Coverage Pointers - Volume IX, No. 14
Dear Coverage Pointers Subscribers:
This week's issue comes with an Insurance Coverage Quiz for those who want to participate. Prizes may be awarded for creativity and reasoning ability. Keep reading.
Only a small handful of decisions in this week's issue. It's not for lack of us trying to report, it's because of a lack of substance from the courts. How do I explain the paucity of good, juicy law? I blame the writers' strike. The judges refuse to cross the picket lines.
CSI New York? Production shut down after 14 of 24 episodes completed.
. Grey's Anatomy? Only half the episodes completed.
The Office? Off air because the cast wouldn't cross the picket lines.
Housewives? Desperate for new material but none forthcoming.
The NY Courts? Enough said.
You will find reminders, however, on important coverage issues. We have an appellate court case that reminds us of the 20 days to make a motion to stay uninsured motorists arbitrations, if there is an issue of arbitrability. The courts tell us that agreements to provide insurance are enforceable, even where indemnity agreements may not be. There are some good pointers in Mark's column on serious injury threshold motions. Audrey, the Queen of No Fault has the healthiest column, reviewing several arbitrated and litigated decisions. Steve offers some insight in a life insurance and in property damage matters. Earl, "The Pearl" Cantwell educates on federal rules important to all who litigate in that court system.
The New Hampshire pollsters had predicted a banner issue this week. Fifty appellate decisions were expected. Ten would be from the Court of Appeals and insurance coverage, as we know it, would be changed forever. According to the pollsters, the four Appellate Departments were expected to hand down decisions that would curl your coverage toes. And we stood by waiting.
But the pollsters had a bad week.
There was bupkas. Nada. Nothing of any consequence. But we will not drop out of the race. Next week, we'll report from South Carolina. We'll come back from the near dead and anything is possible. Perhaps if I shed a tear or two, I too can rise from the ashes like a Phoenix (or is it Tucson?). And if all goes well, you'll be inundated with coverage decisions in our next issue.
While I normally report on 12 - 15 decisions each issue, as does Mark, I eked out three and Mark was delighted to find a single "serious injury" decision to review. I need to speak to Leno and Letterman to see how they were able to get around the problem. I may need to start to write my own material. As soon as I finish celebrating National Step in a Puddle and Splash Your Friend Day which is celebrated this Friday, I'll get right at it.
COVERAGE QUIZ - PRIZES MAY BE AWARDED
Feeling creative today? Here's a puzzler for you coverage aficionados. There's a passenger in a car, let's call him Clem the Claimant. The vehicle he's in, insured by Cheapo Insurance Company has a 25/50 policy with $25K in SUM coverage. That car is struck by a vehicle, insured by Bad Driver Insurance Company with $100,000 in liability coverage. Clem owns a personal auto, insured with ABC Insurance Company that has $300,000 in single liability limits and $300,000 in SUM (Underinsured Motorist) limits. He is the named insured. His business also owns a car. It is insured with XYZ Insurance Company and has $500,000 in liability limits and $500,000 in SUM limits.
Assume Clem's injuries are worth $1,000,000. Assume further that the Bad Driver has offered its $100,000 limits. We know he has no SUM coverage available through Cheapo, because of the low limits. We know he can secure SUM coverage from ABC (with $300,000 in limits) and XYZ (with $500,000 in limits).
Here's the question: Assuming, an indicated, that a SUM Arbitrator finds that the injuries are worth way more than available SUM coverage, how much will ABC pay and how much will XYZ pay? And why?
From Audrey Seeley, we hear the following:
Happy New Year! The new year is starting off well. The no-fault world is busy and Buffalo has enjoyed two days of 60 degree weather effectively melting all of the snow. You heard me correctly 60 degrees and not minus 60 degrees.
In this new year, the Courts are still declining to vacate arbitration decisions and arbitrators are still closely reviewing denials. An interesting arbitration award in this edition presents the issue of whether hitting a pothole with your motor vehicle resulting in a shoulder injury is an "accident" affording coverage under no-fault. In this arbitration it was found to be an accident. I will remember this decision the next time I am driving down Pearl Street and hit what I lovingly refer to as the ditch when you cross over Chippewa Street and conveniently forget not slow down. For those of you from Buffalo, you know where I mean, that section of Pearl St. where you have to slow down to 10 mph or you risk launching your car, just like in the Dukes of Hazard, while sustaining whiplash on the landing. If you would like a copy of this arbitration decision send me an e-mail at [email protected] and I would be happy to send it to you.
