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.
05/11/00: CHARLES F. EVANS
CO., INC. v. ZURICH INS. CO.
New York State Court of
Appeals
Insurer is Obligated to Defend Subcontractor for
Indemnity and Contribution Claims Brought by Contractor where Contractor Sued By
Owner For Economic Loss Arising from Injury Claims
General contractor subcontracted with plaintiff to do roofing work for a building constructed for the owner. The general contractor sued the owner claiming amounts due under the construction contract and the owner counterclaimed against plaintiff, alleging that the roofing around the skylights in the new building was improperly installed and leaked. The general contractor then brought a third-party action for indemnity and contribution against plaintiff. The owner’s counterclaim sought damages for breach of the construction contract, which included bodily injury -- the leaking roof allegedly caused its employees to slip and fall in puddles. As a result, the owner was forced to incur expenses, in the form of lost-time and workers' compensation claims. Plaintiff commenced this action for a declaration that its insurer must defend it in the underlying action. The Court held that plaintiff’s policy, providing coverage for "those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’," was ambiguous as to whether the claims were covered, and must be construed against the insurer. The claims arising from slip-and-fall injuries thus alleged "facts or grounds which bring the action within the protection purchased," and triggered the insurer’s duty to defend plaintiff. The Court rejected the insurer’s contention that the alleged slip-and-falls were not "occurrences" within the meaning of its policy.
05/09/00: SPRINGER
v. ALLSTATE LIFE INS. CO. OF NEW YORK
New York State Court of
Appeals
Two-year Contestability Period in Life Insurance
Policy Runs from Date of Policy, Not Issuance of Binder
The Court was called upon to determine when the two-year contestability period (the period in which a life insurer may deny coverage as a result of the insured’s suicide) begins to run, i.e., from the date the insured purchased a binder or the from the date the policy was issued. The Court concluded that the two-year contestability period runs from the start date of the policy, not the binder. New York was the first State to mandate incontestability clauses in life insurance policies to provide consumers with the security of knowing that their premiums were receiving the protection they were paying for. The statute specifically notes that the two-year contestability period is measured from the date the policy is issued, not from the date of the binder. The legislature could have measured the contestability period by the "period of coverage", which would include the date the binder was issued. To date, however, the statute measures the contestability period from the issuance date of the policy, not when the risk of interim coverage first attaches.
05/10/00: PROGRESSIVE
INS. CO. v. BROUSE
New York State Supreme Court, Appellate
Division, Fourth Department
Summary Judgment Denied where
Insurer Failed to Establish that Driver did not Have Implied Authority to
Operate Vehicle
The court held that the insurer’s motion for summary judgment was properly denied where it failed to establish, as a matter of law, that the driver of the vehicle did not have the owner’s implied permission to operate the vehicle involved in the accident.
05/10/00: PEERLESS INS.
CO. v. TALIA CONSTRUCTION CO., INC.
New York State Supreme Court,
Appellate Division, Fourth Department
Insurer Entitled to
Indemnification for Good Faith Payment on Performance Bond
Defendants agreed to indemnify plaintiff for any claims arising from plaintiff’s liability for losses with respect to a performance bond issued to defendant Talia. The agreement required defendants to reimburse plaintiff for all disbursements "made by it in good faith * * * under the belief that it is or was liable for the sums and amounts so disbursed, or that it was necessary or expedient to make such disbursements, whether or not such liability, necessity, or expediency existed". The agreement further provided that "vouchers or other evidence of any such payments * * * shall be prima facie evidence of the fact and amount of the liability to [plaintiff]" and that plaintiff’s "determination as to whether such claim * * * should be settled or defended shall be binding and conclusive upon" defendants. Talia refused to pay the claim of a landscaping subcontractor. Plaintiff then paid that sum to the contractor after investigating the claim and determining that $14,295 was due and notified the defendants of that determination. Defendants refused to indemnify plaintiff, and plaintiff commenced this action for breach of contract. The court held that, under the terms of the agreement, plaintiff was entitled to indemnification if it acted in good faith and the amount paid was reasonable. Defendants submitted no evidence that plaintiff acted in bad faith, i.e., that plaintiff engaged in fraud or collusion. "[I]t is irrelevant whether [plaintiff ] was actually liable on the underlying debt to [the subcontractor]". Further, proof that plaintiff failed to investigate the claim fully would not impugn plaintiff’s good faith in making the payment. With respect to the reasonableness of the amount paid, Talia’s conclusory statements were insufficient to raise an issue of fact in light of evidence that it directed the owner of the project to release the amount of the subcontractor’s claim.
05/10/00: LATIUK v.
CONA
New York State Supreme Court, Appellate Division, Fourth
Department
Plaintiff’s Medical Proof Inadequate to
Establish "Serious Injury"
Plaintiff failed to establish a "serious injury" within the meaning of
Insurance Law § 5102(d), where plaintiff’s treating psychiatrist testified to
the objective medical findings of another physician, but did not testify that
those findings were related to the motor vehicle accident. Two physicians who
testified that plaintiff’s soft tissue injuries were caused by the accident
found no objective evidence to support plaintiff’s subjective complaints of
pain. Under these circumstances, defendant’s motion for directed verdict was
properly granted.
05/10/00: OSTERREICHER v.
HOME MUTUAL INS. CO. OF BINGHAMTON, NEW YORK
New York State
Supreme Court, Appellate Division, Fourth Department
Insurer’s 52-day Delay in Disclaiming Coverage Raises Issue of
Fact whether it complied with Insurance Law § 3420(d)
Plaintiff was seriously injured while on premises insured by the defendant. The insurer first received written notice of the accident seven months later when the plaintiff’s attorney wrote to the insurer and made a claim against its homeowner’s policy. The insurer disclaimed coverage 52 days later on the ground that its insured had failed to provide timely written notice of the accident. A personal injury action was later commenced against the insured and, when the insured failed to appear in that action, plaintiff obtained a default judgment. Plaintiff then commenced this action to recover under the homeowner ’s policy. The insurer sought dismissal of the action based on its insured ’s failure to comply with the policy provision requiring written notice of the accident "as soon as practicable". The insurer argued that the seven-month delay was unreasonable as a matter of law. Plaintiff argued that the insurer’s 52-day delay in disclaiming coverage was unreasonable as a matter of law and that the insurer was therefore estopped from relying upon the late notice of claim as a ground for disclaiming coverage. The court held that the insurer’s 52-day delay in disclaiming coverage raised issues of fact whether disclaimer was "as soon as is reasonably possible" under Insurance Law § 3420(d). The issue is ordinarily a question of fact that depends on all of the facts and circumstances, including the length of and reason for delay. Although an unexplained delay of two months has been held to be unreasonable as a matter of law, the court held that "[t]he reasonableness of an insurer’s delay of less than two months is generally viewed as a factual issue that should not be resolved on a motion for summary judgment".
