Coverage Pointers - Volume II, No. 10

11/06/00: WEISSMAN v. NALLY
New York State, Appellate Division, Second Department
Serious Injury Threshold: Affirmation by Orthopedic Physician Insufficient where it Failed to Provide Objective Evidence of Alleged Limitation of the Cervical Spine
Plaintiff commenced this action for injuries sustained in an automobile accident. On motion for summary judgment, the Court found that defendant made a prima facie showing that the plaintiff did not sustain a serious injury by the submission of an affirmed medical report of an orthopedic surgeon. In opposition to the motion, plaintiff submitted an affirmation of a board-certified orthopedic physician. However, the court found plaintiff’s submission insufficient because the affirmation failed to provide objective evidence of the extent or degree of the plaintiff’s alleged limitation of motion in the cervical spine area or its duration.

11/02/00: FIREMAN’S FUND INS. CO. v. NEWARK INS. CO.
New York State Supreme Court, Appellate Division, First Department
Named Insured’s Policy Affords Same Coverage to Additional Insured for Additional Insured’s Negligence; G.O.L. §5-322.1 does not Operate to Limit Coverage
Court held that an additional insured was entitled to the same coverage afforded the named insured, where policy language did not limit the additional insured’s coverage to liability arising out of the named insured’s negligence. General Obligations Law §5-322.1, which voids agreements to indemnify negligent parties against their own negligence, does not require such limitation in coverage – the statute specifically states that it "shall not affect the validity of any insurance contract."

10/30/00: RODRIGUEZ v. WHEELS, INC.
New York State, Appellate Division, Second Department
Serious Injury Threshold: Treating Doctor’s Affirmation Insufficient Where it Contradicts Prior Report and X-Ray Report
On defendant’s motion for summary judgment to dismiss this claim on the ground that plaintiff did not sustain "serious injury", the court rejected the affirmation of plaintiff’s treating physician as proof of fracture – the affirmation was contradicted by that physician’s own report indicating only a contusion of the nose and an x-ray report which noted a normal study of the nasal bones.

We regularly feature cases of interest from other jurisdictions. This week we offer decisions from California, New Jersey and West Virginia prepared by Lori E. Iwan of the Chicago law firm of Iwan, Cray, Huber, Horstman & VanAusdal, L.L.C.:

11/08/00: PRICHARD v. LIBERTY MUTUAL INS. CO.
California Court of Appeals, Fourth Appellate District
Insurers' Reimbursement Rights for Defense Costs in Mixed Actions Explained in Context of Recent Case Law ... Sort Of
The Court’s first sentence of the opinion says it all (almost): "Procedurally, this liability insurance bad faith action comes to us contorted as a sheepshank knot. Some unraveling is necessary." Insurer accepted defense of defamation and contract action subject to reservation of rights. With great effort, the court explains the right of reimbursement for defense costs for claims that were never even potentially covered in "mixed actions," that is, those actions where the suit against the policyholder includes at least one claim that was potentially covered and therefore triggered the duty to defend. Holding: insurer had an obligation to defend the policyholders in the underlying action until its conclusion, and not just through the close of evidence at trial; insurer did not breach its obligation to defend the policyholders by objecting to counsel at an excessive rate as part of a continued reservation of rights; insurer could assert a policy period defense to coverage; and an insurer doesn't necessarily escape an indemnity obligation just because a case is settled.

11/08/00: POWELL v. ALEMAY,INC.
New Jersey Superior Court, Appellate Division
Businessowners Liability Policy Does Not Cover Housing Discrimination Cases
Businessowners liability policy did not cover housing discrimination claim against rental agent as discrimination was not a "personal injury" as defined by the policy, and that the policy did not provide coverage for willful violations of penal statutes or ordinances. Plaintiff sought damages for injury to her rights and feelings and sought compensatory, punitive and injunctive relief when apartment rental amount was allegedly misrepresented.

11/03/00: SMITH v. ANIMAL URGENT CARE, INC.
West Virginia Supreme Court of Appeals
Sexual Harassment Not Covered Under CGL Policy for Numerous Reasons
In an insurance liability policy, purely mental or emotional harm that arises from a claim of sexual harassment and lacks physical manifestation does not fall within a definition of "bodily injury", which is limited to "bodily injury, sickness, or disease." A claim based on sexual harassment does not come within the definition of "occurrence," which is defined as an "accident, including continuous or repeated exposure to substantially the same general harmful conditions." "There is neither a duty to defend an insured in an action for, nor a duty to pay for, damages allegedly caused by the sexual misconduct of an insured, when the liability insurance policy contains a so-called 'intentional injury' exclusion. In such a case the intent of an insured to cause some injury will be inferred as a matter of law. The inclusion of negligence-type allegations in a complaint that is at its essence a sexual harassment claim will not prevent the operation of an "intentional acts" exclusion contained in an insurance liability policy which is defined as excluding "bodily injury" "expected or intended from the standpoint of the insured." An "employee" exclusion, which exempts coverage under a liability policy for "bodily injury" arising in the course of employment, includes claims for sexual harassment by a co-employee since those claims "arise out of and in the course of employment."

