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04/10/03:         NATIONAL RESTAURANTS MANAGEMENT, INC. v EXECUTIVE RISK INDEMNITY, INC.

New York Appellate Division, First Department

New York Appellate Court Gives Effect to “Reservation of Rights” Letter

Appellate court finds that a “reservation of rights” letter, which reserved an insurer’s right to change its reason for denying coverage, did, in fact, preserve the carrier’s right to do so. Shareholders brought an underlying action alleging that plaintiffs participated in a scheme to secure the shareholders’ stock for little or no consideration, and convey it to plaintiff president. This action was the result of the insurer’s refusal to defend plaintiffs against the claim. The initial disclaimer was based on the fact that the underlying action sought only injunctive relief, not money damages, but also included an express reservation of the right to subsequently disclaim on different or alternative grounds as might later be found applicable. After plaintiffs were served with an amended complaint and cross claim seeking damages, insurer indicated it would provide a defense subject to a continuing reservation of rights, but then disclaimed based on the policy’s securities exclusion. Court held that since the insurer had at all times expressly reserved its right to disclaim, “neither its initial disclaimer on a different ground from that ultimately invoked, nor its later qualified acknowledgment of coverage, entitles plaintiffs to recover the defense costs they incurred up until the time that defendant finally invoked the securities exclusion.”

 

Editor’s Note:  This appears to be an unusual decision in New York, though all of the circumstances leading to it are unclear.  It has been the general rule in New York that if an insurer has a basis to disclaim coverage on policy exclusions or beach of policy conditions, a “reservation of rights letter” is no substitute -- a “reservation of rights” letter has no relevance to the question whether the insurer has timely sent a notice of disclaimer of liability or denial of coverage (Hartford Ins. Co. v. County of Nassau, 46 NY2d 1028).

 

04/10/03:         MROZINSKI v JOHN

New York Appellate Division, Third Department

Chiropractor's Affidavit, Supported by Objective Tests, Sufficient to Raise Question of “Serious Injury”

In opposing defendant’s motion for summary judgment, plaintiffs relied upon the affidavit of plaintiff’s treating chiropractor. Based upon his examination and treatment of plaintiff, and the history she related, the chiropractor diagnosed plaintiff as suffering from “cervical flexion/extension injury, multiple cervical subluxation, [mild to moderate permanent] cervical brachial syndrome, cervical kyphosis, myospasm, and paresthesia.” He concluded that plaintiff “suffered combined impairment of 35% due to nerve damage and altered function or subluxation of the cervical spine” as a result of the accident. The court observed that that the tests used to reach those conclusions were subjective in that they relied on plaintiff's complaints of pain, or, even if arguably objective, failed to assign a quantitative percentage to a loss of range of motion or limitation of an affected body function or system. However, the chiropractor’s diagnosis of “mild to moderate permanent” cervical brachial syndrome was supported by objective medical evidence based upon plaintiff's electromylogram conducted by a neurologist. That test revealed the existence of “[a] mild left ulnar palsy with mild slowing above to below the elbow.” The chiropractor concluded that this report showed nerve injury to plaintiff’s left brachial plexus, and that this condition causes “periods of increased weakness into [plaintiff’s] left arm,” permanently limiting “her ability to fully perform household duties, hobbies and/or sport related activities that she performed prior to this accident.” Since the chiropractor’s description of the qualitative nature of plaintiff’s limitations was supported by objective evidence, and he correlated the alleged injury with her “inability to perform certain normal daily tasks”, the court could not say that the alleged limitations were so “mild, minor or slight as to be considered insignificant within the meaning of Insurance Law § 5102 (d).”

 

04/03/03:         MOLEON v KREISLER BORG FLORMAN GENERAL CONSTRUCTION CO., INC.

