11/16/00: AMERICAN MOTORIST INS. CO. v. SUPERIOR ACOUSTICS, INC.
New York State Supreme Court, Appellate Division, First Department
Certificate of Insurance Insufficient to Establish that Certificate Holder was Additional Insured
Court held that certificate of insurance, which contained disclaimers that it was for information only, that it conferred no rights on the holder, that it did not amend, extend or alter the coverage provided by the policy and that it was subject to all the terms, exclusions and conditions of the policy, was insufficient to raise a triable issue of fact whether plaintiffs had been named as additional insureds. Therefore, insurers were entitled to summary judgment dismissing the complaint.
11/13/00: AFFATATO v. STANDARD FIRE INS. CO.
New York State Supreme Court, Appellate Division, Second Department
Speculation and Suspicion Insufficient to Raise Issues of Fact concerning Concealment or Misrepresentation
Defendant-insurer failed to support its assertion that plaintiff violated the terms and conditions of her insurance policy concerning her claimed loss resulting from theft. Mere speculation about the plaintiff's financial situation, as well as unsupported suspicion that the theft of fragile items was improbable, did not demonstrate the existence of issues of fact whether the plaintiff or her husband intentionally concealed or misrepresented any material fact or circumstance relating to the theft or engaged in fraudulent conduct.
11/13/00: GALANIS v. TRAVELERS PROPERTY CASUALTY
New York State Supreme Court, Appellate Division, Second Department
Relative of Insured Occupying Two-Family House not a Covered Person under Homeowner’s Policy
Court held that plaintiff was not entitled to coverage under a homeowner’s policy issued to plaintiff's mother. The policy provided that relatives of the insured were covered persons if they resided in the insured’s household. Here, although the plaintiff and her mother lived in the same two-family house, they maintained separate apartments and households, and plaintiff was not a resident of her mother’s household.
11/13/00: PRESBYTERIAN HOSPITAL IN THE CITY OF NEW YORK v. NEW YORK CENTRAL MUTUAL INS. CO.
New York State Supreme Court, Appellate Division, Second Department
Insurer’s Disclaimer of No-Fault Benefits Invalid – Insurer Failed to Reject Claim within 30-day Period required by Insurance Law
In an action to recover payment for medical services pursuant to Insurance Law §5106(a), court held that defendant insurer could not sustain burden of demonstrating meritorious defense, and thus could not overcome default judgment, because the insurer failed to reject plaintiff’s claim for payment of no-fault benefits within the 30-day period prescribed by Insurance Law §5106(a) and 11 NYCRR 65.15(g)(3), and did not present proof in admissible form that the injury for which the subject patient was treated did not arise out of an insured incident. Under these circumstances, the defendant was precluded from disclaiming coverage.
11/22/00: HARRIS v. AMERICAN PROTECTION INS. CO.
New York State Supreme Court, Appellate Division, Third Department
Plaintiff Residing with Mother under Probation Sentence not a "Family Member" under Father’s Auto Policy
Court held that plaintiff, who was injured in an auto accident, was not a "family member" under his father’s auto policy and, as such, was not entitled to recover under his father’s uninsured motorist coverage. The policy defined "family member" as "a person related to [the named insured] by blood, marriage or adoption who is a resident of [the named insured’s] household". Defendant-insurer demonstrated that at the time plaintiff sustained his injuries, he resided with his mother, whereas his father resided in Maryland and had an additional residence in Vermont. Although plaintiff had previously resided with his father in accordance with the terms of his parents’ divorce settlement, a sentence of probation imposed in 1986 required that plaintiff leave his father's residence and reside with his mother and attend school there. Furthermore, plaintiff’s verified complaint in his action against the underinsured tortfeasor alleged that "[a]t all times hereinafter mentioned, the plaintiff was and still is a resident of the County of Clinton, State of New York".
11/16/00: EGAN v. NEW YORK CARE PLUS INS. CO. INC.
New York State Supreme Court, Appellate Division, Third Department
Fraud Claim Dismissed in Absence of Duty Independent of Insurance Contract; Claim for Deceptive Business Practices Dismissed in Absence of Conduct Affecting Public at Large
Plaintiff commenced this action for breach of contract, fraud and deceptive business practices in violation of General Business Law §349, following his health care insurer’s denial of coverage for prolonged intravenous antibiotic therapy for central nervous system Lyme disease. The insurer denied the therapy on the ground that it was not a generally accepted therapy in the treatment of the disease. The court dismissed the fraud claims holding that, absent a legal duty owed to plaintiff independent of that encompassed by the insurance contract, a cause of action for fraud does not arise where the fraud alleged relates to a breach of contract. The court also dismissed plaintiff's General Business Law §349 cause of action. "In order to prevail on that cause of action, plaintiff was required to make a threshold showing that his claim was predicated upon a deceptive act or practice that was consumer oriented." Here, defendants denied treatment based upon their determination that the treatment was not a generally accepted therapy. Since the denial was made in accordance with the provisions of the contract, plaintiff’s claim involved a private contract dispute over policy coverage for the treatment and did not amount to conduct that affected the consuming public at large.
11/16/00: GIBEAULT v. HOME INS. CO.
New York State Supreme Court, Appellate Division, Third Department
Election to Proceed in Arbitration Precludes Litigation in Judicial Forum; 10-year Delay Results in Abandonment of Arbitration
Plaintiff was involved in two automobile accidents in 1983, and in 1984 applied to his insurer for first-party (no -fault) benefits for injuries related to the first accident. Following denial of his application, plaintiff requested arbitration and was awarded a sum for lost earnings resulting from both motor vehicle accidents. Plaintiff later filed additional claims for benefits and again sought arbitration. By decision dated April 21, 1988, an arbitrator denied plaintiff’s additional claims. Plaintiff successfully sought vacatur of that award and the matter was remitted for a new arbitration hearing. Instead of seeking a new hearing, however, plaintiff commenced this action for alleged breach of contract, misrepresentation and bad faith. The court previously dismissed all causes of action except his claim for compensatory damages based on breach of contract. In the ensuing 3 1/2 years, plaintiff took no action to obtain a new arbitration hearing, and defendants moved for summary judgment dismissing plaintiffs' remaining claims for failure to state a cause of action. The court held that plaintiffs’ election to proceed in an arbitral forum precluded litigation of any arbitral issues in a judicial forum. "While plaintiffs’ claims for compensatory damages are not subject to arbitration, defendants' alleged breach of contract, i.e., wrongfully denying benefits, is subject to arbitration and [plaintiff’s] success in that forum is a predicate to continuing the instant litigation." The court concluded that plaintiff’s more than 10-year delay in seeking a new arbitration hearing constituted abandonment as a matter of law, and any arbitral determination to the contrary would be arbitrary and capricious.