05/10/00: COMPIS SERVICES,
INC., v. THE HARTFORD STEAM BOILER INSPECTION AND INS. CO.
New
York State Supreme Court, Appellate Division, Fourth Department
Action on Policy Commenced More Than Two Years After Loss Untimely Absent Conduct Warranting Waiver or Estoppel
The court held that this action to recover the proceeds of an insurance policy was properly dismissed as untimely under the provisions of the policy. The court rejected plaintiff’s contentions that there were issues of fact on its claim that the insurer waived and/or was estopped from relying on the policy provision based on the insurer’s delay in disclaiming coverage, offer of settlement and failure to advise plaintiff of the limitations period. The delay in disclaiming coverage was attributable to the insurer’s investigation of the claim, and "[d]elay by the insurance carrier in completing its investigation of the claim does not excuse the plaintiff from timely commencing an action, since he or she is bound by the terms of the contract to either commence an action prior to the expiration of the limitations period or obtain a waiver or extension of such provision." Moreover, "[e]vidence of communications or settlement negotiations between an insured and its insurer either before or after expiration of a limitations period contained in a policy is not, without more, sufficient to prove waiver or estoppel." Finally, the court held that the insurer had no duty to advise plaintiff of the limitations period. A "carrier [is not] obligated to call plaintiff’s attention to the policy provisions."
05/10/00: SAMPSON v.
JOHNSTON
New York Appellate Division
Policy Exclusions Read Seriatim -- No Coverage afforded if One
Exclusion Applies Regardless of Inconsistencies with Other
Exclusions
Property owner entered into agreement with contractor for construction of a house that included copper piping. After construction was completed, the pipes began to leak and the owner learned that substandard pipe was used. He sued the contractor alleging negligence and breach of contract. Contractor sought defense and indemnity from its CGL carrier. The insurer disclaimed coverage alleging that: (1) the complaint alleged a breach of contract claim which did not constitute an "occurrence" as defined in the policy; (2) that the alleged breach of contract was an intentional act; and (3) the application of the "products-completed operations hazard" exclusion negated coverage under the policy. The insured argued that the products-completed operations hazard was ambiguous, as it conflicted with other exclusions in the policy. The court held that one exclusion’s inconsistency with another is irrelevant. Policy exclusions are to be read seriatim. If any one exclusion applies, there is no coverage since no one exclusions can be regarded as inconsistent with another.
5/09/00: HUNTEMANN v.
ALLSTATE INS.CO.
New York Supreme Court, Appellate Division, First
Department
Arbitrator did not Exceed Authority by
Awarding Future Economic Loss in Underinsured Motorist Claim
An arbitrator’s award of underinsured motorist benefits that included an amount for future economic loss did not exceed his authority. The policy provided coverage for all sums that the insured "shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle because of bodily injury sustained by the insured." This sum includes economic loss. While duplication of a workers’ compensation award is a ground for vacating an award, the arbitrator made it clear that he awarded a wage differential over the workers’ compensation amount.
5/09/00: ALLCITY INS. CO.
v. NOVAS
New York Supreme Court, Appellate Division, First
Department
Letter To Carrier Deemed Sufficient Notice of
Claim for No-Fault Benefits
In this claim for no-fault insurance benefits, the initial arbitrator found that the insurer properly denied claimant’s no-fault benefits because the claimant had not given notice within 90 days of the accident. The master arbitrator reversed, finding that there were factors beyond claimant’s control, which justified late notice. But the appellate court found for the claimant on a different basis -- that timely notice was given. Within the 90-day period following the accident, the claimant had provided the carrier with a letter setting forth the time, place and circumstances of the accident. While the letter was not directed to the carrier’s liability claims department and did not refer to no-fault benefits, the court found the letter to be sufficient notice under 11 NYCRR 65.12. The regulation does not impose any requirement that such a letter be directed to a specific department or that it specifically refer to no-fault benefits.
5/09/00: O’ROURKE v.
CHELSEA PIERS MANAGEMENT
New York Supreme Court, Appellate
Division, First Department
Attorney’s Conclusory
Affirmation Insufficient to Support Allegation that Defendants Breached Notice
Requirement
Defendant/third-party plaintiff sued insurer claiming that it was obligated to indemnify, insure and defend them in the main action. The defendants presented documentary evidence demonstrating entitlement to a judgment declaring that they were covered for the claim made by plaintiff in the underlying action. In opposition, the insurer submitted only an attorney’s affirmation stating that the defendants had breached the notice requirement and that further discovery was needed. The court found that the attorney affirmation was conclusory and inadequate to raise a triable issue of fact as to coverage under the policy.
5/08/00: BELESI v.
CONNECTICUT MUTUAL LIFE INS. CO.
New York Supreme Court, Appellate
Division, Second Department
Disability Policy Rescinded
for Insured’s Misrepresentation on Application
On a claim to recover proceeds of a disability insurance policy, the Appellate Court reversed the lower court and granted insurer’s motion to rescind the policy. The insurer had put forth sufficient evidence to show that the insured had made material misrepresentations on his application for disability insurance. The insurer did not waive its right to rescind since it did not continue to accept premium payments after gaining sufficient knowledge of the alleged misrepresentations.
5/04/00: McKEOWN v.
ALLCITY INS. CO.
New York Supreme Court, Appellate Division, First
Department
An Insured or Injured Plaintiff Must
Demonstrate the Existence of Coverage
The insured’s employee assaulted plaintiff when he attempted to gain entry into the insured’s establishment. The insurer denied coverage to the insured based on lack of occurrence and/or an intentional act. The lower court held that the disclaimer was invalid and declared that the insurer had a duty to defend and indemnify. The appellate court reversed, finding questions of fact exist whether the incident was covered under the policy, since the record was devoid of any evidence as to how or why plaintiff was allegedly assaulted or as to the degree of criminal assault to which the employee pleaded guilty. Coverage for the assault had not been demonstrated by the insured or by plaintiff.