New York State Supreme Court, Appellate Division, First Department

Certificate of Insurance Deemed Inadequate to Confer Additional Insured Status on Party Designated as Such; Employee Exclusion Bars Coverage for Claims Against Additional Insured Brought by Employee of Named Insured

 

 

Plaintiff sustained personal injuries in the course of his employment with AMG at a construction site. AMG had entered into a subcontract with the general contractor to perform subcontracting work on the project, pursuant to which AMG was required to defend and indemnify the general contractor for any claims arising from the negligence of AMG or its employees. AMG was also required to name the general contractor as an additional insured. The policy issued by Utica First Insurance Company to AMG stated that it did not provide coverage for “bodily injury to an employee of an insured if it occurs in the course of employment,” and it did not name the general contractor as an additional insured. For these reasons, Utica declined the general contractor’s and its insurer’s request for defense and indemnity. As a result, the general contractor commenced this third-party action against Utica. Utica moved to dismiss the complaint and for summary judgment pursuant to CPLR 3211(c). The general contractor opposed the motion, contending it was premature without discovery, and relied on the certificate of insurance purporting to name it as an additional insured. The general contractor’s counsel claimed that the broker who prepared the certificate advised him that he had the authority to bind Utica. The general contractor also argued that because it was not plaintiff's employer, the employee exclusion did not apply. The court disagreed, holding that the complaint should have been dismissed. The certificate of insurance presented by the general contractor contained a disclaimer, which states, “this certificate is issued as a matter of information only and confers no rights upon the certificate holder [and that] this certificate does not amend, extend or alter the coverage afforded by the policies.”  Thus, the court held the certificate was insufficient to establish that the general contractor was an additional insured under the policy. The court also held that Utica properly disclaimed coverage based upon plaintiff's status as an employee of AMG at the time of the accident. The exclusion was plain and unambiguous and applies to exclude coverage to an additional insured where, as here, the main action is brought against such additional insured by the employee of a named insured.

 

04/01/03:         GRANITE STATE INS. CO. v DIVERSIFIED EDWARDS AGENCY

New York State Supreme Court, Appellate Division, First Department

Motion to Dismiss Claims by Carriers Against Insurance Broker Denied

This insurance coverage dispute arose out of a construction subcontract that required the subcontractor to indemnify the general contractor for losses arising out of the subcontractor’s work, and to obtain general liability insurance naming the general contractor as an additional insured. The defendant, an insurance broker, procured liability insurance and workers’ compensation insurance, but issued a certificate of insurance with respect to the workers’ comp insurance that contained allegedly erroneous contractual indemnification language, and was also allegedly erroneous in naming a different entity as the insured. Court held that the broker’s motion to dismiss the claims against it by both insurers for reimbursement of moneys paid to settle the underlying personal injury action was properly denied. As for the workers’ comp carrier, allegations were sufficient to show that it was required to afford coverage because of the broker’s allegedly erroneous inclusion of contractual indemnification language in the certificate of insurance. As to both carriers, their allegations were sufficient to show that the alleged misnomer left the subcontractor uninsured, and that both carriers’ contributions toward settlement of the underlying action entitled them to be equitably subrogated to the subcontractor’s rights against the broker for failing to obtain proper insurance.

 

03/31/03:         AVDEYCHIK v ALLSTATE INS. CO.

New York State Supreme Court, Appellate Division, Second Department

Conjecture and Speculation Insufficient to Defeat Motion for Summary Judgment

Plaintiff sought to recover benefits under an auto policy for the claimed theft and damage to his vehicle, and established his entitlement to judgment on the issue of liability by submitting proof that there was a valid policy of insurance covering the automobile, a loss occurred, a timely claim was made, and the loss fell within the terms of the policy.  The court held that the insurer’s unsupported conjecture and speculation that the vehicle had not been stolen failed to raise a triable issue of fact as to whether the plaintiff intentionally concealed or misrepresented any material fact or circumstance relating to the theft or engaged in fraudulent conduct. The defendant also failed to raise an issue of fact as to whether the plaintiff made material misrepresentations on his application for insurance.  Summary judgment on the issue of liability was granted accordingly.

 

ACROSS BORDERS

 

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.

