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.

 

06/20/00:            MATTER OF WORCESTER INS. CO. v. BETTENHAUSER 

New York Court of Appeals

Failure to Raise Timely Disclaimer Based on Policy Exclusion Constitutes Waiver -- New York High Court Reaffirms Zappone and Blinks at Crouse

The New York Court of Appeals clarifies the effect of a failure to disclaim promptly based on an exclusion. In bodily injury and wrongful death cases, Failure to comply with Insurance Law §3420(d) -- which requires prompt disclaimer -- precludes denial of coverage based on a policy exclusion. Court finds its previous affirmance of the opinion in the Crouse case did not reach this particular issue.

 

06/20/00:         AGOADO REALTY CORP. v. UNITED INTERNATIONAL INS. CO.

New York Court of Appeals

Where Lack of Security is Claimed, Murder Constitutes an Accident for Purposes of Determining Obligations to Defend Insured

In this appeal, the New York high court was asked to determine whether the intentional assault of a tenant by an unknown assailant is an “accident” and hence a covered “occurrence” under a landlord's insurance policy, and whether a policy exclusion for “expected or intended” injuries applied. The Court of Appeals concluded that the loss is a covered occurrence and, concomitantly, that the policy exclusion does not apply to the circumstances presented here.  The Court distinguished earlier precedent where an "assault and battery" exclusion applied.

 

6/22/00:            BAILEY v. CHARTER OAK FIRE INS. CO.

New York State Supreme Court, Appellate Division, Third Department

Insured’s Failure to Submit Sworn Proof of Loss within 60 Days of Demand is an Absolute Defense to Coverage

Plaintiff sustained substantial loss resulting from a fire.  He immediately notified his insurer of the loss and began to work closely with a number of the insurer’s representatives.  Approximately four months later, the insurer demanded that the insured provide a sworn proof of loss and submit to an examination under oath.  More than 60 days passed and the insured failed to submit a proof of loss because “he didn’t want to make any mistakes.”  The insurer then disclaimed coverage.  The insurer’s disclaimer was valid.  Failure to file sworn proofs of loss within 60 days of demand constitutes an absolute defense to the action on the policy absent the insurer’s waiver of the requirement or conduct warranting estoppel.  Here, the insured could not recall any contact with the insurer after receiving the demand to file a sworn proof of claim and, thus, no waiver or estoppel could be proved.  Moreover, the insured’s filing of unsworn statements of loss did not satisfy the contractual or statutory requirement to serve the insurer with a sworn proof of loss.

 

06/22/00:            CHOUDHURY v. CHEN

New York State Supreme Court, Appellate Division, First Department

Serious Injury Threshold: Unsworn Medical Report Insufficient to Satisfy Defendant’s Burden on Motion for Summary Judgment

Plaintiff commenced this action for personal injuries following an auto accident. Defendant sought summary dismissal on the ground that plaintiff did not sustain “serious injury” as required by Insurance Law §5102(d).  In support of his motion, defendant submitted an unsworn medical report prepared by defendant’s expert.  The court denied the motion finding that the unsworn medical report was insufficient to satisfy defendants’ initial burden to make a prima facie showing that plaintiff had not sustained “serious injury.”

 

06/20/00:            CAMALLOY WIRE, INC. v. NATIONAL UNION FIRE INS. CO.

New York State Supreme Court, Appellate Division, First Department

Insurer Entitled to Dismissal of Claim where Amounts Reported during Policy Period Fell within Self-Insured Retention

The policy issued to the insured was a “claims made and reported” policy covering the period between March 13, 1989 to March 13, 1990, with a self-insured retention of $50,000.  Under the terms of the policy, the insurer agreed “[t]o indemnify the insured against loss the insured has or will become legally obligated to pay as a result of claims first made against the insured and reported to the Company in writing, during the policy period ... for pollution conditions...”  Only $33,800 of the cost recovery for the Coast Guard clean-up was so reported.  Since the self-insured retention under the insurance policy was $50,000, an amount greater than the clean-up costs, the insured’s complaint was properly dismissed.

 

06/20/00:            MARTINI v. LAFAYETTE STUDIOS CORP.

New York State Supreme Court, Appellate Division, First Department

Insurer’s Disclaimer for Insured’s 17 Month Delay in Providing Notice of Claims was Proper; Broker Liable for Damages Resulting from Negligent Referral of Claims to Wrong Insurer

The defendant requested that its broker refer claims asserted in plaintiff’s proposed amended complaint to “the appropriate insurance carrier”.  The broker notified Atlantic, who initially stated that it would provide a defense to the defendant, but never assumed control of the defense.  After a motion to amend the complaint was granted and the amended complaint served, Atlantic disclaimed coverage on the ground that the claims asserted in the amended complaint were first made after the expiration of Atlantic's policy period.  Firemen's, who had provided similar coverage for the relevant period, did not receive notice of the claims until 17 months later, when the claims were referred to it following Atlantic's disclaimer.  Firemen’s disclaimed coverage based on the defendant’s failure to notify it of the claims “as soon as practicable”, as required by the terms of its policy.  The court concluded that defendant’s 17-month delay in notifying Firemen's of the claims was unreasonable as a matter of law, therefore vitiating coverage under the terms of the policy.  It was no excuse that the delay was caused by the error of the insured's broker in initially notifying the wrong carrier.  Furthermore, Atlantic’s statement that it would provide a defense, without more, did not estop it from denying coverage.  The broker unilaterally made the initial determination to look to Atlantic for coverage, without relying on Atlantic in any way, and the defendant did not rely to its detriment on Atlantic by transferring control of its defense to it.  The court held, however, that the defendant was entitled to recover against the broker all damages caused by the broker’s negligent referral of the claim to the wrong insurer, which included the costs of defense and indemnity equivalent to what Firemen's would have provided had it been timely notified, and the reasonable costs of prosecuting this third-party action against Atlantic and Firemen's as a reasonable effort to mitigate damages.

 

06/19/00:            GOLD v. NATIONWIDE MUTUAL INS. CO.

New York State Supreme Court, Appellate Division, First Department

Insured Not Entitled to Attorney’s Fees in Declaratory Judgment Action

Plaintiff commenced this action for punitive damages and to recover attorney and expert fees after her insurer denied a claim for property damage under her homeowner’s policy.  The court held that claims for attorney and expert fees should have been dismissed because an insured may not recover the expenses incurred in bringing an affirmative action against an insurer to settle its rights under an insurance policy.

 

06/19/00:            PEROVICH v. LIOTTA

New York State Supreme Court, Appellate Division, Second Department

Serious Injury Threshold: Chiropractor’s Report Unsubstantiated by Objective Medical Tests Deemed Inadequate Proof of Serious Injury

The court held that plaintiffs’ personal injury actions were properly dismissed because neither of the plaintiffs sustained a serious injury as defined by Insurance Law § 5102(d). The plaintiffs' evidence submitted in opposition to the motion was insufficient to raise a triable issue of fact. The affidavit of the plaintiffs' treating chiropractor failed to indicate what objective medical tests he performed to measure the restrictions of motions suffered by the respective plaintiffs, and the court correctly refused to consider the unsworn medical records attached to the affidavit of the plaintiffs' chiropractor.

 

06/19/00:            SLAVIN v. ASSOCIATES LEASING, INC.

New York State Supreme Court, Appellate Division, Second Department

Serious Injury Threshold: Unsworn Medical Reports Insufficient Proof of “Serious Injury”

In this action for injuries sustained in an auto accident, plaintiff failed to submit sufficient evidence of “serious injury” under Insurance Law §5102(d) to defeat summary judgment.  In opposition to a motion for summary judgment, plaintiff submitted several unsworn medical reports.  Such reports do not constitute competent evidence.  Plaintiff did submit one sworn report, but that too was rejected because it merely contained “conclusory allegations tailored to meet statutory requirements.”

 

06/19/00:            WELCOME v. DIAB

New York State Supreme Court, Appellate Division, Second Department

Serious Injury Threshold: Physician’s Affidavit Unsupported by Proof of Objectively Diagnosed Injury Deemed Inadequate Proof of “Serious Injury”

In this action for injuries sustained in an auto accident, plaintiff failed to submit sufficient evidence of “serious injury” under Insurance Law §5102(d).  The affirmations of her treating physicians alleged certain restrictions in plaintiff’s range of motion; however, they failed to support their conclusions with proof of an objectively diagnosed injury.  Further, the affirmations did not provide any information concerning the nature of medical treatment or any explanation for a four-year gap in treatment.

 

06/16/00:            CIARAMELLA v. STATE FARM INS. CO.

