Coverage Pointers - Volume IV, No. 5
09/05/02: DABIERE v. YAGER
New York State Supreme Court, Appellate Division, Third Department
Expert’s Speculative Opinions Insufficient to Meet Plaintiff’s Burden on “Serious Injury” Threshold Motion
In this action for personal injuries sustained in an automobile accident, defendants moved for partial summary judgment dismissing the complaint, maintaining that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102 (d). In support of their motion, defendants submitted the affidavit and report of an orthopedic surgeon who conducted an independent medical examination of plaintiff, which revealed the existence of extensive degenerative arthritic changes in plaintiff’s neck and back and that plaintiff had sustained several neck or back injuries prior to the accident, including a broken neck in 1995. Defendants’ expert opined that plaintiff’s soft tissue injury had healed and had no lasting effect on the underlying degenerative arthritic process. The court held such evidence sufficient to meet defendants’ burden on the motion, shifting the burden to plaintiff to support his claim of serious injury by competent medical evidence based on objective medical findings and diagnostic tests. Plaintiff’s treating physician opined that the accident exacerbated plaintiff’s preexisting degenerative condition, resulting in permanent pain that was unlikely to improve. However, the opinion was not based on an observed condition that the expert causally related to the accident. Instead, it was based on the conclusion that, despite plaintiff’s preexisting cervical and lumbar condition, “he was actually doing reasonably well” prior to the accident. Court held that, although an expert’s qualitative assessment of a plaintiff’s condition may suffice to demonstrate the extent or degree of physical limitation, that assessment must be supported by objective proof of the injury in order to satisfy the statutory threshold. Thus, in the absence of objective evidence establishing the aggravation as opposed to the underlying condition, plaintiffs’ submission was insufficient to demonstrate serious injury under the permanent loss of use, consequential limitation of use or significant limitation of use categories. The court reached the same conclusion with regard to the 90/180 category of serious injury. To prevail on this category, plaintiff was required not only to show that his usual activities were curtailed “to a great extent rather than some slight curtailment”, but also to submit medical evidence based on objective medical findings of a medically determined injury or impairment of a nonpermanent nature which caused the alleged limitations on his daily activities. Plaintiffs’ evidence did not satisfy the requirement.
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.
Did Plan Administrator Breach Fiduciary Duties in Denying Benefits?
A life insurance plan was part of an employee benefit plan, and the district court did not err in employing ERISA’s abuse of discretion standard to determine whether the plan administrator had breached a fiduciary duty in denying benefits.
Connecticut Supreme Court (applying Georgia law)
Pre-Tender Defense Costs Not Recoverable
The insured plaintiff was sued in the underlying action by a competitor for alleged copyright infringement and unfair trade practices. The insured and the competitor reached a nonmonetary settlement of their dispute while the insured incurred defense costs of $330,000. Six months after the settlement, the insured tendered the defense costs to Aetna claiming a right to reimbursement because the underlying action alleged a covered advertising injury under the policy. The Supreme Court, applying Georgia law, held that the Aetna policy required the insured to forward the lawsuit papers immediately and not to incur any expenses without Aetna’s consent, and as such, the pre-tender defense costs of $330,000 were not recoverable under the policy.
Prepared by Bruce Celebrezze of Celebrezze & Wesley in Los Angeles.
South Carolina Supreme Court
Where Premium Finance Agency Cancels Auto Policy, No Statutory Duty for Insurer to Notify Loss Payee
The contract of insurance issued to Insured by Insurer contemplated cancellation either by Insured or by Insurer. If Insurer cancelled the policy, the contract required it notify Insured at least 15 days before the effective date of cancellation. This provision of the contract did not require notice to third parties; however, the contract’s loss payable clause required Insurer, when it cancels a policy, to provide the same 15-day notice of cancellation to a loss payee. If the insured cancels, no notice is required. There is no such duty to notify loss payee if cancellation is by Premium Finance Agency.
California Court of Appeal
No Coverage for Claim for Subsidence Which Occurred Prior to Inception of Coverage
The San Clemente Beach Country Club was sued by a neighbor for causing a portion of his property to fall away. Golden Eagle denied coverage on the ground that the loss occurred outside the policy term. In this declaratory relief action, the court found that the underlying complaint did not allege, nor did the facts bear out, a continuing loss. The loss occurred some six months before the policy period, and, thus, there was no potential for liability.
Prepared by Bruce Celebrezze of Celebrezze & Wesley in Los Angeles.