 

04/10/03:         SPAULDING COMPOSITES v AETNA

New Jersey Supreme Court

Long Awaited Decision Strikes Down Non-Cumulation Clause in Environmental Damages Case

In this appeal, the Court was asked whether the non-cumulation clause in Liberty Mutual’s CGL policies can be enforced consonant with the “continuous trigger” and “pro rata allocation” principles adopted in Owens-Illinois, Inc. v United Ins. Co., 138 N.J. 437 (1994) and reaffirmed in Carter-Wallace, Inc. v Admiral Ins. Co., 154 N.J. 312 (1998). Spaulding Composites Company, Inc. purchased $678 million in CGL insurance between 1967 and 1984. Nine of the policies were issued by Liberty between 1976 and 1984, and eight of them had $1 million limits. During that time, Spaulding also purchased varying amounts of excess liability from Liberty, ranging from $23 million to $100 million. Each of Liberty’s nine CGL policies contained the identical non-cumulation clause, which provided: “(C) For the purpose of determining the limit of the company’s liability, all personal injury and property damage arising out of continuous or repeated exposure to substantially the same general conditions shall be construed as arising out of one occurrence.” In 1994, Caldwell Trucking PRP Group (PRP) and the EPA filed suit against Spaulding in the United States District Court, alleging that Spaulding was responsible for cleanup costs at the Caldwell Trucking Superfund site. In 1996, the district court granted PRP partial summary judgment on the issue of Spaulding’s liability for clean-up costs. Following a failed attempt at mediation involving Spaulding, Liberty, the EPA, and PRP, judgments of liability were entered against Spaulding in favor of PRP and the EPA totaling over $13 million. In 1995, Spaulding commenced a state court action seeking a declaratory judgment regarding insurance coverage for its share of the defense and remediation costs at the site. Spaulding moved for summary judgment against its insurers, including Liberty, PRP joined in the motion, and the motion was granted. The trial court determined that the non-cumulation clause was inapplicable because it was incongruent with the Owens-Illinois trigger theory warranting the treatment of sequential environmental damage as a separate occurrence “within each of the years of a CGL policy.” The Appellate Division reversed and declared the non- cumulation clause both clear and effective, and further held that Owens-Illinois and Carter-Wallace merely provided an interpretative rationale in cases involving unclear insurance contract language. In 2002, Spaulding assigned all of its rights to coverage from Liberty and its excess insurers to PRP. The New Jersey Supreme Court granted PRP’s motion for leave to appeal, and held that Liberty’s non-cumulation clause was unenforceable under Owens-Illinois. The trial court’s grant of summary judgment on the non-cumulation clause in favor of PRP was therefore reinstated.

 

04/08/03:         PERRY v THE AM. TOBACCO CO., INC.,

Sixth Circuit

Health Insurers Can't Pursue Claim Against Tobacco Companies

Health insurance subscribers who allege that an insurer has passed along to them increased costs of treating smoking-related injuries, in the form of higher insurance premiums, cannot show that they have been proximately injured by defendant tobacco companies’ conduct.

 

04/07/03:         WHITESIDE v SMITH

Colorado Supreme Court

Colorado’s Workers’ Compensation Act Fee Provision Unconstitutional When Applied to Indigent Claimants

To challenge a physician’s initial decision to terminate temporary disability benefits and medical treatments, an injured worker must pay a $675 fee to obtain an independent medical examination. Once the injured worker receives an independent examination, he can appeal adverse termination decisions of the employer-selected physician to an administrative law judge, then to the Industrial Claim Appeals Office and ultimately to the courts. Because the $675 mandatory fee denies indigent claimants any opportunity to be heard at a meaningful time and in a meaningful manner prior to the termination of their temporary benefits and treatment, the fee requirement is unconstitutional as applied to indigent claimants.

