Coverage Pointers - Volume III, No. 18
In February, we reported that challenges to Insurance Department revisions to Regulation 68, which shorten the time frame for claimants to report a claim and the time to submit proofs of claim for medical treatment, were found to be without merit by Supreme Court Justice William A. Wetzel. (See Volume III, No. 15). Plaintiffs appealed that decision, and obtained a temporary stay pending the appeal. The New York State Insurance Department announces that yesterday the First Department lifted the stay and that, as a result, Regulation 68 becomes effective immediately.
04/04/02: SQUIRES v. ROBERT MARINI BUILDERS INC.
New York State Supreme Court, Appellate Division, Third Department
42-Day Delay in Disclaiming Coverage Deemed Untimely
Plaintiff, a carpenter employed by a subcontractor, commenced this action against the general contractor to recover for injuries sustained when the extension ladder on which he was standing collapsed, causing him to fall approximately 20 feet to the ground. The subcontractor’s contract with the general contractor included the subcontractor’s agreement to indemnify the general for losses or injuries resulting from the acts or omissions of the subcontractor’s employees, and required the subcontractor to maintain a $1,000,000 contractual liability insurance policy naming the general as an additional insured. The general forwarded the complaint to the subcontractor’s insurer, Utica First Insurance Company, which disclaimed coverage first as to the general and later as to the subcontractor based on policy provisions excluding injuries sustained by an insured’s employees and liability assumed by an insured under a contract. The general then commenced a third-party action against the subcontractor for indemnification and breach of the contract to obtain insurance, and against Utica First seeking a declaration requiring it to provide defense and indemnification for the claims. Upon review of various motions for summary judgment, the court held that Supreme Court’s denial of the general contractor’s motion for a conditional judgment of indemnification against the subcontractor was proper – summary judgment was premature with outstanding issues of fact regarding the negligence of the indemnitee. The court also held that the insurer could not rely on two policy exclusions as a basis for denying coverage because its disclaimers were untimely. The insurer was informed of the claim when it received a letter from the general contractor’s insurer accompanied by a copy of the complaint. The insurer’s 42-day delay in disclaiming coverage was deemed untimely, and contentions that delay was caused by the insurer’s investigation of the claim were unavailing -- the information required to decide the coverage issue was evident from the complaint and the subcontract. The court also rejected the insurer’s argument that the claim fell outside of the scope of the policy’s coverage and, thus, that timely disclaimer was not required. There is a well-recognized distinction “between the denial of a claim based upon an exclusion from coverage as opposed to noncoverage . . . .” Timely disclaimer is required where the policy covers the claim but for the applicability of an exclusion.
04/01/02: RINGEL v. BLUE RIDGE INS. CO.
New York State Supreme Court, Appellate Division, Second Department
Injured Plaintiff’s Notice Untimely for Failure to Exercise Due Diligence in Ascertaining Identity of Insured’s Carrier
Plaintiff, who was injured when he tripped at defendant’s home, commenced an action against the homeowner alleging she was negligent in the ownership, maintenance, and control of the premises. The homeowner was covered by a homeowner’s liability insurance policy issued by Blue Ridge Insurance Company, pursuant to which the homeowner was required to give Blue Ridge written notice of any potential claims “as soon as [was] practical.” The homeowner’s insurance broker forwarded notice of the action to Blue Ridge’s agent approximately five months after the accident. As a result, Blue Ridge disclaimed coverage on the ground that the homeowner failed to provide it with timely notice of the accident. The homeowner did not answer or appear in the action and an order was issued directing judgment against him on liability. Plaintiff commenced this action against Blue Ridge seeking a declaration that Blue Ridge was required to defend the homeowner in the underlying action and to afford insurance coverage for the accident. Blue Ridge moved for summary judgment denying it had any such obligations and obtained a declaration to that effect. On appeal, plaintiff argued that he could not be bound by the homeowner’s failure to give timely notice because he had independently notified Blue Ridge when they stipulated to extend Blue Ridge’s time to answer the underlying action. The court held that such notice was untimely as a matter of law because the plaintiff did not exercise due diligence in ascertaining the identity of the homeowner’s insurance company or in notifying Blue Ridge of the accident.
04/01/02: TORAH v. GRAPHIC ARTS MUTUAL INS. CO.
New York State Supreme Court, Appellate Division, Second Department
Summary Judgment Denied Insurer and Granted Insured for Insurer’s Failure to Submit Admissible Evidence of Excluded Cause of Loss
Plaintiff sought coverage for water damage to its premises after a heavy rainstorm. The insurer disclaimed based on an exclusion in the policy for damage due to rain or “[f]aulty, inadequate or defective design.” In this action for coverage, both parties moved for summary judgment. Plaintiff’s expert submitted an affidavit opining that the water that caused the damage entered the premises as a result of a sewer backup, which then caused a backup in the drains on the roof of the premises, causing water to accumulate on the roof and “[run] down the stairs onto the floors below.” Based on this evidence, the insurer’s motion was denied, and plaintiff’s motion for summary judgment on liability was granted. The insurer failed to meet its burden of proving that the loss was within the scope of the policy exclusion because it failed to submit admissible evidence in support of its motion that the “efficient or dominant cause of loss” was rain or “faulty, inadequate or defective design” and not the sewer and drain backup. Conversely, plaintiff’s evidence established its entitlement to judgment as a matter of law on the issue of liability and the defendant failed to meet its burden in opposing plaintiff’s motion by producing evidentiary proof in admissible form establishing the existence of questions of fact on the issue.