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

James D. Gauthier, Team Leader
[email protected]
Donna L. Burden
Andrea Schillaci
Jody E. Briandi

In an action to recover damages for personal injuries, the plaintiff appeals from (1) an order of the Supreme Court, Suffolk County (Doyle, J.), dated October 26, 1999, which granted the defendants' motion for summary judgment dismissing the complaint, and (2) a judgment of the same court entered January 31, 2000, dismissing the complaint. The plaintiff's notice of appeal from the order is deemed to be also a notice of appeal from the judgment (see, CPLR 5501[c]).

ORDERED that the appeal from the order is dismissed , without costs or disbursements; and it is further,

ORDERED that the judgment is affirmed, without costs or disbursements.

The appeal from the intermediate order must be dismissed because the right of direct appeal therefrom terminated with the entry of judgment in the action (see, Matter of Aho, 39 NY2d 241, 248). The issues raised on the appeal from the order are brought up for review and have been considered on the appeal from the judgment (see, CPLR 5501[a] [1]).

In support of their motion for summary judgment, the defendants made out a prima facie case that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) through the affirmed medical report of an orthopedic surgeon (see, Gaddy v Eyler, 79 NY2d 955). The only medical evidence submitted by the plaintiff in opposition to the motion, the affirmation prepared by a board-certified orthopedic physician, failed to provide objective evidence of the extent or degree of the plaintiff's alleged limitation of motion in the cervical spine area and its duration (see, Grossman v Wright, 268 AD2d 79; Beckett v Conte, 176 AD2d 774). Accordingly, the plaintiff failed to raise a triable issue of fact (see, CPLR 3212[b]).

RITTER, J.P., THOMPSON , FRIEDMANN, H. MILLER and FEUERSTEIN, JJ., concur.

In an action to recover damages for personal injuries, the defendants Wheels, Inc., and Lester W. Pearson appeal ( 1), as limited by their brief, from so much of an order of the Supreme Court, Kings County (Clemente, J.), dated June 25, 1999, as denied that branch of their motion which was to dismiss the complaint based on the failure of the plaintiff's decedent to appear for a court-ordered physical examination, and (2 ) from an order of the same court, dated November 19, 1999, which denied their motion for summary judgment dismissing the complaint insofar as asserted against them on the ground that the plaintiff's decedent did not sustain a serious injury as defined by Insurance Law § 5102(d).

ORDERED that the order dated June 25, 1999, is affirmed; and is further,

ORDERED that the order dated November 19, 1999, is reversed, on the law, the motion for summary judgment is granted , the complaint is dismissed insofar as asserted against the appellants, and the action against the remaining defendants is severed; and it is further,

ORDERED that one bill of costs is awarded to the appellants.

Contrary to the appellants' contention, the Supreme Court providently exercised its discretion in denying that branch of their motion which was to dismiss the complaint insofar as asserted against them because the plaintiff's decedent failed to submit to a physical examination before her death (see, McGilvery v New York City Tr. Auth., 213 AD2d 322).

The Supreme Court, however, improperly denied the appellants' motion for summary judgment dismissing the complaint insofar as asserted against them. The appellants' evidence established a prima facie case that the plaintiff's decedent did not sustain a serious injury as defined by Insurance Law § 510 2(d) (see, Gaddy v Eyler, 79 NY2d 955). In opposition to the motion, the plaintiff failed to come forward with sufficient evidence to raise a triable issue of fact on that issue. The affirmation of the decedent 's treating physician, in which he stated, inter alia, that the decedent suffered a fracture of a nasal bone, was contradicted by that physician's report indicating that the decedent had suffered "[c]ontusions " to her nose, and an X-ray report which noted a "[n]ormal study of the nasal bones" (see, Marino v Rosen , 166 AD2d 693, 694; see also, David v Green, 233 AD2d 476). Moreover, the plaintiff failed to submit any competent medical evidence with respect to the decedent's remaining alleged injuries (see, Perovich v Liotta, AD2d [2d Dept., June 19, 2000]; Alcalay v Town of N. Hempstead, 262 AD2d 258; Arshad v Gomer, 268 AD2d 450; Merisca v Alford, 243 AD2d 613; Lincoln v Johnson, 225 AD2d 593).

ALTMAN, J.P., FRIEDMANN, KRAUSMAN and SMITH, JJ., concur.

Order and judgment (one paper), Supreme Court, New York County (Leland DeGrasse, J.), entered on or about January 3, 2000, which, insofar as appealed from as limited by the briefs, declared in favor of plaintiff insurer ("Fireman’s") that defendant -appellant insurer ("Reliance") is required to defend and indemnify Fireman’s insured (" ;Fisher") in an underlying action for personal injuries sustained by a worker at a construction site at which Fisher was the general contractor and Reliance’s insured ("Consultants") was a subcontractor, unanimously affirmed, with costs.

The declaration was properly made on the ground that Fisher, as an additional insured on the policy that Reliance issued to Consultants, is entitled to the same coverage afforded Consultants by the policy, namely, coverage for "all sums which the insured shall become legally obligated to pay as damages because of bodily injury". The policy contains no language plainly limiting Fisher’s coverage to liability for personal injuries caused by Consultants’ negligence (cf., Mazzuoccolo v Cinelli, 245 AD2d 245, 247), and such a limitation is not required by General Obligations Law § 5-322.1, which, while rendering void agreements to indemnify negligent parties against their own negligence, specifically states that "this section shall not affect the validity of any insurance contract" (see, Williamson v Borg Florman Devel. Corp., 191 AD2d 335, lv denied 81 NY2d 711). We have considered appellants’ other arguments and find them unavailing.