Prepared by Bruce D. Celebrezze and Joseph E. Pelochino of Celebrezze & Wesley in San Francisco

 

04/07/03:         LONZA, INC. v THE HARTFORD ACC. & IND. CO

Pollution/Choice of Laws

New Jersey Appellate Division

In a case illustrating the continuing complexities and confusion in New Jersey’s choice of law rules for environmental liability cases, the Appellate Division has ruled that the Superior Court should not have applied Rhode Island law to a primary policy (as being the law of the site for an out of state policy) but New Jersey law to various excess policies issued to the insured in New Jersey, as the effect of such determinations would be to effectively preclude any excess recovery (Rhode Island law limits coverage to the year of “manifestation” whereas New Jersey law would have allocated the loss horizontally throughout the primary layer). Under such circumstances, the law of Rhode Island should apply to all policies applying to the site, including the New Jersey excess policies, thus permitting the insured to obtain recovery from the excess carriers whose policies were in effect in the year of “manifestation.”

Prepared by Michael Aylward of Morrison, Mahoney & Miller, LLP in Boston

 

04/07/03:         STATE FARM v CAMPBELL

United States Supreme Court

$145 Million Bad Faith Punitive Damage Award Unconstitutional Where Compensatory Damage Award is $1 Million

Plaintiffs were awarded $1MM Compensatory and $145 MM Punitive Damages against State Farm in a jury verdict arising in a matter involving allegations of an unreasonably wrongful failure to settle an underlying case. Referring to its earlier decision in Gore v. BMW, the Court held that the Due Process Clause of the 14th Amendment required the punitive damages award be vacated. The Court set a three part test in place to determine appropriateness of punitive damages awards: 1. The degree of reprehensibility of the defendant's misconduct; 2. The disparity between actual or potential harm suffered by the plaintiff and the amount of punitive damages awarded; and 3. The difference between the punitive damages awarded by the jury and civil remedies that area authorized or imposed in comparable cases. The Court noted the trial court's judgment is subject to de novo review by the Court. Justices Scalia, Thomas and Ginsberg filed dissents.

 

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NATIONAL RESTAURANTS MANAGEMENT, INC. v EXECUTIVE RISK INDEMNITY, INC.

 

Order, Supreme Court, New York County (Barbara Kapnick, J.), entered March 25, 2002, which, in an action by plaintiffs-appellants, a corporation and its president, for breach of a directors and officers liability policy and seeking reimbursement of attorneys' fees incurred and the settlement paid in an underlying action, granted defendant insurer's motion to dismiss the complaint and denied plaintiffs' cross motion for partial summary judgment on its cause of action for attorneys' fees, unanimously affirmed, with costs.

 

The underlying action was brought by shareholders in plaintiff corporation and alleged that plaintiffs participated in a scheme to secure the shareholders' stock for little or no consideration and convey it to plaintiff president. The instant action is the result of defendant insurer's refusal to defend plaintiffs against this claim. While the disclaimer was based on the fact that the underlying action sought only injunctive relief, not money damages, it also included an express reservation of the right to subsequently disclaim on different or alternative grounds as might later be found applicable. After plaintiffs were served with an amended complaint and cross claim seeking damages, defendant initially indicated that it would provide a defense subject to a continuing reservation of rights, but ultimately disclaimed on the basis of the policy's securities exclusion. Such exclusion applies to any claim "in any way involving any actual or alleged violation of" Federal laws or rules regulating securities, State Blue Sky laws, or "any provision of the common law imposing liability in connection with the offer, sale or purchase of securities." Defendant's disclaimer was based on the common-law provision.

 

Since defendant at all relevant times expressly reserved its right to disclaim, neither its initial disclaimer on a different ground from that ultimately invoked, nor its later qualified acknowledgment of coverage, entitles plaintiffs to recover the defense costs they incurred up until the time that defendant finally invoked the securities exclusion (see Schiff Assoc. v Flack, 51 NY2d 692, 699). Nor is such exclusion, which applies to "any" claim that "in any way" involves the "offer, sale or purchase of securities," ambiguous in its applicability to private as well as public securities. In the latter regard, we also note, as did the IAS court, that Federal securities laws have been construed to apply to transactions in shares of close as well as publicly held corporations (see Golden v Garafalo, 678 F2d 1139). Plaintiffs' additional claim that they are entitled to coverage because the underlying action involved a "foreclosure" or "transfer," rather than an "offer, sale or purchase" of plaintiff corporation's securities was properly rejected by the IAS court on the ground that any transfer of the stock would necessarily have been preceded by its offer and acceptance.