Colorado Court of Appeals
No Coverage for Release of Contaminants into Environment Which Was Not “Unexpected or Unintended”
Cotter operated a uranium mill in Canon City, Colorado from 1958 until 1986. In 1989, 532 residents of a subdivision near the Cotter mill brought suit alleging that material from Cotter’s uranium mill had seeped from the tailings ponds into their neighborhood, causing personal injury, property damage, and economic harm. In 1991, another sixty-seven plaintiffs filed a similar action. The issue in this declaratory relief action is whether the discharge, dispersal, release, or escape of the allegedly damaging materials was expected or intended, as opposed to whether the insured expected or intended to harm the environment. Some of the policies of Cotter’s seven insurers contained absolute pollution exclusions while the others contained provisions which excluded from coverage all pollution- related injuries, but limited by an exception that restores coverage for “sudden and accidental” events or “sudden, unintended and unexpected” happenings. The Court of Appeals upheld summary judgment in favor of the insurers, finding that what must have been “unexpected or unintended” was the discharge or release of contaminants into the environment.
Prepared by Bruce Celebrezze of Celebrezze & Wesley in Los Angeles.
08/29/02: FREIDLINE v. SHELBY INS. COMPANY
Indiana Supreme Court
Carrier Not Found to be in Bad Faith for Denying Coverage in “Toxic Carpet Fumes” Case
Complaining that toxic fumes from substances used to install carpet in an office building injured them, occupants of the building sued the carpet installer, the building owners, and others. When the building owners’ insurance carrier refused to defend and indemnify them, the owners filed a third party complaint to enforce their rights under the insurance policy. The building owners also alleged the insurance carrier denied coverage in bad faith. The trial court entered summary judgment in the insurance carrier’s favor on both claims. On review, the Court of Appeals reversed. The Supreme Court reinstated judgment against the carrier on its responsibility to defend and indemnify but refused to find the insurer in bad faith for denying coverage in a heavily litigated area.
08/29/02: KING v. DALLAS FIRE INS. CO.
Texas Supreme Court
Negligent Hiring Can Be an “Occurrence” Even Though Injury Caused by Employee’s Intentional Act
An employer’s alleged negligent hiring, training, and supervision can constitute an “occurrence” under the terms of a commercial liability policy, although the injury was directly caused by the employee’s intentional conduct.
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Appeal from an order of the Supreme Court (Sise, J.), entered September 17, 2001 in Montgomery County, which granted defendants' motion for partial summary judgment.
Plaintiffs commenced this action to recover for personal injuries sustained in an August 1999 automobile accident. After joinder of issue and discovery, defendants moved for partial summary judgment dismissing the complaint insofar as it asserted claims based upon personal injuries allegedly sustained by plaintiff Clement Dabiere (hereinafter plaintiff). Concluding that the evidence regarding the cervical injuries claimed by [*2]plaintiff established that he did not sustain a serious injury within the meaning of Insurance Law § 5102 (d), Supreme Court granted the motion. Plaintiffs appeal.
In support of their motion, defendants submitted the affidavit and report of an orthopedic surgeon who conducted an independent medical examination of plaintiff. The examination revealed the existence of extensive degenerative arthritic changes in plaintiff's neck and back and that plaintiff had sustained several neck or back injuries prior to the accident, including a broken neck in 1995. Defendants' expert opined that although plaintiff may have suffered minimal soft tissue injury in the accident, the injury had healed and had no lasting effect on the underlying degenerative arthritic process. We agree with Supreme Court that the evidence is sufficient to meet defendants' burden as the proponent of the motion and, therefore, plaintiff was required to support his claim of serious injury by competent medical evidence based on objective medical findings and diagnostic tests (see Hines v Capital Dist. Transp. Auth., 280 AD2d 768; Tankersley v Szesnat, 235 AD2d 1010).
Plaintiff's treating physician opined that the accident exacerbated plaintiff's preexisting degenerative condition, resulting in permanent pain which was unlikely to improve. However, the opinion is not based on an observed condition which the expert causally related to the accident. Instead, the expert based his opinion on the conclusion that, despite plaintiff's preexisting cervical and lumbar condition, "he was actually doing reasonably well" prior to the accident. Although an expert's qualitative assessment of a plaintiff's condition may suffice to demonstrate the extent or degree of physical limitation, that assessment must be supported by objective proof of the injury in order to satisfy the statutory threshold (see Toure v Avis Rent A Car Sys., ___ NY2d ___, 2002 NY Slip Op 05748, *1 [July 9, 2002]). Without such proof, the opinion "may be wholly speculative" (id. at *1). Thus, in the absence of objective evidence establishing the aggravation as opposed to the underlying condition, plaintiffs' submission is insufficient to demonstrate serious injury under the permanent loss of use, consequential limitation of use or significant limitation of use categories (see Hines v Capital Dist. Transp. Auth, supra at 770).