New York State Supreme Court, Appellate Division, Fourth Department

Insured Required to Provide Timely Notice of Claim Despite Insurer’s Actual Notice of Accident; Insured’s 1 ½ Year Delay Vitiates Coverage

The court held that an insurer had no duty to provide coverage where the insured failed to give notice of a supplementary uninsured motorist (SUM) claim “as soon as practicable”, as required by the policy.  The insured did not give notice until 1-½ years after the accident and eight months after the true extent of the injuries became known.  The insurer’s potential knowledge of the SUM claim because it was plaintiff’s no-fault carrier did not change the outcome – an insurer’s actual notice of the accident does not vitiate the requirement that the insured provide timely notice of his claim.

 

06/16/00:            FARINA v. SECURITY MUTUAL INS. CO.

New York State Supreme Court, Appellate Division, Fourth Department

No Coverage Afforded by Homeowner’s Policy for Intentional Conduct

The court held that an insurer had no duty to indemnify plaintiffs for a judgment in an underlying action where injuries to the plaintiffs were found by the jury to be caused by intentional conduct.  The homeowner’s policy covered the insured for liability arising from an “occurrence”, defined by the policy as an “accident”.  Moreover, liability “caused intentionally by” an insured was excluded from coverage.  The court rejected plaintiffs’ contentions that the verdict in the underlying action was “based on negligence” because the amount awarded was reduced 20 % for the plaintiff’s comparative negligence and that the injuries were accidental because their severity was unintended.

 

06/16/00:            MASTERPOL, INC. v. THE TRAVELERS INS. CO.

New York State Supreme Court, Appellate Division, Fourth Department

Vacancy Exclusion Bars Coverage despite Insured’s Unilateral Mistake in Extent of Coverage Afforded by Policy

Travelers’ coverage disclaimer based on unambiguous policy language excluding coverage if plaintiff’s building was vacant for 60 consecutive days prior to loss was valid and enforceable. The record established that the building was vacant within the meaning of the policy and the court would not permit amendment of the pleading to include a cause of action for reformation where the record established only a unilateral mistake by the plaintiff in the extent of coverage afforded.  The court also held that plaintiff had conclusive presumptive knowledge of the terms of the policy prior to loss and took no action to close the gap in coverage resulting from the exclusion for vacancy.  Plaintiff’s request for insurance did not trigger a duty on the defendants’ part to recommend coverage for vacancy or relieve the plaintiff of its obligation to read the policy.

 

06/16/00:            COLE v. METROPOLITAN LIFE INS. CO.

New York State Supreme Court, Appellate Division, Fourth Department

Out-of-State Physician Lacked Standing to Enforce Medical Insurance Contract between Insurer and New York State

The court held that a physician practicing in Pennsylvania lacked standing to enforce an insurance contract between the insurer and New York State that provided State employees with medical insurance because the physician was not a participating provider in the plan and the certificate of insurance provided that “assignment of benefits to a non-participating provider is not permitted.”  The court rejected the physician’s claim that he was a third-party beneficiary of the contract -- he was not an intended beneficiary.  Here, there was no intent to benefit the physician.  The contract was intended to benefit State employees by providing such employees and their dependents with medical insurance.  The plan specifically excluded non-participating providers from receiving direct benefits and an assignment of benefits was prohibited.

 

6/16/00:            ROOFING CONSULTANTS, INC. v. SCOTTSDALE INS. CO.

New York State Supreme Court, Appellate Division, Fourth Department

Failure to Notify Insurer of Accident for Two years and 10 months deemed Unreasonable as a Matter of Law; Additional Insured’s Notice to Insurer not imputed to the Insured

The insurer properly disclaimed coverage based on the insured’s failure to provide timely notice of its employee’s claim. The court held that the insured’s delay of two years, ten months was unreasonable as a matter of law.  The insurer’s attempt to impute notice provided to the insurer by an additional insured was rejected because the additional insured notified the insurer of the claim only after it was in suit and because the additional insured was not a claimant.  Neither notice provided by an additional insured nor the insurer’s actual knowledge of the claim satisfies the insured’s contractual obligation to provide timely notice.

 

6/16/00:            KLYN v. THE TRAVELERS INDEMNITY CO.

New York State Supreme Court, Appellate Division, Fourth Department

Employee Dishonesty Endorsement Covers Insured’s Unknowing Payment of Unearned Compensation

Insurer denied a property loss claim submitted under an employee dishonesty endorsement issued to Buffalo Tontine and assigned to the plaintiff.  Plaintiff commenced this action alleging entitlement to payment because Tontine’s comptroller embezzled funds from a payroll account over which he had sole control.  The comptroller embezzled the money by paying himself unauthorized and excessive salary, commissions and bonuses.  The insurer moved to dismiss the complaint, arguing that recovery was barred by the policy’s exclusion for “salaries, commissions, fees, bonuses…or other benefits earned in the normal course of employment.”  The plaintiff argued that Tontine did not knowingly make the payments to the comptroller as compensation for his employment.  The court held that the policy protected Tontine from embezzlement or theft by employees.  “Where the employer does not knowingly pay funds to its employee under the belief that the funds have been honestly earned, but is instead unaware of the employee’s receipt of the funds or pays the lost funds for some purpose other than the employee’s compensation, the employee has committed pure embezzlement which is recoverable under the [policy].”

 

06/15/00:         A.J. SHEEPSKIN & LEATHER CO., INC. v. COLONIA INS. CO.

New York State Supreme Court, Appellate Division, First Department

No Coverage for “Serial Infringer” in Trademark Case Alleging Only Knowing and Intentional Conduct

The court found that the insurer was under no duty to defend and indemnify its insured in an action alleging trademark infringement premised upon knowing and intentional conduct.  The allegations fell wholly within the policy’s exclusion for advertising injury “arising out of oral or written publication of material; if done by or at the direction of the insured with knowledge of its falsity”.  The insurer, in determining whether to disclaim coverage, was entitled to rely on and was bound by the four corners of the complaint in the underlying action.  The court noted that, while there exists an exceptional category of cases in which a duty to defend and indemnify may exist, notwithstanding a complaint whose allegations fall entirely within an exclusion, this was not such a case because there has been no showing of “underlying facts made known to the insurer creat[ing] ‘a reasonable possibility that the insured may be held liable for some act or omission covered by the policy’”.  There had been an express finding in the underlying action that the insured was a “serial infringer” that had “deliberately sought to confuse the public” by selling goods nearly identical to another’s.

 

06/12/00:            BORINO v. LITTLE

New York State Supreme Court, Appellate Division, Second Department

Serious Injury Threshold: Physician’s Reports Insufficient Proof of “Serious Injury” where Reports Not Based on Recent Exam of Plaintiff

In this action for injuries sustained in an auto accident, plaintiff failed to submit sufficient evidence of “serious injury” under Insurance Law §5102(d).  In an effort to defeat defendant’s motion for summary judgment, plaintiff relied on medical reports from plaintiff’s treating chiropractor and orthodontist.  The unsworn reports were properly before the court because defendants in support of their motion for summary judgment had submitted them. The reports were inadequate, however, because they did not quantify any restrictions in plaintiff’s range of motion, nor were they based on a recent examination of the plaintiff – the reports did not explain the 3 ½-year gap in treatment.

 

06/12/00:            WORLEY v. GRIFFITH

New York State Supreme Court, Appellate Division, Second Department

Serious Injury Threshold: Physician’s Affidavit Containing Conclusory Assertions Insufficient Proof of “Serious Injury”

In this action for injuries sustained in an auto accident, plaintiff failed to submit sufficient evidence of “serious injury” under Insurance Law §5102(d).  In opposition to defendant’s motion for summary judgment, plaintiff submitted an affidavit from his doctor, which the court found inadequate because it consisted of nothing more than “conclusory assertions tailored to meet statutory requirements.”

 

ACROSS BORDERS

 

From time to time we highlight significant cases of interest from other jurisdictions.  This week we offer a decision from California:

 

06/22/00:            KRANSCO v. INTERNATIONAL INS. CO.

California Supreme Court

Insured has No Tort Duty to Insurer to Act in Good Faith – No Such Defense as Comparative Bad Faith

An insurer’s breach of the covenant of good faith and fair dealing is governed by tort principles. An insured’s breach of the covenant is not a tort, and hence does not give rise to tort damages recoverable by the insurer.

 

Read an expanded analysis of the case by Bryan Weiss of Murchison & Cumming

 

 

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REPORTED DECISIONS

 

MARTINI v. LAFAYETTE STUDIOS CORP. 

