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Additional
Notice of Cancellation Issued under Inapplicable Statute Renders Cancellation
Ineffective
Although the
provisions of Vehicle and Traffic Law §370 (statute governing insurance policies
for vehicles transporting passengers for hire) govern insurance policies for
livery cabs, the insurer elected to send its insured an additional notice of
cancellation pursuant to Vehicle and Traffic Law §313. The sending of the
additional notice could have caused the insured confusion as to its duties under
the financial security provisions of the Vehicle and Traffic Law. Thus,
cancellation of the policy was deemed ineffective and the insurer’s policy was
therefore in effect on the date of the accident.
Physician’s
Affidavit based on Recent Exam and Objective Measurements Defeats Summary
Dismissal
In this
action to recover damages for personal injuries arising out of an auto accident,
the court held that the affirmation of plaintiff’s physician raised triable
issues of fact whether the plaintiff sustained a “significant limitation of use
of a body function or system” under Insurance Law §5102[d]. The affirmation was based on a recent
examination and indicated the degree to which the plaintiff's movement was
restricted in her cervical and lumbar spine. The affirmation also noted that the
restrictions had been objectively measured using a range of motion test and that
the restrictions were permanent in nature.
Physician’s
Affirmation Unsupported by Objective Medical Tests Insufficient to Establish
“Serious Injury” under Insurance Law
The court
held that the medical reports of defendant’s physicians, who examined the
plaintiff and reviewed the MRI films of her cervical and lumbosacral spines,
were sufficient to establish that she did not sustain a serious injury within
the meaning of Insurance Law § 5102[d].
The plaintiffs' evidence was insufficient to defeat summary judgment
because, while there was evidence that she suffered from herniated and bulging
discs, there was no objective evidence of the extent or degree of the alleged
physical limitations resulting from the injuries and their
duration.
Coverage
under Asbestos Liability Policy is First Triggered by Inhalation, not Onset of
Disease; Insolvent Insurer’s Policy not “Collectible Insurance” under “Other
Insurance” Clause
Claimant LAQ
was engaged in the mining, milling and selling of asbestos fiber in
First, the
court concluded that the
Next, the
court considered the construction and effect of the “other insurance” provision
of the
The court
also concluded, however, that the word “insurance” in the clause did not
encompass the insured’s self-insured retention beyond that contemplated by the
policy. The
Finally,
Coverage
Disclaimer for Benefits under Medical Policy based on Alcohol Induced Illness
Not Permitted under Insurance Law
The court
held that the insurer’s disclaimer of coverage for hospital and medical benefits
under a medical insurance policy on the ground that the illness arose from the
use of alcohol was invalid. Disclaimer based on alcohol use is not permitted
under Insurance Law §3221 and its implementing regulations (11 NYCRR
52.16[c]). Furthermore, although
the insurer provided the coverage pursuant to a plan under the Employee
Retirement Income Security Act (ERISA), the requirements of Insurance Law §3221
and its implementing regulations are not preempted by ERISA. The insurer was therefore obligated to
reimburse the plaintiff for the hospitalization
expenses.
Forum
Selection Clause is Valid and Enforceable in New
York
The court
held that the complaint in this action for defense and indemnification under an
insurance policy was properly dismissed.
The insurance policy contained a forum selection clause providing that
any action arising from the terms and conditions of the policy be instituted and
litigated in
Named
Insured’s Sons, who Rented Property, were not Insured Persons under Homeowner’s
Policy
This was a
declaratory judgment action for defense and indemnification of an underlying
personal injury action. The
plaintiff, who sustained injuries while attending a party on the insured
premises, commenced the underlying action against the property owners and their
sons. The insurer denied coverage to the named insured’s sons because, although
they rented the property from the named insured, they were not “insured persons”
under the policy. Under the terms
of the policy, the insurer agreed to provide coverage for an “insured person,”
defined to include the individual named on the declarations page, an employee of
the insured while acting within the scope of that employment, and any person
while acting as the insured's real estate manager of the insured premises. The sons did not qualify under the
definition. Therefore, the court
held coverage was properly denied.
Physician’s
Affirmation Unsupported by Objective Medical Tests Insufficient to Establish
“Serious Injury” under Insurance Law
Court held
that the affirmation of plaintiff's examining physician, which purported to
quantify certain alleged restrictions in the plaintiff's range of motion of her
cervical spine, failed to establish that any objective tests were performed to
support this determination. Thus,
plaintiff failed to raise triable issues of fact that she sustained a serious
injury under Insurance Law §5102[d].
The case was dismissed accordingly.
Cancellation of Auto
Policy Must Comply with Vehicle and Traffic Law §313 even if not a “Covered
Policy” under Insurance Law §3425; Ineffective Cancellation Results in Coverage
after Policy’s Natural Expiration
The case
arises out of a four-car accident that occurred on
ACROSS
BORDERS
From
time to time we highlight significant cases of interest from other
jurisdictions. This week we offer
decisions from
California
Court of Appeal, Second Appellate District, Division
Seven
Self-Insured
Retention is Not Insurance For Purpose of Horizontal
Exhaustion
The
principal issue raised by the insured on this appeal involving an environmental
coverage dispute was whether the trial court erred in concluding that
self-insured retentions may be treated as primary/underlying insurance to which
the rule of horizontal exhaustion applies.
The rule would require Montgomery Ward to exhaust its SIRs on all
potentially applicable policies before any insurer has a duty to indemnify
Montgomery Ward for its losses. The Court of Appeal concluded that self-insured
retentions are not primary insurance, and the principle of horizontal exhaustion
does not apply.
Supreme
Court of New Jersey
Electronic
Harassment Actionable -- Employer Has Duty to Monitor Bulletin Boards; Court has
Long-Arm Jurisdiction
An
employer has a duty to prevent defamatory statements made by its employees on an
on-line computer “bulletin board” that are intended or likely to injure a
co-employee. In this case, those employees should reasonably expect to be
subject to jurisdiction in
Hurwitz
& Fine, P.C. is a full-service law firm
providing legal services
throughout the State of
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
jdg@hurwitzfine.com
Donna L. Burden
Andrea
Schillaci
Jody E. Briandi
©
COPYRIGHT 2000 Hurwitz & Fine, P.C., ALL RIGHTS
RESERVED.
REPORTED
DECISIONS
IN
RE LIQUIDATION OF MIDLAND INS. CO. v. SUPERINTENDENT OF
INSURANCE
WALLACH,
J.P.
This appeal
requires us to determine important issues of insurance law which arise in the
context of a liquidation proceeding under the supervision of respondent
Superintendent of Insurance. Among the questions presented are a determination
as to when insurance coverage attaches ("triggers ") with respect to a policy
covering "exposure" to asbestos-related risks; the effect, whether binding or
otherwise, of a New Jersey Federal District Court decision on the outcome here;
and the construction and effect of "other insurance" clauses in both the Midland
and other policies co-extensive with Midland Insurance Company’s excess coverage
during certain relevant time periods. The claimant ("LAQ"), here asserting the
broadest possible
The matter
comes to this Court on an agreed statement of facts, pertinent of which are as
follows. LAQ is a
From 1954
through 1962 ASARCO purchased liability insurance, including coverage for
product liability hazards, from Employers’ Liability Assurance Corporation, with
annual policy limits of $50, 000. From 1962 through 1976 it purchased similar
coverage from Canadian General Insurance Company, with aggregate limits of
$100,000 from 1972 to February 1974, and $300,000 to February 1976. Canadian
General has entered into a $1.7 million settlement with LAQ for all obligations
under policies it issued.
