Coverage Pointers - Volume IV, No. 8
IN LOVING MEMORY
It is with deep sadness and regret that we report the death of Sheldon Hurwitz, a highly respected insurance law and trial attorney, and a founder of Hurwitz & Fine, P.C., on October 11, 2002, at the age of 72. In his memory, we share a little bit of his story here. We will all miss him, and are grateful for the lessons and the legacy he leaves behind.
New York State Supreme Court, Appellate Division, Third Department
Contingent Beneficiary has No Right to Proceeds of Annuity Contract Upon Primary Beneficiary’s Death – Rights Extinguished When Benefits Vested with Primary Beneficiary
Plaintiff sought to reform an annuity contract issued by defendant to Vigna designating himself as primary beneficiary so that he could receive the death benefit. The annuity contract designated Vigna’s wife as the primary beneficiary, and plaintiff as the contingent beneficiary. Vigna’s wife had survived Vigna by only 72 days, prompting plaintiff’s application for benefits under the annuity contract, and this action was commenced after defendant denied his request. The sole issue on appeal concerned the lower court’s denial of a motion to amend the complaint -- plaintiff did not dispute Supreme Court’s grant of summary judgment dismissing his action for reformation of the contract. The court held that plaintiff’s proposed amended pleading lacked merit and, as such, the motion to amend was properly denied. The court held that by its terms, the entire annuity contract included the application. Any modification to the contract was required to be made by a signed writing, and the application clearly listed Vigna’s wife as beneficiary. Any claim by plaintiff that Vigna intended plaintiff to be a primary beneficiary was without merit, since he failed to produce any writing that altered the designations in the application. Moreover, plaintiff’s attempt to submit parol evidence of a modification of the designated beneficiaries was barred by the statute of frauds (General Obligations Law § 5-701) and Insurance Law § 3204, which precludes any alteration of an insurance contract other than by an instrument signed by the appropriate party. The court also held that plaintiff’s status as contingent beneficiary did not entitle him to the proceeds of the annuity upon the death of the primary beneficiary. The annuity contract unambiguously provided that the benefits will be paid to the primary beneficiary. Since Vigna’s wife was alive at the time of death, the right to such benefits vested immediately, extinguishing any interest of the contingent beneficiary.
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.
10/17/02: JINWOONG, INC. v. JINWOONG, INC.
Despite Absence of Formal Request, Product Retailer Can Get Indemnity from Manufacturer
Failure of a party seeking indemnity, to give the other party formal notice of opportunity to protect its interests, whether by impleader or otherwise, is not a defense to a claim for indemnity. A product retailer or distributor, sued under a strict liability theory, can obtain indemnity from the manufacturer.
10/16/02: WILSON v. FARMERS INS.
California Court of Appeal
Unfinished Renovation Project is Not “Fortuitous” and Excluded Under All-Risk Policy
Plaintiffs submitted a claim to Farmers Insurance Exchange under an all-risk homeowners policy for a loss in the value of the house insured by the policy, which was due to an unfinished renovation project on the house. After Farmers denied the claim, plaintiffs sued Farmers for breach of contract and negligence. The trial court granted summary judgment in favor of Farmers on the ground the loss from the unfinished renovation was not fortuitous to plaintiffs. The appellate court concluded summary judgment was proper because the loss was expressly excluded from coverage as a loss caused by inadequate repair, construction, renovation, or remodeling.
Georgia Supreme Court
Insurance Carrier Cannot Enforce Money Judgment Against Person Not Party to Underlying Lawsuit
While pursuing efforts to execute on a judgment that Liberty Mutual had obtained against C-Staff, Inc., Liberty invoked OCGA § 9-11-69 to implead various persons and entities that had not been parties to the underlying action in which Liberty obtained its judgment. The United States Court of Appeals for the Eleventh Circuit certified to this Court the question of whether OCGA § 9-11-69 authorizes a judgment creditor to implead and hold liable persons who were not parties to the underlying judgment. It does not. In Georgia, a judgment-creditor must initiate a separate civil action against persons it claims are liable for a judgment to which they were not parties by filing a complaint and serving the defendants under the procedures set forth in the Civil Practice Act.
Seventh Circuit (applying Wisconsin law)
No Coverage Under Attorney E&O Policy Based on Personal Profit Exclusion
An insurer had no duty to defend a law firm, in a claim alleging improper receipt and retention of payments for legal services rendered under a void contract, based on a “personal profit” exclusion in a professional liability insurance policy.
Florida Court of Appeals
Striking A Blow In Self Defense Still Intentional And Excluded Under Policy
Helms, an eighteen-year-old man driving his parents’ car, was involved in an automobile accident with a seventy-seven-year-old man. The elder driver, Cabezas, continued to drive for several blocks after the impact and Helms pursued him until he was able to force the man to the side of the road. While examining the front of his parents’ car, Helms heard someone behind him, and believing he was about to be hit, Helms punched Cabezas on the side of the head. As a result of the blow, Cabezas suffered permanent and incapacitating head injuries and brought suit against Helms and his parents. The Helms tendered the action under their homeowners insurance policy to Farm Bureau which defended under a reservation of rights and then brought this declaratory relief action. Affirming the grant of summary judgment in favor of Farm Bureau, the court found that because Helms intended to hit the person behind him, whether it was Cabezas or a local gang member as Helms claimed he feared, the policy’s exclusion for such intentional acts precluded coverage. The court further noted that if such acts were deemed to be in self-defense, they would still be excluded from coverage under the intentional acts exclusion.