New York State Supreme Court, Appellate Division, First Department
Certificate of Insurance Deemed Insufficient to Establish Existence of Coverage; Additional Insured Endorsement Not Triggered for Work Performed on Named Insured’s Behalf
Plaintiffs sued premises owner to recover for damages sustained in a fire. The owner then commenced third-party actions against its insurers and a broker seeking declarations that they were obligated to defend and indemnify it in the main actions. The court held that two of the insurers were entitled to summary judgment in light of their submission of evidence demonstrating that the owner was not named as an additional insured on the general and excess liability insurance policies issued to the owner’s general contractor. A certificate of insurance issued to the owner by the general contractor’s insurance broker was insufficient to raise a factual issue as to the existence of coverage because the policy itself made no provision for coverage. Summary judgment was also properly granted to the broker for negligent misrepresentation because it had no contractual relationship with the owner and, therefore, owed no duty to the owner that could serve as a predicate for the claim. The court also concluded that, although the owner was named as an additional insured in a policy issued by Allcity Insurance Company, the coverage was limited to liability arising from work performed by the named insured on the owner’s behalf. Here, it was plain that the renovation work from which the owner’s liability was alleged to have arisen was not performed on the owner’s behalf, but rather on behalf of the named insured.
New York State Supreme Court, Appellate Division, First Department
Policy Limiting UIM Coverage to “Owned” Vehicles Does not Afford Coverage for Vehicles Leased by the Named Insured
Gladding was injured while riding as a passenger in a vehicle owned by Wigder Corporation and leased by Kings Supermarket, Inc. when struck from behind by another vehicle. Gladding demanded arbitration of her claim for underinsured motorists coverage under a commercial auto policy issued to Kings by Zurich, and Zurich commenced this proceeding to stay the arbitration. The court held that a stay should have been granted. The policy’s declarations section unambiguously indicated that underinsured motorist coverage was afforded only for Vehicles “owned” by the named insured. Since Kings did not own the vehicle, the policy did not afford Gladding underinsured motorist coverage for her injuries.
Visit the HOT CASES section of the Federation of Defense and Corporate Counsel website for cases covering a broad range of legal issues from other jurisdictions: www.thefederation.org.
04/05/02: TENNANT v. SMALLWOOD,
Wyoming Supreme Court
Availability of Uninsured Motorist (UM) Coverage
The court reversed a decision by the Circuit Court of Wetzel County that granted summary judgment in favor of the plaintiff below and permitted the plaintiff to collect UM benefits despite the fact that she had previously recovered proceeds from a policy insuring the defendant below. Holding that where a prior recovery from a defendant’s motor vehicle insurance policy satisfies the financial responsibility laws of this State, the defendant is not an uninsured motorist. Accordingly, the UM provisions of the plaintiff's policy are not applicable.
04/04/02: LAUER v. AMERICAN FAMILY LIFE INS. CO.
Illinois Supreme Court
Insurance Company Can Make Two-Year Contestability Period Commence on Issue Date Rather than Date of Conditional Receipt
At issue was whether an insurance company can validly make the two-year contestability period in a life insurance policy begin on the policy’s issue date rather than on the date it issues a conditional receipt to the insured. Section 224(c) of the Insurance Code authorizes an insurer to provide that the contestability period begins on the policy’s issue date. Defendant’s incontestability clause was thus valid and enforceable, and the policy was still contestable when Lauer died. Accordingly, as there was no dispute that policyholder fraudulently failed to disclose his lung cancer, defendant was entitled to rescind the policy.
03/29/02: US FIRE INS. CO. v. ZURICH INS. COMPANY
Illinois Appellate Court
Under Illinois Law, Primary Carrier Does Not Owe Direct Duty to Excess Carrier
Illinois does not impose a duty by the primary insurer to the excess carrier, despite the “predictions” of the various courts and authority outside Illinois’ jurisdiction. Where insured consented to settlement, excess carrier has no rights against primary carrier for terms of settlement.
AND IN DEFENSE
04/05/02: WAGMAN v. BRADSHAW
New York State Supreme Court, Appellate Division, Second Department
Chiropractor Not Permitted to Testify About Inadmissible Report Interpreting MRI Films Not in Evidence
The court considered whether a plaintiff’s chiropractor was properly permitted to testify as to the contents of an inadmissible written report interpreting MRI films, which was prepared by another healthcare professional who did not testify, when the MRI films were not in evidence, and without proof that, as out-of-court material, the written MRI report was reliable. The court held that it was reversible error to permit plaintiff's expert to testify as to the interpretation of MRI films, as set forth in a written report of a non-testifying healthcare professional, for the truth of the matters asserted in the report. It was also reversible error to permit the plaintiff’s expert to state his opinion that there were herniations because it was based at least in part on the written MRI report, where the reliability of the written MRI report was not established.
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In an action for a judgment
declaring that the defendant Blue Ridge Insurance Company has an obligation to
defend and indemnify the defendant Pessie Orlander in an underlying action
entitled Ringel v Orlander, pending in the Supreme Court, Kings County, under
Index No. 7209/97, the plaintiffs appeal from so much of an order and judgment
(one paper) of the Supreme Court, Kings County (Dabiri, J.), dated October 30,
2000, as granted the motion of the defendant Blue Ridge Insurance Company for
summary judgment and declared that Blue Ridge Insurance Company had no such
ORDERED that the order and judgment is affirmed insofar as appealed from, with costs.
In December 1996 the injured
plaintiff tripped at the home of the defendant Pessie Orlander. In March 1997,
the injured plaintiff and his wife commenced an action against Orlander
alleging, inter alia, that she was negligent in the ownership, maintenance, and
control of the premises.