5/02/00: GAIDON v. THE
GUARDIAN LIFE INS. CO. OF AMERICA
New York Supreme Court,
Appellate Division, First Department
Statute of Frauds
Inapplicable to Action under General Business Law §349; Action Does Not Accrue
until Plaintiff Pleads Injury
Plaintiffs were policyholders who brought class actions against insurance companies in connection with "vanishing premium" whole and universal life insurance polices. Plaintiffs alleged in both cases that they purchased insurance policies based on the insurers’ false representations that out-of-pocket premium payments would vanish within a stated period of time when, in fact, premiums never vanished and payments beyond depicted vanishing dates were necessary to keep policies in force. Both actions alleged claims for fraudulent inducement and deceptive marketing and sales practices (General Business Law § 349). In a prior decision, the Court of Appeals held that the actions stated claims for deceptive business practices under General Business Law § 349, but did not state claims for fraud. In this subsequent decision, the court considered which plaintiffs had standing to maintain the action. The court concluded that parties that had signed clear and unambiguous releases in order to obtain the cash surrender value of the policies lacked standing to bring an action, while policyholders who did not sign a release, and terminated their policies rather than continue to pay premiums did have standing to maintain the action. The court also considered whether the Statute of Frauds barred plaintiffs’ action. It held that a cause of action brought by an individual under General Business Law §349 does not require a valid contract and, therefore, the individual is not precluded where the alleged deceptive practices involves oral promises that cannot be performed within one year. Finally, the Court addressed the applicability of the three-year statute of limitations to a cause of action under General Business Law §349(h). The Court found the action timely, stating that a cause of action under General Business Law §349(h) does not accrue until the individual plaintiff pleads an injury. In this case, the plaintiffs’ cause of action did not accrue until they were notified that they would be charged premiums following the date by which they had been assured that their premium would be covered by dividends.
05/01/00: LIBERTY MUTUAL
INS. CO. v. HARTFORD CASUALTY INS. CO.
New York State Supreme
Court, Appellate Division, Second Department
"Step Down"
Provision of Auto Policy does not Reduce Coverage Afforded by the
Policy
Liberty Mutual issued a single auto policy that, under a "step down" provision, insured the owner of the vehicle for one amount and the lessee of the vehicle for a lesser amount. Hartford issued a separate auto policy to the lessee and driver of the temporarily leased vehicle. The leased vehicle was in an accident, and Liberty and Hartford disputed which policy provided the primary layer of coverage. The court concluded that Liberty’s policy provided the primary layer of coverage, and the "step down" provision was ineffective to reduce the amount of coverage it must provide.
ACROSS BORDERS
From time to time we highlight significant cases of interest from other jurisdictions. This week we offer two decisions from California:
05/08/00: PLCM GROUP
INC. v. DREXLER
California Supreme Court
Entity Represented by In-house Counsel May Recover Attorney Fees
under Civil Code Section 1717
Like private counsel, in-house counsel stand in an attorney-client relationship with the corporation and provide comparable legal services. In the case of such representation, the trial court retains broad discretion under Civil Code section 1717 to fix an award of attorney fees in a reasonable amount. In-house attorneys, like private counsel but unlike pro se litigants, do not represent their own personal interests and are not seeking remuneration simply for lost opportunity costs that could not be recouped by a nonlawyer. A corporation represented by in-house counsel is in an agency relationship, i.e., it has hired an attorney to provide professional legal services on its behalf. Nor is there any impediment to the effective and successful prosecution of meritorious claims because of possible ethical conflict or emotional investment in the outcome. The fact that in-house counsel is employed by the corporation does not alter the fact of representation by an independent third party. Instead, the payment of a salary to in-house attorneys is analogous to hiring a private firm on a retainer.
05/08/00: POTVIN v. METROPOLITAN LIFE INS. CO.
California Supreme Court
Physicians Have Right to "Fair Procedure" Before Removal from
"Preferred Provider" Lists
After removal from defendant insurance company’s "preferred provider" lists, plaintiff physician brought this action. Citing the common law right to fair procedure, which forbids arbitrary expulsions from private organizations under certain circumstances, the court concludes that he should have been given reasonable notice and an opportunity to be heard before his removal. Plaintiff here points out that when an insurance company with fiduciary obligations to its insureds maintains a list of preferred provider physicians to render medical services to the insureds, a significant public interest is affected. One practical effect of the health care revolution, which has made quality care more widely available and affordable through health maintenance organizations and other managed care entities, is that patients are less free to choose their own doctors for they must obtain medical services from providers approved by their health plan. But an even greater public interest is at stake when those medical services are provided through the unique tripartite relationship among an insurance company, its insureds, and the physicians who participate in the preferred provider network. That the relationship between insurers and their preferred provider physicians significantly affects the public interest does not necessarily mean that every insurer wishing to remove a doctor from one of its preferred provider lists must comply with the common law right to fair procedure. The obligation to do so arises only when the insurer possesses power so substantial that the removal significantly impairs the ability of an ordinary, competent physician to practice medicine or a medical specialty in a particular geographic area, thereby affecting an important, substantial economic interest.
AND IN DEFENSE . . .
We periodically include selected New York cases bearing on the defense of tort actions.
05/11/00: ANDON
v. MOTT STREET ASSOCIATES
New York State Court of
Appeals
High Court Upholds Denial of Defense
Request for IQ Testing of Mother in Lead-Paint
Case
In this action for damages resulting from alleged lead-paint injuries to an infant plaintiff, the Court of Appeals rules that it was not an abuse of discretion for the lower court to rule that plaintiff-mother cannot be compelled to submit to an IQ examination in compliance with defendants' discovery demand. In support of their motion, defendants introduced an affidavit from a pediatrician experienced in the evaluation of developmental deficiencies in children. Relying on unidentified studies, the doctor concluded that maternal IQ is "extremely relevant" in assessing a child's potential cognitive development in the absence of lead exposure. The Appellate Division had concluded that the burden of subjecting plaintiff-mother to an IQ test outweighed any relevance her IQ would bear on the issue of causation. The court noted that the mother's mental condition is not in dispute and that IQ results, while not confidential, are private.
Hurwitz & Fine,
P.C. is a full-service law firm
providing legal services throughout the State
of New York.
Newsletter Editor
Kevin T.
Merriman
[email protected]
Insurance Coverage
Team
Dan D.
Kohane, Team Leader
[email protected]
Sheldon Hurwitz
Carolyn M. Henry
Kevin T.
Merriman
Fire, First Party & Subrogation Team
James D. Gauthier, Team
Leader
[email protected]
Donna L. Burden
Andrea Schillaci
Jody E.
Briandi
David F.