 

MOLEON v KREISLER BORG FLORMAN GENERAL COSNTRUCTION CO., INC.

 

Order, Supreme Court, New York County (Michael Stallman, J.), entered November 28, 2001, which, in this third-party declaratory judgment action seeking a declaration and damages with respect to obligations under an insurance policy, denied, without prejudice, third-party defendant Utica First Insurance Company's motion for an order pursuant to CPLR 3211(a)(1) and (7) dismissing the third-party complaint insofar as asserted against it and for summary judgment pursuant to CPLR 3211(c), unanimously reversed, on the law, without costs, the motion to dismiss pursuant to CPLR 3211(a)(1) granted, a declaration issued that Utica First Insurance Company has no obligation to defend or indemnify Sentry Contracting, Inc. in the main action, and the third-party complaint otherwise dismissed insofar as asserted against Utica First Insurance Company. The Clerk is directed to enter judgment accordingly.

 

In the main action, plaintiff Marc Moleon (plaintiff) seeks monetary damages for alleged personal injuries sustained in a construction site accident on July 26, 2000 at Bellevue Kids Center at Bellevue Hospital in Manhattan. At the time of the accident, plaintiff was employed by third-party defendant AMG Construction, Inc. (AMG). AMG had entered into a subcontract with third-party plaintiff Sentry Contracting, Inc. (Sentry){1} to perform subcontracting work on the project. The complaint in the main action alleges Labor Law violations against multiple defendants including Sentry.

 

Pursuant to the subcontract, AMG was required to defend and indemnify Sentry for any claims arising from the negligence of AMG or any of its employees. The subcontract also required AMG to name Sentry as an additional insured under its general insurance policy.

 

Third-party defendant Utica First Insurance Company (Utica) issued an insurance policy to AMG, which states in relevant part that it does not provide coverage for "bodily injury to an employee of an insured if it occurs in the course of employment." In addition, the policy does not name Sentry as an additional insured. Sentry's insurer, Travelers Property Casualty, requested that AMG defend and indemnify Sentry in the main action in accordance with the subcontract. However, Utica declined coverage because Sentry was not named as an insured or additional insured under the policy, and plaintiff's injury was excluded under the terms of the policy.

 

Consequently, Sentry commenced this third-party action against Utica seeking defense and indemnification in the main action.{2} In lieu of interposing an answer, Utica moved to dismiss the complaint and for summary judgment pursuant to 3211(c).{3} In support, Utica submitted a copy of the insurance policy, a Certificate of Liability Insurance, and an affidavit from its Claim Representative attesting that Sentry was not an insured or additional insured and that the policy excluded coverage for plaintiff's injury.

 

Sentry opposed the motion to dismiss on the grounds that the motion was premature as discovery had not yet been conducted. In support, Sentry relied on the Certificate of Insurance purporting to name Sentry as an additional insured. Sentry's counsel claimed that the broker who prepared the certificate advised him that he had the authority to bind Utica. Sentry also argued that because it was not plaintiff's employer, the employee exclusion did not apply. Finally, Sentry requested that any summary judgment determination be made after discovery.

 

Without explanation, the Supreme Court denied Utica's motion to dismiss without prejudice to a motion for summary judgment.

 

Contrary to Sentry's contention, an order denying a motion without prejudice to renew is appealable as of right. The authority relied on by Sentry has been overruled (see Okin v White Plains Hospital, 97 AD2d 399; see also Keller v Frank P. Eberhard Co., 110 AD2d 686).