Orlander was covered by a
homeowner's liability insurance policy issued by the defendant Blue Ridge
Insurance Company (hereinafter Blue Ridge). Pursuant to the policy, Orlander was
required to give Blue Ridge written notice of any potential claims "as soon as
[was] practical." Orlander's insurance broker forwarded notice of the action to
Blue Ridge's agent on May 26, 1997, and the agent proceeded to forward a copy to
Blue Ridge two days later. Thus approximately five months passed from the date
of the accident until notification of the pending action was sent to Blue Ridge.
On June 19, 1997, Blue Ridge
requested and was granted a 30-day extension of time to answer. However, after
learning that Orlander was aware of the accident on the date it occurred or on
the following day, by letter dated June 26, 1997, Blue Ridge disclaimed coverage
on the ground that Orlander, as the insured, failed to provide it with timely
notice of the accident pursuant to the terms of the policy. Thereafter, Orlander
did not answer or appear to defend against the injured plaintiff's allegations,
and in December 1997, an order was issued directing judgment against Orlander on
the issue of liability.
The plaintiffs subsequently
commenced the instant action against Blue Ridge in March 1998, seeking a
declaration that Blue Ridge was required to defend Orlander in the underlying
personal injury action and to afford insurance coverage for the accident.
However, Blue Ridge moved for summary judgment denying it had any such
obligations and obtained a declaration to that effect. This appeal ensued.
Contrary to the plaintiffs'
contention that they cannot be bound by Orlander's failure to give timely notice
because they had independently notified Blue Ridge when they stipulated to
extend Blue Ridge's time to answer, the Supreme Court correctly determined that
the plaintiffs' notice was untimely as a matter of law because the plaintiffs
did not exercise due diligence in ascertaining the identity of Orlander's
insurance company or in notifying Blue Ridge of the accident (see Eveready Ins.
Co. v Chavis, 150 A.D.2d 332, 540 N.Y.S.2d 860; Serravillo v Sterling Ins. Co.,
261 A.D.2d 384, 689 N.Y.S.2d 521). The injured plaintiff's affidavit submitted
in opposition to Blue Ridge's motion for summary judgment was insufficient to
raise an issue of fact in this regard because it was inconsistent with his
previous deposition testimony (see O'Connor v Telephone Dynamics Corp., 269
A.D.2d 434, 703 N.Y.S.2d 229).
Insurance Law @ 3420(a)(3) gives
the injured party an independent right to give notice of an accident and to
satisfy the notice requirement of a policy (see Eveready Ins. Co. v Chavis,
supra) and, where the notice is provided directly by the injured party, the
disclaimer must address with specificity the grounds for disclaiming coverage
applicable to both the injured party as well as the insured (see Massachusetts
Bay Ins. Co. v Flood, 128 A.D.2d 683, 513 N.Y.S.2d 182). However, where the
insured is the first to notify the carrier, even if that notice is untimely, any
subsequent information provided by the injured party is superfluous for notice
purposes and need not be addressed in the notice of disclaimer issued by the
insurer (see Massachusetts Bay Ins. Co. v Flood, supra).
Moreover, contrary to the
plaintiffs' contentions, the stipulation merely extended the time to answer and
did not provide that Blue Ridge would answer or afford coverage. Furthermore,
the stipulation was not binding on the parties (see CPLR 2104; Klein v Mount
Sinai Hospital, 61 N.Y.2d 865, 474 N.Y.S.2d 462, 462 N.E.2d 1180).
The plaintiffs' remaining
contentions are without merit.
SMITH, J.P., GOLDSTEIN, McGINITY and MILLER, JJ., concur.
Orders, Supreme Court, Bronx County
(Stanley Green, J.), entered on or about February 16, 2001 and April 2, 2001,
and judgments (10 papers), same court and Justice, entered, respectively, in New
York County on May 9, 2001 (action number 1), Bronx County on May 31, 2001
(action number 2), Bronx County on May 30, 2001 (action number 3), Bronx County
on May 31, 2001 (action number 4), Bronx County on May 30, 2001 (action number
5), New York County on May 9, 2001 (action number 6), Bronx County on March 26,
2001 (action number 7), New York County on May 9, 2001 (action number 9), New
York County on May 9, 2001 (action number 12), and New York County on May 9,
2001 (action number 14), which, inter alia, granted the motions of third-party
defendants Allcity Insurance Company, Insurance Corporation of New York f/k/a
Reinsurance Corporation of New York (Inscorp), National Casualty Corporation of
New York (National), and RBL
Associates, Inc. (RBL) for summary judgment, and dismissed the second and third
third-party complaints against them in the above-captioned actions numbered 1,
2, 3, 4, 5, 6, 7, 9, 12 and 14, unanimously modified, on the law, to declare in
third-party defendant insurers' favor that they are not obligated to defend or
indemnify defendant third-party plaintiff United House of Prayer (UHP) in main
actions numbered 1, 2, 3, 4, 5, 6, 7, 9, 12 and 14 arising out of the December
8, 1995 incident, and otherwise affirmed, without costs.