 

Order, Supreme Court , New York County (Edward Lehner, J.), entered June 24, 1998, which, to the extent appealed from, inter alia, granted third-party plaintiffs' motion for summary judgment on their third-party complaint to the extent of declaring that third-party defendant Atlantic Mutual Insurance Company (Atlantic ) is obligated to defend and indemnify third-party plaintiffs in the main action, and to the extent of declaring that third-party defendant B&B Coverage, Ltd. (B&B) is liable to third-party plaintiffs for the costs of prosecuting this third-party action, unanimously modified, on the law, to deny third -party plaintiffs' motion for summary judgment, to grant Atlantic's cross motion for summary judgment declaring that Atlantic is not obligated to defend or indemnify third-party plaintiffs in the main action herein, and to grant third-party plaintiffs' motion for summary judgment in their favor against B& ;B to the extent of declaring B&B liable to bear the costs of defending and indemnifying third-party plaintiffs in the main action to the extent of the coverage Firemen's would have provided had it been timely notified of the covered claims against third-party plaintiffs in the main action, and otherwise affirmed, without costs. Judgment, same court and Justice, entered June 25, 1998, declaring that third -party defendant Firemen's Insurance Company of Washington, D.C. is not obligated to defend or indemnify third-party plaintiffs in the main action, and otherwise dismissing the third-party complaint and a cross -complaint as against Firemen's, unanimously affirmed, without costs.

 

Plaintiff, whose original complaint sought only declaratory and injunctive relief, concededly not covered by any relevant insurance , solely against defendant/third-party plaintiff Lafayette Studios Corp., moved in November 1995 to amend the complaint in the main action herein to add the members of Lafayette's board of directors as additional defendants and to assert various causes of action seeking monetary damages against Lafayette and the proposed additional defendants. Lafayette thereupon requested that B&B, its insurance broker, refer the claims sought to be asserted in the proposed amended complaint to "the appropriate insurance carrier ", and B&B notified Atlantic, which had issued Lafayette a policy for the period from July 1, 199 4 to July 1, 1995, including directors-and-officers coverage applying to claims "first made" during the policy period. Atlantic initially stated that it would provide a defense to Lafayette and the board members, but never assumed control of the defense. In April 1997, after the motion to amend was granted by this Court (see, 234 AD2d 146) and the amended complaint served, Atlantic disclaimed coverage on the ground that the purportedly covered claims asserted in the amended complaint were first made after the expiration of Atlantic's policy period. Firemen's, which had issued Lafayette a policy providing similar coverage for the period from July 1, 1995 to July 1, 1996, received no notice of the claims until April 1997, when the claims were referred to it following Atlantic's disclaimer, whereupon Firemen's disclaimed coverage based on the insureds' failure to notify it of the claims "as soon as practicable ", as required by the terms of its policy.

 

We conclude that the 17-month delay in notifying Firemen's of the relevant claims, from the time plaintiff moved to amend the complaint in November 19 95 until April 1997, was unreasonable as a matter of law, therefore vitiating coverage under the terms of the Firemen's policy, and it is no excuse that the delay was caused by the error of the insured's broker in initially notifying the wrong carrier (see, e.g., Security Mut. Ins. Co. of New York v Acker-Fitzsimmons Corp., 31 NY2d 436, 440, 442 n3; Shaw Temple A.M.E. Zion Church v Mount Vernon Fire Ins. Co., 199 AD2d 374, 376). We disagree that Atlantic's mere statement that it would provide a defense, without more, estops it to deny coverage , since Lafayette's agent, B&B, unilaterally made the initial determination to look to Atlantic for coverage, without relying on Atlantic in any way, and, since Lafayette did not rely to its detriment on Atlantic by transferring control of its defense to the insurer, the element of detrimental reliance needed to support a claim of estoppel is lacking (see generally, Nassau Trust Co. v Montrose Concrete Prods. Corp., 56 NY2d 175, 184, lv denied 57 NY2d 674). Lafayette is entitled to recover against B&B all damages caused by B&B's negligent referral of the claim to the wrong insurer, i.e., the costs of defense and indemnity equivalent to what Firemen's would have provided had it been timely notified, and the reasonable costs of prosecuting this third-party action against Atlantic and Firemen's as a reasonable effort to mitigate damages (cf., American Motorists Ins. Co. v Salvatore, 102 AD2d 342, 346).

 

A.J. SHEEPSKIN AND LEATHER CO., INC. v. COLONIA INS. CO. 

 

Order, Supreme Court, New York County (Paula Omansky, J.), entered March 11, 1999, which, inter alia, denied plaintiff ’s cross motion for summary judgment and, upon a search of the record, granted defendant insurer summary judgment dismissing the complaint, unanimously modified, on the law, to declare in defendant’s favor that it has no obligation to defend or indemnify plaintiff in the underlying action, and otherwise affirmed , with costs to defendant.

 

The motion court correctly found that defendant insurer was under no duty to defend and indemnify plaintiff insured A.J. Sheepskin and Leather Co. in the underlying Federal action, because the allegations of the complaint in that action, setting forth claims of trademark infringement against A.J. Sheepskin premised, without exception, upon conduct both knowing and intentional, fell wholly within the exclusion in the subject insurance policy pertaining to advertising injury "arising out of oral or written publication of material; if done by or at the direction of the insured with knowledge of its falsity". Defendant insurer, in determining whether to disclaim coverage, was entitled to rely on and, indeed, was bound by the four corners of the complaint in the Federal action (see , Bingham III v Atl. Mut. Ins. Co., 215 AD2d 315; New Hampshire Ins. Co. v Jefferson Ins. Co. of New York, 213 AD2d 325, 328). Although we recognize that there exists an exceptional category of cases in which a duty to defend and indemnify may exist, notwithstanding a complaint whose allegations fall entirely within an exclusion (see, e.g., PG Ins. Co. of New York v SA Day Mfg. Co., 251 AD2d 1065), this is not such a case, since there has been no showing of "underlying facts made known to the insurer creat[ing] ‘a reasonable possibility that the insured may be held liable for some act or omission covered by the policy’" (Fitzpatrick v Am. Honda Motor Co., 78 NY2d 61, 70, quoting A. Meyers & Sons Corp. v Zurich Am. Ins. Co., 74 NY2d 298, 302). Indeed, the underlying facts in the now concluded Federal trademark infringement action, afford no reason to suppose that the A.J. Sheepskin’s insurer, present defendant Colonia, had any reason to suppose that there was a reasonable possibility that liability in that action might be premised on unintentional or unknowing conduct not embraced by Colonia’s exclusion (cf., PG Ins. Co. of New York, supra). To the contrary, prior to the Federal action’s settlement, there was an express finding, after a full evidentiary hearing held in connection with BEAR USA’s successful application for a preliminary injunction, that, in accordance with the allegations of the complaint, A.J. Sheepskin was a "serial infringer" that had "deliberately sought to confuse the public" by selling goods nearly identical to BEAR’s. We modify only to the extent of declaring in defendant’s favor (see, Lanza v Wagner, 11 NY2d 317).

 

We have considered plaintiff’s remaining contentions and find them unavailing.

 

GOLD v. NATIONWIDE MUTUAL INS. CO.

 

In an action to recover damages for breach of an insurance contract , the defendant appeals, as limited by its brief, from so much of an order of the Supreme Court, Kings County (Barasch, J.), dated November 4, 1999, as denied that branch of its motion which was to dismiss the third cause of action seeking to recover an attorney's fee and expert fees.

 

ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and that branch of the motion which was to dismiss the plaintiff's third cause of action to recover an attorney's fee and expert fees is granted.

 

After the defendant denied a claim for property damage made by the plaintiff pursuant to her homeowners insurance policy, she commenced this action, alleging a breach of contract and seeking punitive damages and to recover an attorney's fee and expert fees therefor . The Supreme Court granted the defendant's motion insofar as it sought dismissal of the claim for punitive damages, but denied that branch of the motion which sought dismissal of the claim to recover an attorney 's fee and expert fees.

 

"It is well established that an insured may not recover the expenses incurred in bringing an affirmative action against an insurer to settle its rights under the policy [of insurance]" (New York Univ. v Continental Ins. Co., 87 NY2d 308, 324; see also, Mighty Midgets v Centennial Ins. Co., 47 NY2d 12, 21). Accordingly , the defendant's motion to dismiss the third cause of action which sought to recover an attorney's fee and expert fees, arising from the insurer's alleged breach of contract, should have been granted (see , New York Univ. v Continental Ins. Co., supra; see also, Chase Manhattan Bank v Each Individual Underwriter Bound to Lloyd's Policy No. 790/004A89005, 258 AD2d 1; Mazzuoccolo v Cinelli, 245 AD2d 245).

 

SANTUCCI, J.P., THOMPSON , FRIEDMANN and KRAUSMAN, JJ., concur.

