supreme Court arose as a result of a restrictively focused and isolated analysis of paragraph K.3c. Supreme Court failed to recognize that the purported ambiguity, if it exists, withers when subparagraph c is read in its contextual setting.

Examination of paragraph K.3 of the policy shows that it sets forth a menu representing the spectrum of possibilities in valuing an insured’s stock. That menu commences with the valuation of stock consisting of raw materials (subparagraph a), progresses to stock consisting of work-in-progress, which, of course, consists of raw materials in the process of being assembled but which are not yet in finished form (subparagraph b), and culminates with finished goods manufactured by the insured, namely, Bijan (subparagraph c).

What this reveals is that the reference in paragraph c to "finished goods ... manufactured by you," plainly contemplates the concept of manufacturing in its ordinarily understood sense, i.e., the fabrication of a final product through the use of raw materials (see, Merriam Webster's Collegiate Dictionary at 709 936 [10th ed 1997][defining "manufacture," inter alia, as "something made from raw materials by hand or by machinery"]). This follows because subparagraph c is contextually the culmination of the two preceding subparagraphs, which as noted speak of raw materials and work-in-progress on those raw materials. It necessarily develops, therefore, that "finished goods ... manufactured by you" is a reference to goods resulting from actual, physical work performed on raw materials.

Further support for this conclusion emerges from the juxtaposition of subparagraph c with subparagraph d. As previously indicated, subparagraph d provides: "Stock that is finished goods that you have purchased from others for resale will be valued at Replacement Cost." The construction advocated by Bijan would create an anomalous situation in which Bijan’s stock would fall within the parameters of both subparagraphs c and d.

In this regard, applying Bijan’s loose definition of manufacturing, its stock would fall under subparagraph c because, as explained by Professor Kahn, it is a manufacturer as that term is colloquially used in the apparel industry. However, since Bijan has effectively conceded that the clothing it designs are "finished goods" at the time it receives and accepts the clothing from foreign manufacturers, the stock would also be "finished goods ... purchased from others" under subparagraph d. Hence, the construction advocated by Bijan would create a conflict between subparagraphs c and d. We cannot accept that the parties intended such a result or that such a result is required by virtue of the colloquial reference to Bijan as a manufacturer in apparel industry circles. Moreover, the outcome Bijan advocates would violate the rule that "where two seemingly conflicting contract provisions reasonably can be reconciled, a court is required to do so and to give both effect" (Proyecfin de Venezuela, S.A. v Banco Indus. de Venezuela, S.A., 760 F2d 390, 395-396; see, G&B Photography v Greenberg, 209 AD2d 579, 581).

Bijan nevertheless claims that at the end it must be considered to have manufactured the subject clothing because designing a garment, selecting the materials to be used, and providing specifications to factories, are the most important aspects of creating clothing. The level of importance of an activity, however, is not what defines that activity. By way of analogy, an architect’s role in the construction of a building is obviously of central importance. Beyond designing a building that is structurally sound and aesthetically pleasing, the architect will often be required to conduct site visits to assure that the building is being constructed in accordance with the plans. However, no matter how central the architect’s role to the successful completion of the building, it could not reasonably be argued that the architect is the builder. By a parity of reasoning, Bijan, as the "architect" of its clothing line, does not manufacture the clothing.

Finally, it must be recognized that Bijan did not appear to consider itself the manufacturer of its clothing line. Thus, Bijan’s financial statements for 1994 and 1995 describe it as an "exclusive retail apparel and accessory boutique;" for the two years prior to the fire Bijan did not claim that any of its inventory consisted of raw materials; its combined balance sheet for 1995 showed no manufacturing plants or equipment and claimed no expenses related to the manufacture of goods; its 1995 tax return indicated no expense for raw materials, plant, equipment or labor with regard to the goods sold and claimed no deduction for depreciation of manufacturing plant or equipment; and, for the 13 years prior to the instant fire loss, Bijan identified itself on all tax filings as a retailer. Interestingly, it was not until after the fire that Bijan changed its identification on tax filings to that of a manufacturer.

In sum, the insurance contract at issue was clear and unambiguous. Finished goods that were purchased by Bijan from others are compensable under the policy at replacement cost. As Bijan did not manufacture its stock, judgment should have been entered as a matter of law in favor of Fireman’s Fund.

Accordingly, the judgment of the Supreme Court, New York County (Paula Omansky, J.), entered December 30, 1998, on a jury verdict for plaintiff Bijan after trial, should be reversed, on the law, without costs, that judgment vacated, and judgment entered in favor of defendant Fireman’s Fund, declaring that Bijan’s stock damaged in the 1991 fire was not manufactured by Bijan within the meaning of the subject insurance policy. Cross-appeal by Bijan from the same judgment to the extent that the judgment failed to award attorney’s fees should be dismissed, without costs, as academic.

Footnotes

(1) During trial the caption of the action was amended to style Bijan as the plaintiff and Fireman’s Fund as the defendant.

THIS CONSTITUTES THE DECISION AND ORDER

OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

MAKASTCHIAN v. OXFORD HEALTH PLANS, INC.

Orders, Supreme Court, New York County (Stephen Crane, J.), entered on or about August 31, 1998 and January 28, 1999, which, inter alia, granted plaintiffs class certification and summary judgment on the issue of defendants' liability for breach of contract and violation of General Business Law § 349, and which denied defendants' motion to dismiss the complaint, unanimously modified, on the law, to the extent of dismissing the second, third, fourth, and fifth causes of action and, except as so modified, affirmed, without costs. Appeal from order, same court and Justice, entered on or about July 9, 1998, unanimously dismissed, without costs, as superseded by the appeal from the order entered on or about August 31, 1998.