Plaintiffs in the above actions sue to
recover for harm sustained by them and their
decedents in a fire which occurred on December
8, 1995 on premises owned by defendant UHP. UHP has, in turn, commenced
third-party actions against third-party defendant insurers and third-party
defendant broker RBL, seeking, inter alia, declarations that third-party
defendant insurers are obligated to defend and indemnify UHP in the main
Third-party defendant insurers Inscorp and
National were entitled to summary judgment dismissing the third-party complaints
as against them in light of their submission of unrefuted evidence demonstrating
that UHP was not named as an additional insured on the general and excess
liability insurance policies issued by them, respectively, to UHP's general
contractor, L.M.A. International, Inc. (LMA). While UHP was presented with a
certificate of insurance by LMA's broker, RBL Associates, Inc., a certificate of
insurance, by itself, is insufficient to raise a factual issue as to the
existence of coverage (see, Am. Motorist Ins. Co. v Superior Acoustics Inc., 277
A.D.2d 97, 716 N.Y.S.2d 389; St. George v W.J. Barney Corp., 270 A.D.2d 171, 706
N.Y.S.2d 24), particularly where, as here, the policy itself makes no provision
for coverage (see, Buccini v 1568 Broadway Assocs., 250 A.D.2d 466; Am. Ref-Fuel
Co. of Hempstead v Resource Recycling, Inc., 248 A.D.2d 420, 423, 671 N.Y.S.2d
Summary judgment was also properly granted
to the broker, RBL, dismissing UHP's claim against it for negligent
misrepresentation in the third third-party actions, since RBL, having had no
contractual relationship with UHP, and not having otherwise been in privity with
it, was under no duty to UHP that might serve as a predicate for UHP's claim
(see, St. George v W.J. Barney Corp., 270 A.D.2d 171, 172, 706 N.Y.S.2d 24; Am.
Ref-Fuel Co. of Hempstead, 248 AD2d, supra, at 424).
Finally, the motion court properly held
that although UHP was named as an additional insured in the liability policy
issued by third-party defendant Allcity Insurance Company, the additional
insured endorsement in the Allcity policy clearly limited the coverage afforded
UHP to liability arising from work performed by the named insured on UHP's
behalf. Therefore, the court correctly concluded that UHP was not covered under
the Allcity policy for the liability alleged against it in the main actions; it
is plain as a matter of law that the renovation work from which UHP's liability
is alleged to have arisen was not performed on UHP's behalf, but rather on
behalf of the named insured (cf., Consolidated Edison Co. of New York v United
States Fid. and Guar. Co., 263 A.D.2d 380, 382, 693 N.Y.S.2d 31; County of
Orange v Hartford Acc. & Indem. Corp., 226 A.D.2d 578, 579, 641 N.Y.S.2d 118).
We modify only to declare in third-party defendant insurers' favor that they are
not obligated to defend or indemnify UHP in the main actions (see, Lanza v
Wagner, 11 N.Y.2d 317, 334, 229 N.Y.S.2d 380, 183 N.E.2d 670).
We have considered appellant's remaining
arguments and find them unavailing.
Judgment (denominated an order), Supreme Court, New York
County (Carol Arber, J.), entered May 2, 2001, which, in a proceeding pursuant
to CPLR article 75, denied the petition of Zurich Insurance Company (Zurich)
insofar as it seeks a permanent stay of an arbitration commenced by respondent
Miranda Gladding against Zurich, denied in part and granted in part Zurich's
petition insofar as it seeks certain alternative relief, and dismissed the
proceeding, unanimously reversed, on the law, without costs, the petition
granted insofar as it seeks to permanently stay the arbitration, and the
alternative relief sought by the petition denied as academic.
Respondent Gladding allegedly was injured when the vehicle
in which she was a passenger, which was owned by nonparty Wigder Corporation and
leased by nonparty Kings Supermarket, Inc. (Kings), was struck from behind by
another vehicle. Kings was the named insured under a Commercial Auto Insurance
Policy issued by petitioner Zurich (the Policy). Gladding demanded arbitration
of her claim against Zurich for benefits under the underinsured motorists
coverage afforded by the Policy, and Zurich commenced this proceeding seeking
principally to stay the arbitration. Supreme Court denied the petition insofar
as it sought a stay.
Supreme Court erred in declining to stay the arbitration.
The Policy's declarations section unambiguously indicates, by reference to the
annexed Business Auto Coverage Form, that underinsured motorist coverage is
afforded only for Vehicles "owned" by the named insured. Since the vehicle in
which Gladding was injured was not owned by Kings, the named insured, the Policy
does not afford Gladding underinsured motorist coverage for injuries sustained
in the subject incident. "Where, as is the case here, the provisions of an
insurance policy are clear, the contract must be enforced as written"
(Charnowitz v GEICO, 177 A.D.2d 320, 321, 575 N.Y.S.2d 875, citing Adorable Coat
Co. v Connecticut Indem. Co., 157 A.D.2d 366, 369, 556 N.Y.S.2d 37). Gladding's
reliance on the uninsured and underinsured motorists coverage endorsement to the
Policy is unavailing, as that endorsement plainly states that it modifies
coverage provided under the Business Auto Coverage Form only for a vehicle that
is "covered" under the insurance afforded by that form, which, as previously
stated, the vehicle at issue was not.
The foregoing renders it unnecessary for us to reach Zurich's argument challenging Supreme Court's denial of part of the alternative relief sought by the petition.
In an action to recover damages pursuant to a homeowner's insurance policy, the defendant appeals, as limited by its brief, from so much of an order of the Supreme Court, Kings County (Barasch, J.), dated November 9, 2000, as denied its motion for summary judgment dismissing the complaint.
ORDERED that, upon searching the record, the order is modified by deleting the provision thereof denying the plaintiff's cross motion for summary judgment on the issue of liability, and substituting therefor a provision granting that cross motion; as so modified, the order is affirmed insofar as appealed from, with costs to the plaintiff.
The plaintiff sought coverage under a policy issued by the defendant for water damage to its premises after a heavy rainstorm. The defendant issued a disclaimer letter based on policy provisions which excluded coverage for damage due to or resulting from, among other things, rain or "[f]aulty, inadequate or defective design." However, the plaintiff's expert submitted an affidavit opining that the water which caused the damage entered the premises as a result of a sewer backup, which then caused a backup in the drains on the roof of the premises, causing water to accumulate on the roof and "[run] down the stairs onto the floors below." The defendant moved for summary judgment dismissing the complaint, and the plaintiff cross-moved for summary judgment on the issue of liability. Both the motion and cross motion were denied.