 

PEROVICH v. LIOTTA

 

In an action to recover damages for personal injuries, etc., the plaintiffs appeal from (1) an order of the Supreme Court, Suffolk County (Doyle, J.), dated June 10, 1999, which granted the defendants' motion for summary judgment dismissing the complaint , and (2) an order of the same court, dated November 1, 1999, which denied their motion, in effect, for reargument.

 

ORDERED that the appeal from the order dated November 1, 1999, is dismissed, as no appeal lies from an order denying reargument; and it is further,

 

ORDERED that the order dated June 10, 1999, is affirmed; and it is further,

 

ORDERED that the respondents are awarded one bill of costs.

 

The Supreme Court properly granted the defendants' motion for summary judgment. In support of their motion, the defendants established a prima facie case that neither of the plaintiffs sustained a serious injury as defined by Insurance Law § 5102(d) (see, Gaddy v Eyler, 79 NY2d 955). The plaintiffs' evidence submitted in opposition to the motion was insufficient to raise a triable issue of fact. The affidavit of the plaintiffs' treating chiropractor failed to indicate what objective medical tests he performed to measure the restrictions of motions suffered by the respective plaintiffs (see, Grossman v Wright,     AD2d    [2d Dept., May 8, 2000]; Cabri v Park, 260 AD2d 525; Merisca v Alford , 243 AD2d 613; Lincoln v Johnson, 225 AD2d 593). The Supreme Court correctly refused to consider the unsworn medical records attached to the affidavit of the plaintiffs' chiropractor (see, Friedman v U- Haul Truck Rental, 216 AD2d 266; Shay v Jerkins, 263 AD2d 475; Decayette v Kreger Truck Renting, 260 AD2d 342; Williams v Hughes, 256 AD2d 461).

 

The appeal from the order dated November 1, 1999, must be dismissed. The Supreme Court properly treated the plaintiffs' motion as a motion for reargument, the denial of which is not appealable (see, Stillway v Guzewicz, 261 AD2d 392; McGill v Polytechnic Univ., 235 AD2d 402).

 

FRIEDMANN, J.P., KRAUSMAN, LUCIANO and SCHMIDT, JJ., concur.

 

SLAVIN v. ASSOCIATES LEASING, INC.

 

In an action to recover damages for personal injuries, etc., the defendants appeal from an order of the Supreme Court, Queens County (Kitzes, J.), dated November 10, 1999, which denied their motion for summary judgment dismissing the complaint.

 

ORDERED that the order is reversed, on the law, with costs, the motion is granted, and the complaint is dismissed.

 

The Supreme Court erred in denying the defendants' motion for summary judgment dismissing the complaint. The defendants submitted evidence which established a prima facie case that the injured plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d). All but one of the medical reports submitted by the plaintiffs in opposition to the motion were neither sworn to nor affirmed to be true under penalty of perjury and thus did not constitute competent evidence (see, CPLR 2106; Grasso v Angerami , 79 NY2d 813; Moore v Tappen, 242 AD2d 526; Mobley v Riportella, 241 AD2d 443; Attivissimo v Kugler, 226 AD2d 658). The remaining medical report merely contained "conclusory allegations tailored to meet statutory requirements" (Lopez v Senatore, 65 NY2d 1017; see, Perez v Velez, 253 AD2d 865; Stowe v Simmons , 253 AD2d 422; Medina v Zalmen Reis & Assocs., 239 AD2d 394; Marshall v Albano, 182 AD2d 614).

 

RITTER, J.P., SULLIVAN, S. MILLER, LUCIANO and H. MILLER, JJ., concur.

 

WELCOME v. DIAB

 

In an action to recover damages for personal injuries, the plaintiff Iona Welcome appeals from an order of the Supreme Court, Kings County (R. Goldberg , J.), dated May 7, 1999, which granted the defendant's motion for summary judgment dismissing the complaint insofar as asserted by her.

 

ORDERED that the order is affirmed, with costs.

 

The defendant made a prima facie showing of entitlement to judgment as a matter of law (see, Gaddy v Eyler, 79 NY2d 955). In opposition, the appellant failed to raise an issue of fact as to whether she had sustained a serious injury within the meaning of Insurance Law § 5102(d). While the affirmations of the appellant's treating and examining physicians purported to quantify certain alleged restrictions in her range of motion, they failed to support their determinations with proof of an objectively -diagnosed injury (see, Grossman v Wright,    AD2d    [2d Dept., May 8, 2000]; Carroll v Jennings, 264 AD2d 494; Kauderer v Penta, 261 AD2d 365; Lobo v Singh , 259 AD2d 523; DiNunzio v County of Suffolk, 256 AD2d 498; Russell v City of Mount Vernon, 256 AD2d 454). In addition, the affirmations do not provide any information concerning the nature of the appellant 's medical treatment or any explanation for the over four-year gap between the date of the accident and her subsequent visits to these physicians in November 1998 and March 1999 (see, Perez v Velez, 253 AD2d 865; Stowe v Simmons, 253 AD2d 422; Medina v Zalmen Reis & Assocs., 239 AD2d 394).

 

Furthermore, the appellant's affidavit stating, inter alia, that she was unable to return to work, without competent evidence of a medically-determined injury producing the alleged impairment of her activities , was insufficient to create a triable issue of fact as to her inability to perform substantially all of her daily activities for at least 90 of the first 180 days subsequent to the accident (see, Taylor v Taylor, 260 AD2d 571; Ryan v Xuda, 243 AD2d 457; Yagliyan v Yang, 241 AD2d 518; Orr v Miner, 220 AD2d 567).

 

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

 

WORLEY v. GRIFFITH

 

In an action to recover damages for personal injuries, the defendants appeal from an order of the Supreme Court, Queens County (Milano, J.), dated July 16, 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 reversed, on the law, with costs, the motion is granted, and the complaint is dismissed.

 

The Supreme Court improperly denied the defendants' motion for summary judgment dismissing the complaint. The defendants established a prima facie case that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) (see, Grossman v Wright,    AD2d& nbsp;   [2d Dept., May 8, 2000]; Gaddy v Eyler, 79 NY2d 955; Flanagan v Hoeg, 212 AD2d 756), thereby shifting the burden to the plaintiff to raise a triable question of fact on that issue (see, Licari v Elliott, 57 NY2d 230). The plaintiff failed to meet this burden, as the physician's affidavit he submitted in opposition to the motion consisted of nothing more than "conclusory assertions tailored to meet statutory requirements" (Lopez v Senatore, 65 NY2d 1017, 1019; see, Grossman v Wright, supra; Medina v Zalman Reis & Associates, 239 AD2d 394; Marshall v Albano, 182 AD2d 614). Accordingly, the defendants' motion should have been granted.

 

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

 

BORINO v. LITTLE

 

In an action to recover damages for personal injuries, etc., the plaintiffs appeal from an order of the Supreme Court, Suffolk County (Doyle, J.), dated April 29, 1999, which granted the defendants ' motion for summary judgment dismissing the complaint on the ground that the plaintiff Renee Borino did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

 

ORDERED that the order is affirmed, with costs.

 

The defendants demonstrated their prima facie entitlement to judgment as a matter of law by submitting the reports of two orthopedic surgeons that the plaintiff Renee Borino (hereinafter the plaintiff) did not sustain any restrictions in range of motion due to the accident in question and could resume her normal activities. In opposition, the plaintiff failed to submit sufficient evidence to create a triable issue of fact regarding whether she sustained a serious injury within the meaning of Insurance Law § 5102(d). The reports submitted by the plaintiff's treating chiropractor and orthodontist were not based upon a recent examination of the plaintiff and are therefore insufficient (see, Calcagno v New York City Tr. Auth., 266 AD2d 421; Alvarez v Ming Chao Wong, 266 AD2d 248). In any event, the reports failed to explain the more than 3 1/2 year gap in treatment immediately preceding the submission of the reports (see, Dimenshteyn v Caruso , 262 AD2d 348).

 

Contrary to the determination of the Supreme Court, the unsworn report of the plaintiff's orthopedic surgeon was properly before it because the report was submitted by the defendants in support of the motion for summary judgment (see, Pagano v Kingsbury, 182 AD2d 26 8). Nevertheless, that report was insufficient to defeat the motion. While the orthopedic surgeon stated that the plaintiff suffered from "chronic cervical strain, chronic impingement syndrome, and myofascial pain syndrome" as a result of the accident, he failed to quantify any restriction in the plaintiff's range of motion (see, Grossman v Wright,    AD2d    [ 2d Dept., May 8, 2000]; Thompson v Cochran, 253 AD2d 871; Wilkins v Cameron, 214 AD2d 557). Additionally , that report is not based upon a recent examination of the plaintiff (see, Calcagno v New York City Tr. Auth., supra; Alvarez v Ming Chao Wong, supra).