Plaintiffs, subscribers to a health care policy known as the Freedom Plan offered by defendant insurers (collectively, Oxford), allege that the policy provides that defendants invoice the insured for premiums 15 days before they are due; that in the event the premium is not timely paid, defendants must send the insured a termination notice containing a 30 -day grace period for paying the premium; that defendants have regularly failed to give such advance notice of cancellation, instead mailing out retroactive notices of termination; that such termination notices are sent out even when defendants have previously supplied the insured with billing statements reflecting no outstanding premiums and when defendants have precertified medical procedures for the period of the retroactive termination; and that defendants have frequently mailed out erroneous billing statements that caused insureds to go into default, and then retroactively terminated the policies of such supposedly defaulting insureds. Plaintiffs seek declaratory and injunctive relief on theories of breach of contract , negligent misrepresentation, promissory estoppel, waiver, common-law fraud and deceptive trade practices in violation of General Business Law § 349.

We agree with the IAS court that the action should be prosecuted as a class action, with a main class consisting of all persons who subscribed to the Plan (before January 1, 1996 for reasons not in issue on appeal), and a subclass consisting of those subscribers whose coverage was terminated for nonpayment of premiums. In question is defendants' general practice of terminating policies for nonpayment of premium without notice, not whether certain subscribers did or did not pay their premiums before their policies were canceled. This general practice, and the question of whether it violates the insurance policy, affects all policy holders, who number many thousands, and any questions relating to individual reliance, causation and damages are, given the essentially declaratory nature of the relief sought, relatively insignificant, if not entirely irrelevant to the question of class certification (see, Pruitt v Rockefeller Ctr. Props., 167 AD2d 14, 22). Considering that there are many subscribers who have no financial stake in the outcome but do have an interest in resolving whether defendants are required to provide notice of termination 30 days in advance, a class action is clearly superior to any other method of litigation.

On the merits, the IAS court correctly held that defendants' practice of terminating policies without providing 30 days prior notice is in violation of the plain terms of the policy, and that it does not avail defendants that such terms were the result of a typographical error. We also agree with the IAS court that defendants may have engaged in deceptive practices that would cause subscribers to believe that they still had health insurance when coverage had already been canceled.

As to the claims predicated on misrepresentation, waiver and estoppel, Supreme Court concluded that questions of fact remain with respect to these issues. While we do not dispute plaintiffs ' right to assert these theories, we note that they are subsumed under the breach of contract cause of action (Calamari and Perillo, Contracts § 104-105, at 178-179) and neither state an independent basis for recovery ( Clark-Fitzpatrick Inc. v Long Is. R. R. Co., 70 NY2d 382, 389; North Shore Bottling Co. v Schmidt & Sons, 22 NY2d 171, 179) nor seek compensation distinct from that sought under the claim for breach of contract ( Rockefeller Univ. v Tishman Constr. Corp., 240 AD2d 341, 342, lv denied 91 NY2d 803 ).

MELLA v STATE FARM INSURANCE COMPANY

In an action, inter alia , to recover the proceeds of an insurance policy, the defendants, State Farm Insurance Company and Anthony J. Chille, respectively appeal and cross-appeal from a judgment of the Supreme Court, Queens County ( Levine, J.), entered August 25, 1998, which, after a nonjury trial, is in favor of the plaintiff and against them in the principal sum of $15,737.07.

ORDERED that the judgment is modified by deleting the provision thereof which is in favor of the plaintiff and against the defendant Anthony J. Chille and substituting therefor a provision dismissing the complaint insofar as asserted against that defendant; as so modified the judgment is affirmed, without costs or disbursements.

Inasmuch as the defendant State Farm Insurance Company (hereinafter State Farm) failed to satisfy its "strict obligation" to inform the plaintiff of the mandatory photo inspection requirement and to provide the plaintiff with a list of inspection sites, the automobile physical damage insurance policy did not lapse ( Insurance Law § 3411; 11 NYCRR part 67; see, Siddiqui v Nationwide Mutual Ins. Co., 255 AD2d 30; Govan v Motor Ins. Corp. CIM Ins., 167 Misc 2d 733, 736; Valachovic v Lumbermen's Mut. Cas. Co., 105 Misc 2d 577, 580, affd 84 AD2d 879).

However, the Supreme Court erred in extending that obligation to the defendant Anthony J. Chille, as the statutory duty is imposed solely on the insurance carrier, State Farm (see, Insurance Law § 3411; 11 NYCRR part 67).

O'BRIEN, J.P., ALTMAN, LUCIANO, and SMITH, JJ., concur.

WHALEN v CITY OF NEW YORK

In an action to recover damages for personal injuries, the defendants third-party plaintiffs, the City of New York and Perini Corporation, s/h/a Perini Construction Incorporated, appeal (1) from a purported interlocutory judgment of the Supreme Court, Queens County (Weiss, J.), dated May 19, 1998, on the issue of liability , (2) from a judgment of the same court, entered December 18, 1998, which is in favor of the plaintiff and against them in the principal sum of $392,860, (3), as limited by their brief, from so much of an order of the same court, dated January 20, 1999, as denied that branch of their motion which was for a declaration that Perini Corporation, s/h/a Perini Construction Incorporated, was entitled to an automatic stay pursuant to CPLR 5519(a)(1), and (4) from an order of the same court (Polizzi, J.), dated February 3, 1999, which granted the motion of the third-party defendant Thunderbird Constructors, Inc., to renew the prior motion of the defendants third-party plaintiffs for summary judgment on the third-party complaint which was granted by order of the same court dated June 10, 1997, and, upon renewal, denied the prior motion.