Contrary to its contention, the defendant failed to meet its burden of proving that the loss was within the scope of the policy exclusions it sought to impose (see Facet Indus. v Wright, 62 NY2d 769, 771; Novick v United Servs. Auto Assoc., 225 AD2d 676). The defendant submitted no admissible evidence that the "efficient or dominant cause of loss" was rain or "faulty, inadequate or defective design" and not the sewer and drain backup (Album Realty Corp. v American Home Assurance Co., 80 NY2d 1008, 1010). Therefore, the Supreme Court properly denied the defendant's motion for summary judgment dismissing the complaint.
On review of the denial of the defendant's motion for summary judgment, this court is empowered to search the record and may, if warranted, grant summary judgment to the plaintiff (see Merritt Hill Vineyards v Windy Hgts. Vineyard, 61 NY2d 106, 110; Ins. Co. of Evanston v Mid-Hudson Co-Operative Ins. Co., 271 AD2d 651, 652). The plaintiff established its entitlement to judgment as a matter of law on the issue of liability (see CPLR 3212[b]; Zuckerman v City of New York, 49 NY2d 557, 562). The defendant failed to meet its burden in opposing the cross motion by producing evidentiary proof in admissible form establishing the existence of questions of fact on the issue (see Zuckerman v City of New York, supra, at 562). Accordingly, upon searching the record, the plaintiff is granted summary judgment on the issue of liability.
FLORIO, J.P., S. MILLER, McGINITY and ADAMS, JJ., concur.
Appeal from an order of the Supreme Court (Teresi, J.), entered July 31, 2001 in Albany County, which, inter alia, granted plaintiff's motion for partial summary judgment on the issue of liability under Labor Law @ 240 (1).
Plaintiff, a carpenter for subcontractor and third-party defendant Thomas Davin, commenced this action against defendant, the general contractor, to recover for injuries sustained when the extension ladder on which plaintiff was standing collapsed, causing him to fall approximately 20 feet to the ground. Davin's contract with defendant included his agreement to indemnify defendant for losses or injuries resulting from the acts or omissions of his employees, and required him to maintain a $ 1,000,000 contractual liability insurance policy naming defendant as an additional insured. In his complaint against defendant, plaintiff alleged negligence and liability under Labor Law @@ 200, 240, 241 and 241-a. Defendant forwarded the complaint to Davin's insurer, third-party defendant Utica First Insurance Company, which disclaimed coverage first as to defendant and later as to Davin based on policy provisions excluding injuries sustained by an insured's employees and liability assumed by an insured under a contract. Defendant then commenced a third-party action against Davin and Utica First asserting claims against Davin for indemnification and breach of the contract to obtain insurance, and seeking a declaration requiring Utica First to provide coverage and a defense of plaintiff's claims. Upon the parties' various motions, Supreme Court granted partial summary judgment to plaintiff on his Labor Law @ 240 (1) claim, denied defendant's cross motion for indemnification, granted summary judgment to Utica First declaring that Davin's policy excluded plaintiff's claims, and denied Davin's cross motion for dismissal of defendant's third- party claim. Defendant appeals.
As for plaintiff's Labor Law @ 240 (1) claim, we have repeatedly held that the question of whether an elevation-related safety device provides the statutorily mandated protection is resolved as a matter of law "where the device collapses, slips or otherwise fails to perform its function of supporting the workers and their materials" (Beesimer v Albany Ave./Rte. 9 Realty, 216 A.D.2d 853, 854; see, Grogan v Norlite Corp., 282 A.D.2d 781, 782, 723 N.Y.S.2d 529; Spenard v Gregware Gen. Contr., 248 A.D.2d 868, 869, 669 N.Y.S.2d 772). Here, plaintiff supported his motion for partial summary judgment with his own testimony and that of his co-workers that the ladder was unsecured and collapsed out from under him, shifting the burden to defendant to "submit evidence which would raise a factual issue, or an acceptable excuse, for its failure to provide the 'proper protection'" (Davis v Pizzagalli Constr. Co., 186 A.D.2d 960, 961, 589 N.Y.S.2d 211). Because defendant failed to do so, Supreme Court properly granted plaintiff's motion for partial summary judgment holding defendant liable for a violation of Labor Law @ 240 (1) (see, Sinzieri v Expositions, Inc., 270 A.D.2d 332, 333, 704 N.Y.S.2d 293). This conclusion also renders academic defendant's argument addressing plaintiff's common-law negligence and Labor Law @ 200 claims (see, Covey v Iroquois Gas Transmission Sys., 218 A.D.2d 197, 201, 637 N.Y.S.2d 992, affd 89 N.Y.2d 952, 655 N.Y.S.2d 854, 678 N.E.2d 466).
Supreme Court's denial of defendant's motion for a conditional judgment of indemnification against Davin also was proper, as such a judgment is premature when there are outstanding issues of fact regarding the negligence of the indemnitee (see, State of New York v Travelers Prop. Cas. Ins. Co., 280 A.D.2d 756, 757-758, 720 N.Y.S.2d 589; Potter v M.A. Bongiovanni Inc., 271 A.D.2d 918, 919, 707 N.Y.S.2d 689). Here, defendant's project manager, Michael Marini, testified that he visited the job site daily and that his responsibilities included monitoring safety issues at the site. Plaintiff and Davin also assert that defendant had actual or constructive notice that the ladder was not properly secured because the ladder was already in position when Marini arrived on the job site on the morning of plaintiff's fall. Since defendant may have had an opportunity to observe and correct the unsafe practice, we agree that there are triable issues of fact regarding defendant's negligence (see, Rizzuto v Wenger Contr. Co., 91 N.Y.2d 343, 352, 670 N.Y.S.2d 816, 693 N.E.2d 1068; Cole v Rappazzo Elec. Co., 267 A.D.2d 735, 736, 700 N.Y.S.2d 277).