 

Finally, the plaintiff failed to demonstrate that she was prevented from performing substantially all of the material acts which constituted her usual and customary daily activities for a period of not less than 90 days during the 180-day period immediately following the accident (see, Licari v Elliott, 57 NY2d 230; Almonacid v Meltzer, 222 AD2d 631).

 

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

 

GOLDSTEIN , J., dissents and votes to reverse the order appealed from, on the law, and to deny the motion, with the following memorandum:

 

Insurance Law § 5102(d) sets forth nine specific categories of serious injury. A plaintiff need only establish that his or her injuries fall under one of those categories (see, Licari v Elliott, 57 NY2d 230). Evidence of a significant but not necessarily permanent limitation of use of a body function or system is sufficient (see, Lopez v Senatore, 65 NY2d 1017). The plaintiff is not required to establish that the limitation precluded him or her from performing usual and customary daily activities (see, Paternoster v Drehmer, 260 AD2d 867).

 

In support of their motion for summary judgment, the defendants submitted, inter alia, reports from two orthopedic surgeons and a chiropractor. The chiropractor, based upon an examination of the injured plaintiff performed six months after the accident at the request of State Wide Insurance Company (hereinafter State Wide), noted that "[r]ange of motion of the [right] shoulder is decreased to 100 degrees of forward elevation , 20 degrees of backward elevation, 110 degrees of abduction, 20 degrees of adduction, 40 degrees of external rotation, and 20 degrees of internal rotation". When the injured plaintiff was reexamined by an orthopedic surgeon five months later, again at the request of State Wide, her range of motion had improved, but was still "decreased to 140 degrees of forward elevation, 30 degrees of backward elevation , 140 degrees of abduction, 60 degrees of external rotation, and 30 degrees of internal rotation and was full in adduction". The orthopedic surgeon stated that "[t]here will be no permanence", and no need for further medical treatment.

 

The defendants also relied upon the unsworn report of the injured plaintiff's orthopedic surgeon, which the majority acknowledges is properly before this court, and may be considered by us (see, Perry v Pagano,    AD2d  & nbsp; [2d Dept., Dec. 13, 1999]; Raso v Statewide Auto Auction, 262 AD2d 387). In that report , prepared in May 1996, 18 months after the accident, the surgeon noted that arthroscopy revealed "scarring and chronic bursitis" and "impingement syndrome" requiring "subacromial decompression" surgery. Following surgery, the surgeon's final diagnosis was "chronic cervical strain, chronic impingement syndrome, and a myofascial pain syndrome", resulting from the accident. Her prognosis was described as "guarded".

 

Thereafter, in November 1997, the injured plaintiff was again examined by an orthopedic surgeon at the defendants' request. The doctor acknowledged that there was "surgical intervention" with respect to the right shoulder, but concluded that, at the time of his examination, her prognosis was excellent.

 

In view of the foregoing, the defendants failed to establish, as a matter of law, that the plaintiff did not suffer from a serious injury as defined in Insurance Law § ; 5102(d) (see, Polizzi v Won Jun Choi, 264 AD2d 830). The evidence submitted by the defendants established a restriction of range of motion. The conclusion that further medical treatment was not required was disproven by the proof, also submitted by the defendants, that the injured plaintiff later underwent arthroscopic surgery on her right shoulder.

 

Prolonged bursitis which may require surgery may constitute a significant limitation of use of a body or system (see, Gonzalez v Braxley, 199 AD2d 1013). In this case, the evidence submitted by the plaintiff went one step further: it demonstrated that arthroscopic surgery was in fact performed. Such evidence, standing alone, is sufficient to defeat a defendant's motion for summary judgment (see, Duarte v Ester, 247 AD2d 356; see also, Hoffman v S.J . Hawk, Inc., 258 AD2d 618). Clearly, a finder of fact can find that an injury which requires surgery constituted a significant limitation of a use of a body function or system.

 

Since the defendants did not establish their entitlement to judgment as a matter of law, the sufficiency of the plaintiffs' opposition papers is not before us (see, Mariaca-Olmos v Mizrhy, 226 AD2d 437).

 

VILLALTA v. SCHECHTER

 

In an action to recover damages for personal injuries, the defendant appeals from an order of the Supreme Court, Nassau County (Adams, J.), entered December 17, 1998, which denied her 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.

 

The defendant met her initial burden of establishing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) by submitting affirmed reports of a neurologist and an orthopedic surgeon which indicated that the plaintiff did not suffer any serious injury as a result of the subject accident. Specifically, the doctors stated that the objective tests performed during their examination of the plaintiff revealed that he had a "normal range of motion".

 

In opposition, the plaintiff failed to submit sufficient evidence to raise a triable issue of fact with regard to whether he sustained a serious injury as a result of the accident. The sworn report of the plaintiff's treating chiropractor failed to explain the objective tests which were performed to support his conclusion that the plaintiff suffered restricted range of motion (see, Grossman v Wright,    AD2d    [2d Dept., May 8, 2000]). Instead , the chiropractor's conclusions appear to be based upon the plaintiff's subjective complaints of pain , which are insufficient to defeat the motion (see, Delaney v Rafferty, 241 AD2d 537; Lincoln v Johnson , 225 AD2d 593). Although the plaintiff's chiropractor indicated that the plaintiff suffered from a bulging disc, he never stated, contrary to the dissent's conclusion, that this condition was causally related to the accident (see, Lalli v Tamasi, 266 AD2d 266; Verrelli v Tronolone, 230 AD2d 789). Additionally , neither the plaintiff nor his chiropractor sufficiently explained the almost four-year gap between the plaintiff's last treatment and his most recent examination (see, Dimenshteyn v Caruso, 262 AD2d 3 48). Finally, the plaintiff failed to present sufficient evidence to establish that he was prevented from performing substantially all of his usual activities for at least 90 of the 180 days following the accident (see, Curry v Velez, 243 AD2d 442).

 

Accordingly, the Supreme Court erred in denying the defendant's motion for summary judgment.

 

O'BRIEN, J.P., SULLIVAN and FEUERSTEIN , JJ., concur.

 

GOLDSTEIN, J., dissents and votes to affirm the order appealed from, with the following memorandum in which LUCIANO, J., concurs.

 

 

The defendant moved for summary judgment based upon the affirmed reports of her expert-doctors stating that the plaintiff suffered no permanent injury, and the unsworn report of a magnetic resonance imaging (hereinafter MRI ) examination, diagnosing a "posterior bulging of the L4-5 disc annulus without impingement on the L5 nerve roots", and a "reversal of the normal cervical lordosis from C2 - C6". Dr. Alexander Rimalovski determined that the findings in the MRI reports were "not causally related to the accident". Dr. Frank M. Hudak merely recited the MRI findings without further explanation, and noted that the "[r]eport from Dr. Charles dated 10/21/94 indicates the claimant was examined and had electrodianostic studies consistent with bilateral carpal tunnel syndrome and cervical lumbosacral spine derangement". Nevertheless, Dr. Hudak concluded that the plaintiff's "subjective complaints" were unsupported by "objective findings" .

 

In view of the conflicting and conclusory statements in the defendant's submissions , the defendant failed to establish her entitlement to judgment as a matter of law (see, Lopez v Senatore , 65 NY2d 1017).

 

In any event, the plaintiff, in opposition, established the existence of a triable issue of fact. He submitted sworn reports of Dr. Richard Lee, a licensed chiropractor, stating that the bulging discs were caused by the accident and resulted in residual low-grade inflamation to the nerve roots.

 

Dr. Lee stated that the plaintiff suffered "[r]estricted range of motion * * * in the cervical and lumbar regions by approximately 25%" based upon specified objective tests performed during an examination which occurred four years after the accident (cf., Grossman v Wright ,    AD2d    [2d Dept., May 8, 2000]). He further noted that the plaintiff ceased medical treatment for his injury four months after the accident because reimbursement for treatment was denied by the no-fault insurance carrier. According to Dr. Lee, "based on the history presented by the patient" and his examination of the plaintiff, the plaintiff's "injuries were sustained in the accident of September 4, 1994".

 

The Supreme Court, Nassau County, found that "the sworn statement of Dr. Lee indicates a bulging disc at L4-L5 which is a permanent injury and will continue to impair the plaintiff in the future".