ORDERED that the appeal from the purported interlocutory judgment is dismissed, without costs or disbursements, as it is a jury verdict embodied in an extract of the trial minutes, which is not appealable; and it is further,

ORDERED that the appeal by the City of New York from the order dated January 20, 1999, is dismissed, without costs or disbursements, as the City of New York is not aggrieved by the portion of the order appealed from (see, CPLR 5511); and it is further,

ORDERED that the appeal by Perini Corporation , s/h/a Perini Construction Incorporated, from the order dated January 20, 1999, is dismissed, without costs or disbursements, as the portion of the order appealed from is not appealable as of right and leave to appeal has not been granted (see, CPLR 5701); and it is further,

ORDERED that the judgment is affirmed, without costs or disbursements; and it is further,

ORDERED that the order dated February 3, 1999, is modified by deleting the provision thereof denying the motion of the defendants third-party plaintiffs for summary judgment and substituting therefor a provision adhering to the original determination in the order dated June 10, 1997; as so modified, the order dated February 3, 1999, is affirmed, without costs or disbursements.

The plaintiff, Kevin Whalen, an iron worker, commenced this action to recover damages for injuries he sustained while descending an icy staircase from a construction site on the Pulaski Bridge in Queens. The complaint alleged, inter alia, that the two defendants, the City of New York (hereinafter the City) and the general contractor, Perini Corporation, s/h/a Perini Construction Incorporated (hereinafter Perini), negligently maintained the construction site and violated Labor Law §§ 200 and 241(6). The defendants commenced a third-party action against Whalen 's employer, Thunderbird Constructors, Inc. (hereinafter Thunderbird), the subcontractor hired to perform the steel work on the bridge. In an order dated June 10, 1997, the Supreme Court granted those branches of the motion of the City and Perini which were for summary judgment on the third-party complaint which asserted, among other things, causes of action for indemnification and breach of contract based on Thunderbird 's failure to name the City and Perini as additional insureds on its insurance policy. After a bifurcated trial, the jury rendered a verdict in favor of Whalen and against the City and Perini. After entry of the judgment, the Supreme Court granted Thunderbird's motion for renewal and denied the motion of the City and Perini for summary judgment on the third-party complaint.

It is well settled that Labor Law § 241(6) imposes a nondelegable duty on owners and contractors regardless of their control or supervision of the work site (see, Allen v Cloutier Constr. Corp., 44 NY2d 290; Long v Forest-Fehlhaber, 55 NY2d 154; Miller v Perillo, 71 AD2d 389). In order to prevail on a Labor Law § 241(6) claim, however, the plaintiff must establish that the defendant violated a regulation that sets forth a specific standard of conduct (see, Ross v Curtis-Palmer Hydro-Elec. Co., 81 NY2d 494). Here, Whalen relied on a provision of the Industrial Code, 12 NYCRR 23-1.7(d), which requires removal, sanding, or covering "[i]ce, snow, water , grease and any other foreign substance which may cause slippery footing" from any "floor, passageway , walkway, scaffold, platform or other elevated working surface".

Contrary to the defendants' contention, 12 NYCRR 23-1.7(d) contains specific directives that are sufficient to sustain a cause of action under Labor Law § 241(6) (see, Fox v Westchester Resco, 229 AD2d 466; Ciraolo v Melville Ct. Assocs., 221 AD2d 582; Colucci v Equitable Life Assur. Socy. of U.S., 218 AD2d 513; Hammond v International Paper Co., 178 AD2d 798). Moreover, the testimony at trial established that the staircase where the accident occurred was a passageway to the work site. Responsibility under Labor Law § 241(6) "extends not only to the point where the * * * work was actually being conducted , but to the entire site, including passageways utilized in the provision and storage of tools, in order to insure the safety of laborers going to and from the points of actual work" ( Sergio v Benjolo, 168 AD2d 235, 236; see also, Zeigler-Bonds v Structure Tone, 245 AD2d 80).

In addition, Whalen met his burden of proof with respect to lost earnings by submitting evidence which included documentation of the wages received by union workers at the plaintiff's pay scale and documentation of his employment during the period immediately preceding the accident (see, Nelson v 1683 UNICO, 246 AD2d 447).

Nonetheless, upon granting that branch of Thunderbird's motion which was to renew the appellants' prior motion for summary judgment on the third -party complaint, the Supreme Court should have adhered to the prior determination granting the motion . The basis for renewal was evidence that General Star Insurance Co. (hereinafter General Star) had mistakenly failed to name the City and Perini as additional insureds on Thunderbird's policy and that on October 28, 1998, General Star modified the policy issued to Thunderbird to add the City and Perini as additional insureds, retroactive to October 4, 1993, a date before Whalen's accident. The modification , however, only provided coverage to the City and Perini for damages awarded to the plaintiff based on Thunderbird's own negligence. In light of the fact that in May 1998 the jury determined that only the City and Perini were negligent, General Star disclaimed coverage as to the City and Perini. We find this belated, and somewhat dubious, modification of the insurance policy insufficient to defeat the motion for summary judgment on the third-party complaint by the City and Perini. The contract between Perini and Thunderbird required Thunderbird to purchase insurance naming the City and Perini as additional insureds for all purposes except for Workers' Compensation claims. Indeed, if the purpose of the insurance requirement of the contract was only to insure the City and Perini for Thunderbird's negligence, there would be no reason to list them as additional insureds. Thus, the fact that General Star finally named the City and Perini as additional insureds did not comport with the contract requirements between Perini and Thunderbird and could not form the basis for reversal of the Supreme Court's original order granting summary judgment on the third-party complaint (see, Kinney v Lisk Co., 76 NY2d 215; Kennelty v Darlind Constr., 260 AD2d 443).

SANTUCCI, J.P., S. MILLER, LUCIANO, and FEUERSTEIN , JJ., concur.

WARD v. ELRAC, INC., d/b/a ENTERPRISE RENT-A-CAR

In an action to recover damages for personal injuries, etc., the defendant Douglas M. Seaton and the third-party defendant, Leslie Seaton, appeal from so much of an order of the Supreme Court, Queens County (Posner, J.), dated February 4, 1999, as granted that branch of the motion of the defendant third-party plaintiff which was for summary judgment on the issue of contractual indemnification in the third-party action.