From
For the
period from
The
underlying AHAC policy, whose form
The AHAC
policy, and consequently, the
It is
agreed, that if any loss is also covered in whole or in part under any other
excess policy issued to the insured prior to the inception date hereof, the
company’s limit of liability . . . shall be reduced by any amounts due the
insured on account of any such loss under such prior
insurance.
Both
policies also contained the following "Other Insurance" clause:
If other
collectible insurance with any other insurer is available to the insured
covering a loss also covered hereunder, this insurance shall be in excess of,
and shall not contribute with such other insurance. Excess insurance over the
limits of liability expressed in this policy is permitted without prejudice to
this insurance and the existence of such insurance shall not reduce any
liability under this policy .
The
For the
period from
Between
In the years
after 1978, LAQ was insured under other excess AHAC policies, with varying
limits of liability beyond the limits of self-insured retention. Additionally ,
from 1977 through 1980 ASARCO maintained excess coverage with other
underwriters, with annual limits of $10 million. Some of these policies
contained asbestos-related exclusions, which the issuing insurers contend
exclude coverage for some or all asbestos-related bodily injury
claims.
1. The
In 1983 LAQ
instituted a declaratory judgment action against AHAC,
The
following month,
On
2. The
Shortly
after the dismissal against
(a) What
factor(s) occurring or existing during the
(b) What is
the proper application of the "prior insurance" and "other insurance" clauses
appearing in AHAC ’s 1975-76 policy and, pursuant to the "follow form"
provision, in
We find,
however, that the issues on this appeal are more
far-reaching.
A
liquidation Referee recommended, in January 1993, that the court adopt the
position of the Superintendent of Insurance that the policy provides coverage
for asbestos claims only if the initial injurious inhalation of the asbestos
occurred during the policy period, thus rejecting the argument that coverage
could also be triggered by subsequent exposure "in residence" (i.e., the point
at which -- it is later determined - - the body became diseased from an earlier
ingestion or exposure). In September 1994 the IAS court adopted the Referee’s
recommendation in modified form, confirming the finding that coverage was
triggered by initial exposure, but adding that coverage under the
The
Superintendent then sought a declaration that the "Other" and "Prior" insurance
clauses in the Midland policy warranted a determination that Midland’s
obligations were reduced by insurance available under other policies, such as
those issued by Highlands, AHAC, Canadian General and Employers’ Liability, and
particularly by Highlands, which was able to settle for $2.5 million in
indemnity payments even though its policy bore a $20 million limit of
liability.
In a
subsequent decision in March 1998, the court found that the Highlands policy was
such an "other" excess policy issued to the insured prior to the inception of
the Midland policy, and that since only $2.5 million of the $20 million
insurance available under the Highlands policy was paid to LAQ, Midland’s
exposure should be reduced by $17.5 million.
However, the
court also rejected
The court
additionally found that the Superintendent failed to meet his burden of
establishing that the policy limits of certain other policies constituted valid
and collectible insurance, as that term is used in the "Other Insurance "
clauses contained in the Midland policy, which would serve to reduce further
Midland’s obligations .
3. The
Asbestos Risk
At the
outset, insurance coverage issues aside, it is clear that asbestosis and related
diseases are more complex than other types of personal injury claims under
liability policies. The parties themselves have stipulated to the nature of the
disease, deeming as accurate the descriptions of asbestosis and mesothelioma in
Borel v Fibreboard Paper Prods. Corp. (493 F2d 1076, 1083, cert denied 419
[I]nhaling
asbestos dust in industrial conditions, even with relatively light exposure, can
produce the disease of asbestosis. The disease is difficult to diagnose in its
early stages because there is a long latent period between initial exposure and
apparent effect. This latent period may vary according to individual
idiosyncrasy, duration and intensity of exposure, and the type of asbestos used.
In some cases, the disease may manifest itself in less than ten years after
initial exposure. In general, however, it does not manifest itself until ten to
twenty-five or more years after initial exposure. This latent period is
explained by the fact that asbestos fibers, once inhaled, remain in place in the
lung, causing a tissue reaction that is slowly progressive and apparently
irreversible. Even if no additional asbestos fibers are inhaled, tissue changes
may continue undetected for decades. By the time the disease is diagnosable, a
considerable period of time has elapsed since the date of the injurious
exposure. Furthermore, the effect of the disease may be cumulative since each
exposure to asbestos dust can result in additional tissue changes. A worker ’s
present condition is the biological product of many years of exposure to
asbestos dust, with both past and recent exposures contributing to the overall
effect. All of these factors combine to make it impossible, as a practical
matter, to determine which exposure or exposures to asbestos dust caused the
disease.
A second
disease, mesothelioma, is a form of lung cancer caused by exposure to asbestos.
It affects the pleural and peritoneal cavities, and there is a similarly long
period between initial contact and apparent effect. As with asbestosis, it is
difficult to determine which exposure to asbestos dust is responsible for the
disease.
There exist
at present no medical techniques capable of specifically identifying and
quantifying the progression of asbestos-related injury, sickness or disease
actually sustained in each year from and after a first exposure to asbestos
fiber.
4. The
Coverage "Trigger"
The IAS
court concluded, and the parties do not dispute , that
The issue
before the Court of Appeals was whether Continental Casualty Company and
Transportation Insurance Company (collectively CNA), which had issued
comprehensive general liability policies for the period between 1971 and 1980,
could be liable for individuals who displayed manifestations of the disease only
after the expiration of the policy period. CNA argued that the insured had
conducted its insurance program for years under the theory that the underwriter
supplying coverage at the time of the manifestation of the disease was the
carrier responsible for coverage. CNA took the position that since it was not on
the risk at the time the individuals actually developed asbestosis, it could not
be liable. The Court found that since CNA had agreed to provide coverage for an
occurrence , defined similarly in the policies at issue in this case, i.e.,
continuous or repeated exposure, the injured workers had been exposed by
inhalation to asbestos when Continental was on the risk, and thus it was liable
to indemnify. Implicit in the decision’s reliance upon the policy definition of
" occurrence" is that under
The
underlying AHAC policy in this case provides that coverage is triggered by an
occurrence, and that an occurrence is an event which includes " continued or
repeated exposure" to conditions which result in personal injury. At the very
least , the language of the policy, which includes "continued exposure",
indicates that any type of inhalation of the asbestos fibers is an occurrence,
and not just the first inhalation.
Any
interpretation of an insurance contract implicates as a standard "the reasonable
expectation and purpose of the ordinary businessman when making an ordinary
business contract" (see, Atlantic Cement Co. v Fid. & Cas. Co. of N.Y., 91
AD2d 412, 418, affd 63 NY2d 798). LAQ’s ordinary expectation under a policy
providing coverage for its employees’ continued exposure would be coverage for
more than the first inhalation. If AHAC had intended otherwise, it could simply
have used the language "first exposure" in lieu of "continuous or repeated
exposure."