11/16/00: McCARTHY v. PERAULT
New York State Supreme Court, Appellate Division, Third Department
Serious Injury Threshold: Plaintiff Defeated Summary Judgment with Competent Proof and Objective Indicia of Serious Injury
Court held that plaintiff’s proffer of competent evidence with objective indicia, which included plaintiff’s own affidavit and the affidavit of his orthopedist, created a triable issue of fact as to whether plaintiff sustained a "serious injury" within the meaning of Insurance Law § 5102 (d). The evidence demonstrated that a specific serious injury had been identified and that the injury claimed was not merely a minor limitation. The orthopedist’s affidavit detailed that plaintiff had an onset of radiating neck pain caused by the accident, which also exacerbated his preexisting arthritis. Arthritic spur impingement upon cervical vertebrae caused inflammation, neck, left shoulder and arm pain, numbness in his hands and restriction in his range of neck motion. A 1999 physical examination of plaintiff revealed that plaintiff’s neck flexion was reduced to 30 degrees from a normal flexion of 45 degrees, his neck extension was reduced to 20 degrees from a normal extension of 45 degrees, and that the lateral bending of his neck was 20 degrees from a normal bending of 30 degrees. The orthopedist further opined that the injury was a permanent condition of chronic cervical syndrome with radiculopathy resulting in a permanent consequential limitation of use of his neck and his left small finger and left ring finger, all of which may worsen in time.
11/16/00: PAHL v. GRENIER
New York State Supreme Court, Appellate Division, Third Department
Insurer Obligated to Defend where Allegations in Complaint and Underlying Facts Create Reasonable Possibility that Insured Liable for Act Covered by Policy
Plaintiff sustained injuries in an auto accident while riding as a passenger in a vehicle that had been rented from Hertz by Mallery. The vehicle was driven by Grenier at the request of Mallery's son, Baldwin, who was also a passenger. Nationwide insured two vehicles owned by Mallery. The policy provided liability coverage for Mallery and "any person or organization who is liable for the use of [her ] auto", which "must be used with [her] permission". The policy also covered: "1. a motor vehicle you do not own, while it is used in place of your auto for a short time. Your auto must be out of use because of: a) breakdown; b) repair; c) servicing; or d) loss . . . 3. to a motor vehicle owned by a non-member of your household." Nationwide denied coverage on the grounds that the vehicle rented from Hertz did not fall within the policy’s coverage for other motor vehicles, its liability coverage was secondary to other collectible motor vehicle insurance and the vehicle was not being used with Mallery's permission. Hertz defended Mallery in the main action and then brought this third-party action against Nationwide seeking reimbursement of Mallery's defense costs and for funds it paid in settlement. The court held that Nationwide was required to defend Mallery in the main action. The complaint in that action alleged that Grenier was operating the vehicle with the implied and/or express permission of Hertz, Mallery and Baldwin and, although the complaint contained no allegations concerning whether the rental car qualified as an "other motor vehicle" under the terms of the Nationwide policy, Hertz supplied Nationwide with Mallery's written report stating that she had a truck that was being repaired and that the rental car "was intended to be a substitute for the truck while it was being repaired". Thus, at the time of its disclaimer, Nationwide had information that, if ultimately established to be true, would bring the occurrence within coverage and would thereby require that Nationwide provide a defense. The court also concluded that unresolved factual issues whether the rental car qualified as an "other motor vehicle" under the policy and whether Grenier was driving with Mallery's express or implied permission (which had been determined in the main action but which was not binding on Nationwide) precluded summary judgment on the issue of whether Nationwide had a duty to indemnify Hertz for payments it made to settle the main action.
11/13/00: VECCHIARELLI v. CONTINENTAL INS. CO.
New York State Supreme Court, Appellate Division, Fourth Department
Summary Judgment Improper where Insurer Raises Issue of Fact concerning Timeliness of Disclaimer; Insured must Demonstrate Prejudice from Delay for Claims not subject to Insurance Law §3420(d)
Plaintiff’s residence was damaged by fire on December 5, 1992, and defendant insurer disclaimed coverage on October 13, 1993. In this action to recover the proceeds of the policy, plaintiff moved for partial summary judgment dismissing the insurer’s affirmative defenses on the ground that the insurer had unreasonably and inexcusably delayed in disclaiming coverage. Defendant cross-moved for partial summary judgment dismissing that part of the complaint alleging that defendant's disclaimer was inadequate and/or untimely. The court denied both motions, holding that there were issues of fact whether defendant's delay in disclaiming coverage was reasonable. The timeliness of a disclaimer is measured from the date on which the insurer possesses all the facts necessary to invoke an exclusion. In the absence of an explanation for the delay, a delay of over two months is unreasonable as a matter of law. In this case, the insurer argued that it was investigating the applicability of various exclusions, including fraud, arson and false statements, and that plaintiff was not cooperating with its investigation. The court held that defendant raised an issue of fact whether the delay resulted from "a prompt, diligent and good faith investigation with respect to coverage". Defendant submitted evidence that it was conducting depositions until October 7, 1993, when it finally received requested documentary evidence from plaintiff's public adjusters. Furthermore, a final recommendation from defendant 's Senior Property Adjuster was not made until September 30, 1993. The court also held that the parties failed to satisfy their burden of demonstrating prejudice (or lack of prejudice) by the delay, which was required because the claim did not arise out of an accident involving bodily injury or death and, therefore, was not subject to the notice of disclaimer provisions in Insurance Law § 3420(d). "[U]nder the common-law rule, delay in giving notice of disclaimer of coverage, even if unreasonable, will not estop the insurer to disclaim unless the insured has suffered prejudice from the delay".
11/13/00: MATTER OF THE ARBITRATION BETWEEN NEW YORK CENTRAL MUTUAL FIRE INS. CO. AND BENSON
New York State Supreme Court, Appellate Division, Fourth Department
Notice of SUM Claim Deemed Timely where Insured gave Notice Promptly after Learning Injury More Significant than Originally Determined
Court held that record supported finding that insured notified her carrier of her supplemental uninsured motorist (SUM) claim "as soon as practicable", as required by the policy. Insured’s medical condition was diagnosed at the time of the accident as muscle spasms of the back. That diagnosis continued for almost a year, at which time the insured’s physician noted that she may not be able to return to her employment as a nurse's aide. When it became apparent that the injury was more significant than originally determined, insured's attorney promptly contacted the tortfeasor’s insurer, negotiated a settlement for the bodily injury coverage limits of that policy and immediately notified the SUM carrier that the insured was making a claim for SUM benefits. Under these circumstances, the insured gave "notice with reasonable promptness after [she] knew or should reasonably have known that the tortfeasor was underinsured".
11/13/00: MC HUGH v. THE GUARDIAN LIFE INS. CO. OF AMERICA
New York State Supreme Court, Appellate Division, Fourth Department
Insured’s Allegations that Disability Policy Application was Forged Results in Rescission
Plaintiff commenced this action to recover the proceeds of a disability policy. The insurer had disclaimed coverage on the ground that plaintiff made material misrepresentations in the application concerning his job duties and medical history, and sought recision of the policy. The plaintiff alleged that he submitted a signed application for insurance, but that the application attached to the policy was not the application he had signed and that it had been forged by the insurer’s representative. Plaintiff admitted, however, that the information contained in both applications was the same. The court dismissed the plaintiff’s complaint and declared that the policy be rescinded. Since plaintiff alleged that he did not sign the application attached to the policy, the application failed to comply with Insurance Law §3205(c) and no valid insurance contract ever came into existence. The court also held that even if the application complied with the Insurance Law, defendant satisfied its burden of establishing that the misrepresentations were material.
11/13/00: UNITED STATES FIDELITY AND GUARANTY COMPANY v. THE NEW YORK, SUSQUEHANNA AND WESTERN RAILWAY CORP.