 

Substantively, we find that the motion court erred in failing to dismiss the complaint based on documentary evidence (CPLR 3211[a][1]). The party claiming insurance coverage has the burden of proving entitlement (see Plotkin v Disability and Cas. Inter-Insurance Exchange, 27 AD2d 719; see also Daniel v Allstate Life Insurance Co., 71 AD2d 872). A party that is not named an insured or additional insured on the face of the policy is not entitled to coverage (see McKenzie v New Jersey Transit Rail Operation, Inc., 772 FSupp 146, 149, citing Stainless, Inc. v Employers Fire Ins. Co., 49 NY2d 924, affg 69 AD2d 27).

 

Here, Utica presented the policy which did not name Sentry as an additional insured. In response, Sentry submitted the Certificate of Insurance. However, the certificate contains a disclaimer which states that "this certificate is issued as a matter of information only and confers no rights upon the certificate holder [and that] this certificate does not amend, extend or alter the coverage afforded by the policies." Accordingly, the certificate is insufficient to establish that Sentry is an additional insured under a policy especially where, as here, the policy itself makes no provision for coverage (see Glynn v United House of Prayer for All People, 292 AD2d 319, 322; American Motorist Insurance Company v Superior Acoustics Inc., 277 AD2d 97; see also Taylor v Kinsella, 742 F2d 709 [applying New York law]).

 

In any event, even if, as Sentry contends, the broker who signed the Certificate of Insurance had the authority to bind Utica, and Sentry were named as an insured or additional insured, Utica properly disclaimed coverage based upon plaintiff's status as an employee of AMG at the time of the accident. Indeed, New York courts have held that employee exclusionary clauses containing the same or similar language are plain and unambiguous and that such a clause applies to exclude coverage to an additional insured where, as here, the main action is brought against such additional insured by the employee of a named insured (see Rivera v St. Regis Hotel Joint Venture, 240 AD2d 332, 334; Tardy v Morgan Guaranty Trust Co., 213 AD2d 296).

 

Sentry also contends that the employee exclusion offends public policy. However, this argument may not be raised for the first time on appeal (see Mardjokic v Griffin, 186 AD2d 431), and, in any event, lacks merit.

 

We need not reach the parties' remaining contentions in light of our determination.

 

GRANITE STATE INS. CO. v DIVERSIFIED EDWARDS AGENCY

 

Order, Supreme Court, New York County (Louis York, J.), entered March 12, 2002, which in an action by plaintiff workers' compensation carrier (Granite) against defendant-appellant insurance broker (Diversified) and defendant-respondent general liability carrier (Scottsdale) for reimbursement of money that Granite paid to settle a laborer's underlying action for personal injuries, denied Diversified's motion to dismiss the complaint, unanimously affirmed, with costs. Order, same court and Justice, entered on or about October 24, 2002, which denied Diversified's motion to dismiss Scottsdale's cross claims for reimbursement of the money that it paid to settle the underlying personal injury action, unanimously affirmed, with costs.

 

The instant dispute over insurance coverage arises out of a construction subcontract that required the subcontractor, the injured laborer's employer, Kendrick Trucking & Excavation (Kendrick), to indemnify the general contractor for losses arising out of Kendrick's work, and to obtain general liability insurance naming the general contractor as an additional insured. On behalf of Kendrick, insurance broker Diversified procured liability insurance from Scottsdale and workers' compensation insurance from Granite, but issued a certificate of insurance with respect to Granite that contained allegedly erroneous contractual indemnification language, and, like the certificate of insurance that it issued with respect to Scottsdale, was also allegedly erroneous in naming not Kendrick but James Kendrick Trucking, Inc., a different entity. The motion court properly denied Diversified's motions to dismiss the claims against it by Granite and Scottsdale for reimbursement of the moneys they paid to settle the underlying personal injury action. As for Granite, its allegations suffice to show that it was required to afford coverage because of, inter alia, Diversified's allegedly erroneous inclusion of contractual indemnification language in the certificate of insurance. As to both Granite and Scottsdale, their allegations suffice to show that the alleged misnomer effectively left Kendrick uninsured, and that Granite's and Scottsdale's contributions towards the settlement of the underlying action therefore entitle them to be equitably subrogated to Kendrick's rights against Diversified for failing to obtain proper insurance (see National Union Fire Ins. Co. v State Ins. Fund, 222 AD2d 369). We have considered Diversified's other arguments and find them unavailing.