Next, defendant argues that Utica First cannot rely on the two policy exclusions cited in its disclaimers of coverage because those disclaimers were untimely. We must agree. Although Utica First contends that no timely disclaimer was required because plaintiff's claim falls outside the scope of the policy's coverage, it overlooks the well-recognized distinction "between the denial of a claim based upon an exclusion from coverage as opposed to noncoverage * * *. In the former situation, the policy covers the claim but for the applicability of the exclusion and, therefore, a notice of disclaimer is required" (Greater N.Y. Mut. Ins. Co. v Clark, 205 A.D.2d 857, 858, 613 N.Y.S.2d 295, lv denied 84 N.Y.2d 807 [citation omitted]; see, Matter of Worcester Ins. Co. v Bettenhauser, 95 N.Y.2d 185, 188, 712 N.Y.S.2d 433, 734 N.E.2d 745; United Servs. Auto. Assn. v Meier, 89 A.D.2d 998, 999, 454 N.Y.S.2d 319).
Our review of the record leads to the conclusion that here, as a matter of law, notice of the disclaimer was required, but not timely given. Utica First was informed of the existence and nature of plaintiff's claim on March 22, 2000 when it received a letter from defendant's insurer accompanied by copies of plaintiff's complaint and Davin's subcontract. On May 3, 2000, Utica First sent a letter to defendant, with a copy to Davin, disclaiming coverage based on two specified policy exclusions. Despite Utica First's allegation that this notice was timely because of its need to investigate the claim before disclaiming, it is clear that the information required to decide whether or not to deny coverage was plaintiff's status as an employee of Davin and Davin's subcontract with defendant. Plaintiff's complaint and Davin's subcontract unambiguously provided this information. Significantly, Utica First does not allege that it had any reason to doubt the allegations of plaintiff's complaint. As a result, Utica First had the information necessary to immediately determine whether one or more of the policy exclusions applied, and the record does not support the claim that its 42-day delay in disclaiming was reasonable (see, Kokonis v Hanover Ins. Co., 279 A.D.2d 868, 870, 719 N.Y.S.2d 376; North Country Ins. Co. v Tucker, 273 A.D.2d 683, 684, 709 N.Y.S.2d 255; Mohawk Minden Ins. Co. v Ferry, 251 A.D.2d 846, 848, 674 N.Y.S.2d 512; compare, Crowningshield v Nationwide Mut. Ins. Co., 255 A.D.2d 813, 815, 680 N.Y.S.2d 302; State Farm Mut. Auto. Ins. Co. v Clift, 249 A.D.2d 800, 802, 671 N.Y.S.2d 843). As the disclaimer was untimely, Supreme Court erred in granting Utica First's motion and denying defendant's cross motion.
Having concluded that Utica First should be precluded from denying coverage of plaintiff's claim based on its policy exclusions, we need not consider defendant's alternate argument that Supreme Court also erred in failing to find that Davin breached his subcontract by neglecting to obtain the prescribed contractual liability insurance.
Mercure, J.P., Crew III, Mugglin and Lahtinen, JJ., concur.
ORDERED that the order is modified, on the law, without costs, by reversing so much thereof as granted the motion of third-party defendant Utica First Insurance Company for summary judgment and denied defendant's cross motion for summary judgment declaring that said third-party defendant is obligated to defend and indemnify against plaintiff's claim in this action; motion denied and cross motion granted to the extent that it is declared that said third-party defendant is obligated to defend and indemnify defendant in this action; and, as so modified, affirmed.
LUCIANO, J. - The question before the court is whether a
chiropractor who treated the plaintiff was properly permitted to testify as to
the contents of an inadmissible written report interpreting magnetic resonance
imaging (hereinafter MRI) films, which was prepared by another healthcare
professional who did not testify, when the MRI films were not in evidence, and
without proof that, as out-of-court material, the written MRI report was
The Court of Appeals has held that an expert witness may testify that he or she relied upon specific, inadmissible out-of-court material to formulate an opinion, provided (1) it is of a kind accepted in the profession as reliable as a basis in forming a professional opinion, and (2) there is evidence presented establishing the reliability of the out-of-court material referred to by the witness (see, Hambsch v. New York City Tr. Auth., 63 NY2d 723).
Some decisions of this court, however, have extended this rule. In revisiting these decisions we do not seek to thwart the expansion of rules, but merely seek to avoid rules from being errantly developed or needlessly extended. Therefore, we reiterate that, while the expert witness's testimony of reliance upon out-of-court material to form an opinion may be received in evidence, provided there is proof of reliability, testimony as to the express contents of the out-of-court material is inadmissible.
In this action, the plaintiff suffered injuries to his neck and back in 1993 when the car he was driving collided with an automobile owned and operated by the defendants. The defendants conceded that they were 100 percent at fault in the happening of the accident. Therefore, the sole issue to be determined at trial was damages.
During the plaintiff's case-in-chief, the plaintiff testified that he had previously injured his back in 1991, and that in connection with the treatment of that injury, MRI films were taken. At that time he was treated by Dr. Sidney Zelin, a chiropractor, who also treated him for the injuries suffered in the 1993 accident. Dr. Zelin testified that he examined the plaintiff within two days after the 1993 accident, and he treated the plaintiff from October 1993 through November 1994. As a result of the initial examination in 1993, he formed a diag-
nosis that the plaintiff had injuries to his neck and lower back, and sent the plaintiff for MRI scans of his back. Although Dr. Zelin did not see and interpret the resulting MRI films, he reviewed a written report prepared by another healthcare professional, which contained an interpretation of the MRI films.