Prepared by Bruce Celebrezze of Celebrezze & Wesley in Los Angeles
Ninth Circuit (applying Washington law)
Insurance Coverage Applicable to Construction Defect Claim Reviewed
Contractor failed to construct concrete piles properly. As a result, the original holes and pile assembles were unusable, and contractor had to install about 300 more piles on the site. Court affirmed denial of coverage for alleged damage to site from defective piles, reversed denial of coverage for subcontractors’ work that was destroyed because of the defective piles and remanded regarding application of certain exclusions as they related to damage to underground structures caused by equipment movement.
Prepared by Robert Schiff of Haight, Brown & Bonesteel LLP in San Francisco
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Appeals (1) from an order of the Supreme Court (Bradley, J.), entered September 11, 2001 in Ulster County, which, inter alia, granted defendants' motion for summary judgment dismissing the complaint, and (2) from an order of said court, entered January 25, 2002 in Ulster County, which denied plaintiff's motion for reconsideration.
In this action, plaintiff seeks to reform an annuity contract to designate him a primary beneficiary so that he may receive the death benefit. Defendant Manufacturers Life Insurance Company of New York (hereinafter Manufacturers) is the successor of First North American Life Assurance Company, which issued an annuity contract to Joseph Vigna in October 1994. The annuity contract at issue designates his wife, Fannie Vigna, the primary beneficiary, and plaintiff the contingent beneficiary. Fannie Vigna survived Joseph Vigna by only 72 days, prompting plaintiff's application for benefits under the annuity contract. This action was commenced after Manufacturers denied his request for payment.
Following joinder of issue, Manufacturers moved for summary judgment dismissing all claims and plaintiff cross-moved to amend his complaint to substitute a cause of action for breach of contract and for summary judgment on the amended complaint. Defendant Theresa M. Bock, as administrator of Fannie Vigna's estate, joined in Manufacturers' motion. Supreme Court, finding no merit in plaintiff's breach of contract claim, denied plaintiff's cross motion to amend and granted Manufacturers' motion for summary judgment holding that plaintiff's original request to reform the contract was time barred by the applicable six-year statute of limitations. Plaintiff moved for reconsideration of his cross motion to amend, which was denied. Plaintiff appeals from both orders.
We affirm. Initially, we observe that the sole issue on appeal concerns the denial of the cross motion to amend since plaintiff does not dispute Supreme Court's grant of summary judgment dismissing his action for reformation of the contract. It is well settled that a motion to amend the complaint is addressed to the sound discretion of the court and, in the absence of a clear abuse of such discretion, the determination will not be disturbed on appeal (see Rayco of Schenectady v City of Schenectady, 267 AD2d 664, 666). Although a motion to amend a complaint will be freely granted in the absence of prejudice or surprise (see Pettengill v Sissman, 267 AD2d 767), the proposed amended pleading must be meritorious (see CFJ Assoc. of N.Y. v Hanson Indus., 274 AD2d 892, 895; Pettengill v Sissman, supra at [*3]768). Since we conclude that plaintiff's proposed amended pleading lacks merit, we find no abuse of discretion in Supreme Court's decision denying plaintiff leave to amend.
By its terms, the entire annuity contract at issue includes the application therefor. Any modification to the contract is required to be made by a signed writing. The application clearly lists Fannie Vigna as beneficiary and plaintiff as contingent beneficiary. Any claim by plaintiff that Joseph Vigna intended plaintiff to be a primary beneficiary is without merit, since he has failed to produce any writing signed by Joseph Vigna which would alter the status of the beneficiaries as designated in the application. We agree with Supreme Court that plaintiff's attempt to submit parol evidence of a modification of the designated beneficiaries is barred by the statute of frauds (see General Obligations Law § 5-701) and Insurance Law § 3204, which precludes any alteration of an insurance contract other than by an instrument signed by the appropriate party.[FN1]
Likewise, there is no merit to plaintiff's contention that his status as contingent beneficiary entitles him to the proceeds of the annuity upon the death of the primary beneficiary. The annuity contract unambiguously provides that the benefits will be paid to the primary beneficiary, as designated in the application, upon the death of Joseph Vigna, the annuitant. Since Fannie Vigna was alive at the time of the annuitant's death, the right to such benefits vested immediately, extinguishing any interest of the contingent beneficiary (see Continental Assur. Co. v Patrick, 157 AD2d 1016, 1018). Accordingly, Supreme Court properly determined that plaintiff's proposed amended claim for breach of contract lacked merit, requiring denial of the motion to amend.
As a final matter, to the extent that plaintiff's motion for reconsideration is considered one to reargue, it is not subject to appeal (see Matter of Pravda v New York State Dept. of Motor Vehs., 286 AD2d 838, 839). If the motion is considered to be one to renew, Supreme Court's denial was correct first, because plaintiff failed to offer any reason why the evidence he submitted on the motion was not offered on the original motion (see CPLR 2221 [e]), and, second, because the additional evidence consisted only of inadmissible affidavits that Joseph Vigna's understanding and intent were contrary to the unambiguous terms of the document. Thus, we find no abuse in Supreme Court's denial of plaintiff's reconsideration motion.
Cardona, P.J., Rose, Lahtinen and Kane, JJ., concur.
ORDERED that the orders are affirmed, with costs.
Footnote 1:In his reply brief, plaintiff, relying on Matter of New York State Assn. of Life Underwriters v New York State Banking Dept. (83 NY2d 353), asserts that since annuities are not insurance, the rules applicable to life insurance do not apply. In our view, this reliance is misplaced. This case dealt with interpretation of the Banking Law concerning the types of financial products that banks were authorized to market, and did not alter the plain language of Insurance Law §3204.