We reach the same conclusion with regard to the 90/180 category of serious injury. To prevail on this category, plaintiff was required not only to show that his usual activities [*3]were curtailed "to a great extent rather than some slight curtailment" (Licari v Elliott, 57 NY2d 230, 236), but also to submit medical evidence based on objective medical findings of a medically determined injury or impairment of a nonpermanent nature which caused the alleged limitations on his daily activities (see Monk v Dupuis, 287 AD2d 187, 191). Plaintiffs' medical evidence does not satisfy the latter requirement, particularly in the absence of evidence that the restrictions on plaintiff's activities were medically indicated and causally related to the accident (see Blanchard v Wilcox, 283 AD2d 821, 824). Instead of correlating the curtailment in plaintiff's activities to an injury sustained in the accident, plaintiffs' expert relied on that curtailment to conclude that the accident must have exacerbated the preexisting degenerative condition. Accordingly, we agree with Supreme Court that the expert's conclusory opinion is insufficient to defeat defendants' motion.
Crew III, J.P., Mugglin and Rose, JJ., concur. Lahtinen, J. (dissenting).
I respectfully dissent. Viewing the evidence in the light most favorable to plaintiffs, I believe that sufficient factual issues exist to avoid summary judgment. Plaintiff Clement Dabiere (hereinafter plaintiff) was examined in the emergency room on the date of the accident and, thereafter, made numerous visits to the office of his personal physician regarding physical complaints arising from the accident. A detailed affirmation was submitted from plaintiff's physician, Peter Diamond, who related that plaintiff visited one of his partners on August 12, 1999 and plaintiff's maladies included neck pain, marked limitation of range of motion and "a lot of muscle spasm in his neck." The doctor authorized a home health aide for plaintiff "because of the disability incurred as a result of the accident." At a September 1999 visit, Diamond found that plaintiff's reflexes were "absent in the upper extremities and dull and symmetrical in the lower extremities." Plaintiff was noted as having paraspinal muscle spasms during visits in September 1999, October 1999, June 2000 and August 2000. Diamond diagnosed plaintiff as suffering from "acute exacerbation of chronic degenerative joint disease" and opined that "the whiplash injury on top of prior history of cervical vertebral fracture and underlying [degenerative joint disease] * * * left his neck in a very terrible, probably permanent state." Diamond noted in October 1999 that plaintiff was unable to do household chores and concluded after a July 2001 examination as follows:
"He remains unable to do most things that prior to the accident on August 7, 1999 he enjoyed doing. An example of these are ability to work around his lawn or garden or to do simple tasks in his house. Having cared for [plaintiff] before the accident of August 7, 1999 and certainly after the accident of August 7, 1999 I can say without question that this accident exacerbated and worsened [his] prior existent degenerative joint disease of the cervical and lumbar spine and has therefore caused him to have permanent pain which is very unlikely to improve.
Such evidentiary proof reflects a significant aggravation of plaintiff's preexisting neck problems and that the aggravation of his preexisting injuries prevented him from engaging in his normal preaccident activities for more than 90 of the first 180 days following the accident. Objective evidence of the aggravation of plaintiff's injuries suffered in the August 1999 motor vehicle accident was supplied by both the noted decrease of his reflexes (see Kawasaki v Hertz Corp., 199 AD2d 46, 47; cf. Morgan v Beh, 256 AD2d 752, 752-753 [summary dismissal granted where examination of the plaintiff revealed "no spasm * * * reflex dissymmetry * * * or other objective evidence of continuing injury"]) and his doctor's observations on numerous occasions during physical examinations of plaintiff, after the August 1999 motor vehicle accident, of "marked" and "palpable" paraspinal spasms (see Hines v Capital Dist. Transp. Auth., 280 AD2d 768, 771; see also Toure v Avis Rent A Car Sys., ___ NY2d ___, 2002 NY Slip Op 05748, *14-15 [July 9, 2002]). There is no indication that either the reflex test or the observation of spasms were fatally infected by being premised solely upon subjective proof (see Toure v Avis Rent A Car Sys. supra at *15) and the spasms were causally related to the accident by Diamond's opinion that plaintiff "suffered a serious injury which has resulted in chronic pain and spasm in his neck." As such, I would reverse the order granting defendants' motion for summary judgment.