What do we offer you this week? Appellate decisions included in this issue involve the following topics:
- "Independent Contractor Exclusion" Enforced Under One Policy and Coverage Not Afforded for Non-Insured Under Another
- Again, Carrier Gets Bitten by 20-Day Limitation Period to Bring Motion to Stay Arbitration
- Agreement to Provide Insurance Coverage is Enforceable, Even if Indemnity Agreement is Void
STAROSIELEC'S SERIOUS (INJURY) SIDE OF NEW YORK NO FAULT
- Failing to Review ALL of Plaintiff's Medical Records Proves Fatal to Defendant's MSJ
AUDREY'S ANGLES ON NO-FAULT
- Verbal Notice not the Same as Written Notice in NF-10 on EIP's Ability to Excuse Late Notice of Claim
- Applicant's Testimony that Unable to Perform Job Requirements Sufficient to Defeat Wage Denial on Lack of Cooperation with Vocational Rehabilitation Efforts
- Striking a Pothole Resulting in Injury Found to be an Accident
- It's a Bunch of Garbage - Court Vacates Loss Transfer Arbitration Award Involving Issue of Whether Garbage Truck "Involved" in an Accident
- Court Declines to Vacate Master Arbitration Award in Insurer's Favor
- Statutory Interest and Attorney's Fees Still Owed in Light of Insurer's Admissions Even if Paid Claim After Suit Filed
- Medical Expert's Preclusion Improper at Time of Trial
Steven E. Peiper
- Non-Negligent Retailer Entitled to Contractual Indemnification
- Policy Means what it Says: Two-Year Contestability Clause Precludes Carrier's Challenge
- Twelve-Month Delay for Coverage when Damage arises from a Pre-existing Condition is Valid Under the Insurance Law; a Complete Denial is Not
Earl K. Cantwell, II
New Year's Resolution: Be Careful!
New Year's Solution: Amendments to Federal Rules of Civil Procedure
OK, hope that the strike ends and the courts decide to give us both substance and quantity for our next issue. Hope your January is peaceful.
Hurwitz & Fine, P.C. is a
full-service law firm
providing legal services throughout the State of New York.
Dan D. Kohane
Insurance Coverage Team
Dan D. Kohane,
Audrey A. Seeley
Steven E. Peiper
Fire, First-Party and
Andrea Schillaci, Team Leader
Jody E. Briandi
Steven E. Peiper
Audrey A. Seeley, Team Leader
Jody E. Briandi, Team Leader
Dan D. Kohane
Scott M. Duquin
Index to Special Columns
Appellate Division, Second Department
“Independent Contractor Exclusion” Enforced Under One Policy and Coverage Not Afforded for Non-Insured Under Another
Metropolitan was contracted to install a boiler in a commercial building. It was buying the boiler from Eastmond and Easco was going to install it. During the installation process, an Easco employee allegedly caused and explosion and fire while welding and there were resulting damages and injuries.
Tower Insurance Company insured Metropolitan and denied
coverage to Metropolitan based on an exclusion in the policy for damages
"arising out of operations performed for any insured by independent
contractors." Easco's insurer, AIG also denied coverage, as the Metropolitan
was listed as a named or additional insured on Easco's policy with AIG . AIG
also asserted that the plaintiff was not covered as an additional insured by
virtue of the policy language providing for such coverage where the contract
with the policyholder required the policyholder to include as an additional
insured the other party or parties to that contract (hereinafter the Easco
The court agreed with Tower that Easco was an independent contractor and thus the exclusion applied. Easco performed the work according to its own methods without being subject to the plaintiff's control, except as to the product or result of its work so Tower walks..
AIG also established that Metropolitan was not covered under its policy because (a) the policy does not name the plaintiff as an insured or an additional insured, and the plaintiff does not allege that it was named as an insured or explicitly added as an additional named insured on the AIG policy.
The Certificate of Insurance, which suggested coverage, was informational only and did not and could not alter the coverage provided by the AIG policy.
Editor’s Note: Attaboy Max.