ORDERED that the appeal by the defendant Douglas M. Seaton is dismissed, as that defendant is not aggrieved by the order appealed from (see, CPLR 5511); and it is further,

ORDERED that the order is affirmed insofar as reviewed ; and it is further,

ORDERED that the respondent is awarded one bill of costs.

It is undisputed that the defendant Douglas M. Seaton was involved in a motor vehicle accident while operating a vehicle rented from the defendant ELRAC, Inc., d/b/a Enterprise Rent-A-Car (hereinafter ELRAC), by the third-party defendant Leslie Seaton. The plaintiff, a pedestrian, allegedly sustained personal injuries as a result of the accident. A rental agreement between ELRAC and Leslie Seaton provided that Leslie Seaton, as lessee of the rental vehicle, would indemnify ELRAC for all claims arising out of the use of the rental vehicle. Therefore, ELRAC is entitled to summary judgment on the issue of contractual indemnity (see, ELRAC, Inc. v Ward, AD2d & nbsp; [2d Dept., Nov. 29, 1999]; Cuthbert v Pederson, AD2d & nbsp; [2d Dept., Nov. 8, 1999]; ELRAC, Inc. v Beckford, 250 AD2d 725; ELRAC, Inc. v Rudel, 233 AD2d 417). Leslie Seaton's contention that ELRAC, as a self -insurer, is required to provide at least the minimum insurance coverage pursuant to Vehicle and Traffic Law § 388 and Morris v Snappy Car Rental (84 NY2d 21) is without merit. Because ELRAC seeks indemnification for sums it may become obligated to pay to the plaintiff, the policy underlying Vehicle and Traffic Law § 388 is not undercut by enforcement of the indemnification clause ( see, Morris v Snappy Car Rental, supra, at 27; Cuthbert v Pederson, supra).

Leslie Seaton's remaining contentions are without merit.

SULLIVAN, J.P., S. MILLER, FRIEDMANN, and SCHMIDT, JJ., concur.

CITY OF AMSTERDAM v. LAM

Peters, J.

Appeal from an order of the Supreme Court (Best, J.), entered December 23, 1998 in Montgomery County, which granted defendant Cigna Insurance Company's motion for summary judgment dismissing the complaint against it.

In this case of first impression , a municipality seeks to hold an insurance company liable for "inducing arson" by overinsuring property. Upon these facts, we cannot find any duty owed to plaintiff since it was not in privity of contract.

Defendant Nissim Mizrachi, the owner and controller of defendant Nizmeister Realty Corporation, purchased a 100-year-old industrial building complex (hereinafter the complex) in the City of Amsterdam, Montgomery County, for $690,000 in January 1992. On or about February 4, 1992, Virginia Boyles, a commercial underwriter for defendant CIGNA Insurance Company, received an application for a commercial insurance policy for the complex from E. Kinker & Company, an Ohio insurance brokerage firm. Richard Lonneman, a broker with E. Kinker & Company, is alleged to have represented to CIGNA that the complex was rehabilitated into commercially valuable property consisting of offices and warehouses and that the individual buildings therein were partially rented and sprinklered for fire protection. On those representations, CIGNA issued a commercial insurance policy providing replacement cost coverage with policy limits of $14,154,000, effective January 31, 1992. The policy provided that if the buildings were not replaced after an "occurrence", the insured would receive the actual cash value of the loss. In February 1992, Marcard Stein & Company, a German bank, lent Nizmeister Realty Corporation a total of $4,000,000 to aid in the rehabilitation of the complex. The policy's declaration sheets accordingly named such bank as a mortgagee.

After the issuance of coverage and subsequent to a request for an inspection of such property by CIGNA to Richard Savo, a former loss control representative , it is alleged that Lonneman continued to represent, as of March 1992, that the complex was sprinklered and at least 50% occupied. Anticipating 85% occupancy within the next 60 days, additional worksheets were transmitted between Lonneman and CIGNA. Savo contends that his numerous attempts to inspect the complex were foiled until August 12, 1992 when Mizrachi finally made the site available. Savo's inspection revealed that the buildings were not sprinklered for fire protection; that there was a 90% vacancy rate; and that structural, safety and mechanical improvements to the complex were not being made by Nizmeister. Concluding that the "buildings are in generally poor condition" and that " ;the complex has little economic value in its present state since major structural, mechanical and safety improvements will be necessary to provide a suitable space for any type of tenant", immediate cancellation of the insurance policy was recommended.

CIGNA contends, however, that Savo' s loss control report was not received before August 28, 1992 when eight of the buildings were destroyed by fire and four others were damaged. Investigation revealed that the fire was intentionally set by Mizrachi who later pleaded guilty to criminal charges relating thereto. CIGNA paid approximately $4, 000,000 to the mortgagee of the complex.

Plaintiff commenced this action to recover its expenses for extinguishing the fire and remediating the fire scene. It also sought punitive damages against CIGNA, amongst others, asserting that its issuance of this insurance policy for amounts far exceeding the value of the property induced the insured to commit arson. Alleging causes of action in negligence , conspiracy, intentional tort and breach of contract as a third-party beneficiary, CIGNA responded with a motion for summary judgment seeking a dismissal of the complaint by contending, inter alia , that it owed no duty to plaintiff. Supreme Court granted CIGNA's motion, prompting this appeal .

As plaintiff was not a party to this contract, no viable claim for negligence can exist unless contracting parties can be found to have owed a duty to plaintiff as a third-party beneficiary (see, Eaves Brooks Costume Co. v Y.B.H. Realty Corp., 76 NY2d 220; Leavitt-Berner Tanning Corp. v American Home Assur. Co., 129 AD2d 199, lv denied 70 NY2d 609). And, as the "party who seeks the status of a third-party beneficiary [it] has the burden of demonstrating that [it] has enforceable rights thereunder * * * which the * * * parties to the contract intended [it] to have" (Leavitt- Berner Tanning Corp. v American Home Assur. Co., supra , at 203 [citations omitted]).