Powell
© COPYRIGHT 2000 Hurwitz & Fine, P.C., ALL RIGHTS RESERVED.
REPORTED DECISIONS
HUNTEMANN v. ALLSTATE INS. CO.
Order, Supreme Court, Bronx County (Joseph Giamboi, J.), entered June 16, 1999, which confirmed an arbitration award of underinsured motorist benefits in favor of petitioner insured and against respondent insurer, unanimously affirmed, with costs.
The arbitrator did not exceed his authority or rule irrationally in determining that the policy coverage for "all sums that the insured ... shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle because of bodily injury sustained by the insured" included future economic loss as well as pain and suffering. Even assuming that duplication of a workers’ compensation award is a ground for vacating an award of underinsured motorist benefits, no basis exists for finding any such duplication here, as the arbitrator made it clear that this award was for the wage differential over the workers’ compensation amount.
Order and judgment (one paper), Supreme Court, New York County (Barry Cozier, J.), entered February 1, 1999, which granted the petition to vacate an award of no-fault insurance benefits rendered by a master arbitrator in favor of respondent against petitioner and to reinstate the award rendered by an initial arbitrator denying respondent’s claim, and denied claimant’s cross motion to confirm the master arbitrator’s award, unanimously reversed, on the law and the facts, with costs, the petition denied, the cross-motion of respondent granted, and the master arbitrator’s award confirmed.
The initial arbitrator found that petitioner had properly denied respondent’s claim for no-fault insurance benefits on the ground that the carrier had not been given notice of the claim within 90 days of the February 13, 1995 accident as required by 11 NYCRR 65.12 and that there were no factors beyond claimant ’s control which would have allowed later notice. The master arbitrator found for respondent on the basis that there were factors beyond her control which justified later notice. Notice to a carrier is sufficient when the carrier is notified of the applicant’s identity as well as the time, place and circumstances of the accident. Such information was provided to the carrier by a May 11, 1995 letter. The letter was not deficient as notice because it was not directed to the carrier’s liability claims department or because it did not refer to no-fault benefits since the regulation does not impose those requirements . Since the record evidence conclusively demonstrates that claimant provided the carrier with timely notice, the master arbitrator’s decision should have been confirmed.
O’ROURKE v. CHELSEA PIERS MANAGEMENT
Order and judgment (one paper), Supreme Court, New York County (Leland DeGrasse, J.), entered March 26, 1999, which, inter alia, granted the cross motion by defendants/third-party plaintiffs for summary judgment declaring that third-party defendant insurer Indemnity Insurance Company of North America (IINA) is obligated to indemnify, insure and defend them in the main action, unanimously affirmed, with costs.
Defendants, in support of their cross motion for summary judgment, presented documentary evidence demonstrating a prima facie entitlement to judgment in their favor, declaring that, pursuant to the subject policy issued by third-party defendant IINA, they were covered for the claim made by plaintiff in the main action and, accordingly, were entitled to be defended and indemnified against liability for that claim by IINA. In opposition to the motion, IINA merely submitted its attorney’s conclusory affirmation, stating, in relevant part, that defendants had breached the notice requirements of the insurance policy and that further discovery was needed. Such opposition was inadequate to raise a triable issue as to coverage and, accordingly, defendants’ cross motion for summary judgment was properly granted (see, Gilbert Frank Corp. v Fed. Ins. Co., 70 NY2d 966, 967; Kaufman v Silver, 90 NY2d 204, 208; Finova Capital Corp. v CVS Revco D.S., Inc., __AD2d__, 702 NYS2d 823).
We have considered IINA’s remaining arguments and find them unavailing.
Order, Supreme Court, New York County (Jane Solomon, J.), entered on or about December 10, 1998, which granted plaintiff’s motion for summary judgment, declared that Allcity’s disclaimer of coverage was invalid, declared that it was obligated to insure and indemnify defendant-respondent 212 E. 10 N.Y. Bar, Ltd., d/b/a 10th Street Lounge in an action brought against it by plaintiff, and denied Allcity’s cross-motion for summary judgment , unanimously modified, on the law, to the extent of denying plaintiff's motion and vacating the declarations , and otherwise affirmed, without costs.
Under the circumstances, the motion court erred in granting plaintiff summary judgment and in declaring that the insurance policy at issue afforded coverage . There are questions of fact as to whether the incident was covered under the policy, since the record is devoid of any evidence as to how or why plaintiff, who was a patron attempting to gain entry into defendant-respondent’s establishment, was allegedly assaulted by one of its employees, or as to the degree of criminal assault to which the employee allegedly pleaded guilty. Thus, coverage was not demonstrated by the insured (Munzer v St. Paul Fire & Marine Ins. Co., 145 AD2d 193, 199) or by plaintiff. It should also be noted that an unprovoked intentional assault might not be covered under a general liability policy, like the one at issue (see, State Farm Fire and Casualty Co. v Torio, 250 AD2d 833, lv denied 92 NY2d 819).
The court’s finding of an alleged ambiguity in the insurance policy with regard to the term "accident", which resulted in the policy being construed against the insurer , was error. Though not defined in the policy, the term "accident", according to the Court of Appeals, should be "construed...in accordance with its understanding by the average man" (Miller v Continental Ins. Co., 40 NY2d 675, 676; see also, Nallan v Union Labor Life Ins. Co., 42 NY2d 884, 885). Thus, the meaning of the term in New York law is readily ascertainable.
The record also shows that the timeliness of the disclaimer is not at issue, since the disclaimer was made on coverage grounds (see, Zappone v Home Ins. Co., 55 NY2d 131, 137-138 [the Insurance Law requirement as to timeliness of disclaimer (then § 167[8], now § 3420[d]) does not apply to denial of coverage]).
GAIDON v. THE GUARDIAN LIFE INS. CO. OF AMERICA
Upon remittitur from the Court of Appeals, judgment, Supreme Court, New York County (Charles Ramos, J.), entered June 12, 1997, dismissing the complaint, and bringing up for review an order which, in an action arising out of defendant insurer’s sale to plaintiffs' insureds of life insurance policies utilizing the "vanishing premium" concept, granted defendant’s pre-answer motion to dismiss the complaint, unanimously modified , on the law, so as to reinstate the tenth cause of action of plaintiffs Allen Glass as Trustee, and Barbara Gaidon as Trustee, and as so modified, affirmed, without costs.