During the trial, the plaintiff's counsel, on direct examination of Dr. Zelin, asked: "Can you share with us the results of the MRI?" The defendant's counsel immediately objected to the question. After the Supreme Court elicited that Dr. Zelin had relied upon the written MRI report to form his diagnosis, the objection of the defendant was overruled. Dr. Zelin was then permitted to testify as to the "results of the MRI", as set forth in the report, which was not in evidence, that there were "small central herniations at L4-L5 and L5-S1". The expert further testified that the 1993 accident was a competent producing cause of the plaintiff's injuries. The plaintiff was thus allowed to place in evidence, by way of the treating chiropractor, a subjective interpretation of MRI films, from an inadmissible report written by a non-testifying healthcare professional. This was prejudicial error, requiring this court to reverse the judgment in the plaintiff's favor, and grant a new trial.
It is well settled that, to be admissible, opinion evidence must be based on one of the following: first, personal knowledge of the facts upon which the opinion rests; second, where the expert does not have personal knowledge of the facts upon which the opinion rests, the opinion may be based upon facts and material in evidence, real or testimonial; third, material not in evidence provided that the out-of-court material is derived from a witness subject to full cross-examination; and fourth, material not in evidence provided the out-of-court material is of the kind accepted in the profession as a basis in forming an opinion and the out-of-court material is accompanied by evidence establishing its reliability.
It is this fourth basis for positing an opinion, commonly known as the "professional reliability" basis, which is implicated in this matter, and which has resulted in confusion with respect to the use of secondary evidence in this department (see, Hambsch v. New York City Tr. Auth., supra, at 726; see also, Romano v. Stanley, 90 NY2d 444, 452; Serra v. City of New York, 215 AD2d 643; Flamio v. State of New York, 132 AD2d 594). Reemphasis of the rule stated by the Court of Appeals is required to eliminate any confusion in its application.
Expert opinion, based on unreliable secondary evidence, is nothing more than conjecture if the only factual foundation, as in this case, is another healthcare provider's interpretation of what an unproduced MRI film purports to exhibit. Admission into evidence of a written report prepared by a non-testifying healthcare provider would violate the rule against hearsay and the best evidence rule. Inasmuch as such a written report is inadmissible, logic dictates that testimony as to its contents is also barred from admission into evidence.
Plainly, it is reversible error to permit an expert witness to offer testimony interpreting diagnostic films such as X-rays, CAT scans, PET scans, or MRIs, without the production and receipt in evidence of the original films thereof or properly authenticated counterparts (see, Hambsch v. New York City Tr. Auth., supra, at 725; Marion v. Coon Constr. Co., 216 NY 178, 182; Kosiorek v. Bethlehem Steel Corp., 145 AD2d 935; Chang Chiu v. Garcia, 75 AD2d 594). Without receipt in evidence of the original films, a party against whom expert opinion testimony is offered is deprived of the opportunity to cross-examine the expert witness concerning the basis for the opinion, offer opposing evidence to clear misimpressions, or offer a contrary opinion controverting the interpretation of the films, through his or her own expert witness.
The New York State Legislature has acknowledged the problems inherent in laying foundations for the introduction in evidence of medical material. CPLR 4253-a was thus enacted to provide a remedial and convenient method for the introduction in evidence of X-rays, MRIs, CAT scans, PET scans, electromylograms, sonograms, or fetal heart rate monitor strips, without foundational testimony. The proponent thereof, however, is required to literally comply with the requirements of CPLR 4253-a (see, Galuska v. Arbaiza, 106 AD2d 543, 545 [judgment reversed because X-rays which were not photographically inscribed with the patient's name were improperly admitted into evidence]). Once the actual film is received in evidence, any qualified expert may opine an interpretation as to what it shows, since the opinion testimony is now based upon facts which are in evidence before the court (see, Marion v. Coon Constr. Co., supra).
Since CPLR 4253-a applies only to the actual film, scan, or strip resulting from one of the specified medical tests, a written report prepared by a non-testifying healthcare professional interpreting MRI films, such as the MRI report herein, is not admissible into evidence (see, Schwartz v. Gerson, 246 AD2d 589 [report prepared by doctor who examined the plaintiff for his insurance carrier but did not testify at trial should not have been admitted into evidence and read to jury]). Such a written report is patently inadmissible hearsay as the declarant, the preparer of the report, is unavailable for cross-examination (see generally, People v. Sugden, 35 NY2d 453, 460).
Additionally, the receipt in evidence of the contents of a non-testifying healthcare professional's written report, interpreting a film produced as the result of a medical test, violates the best evidence rule (see, Schozer v. William Penn Life Ins. Co. of N.Y., 84 NY2d 639). The best evidence rule is intended to eliminate or reduce the spectre of deceit or perjury, potential inaccuracies attendant to human recall, or errors in crafting or recording a writing. The rule clearly bars a healthcare provider's written report which interprets the results of a medical test from receipt in evidence.
In Schozer v. William Penn Life Ins. Co. of N.Y. (supra, at 644), the Court of Appeals noted that the best evidence rule has been applied to "an unproduced X-Ray and the derivative evidence offered in its place to describe its contents". The court further opined that, generally, the original X-ray film must be produced before testimony can be adduced as to its diagnostic significance. Secondary evidence of such a diagnostic interpretive report, will be permitted only if the proponent thereof (1) sufficiently explains the X-ray films' unavailability, and (2) establishes that the secondary evidence accurately and reliably portrays the original. This principle applies with equal force to MRI films and diagnostic reports interpreting them.