The
Superintendent argues that since the policy defines repeated exposure as one
occurrence, " ;a claimant’s repeated exposure to asbestos fibers over many years
constitutes a single occurrence" ;, relying on cases such as Stonewall Ins. Co.
v Asbestos Claims Mgt. (73 F3d 1178), where the court found that clean-up costs
for the removal of asbestos from buildings should be borne by the insurer on the
risk at the time of the installation of the asbestos-containing materials. The
Second Circuit there reasoned that property damage was actually incurred at the
time of installation, and rejected one insurer’s contention that the injury
actually occurred at the time the damage was discovered (at 1209). There is a
clear distinction between actual installation of asbestos-containing materials
in a building, where the "injury" ; (the actual installation) occurs at a fixed
date in time, and the long-term inhalation of asbestos fibers into the human
body, where every respiration can be deemed to have contributed to and magnified
the actual injury, i.e. the slow-forming asbestosis. Our reading of the policy
at issue indicates that the purpose of defining all exposure as one occurrence
is to make clear that only one deductible will apply, and that the limit of
liability, where an insurer has issued renewal policies, shall be the policy
limits for one policy, rather than the aggregate for all policies issued.
Otherwise, an insurer that issues a $1 million liability policy renewed 20 times
could find itself liable for $20 million in damage claims for the same
injury.
As to
whether coverage may be triggered "in residence," ; the leading case for the
proposition is Keene Corp. v Ins. Co. of N. Am. (supra), where the court was
faced with deciding when coverage was triggered by an "occurrence," which was
defined, as in this case, as " ;an accident, including injurious exposure to
conditions, which results, during the policy period, in bodily injury . . .
neither expected nor intended from the standpoint of the insured " (667 F2d at
1039 [emphasis in original]). All four underwriters in that case had provided
coverage at various points in time when the inhalation actually occurred. One
insurer argued that coverage was triggered by the inhalation of asbestos fibers,
but that each company’s coverage should be determined by the ratio of exposure
years during its policy period to the entire period of inhalation; the other
three advanced the notion that coverage was triggered only by actual
manifestation of the injury, i.e ., disease (at 1042-1043). The court found that
in order to protect the insured, and to fulfill the ordinary expectations it had
when it purchased the various insurance policies, coverage would be triggered by
manifestation of the disease as well as exposure. It reasoned that otherwise, a
policyholder would not be protected from future claims arising out of exposure
from years earlier. The court observed that when insurers became aware of the
virtually unlimited risks of asbestos coverage, they stopped writing such
policies, so that unless the underwriters on the risk at the time of actual
exposure were obligated to indemnify, the insured would be without coverage (at
1045-1046).
In
The language
of the AHAC policy, which
The Circuit
Court for the
While these
decisions are consistent with our conclusion that New York does not follow the
multiple-trigger theory advocated by LAQ, they still create a dilemma as to what
constitutes an "injury" within the policy period. The trigger event in the
policy at issue is an occurrence which results in injury, not the injury itself.
In our view such policy language requires only an occurrence (inhalation) during
the coverage period, and not the injury itself (the actual onset of
asbestosis).
This latter
approach obviously presents some difficulty, since not all inhalation of fibers
results in asbestosis, any more than inhalation of tobacco always results in
lung cancer (see, e.g., Eagle-Picher Indus. v Liberty Mut. Ins. Co., 682 F2d 12,
cert denied 460 US 1028). As has been noted, "A cumulative, progressive disease
does not fit the disease or accident situation which the policies typically
cover" (Ins. Co. of N. Am. v Forty-Eight Insulations, 63 3 F2d 1212, 1222).
Nevertheless, our approach appears to be as bright a line as can be established
for determining when coverage has been triggered. If exposure never results in
illness, the issue becomes academic. If illness does follow, it is more
consistent with the "occurrence" language of the policy to find that the injury
first occurred when the individual was actually exposed to asbestos fibers by
inhalation, than to conclude that an insurer coming upon the risk after actual
exposure by inhalation has terminated should be bound to indemnify the insured.
Thus, given
the " round hole, square peg" category of an asbestos claim, and the
"occurrence" language of the policy, the IAS court correctly found that coverage
is triggered by exposure, whether first or continued , but not by exposure in
residence.
5.
Application of New York Law
An ancillary
question to the trigger dispute is presented by the fact that the District Court
in New Jersey found that under the terms of AHAC’s policy, coverage was
triggered by exposure in residence and by manifestation , as well as by simple
exposure (613 F Supp at 1557-1558). LAQ contends that this interpretation is
binding upon Midland, since Midland agreed to follow the AHAC form. The
Superintendent responds that since the judgment was vacated against Midland, the
District Court’s decision is not binding in this proceeding. We conclude that
the decision is not binding because the District Court applied New Jersey law to
AHAC’s policy, and Midland’s obligations should be interpreted under New York
law.
Under normal
circumstances, given the "follow-the-form" language of the Midland policy, the
interpretation would have remained binding upon Midland, even in a liquidation
proceeding, since liability under a primary policy triggers liability in an
excess "follow the form" policy (see, Jefferson Ins. Co. v Travelers Indemnity
Co., 92 NY2d 363, 369; see also, Associated Indem. Corp. v Dow Chem. Co., 81 4 F
Supp 613, 618). Thus, the definition of occurrence construed in the context of
the primary policy would normally control the definition for interpretation of
the excess policy (814 F Supp at 618).
In this
case, however, the Federal District Court applied New Jersey law (613 F Supp at
1554) in finding that exposure in residence could also trigger coverage. It has
been determined that the Midland policies are to be interpreted in the
liquidation proceeding under New York law, since New York was Midland’s place of
business and as well as the State where the policy was written. Furthermore,
public policy dictates that in a liquidation proceeding all creditors are to be
treated equally (Matter of Knickerbocker Agency v Holz, 4 AD2d 71, 73, affd 4
NY2d 245). In order to assure that all Midland creditors are treated equally and
in accordance with conflicts of law principles, it is necessary that the court
apply New York law in ascertaining whether an occurrence is triggered by
exposure in residence, rather than defer to the District Court’s decision.
Otherwise, a non-LAQ claimant whose employment ceased before Midland issued a
policy to his employer would not be able to recover against Midland, while the
similarly situated LAQ employee would.
6. The
Highlands Policy
The Federal
District Court also found that since the Highlands policy had been canceled
prior to its intended termination date, and since the first Midland policy was
issued for the balance of the intended coverage period, that the limits of the
Highlands policy should be prorated for the period of time in which the policy
actually existed. The court noted that there was no manifestation of agreement
by the parties as to whether the $20 million limits would remain available for
coverage of latent harm, and concluded that under the unique circumstances,
where Midland succeeded to the policy risk for the balance of the initial
coverage period , that its indemnity limit should be deemed to be $2.5 million.
The IAS court found that the District Court decision was not binding upon
Midland, and consequently rejected the District Court’s reduction of the $20
million coverage to $2.5 million. It thus concluded that any sums due from
Midland must be reduced by $17.5 million pursuant to the "Other Insurance"
clause of the Midland policy, which requires exhaustion of prior excess policies
before Midland’s obligations attach.