As the motion court properly held, plaintiffs Frank C. DeHamer, Nicholas J. DeHamer and Kathleen M. Warner lack standing to sue in view of the clear and unambiguous releases they signed in order to obtain the cash surrender value of the policies. However, the owners and holders of the policy insuring Frank Gaidon signed no such release, and the decision to terminate the policy rather than continue to pay the demanded premiums does not alter their standing to proceed with the action. Although Gaidon lacks standing to sue individually , inasmuch as it was not he who purchased the policy (see, Restatement [Second] of Trusts § 28 0), his actions in respect to the trustees' decisions related to the policy may be said to constitute the actions of an agent of the trustees. Consequently, the fact that Gaidon was the individual to whom the allegedly deceptive presentation was made does not negate the trustees' ability to make out their cause of action.
We reject defendant's challenge to the action as violative of the Statute of Frauds (General Obligations Law § 5-701[a][1]), concluding that a cause of action brought by an individual under General Business Law § 349 does not require a valid contract, and therefore is not precluded where the alleged deceptive practice involves oral promises that cannot be performed within one year.
As to defendant's Statute of Limitations argument, we hold that although the three-year limitations period of CPLR 214(2) applies, the cause of action under General Business Law § 349(h) is timely, inasmuch as it first accrued when plaintiffs first suffered compensable injury. The elements of the cause of action are (1) a deceptive practice in the conduct of a business, (2) by which the plaintiff was injured (see, Givens, Practice Commentaries, McKinney's Cons Laws of NY, Book 19, General Business Law § 349, at 565). Until an individual plaintiff can plead injury, no cause of action has accrued. We conclude that plaintiffs' cause of action did not accrue until they were notified that they would be charged premiums following the date by which they had been assured that their premium would be covered by dividends.
BELESI v CONNECTICUT MUTUAL LIFE INS. CO.
In an action to recover the proceeds of a disability insurance policy, the plaintiff appeals, as limited by his brief, from so much of an order of the Supreme Court, Nassau County (Schmidt, J.), entered November 2, 1998, as granted the defendant 's motion (a) pursuant to CPLR 5015 to vacate a judgment of the same court entered March 24, 1998, and (b) for leave to renew its prior cross motion to amend its answer to include a counterclaim for rescission , and for summary judgment on the counterclaim, and (c), upon renewal, granted that branch of the cross motion which was for leave to amend the answer, and the defendant cross-appeals from so much of the same order as, upon renewal, denied that branch of its cross motion which was for summary judgment on the counterclaim.
ORDERED that the order is affirmed insofar as appealed from; and it is further,
ORDERED that the order is reversed insofar as cross-appealed from, that branch of the defendant's prior cross motion which was for summary judgment on the counterclaim is granted , the subject policy is rescinded, and the complaint is dismissed; and it is further,
ORDERED that the defendant is awarded one bill of costs.
Contrary to the plaintiff 's contention, the defendant offered sufficient evidence that the plaintiff had engaged in fraud, misrepresentation , or other misconduct by making false statements upon which the court relied in determining the prior motion for summary judgment. Thus, vacatur of the judgment was proper (see, CPLR 5015[a][3]).
The Supreme Court providently exercised its discretion by granting, upon renewal, that branch of the defendant's prior cross motion which was for leave to amend its answer to include a counterclaim for rescission (see, CPLR 3025[b]; Edenwald Contr. Co. v City of New York, 60 NY2d 957; Sidor v Zuhoski , 257 AD2d 564; Branch v Abraham & Strauss Dept. Store, 220 AD2d 474, 475; Caruso v Anpro, Ltd., 215 AD2d 713; McKiernan v McKiernan, 207 AD2d 825).
However, the Supreme Court erred in denying, upon renewal, that branch of the defendant's prior cross motion which was for summary judgment on the counterclaim. The defendant submitted sufficient evidence to establish as a matter of law that the insured made material misrepresentations on his application for disability insurance (see, Threatt v American Centurion Life Assurance Co., 251 AD2d 284; Hydell v North Atlantic Life Ins. Co., 246 AD2d 511; Gugleotti v Lincoln Sec . Life Ins. Co., 234 AD2d 514; see also, Insurance Law § 3105[b]). The defendant did not waive its right to rescind since it did not continue to accept premium payments after gaining sufficient knowledge of the alleged misrepresentations (see, Insurance Law § 3105[b]; Hydell v North Atlantic Life Ins. Co., AD2d [2d Dept., Oct. 25, 1999]; cf., Scalia v Equitable Life Assurance Socy. of U.S., 251 AD2d 315). In opposition , the plaintiff did not raise any triable issues of fact.
SANTUCCI, J.P., FRIEDMANN, McGINITY and SMITH, JJ., concur.
LIBERTY MUTUAL INS. CO. v. HARTFORD CASUALTY INS. CO.
In an action for a judgment declaring the parties' obligations to defend and/or indemnify the defendant John Vaccarino in an underlying action to recover damages for personal injuries entitled Ewald v Vaccarino , pending in the Supreme Court, Nassau County, under Index No. 7770/96, the plaintiff appeals from so much of an order of the Supreme Court, Nassau County (Burke, J.), entered February 9, 1999, as denied its motion for summary judgment declaring that the automobile liability insurance policy issued by the defendant provided the primary layer of insurance coverage and, upon searching the record, granted summary judgment to the defendant declaring, inter alia, that the automobile liability insurance policy issued by the plaintiff provided the primary layer of insurance coverage.
ORDERED that the order is affirmed insofar as appealed from, with costs.
The plaintiff, Liberty Mutual Insurance Company (hereinafter Liberty), issued a single automobile liability insurance policy which, pursuant to a "step down" provision, insured the owner of the vehicle for one amount and the lessee of the vehicle for a lesser amount. The defendant, Hartford Casualty Insurance Company (hereinafter Hartford), issued a separate automobile liability insurance policy to the lessee and driver of the temporarily -leased vehicle. The subject leased vehicle was in an accident, and Liberty and Hartford were unable to agree, inter alia, as to which insurance policy provided the primary layer of insurance coverage.
Contrary to Liberty's contentions, the Supreme Court properly determined that the policy issued by Liberty provides the primary layer of insurance coverage, and the "step down" provision is ineffective to reduce the amount of coverage it must provide (see, Federal Ins. Co. v Ryder Truck Rental, 82 NY2d 909; North Star Reins . Corp. v Continental Ins. Co., 82 NY2d 281; Alinkofsky v Country-Wide Ins. Co., 257 AD2d 70; Liberty Mut. Ins. Co. v Aetna Cas. & Sur. Co., 235 AD2d 523).