New York State Supreme Court, Appellate Division, Fourth Department
Insured Entitled to Attorney’s Fees and Costs incurred in Defending Declaratory Judgment Action commenced by Insurer
In this declaratory judgment action seeking reimbursement from defendant for amounts the insurer expended in the defense and indemnification of defendant in an underlying personal injury action, court held that defendant was entitled to attorney’s fees and costs in defending the declaratory judgment action. "By commencing this action, plaintiff [insurer] has ‘cast [defendant ] in a defensive posture by the legal steps [plaintiff has taken] in an effort to free itself from its policy obligations’ [citation omitted] and thus defendant is entitled to recover from plaintiff the attorney's fees and costs incurred in defending this action . . . . [A]n insurer's responsibility to defend reaches the defense of any actions arising out of the occurrence . . . including a declaratory judgment action such as this commenced by the insurer [citation omitted]".
11/13/00: LUMPKINS v. KENDRICK
New York State Supreme Court, Appellate Division, Fourth Department
Serious Injury Threshold: Plaintiff’s Allegations Unsupported by Objective Medical Findings Deemed Insufficient to Defeat Summary Judgment
Court held that plaintiff failed to establish that he sustained "serious injury" within the meaning of Insurance Law § 5102 (d). Allegations that he sustained a "significant limitation of use of a body function or system" were unsupported by objective medical findings. Plaintiff also failed to prove that he sustained a medically determined injury or impairment that prevented him from performing substantially all of the material acts constituting his usual and customary daily activities for not less than 90 days during the 180 days following the accident (Insurance Law § 5102 [d]). Plaintiff’s treating physician testified that plaintiff was "totally disabled" with respect to his employability; however, plaintiff testified that he had not been employed at the time of the accident. Furthermore, plaintiff’s testimony established that the activities that he was prevented from performing were not "daily activities" within the meaning of the statute.
ACROSS BORDERS
We regularly feature cases of interest from other jurisdictions. This week we offer a decision from New Hampshire:
11/20/00: MERCHANTS RENT-A-CAR, INC. v. ARBELLA PROTECTION INS. CO.
New Hampshire Supreme Court
Rental of Large Van Covered by Non-Owned Provisions of Personal Auto Policy
The personal auto policy provided that the carrier would pay for direct and accidental loss to "your covered auto" or to any "non-owned auto." "Non-owned auto" is defined as: "Any private passenger auto, pickup, van or "trailer" not owned by or furnished or available for the regular use of you . . . ." Your covered "auto" is defined to include:
1. Any vehicle shown in the declarations.
2. Any of the following types of vehicles on the date you became the owner:
a. a private passenger auto; or
b. a pickup or van that:
(1) has a gross vehicle weight of less than 10,000 lbs.; and
(2) is not used for the delivery or transportation of goods and materials
There was no dispute that the vehicle in question was not a private passenger auto, a pickup, or a "trailer." The only issue was whether the vehicle was a "van" within the "non-owned auto" section of the policy. Presumably concluding that the weight and use restrictions referred to in the "your covered auto" section also apply to the "non-owned auto" section, the trial court found that the vehicle was not a "van" because the vehicle weighed 10,000 pounds and was used for the "transportation of goods and materials." Court concludes that the weight and use restrictions that apply to "van" under "your covered auto" do not apply to a "van" under "non-owned auto." The common definition of "van" includes "use[] for transportation of goods . . . ." Thus, the unqualified use of the term "van" in the "non-owned auto" section includes vehicles that may be used for transportation of goods. Furthermore, the fact that the "your covered auto" section limits liability to vans of a certain weight and use indicates that the unqualified use of the term "van" in the "non-owned auto" section could encompass a broader range of vehicle — i.e., vehicles with a gross weight of 10,000 pounds or more and vehicles used for the delivery or transportation of goods and materials.
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REPORTED DECISIONS
AMERICAN MOTORIST INS. CO. v. SUPERIOR ACOUSTICS, INC.
Order, Supreme Court, New York County (Paula Omansky, J.), entered May 25, 1999, granting the motion of defendant Transamerica Insurance Company and the cross motion of defendants Superior Acoustics , Inc. and Pacific Employers Insurance Company for summary judgment dismissing the complaint as against them, unanimously affirmed, with costs.
Defendants-respondents were entitled to summary judgment dismissing the complaint as against them in light of their submission of unrefuted evidence demonstrating that plaintiffs were not named as additional insured on the policies issued to plaintiff Lehr's subcontractors , and that there was no request on the part of the subcontractors to add plaintiffs as additional insureds . Plaintiffs' submission of a certificate of insurance naming Lehr as an additional insured on the policy issued by Transamerica to co-defendant subcontractor Petrocelli Electric Company, Inc. and their reliance on a similar certificate allegedly issued by defendant Pacific to defendant Superior, which contained disclaimers that it was for information only, that it conferred no rights on the holder, that it did not amend, extend or alter the coverage provided by the policy and that it was subject to all the terms , exclusions and conditions of the policy, was insufficient to raise a triable issue of fact as to whether plaintiffs had been named as additional insureds under the subject policies (see, St. George v W.J. Barney Corp., 270 AD2d 171; Buccini v 1568 Broadway Assocs., 250 AD2d 466).
AFFATATO v. STANDARD FIRE INS. CO.
In an action, inter alia, to recover damages for breach of a homeowner's insurance policy, the defendant appeals, as limited by its brief, from so much of an order of the Supreme Court, Nassau County (Dunne , J.), entered January 12, 2000, as granted those branches of the plaintiff's motion which were (1) pursuant to CPLR 3211(b) and 3016(b) to dismiss the defendant's first through fifth affirmative defenses, and (2) pursuant to CPLR 3212 for partial summary judgment on the issue of liability on the first cause of action.
ORDERED that the order is affirmed insofar as appealed from, with costs .
In its verified answer and in its opposition to the plaintiff's establishment of a prima facie case for partial summary judgment, the defendant failed to support its assertion that the plaintiff violated the terms and conditions of the insurance policy at issue in relation to her claimed loss resulting from a theft (see, Brown v State Farm Ins. Co., 237 AD2d 476; Berman v Federal Ins. Co., 110 AD2d 803). The defendant's mere speculation about the plaintiff's financial situation, as well as its unsupported suspicion that the theft of fragile items was improbable, did not demonstrate the existence of issues of fact as to whether the plaintiff or her husband intentionally concealed or misrepresented any material fact or circumstance relating to the theft or engaged in fraudulent conduct (cf., Stone v Continental Ins. Co., 234 AD2d 282; Ashline v Genesee Patrons Coop. Ins. Co., 224 AD2d 847).
O'BRIEN, J.P ., GOLDSTEIN, FLORIO and McGINITY, JJ., concur.
GALANIS v. TRAVELERS PROPERTY CASUALTY
In an action for a judgment declaring that the defendant is obligated to defend and indemnify the plaintiff in an underlying personal injury action entitled Constantinides v Galanis, pending in the Supreme Court , Queens County, under Index No. 2578/98, the plaintiff appeals from an order of the Supreme Court, Queens County (Giaccio, J.), dated November 9, 1999, which denied her motion, in effect, for summary judgment on the complaint, and determined that she was not an insured under the defendant's policy and that the defendant was not obligated to defend and indemnify her in the underlying personal injury action.
ORDERED that the order is affirmed, with costs, and the matter is remitted to the Supreme Court, Queens County, for the entry of a judgment declaring that the defendant is not obligated to defend and indemnify the plaintiff in the underlying personal injury action.