In this case, the MRI report was not, and could not have been, properly admitted into evidence, since the proponent thereof advanced no claim that the original MRI films were lost or destroyed, and consequently, unavailable. The plaintiff's treating chiropractor, notwithstanding these circumstances, was permitted, over objection, to testify as to the ultimate conclusion set forth in the report, prepared by a non-testifying healthcare provider, under the guise of the "professional reliability" basis for admission of an expert's opinion into evidence. The plaintiff's expert's testimony concerning the interpretation of the MRI films, as stated in the report of the non-testifying preparer thereof, was not limited to testimony that his opinion was based, in part, upon the out-of-court material, but rather was impermissibly offered for the truth of the contents of the written MRI report. As such, and with no opportunity for the defendant to cross-examine the healthcare professional who prepared the report, or offer his own evidence or expert testimony to rebut it or controvert the interpretation and significance of the MRI films, the potential existed for a jury to give undue probative weight to out-of-court material.
In addition to our holding that the "professional reliability" exception does not permit an expert witness to offer opinion testimony based upon out-of-court material, for the truth of the matter asserted in the out-of-court material, we also take this opportunity to reiterate the requirement that, "[i]n order to qualify for the 'professional reliability' exception, there must be evidence establishing the reliability of the out-of-court material" (Hambsch v. New York City Tr. Auth., supra, at 726). Indeed, "reliability of the material is the touchstone; once reliability is established, the medical expert may testify about it even though it would otherwise be considered inadmissible hearsay" (Borden v. Brady, 92 AD2d 983, 984 [Yesawich, J., concurring]).
In the case at bar, there was no proof presented to establish that the written MRI report contained reliable data. It is significant that the plaintiff's treating chiropractor never saw the actual MRI films. There was simply no evidence regarding the healthcare professional who prepared the MRI report, or when and under what circumstances it was prepared. Additionally, there was no evidence that the written MRI report offered a detailed interpretation of the several images displayed in the MRI films, or whether the report merely stated a conclusion as to the condition or conditions purportedly revealed by the films. Furthermore, the treating chiropractor's testimony was equivocal as to whether he used the written MRI report merely to confirm an already established diagnosis or whether he relied upon it to form his diagnosis (compare, Serra v. City of New York, supra). Accordingly, this particular written MRI report was not shown to be sufficiently reliable to permit the witness to rely upon it as out-of-court material "of a kind accepted in the profession as reliable in forming a professional opinion" (People v. Sugden, supra, at 460; Hambsch v. New York City Tr. Auth., supra, at 726; Magras v. Colasuonno, 278 AD2d 388; Erosa v. Rinaldi, 270 AD2d 384).
To the extent that prior cases from this court (see, e.g., Torregrossa v. Weinstein, 278 AD2d 487; Pegg v. Shahin, 237 AD2d 271) have not limited application of the "professional reliability" basis for opinion evidence to permit an expert witness to testify that he or she relied upon out-of-court material which is of a type ordinarily relied upon by experts in the field to formulate an opinion, and have not required proof that the out-of-court material was reliable, those cases should be not be followed.
In Torregrossa (supra, at 488), "the court admitted into evidence the [MRI] report of John Torregrossa even though the doctor who prepared the report did not testify". The court recognized that the written MRI report was improperly admitted into evidence, but held that the error was harmless. It further held that the "treating physician was properly allowed to testify with respect to the [written] MRI report because he had personally examined him, and the [written] MRI report is data of the kind ordinarily accepted by experts in the field". The inherent inconsistency of that holding is obvious. If admission into evidence of the report, in violation of the best evidence rule and the rule against hearsay, is erroneous, then permitting an expert to testify as to the substantive contents of the inadmissible report is likewise erroneous. Thus, application of the harmless error doctrine in Torregrossa was incorrect.
In Pegg (supra, at 272, 273), this court held that the trial court "did not err in permitting the treating physician of the plaintiff to testify concerning the results of certain X-rays and a [MRI] test", based upon written reports interpreting the results because the written reports were data of a type ordinarily accepted by experts in the field, and "[t]he references to the X-rays and the MRI test, for the most part, served to confirm the conclusions drawn by the respective experts following their independent examination of these plaintiffs". To the extent that Pegg (supra), applied the "professional reliability" exception to allow testimony as to the results of the written reports, for the truth of the matters asserted in the written reports, without requiring the proponent of the evidence to establish the reliability of the written reports, it should no longer be followed.
Rules of evidence are the palladium of the judicial process. To suffer intrusions into time-tested concepts limiting the use of secondary evidence destroys the vitality of that judicial process. The danger and unfairness of permitting an expert to testify as to the contents of inadmissible out-of-court material is that the testimony is immune to contradiction. It offends fair play to disregard evidentiary rules guaranteed by the force of common sense derived from human experience. Venerable rules of evidence should not be casually discarded to accommodate convenience and speed in the gathering and presentation of facts or evidence.
In the instant case, the trial court committed reversible error in permitting the plaintiff's expert, who presented the only medical testimony offered on the plaintiff's case-in-chief, to testify as to the interpretation of MRI films, as set forth in a written report of a non-testifying healthcare professional, for the truth of the matters asserted in the report. It was, moreover, reversible error to permit the plaintiff's expert to state his opinion that there were herniations, which opinion was at least partially based upon the written MRI report, without first establishing the reliability of the written MRI report (see, Magras v. Colasuonno, supra).
Under the circumstances, a new trial is warranted on the issue of damages. In light of our determination, we do not reach the defendants' remaining contentions. Therefore, we reverse the judgment, on the law, and a new trial is granted, with costs.
FLORIO, J.P., GOLDSTEIN and H. MILLER, JJ., concur.
ORDERED that the judgment is reversed, on the law, and a new trial is granted, with costs to abide the event.