SULLIVAN, J.P., FLORIO, LUCIANO and FEUERSTEIN, JJ., concur.
COMPIS SERVICES, INC., v. THE HARTFORD STEAM BOILER INSPECTION AND INS. CO.
(APPEAL NO. 1.) -- Order unanimously affirmed without costs. Memorandum: Plaintiff commenced separate actions, one in November 1997 (appeal No. 1) and the other in July 1998 (appeal No . 2), to recover under insurance policies for losses incurred in March 1993. Supreme Court properly granted each defendant’s motion for summary judgment dismissing the complaint as untimely. Defendants met their initial burden of establishing that the actions were not commenced within two years of the loss as required by each policy (see, Gilbert Frank Corp. v Federal Ins. Co., 70 NY2d 966, 967-968), and plaintiff failed to raise a triable issue of fact.
With respect to defendant, The Hartford Steam Boiler Inspection and Insurance Company (Hartford Steam), plaintiff contends that there is an issue of fact on its claims of waiver and/or estoppel based upon Hartford Steam’s delay in disclaiming coverage, offer of settlement and failure to advise plaintiff of the limitations period. The delay in disclaiming coverage, however , was attributable to Hartford Steam’s investigation of plaintiff’s claim, and "[d]elay by the insurance carrier in completing its investigation of the claim does not excuse the plaintiff from timely commencing an action, since he or she is bound by the terms of the contract to either commence an action prior to the expiration of the limitations period or obtain a waiver or extension of such provision" ( Brown v Royal Ins. Co. of Am., 210 AD2d 279). Further, contrary to plaintiff’s contention, "[e]vidence of communications or settlement negotiations between an insured and its insurer either before or after expiration of a limitations period contained in a policy is not, without more, sufficient to prove waiver or estoppel " (Gilbert Frank Corp. v Federal Ins. Co., supra, at 968). Finally, Hartford Steam had no duty to advise plaintiff of the limitations period. A "carrier [is not] obligated to call plaintiff’s attention to the policy provisions" (Blitman Constr. Corp. v Insurance Co. of N. Am., 66 NY2d 820, 823; see, Schunk v New York Cent. Mut. Fire Ins. Co., 237 AD2d 913, 914; May v Aetna Life & Cas. Co., 204 AD2d 1007). In any event, Hartford Steam conducted its investigation and entered into settlement negotiations "under a full reservation of rights", and thus a waiver or estoppel may not be inferred therefrom (see, Culinary Inst. of Am. v Aetna Cas. & Sur. Co., 151 AD2d 638, 638-639).
Plaintiff also contends that there is an issue of fact concerning its claims of waiver and/or estoppel with respect to defendant , ITT Hartford Insurance Company, Inc. (ITT). We disagree. Regardless of what happened prior to August 25, 1995, plaintiff acknowledged on that date that "both parties retain all of their respective legal rights under the terms and conditions of the said policy". Nearly three years then elapsed before plaintiff commenced its action. For that three-year period, plaintiff "offers no evidence from which a clear manifestation of intent by [ITT] to relinquish the protection of the contractual limitations period could be reasonably inferred * * *. Nor do the facts show that [ITT], by its conduct, otherwise lulled plaintiff into sleeping on its rights under the insurance contract" (Gilbert Frank Corp . v Federal Ins. Co., supra, at 968). (Appeal from Order of Supreme Court, Onondaga County, Elliott, J. - Summary Judgment .) PRESENT: PIGOTT, JR., P. J., GREEN, WISNER AND SCUDDER, JJ. (Filed May 10, 2000.)
OSTERREICHER v. HOME MUTUAL INS. CO. OF BINGHAMTON, NEW YORK
-- Order unanimously modified on the law and as modified affirmed without costs in accordance with the following Memorandum: Defendant , Home Mutual Insurance Company of Binghamton, New York (Home Mutual), issued a homeowner’s insurance policy covering the premises where the infant plaintiff was seriously injured in an accident on August 24, 1989, while he was a guest at the residence of Home Mutual’s insured. Home Mutual first received written notice of the accident on March 26, 1990, some seven months after the accident, when the attorney representing the infant plaintiff wrote to Home Mutual and made a claim against its homeowner’s policy . It was not until May 17, 1990, 52 days later, that Home Mutual disclaimed coverage on the ground that its insured had failed to provide timely written notice of the accident.
Thereafter, a personal injury action was commenced on behalf of the infant plaintiff against Home Mutual’s insured. Home Mutual ’s insured failed to appear in that action and plaintiff obtained a default judgment against her in excess of the policy limits.
Plaintiff then commenced this action to recover under the homeowner ’s insurance policy. Home Mutual moved for summary judgment dismissing the complaint based on its insured ’s failure to comply with the provision of the policy requiring the insured to give written notice of the accident "as soon as practicable". Home Mutual contended that the delay of seven months in giving written notice was unreasonable as a matter of law. Plaintiff cross-moved for summary judgment declaring that Home Mutual must indemnify its insured. Plaintiff contends that Home Mutual’s 52-day delay in disclaiming coverage was unreasonable as a matter of law and that Home Mutual was estopped from relying upon the late notice of claim as a ground for disclaiming coverage. Supreme Court erred in granting Home Mutual’s motion, but properly denied plaintiff’s cross motion.
Insurance Law § 3420 (d) requires an insurer disclaiming liability to give written notice of the disclaimer "as soon as is reasonably possible" to the insured, the injured person, and any other claimant. "A failure by the insurer to give such notice as soon as is reasonably possible after it first learns of the accident or of grounds for disclaimer of liability or denial of coverage, precludes effective disclaimer or denial" (Hartford Ins. Co. v County of Nassau, 46 NY2d 1028, 1029, rearg denied 47 NY2d 951). An insurer must provide timely notice of disclaimer even where, as here, the insured or injured claimant has in the first instance failed to provide the insurer with timely notice of the accident (see, Matter of Nationwide Mut. Ins. Co. v Steiner, 199 AD2d 507).