The Supreme Court correctly determined that the plaintiff is not entitled to coverage under the homeowner's insurance policy issued by the defendant to the plaintiff's mother. The policy provided that the relatives of the insured were covered persons if they resided in the insured's household. Here, although the plaintiff and her mother lived in the same two-family house, they maintained separate apartments and households , and the plaintiff is not a resident of her mother's household (see, General Assur. Co. v Schmitt, 2 65 AD2d 299; Drake v Donegal Mut. Ins. Co., 422 F Supp 272). Accordingly, the plaintiff is not an insured under the terms of the policy , and the defendant is not obligated to defend or indemnify her in the underlying personal injury action.
Since this is a declaratory judgment action, the matter is remitted for the entry of a judgment declaring that the defendant is not obligated to defend or indemnify the plaintiff in the underlying personal injury action (see, Lanza v Wagner, 11 NY2d 317, 334, appeal dismissed 371 US 74, cert denied 371 US 901).
RITTER, J.P., SANTUCCI, GOLDSTEIN and FEUERSTEIN, JJ., concur.
PRESBYTERIAN HOSPITAL IN THE CITY OF NEW YORK v.
NEW YORK CENTRAL MUTUAL INS. CO.
In an action to recover no-fault medical payments under two insurance contracts, the plaintiffs Presbyterian Hospital in the City of New York, as assignee of Julia Khvasechko , and St. Luke's-Roosevelt Hospital, as assignee of Bhupinder Singh, appeal from an order of the Supreme Court, Nassau County (McCarty, J.), dated September 29, 1999, which granted the defendant's motion to vacate a judgment of the same court dated April 12, 1999, entered upon its failure to oppose the plaintiffs ' motion for renewal and reargument of a prior motion for summary judgment on the first cause of action to recover payments for medical services rendered by the plaintiff Presbyterian Hospital in the City of New York, which was granted by order of the same court dated February 10, 1999.
ORDERED that the appeal by the plaintiff St. Luke's-Roosevelt Hospital is dismissed as that plaintiff is not aggrieved by the order appealed from (see, CPLR 5511); and it is further,
ORDERED that the order is reversed, on the law, the motion to vacate the judgment entered on the defendant 's default is denied, and the judgment dated April 12, 1999, is reinstated; and it is further,
ORDERED that the plaintiff Presbyterian Hospital in the City of New York is awarded one bill of costs.
After the court denied the motion of the plaintiffs Presbyterian Hospital in the City of New York (hereinafter Presbyterian Hospital) and St. Luke's-Roosevelt Hospital for summary judgment on their claims to recover payment for medical services pursuant to Insurance Law § 5106(a), Presbyterian Hospital moved for renewal and reargument. When the defendant failed to oppose the motion, the court granted it on the defendant's default, and a judgment in favor of Presbyterian Hospital was entered. The defendant subsequently moved to vacate the judgment, and the court granted its motion.
To vacate a judgment on the ground of excusable default pursuant to CPLR 5015(a)(1), a defendant is required to demonstrate both a reasonable excuse for its default and the existence of a meritorious defense to the action (see, Parker v City of New York, 272 AD2d 310; Lovario v Vuotto, 266 AD2d 191; Wynne v Wagner, 262 AD2d 556). The defendant's explanation for its default was law office failure, which the court, in its discretion, could accept as a reasonable excuse (see, Parker v City of New York, supra; Lovario v Vuotto, supra). However, the defendant did not sustain its burden of demonstrating a meritorious defense to the first cause of action asserted on behalf of Presbyterian Hospital. The defendant failed to reject Presbyterian Hospital's claim for payment of no-fault benefits within the 30-day period prescribed by Insurance Law § 5106(a) and 11 NYCRR 65.15(g)(3), and did not present proof in admissible form that the injury for which the subject patient was treated did not arise out of an insured incident. Under these circumstances, the defendant is precluded from disclaiming coverage (see, Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195; Presbyterian Hosp. [in City of N.Y.] v Maryland Cas. Co. , 90 NY2d 274; Mount Sinai Hosp. v Triboro Coach, Inc., 263 AD2d 11), and its motion should have been denied.
ALTMAN, J.P., FRIEDMANN, KRAUSMAN and SMITH, JJ., concur.
HARRIS v. AMERICAN PROTECTION INS. CO.
Mercure, J.P.
Appeal from an order of the Supreme Court (Dawson, J.), entered December 27, 1999 in Clinton County, which granted defendant's motion for summary judgment dismissing the complaint.
Plaintiff was injured in a June 15, 1987 accident while a passenger in a vehicle driven by Michael Daggett. After settling his lawsuit against Daggett for the $10,000 liability limit of Daggett's automobile insurance policy, plaintiff sought to recover under the underinsured motorist coverage of his father 's policy (hereinafter the policy), issued by defendant. Defendant denied coverage and this declaratory judgment action ensued. Following joinder of issue, defendant moved for summary judgment dismissing the complaint upon the ground that plaintiff did not as a matter of law qualify as a "family member " and thus was not a "covered person" under the policy. Supreme Court granted the motion and plaintiff appeals.
The relevant policy provision defined "family member" ; as "a person related to [the named insured] by blood, marriage or adoption who is a resident of [the named insured's] household". Defendant supported its summary judgment motion with competent evidence that at the time plaintiff sustained his injuries, he resided with his mother in the City of Plattsburgh, Clinton County, whereas his father resided in Maryland and had an additional residence in Vermont. Notably, although plaintiff had previously resided with his father in accordance with the terms of his parents' divorce settlement, a sentence of probation imposed in 1986 required that plaintiff leave his father's residence, then in Vermont, and reside with his mother and attend school in Clinton County. Further, the verified complaint in plaintiff's action against Daggett alleged that "[a] t all times hereinafter mentioned, the plaintiff was and still is a resident of the County of Clinton , State of New York".
The additional evidence presented by plaintiff merely tended to establish that in the 10 months preceding the accident, plaintiff was temporarily present at his father's home in Vermont with no degree of permanency or intent to remain there (see, New York Cent. Mut. Fire Ins. Co. v Kowalski, 195 AD2d 940, 941). Even that evidence failed to account for the fact that by the time of the accident plaintiff's father had moved to Maryland. Under the circumstances, we conclude that the evidence warranted a determination as a matter of law that at the time of the accident plaintiff had but one residence, which was not with his father (see, Walburn v State Farm Fire & Cas. Co., 215 AD2d 837).
Spain, Carpinello, Graffeo and Mugglin, JJ., concur.
EGAN v. NEW YORK CARE PLUS INS. CO. INC.
Crew III, J.P.
Appeal from an order of the Supreme Court (Canfield, J.), entered November 22, 1999 in Albany County, which, inter alia, denied defendants' motion for partial summary judgment dismissing plaintiff's third, fourth and fifth causes of action in the complaint.
In 1997, plaintiff was diagnosed as having central nervous system Lyme disease. As a consequence , his physician sought from defendants, who insured plaintiff under a "Care Plus Health Care Contract ", preapproval of intravenous antibiotic therapy. This request eventually was denied upon the basis that prolonged intravenous antibiotic therapy was not a generally accepted therapy in the treatment of such disease. Consequently, plaintiff commenced this action in January 1998 sounding in, inter alia, breach of contract, fraud and deceptive business practices in violation of General Business Law § 349.