 

AVDEYCHIK v ALLSTATE INS. CO.

 

In an action to recover benefits under an automobile insurance policy, the defendant appeals from an order of the Supreme Court, Nassau County (Joseph, J.), entered May 7, 2002, which granted the plaintiff's motion for summary judgment on the issue of liability.

 

ORDERED that the order is affirmed, with costs.

 

The plaintiff seeks to recover benefits under an automobile insurance policy for the claimed theft and subsequent damage to his vehicle, which was insured by the defendant. The plaintiff established his prima facie entitlement to judgment as a matter of law on the issue of liability by submitting proof that there was a valid policy of insurance covering the subject automobile, a loss occurred, a timely claim was made, and the loss fell within the terms of the policy (see Palmier v United States Fid. & Guar. Co., 135 AD2d 1057; see generally Winegrad v New York Univ. Med. Ctr., 64 NY2d 851). In opposition thereto, the defendant's unsupported conjecture and speculation that the vehicle had not been stolen failed to raise a triable issue of fact as to whether the plaintiff intentionally concealed or misrepresented any material fact or circumstance relating to the theft or engaged in fraudulent conduct (see Affatato v Standard Fire Ins. Co., 277 AD2d 264; Berman v Federal Ins. Co., 110 AD2d 803). The defendant also failed to raise an issue of fact as to whether the plaintiff made material misrepresentations on his application for insurance (see DiDonna v State Farm Mut. Auto. Ins. Co., 259 AD2d 727).

 

Accordingly, the Supreme Court properly granted the plaintiff's motion for summary judgment on the issue of liability.

 

RITTER, J.P., SANTUCCI, FEUERSTEIN and SCHMIDT, JJ., concur.

 

MROZINSKI v ST. JOHN

 

Cardona, P.J.

 

Appeal from an order of the Supreme Court (Reilly Jr., J.), entered August 15, 2002 in Schenectady County, which, inter alia, granted defendant's motion for summary judgment dismissing the complaint.

 

Plaintiff Kristin C. Mrozinski (hereinafter plaintiff) and her husband, derivatively, commenced this negligence action to recover damages for injuries she allegedly sustained on December 18, 2000 in a motor vehicle accident. Following joinder of issue and discovery, defendant moved from summary judgment dismissing the complaint alleging plaintiffs' failure to satisfy the serious injury threshold of Insurance Law § 5102 (d). In support of the [*2]motion, defendant referred to plaintiff's medical records which included normal X rays and CT and MRI scans. Defendant also cited to the reports of plaintiff's treating neurologist, Richard Brooks, the independent medical examinations of Lynn Taylor-Nicholson, neurologist Richard Holub, and chiropractor Vilko Green. These submissions revealed no objective data of active radiculopathy, reflex loss, asymmetry or disability supporting plaintiff's complaints of pain in her left shoulder, arm, hand, head, jaw, vision problems and dizziness. Plaintiffs opposed the motion and cross-moved for partial summary judgment on the issue of liability. Finding plaintiffs' proof insufficient to meet the serious injury threshold, Supreme Court granted defendant's motion and dismissed the complaint.

 

On appeal, plaintiffs do not challenge the sufficiency of defendant's submission of medical evidence demonstrating, in the first instance, that she did not suffer a serious injury under the no-fault law (see Gaddy v Eyler, 79 NY2d 955, 956; June v Gonet, 298 AD2d 811). Therefore, the issue for our determination is whether plaintiffs met their burden of "raising a triable issue of fact through competent medical evidence based upon objective medical findings and diagnostic tests" (Drexler v Melanson, AD2d , ___, 754 NYS2d 433, 435).