The language of this contract clearly precludes plaintiff from meeting this burden. It provides that CIGNA only agreed to pay up to $1,000 for fire department service charges that the insured had assumed by contract prior to a recovered loss or as would be required to pay by local ordinance. By so specifying its liability due to fire loss, CIGNA clearly articulated its intention to be limited to these defined charges. Nor can a claim be predicated upon a failure to inspect. The contract states that CIGNA has "the right, but [is] not obligated to * * * [m]ake inspections and surveys at any time". It explains that the inspection is undertaken for CIGNA's own protection to reduce its risks, not "to perform the duty of any person or organization to provide for the health or safety of workers or the public". It proclaims no intention to " warrant that conditions * * * [a]re safe or healthful; or * * * [c]omply with laws, regulations, codes or standards." As CIGNA's ability to inspect under the contract was a right, not a duty, and an insurer does not have a duty to inspect the premises before issuing a policy (see, Matter of James v State of New York, 90 AD2d 342, 343, affd 60 NY2d 737; see also , Jansen v Fidelity & Cas. Co. of N.Y., 165 AD2d 223, 226, affd 79 NY2d 867), plaintiff failed to meet its burden.

These facts further foreclose a claim of negligence predicated on the limited exception for those not in privity of contract. The exception may apply if:

* * * (1) the defendant contracting party was aware that his performance under the contract * * * was to be used for a particular purpose, (2) the defendant knew that a known third party was intending to rely upon the defendant's performance, and (3) there has been some conduct on the part of the defendant, linking the defendant to the third party, which evinces the defendant's understanding of the third party's reliance" (Leavitt-Berner Tanning Corp. v American Home Assur. Co., supra, at 202 [emphasis supplied], citing Credit Alliance Corp. v Andersen & Co., 65 NY2d 536, 551).

(See also, Matter of James v State of New York, supra, at 344.) No record evidence here indicates that CIGNA agreed to have plaintiff rely upon its inspection of the subject premises before it issued a policy of insurance as a means to somehow obviate its obligation under applicable building, housing or zoning codes to perform its own safety inspection.

Nor can we find that CIGNA induced Mizrachi to commit arson by its issuance of an excessive insurance policy since such act was not foreseeable as a matter of law. "[T]he mere existence of an intervening criminal act by a third person will not completely absolve a defendant * * * from liability[] where the defendant[] should have reasonably anticipated a risk of harm from criminal activity" ( Rodriguez v Mohr, 174 AD2d 382, 382). In our view, no risk of harm could have been anticipated here since representations were made to CIGNA that the complex was rehabilitated into commercially valuable space, had a 50% occupancy rate and was fully equipped with a sprinkler protection system (cf. , New York Cent. Mut. Fire Ins. Co. v City of Albany, 247 AD2d 815).

Cardona, P.J., Mercure and Mugglin, JJ., concur .

ORDERED that the order is affirmed, with costs.

KRISTEL v. MITCHELL

Graffeo, J.

Appeals (1) from an order of the Supreme Court (Lynch, J.), entered February 9, 1999 in Schenectady County, which granted motions by defendants Theresa M. Mitchell and Darryl C. Romano for summary judgment dismissing the complaint against them, and (2) from an order of said court, entered August 25, 1999 in Schenectady County, which, upon renewal, adhered to its prior decision.

Plaintiff commenced this action to recover damages for injuries she allegedly sustained to her head, neck, back, hip and jaw in two motor vehicle accidents. In the first accident, which occurred in July 1990, plaintiff contends that she struck her head on the windshield and received emergency room medical treatment. In the second accident , approximately two months later, she claims that her head struck the front visor but she did not seek medical treatment and was able to drive home.

After joinder of issue, defendants Theresa M . Mitchell and Darryl C. Romano (hereinafter collectively referred to as defendants) moved for summary judgment dismissing the complaint against them, asserting that plaintiff had not sustained a "serious injury" as defined by Insurance Law § 5102 (d). Supreme Court granted the motions which prompted plaintiff's motion to renew. Upon renewal, Supreme Court adhered to its original determination and plaintiff now appeals both orders.

It is well settled that the proponent of a motion for summary judgment based on New York's no-fault statute must submit admissible evidence demonstrating that the plaintiff did not sustain a "serious injury" within the meaning of Insurance Law § 5102 (d) (see, Flater v Brennan, 173 AD2d 945, 947). Once a defendant has satisfied his or her prima facie burden, the plaintiff must present "competent medical evidence based upon objective medical findings " establishing the existence of a "serious injury" ( Eisen v Walter & Samuals, 215 AD2d 149, 150; see, Congdon v Preisman, 263 AD2d 808).

Here, in support of their motions, defendants submitted the affidavit of the physician who conducted an independent neurological examination of plaintiff . The physician opined that there were no objective neurologic findings to support plaintiff's claim of brain injury. Indicating that plaintiff's alleged injuries were incompatible with her complaints, plaintiff's condition was diagnosed as psychogenic in nature, coupled with chronic depression. Any alleged pain and other symptoms were found to be unrelated to the automobile accidents. Defendants, therefore , met their burden of presenting admissible evidence that plaintiff did not sustain a "serious injury".

In opposition to defendants' motions, plaintiff initially submitted the affidavit of a psychologist who interviewed her on two occasions in 1996 and, based on a neuropsychological evaluation , concluded that plaintiff suffered intellectual impairments and that her "overall presentation " was consistent with an organic mood disorder. He opined "with reasonable psychological certainty" that plaintiff's condition was caused by the trauma of the automobile accidents. Defendants assert not only that the psychologist's affidavit was conclusory, but that it did not constitute " ;competent medical evidence". Although this court has held that under certain circumstances a mental or emotional impairment may constitute a "serious injury" (see, Sellitto v Casey , AD2d [Jan. 13, 2000], slip opn pp 3-4), we find that the affidavit of plaintiff 's psychologist did not contain an adequate assessment of how the alleged injuries were related to either or both accidents.