Specifically, plaintiff's complaint alleged fraud based upon defendants' purported & quot;policy of limiting reimbursement for intravenous antibiotic treatment for Lyme disease" and defendants' practice of "knowingly maintain[ing] a policy of denying benefits on the ground that a given mode of therapy is not generally accepted", neither of which was disclosed in the insurance policy or defendants' marketing materials.
Following joinder of issue and discovery , defendants moved for partial summary judgment dismissing those causes of action sounding in fraud and predicated upon General Business Law § 349, as well as plaintiff's claims for punitive damages and counsel fees. Plaintiff cross-moved to amend his complaint to include additional factual averments , as well as additional causes of action sounding in fraud. Supreme Court denied defendants' motion and granted plaintiff's cross motion, prompting this appeal.
We reverse. Plaintiff's fraud claims are premised upon defendants' refusal to pay for plaintiff's extended treatment on the ground that it was not "medically necessary" as defined in the contract of insurance and, as such, essentially distill to a contract dispute. It is axiomatic that a cause of action for fraud does not arise where, as here, the fraud alleged relates to a breach of contract (see, e.g., Fourth Branch Assocs. Mechanicville v Niagara Mohawk Power Corp., 235 AD2d 962, 963). Thus, absent a legal duty owed to plaintiff by defendants, independent of that encompassed by the contract, plaintiff 's causes of action grounded on fraud are not cognizable (see, e.g., Roklina v Skidmore Coll ., 268 AD2d 765, 766-767, lv denied 95 NY2d 758). As no such independent legal duty has been demonstrated by plaintiff, such causes of action should have been dismissed.
Similarly, plaintiff's General Business Law § 34 9 cause of action must be dismissed. In order to prevail on that cause of action, plaintiff was required to make a threshold showing that his claim was predicated upon a deceptive act or practice that was consumer oriented (see, Gaidon v Guardian Life Ins. Co. of Am., 94 NY2d 330, 344). Here, defendants denied long-term intravenous antibiotic treatment based upon their determination that such treatment was not a generally accepted therapy in the treatment of Lyme disease. Such denial was made in accordance with the provisions of the contract, which reserved the right of denial to the insurer. As such, plaintiff's claim involved a private contract dispute over policy coverage for the sought-after treatment and did not amount to conduct that affected the consuming public at large.
In view of our conclusions concerning plaintiff's causes of action sounding in fraud and his cause of action premised upon General Business Law § 349, his claims for punitive damages and counsel fees must be dismissed, inasmuch as punitive damages are not available in a breach of contract action (see, Tate v Metropolitan Life Ins. Co., 186 AD2d 859, 860) and plaintiff's right to counsel fees was predicated on the provisions of General Business Law § ; 349. Finally, Supreme Court improperly permitted plaintiff to amend his complaint, as the causes of action sought to be interposed are subsumed by the breach of contract action.
Peters , Mugglin, Rose and Lahtinen, JJ., concur.
Crew III, J.
Appeal from an order of the Supreme Court (Keniry, J.), entered July 16 , 1999 in Saratoga County, which granted defendants' motion for summary judgment dismissing the complaint .
Plaintiff Robert E. Gibeault (hereinafter Gibeault) was involved in two automobile accidents in 1983. In 1984, Gibeault applied to defendant Home Insurance Company for first-party (no -fault) benefits for injuries related to the first 1983 accident. Following denial of his application , Gibeault requested arbitration of his claim and was awarded $15,626 for lost earnings resulting from both motor vehicle accidents. Thereafter, Gibeault filed additional claims for benefits and, following Home's denial thereof, he again sought arbitration. By decision dated April 21, 1988, an arbitrator denied Gibeault's claims. Thereafter, Gibeault successfully sought vacatur of that award and, on August 9, 1998, the matter was remitted for a new arbitration hearing.
Instead of seeking a new hearing, however, Gibeault and his spouse, derivatively, commenced the instant action asserting five causes of action based upon defendants' alleged breach of contract, misrepresentation and bad faith. In June 1994, defendants moved for partial summary judgment, as the result of which Supreme Court dismissed all of plaintiffs' causes of action except that which sought compensatory damages based upon breach of contract. Upon appeal we affirmed, noting that plaintiffs' claim for compensatory damages based upon defendants' allegedly wrongful denial of benefits was not subject to arbitration (221 AD2d 826). In the ensuing 3 1/2 years, Gibeault apparently took no action to obtain a new arbitration hearing , as a consequence of which defendants moved for summary judgment dismissing plaintiffs' remaining claims for failure to state a cause of action. Supreme Court granted defendants' motion and this appeal ensued .
We affirm. As noted in our prior decision, plaintiffs' election to proceed in an arbitral forum precluded litigation of any arbitral issues in a judicial forum. While it is true that plaintiffs' claims for compensatory damages are not subject to arbitration (see, Monroe v Providence Washington Ins. Co., 126 AD2d 929), defendants' alleged breach of contract, i.e., wrongfully denying benefits, is subject to arbitration and Gibeault's success in that forum is a predicate to continuing the instant litigation. On this point, while we recognize that the issue of whether the arbitration proceeding has been abandoned ordinarily is a question for the arbitrator (see, New York Tel. Co. v Speciner , 55 NY2d 1002, 1004), we hold that Gibeault's more than 10-year delay in seeking a new hearing constitutes abandonment as a matter of law, and any arbitral determination to the contrary would be arbitrary and capricious (see, Matter of Finkelstein [Harris], 17 AD2d 137, 138-139, lv denied 12 NY2d 646). Accordingly, Supreme Court properly dismissed plaintiffs' complaint.
Mercure, J.P., Mugglin, Rose and Lahtinen, JJ., concur.
Peters, J.
Appeal from an order of the Supreme Court (Demarest, J.), entered June 28, 1999 in St. Lawrence County, which granted defendant's motion for summary judgment dismissing the complaint.
Plaintiff John F. Gallup (hereinafter plaintiff) was in a motor vehicle accident on December 19, 1995. Although he did not initially experience pain, after that day stiffness in his shoulder and neck prompted a visit to the emergency room where he was diagnosed with muscle strain and given pain medication. In February and April 1996, he complained of neck pain and stiffness to his family doctor who recommended a course of physical therapy which was administered from April to May 1996. Commencing June 1996, he was treated by George Mina, an orthopedic surgeon. Starting in September 1997, he was reporting numbness, tingling and weakness in his hands. Mina ultimately opined that due to the aforementioned motor vehicle accident, plaintiff's preexisting asymptomatic arthritic changes (spurs on his cervical vertebrae) now impinged upon his cervical nerves . This caused inflammation, neck pain and restriction in range of motion as well as left shoulder and arm pain and numbness in the fingers of his left hand. Mina diagnosed permanent, chronic cervical syndrome with radiculopathy, concluding that the symptoms could worsen with time and result in a permanent limitation of the use of his neck and left outer fingers. Plaintiff claimed to also suffer from severe headaches , all of which disrupted his normal activities, yet such additional symptoms were not recorded in Mina 's records.