 

It is well-settled that a licensed chiropractor is qualified to render an opinion as to the cause and extent of a plaintiff's injuries (see, Zeyger v Litman, 250 AD2d 841; Sobha v Anthos Coat Co., 243 AD2d 704). The quantification of loss of range of motion based upon objective tests is generally sufficient to defeat a motion for summary judgment (cf., Curry v Velez, 243 AD2d 442; Lincoln v Johnson, 225 AD2d 593; Friedman v U-Haul Truck Rental, 216 AD2d 266; Baker v Zelem, 202 AD2d 617, 618). Further, the unsworn MRI reports were submitted by the defendant on her motion for summary judgment, and were referred to by the defendant' s doctors. Accordingly, these MRI reports were properly before the court (see, Raso v Statewide Auto Auction, Inc., 262 AD2d 387; Pietrocola v Battibuli, 238 AD2d 864). The issue of whether the impairment referred to in those MRI reports was caused by the accident was a question of fact. The gap in medical treatment was adequately explained by the refusal of the no-fault insurance carrier to reimburse the plaintiff for further treatment.

 

In view of the foregoing, the defendant's motion for summary judgment was properly denied.

 

CIARAMELLA v. STATE FARM INS. CO.

 

Judgment unanimously reversed on the law without costs and judgment granted in accordance with the following Memorandum : Supreme Court erred in granting judgment in favor of plaintiff declaring that plaintiff provided timely notice of a supplementary uninsured motorist (SUM) claim and that defendant has a duty to provide coverage for plaintiff. The court should have granted judgment in favor of defendant declaring that defendant has no duty to provide coverage for plaintiff. Although the relevant provision of the insurance policy required plaintiff to give notice of a SUM claim "as soon as practicable" (see, Matter of Metropolitan Prop. & Cas. Ins. Co. v Mancuso, 93 NY2d 487, 495), plaintiff did not give the required notice until 1½ years after the accident, which occurred in March 1997. Even assuming, arguendo, that plaintiff was excused from providing timely notice until the true extent of his injury was known in December 19 97 (see, Matter of Metropolitan Prop. & Cas. Ins. Co. v Mancuso, supra, at 493), we conclude that plaintiff failed to explain the next eight months of delay during which he was represented by counsel. Plaintiff contends that no attempt was made to ascertain the other driver’s policy limits during this period because defendant failed to provide relevant information about plaintiff’s coverage when plaintiff asked for that information shortly after the accident. That contention lacks merit for several reasons. First , the record establishes that plaintiff did not ask defendant about SUM coverage until July 1998. Second , when plaintiff asked defendant for policy information shortly after the accident, the seriousness of plaintiff’s injuries was not apparent and defendant had no reason to believe that plaintiff had a SUM claim. Third, in the absence of fraud or other wrongful conduct, plaintiff as the policy holder " ;is conclusively presumed to know its contents and to assent to them" (Metzger v Aetna Ins. Co., 227 NY 411, 416). " ;Ignorance through negligence or inexcusable trustfulness will not relieve a party from his contract obligations" (Metzger v Aetna Ins. Co., supra, at 416).

 

Finally, the fact that defendant had potential knowledge of plaintiff’s SUM claim because it was plaintiff’s no-fault carrier does not alter the fact that plaintiff failed to provide timely written notice (see, Matter of Allstate Ins. Co. [Dewyea], 245 AD2d 667, 668). "The resolution of the issue whether plaintiff[] provided timely notice ‘turns solely on [his] diligence and therefore on facts within [his] knowledge’" (Dixon v New York Cent. Mut. Fire Ins. Co., 265 AD2d 914, quoting Matter of Seasonwein [MVAIC], 23 AD2d 732). Defendant’s "actual notice of the accident does not vitiate the requirement that [plaintiff] provide timely notice of [his] claim" (Matter of Nationwide Mut. Ins. Co. [Steber], ___ AD2d ___ [decided May 10, 2000]; see, Matter of Nationwide Ins. Co. [De Rose], 241 AD2d 607, 608). We therefore reverse the judgment and grant judgment in favor of defendant declaring that it has no duty to provide coverage for plaintiff. (Appeal from Judgment of Supreme Court, Onondaga County, Murphy, J. - Declaratory Judgment .) PRESENT: PINE, J. P., WISNER, HURLBUTT AND SCUDDER, JJ. (Filed June 16, 2000.)

 

FARINA v. SECURITY MUTUAL INS. CO.

 

Judgment unanimously reversed on the law without costs and judgment granted in accordance with the following Memorandum: Plaintiffs commenced this action seeking judgment declaring that defendant must indemnify its insured with respect to a judgment awarded plaintiffs in the underlying action against defendant’s insured (see, Insurance Law § 3420 [a] [2]). Defendant provided a defense for its insured in the underlying action, but refused to provide indemnification because the jury found that the insured had caused the infant plaintiff’s injuries by "an intentional action which was intended to cause injury less serious than actually suffered by [the infant plaintiff]" ;.

 

Supreme Court erred in granting judgment in favor of plaintiffs and should have granted judgment in favor of defendant. The homeowner’s policy issued by defendant covers the insured for liability arising from an "occurrence", defined by the policy as an "accident". Further, coverage is excluded with regard to liability "caused intentionally by" an insured. The finding of the jury in the underlying action conclusively establishes that the infant plaintiff’s injuries were caused by intentional rather than accidental conduct. We therefore reverse the judgment and grant judgment in favor of defendant declaring that it has no obligation to indemnify plaintiffs with respect to the judgment in the underlying action (see, Pennsylvania Millers Mut. Ins. Co. v Rigo, 256 AD2d 769, 770-771; Salimbene v Merchants Mut. Ins. Co., 217 AD2d 991, 994; see generally, Allstate Ins. Co. v Mugavero, 79 NY2d 153, 160-161). We reject plaintiffs’ contentions that the verdict in the underlying action is "based on negligence" because the amount awarded was reduced 20 % for the infant plaintiff’s comparative negligence and that the injuries were accidental because their severity was unintended. (Appeal from Judgment of Supreme Court, Niagara County, Joslin, J. - Declaratory Judgment.) PRESENT: PIGOTT, JR., P. J., PINE, HURLBUTT AND LAWTON, JJ. (Filed June 16, 2000.)

 

MASTERPOL, INC. v.  THE TRAVELERS INSURANCE COMPANIES

 

Judgment unanimously modified on the law and as modified affirmed without costs in accordance with the following Memorandum: Supreme Court properly denied those parts of plaintiff’s motion seeking summary judgment and dismissal of the defense of defendant The Travelers Insurance Companies (Travelers) based upon Travelers’ disclaimer of coverage, and determined that the disclaimer is valid and enforceable. The disclaimer by Travelers was based on the clear and unambiguous language of the policy excluding coverage if plaintiff’s building was vacant for 60 consecutive days prior to the loss , and the record establishes that the building was vacant within the meaning of the policy for the requisite period (see, Nurnberg v Citizens Cas. Co. of N. Y., 18 AD2d 650, affd 13 NY2d 681). The court also properly denied that part of plaintiff’s motion seeking, in the alternative, leave to amend the amended complaint to allege a cause of action for reformation. "While leave to amend should be freely given (see, CPLR 3025 [b]), a proposed amendment which is devoid of merit should not be permitted" (West Branch Realty Corp. v Exchange Ins. Co., 260 AD2d 473). The record contains no proof that the policy was executed under either a mutual mistake or a unilateral mistake coupled with fraud (see, Loyalty Life Ins. Co. v Fredenberg, 214 AD2d 297, 299-300; Town of German Flats v Aetna Cas. & Sur. Co., 174 AD2d 1003, 1004 , lv denied 78 NY2d 860). Rather, the record establishes only a unilateral mistake by plaintiff (see, Metzger v Aetna Ins. Co., 227 NY 411, 415-416; Bardi v Farmers Fire Ins. Co., 260 AD2d 783, 786, lv denied 93 NY2d 815, rearg denied 94 NY2d 839).

 

The court erred, however, in denying the cross motions of defendants for summary judgment dismissing the amended complaint, and thus we modify the judgment accordingly. Plaintiff had conclusive presumptive knowledge of the terms of the policy prior to the loss and took no action to close the gap in coverage resulting from the exclusion for vacancy (see, Madhvani v Sheehan, 234 AD2d 652, 654-655; Rogers v Urbanke, 194 AD2d 1024, 1024-1025; Rotanelli v Madden, 172 AD2d 815, 817, lv denied 79 NY2d 754). Plaintiff’s request for insurance neither triggered a duty on defendants’ part to recommend coverage in the event that the building was vacant, nor " ;relieve[d] plaintiff of its obligation to read the policy, which contained an express exclusion" ; for vacancy (L.C.E.L. Collectibles v American Ins. Co., 228 AD2d 196, 197). (Appeals from Judgment of Supreme Court, Onondaga County, Tormey, III, J., for Hurlbutt, J., pursuant to CPLR 9002 - Summary Judgment.) PRESENT: GREEN , J. P., HAYES, KEHOE AND LAWTON, JJ. (Filed June 16, 2000.)