In the Matter of Standard Fire Insurance Company v. Mouchette
Appellate Division, Second Department
Again, Carrier Gets Bitten by 20-Day Limitation Period to Bring Motion to Stay Arbitration
This isn’t the first time you’ve heard this; it may be the 50th. If a carrier believes that an uninsured motorists arbitration should not go forward because the offending driver was insured, or the driver’s policy wasn’t cancelled or didn’t expire, or that the disclaimer letter issued by the driver’s carrier was invalid or there is a claim that the other driver was unknown or there wasn’t physical contact with the other vehicle, etc., it must bring an application to stay arbitration within 20 days of the demand.
Twenty days means 20 days. It’s not long. In fact, it’s short. If the application to stay isn’t brought in time, all issues of arbitrability are waived. That’s what happened here. Appellate court rejected insurer’s argument that the demand for arbitration was sent to its home office, rather than the office handling the claim and that such a move was deceptive and meant to cause the carrier to miss the 20-day period
Kim v. D & W Shin Realty Corp.
Appellate Division, Second Department
Agreement to Provide Insurance Coverage is Enforceable, Even if Indemnity Agreement is Void
ACP Seafood Corp. (ACP) contracted with the employer of the plaintiff Kim to perform siding work at a building leased to it by the defendant D & W Shin Realty Corp. ( D & W). Plaintiff was working on a ladder and he claims it slipped, causing him to fall several feet to the ground and suffer injury. Kim sued D&W and D&W cross-claimed against ACP. The claims against ACP were for common law and contractual indemnity and for damages for failing to provide ACP with promised liability insurance..
With respect to the claims related to failure to provide insurance coverage, that agreement was enforceable. Even if the indemnification agreement was void as against public policy, an agreement to procure insurance is not an agreement to indemnify and hold harmless. Accordingly, D & W is entitled to recover from ACP the damages resulting from the breach, including the prospective damages arising from the liability of D & W to the plaintiff and the costs incurred by D & W in defending against the plaintiff's action.
SERIOUS (INJURY) SIDE OF NEW YORK NO FAULT
1/3/08 Haack v. Kriss
Appellate Division, Third Department
Failing to Review ALL of Plaintiff’s Medical Records Proves Fatal to Defendant’s MSJ
Parties were involved in a motor vehicle accident in Albany County. Defendants appealed denial of motion for summary judgment on the 90/180 category. Defendants submitted, inter alia, the affirmation of orthopedist Bryan Bilfield who conducted an IME focusing on plaintiff’s claims of cervical strain, lumbar strain, thoracic strain, posttraumatic headaches and left knee trauma/contusion. Plaintiff’s deposition testimony had detailed how these injuries affected his ability to return to work as a draftsman and how these injuries affected his avocational activities.
While Bilfield’s affirmation acknowledges plaintiff’s claimed injuries as well as his limitations on his avocational activities, he failed to review plaintiff’s primary physician’s medical records or plaintiff’s physical therapist’s records. Instead, Bilfield focused on plaintiff’s medical records as they pertained to a prior lumbar injury and those from May 1996 regarding stiffness in his neck, leg and lower back, attributed to a motor vehicle accident at that time. With respect to the present accident, only some of plaintiff’s medical records were reviewed. In the Court’s view, Bilfield’s failure to review plaintiff’s medical records from his physical therapist and his diagnosing and treating physician, which certified him not to return to work and unable to perform substantially all of his usual and customary activities for 90 of the 180 days following the accident, was fatal. Bilfield could not adequately address plaintiff’s limitations during that period or express an opinion concerning the disabling effect that these injuries had on him.
AUDREY’S ANGLES ON NO-FAULT
The reporting of No-Fault arbitration awards is not at the same level of reported case law, meaning there is no one source to turn to for comprehensive research of arbitration awards. We encourage you to submit to us, in a PDF format, at [email protected], any recent no-fault arbitration awards, especially Master Arbitration awards, that address interesting no-fault issues.
1/7/08 In the Matter of the Arbitration Between Applicant and Respondent
Arbitrator Thomas J. McCorry (Erie County)
Verbal Notice not the Same as Written Notice in NF-10 on EIP’s Ability to Excuse Late Notice of Claim.
The insurer denied the Applicant’s, eligible injured person (“EIP”), claim for no-fault benefits based upon the EIP’s failure to provide notice of the claim within 30 days from the date of the accident. The NF-10 failed to contain the complete language from the regulation, importantly the language advising the EIP on how late notice may be excused.
The insurer argued that the EIP was verbally advised that the EIP could submit a letter justifying the late notice. The arbitrator held a verbal advisory does not comply with the regulation’s requirement.