In April 1997, plaintiff and his wife, derivatively, commenced this action alleging, inter alia, that the injuries he sustained were "serious" within the meaning of Insurance Law § 5102 (d) and permanent. Together with the service of an answer in August 199 7, defendant interposed a demand for a bill of particulars seeking a statement of such injuries and a description of the permanent injuries that plaintiff would claim at the time of trial. Plaintiff timely responded with full detail to all numerically delineated queries except No. 7 which requested a description of his "permanent" injuries. Notably, in response to any question which plaintiff failed to find relevant, the number of the question was listed with a notation of "not applicable "; yet a response to question No. 7 was omitted in its entirety.
In June 1998, depositions of all parties were conducted. Defendant proffered a motion for summary judgment in April 1999, contending, inter alia, that plaintiffs should not be permitted to invoke the sections of Insurance Law § 5102 (d) pertaining to permanent injuries since no such injuries were detailed in the bill of particulars. Defendant also asserted that plaintiff's injuries failed to establish that he suffered a nonpermanent medically-determined injury that substantially curtailed his usual activities for at least 90 out of the 180 days following the accident (see, Insurance Law § 5102 [d ]). Supreme Court granted summary judgment by finding that plaintiff was not claiming any "permanent injury" and further that he failed to establish a prima facie showing of serious injury since he did not offer medical evidence indicating that he could not substantially perform all of his customary activities for 90 out of 180 days following the accident. Plaintiffs appeal and we reverse.
As the proponent of this motion, defendant sustained his burden of establishing, as a matter of law, that plaintiff did not suffer a "serious injury" within the meaning of Insurance Law § 5102 (d) (see, Anderson v Persell, 272 AD2d 733) by the offer of plaintiff's deposition testimony and medical records detailing the conclusion of the emergency room physician that plaintiff 's neck was supple and only slightly stiff. Further included were records from both plaintiff's family physician who found only mild tenderness and from Mina which noted only slight restrictions in motion . With records from physical therapy detailing a vacillating range of neck motion between normal to minimally restricted, and muscle spasms ranging from minimal to moderate, the burden shifted to plaintiffs to raise a triable issue based upon objective medical findings and diagnostic tests (see, Anderson v Persell, supra).
Contrary to Supreme Court's determination, we find that plaintiffs' proffer of their own affidavits as well as Mina's affidavit demonstrated that a specific serious injury had been identified and that the injury claimed was not merely a minor limitation (see, Gaddy v Eyler, 167 AD2d 67, 70-71, affd 79 NY2d 955). Mina's affidavit detailed that plaintiff had an onset of radiating neck pain caused by the accident which also exacerbated his preexisting arthritis. Arthritic spur impingement upon cervical vertebrae caused inflammation, neck, left shoulder and arm pain, numbness in his hands and restriction in his range of neck motion. A May 1999 physical examination of plaintiff by Mina revealed that plaintiff's neck flexion was reduced to 30 degrees from a normal flexion of 45 degrees, his neck extension was reduced to 20 degrees from a normal extension of 45 degrees, and that the lateral bending of his neck was 20 degrees from a normal bending of 30 degrees. Mina further opined that due to the longevity of the condition and his complaints , plaintiff suffered from a "serious injury" within the meaning of the Insurance Law, such injury being a permanent condition of chronic cervical syndrome with radiculopathy resulting in a permanent consequential limitation of use of his neck and his left small finger and left ring finger, all of which may worsen in time. Medical records proffered by plaintiffs indicate that the loss in the range of his neck motion had been consistent since August 1996, notwithstanding a September 1997 notation indicating some improvement with "only a slight possibility * * * that he might have a very mild residual permanent disability".
Because plaintiff failed to detail a response to question No. 7 posed in defendant's bill of particulars, Supreme Court did not consider the aforementioned records and affidavits pertaining to the "permanence" of plaintiff's injuries. Recognizing that the complaint specifically alleged permanence and that defendant did not move or otherwise request a response to such question (see, CPLR 3042 [c]) upon learning of the omission, we find the result to be harsh.
Based upon the proffer of competent evidence with objective indicia revealing more than "'a mild or minor decrease or limitation in range of motion or use'" (Tompkins v Burtnick, 236 AD2d 708, 709, quoting Podwirny v De Caprio, 194 AD2d 1057, 1057), in our view the 33% reduction in range of neck motion, deemed permanent by an orthopedist, qualifies as a & quot;serious injury" within the meaning of Insurance Law § 5102 (d), whether or not severely painful (cf., Sellitto v Casey, 268 AD2d 753). With such evidence creating a triable issue of fact as to "permanence" within the meaning of Insurance Law § 5102 (d), we find that the matter should be tried before a jury and Supreme Court's order granting defendants' motion for summary judgment dismissing the complaint is reversed.
Crew III, J.P., Mugglin, Rose and Lahtinen , JJ., concur.
Mercure, J.P.
Appeal from an order of the Supreme Court (Kramer, J.), entered October 28, 1999 in Schenectady County, which, inter alia, denied third-party defendant's motion for summary judgment dismissing the third-party complaint.
Plaintiff Amber Pahl sustained the injuries forming the basis for this action in a November 23, 1 995 automobile accident. Pahl was a passenger in a 1995 Pontiac sedan that had been rented the previous day from defendant Hertz Corporation by defendant Nancy Mallery. The vehicle was being driven at the time of the accident by defendant George V. Grenier III at the request of Mallery's son, defendant Todd Baldwin, who was also a passenger. The complaint in the main action alleges, among other things, that Mallery was authorized to allow others to operate the rental vehicle, that she authorized Baldwin to use, control and supervise the use of the vehicle, and that at the time of the accident, Grenier was operating the vehicle with the implied and/or express permission of Hertz, Mallery and Baldwin.
Third-party defendant, Nationwide Mutual Insurance Company, insured two vehicles owned by Mallery, a 1990 Geo Storm and a 1989 Toyota pickup truck. The Nationwide policy provided liability coverage for Mallery and, as relevant here, "any person or organization who is liable for the use of [her ] auto", which "must be used with [her] permission". The policy also covered other motor vehicles as follows:
1. a motor vehicle you do not own, while it is used in place of your auto for a short time. Your auto must be out of use because of: a) breakdown; b) repair; c) servicing ; or d) loss.
* * *
3. to a motor vehicle owned by a non-member of your household. This applies only when the vehicle is being used by you or a relative.
Hertz made demands, both before and after commencement of the main action, that Nationwide defend and indemnify Mallery. Nationwide denied coverage upon the grounds that the vehicle rented from Hertz did not fall within the policy's coverage for other motor vehicles, its liability coverage for other motor vehicles was in any event secondary to other collectible motor vehicle insurance and (asserted somewhat later) the vehicle was not being used with Mallery's permission at the time of the accident . Hertz therefore provided Mallery with a defense in the main action and then brought a third-party action against Nationwide seeking reimbursement of Mallery's defense costs and indemnification for any judgment rendered against it. Following Hertz's settlement of the main action for $4 million, Nationwide moved for summary judgment seeking dismissal of the third-party complaint and a declaration that the policy it issued to Mallery did not cover the subject accident. Hertz cross-moved for summary judgment . Supreme Court granted the cross motion to the extent of determining that Nationwide was required to provide Mallery with a defense in the main action and to indemnify Hertz to the extent of its policy coverage. Nationwide appeals.