LAQ argues
that the court committed error because the "Other Insurance" and "Prior
Insurance" ; clauses are only relevant in disputes over contribution between
insurers, but cannot be used to deprive the insured of the coverage it
purchased; that the Highlands policy was not issued prior to the Midland policy
since it was actually delivered to LAQ only after the cancellation date; and
that there are no amounts due the insured under the Highlands policy pursuant to
the District Court’s conclusion that the pro-rated limits were actually $2.5
million.
The
Superintendent claims that the plain wording of the Midland "Other Insurance"
clause permits reduction of its obligation in the first instance to LAQ; that
the limits of the Highland policy were $20 million, no matter how short a time
the policy was effective; and that the Highlands policy was issued prior to the
Midland policy, regardless of the actual delivery
date.
The AHAC
policy, to which the Midland policy attaches under the " ;follow-the-form"
language, provides for reduction in the amounts owed "if any loss is also
covered in whole or in part under any other excess policy issued to the insured
prior to the inception date hereof". It further provides that AHAC’s coverage --
and therefore, Midland’s -- shall be excess if "other collectible insurance with
any other insurer is available to the insured covering a loss also covered
hereunder".
With regard
to LAQ’s claim that since the Highlands policy itself was not, for some
ministerial reason, actually delivered to LAQ until after the Highlands
cancellation was effective, it would be absurd to conclude that the policy
itself was not issued by Highlands prior to the issuance of the Midland policy.
The Midland policy did not attach until after the Highlands policy was canceled.
While in certain circumstances (e.g., a life insurance policy) the delivery date
becomes the issuance date, a fair reading of the language of the AHAC/Midland
policy, and a construction of the obvious intentions of LAQ and Midland with
regard to the contract they formed, can only lead to the conclusion that the
Highlands policy was issued first, then canceled, and the Midland policy then
attached.
Likewise, a
plain reading of the "Other Insurance" and "Prior Insurance " clauses defeats
LAQ’s claim that the clauses were to be used only to resolve disputes over
contribution between insurers, but could not be used to reduce the amount owed
by Midland to LAQ in the first instance . The clauses clearly provide that
Midland’s $20 million coverage obligation to LAQ would be reduced by any sums
owed to LAQ by other excess policies on the same risk, and specifically preclude
contribution .
Consequently,
the only question with regard to the Highlands policy is whether the District
Court’s proration of the policy limits was binding on Midland. Inasmuch as the
reduction was an adjudication of Highlands’ contractual obligations to LAQ, and
did not directly affect Midland, the IAS court was not free to find that the
coverage available to LAQ from Highlands was still $20 million. Once the
District Court decided that the Highlands policy limits were to be prorated,
this became a binding construction with res judicata/collateral estoppel effect.
The forum for Midland to attack the District Court ’s decision was the appeal
from that order to the Third Circuit. The fact that the Third Circuit vacated
any determinations made concerning Midland’s obligations under its policy does
not permit the Superintendent in this liquidation proceeding to challenge the
District Court’s adjudication of LAQ’s rights under the Highlands
policy.
The
Superintendent correctly points out that case law generally holds that proration
of policy limits is not permitted when the coverage period has been shortened
(see, e.g., Unigard Sec. Ins. Co. v N. Riv. Ins. Co., 762 F Supp 566, 595-596,
affd in part, revd in part on other grounds 4 F3d 1049). Nevertheless, proration
has been permitted in this case , for whatever reason, and we cannot sit in
appellate review of the District Court’s decision.
7. "Other
Insurance" Provisions in the Policies
The IAS
court declared that the policy issued by Employers’ Liability to LAQ must be
exhausted prior to the attachment of Midland’s coverage , due to the "Other
Insurance" provisions of Midland’s coverage. LAQ contends that since Employers ’
Liability has refused to pay on the policies, such insurance is not
"collectible" insurance "available" to LAQ, as provided in the "Other Insurance"
clause, and consequently should not be used to reduce LAQ’s rights. We agree,
but conclude that LAQ should be given an opportunity to establish a bona fide
reason for Employers’ Liability’s inability or refusal to pay before the
Employers’ Liability policy is deemed
uncollectible.
The same
declaration was made with regard to Canadian General’s policy. LAQ contends that
Canadian General met its obligations in full when it settled for $1.7 million.
The Superintendent claims that the aggregate policy limits were $1.85 million.
Since this appears to be merely a ministerial matter of arithmetic, and the case
has already been referred to a Referee, no reason exists to disturb this
declaration; the Referee can readily calculate the face limits of the policies,
and subtract from them that which Canadian General has paid . If it is
determined that Canadian General settled for less than the limit of its
liability, certainly Midland’s obligation should be reduced
accordingly.
The IAS
court found that the policies issued by AHAC from 1976 to 1978 must also be
exhausted before Midland is obligated to indemnify, since they constitute other
insurance also available to LAQ for the same occurrences. The court reasoned
that the "Other Insurance" clause did not limit coverage to current or prior
years, and the contract should be enforced according to its terms. The court
also concluded that not enforcing the clause would allow an insured to
manipulate claims into years when it had more abundant
coverage.
There is a
dearth of case law on this issue in New York, with the exception of Merchants
Mut. Ins. Co. v Hartford Ins. Group (145 Misc 2d 1), which concerned a dispute
between insurers at the same level of coverage. We conclude that the "Other
Insurance" ; language of the Midland policy is broad enough to cover all primary
policies, prior and subsequent, which must be exhausted before Midland’s excess
policy can be called to indemnify (see, Rhone -Poulenc v Intl. Ins. Co., 877 F
Supp 1170, applying Illinois law). Since the provision is clear and unambiguous,
there is no reason for the court to resort to interpretation. Knowing what the
terms of Midland’s coverage were, LAQ settled with AHAC before resolving this
question, even though it could have sought protective language in the
settlement, or deferred settlement until this issue was
resolved.
The court
found that any self-insured retention by LAQ also constituted other insurance
which must be exhausted before triggering Midland’s excess policy, reasoning
that since a self-insured retention substitutes for insurance, the insured’s
choice to "go bare" should not inure to the detriment of the excess carrier.
Nevertheless , the Midland policy specifically states only that it is providing
$20 million excess of AHAC’s $3 million layer, "and $500,000 S.I.R. in uninsured
areas." It is evident that the only retention with which Midland was concerned
was the $500,000 mentioned in the policy, and thus the unambiguous policy terms
provide that Midland only required LAQ to exhaust $500,000 in self-insured
retention. If it wished LAQ to exhaust all self-insured retentions in all policy
years, it could easily have so provided in the policy. We do not believe that
the word "insurance" in an "Other Insurance" clause can be construed to
encompass self-insured retention (see, Stratford School Dist., S.A.U. #58 v
Empls . Reins. Group, 162 F3d 718).
Midland
claims that since it was in liquidation, its insurance was not collectible, and
thus not subject to proration pursuant to the "Other Insurance" clauses of other
policies providing coverage that is deemed "excess" to any otherwise available
collectible insurance. Midland asserts that an insurer in liquidation does not
have "collectible" funds . The IAS court found that since some sums will be
available in the liquidation proceeding, they are "collectible," and that there
is also money available from the Security Fund established by statute (Insurance
Law §§ 7603, 7609), which can be deemed
collectible.