 

Initially, since plaintiffs have not pursued the "permanent loss of use" category in their brief on appeal, that claim is deemed abandoned (see Santos v Marcellino, 297 AD2d 440, 441). In addition, because plaintiffs did not assert a claim under the "permanent consequential limitation" category in their complaint or bill of particulars, it may not be considered for the first time on appeal (see Melino v Lauster, 195 AD2d 653, 656, affd 82 NY2d 828).

 

Therefore, we address only plaintiffs' claim that plaintiff suffered a "significant limitation of use of a body function or system" (Insurance Law § 5102 [d]). A plaintiff may prove "the extent or degree of physical limitation" through an "expert's designation of a numeric percentage of [his or her] loss of range of motion" or through "[a]n expert's qualitative assessment of [his or her] condition * * * provided that the evaluation has an objective basis and compares limitations to the normal function, purpose and use of the affected * * * function or system" (Toure v Avis Rent A Car Sys., 98 NY2d 345, 350 [emphasis in original]; see Dufel v Green, 84 NY2d 795, 798). [*3]

 

In opposing defendant's motion, plaintiffs primarily relied upon medical evidence presented in the affidavit of plaintiff's treating chiropractor, William Root [FN1]. Based upon his examination and treatment of plaintiff during some 70 office visits and the history she related, Root diagnosed plaintiff as suffering from "cervical flexion/extension injury, multiple cervical subluxation, [mild to moderate permanent] cervical brachial syndrome, cervical kyphosis, myospasm, and paresthesia." He concluded that plaintiff "suffered combined impairment of 35% due to nerve damage and altered function or subluxation of the cervical spine" as a result of the accident. We note that the tests administered to reach those conclusions and support those diagnoses were largely subjective in nature in that they relied on plaintiff's complaints of pain, or, even if arguably objective, failed to assign a quantitative percentage to a loss of range of motion or limitation of an affected body function or system. On the other hand, we cannot say that Root's diagnosis of "mild to moderate permanent" cervical brachial syndrome is not supported by objective medical evidence based upon plaintiff's electromylogram conducted in February 2001 by neurologist Bruno Tolge. Tolge's report reveals the existence of "[a] mild left ulnar palsy with mild slowing above to below the elbow." Root contends that Tolge's report shows nerve injury to plaintiff's left brachial plexus. Root opines that this condition causes "periods of increased weakness into [plaintiff's] left arm," permanently limiting "her ability to fully perform household duties, hobbies and/or sport related activities that she performed prior to this accident." Since Root's description of the qualitative nature of plaintiff's limitations is supported by objective evidence and he "correlates" the alleged injury to her left brachial plexus with her "inability to perform certain normal daily tasks" (Manzano v O'Neil, 98 NY2d 345, 355), we cannot say that the alleged limitations are so "mild, minor or slight" (Licari v Elliott, 57 NY2d 230, 236) "as to be considered insignificant within the meaning of Insurance Law § 5102 (d)" (Toure v Avis Rent A Car Sys., supra, at 353; see Armstrong v Morris, AD2d , ___, 754 NYS2d 420, 422). Accordingly, we find that plaintiffs have raised a triable issue of fact [*4]sufficient to defeat defendant's motion for summary judgment with respect to that category of injury.

 

Mercure, Carpinello, Lahtinen and Kane, JJ., concur.

 

ORDERED that the order is modified, on the law, without costs, by reversing so much thereof as granted defendant's motion for summary judgment dismissing the cause of action alleging a significant limitation of use of a body function or system; motion denied to that extent; and, as so modified, affirmed.

 

Footnotes

 

Footnote 1: Because the records of dentist Marshall Price and orthodontists Myron Serling, A. Thomas Decker and Michael Sbuttoni proffered by plaintiffs as objective proof of injury to plaintiff's temporal mandibular joint are not in admissible form, they may not be considered on this motion (see Grasso v Angerami, 79 NY2d 813, 814).