Initially, we agree with Supreme Court's determination that Nationwide was required to provide Mallery with a defense in the main action. The duty to defend is a very broad one (see, Sea Crest Constr. Corp. v Centennial Ins. Co., 175 AD2d 453, 454), arising whenever the allegations contained in the pleadings, together with such other underlying facts as have been "'made known to the insurer create a "reasonable possibility that the insured may be held liable for some act or omission covered by the policy"'" (City of New York v Consolidated Edison Co. of N.Y ., 238 AD2d 119, 120, quoting Fitzpatrick v American Honda Motor Co., 78 NY2d 61, 70, quoting Meyers & Sons Corp. v Zurich Am. Ins. Group, 74 NY2d 298, 302; see, Frontier Insulation Contrs. v Merchants Mut. Ins. Co., 91 NY2d 169, 175; Gibbs v CNA Ins. Cos., 263 AD2d 836, 837, lv denied 94 NY2d 755; Cepeda v Varveris, 234 AD2d 497, 498 ).
As already noted, the complaint in the main action alleges that at the time of the accident, Grenier was operating the vehicle with the implied and/or express permission of Hertz, Mallery and Baldwin. Although the complaint contains no allegations bearing on the question of whether the rental car qualified as an "other motor vehicle" under the terms of the Nationwide policy -- not at all surprising since that issue has no relevance to any of the causes of action pleaded in the complaint -- Hertz supplied Nationwide with Mallery's written report wherein she stated that she had a truck (the 1989 Toyota pickup) that was being repaired and that the rental car "was intended to be a substitute for the truck while it was being repaired". Thus, at the time of its disclaimer , Nationwide was possessed of information which, if ultimately established to be true, would bring the occurrence within its coverage, thereby requiring that it provide Mallery with a defense. Notably, the fact that Nationwide was possessed of other evidence supportive of its position that the occurrence fell outside its coverage is irrelevant with regard to its duty to defend (see, e.g., Gibbs v CNA Ins. Cos., supra, at 837; Cepeda v Varveris, supra, at 498). Quite the contrary, courts should " ;refuse[] to permit insurers to look beyond the complaint's allegations to avoid their obligation to defend" (Fitzpatrick v American Honda Motor Co., supra, at 66).
We are of a different view, however, with regard to the issue of whether Nationwide has a duty to indemnify Hertz. We disagree with Supreme Court's conclusion that preclusive effect should be given to its prior determination in the main action that Grenier had permission to operate the vehicle within the purview of the rental agreement between Mallery and Hertz. As correctly contended by Nationwide, it had no full and fair opportunity to contest the prior determination and the requisite identity of issue is lacking (see, D'Arata v New York Cent. Mut. Fire Ins. Co., 76 NY2d 659, 664).
In our view, the evidence presented on the summary judgment motions leaves unresolved factual issues as to whether the rental car qualifies as an "other motor vehicle" under the provisions of the Nationwide policy or whether Grenier was driving with Mallery's express or implied permission at the time of the accident. Notably, the undisputed evidence shows that Mallery picked up the rental car on November 22, 1995, the day before Thanksgiving , because the Toyota was to be undergoing repair work -- installation of a new clutch -- on November 24, 1995 and she planned to let her daughter use her Geo at the same time, thereby raising a question as to which of Mallery's vehicles the rental car was intended to temporarily replace. Further, although the Toyota had a bad clutch, it appears not to have been totally inoperable, as evidenced by the fact that Mallery used it to drive to the airport to pick up the rental car on the day prior to the accident .
The parties' additional contentions have been considered and found to be unavailing .
Crew III, Mugglin, Rose and Lahtinen, JJ., concur.
ORDERED that the order is modified, on the law, with costs to third-party defendant, by reversing so much thereof as granted third-party plaintiff's cross motion for summary judgment on its claim for indemnification; cross motion denied; and, as so modified, affirmed.
VECCHIARELLI v. CONTINENTAL INS. CO.
Order unanimously modified on the law and as modified affirmed without costs in accordance with the following Memorandum: On December 5, 1992, plaintiff's residence was severely damaged by fire, and defendant insurer disclaimed coverage on October 13, 1993. Plaintiff's cause of action for breach of contract is the only cause of action that survived a prior appeal (Vecchiarelli v Continental Ins. Co., 216 AD2d 909, 910). Plaintiff has now moved for partial summary judgment dismissing affirmative defenses asserted in defendant's answer on the ground that defendant unreasonably and inexcusably delayed in disclaiming coverage. Defendant cross-moved for partial summary judgment dismissing that part of the complaint alleging that defendant's disclaimer was inadequate and/or untimely.
Supreme Court properly denied plaintiff's motion but erred in granting defendant's cross motion. We conclude that there is an issue of fact whether defendant's delay in disclaiming coverage was reasonable. The timeliness of a disclaimer is measured from the date on which the insurer possesses all the facts necessary to invoke an exclusion (see, Utica Fire Ins. Co. of Oneida County v Spagnolo, 221 AD2d 921 , 922; see also, 2540 Assocs. v Assicurazioni Generali, 271 AD2d 282). Plaintiff contends that defendant possessed the necessary facts before July 1993 and thus that the delay of over two months in disclaiming coverage was unreasonable as a matter of law. Defendant contends that it was investigating the applicability of various exclusions, including fraud, arson and false statements made by plaintiff . Defendant also contends that plaintiff was not cooperating with its investigation. In the absence of an explanation for the delay, a delay of over two months is unreasonable as a matter of law (see , Hartford Ins. Co. v County of Nassau, 46 NY2d 1028, 1029, rearg denied 47 NY2d 951; see also, Nuzzo v Griffin Technology, 222 AD2d 184, 188, lv dismissed 89 NY2d 981, lv denied 91 NY2d 802). An insurer's explanation may excuse the delay, however, and the reasonableness of the explanation is generally an issue of fact (see, Hartford Ins. Co. v County of Nassau, supra, at 1030; see also, Wilczak v Ruda & Capozzi , 203 AD2d 944, 945). Here, defendant has raised an issue of fact whether the delay resulted from "a prompt, diligent and good faith investigation with respect to coverage", rendering summary judgment inappropriate (see, Wilczak v Ruda & Capozzi, supra, at 945). Defendant submitted evidence that it was conducting depositions until October 7, 1993, when it finally received requested documentary evidence from plaintiff's public adjusters. Furthermore, a final recommendation from defendant 's Senior Property Adjuster was not made until September 30, 1993.
Assuming, arguendo, that the delay in disclaiming was unreasonable, we conclude that plaintiff also had the burden on its motion of showing that it was prejudiced by the delay and that defendant had the burden on its cross motion of showing that plaintiff was not prejudiced. Where, as here, the underlying claim does not arise out of an accident involving bodily injury or death, the notice of disclaimer provisions set forth in Insurance Law § 3420 (d) are inapplicable and, "[u]nder the common-law rule, delay in giving notice of disclaimer of coverage, even if unreasonable, will not estop the insurer to disclaim unless the insured has suffered prejudice from the delay" (Fairmont Funding v Utica Mut. Ins. Co., 264 AD2d 581, 581-582; see, Incorporated Vil. of Pleasantville v Calvert Ins. Co., 204 AD2d 689, 690). Neither party met its burden (see, Kamyr, Inc. v St. Paul Surplus Lines Ins. Co., 152 AD2d 62, 67). We therefore modify the order by denying defendant's cross motion. (Appeal from Order of Supreme Court, Onondaga County, Nicholson, J. - Summary Judgment.) PRESENT: PINE, J. P., WISNER, BALIO AND LAWTON, JJ. (Filed Nov. 13, 2000.)