 

COLE v. METROPOLITAN LIFE INS. CO.

 

Order unanimously affirmed without costs. Memorandum: We reject plaintiff’s contention that Supreme Court erred in granting defendant’s motion to dismiss the complaint based on plaintiff’s lack of standing. We agree with the court that plaintiff, a physician practicing in Pennsylvania, lacks standing to enforce an insurance contract between defendant insurer and New York State providing State employees with medical insurance under the Empire Plan (Plan). Plaintiff was not a participating provider in the Plan, and the insurance certificates in the record provide that "[a]ssignment of benefits to a Non-Participating Provider is not permitted".

 

There is no merit to the contention of plaintiff that he is a third-party beneficiary of the contract. As a third party seeking to enforce a contract, plaintiff had to establish that he was an intended beneficiary of the contract rather than merely an incidental beneficiary (see, Fourth Ocean Putnam Corp. v Interstate Wrecking Co., 66 NY2d 38, 43-44; Stainless , Inc. v Employers Fire Ins. Co., 69 AD2d 27, 33-34, affd 49 NY2d 924). "One is an intended beneficiary if one’s right to performance is ‘appropriate to effectuate the intention of the parties’ to the contract and either the performance will satisfy a money debt obligation of the promisee to the beneficiary or ‘the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance’" (Lake Placid Club Attached Lodges v Elizabethtown Bldrs., 1 31 AD2d 159, 161, quoting Restatement [Second] of Contracts § 302 [1] [a], [b]; see, Fourth Ocean Putnam Corp. v Interstate Wrecking Co., supra, at 44; Rekis v Lake Minnewaska Mtn. Houses, 170 AD2d 124, 128, lv dismissed 79 NY2d 851, rearg denied 79 NY2d 978). On the other hand , "[a]n incidental beneficiary is a third party who may derive [a] benefit from the performance of a contract though he is neither the promisee nor the one to whom performance is to be rendered" (Airco Alloys Div. v Niagara Mohawk Power Corp., 76 AD2d 68, 79, citing 2 Williston, Contracts § 402 [3d ed]; see, Artwear, Inc. v Hughes, 202 AD2d 76, 81; World Trade Knitting Mills v Lido Knitting Mills, 154 AD2d 99, 103).

 

The court properly determined that there was no intent to benefit plaintiff or a class of which plaintiff is a member. The contract was intended to benefit State employees by providing such employees and their dependents with medical insurance. The Plan excludes non-participating providers from receiving direct benefits; they are to be paid by the patients and have no relationship with the insurance provider. Thus, we conclude that plaintiff, a non-participating provider , was not an intended beneficiary and cannot enforce the insurance contract between the State and defendant .

 

Although plaintiff's patients assigned their rights to plaintiff, those assignments are void. "[I]t has been consistently held that assignments made in contravention of a prohibition clause in a contract are void if the contract contains clear, definite and appropriate language declaring the invalidity of such assignments" (Macklowe v 42nd St. Dev. Corp., 170 AD2d 388, 389; see, Sullivan v International Fid. Ins. Co., 96 AD2d 555, 556). Here, the contract contains such language and the assignments cannot confer standing upon plaintiff.

 

Plaintiff’s remaining contentions are raised for the first time on appeal and thus are not properly before us (see, Rentways, Inc. v O’Neill Milk & Cream Co. , 308 NY 342, 349; Orellano v Samples Tire Equip. & Supply Corp., 110 AD2d 757, 758). (Appeal from Order of Supreme Court, Chautauqua County, Gerace, J. - Dismiss Pleading.) PRESENT: PINE, J. P ., WISNER, HURLBUTT AND SCUDDER, JJ. (Filed June 16, 2000.)

 

ROOFING CONSULTANTS , INC. v. SCOTTSDALE INSURANCE COMPANY

 

Judgment unanimously reversed on the law without costs and judgment granted in accordance with the following Memorandum: Supreme Court erred in declaring that Scottsdale Insurance Company (defendant) was obligated to pay half of the costs incurred in defending plaintiff Roofing Consultants, Inc. (Roofing Consultants) in the underlying action and to pay half of any award entered against Roofing Consultants in that action. In November 1995 an employee of Roofing Consultants was injured while working on a roofing project at a Mobil Oil Corporation (Mobil Oil) station. Roofing Consultants first notified defendant, its insurer, of the accident when plaintiffs commenced this declaratory judgment action in September 1998. Defendant properly disclaimed coverage based on the failure of Roofing Consultants to provide timely notice of its employee’s claim (see, White v City of New York, 8 1 NY2d 955, 957; Security Mut. Ins. Co. of N. Y. v Acker-Fitzsimons Corp., 31 NY2d 436, 440). The delay of two years and 10 months in providing notice of the claim is unreasonable as a matter of law (see, American Mfrs. Mut . Ins. Co. v CMA Enters., 246 AD2d 373; see also, Matter of State Farm Mut. Auto. Ins. Co. [Tremaine], ___ AD2d ___ [decided Mar. 29, 2000]).

 

We reject plaintiffs’ contention that the notice provided to defendant by Mobil Oil in August 1996 should be imputed to plaintiffs. Mobil Oil notified defendant of the claim after it was sued by the injured employee. Mobil Oil sought indemnification from defendant based on its belief that it was an additional insured under Roofing Consultants’ policy with defendant. Contrary to plaintiffs’ contention , Mobil Oil was not a claimant but, rather, was acting as an alleged additional insured. Neither notice provided by another insured nor the insurer’s actual knowledge of the claim satisfies the contractual obligation of an insured to give timely notice (see, American Mfrs. Mut. Ins. Co. v CMA Enters., supra; Heydt Contr . Corp. v American Home Assur. Co., 146 AD2d 497, 499, appeal dismissed 74 NY2d 651).

 

Contrary to plaintiffs’ contention, defendant was not obligated to disclaim coverage until Roofing Consultants provided notice of the accident or claim (see, Dryden Mut. Ins. Co. v Brockman, 259 AD2d 947, 948), and the disclaimer in its answer constitutes timely notice of disclaimer (see, American Mfrs. Mut. Ins. Co. v CMA Enters., supra, at 373). We therefore reverse the judgment and grant judgment in favor of defendant declaring that defendant has no obligation to contribute to the costs incurred in defending Roofing Consultants in the underlying action or to contribute to any award entered against Roofing Consultants in the underlying action. ( Appeal from Judgment of Supreme Court, Erie County, Fahey, J. - Declaratory Judgment.) PRESENT: PINE , J. P., WISNER, SCUDDER AND LAWTON, JJ. (Filed June 16, 2000.)

 

KLYN  v. THE TRAVELERS INDEMNITY COMPANY

 

Order unanimously reversed on the law without costs, motion denied and complaint reinstated. Memorandum: Supreme Court erred in granting defendant’s motion seeking summary judgment dismissing the complaint. Defendant denied a property loss claim submitted under an "employee dishonesty " endorsement of a policy of insurance issued to Buffalo Tontine Shops Corp. (Tontine) and assigned to plaintiff. Plaintiff commenced this action alleging that she is entitled to payment because Tontine ’s comptroller embezzled funds from a payroll account over which he had sole control by secretly and fraudulently paying himself unauthorized and excessive salary, commissions and bonuses. We reject defendant ’s contention that recovery under the policy is barred by the provision excluding coverage for " salaries, commissions, fees, bonuses, * * * or other benefits earned in the normal course of employment ". Plaintiff’s allegations, if true, establish that Tontine did not knowingly make the payments to the comptroller as compensation for his employment (see, Resolution Trust Corp. v Fidelity & Deposit Co. of Maryland, 205 F3d 615, 649). The policy protects Tontine from embezzlement or theft by employees (see, Federal Deposit Ins. Corp. v National Union Fire Ins. Co. of Pittsburgh, 205 F3d 66, 72; Glusband v Fittin Cunningham & Lauzon, 892 F2d 208, 212; see also, Aetna Cas. & Sur. Co. v Kidder, Peabody & Co., 246 AD2d 202, 209, lv denied 93 NY2d 805). "Where the employer does not knowingly pay funds to its employee under the belief that the funds have been honestly earned, but is instead unaware of the employee’s receipt of the funds or pays the lost funds for some purpose other than the employee’s compensation, the employee has committed pure embezzlement which is recoverable under the [policy]" ; (Federal Deposit Ins. Corp. v St. Paul Fire & Marine Ins. Co., 738 F Supp 1146, 1160, mod on other grounds 942 F2d 1032).