Similarly, the affidavit of plaintiff's physician, submitted with the motion to renew, failed to provide competent objective medical evidence establishing that plaintiff sustained a "serious injury" as a result of the accidents. Notably, the contemporaneous notes by the doctor from his initial evaluation of plaintiff indicated that he made no findings which explained plaintiff's symptoms and suggested that plaintiff's symptoms were of a psychological nature. In the absence of adequate objective findings supporting the claim that plaintiff suffered from a "serious injury" and that her injuries were causally related to the accidents, there is no reason to disturb Supreme Court's determination that plaintiff did not make a sufficient showing to defeat defendants' motions for summary judgment (see, Gaddy v Eyler, 79 NY2d 955).

Mercure, J.P., Crew III, Peters and Spain, JJ., concur .

ORDERED that the orders are affirmed, with one bill of costs.

STRAND v. PIONEER INSURANCE COMPANY

Mercure, J.

Cross appeals from an order of the Supreme Court (Torraca , J.), entered November 17, 1998 in Ulster County, which denied plaintiff's motion for summary judgment and denied defendant's cross motion for summary judgment dismissing the complaint.

In March 1989, the Department of Environmental Conservation brought an action against plaintiff and others pursuant to Navigation Law article 12 seeking reimbursement for petroleum contamination cleanup and removal costs and penalties under Navigation Law § 192 (hereinafter the DEC action).[1] Ultimately, a jury rendered a verdict against plaintiff for $4,400, and judgment was entered against her for that amount plus preverdict interest , costs and disbursements ( State of New York v Arthur L. Moon Inc., 256 AD2d 862).

During the pendency of the DEC action, plaintiff commenced this action against defendant, her premises liability insurer, alleging , inter alia, that defendant breached its insurance contract with plaintiff by refusing to provide plaintiff with a defense and indemnity in the DEC action. In its answer, defendant acknowledged that it had disclaimed coverage but asserted as affirmative defenses that the disclaimer was justified by virtue of plaintiff's failure to give it timely notice of the occurrence giving rise to liability and to promptly forward the legal papers received in the DEC action and also that the policy's pollution exclusion barred coverage under the contract. Following joinder of issue, plaintiff moved for summary judgment for the relief demanded in the complaint and defendant cross-moved for summary judgment dismissing the complaint. Supreme Court denied the motion and the cross motion and the parties cross-appeal.

We affirm. In our view, plaintiff's sworn statements that she first learned of the fuel oil discharge on March 31, 1986 and promptly notified defendant's local agent of the same by telephone, but was told that there was nothing defendant could do because "contamination" was not covered by her policy, made out a prima facie showing on the issues of prompt notice to defendant or its agent and plaintiff's good-faith belief in noncoverage excusing her subsequent failure to provide defendant with the legal papers received in the DEC action (see, Reynolds Metal Co. v Aetna Cas. & Sur. Co., 259 AD2d 195, 199-200; Marinello v Dryden Mut. Ins. Co., 237 AD2d 795, 796 [citations omitted]). Further, deposition testimony of DEC employee Olufemi Falade that his investigation revealed oil on the side of plaintiff's tank "where it all had flown over" provides adequate evidentiary support for a finding that the oil spill was caused by an inadvertent overfilling of the tank and that the occurrence therefore involved a "sudden and accidental " discharge, expressly falling outside the policy exclusion. In each case, however, contrary evidence presented by defendant raised genuine issues for resolution by the trier of fact, including whether plaintiff's belief in noncoverage was reasonable under the circumstances, thereby precluding an award of summary judgment in favor of either party.

Cardona, P.J., Crew III, Peters and Mugglin , JJ., concur.

ORDERED that the order is affirmed, without costs.

INGALSBE v. CHICAGO INSURANCE COMPANY

Mugglin, J.

Appeal from an order of the Supreme Court (Malone Jr., J.), entered June 10, 1999 in Ulster County, which, inter alia, granted plaintiff's motion for partial summary judgment and made a declaration in his favor .

The principal facts in this declaratory judgment action are not in dispute. Between 1984 and September 30, 1995, plaintiff, an attorney, maintained a professional liability insurance policy with defendant Home Insurance Company. This "claims-made" policy was procured for plaintiff by defendant Bertholon-Rowland Corporation (hereinafter B-R). In 1994, when Home announced that it would cease writing professional liability policies in New York, B-R successfully placed plaintiff's insurance with defendant Chicago Insurance Company. The policy with Chicago covered the period from September 30, 1995 until September 30, 1997. During the summer months of 1995, plaintiff received information from B-R of coverage to be provided and the necessity for extended reporting endorsements (hereinafter "tail" coverage).

In July 1997, plaintiff was sued for legal malpractice on the ground that on February 26, 1994, he negligently allowed the Statute of Limitations to run on a wrongful death claim. When Home and Chicago disclaimed any duty to defend plaintiff in the legal malpractice action, plaintiff instituted this action seeking, inter alia, a declaration that Chicago and Home have a duty to defend and indemnify him. Following the joinder of issue and discovery, plaintiff moved for partial summary judgment against Home and Chicago on the issue of their respective obligations to defend. Chicago and Home cross-moved for summary judgment seeking a declaration of their lack of any duty to defend plaintiff or, in the alternative, dismissal of the complaint on the ground of appropriate denial of coverage under the respective policies. As to Home, Supreme Court found that plaintiff failed to demonstrate entitlement to coverage because he failed to assert a claim or to report facts that potentially could lead to a claim during the policy period or during any extended reporting period. The court, applying the same rationale, similarly found that plaintiff was not covered under the policy of insurance issued by Chicago. However, the court held that B-R was the agent of both Home and Chicago and, based on statements contained in an information flyer sent by B-R to plaintiff, that Home and Chicago were equitably estopped from disclaiming coverage. Supreme Court, therefore, granted plaintiff's motion and defendants appeal.