Where
contemporaneous insurance policies contain respective "Other Insurance" clauses
providing that each is deemed excess to other available and/or collectible
insurance, the clauses cancel each other out, and " each insurer contributes in
proportion to its limit amount of insurance" (Lumbermens Mut. Cas . Co. v
Allstate Ins. Co., 51 NY2d 651, 655). Thus, where other policies besides
Midland’s contain the "Other Insurance" ; clauses, Midland’s coverage would
normally have to be prorated with theirs.
In this
case, however, Midland is in liquidation. This Court has stated that an
insolvent insurance company has uncollectible insurance (American Lumbermens
Mut. Cas. Co. v Lumber Mut. Cas. Ins. Co., 251 App Div 231, 235). Since a
condition precedent to the application of the "Other Insurance" clause is
insurance that is collectible, it would appear that for purposes of allocating
indemnity obligations, the Midland policy would not be affected by the "Other
Insurance" clauses in other policies, and the IAS court erred in finding that
Midland had available insurance.
Regardless
of whether Midland’s obligations had become fixed prior to its entry into
liquidation, the fact remains that it is no longer a viable underwriter with
readily available coverage.
Furthermore,
the Security Fund is not insurance, but a pool of money contributed by insurers
doing business in New York for the payment of allowed claims of policyholders
and injured parties (see, Matter of Allcity Ins. Co. v Kondak, 66 AD2d 531, 537,
appeal dismissed in part, denied in part 48 NY2d 629). If and when LAQ’s claim
against Midland is fixed in a sum certain, and Midland’s assets have been
marshaled, then the claim may be submitted to the Security Fund for treatment
along with all other claims. At this point, however, there is no guaranty that
any of Midland’s assets will be available to creditors. Thus, it is impossible
to state that there is $20 million in insurance that is collectible from
Midland.
8. Other
Potential Coverage
Finally,
there are apparently other subsequently issued policies also available to LAQ,
some of which contain exclusions for asbestos coverage only, some of which
contain no exclusions , and some of which contain exclusions for asbestosis and
silicosis. The court found that the Superintendent had failed to meet its burden
of showing that policies issued subsequent to March 15, 1978 containing
"asbestosis" exclusions constitute "other valid and collectible insurance" as
that term is used in the "Other Insurance" clauses referred to in the Midland
policies and as applied to LAQ’s underlying asbestos liabilities, essentially
because these policies were not included in the record. We believe that the
court should have made no declaration once it found that Midland had failed to
meet its burden, and instead should have directed a hearing on the issue, where
the policies could be reviewed. The Referee could then report and recommend
whether the exclusions encompass all asbestos -related ailments, and the court
could then rule whether the policies with the exclusions can still be considered
other collectible insurance.
Accordingly,
the order of Supreme Court, New York County (Beverly Cohen, J.), entered August
5, 1998, which, inter alia, provided as follows :
• Granted in
part and denied in part the Superintendent’s motion to confirm and LAQ’s cross
-motion to reject the Referee’s Report and Recommendation dated January 26,
1993;
• Declared
that coverage under the Midland policy for asbestos-related personal injury
claims is triggered by exposure to asbestos occurring during the policy
period;
• Declared
that the "Prior Insurance& quot; clause contained in the Midland policies is
applicable only to other excess coverage policies of insurance, and is not
applicable to primary insurance policies;
• Declared
that the policies issued to LAQ by Employers’ Liability Assurance Corporation
for policy periods from 1954 through 1962 , and by Canadian General Insurance
Company for policy periods from 1962 through 1976, do not constitute excess
policies of insurance within the meaning of the Prior Insurance clause of the
Midland policies ;
• Declared
that Highlands Insurance Company policy # SR 10644 was "issued" on March 15,
1975;
• Declared
that the Superintendent is not bound by either the settlement or judgment in the
matter denominated Lac d’Amiante du Quebec, Ltee. v American Home Assurance Co.
(613 F Supp 1549 [D.N.J., mod to vacate and dismiss as against Midland 864 F2d
1033 [3rd Cir.]);
• Declared
that the Highlands policy constitutes an "other" excess policy issued to LAQ
prior to the inception date of the Midland policy, as defined in the "Prior
Insurance" clause of the Midland policy;
• Declared
that the "Prior Insurance" clause in the Midland Policy operates to reduce the
limits of that policy by $17.5 million, an amount that remains due to LAQ under
the Highlands policy;
• Declared
that for purposes of the claim in this matter only, the liability limits of all
the Midland policies are deemed "collectible" and "available," as those terms
are used in the "Other Insurance" clauses of policies other than
Midland’s;
• Declared
that the "Other Insurance" clauses contained in the Midland policies apply to
all policies of insurance providing coverage to LAQ that are triggered by the
same claims that trigger the Midland policies and that were issued prior or
subsequent to the Midland policies;
• Declared
that as to any policies issued subsequent to the Midland policies which contain
or incorporate a "Prior Insurance" clause, the Superintendent has failed to
carry his burden of proving that the Midland policies need not be exhausted
prior to recourse to those subsequent policies;
• Declared
that the policies of Employers’ Liability and Canadian General must be exhausted
prior to the Midland policies to the extent, if any, that those policies have
not already been exhausted;
• Declared
that LAQ’s self-insured retention for each period in which LAQ remained
self-insured for primary or excess coverage shall constitute " ;other valid and
collectible insurance," as that term is used in the "Other Insurance" clause in
the Midland policies;
• Declared
that the insurance coverage provided by Employers ’ Liability is available
pursuant to the "Other Insurance" clause of the Midland
policies;
• Declared
that the Superintendent has failed to meet his burden to show that the policies
issued to LAQ by CNA and First State Insurance Company for the period March 15,
1977 through March 15, 1978, and American Home Assurance Company subsequent to
March 15, 1978, constitute "other valid and collectible " insurance, as that
term is used in the "Other Insurance" clause in the Midland policies
;
• Declared
that the Superintendent has failed to meet his burden to show that policies
issued to LAQ for periods subsequent to March 15, 1978 containing "asbestosis"
exclusions constitute "other valid and collectible insurance," as that term is
used in the "Other Insurance& quot; clause in the Midland policies and as
applied to LAQ’s underlying asbestos liabilities;
and
• Ordered a
reference to hear and report on the amounts remaining due from LAQ’s
self-insured retentions and policies issued by Employers’ Liability, Canadian
General, AHAC and Midland,
should be
modified, on the law, so as to
• Declare
that coverage under the Midland Policy for asbestos -related personal injury
claims is triggered by exposure to asbestos by inhalation, whether first or
subsequent, and not by exposure "in residence";
• Declare
that the Superintendent is bound by the judgment in the Federal action only to
the extent that the judgment adjudicated LAQ’s rights under policies other than
Midland’s, including the Highlands policy;
• Vacate the
declaration that with reference to the Highlands policy, Midland’s liability to
LAQ is reduced by $17.5 million;
• Vacate the
declaration that the liability limits of the Midland policies are deemed
"collectible " and "available," as those terms are used in the "Other Insurance"
clauses of policies other than Midland’s, and declare that the limits of the
Midland policies are neither " ;collectible" nor "available" under the "Other
Insurance" clauses of the non -Midland policies;
• Vacate the
declaration that the Superintendent has failed to meet his burden of proving
that the Midland policies need not be exhausted prior to the implication of any
subsequent policies containing "Other Insurance"
clauses;
• Vacate as
premature the declaration that the Employers’ Liability policy must be exhausted
prior to the implication of the Midland policies , and grant LAQ leave to
establish that the funds are uncollectible for reasons other than unjustified
refusal by Employers’ Liability to pay;
• Vacate the
declaration that LAQ’s self-insured retention for all policy periods constitutes
"other valid and collectible insurance," as defined in the Midland policies, and
declare that Midland’s obligations shall be reduced only by the $500,000
self-insured retention recited in the Midland
policy;
• Vacate the
declaration that the Superintendent has failed to meet his burden of proving
that the CNA, First State and AHAC policies constitute " ;Other Insurance," as
that term is used in the Midland policy, and declare that to the extent said
policies cover the same risk, they constitute "Other Insurance";
and
• Vacate the
declaration that the Superintendent has failed to meet his burden with regard to
policies containing asbestosis exclusions, and direct remand for further review
of that issue upon production by LAQ of the policies which Midland contends
constitute "Other Insurance," and as so modified , affirmed, without
costs.