 

Additionally , we reject defendant’s contention that Tontine failed to comply with the provision of the policy requiring "a detailed, sworn proof of loss within 120 days of the date of discovery". It is undisputed that Tontine filed a proof of loss within 60 days of defendant’s demand therefor. Because Tontine complied with that demand, Tontine "shall be deemed to have complied with the provisions of [the] contract of insurance relating to the time within which proofs of loss are required" (Insurance Law § 340 7 [a]; see, Ball v Allstate Ins. Co., 81 NY2d 22, 25-26).

 

The remaining issue concerns the period of coverage. Defendant moved for summary judgment dismissing the complaint but in the alternative sought summary judgment dismissing that part of the complaint seeking recovery "for the period 1978 through March 31, 19 84", contending that there was no policy of insurance in effect then. Defendant failed to submit any proof in admissible form supporting that contention, and thus defendant failed to meet its initial burden of establishing its entitlement to judgment as a matter of law (see generally, Zuckerman v City of New York, 49 NY2d 557, 562). (Appeal from Order of Supreme Court, Erie County, Whelan, J. - Summary Judgment.) PRESENT: PINE, J. P., WISNER, SCUDDER AND LAWTON, JJ. (Filed June 16, 2000.)

 

CHOUDHURY v. CHEN

 

Order, Supreme Court, Bronx County (Bertram Katz, J.), entered on or about August 18, 1999, which denied defendants' motion for summary judgment dismissing the complaint upon the ground that plaintiff Nadira Choudhury had not sustained "serious injury" within the meaning of Insurance Law § 5 102(d), unanimously affirmed, without costs.

The unsworn medical report prepared by defendants ' medical expert and submitted in support of their summary judgment motion was insufficient to satisfy defendants’ initial burden as summary judgment movants to make a prima facie showing that plaintiff had not sustained "serious injury" within the meaning of Insurance Law § 5102(d) (see, DeAngelo v Fidel Corp. Servs., Inc., 171 AD2d 588, 589). In any event, defendants' claim that the diagnoses of plaintiff Nadira Choudhury’s examining physician are without probative value because they are not supported by objective tests is unavailing because his findings were based on his own physical examination of plaintiff (see, Grossman v Wright, __AD2d__, 2000 NY App Div LEXIS 5129) . Defendants' remaining contentions raise issues of credibility appropriately left for resolution at trial (see, Vargas v New York City Tr. Auth., 254 AD2d 175, 176).

 

CAMALLOY WINTE, INC. v. NATIOANL UNION FIRE INS. CO.

 

Order, Supreme Court, New York County (Herman Cahn, J.), entered on or about December 10, 1999, which granted defendant’s motion for summary judgment dismissing the complaint, unanimously affirmed , without costs.

On a prior appeal this Court affirmed the order of the IAS court entered July 15, 1998 granting defendant insurance company’s motion for summary judgment dismissing the complaint to the extent damages were sought beyond the amount spent by the Coast Guard for the oil clean-up arising out of an August 1989 oil spill, which amount was determined to be $33,800.

 

Plaintiff now presents this Court with the identical question presented on the prior appeal and once again argues that the extent of damages recoverable under the insurance policy should not be limited to $33,800. Our present consideration of the matter is circumscribed by the law of the case doctrine (see, Sharp v Stavisky, 242 AD2d 447, lv dismissed 91 NY2d 956).

 

It is significant that the insurance policy issued by National Union to Greylag was a "claims made and reported" policy covering the period between March 13, 1989 and March 13, 1990. Under the terms of the policy, the agreement was "To indemnify the insured against loss the insured has or will become legally obligated to pay as a result of claims first made against the insured and reported to the Company in writing, during the policy period ... for pollution conditions ..." (Emphasis in original). Only the $33,800 cost recovery for the Coast Guard clean-up was so reported.

Since the self-insured retention under the insurance policy is $50,000, which amount is greater than the clean-up costs, plaintiff’s complaint was properly dismissed.

 

BAILEY v. CHARTER OAK FIRE INS. CO.

 

Lahtinen , J.

 

Appeal from an order of the Supreme Court (Williams, J.), entered June 8, 1999 in Saratoga County, which denied defendants' motion for summary judgment dismissing the complaint.

 

After purchasing a fire insurance policy from defendants in February 1997, plaintiff suffered a substantial fire loss on August 17, 1997. Plaintiff immediately notified defendants of his loss and he and his wife worked closely with a number of defendants' representatives in an effort to collect under the terms and conditions of his policy.

From the date of loss through early December 1997, plaintiff submitted various statements and estimates detailing his loss. He admits that on December 8, 1997, he received a letter from defendants' attorney containing a demand for a sworn proof of loss , together with the appropriate forms and notice of defendants' request for plaintiff's examination under oath scheduled for December 10, 1997. Plaintiff requested an adjournment of the December 10, 1997 examination date for various reasons and the examination was eventually rescheduled to February 17, 1998.

 

At the time of his appearance at the examination under oath, plaintiff had not completed or filed the requested proof of loss. When asked at his examination under oath why the forms were not filed, plaintiff answered, "I just didn't want to make any mistakes on it. I was trying to get together with the attorney and I wanted to go through it, make sure I -- because it looked like its pretty important stuff, so I wanted to make sure I got it right." After plaintiff testified to the fact that a proof of loss had not been filed, defendants' attorney adjourned the examination indicating that the failure to file a timely proof of loss gave rise to a potential policy defense and he had to discuss the matter with defendants.

On March 30, 1998 defendants rejected plaintiff's claim because of plaintiff's failure to file a sworn proof of loss within 60 days of defendants ' demand as required by the policy of insurance. Plaintiff thereafter commenced this lawsuit seeking recovery under his policy. Defendants' subsequent motion for summary judgment was denied and they now appeal.

 

We reverse. "It is well settled that the failure to file sworn proofs of loss within 60 days of the demand therefor constitutes an absolute defense to an action on an insurance policy absent a waiver of the requirement by the insurer or conduct on its part estopping its assertion of the defense * * *" (Vena v State Farm Fire & Cas. Co., 203 AD2d 790, 790-791 [citations omitted]). Plaintiff's admission that he failed to submit a sworn proof of loss within the required 60-day period provides defendants with the requisite showing of their entitlement to judgment as a matter of law (see, Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853). Such a showing shifts the burden to plaintiff to come forward with admissible proof sufficient to raise a question of fact (see, Zuckerman v City of New York, 49 NY2d 557, 562).

 

Although plaintiff alleges that he or his wife submitted various documents to and had numerous conversations with defendants , all of these contacts occurred prior to receipt of defendants' demand for a sworn proof of loss. Neither plaintiff nor his wife recall any other contact with defendants after receiving their demand to file a sworn proof of loss, which precludes a finding that defendants intended to waive that policy requirement and prevents plaintiff from relying on the theory of waiver (see, Gilbert Frank Corp. v Federal Ins. Co., 70 NY2d 966; Brostowin v Hanover Ins. Co., 154 AD2d 418).

 

Additionally, defendants' failure to state in their demand letter that the sworn proof of loss was required to be filed within 60 days and the fact that the letter also contained a demand that plaintiff appear for an examination under oath is insufficient to support a finding that a question of fact exists with regard to the application of the doctrine of estoppel (see, Anthony Marino Constr. Corp. v INA Underwriters Ins. Co., 69 NY2d 798; Igbara Realty Corp. v New York Prop. Ins. Underwriting Assn., 63 NY2d 201). Nor does the record contain any other admissible proof of conduct on the part of defendants which could have reasonably lulled plaintiff into inaction (see, Pedrick v Commercial Union Ins. Co., 134 Misc 2d 313, 314, mod 132 AD2d 980, appeal dismissed 132 AD2d 981), and any such argument is belied by plaintiff's statement at his abbreviated examination under oath that he failed to timely file his sworn proof of loss because it looked like "pretty important stuff" and he "didn' t want to make any mistakes on it".

Plaintiff also argues that his estimates and other proof of loss that he submitted to defendants prior to December 8, 1997 were more detailed than the information requested on the proof of loss forms provided him by defendants and, because he has submitted those detailed proofs of loss prior to defendants' December 8, 1997 demand, he should be deemed in compliance with the policy requirements. Notwithstanding the fact that plaintiff has not included those alleged submissions in the record on appeal for our review, nor apparently provided them to Supreme Court, we have previously held that such unsworn statements of loss do not satisfy the contractual or statutory requirement to serve defendants with sworn proofs of loss (see, Vena v State Farm Fire & Cas. Co., supra, at 790-791; see also, Insurance Law §§ 3404, 3407; Litter v Allstate Ins. Co., 208 AD2d 602; cf., De Santis v Dryden Mut. Ins. Co., 241 AD2d 916).

Crew III, J.P. , Graffeo, Mugglin and Rose, JJ., concur.

ORDERED that the order is reversed, on the law, with costs, motion granted, summary judgment awarded to defendants and complaint dismissed.