We agree with Supreme Court's conclusions that since plaintiff knew in July 1994 that he had missed the wrongful death Statute of Limitations, he had a reasonable basis upon which to report a potential claim to his malpractice carrier. Since this occurred during the period when the Home policy was in force and since no claim or potential claim was reported, there is no coverage under the Home policy. Likewise, we agree with the court that since the Chicago policy provides coverage for claims arising during the policy period or prior to the policy period provided that, inter alia, the insured had no reasonable basis to believe that he had breached a professional duty or to foresee that a claim would be made against him, that there is no coverage under the Chicago policy. Nevertheless, since we believe that Supreme Court improperly applied the doctrine of equitable estoppel, there must be a reversal.

In order to be entitled to equitable estoppel, plaintiff must establish that Home and Chicago engaged in conduct which amounts to false representation or concealment of material facts with the intention or expectation that such conduct would be acted upon by him and that Home and Chicago had knowledge of the real facts (see, Michaels v Travelers Indem. Co., 257 AD2d 828, 829). To obtain the benefits of equitable estoppel , plaintiff must also prove lack of knowledge and the lack of any means to acquire knowledge of the truth as to the facts in question, reliance upon the conduct of the other party and a prejudicial change of position based upon that conduct (see, id., at 829). Applying these principles herein and assuming, without deciding, that B-R was the agent of Home and/or Chicago, it is apparent that the doctrine is inapplicable for several reasons.

First, to conclude as does plaintiff and Supreme Court that the flyer sent by B-R to plaintiff was false in that it asserted that "tail " insurance was not necessary requires that the flyer be read selectively and not in its entirety . The flyer specifically advised that if a claim has not been filed but there is a belief that one might "surface" from work done in the past, that it should be reported immediately to the current carrier. The flyer stated:

What should I do if a claim has not been filed, but I believe one may surface from work I am now performing or have previously performed? Please report all incidents of which you are aware to the current carrier immediately. It is imperative that you report all incidents , potential claims, actual claims or situations you believe may become a claim prior to your renewal date; this will ensure that all eligible claim(s) will be covered under your current policy. As part of the renewal process, we ask that you complete the claim/incident information sections of the renewal application. (Emphasis in original.)

There is nothing false or misleading about this information. Moreover, since plaintiff had both policies in his possession before the Home policy expired, he had the means to acquire knowledge of the exact coverage provided by the policies. The doctrine is inapplicable for the additional reason that plaintiff can show no prejudicial change of position based upon the conduct of any defendant. Plaintiff asserts that there was no attorney-client relationship between him and the plaintiff in the malpractice action and he therefore could breach no duty owed her . If true, he would have no need for "tail" coverage and therefore would not have changed his position from needing such coverage to not acquiring it to his prejudice.

This determination renders it unnecessary for us to address the issues of whether B-R was the agent of either Home or Chicago and whether Home's cross motion seeking summary judgment dismissing the fifth cause of action wherein plaintiff sought reformation of the policy should have been granted.

As a final matter, we note that plaintiff's request for summary judgment declaring that Home and Chicago are obligated to indemnify him is not properly before us. Plaintiff's motion for summary judgment before Supreme Court was limited to a request for a declaration that Home and Chicago be required to defend him in the legal malpractice action and reimburse him for counsel fees expended in his defense to date. Since plaintiff did not seek summary judgment regarding indemnification, this issue is not properly before us (see, Rotundo v S & C Magnetic Resonance Imaging, 255 AD2d 573, 574; Ciesinski v Town of Aurora, 202 AD2d 984, 985).

Cardona, P.J., Mercure and Peters , JJ., concur.

ORDERED that the order is reversed, on the law, without costs, and it is declared that defendants Home Insurance Company and Chicago Insurance Company did not have an obligation to defend plaintiff in the underlying legal malpractice action.

GA INS. CO. OF NEW YORK v. SIMMES

Spain, J.P.

Appeal from an order of the Supreme Court (Dier, J.), entered September 10, 1998 in Washington County, which denied plaintiff's motion for summary judgment.

In the fall of 1995, defendant Diane Simmes, doing business as Painter Contracting, was awarded a subcontract by Murnane Building Contractors Inc. for a painting project at Great Meadow Correctional Facility in Washington County. Plaintiff issued Simmes an insurance policy for the period November 1995 to November 1996, which was canceled effective March 31, 1996 for nonpayment of premiums.

In August 1996 Murnane informed Simmes that they both were being sued by defendant Melanie R. Cary,[1] a correction officer at Great Meadow , for injuries allegedly caused by her exposure to solvent or paint fumes on or about January 13, 1 996. Simmes, believing that she had no insurance, did not notify plaintiff of this information. It appears that in January 1997 Simmes received a letter from Cary's attorney advising Simmes of the claim and requesting that she forward the letter to her insurance carrier; Simmes again failed to notify plaintiff .[2] Plaintiff's records reflect that on March 10, 1997 Murnane's insurer informed Cary's attorney that plaintiff was Simmes' carrier. Cary's attorney commenced an action against Simmes and, although Simmes received a summons and complaint on May 6, 1997, she never forwarded the papers to plaintiff. In early July 1997 Cary's attorney forwarded copies of the pleadings to plaintiff.