All
concur.
HARVEY v. MEMBERS EMPLOYEES TRUST FOR
RETAIL OUTLETS
In an action
for a judgment declaring that the defendant is obligated to reimburse the
plaintiff for certain medical and hospital bills pursuant to a medical insurance
policy issued by the defendant to the plaintiff's decedent, the plaintiff
appeals from an order of the Supreme Court, Nassau County (McCaffrey , J.),
dated February 4, 1999, which denied his motion for summary judgment on the
complaint and granted the defendant's cross motion for summary judgment
dismissing the complaint.
ORDERED that
the order is reversed, on the law, with costs, the motion is granted, the cross
motion is denied, and the matter is remitted to the Supreme Court, Nassau
County, for the entry of a judgment declaring that the defendant is obligated to
reimburse the plaintiff for the subject medical and hospital bills pursuant to
the medical insurance policy issued by the defendant to the plaintiff's
decedent.
The
defendant insurer disclaimed coverage for hospital and medical expenses incurred
by the plaintiff 's decedent on the ground that the decedent's illness arose
from the use of alcohol. However, Insurance Law § 3221 and its implementing
regulations do not permit an insurer to exclude coverage for medical conditions
which develop as a consequence of alcohol use (see, 11 NYCRR 52.16[c]).
Furthermore, although the defendant provided coverage to the decedent pursuant
to a plan under the Employee Retirement Income Security Act (see, 29 USC § 1001,
et seq; hereinafter ERISA), the requirements of Insurance Law § 3221 and its
implementing regulations are not preempted by ERISA (see, Trapanotto v Aetna
Life Ins. Co. - Aetna Health Plans, 1996 WL 417519 [SDNY 1996]; see also, New
York State Conference of Blue Cross & Blue Shield Plans v Travelers Ins.
Co., 514 US 645; Travelers Ins. Co. v Pataki, 63 F3d 89). Accordingly, the
defendant is required to reimburse the plaintiff for expenses relating to the
decedent's final hospitalizations.
The
defendant's remaining contentions are without merit.
BRACKEN,
J.P., RITTER, KRAUSMAN and SMITH, JJ., concur.
KOKO
CONTRACTING, INC. v CONTINENTAL ENVIRONMENTAL ASBESTOS
REMOVAL CORP.
In an
action, inter alia , for a judgment declaring that the defendant Zurich
Insurance Co. is obligated to defend and indemnify the plaintiff Koko
Contracting, Inc., in an action entitled Jaroslav v United States of America,
pending in the United States District Court for the Eastern District of New
York, under Index No. CV 96 2864, the plaintiffs appeal from an order of the
Supreme Court, Nassau County (Bucaria, J.), entered May 11 , 1999, which granted
the motion of the defendant Zurich Insurance Co. to dismiss the complaint on the
basis of a forum selection agreement.
ORDERED that
the order is affirmed, with costs.
The Supreme
Court properly dismissed the complaint on the ground that the forum selection
clause contained in the subject insurance policy provided that any action
arising from the terms and conditions of the policy shall be instituted and
litigated in the courts of the State of Colorado. Under New York law, forum
selection clauses are prima facie valid (see, Brooke Group v JCH Syndicate 488,
87 NY2d 530, 534; Micro Balanced Prods. Corp. v Hlavin Indus., 238 AD2d 284,
285; British W. Indies Guar. Trust Co. v Banque Internationale A Luxembourg, 172
AD2d 234). "Forum selection clauses are enforced because they provide certainty
and predictability in the resolution of disputes" (Brooke Group v JCH Syndicate
488, supra, at 534). Here, the plaintiffs failed to show either that enforcement
of the clause would be unreasonable, unjust, or would contravene public policy,
or that the clause is invalid because of fraud or overreaching (see, National
Union Fire Ins.Co. of Pittsburgh, Pa. v Williams, 223 AD2d 395, 398; Hirschman v
National Textbook Co., 184 AD2d 494, 495; British W. Indies Guar. Trust Co. v
Banque Internationale A Luxembourg, supra; Di Ruocco v Flamingo Beach Hotel
& Casino, 163 AD2d 270, 271-272).
FRIEDMANN ,
J.P., KRAUSMAN, LUCIANO and SCHMIDT, JJ., concur.
In an
action, inter alia, for a judgment declaring that the defendant is obligated to
defend and indemnify Paul Anderson and Scott Anderson in an underlying action
entitled Marino v Anderson, pending in the Civil Court, Kings County, under
Index No. 5594/97, the plaintiff appeals from an order of the Supreme Court,
Kings County (Garson, J.), dated May 26, 1999, which granted the defendant's
motion to dismiss the complaint and denied her cross motion for summary judgment
on the complaint.
ORDERED that
the order is affirmed, and the matter is remitted to the Supreme Court, Kings
County, for the entry of a judgment declaring that the defendant is not
obligated to defend and indemnify Paul Anderson and Scott Anderson in the
underlying action.
An
altercation ensued between members of the plaintiff's family and people
attending a party at a neighboring home. The plaintiff was attacked and
assaulted by one of the attendees of the party and sustained injuries as a
result of the attack. The host of the party, Paul Anderson, rented the house
from his parents, who were the owners of the premises. Paul Anderson resided at
the house with two other men.
The
plaintiff commenced an action against Paul Anderson , his brother Scott
Anderson, and their parents, Robert and Joyce Anderson, to recover damages for
her injuries. Robert Anderson was the named insured under an insurance policy
issued by the defendant, Allstate Insurance Company (hereinafter Allstate), for
the premises he owned and rented to Paul Anderson. Allstate denied coverage to
Paul Anderson and refused to defend him in the action. A judgment was entered
against Paul Anderson upon his failure to appear in the action. Subsequently,
the plaintiff commenced the instant action against Allstate seeking a
declaration that Allstate had a duty to defend and indemnify Paul Anderson and
Scott Anderson in the underlying action.
Under the
terms of the insurance policy, Allstate agreed to provide coverage, inter alia,
for an "insured person" under the policy. Pursuant to the policy, in addition to
the individual named on the declarations page, an "insured person" also includes
an employee of the insured, while acting within the scope of that employment,
and any person while acting as the insured's real estate manager of the insured
premises. Neither Paul Anderson nor Scott Anderson was an employee of their
parents or a real estate manager of the premises. Since there was no coverage,
the court properly found in favor of Allstate.