MATTER OF THE ARBITRATION BETWEEN NEW YORK CENTRAL MUTUAL FIRE INS. CO. AND BENSON
Order unanimously affirmed with costs. Memorandum : Contrary to petitioner's contention, Supreme Court's determination that respondent notified petitioner of her supplemental uninsured motorist (SUM) claim "as soon as practicable" is supported by the record. Respondent's medical condition was diagnosed at the time of the accident as muscle spasms of the back. That diagnosis continued for almost a year, at which time respondent's physician noted that respondent may not be able to return to her employment as a nurse's aide. When it became apparent that the injury was more significant than originally determined, respondent's attorney promptly contacted the tortfeasor's insurer, negotiated a settlement for the bodily injury coverage limits of that policy and immediately notified petitioner that respondent was making a claim for SUM benefits. We conclude that, under the circumstances, respondent gave "notice with reasonable promptness after [she] knew or should reasonably have known that the tortfeasor was underinsured" (Matter of Metropolitan Prop. & Cas. Ins. Co. v Mancuso, 93 NY2d 487, 495; see also, Matter of Nationwide Ins. Co. [Brown-Young], 265 AD2d 918; cf., Matter of Travelers Ins. Co. [DeLosh], 249 AD2d 924, 925). (Appeal from Order of Supreme Court, Oneida County, Shaheen, J. - Arbitration.) PRESENT : PIGOTT, JR., P. J., GREEN, PINE, BALIO AND LAWTON, JJ. (Filed Nov. 13, 2000.)
MC HUGH v. THE GUARDIAN LIFE INS. CO. OF AMERICA
Judgment unanimously affirmed without costs. Memorandum: Plaintiff commenced this action to recover the proceeds of a disability insurance policy issued by The Guardian Life Insurance Company of America (defendant), and defendant counterclaimed for judgment declaring the policy to be rescinded. Defendant disclaimed coverage on the ground that plaintiff made material misrepresentations concerning the duties of his job and his medical history in his application for insurance. Plaintiff alleged that he submitted a signed application for insurance, dated August 26, 1994, to defendant. The application attached to the policy, however, was dated April 3, 1995. Plaintiff admitted that the application attached to the policy contained the same information concerning his job duties and medical history as the prior application, but alleged that his signature on that application was forged by a representative of defendant.
Supreme Court properly granted defendant's motion for summary judgment dismissing the amended complaint and declaring the disability policy to be rescinded on the ground of material misrepresentations . Because plaintiff alleges that he did not sign the application attached to the policy, the application fails to comply with Insurance Law § 3205 (c), and no valid contract of insurance ever came into existence (see, Choczner v William Penn Life Ins. Co. of N. Y., 212 AD2d 750, 752, lv denied 86 NY2d 709). Even if we were to agree with plaintiff that his August 1994 application satisfies the requirements of Insurance Law § 3205 (c), we would nevertheless conclude that defendant could properly disclaim coverage based upon the material misrepresentations contained in that application concerning plaintiff's job duties and medical history. The record establishes that defendant satisfied its burden of establishing the materiality of the misrepresentations in the application for disability insurance sufficiently to warrant the court as a matter of law in directing judgment in its favor (see, Insurance Law § 3105; cf., Cutrone v American Gen. Life Ins. Co. of N. Y., 199 AD2d 1032, 1033). (Appeal from Judgment of Supreme Court, Wyoming County , Rath, Jr., J. - Declaratory Judgment.) PRESENT: PIGOTT, JR., P. J., PINE, HAYES, WISNER AND KEHOE , JJ. (Filed Nov. 13, 2000.)
UNITED STATES FIDELITY AND GUARANTY COMPANY v. THE NEW YORK, SUSQUEHANNA AND WESTERN RAILWAY CORP.
Order insofar as appealed from unanimously reversed on the law without costs, motion granted and matter remitted to Supreme Court for further proceedings in accordance with the following Memorandum: Plaintiff commenced this declaratory judgment action seeking reimbursement from defendant for amounts it expended in the defense and indemnification of defendant in the underlying personal injury action. Supreme Court erred in denying defendant's motion seeking the attorney's fees and costs incurred in defending this action. By commencing this action, plaintiff has "cast [defendant ] in a defensive posture by the legal steps [plaintiff has taken] in an effort to free itself from its policy obligations" (Mighty Midgets v Centennial Ins. Co., 47 NY2d 12, 21), and thus defendant is entitled to recover from plaintiff the attorney's fees and costs incurred in defending this action (see, Allegany Co-op Ins. Co. v Williams, 216 AD2d 894, 895, lv denied 87 NY2d 806; see also, Reliance Ins. Co. v National Union Fire Ins. Co. of Pittsburgh, Pa., 262 AD2d 64, 66; Mohawk Minden Ins. Co. v Ferry, 251 AD2d 846, 849; Sphere Drake Ins. Co. v Block 7206 Corp., 237 AD2d 427, 428; U.S. Liab. Ins. Co. v Staten Is. Hosp., 162 AD2d 445, 447). The fact that plaintiff initially paid the cost of defendant's defense in the underlying action is of no moment. "[A]n insurer's responsibility to defend reaches the defense of any actions arising out of the occurrence " (Mighty Midgets v Centennial Ins. Co., supra, at 21 [emphasis in original]), including a declaratory judgment action such as this commenced by the insurer (see, Chase Manhattan Bank v Each Individual Underwriter Bound to Lloyd's Policy No. 790/004A89005, 258 AD2d 1, 5). We therefore reverse the order insofar as appealed from, grant defendant's motion and remit the matter to Supreme Court to determine the amount of the attorney 's fees and costs to which defendant is entitled (see, U.S. Liab. Ins. Co. v Staten Is. Hosp., supra, at 447). (Appeal from Order of Supreme Court, Onondaga County, Stone, J. - Counsel Fees.) PRESENT: PIGOTT, JR., P. J., GREEN , HURLBUTT, SCUDDER AND BALIO, JJ. (Filed Nov. 13, 2000.)
Judgment and order unanimously affirmed without costs. Memorandum: Supreme Court properly granted defendants ' motion for judgment at the close of plaintiff's proof on the ground that plaintiff failed to establish a prima facie case of serious injury within the meaning of Insurance Law § 5102 (d). With respect to his allegation that he sustained a significant limitation of use of a body function or system, plaintiff failed to support his subjective claims of pain and limitation of motion with the requisite objective medical findings (see, Taber v Skulicz, 265 AD2d 902; Stowell v Safee, 251 AD2d 1026).
Plaintiff also failed to prove that he sustained a medically determined injury or impairment that prevented him from performing substantially all of the material acts constituting his usual and customary daily activities for not less than 90 days during the 180 days following the accident (see , Insurance Law § 5102 [d]). Although plaintiff's treating physician testified that plaintiff was "totally disabled" with respect to his employability, plaintiff testified that he had not been employed at the time of the accident. Furthermore, the testimony of plaintiff established that the activities that he was prevented from performing were not "daily activities" within the meaning of the statute . (Appeal from Judgment and Order of Supreme Court, Erie County, Burns, J. - Negligence.) PRESENT: GREEN, J. P., WISNER, HURLBUTT, SCUDDER AND KEHOE, JJ. (Filed Nov. 13, 2000.)