In October 1997 plaintiff commenced this action against Simmes and Cary seeking a declaration that it had no obligation to defend or indemnify Simmes pursuant to the insurance policy. Simmes failed to timely answer. Plaintiff moved for a default judgment against Simmes and for summary judgment against Simmes and Cary declaring that it owed no duty to indemnify or defend Simmes in Cary's underlying action. Supreme Court initially granted plaintiff a default judgment against Simmes and summary judgment against both Simmes and Cary . Upon reargument, the court amended its prior order and denied that portion of plaintiff's summary judgment motion as it related to Cary, finding that Cary, as the injured party, had "provided sufficient notice to [plaintiff]". The amended order did not disturb the default judgment entered in favor of plaintiff awarding it summary judgment against Simmes. Plaintiff now essentially appeals the denial of its summary judgment motion as against Cary.

First, Supreme Court properly granted Cary's motion to reargue the summary judgment motion based, as it was, upon the letter from Cary's attorney pointing out that his affidavit was not listed among the papers considered by the court in making its initial decision. Although pretrial motions are generally made in writing, a court may entertain an oral motion when the parties are before it and where it appears that no prejudice would result from an informal procedure (see, Siegel, NY Prac § 243, at 390-391 [3d ed]). The court held a conference at which all parties were represented and oral argument was heard, following which the court issued its amended order. Under these circumstances there was no prejudice to plaintiff .

Next, we reject plaintiff's contention that Cary's notice to it was untimely as a matter of law; however, we also disagree with Supreme Court's implicit finding in its amended order that Cary's notice was timely as a matter of law, finding that a triable question of fact has been raised on this issue. Insurance Law § 3420 (a) (4) states that all insurance policies written in New York which provide the kind of coverage plaintiff afforded to Simmes must include the following:

A provision that failure to give any notice required to be given by such policy within the time prescribed therein shall not invalidate any claim made by the insured or by any other claimant if it shall be shown not to have been reasonably possible to give such notice within the prescribed time and that notice was given as soon as was reasonably possible (emphasis supplied).

This statute, like its predecessor, created "an independent right in the injured party to give notice of the accident * * * [and,] where the injured person proceeds diligently in ascertaining coverage and in giving notice , he is not vicariously charged with any delay by the assured" ( Jenkins v Burgos, 99 AD2d 217, 221). Significantly, the notice required of an injured party to an insurer is measured less rigidly than the notice required of an insured. "In evaluating the propriety of notice given by the injured party, it has been clearly established that such notice is not to be judged by the same standards, in terms of time, as govern notice by the insured, since what is reasonably possible for the insured may not be reasonably practical for the injured person" (id., at 221; see, Lauritano v American Fid. Fire Ins. Co., 3 AD2d 564, 568, affd 4 NY2d 1028; see also, Wraight v Exchange Ins. Co., 234 AD2d 916, 917, lv denied 89 NY2d 813; Elmuccio v Allstate Ins. Co., 149 AD2d 653; National Grange Mut. Ins. Co. v Diaz, 111 AD2d 700). Indeed, "[t]he passage of time does not of itself make delay unreasonable . Promptness is relative and measured by circumstances" (Lauritano v American Fid. Fire Ins. Co., supra, at 568 ).

Here, Simmes' failure to provide plaintiff with notice in a timely fashion does not preclude Cary's claim. Rather, the several unresolved factual inconsistencies raised by the parties ' proof created a material question of fact with respect to the sufficiency of Cary's notice to plaintiff . For example, Cary's attorney asserts that when he contacted plaintiff's Albany office by telephone [3] in February 1997 to check on the status of Cary's claim against Simmes, he was advised that plaintiff had no knowledge of any such claim. This call appears to have been prompted by information counsel received from Murnane's insurer which, according to plaintiff's records, had advised Cary's attorney that plaintiff was Simmes' insurer on March 10, 1997. In contrast, plaintiff asserts that it has no record of receiving the phone call from Cary's attorney and that Cary's attorney may have known that plaintiff was Simmes' insurer as early as January 1997. Exactly when Cary's attorney became aware that plaintiff was Simmes' insurer or -- with more diligence -- should have known of plaintiff's status and whether Cary's attorney gave notice to plaintiff as soon as was reasonably proper under the circumstances (see, Insurance Law § 3420 [a] [4]) raise issues of fact which preclude a finding, as a matter of law, that Cary's notice to plaintiff was or was not timely (see, James v Allstate Ins. Co., 177 AD2d 998; National Grange Mut. Ins. Co. v Diaz, supra; cf., Todd v Bankers Life & Cas. Co., 135 AD2d 1066; Koretnicki v Firemen's Ins. Co. of Newark, N.J., 109 AD2d 993).

Finally, inasmuch as the order appealed from was amended only as to the summary judgment earlier granted against Cary (i.e., it merely denied summary judgment as against Cary), it left intact that portion of the initial order granting plaintiff a default judgment against Simmes. It also left intact that portion of the initial order which determined that plaintiff had no duty to defend Simmes. It should be noted, however, that the judgment against Simmes does not relieve plaintiff from any obligation that plaintiff might have to indemnify Simmes in the underlying action by Cary (see, Robbins v Michigan Millers Mut. Ins. Co., 236 AD2d 769, 770).

Carpinello, Graffeo and Mugglin, JJ., concur.

ORDERED that the order is affirmed, without costs.

**FOOTNOTES**

[1 ]: On November 4, 1998, Cary was killed in an auto accident and her sister, who is also her executor, was thereafter appointed as her personal representative in this action. For simplicity , Cary will be referred to as the named defendant.

[2 ]: Simmes made a statement in July 1997 in which she stated that she received a letter in September 1996 seeking insurance company information from Cary's attorneys. However, in an affidavit dated May 22, 1998 Simmes retracted that portion of her 1997 statement and stated that the letter did not come in September 1996 but, rather, in January 1997. Cary's attorney asserts that the only letter sent was sent in January 1997.

3 Insurance Law § 3420 (a) (3) requires that all insurance policies written in New York which provide the kind of coverage plaintiff afforded to Simmes must also state that notice by or on behalf of an injured party shall be in writing. It is undisputed that the first written notice to plaintiff by Cary occurred in early July 1997 when plaintiff received a copy of the pleadings.

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