We note that
since this is a declaratory judgment action, the Supreme Court should have
directed the entry of a declaration in favor of the defendant rather than
dismissal of the complaint (see, Lanza v Wagner, 11 NY2d 317, 3 34, appeal
dismissed 371 US 74, cert denied 371 US 901).
SANTUCCI,
J.P., ALTMAN, KRAUSMAN and FEUERSTEIN, JJ., concur.
AMERICAN HOME ASSURANCE CO. v.
CHIN
FRIEDMANN ,
J.P. The issue presented for resolution on the instant appeal is whether an
automobile liability insurance policy, which is not a "covered policy" within
the meaning of Insurance Law § 3425 and which the insurer ineffectively
attempted to cancel, remains in effect after its natural expiration
date.
The instant
proceeding arises out of a four-vehicle collision which occurred on August 7,
1995. The vehicle in which the respondent Kenneth F. Chin was a passenger was
insured by the petitioner, American Home Assurance Company (hereinafter American
Home). The vehicle that was allegedly uninsured was owned by the respondent Roxy
Auto Sales, Inc. (hereinafter Roxy). It is undisputed that Roxy's vehicle had
been insured by the appellant, John Deere Insurance Company (hereinafter John
Deere), for a one-year period commencing April 12, 1994. On June 13, 1994, John
Deere mailed a notice of cancellation to Roxy informing it that the policy had
been canceled for nonpayment of premium. The effective date of the cancellation
was July 5, 1994.
After the
collision, Chin filed a claim for uninsured motorist benefits with American
Home. American Home refused to provide him with such benefits, and he filed a
demand for arbitration. In response, American Home commenced the instant
proceeding pursuant to CPLR article 75 to permanently stay arbitration of Chin's
claim. It asserted that Chin had no right to proceed to arbitration, inter alia,
because Roxy's vehicle was insured by John Deere at the time of the underlying
accident. In support of its position, American Home submitted several documents
which indicated that Roxy's vehicle was insured by John Deere on the date of the
subject accident.
In
opposition , Chin argued, inter alia, that John Deere had canceled Roxy's policy
prior to the accident. Chin submitted the notice of cancellation which John
Deere mailed to Roxy on June 13, 1994. John Deere also opposed the petition on
the ground that it had canceled the policy prior to the subject
accident.
In its
reply, American Home asserted, inter alia, that John Deere's notice of
cancellation to Roxy had been ineffective because it had incorrectly stated that
the civil penalty for a lapse of insurance was four dollars per day, rather than
six dollars per day.
By order
dated September 8, 1998, the Supreme Court, Nassau County (Davis, J.), referred
the matter to the Trial Assignment Part, inter alia, to determine the
effectiveness of John Deere's purported cancellation of Roxy's policy. The order
added Roxy, John Deere, and the other motorists involved in the subject accident
as party respondents to the instant proceeding .
John Deere
subsequently moved to dismiss the proceeding on the grounds that (1) the policy
it had issued to Roxy was not a "covered policy" as defined by Insurance Law §
3425 because it had not been issued to a "natural person" for "non-business"
purposes, and (2), because the policy was not a "covered policy", the
ineffective cancellation could not extend the life of the policy beyond its
stated or natural expiration date, i.e., April 12, 1995, nearly four months
before the underlying accident occurred . In opposition to John Deere's motion,
American Home asserted that until John Deere issued a proper notice of
cancellation, the policy issued to Roxy remained in
effect.
By order
dated March 22, 1999, the court denied John Deere's motion and granted American
Home's petition to permanently stay arbitration of Chin's claim. Although the
court agreed that the policy issued to Roxy was not a "covered policy" within
the meaning of Insurance Law § 3425, it determined that John Deere was
nevertheless required to cancel Roxy's policy in accordance with Vehicle and
Traffic Law § 313, and that its failure to do so meant that the policy remained
in effect until it was canceled in the manner prescribed by that statute . John
Deere appeals from this order and we affirm.
It is clear
that the policy which John Deere issued to Roxy is not a "covered policy" as
that term is defined by Insurance Law § 3425. Insofar as is relevant to the
instant appeal, a "covered policy" is defined as an automobile insurance policy
"insuring against losses or liabilities arising out of the ownership, operation,
or use of a motor vehicle, predominantly used for non-business purposes, when a
natural person is the named insured under the policy of automobile insurance"
(Insurance Law § 3425[a][1]). Here, Roxy, not a natural person, was the named
insured on the policy, and the vehicles insured apparently were not
predominantly used for non-business purposes . However, Insurance Law § 3425,
which governs, inter alia, when an insurer may cancel or refuse to renew certain
insurance policies, does not provide what a notice of termination must contain.
That is provided for in Vehicle and Traffic Law §
313.
"It is well
established that a notice of cancellation is ineffective unless in strict
compliance with the requirements of Vehicle and Traffic Law § 313(1)( a) * * *
and of regulations of the Commissioner if properly filed and not inconsistent
with specific statutory provision" (Barile v Kavanaugh, 67 NY2d 392, 399). Thus,
in the instant case, it is clear that John Deere's notice of cancellation to
Roxy, which incorrectly stated that the civil penalty was four dollars for each
day that insurance was not in effect, rather than six dollars per day, was
ineffective (see, Dunn v Passmore, 228 AD2d 472). Because its notice of
cancellation was ineffective, the subject policy remained in effect at least
until its stated expiration date.
In addition,
Vehicle and Traffic Law § 313(1)(a) expressly required John Deere to issue to
Roxy a notice of its intention not to renew the policy. Contrary to John Deere's
contention, the fact that the subject policy was not a "covered policy" within
the meaning of Insurance Law § 3425 has no bearing on whether or not John Deere
had to comply with Vehicle and Traffic Law § 313 (a)(1). In fact, as noted by
the court in the order appealed from, Vehicle and Traffic Law § 313(1)(a)
contradicts John Deere's position. That section plainly states, in relevant
part, that no automobile insurance contract "in which the named insured is not a
natural person or the motor vehicle is used predominantly for business purposes
shall be non-renewed " unless the insurer provides notice of its intent not to
renew at least 20 days prior to the renewal date (Vehicle and Traffic Law §
313[1][a]); emphasis added).
Since the
notice of cancellation was ineffective, regardless of whether the policy issued
by John Deere to Roxy was a "covered policy" within the meaning of Insurance Law
§ 3425, John Deere's "right to refuse to renew the policy upon the expiration of
its term is restricted by statute, and the policy continues in force after its
expiration date without a renewal, 'unless and until notice of termination is
given in accordance with the statute '" (Matter of Public Serv. Mut. Ins. Co. v
Foley, 190 AD2d 800, 801, quoting Teeter v Allstate Ins. Co., 9 AD2d 176, 181,
affd 9 NY2d 655; see, Broquedis v Employers Mut. Liab. Ins. Co. of Wisconsin, 45
AD2d 591, 594). Here, John Deere failed to give Roxy a notice of termination in
accordance with the statute.