The issue whether an insurer has disclaimed liability "as soon as is reasonably possible" is ordinarily a question of fact that depends on all the facts and circumstances , especially the length of and reason for the delay (see, Hartford Ins. Co. v County of Nassau, supra, at 1030; Allstate Ins. Co. v Gross, 27 NY2d 263, 270; State Farm Mut. Auto. Ins. Co. v Daniels [appeal No. 1], ___ AD2d ___ [decided Feb. 16, 2000]). An unexplained delay of two months has been held to be unreasonable as a matter of law (see, Hartford Ins. Co. v County of Nassau, supra, at 1030 ). However, "[t]he reasonableness of an insurer’s delay of less than two months is generally viewed as a factual issue that should not be resolved on a motion for summary judgment" (Utica Fire Ins. Co. of Oneida County v Spagnolo , 221 AD2d 921, 922). Because there was a delay of 52 days in disclaiming coverage, the reasonableness of that delay is a factual issue for trial (see, Utica Fire Ins. Co. of Oneida County v Spagnolo, supra, at 922; Wilczak v Ruda & Capozzi, 203 AD2d 944). Therefore, we modify the order by denying Home Mutual’s motion and reinstating the complaint. (Appeal from Order of Supreme Court, Erie County, Flaherty, J. - Summary Judgment.) PRESENT: PIGOTT, JR., P. J., PINE, SCUDDER AND LAWTON, JJ. (Filed May 10, 2000.)
-- Order unanimously affirmed without costs. Memorandum: Supreme Court properly granted defendant's motion for a directed verdict at the close of plaintiff’s proof on the ground that plaintiff failed to establish a prima facie case of serious injury within the meaning of Insurance Law § 5102 (d). Plaintiff’s treating psychiatrist testified to the objective medical findings of another physician, but he did not testify that those findings were related to the motor vehicle accident approximately two years before those findings were made (see , Lichtman-Williams v Desmond, 202 AD2d 646, lv dismissed 84 NY2d 849). The two physicians who testified that plaintiff’s soft tissue injuries were caused by the motor vehicle accident found no objective evidence to support plaintiff’s subjective complaints of pain (see, Scheer v Koubek, 70 NY2d 678, 679; Crandall v Sledziewski, 260 AD2d 754, 757, lv denied 93 NY2d 811; Green v Gloede & Assocs. Leasing, 222 AD2d 1066, 1067; Eldred v Stoddard, 217 AD2d 952, 953).
Any error in refusing to admit certain medical reports in evidence is harmless because plaintiff’s psychiatrist testified concerning the contents of those reports. (Appeal from Order of Supreme Court, Monroe County, Lunn, J. - Negligence.) PRESENT: GREEN, J. P., HAYES, WISNER AND HURLBUTT, JJ. (Filed May 10, 2000.)
99-850. (Onondaga Co.) -- MATTER OF THE ARBITRATION BETWEEN NATIONWIDE MUTUAL INSURANCE COMPANY, PETITIONER-RESPONDENT, AND JEFFREY STEBER AND ROBERT E. STEBER, RESPONDENTS-APPELLANTS. -- Judgment unanimously affirmed without costs. Memorandum : Supreme Court properly granted the petition seeking a permanent stay of arbitration of respondents ’ supplemental uninsured motorist (SUM) claim. Petitioner supported its application with proof that respondents waited 30 months after the accident to provide notice of their SUM claim. The burden was on respondents to explain their delay (see, Unwin v New York Cent. Mut. Fire Ins. Co., ___ AD2d ___ [decided Jan. 6, 2000]). The record establishes that, immediately following the accident, respondents were aware of the severity of respondent Jeffrey Steber’s injuries and the identity of the culpable driver, but they waited 30 months before considering an action against the driver for damages and filing a claim with petitioner. Respondents offered no reasonable explanation for their delay (see, Unwin v New York Cent. Mut. Fire Ins. Co., supra).
Furthermore , although the insured, respondent Robert E. Steber, contacted petitioner several days after the accident , he did not notify petitioner that a claim would be made under the SUM endorsement of his policy. Petitioner ’s actual notice of the accident does not vitiate the requirement that respondents provide timely notice of their claim (see, Dixon v New York Cent. Mut. Fire Ins. Co., 265 AD2d 914). (Appeal from Judgment of Supreme Court, Onondaga County, Nicholson, J. - Arbitration.) PRESENT: HAYES, J. P., WISNER, HURLBUTT, SCUDDER AND KEHOE, JJ . (Filed May 10, 2000.)
PEERLESS INS. CO. v. TALIA CONSTRUCTION CO., INC.
-- Order unanimously reversed on the law without costs and cross motion granted. Memorandum: Supreme Court erred in denying plaintiff’s cross motion for summary judgment . Defendants agreed to indemnify plaintiff for any claims arising from plaintiff’s liability for losses with respect to a performance bond issued to defendant Talia Construction Co., Inc. (Talia). The agreement requires defendants to reimburse plaintiff for all disbursements "made by it in good faith * * * under the belief that it is or was liable for the sums and amounts so disbursed, or that it was necessary or expedient to make such disbursements, whether or not such liability, necessity, or expediency existed ". The agreement further provides that "vouchers or other evidence of any such payments * * * shall be prima facie evidence of the fact and amount of the liability to [plaintiff]" and that plaintiff’s "determination as to whether such claim * * * should be settled or defended shall be binding and conclusive upon" defendants. Talia refused to pay the claim of a turf and landscaping subcontractor and, after investigating the claim and determining that the sum of $14,295 was due and notifying defendants of that determination, plaintiff paid that sum to the subcontractor. Defendants refused to indemnify plaintiff, and plaintiff commenced this action for breach of contract.
& #9;Based upon the terms of the parties’ agreement on this indemnity claim, plaintiff is entitled to indemnification if it acted in good faith and the amount paid was reasonable (see, Acstar Ins. Co. v Teton Enters., 248 AD2d 654; International Fid. Ins. Co. v Spadafina, 192 AD2d 637, 639). Plaintiff met its initial burden, and defendants failed to raise an issue of fact . Defendants submitted no evidence that plaintiff acted in bad faith, i.e., that plaintiff engaged in fraud or collusion (see, BIB Constr. Co. v Fireman’s Ins. Co., 214 AD2d 521, 524). "[I]t is irrelevant whether [plaintiff ] was actually liable on the underlying debt to [the subcontractor]" (International Fid. Ins. Co. v Spadafina, supra, at 639; see, Continental Cas. Co. v Marman Dev. Corp., 23 Misc 2d 618, 619). Further, proof that plaintiff failed to investigate the claim fully would not impugn the good faith of plaintiff in making the payment (see, Maryland Cas. Co. v Grace, 292 NY 194, 200; Continental Cas. Co. v Marman Dev. Corp., supra, at 619).