Moreover,
there was no evidence that Roxy "indicated that [it] wished to cancel the
policy, nor did [it] obtain replacement coverage which would have excused [John
Deere] from providing notice under Vehicle and Traffic Law § 313" (Matter of
Public Serv. Mut. Ins. Co. v Foley, supra, at 80). Therefore, the court
correctly determined that Roxy's insurance policy continued in force after its
stated expiration date. Such a result comports with the purpose of the statute,
which was to ensure that "motorists shall be financially able to respond in
damages for their negligent acts, so that innocent victims of motor vehicle
accidents may be recompensed for the injury and financial loss inflicted upon
them" (Vehicle and Traffic Law § 310[2]). To the extent that this holding is
inequitable in that it effectively extends the life of Roxy 's insurance policy
beyond its stated expiration date, it is a matter more properly left for the
Legislature to remedy. Accordingly, the order must be
affirmed.
McGINITY,
LUCIANO and FEUERSTEIN, JJ., concur.
ORDERED that
the order is affirmed, with costs.
TRAVELERS
PROPERTY & CASUALTY CORP. v. EAGLE INS. CO.
Order,
Supreme Court, New York County (Diane Lebedeff, J .), entered on or about June
1, 1999, which, in an action between insurers involving their respective
obligations to pay certain no-fault and uninsured motorist benefits, upon the
parties’ respective motions for summary judgment, inter alia, declared in favor
of plaintiff that defendant’s purported cancellation of its policy on the
offending vehicle was ineffective, and that defendant’s policy was in full force
and effect on the date of the accident, unanimously affirmed, with
costs.
Although the
offending vehicle, a livery cab, was governed by the financial security
provisions of Vehicle and Traffic Law § 370, defendant elected to send its
insured an additional notice of cancellation pursuant to Vehicle and Traffic Law
§ 313. The sending of such additional notice, which could have caused the
insured confusion as to its duties under the financial security provisions of
Vehicle and traffic Law , rendered the purported cancellation ineffective
(Matter of Wilson v MVAIC, 242 AD2d 636).
In an action
to recover damages for personal injuries, etc., the plaintiffs appeal from (1)
an order of the Supreme Court, Queens County (Weiss, J.), dated July 14, 1999,
which granted the defendants' respective motions for summary judgment dismissing
the complaint insofar as asserted against them, and (2) an order of the same
court, dated October 28, 1999, which denied their motion, denominated as one for
renewal and reargument, which was, in effect, for reargument.
ORDERED that
the appeal from the order dated October 28, 1999, is dismissed, as no appeal
lies from an order denying reargument; and it is further,
ORDERED that
the order dated July 14, 1999, is affirmed; and it is further,
ORDERED that
the respondents are awarded one bill of costs.
The affirmed
medical reports of the physicians who examined the injured plaintiff Carole
Nisnewitz and reviewed the Magnetic Resonance Imaging films of her cervical and
lumbosacral spines on behalf of the defendants were sufficient to establish,
prima facie, that she did not sustain a serious injury within the meaning of
Insurance Law § 5102(d) as a result of the underlying motor vehicle accident
(see, Gaddy v Eyler, 79 NY2d 955, 956-957; Kosto v Bonelli, 255 AD2d 557). The
plaintiffs' evidence submitted in opposition to the defendants' motions for
summary judgment was insufficient to raise a triable issue of fact as to whether
the injured plaintiff sustained a serious injury. Although there was evidence
that she suffered from herniated and bulging discs, there was no objective
evidence of the extent or degree of the alleged physical limitations resulting
from the injuries and their duration (see, Guzman v Paul Michael Mgt., 266 AD2d
508; Noble v Ackerman, 252 AD2d 392, 394).
The
plaintiffs' motion, denominated as one for renewal and reargument, was, in
effect, for reargument, the denial of which is not appealable. The additional
evidence was neither newly-discovered nor unavailable to them at the time of the
prior motion (see, Vaynshteyn v Cohen , 266 AD2d 280; Knutson v Sand, 249 AD2d
451).
O'BRIEN,
J.P., ALTMAN, FRIEDMANN, McGINITY and SMITH, JJ., concur.
VITALE
v. LEV EXPRESS CAB CORP.
In an action
to recover damages for personal injuries, the defendants appeal from an order of
the Supreme Court, Queens County (Milano, J .), dated March 19, 1999, which
denied their motion for summary judgment dismissing the complaint on the ground
that the plaintiff did not sustain a serious injury within the meaning of
Insurance Law § ; 5102(d).
ORDERED that
the order is affirmed, with costs.
The
defendants initially submitted evidence sufficient to establish a prima facie
case that the plaintiff did not sustain a serious injury as a matter of law
(see, Gaddy v Eyler, 79 NY2d 955; Flanagan v Hoeg , 212 AD2d 756). In response,
the plaintiff submitted an affirmation by Dr. Roman Tabakman, based in part on a
recent examination, which indicated the degree to which the plaintiff's movement
was restricted in her cervical and lumbar spine, and noted that those
restrictions had been objectively measured using a range of motion test. The
affirmation also stated that the restrictions were permanent in nature. The
affirmation was sufficient to raise a triable issue of fact as to whether the
plaintiff sustained a "significant limitation of use of a body function or
system" (Insurance Law § 5102[d]; see also , Meyer v Gallardo, 260 AD2d 556;
Lombardi v Columbo, 259 AD2d 524; Yahya v Schwartz, 251 AD2d 498; Cenat v
Cutler, 251 AD2d 362; Pareti v Giglietta, 221 AD2d 607; Meireles v Lakeland
Cent. School Dist., 208 AD2d 508; cf., Grossman v Wright, AD2d [2d Dept .,
The
defendants' remaining contentions are without merit.
MANGANO,
P.J., SANTUCCI, KRAUSMAN, FLORIO, and SCHMIDT, JJ., concur.
In an action
to recover damages for personal injuries, the defendant appeals from an order of
the Supreme Court, Nassau County (Phelan, J.), entered December 30, 1998, which
denied his motion for summary judgment dismissing the complaint on the ground
that the plaintiff did not sustain a serious injury within the meaning of
Insurance Law § 5102(d).
ORDERED that
the order is reversed, on the law, with costs, the motion is granted, and the
complaint is dismissed.
After the
defendant established his entitlement to judgment as a matter of law by
submitting proof in admissible form that the plaintiff did not sustain a serious
injury within the meaning of Insurance Law § 5 102(d), the burden shifted to the
plaintiff to demonstrate the existence of a triable issue of fact ( see, Gaddy v
Eyler, 79 NY2d 955, 956-957). Although the affirmation of the plaintiff's
examining physician purported to quantify certain alleged restrictions in the
plaintiff's range of motion of her cervical spine, it failed to establish that
any objective tests were performed to support this determination ( see, Grossman
v Wright, AD2d [2d Dept., May 8, 2000]; Kauderer v Penta, 261 AD2d 365; Stowe v
Simmons, 253 AD2d 422; Merisca v Alford, 243 AD2d 613; Gill v O.N.S. Trucking,
239 AD2d 463). Furthermore, the plaintiff's evidence failed to demonstrate that
she was unable to perform her usual and customary activities for at least 90 out
of the 180 days immediately following the accident (see, Andrews v Nachman, 258
AD2d 607; Shames v Murtha, 204 AD2d 841).
THOMPSON,
J.P., S. MILLER, KRAUSMAN, FLORIO, and SCHMIDT, JJ.,
concur.