With respect to the reasonableness of the amount paid, the conclusory statement of defendant Richard Sperandio, Talia’s president, that the subcontractor supplied 126,000 square feet of turf sod instead of 135,000 square feet is insufficient to raise a triable issue of fact (see, Acstar Ins. Co. v Teton Enters., supra, at 655; International Fid. Ins. Co. v Spadafina, supra, at 639), particularly in light of evidence that Talia directed the owner of the project to release the amount of the subcontractor’s claim. Thus , we reverse the order and grant plaintiff’s cross motion for summary judgment. Plaintiff did not challenge in its brief that part of the order granting defendants' motion for a change of venue. In any event, in view of our determination, there is no need to reach that portion of the order. (Appeal from Order of Supreme Court, Onondaga County, Murphy, J. - Summary Judgment.) PRESENT: GREEN, J. P., WISNER, HURLBUTT AND BALIO, JJ. (Filed May 10, 2000.)
PROGRESSIVE INS. CO. v. BROUSE
-- Judgment unanimously modified on the law and as modified affirmed without costs in accordance with the following Memorandum: Supreme Court properly denied plaintiff’s motion for summary judgment but erred in declaring that plaintiff is obligated to defend and indemnify its insured, Troy Powell, against personal injury claims arising from an automobile accident involving Jammie Powell, Troy's brother, the driver of Troy's vehicle. Troy Powell is not a party to this action and plaintiff asserted that it has not raised any issue with respect to Vehicle and Traffic Law § 388.
Plaintiff contends that it is not required under the terms of Troy Powell’s insurance policy to defend the Estate of Jammie Powell because Jammie was not an "insured person " as defined in the policy. There is no dispute that Jammie was not a "relative" as defined in the policy because he did not reside in the same household as the insured. Plaintiff failed to establish as a matter of law, however, that Jammie did not have implied permission to drive Troy’s vehicle.
Thus , although plaintiff’s motion was properly denied, we modify the judgment by deleting the words "with prejudice" from the first decretal paragraph. The court erred in sua sponte granting judgment in favor of Troy and Jammie, and we further modify the judgment by vacating the second decretal paragraph . (Appeal from Judgment of Supreme Court, Oswego County, Nicholson, J. - Declaratory Judgment.) PRESENT : PIGOTT, JR., P. J., PINE, SCUDDER AND KEHOE, JJ. (Filed May 10, 2000.)
CHARLES F. EVANS CO., INC. v. ZURICH INS. CO.
MEMORANDUM:
The order of the Appellate Division should be affirmed, with costs.
Plaintiff Charles F. Evans Company , an insured, seeks a declaration that defendant Zurich Insurance Company must defend it in an underlying action.
Damon G. Douglas Company, a general contractor, subcontracted with Evans to do roofing work for a building constructed for BASF Corporation. Douglas sued BASF claiming the remaining amounts due under the construction contract. BASF, in turn, counterclaimed against Douglas, alleging that the roofing around the skylights in the new building was improperly installed and leaked. Douglas then brought a third-party action for indemnity and contribution against Evans. BASF's counterclaim in the underlying action sought damages for breach of the construction contract, in part incurred because of bodily injury. Specifically, BASF alleged that due to the leaking roof, its employees "slipped and fell in puddles *** and were injured," and " ;[a]s a result thereof, BASF has been forced to incur expenses, in the form of lost-time and workers' compensation claims, and to incur has thereby been damaged."
The policy, providing coverage for "those sums that the insured becomes legally obligated to pay as damages because of `bodily injury'," is at least ambiguous as to whether the claims in question are covered , and must be construed against the insurer. The claims arising from slip-and-fall injuries thus allege "facts or grounds which bring the action within the protection purchased," and trigger Zurich's duty to defend Evans (Seaboard Sur. Co. v Gillette Co., 64 NY2d 304, 310; see , Schwab v Fireman's Ins. Co., 41 NY2d 947, 949; International Paper Co. v Continental Cas. Co., 35 NY2d 322, 3 25-326). We also reject Zurich's contention that the alleged slip-and-falls were not "occurrences " (defined to include an "accident") within the meaning of its policy.
* * * * * * * * * * * * * * * * *
Order affirmed, with costs, in a memorandum. Chief Judge Kaye and Judges Bellacosa, Smith, Levine, Ciparick, Wesley and Rosenblatt concur.
-- Judgment unanimously reversed on the law without costs, motion denied, cross motion granted and judgment granted in accordance with the following Memorandum: Third-party plaintiff, Larry Johnston, d/b/a Larry Johnston Contracting, commenced this third-party action seeking a declaration that third-party defendant, The Travelers Insurance Company (Travelers), is obligated to defend and indemnify him in the underlying breach of contract action commenced by plaintiff, Scott E. Sampson. Johnston and Sampson entered into a contract pursuant to which Johnston would build a four-unit residential building for Sampson. That project was completed in July 1990, but the pipes in the building began leaking in July 1991. Sampson commenced the underlying action for breach of contract, alleging that the pipes installed by Johnston did not comply with the plan specifications or the building code for the Village of Mayville. Travelers denied coverage under the commercial general liability insurance policy issued to Johnston. Johnston commenced this third-party action and moved for summary judgment declaring that Travelers must defend and indemnify him in the underlying action, and Travelers cross-moved for summary judgment on its counterclaims, which seek judgment declaring that it has no duty to defend or indemnify Johnston.
Supreme Court erred in granting the motion and denying the cross motion. Exclusion 2 (l) in the Travelers policy excludes the property damage at issue in the underlying action. Contrary to Johnston’s contention, the fact that another exclusion may have been inconsistent with exclusion 2 (l) is irrelevant. "[P]olicy exclusions are to be read seriatim and, if any one exclusion applies, there is no coverage since no one exclusion can be regarded as inconsistent with another" (Hartford Acc. & Indem. Co. v Reale & Sons, 228 AD2d 935, 936; see, Monteleone v Crow Constr. Co., 242 AD2d 135, 140-141, lv denied 92 NY2d 818; Zandri Constr. Co. v Firemen’s Ins. Co. of Newark, 81 AD2d 106, 109, affd sub nom. Zandri Constr. Co. v Stanley H. Calkins, Inc., 54 NY2d 999). Because exclusion 2 (l) applies, we reverse the judgment, deny the motion, grant the cross motion and grant judgment in favor of Travelers declaring that it is not obligated to defend or indemnify Johnston in the underlying action. (Appeal from Judgment of Supreme Court, Chautauqua County, Gerace, J. - Declaratory Judgment.) PRESENT: PINE, J. P., HAYES, SCUDDER AND KEHOE, JJ. (Filed May 10, 2000.)