1/2/08 In the Matter of the Arbitration Between Applicant and Respondent
Arbitrator Thomas J. McCorry (Erie County)
Applicant’s Testimony that Unable to Perform Job Requirements Sufficient to Defeat Wage Denial on Lack of Cooperation with Vocational Rehabilitation Efforts.
The Applicant, eligible injured person (“EIP”), sought lost wage benefits as a result of an August 13, 2006, motor vehicle accident. The Applicant underwent right shoulder surgery approximately two months after the accident. He was released to return to work with a partial disability and 20 pound lifting restriction as well as a restriction of no lifting of the right arm above shoulder level.
The insurer referred the Applicant for vocational rehabilitation and denied the lost wage claim on the ground that the Applicant refused employment due to child care issues. The Applicant testified at the arbitration that he refused employment because the job offered to him exceeded his ability to perform it. Due his concern of sustaining further injury to his shoulder he declined the position.
The arbitrator held that based upon the Applicant’s testimony, which was persuasive, the insurer’s lost wage denial was inappropriate.
1/2/08 In the Matter of the Arbitration Between Applicant and Respondent
Arbitrator Thomas J. McCorry (Erie County)
Striking a Pothole Resulting in Injury Found to be an Accident.
The Applicant, eligible injured person (“EIP”), was operating a self insured bus on April 25, 2006 when her bus struck a pothole purportedly causing injury to her left shoulder. The Applicant was awarded Workers’ Compensation benefits for this injury and the Applicant sought the difference between the amount of her wages and the amount Workers’ Compensation paid for her wages.
The insurer denied Applicant’s claim on the ground that her injury did not arise out of an accident under the insurance policy. The insurer, relying upon Michaels v. City of Buffalo, 85 NY2d 754, argued that the word accident, as used in an automobile policy, refers to an event involving trauma, violence, or casualty. In this case, Applicant hitting a pothole while driving, while unfortunate, involved no extraordinary factor that would make it an accident as opposed to a mere unexpected event.
The arbitrator disagreed and held that the Applicant’s testimony was credible as to numerous complaints from drivers regarding steering and suspension issues with these buses. We note that the decision does not indicate that the basis for the issues was due to this pothole. The arbitrator further held that this issue of a maintenance problem alone could create coverage but he could not distinguish this event from striking any road hazard like a train, car, tree or a deer.
1/9/07 In the Matter of Progressive Cas.
Ins. Co. v. New York State Ins. Fund
Appellate Division, Second Department
It’s a Bunch of Garbage – Court Vacates Loss Transfer Arbitration Award Involving Issue of Whether Garbage Truck “Involved” in an Accident
The Court vacated a loss transfer arbitration award in favor of the New York State Insurance Fund (“NYSIF”) on the grounds that the award had no evidentiary support and was not rational. Mr. Zimone Brown, a sanitation worker that was employed by a company NYSIF insured was struck by a Progressive insured vehicle while standing in the road during the course of loading the garbage truck. NYSIF paid workers’ compensation benefits to Mr. Brown and sought, in a loss transfer proceeding, to recover from Progressive those benefits.
In the arbitration, Progressive argued that NYSIF failed to meet the statutory requirement that one vehicle involved in the accident must weight more than 6,500 pounds. The mere presence of the garbage truck in the general vicinity of the accident did not satisfy the statutory requirement. The arbitration panel rejected this argument and found in NYSIF’s favor to which Progressive petitioned to vacate the award.
The Appellate Court determined that Progressive’s participation in the arbitration, without seeking a stay, was not a waiver of the defense that the garbage truck was not involved in the accident under Insurance Law §5105. Further, since the arbitration obligation arises out of a statutory mandate the arbitrator’s determination was subject to closer judicial scrutiny under CPLR §7511 than that of voluntary arbitration between two parties. Thereafter, the Court held that there was not evidence in the record or a rational basis for the arbitrators’ determination that the garbage truck was involved in the accident under Insurance Law §5105.
12/31/07 SP Medical, P.C. a/a/o Manuel Taveras v. General Assurance Co.,
Appellate Term, Second Department
Court Declines to Vacate Master Arbitration Award in Insurer’s Favor
The Court refused to vacate a Master Arbitration award that upheld a lower arbitrator’s award in favor of the insurer. The Court reasoned that the Master Arbitration decision had a rationale basis.
12/31/07 Delta Diagnostic Radiology, P.C. v. Progressive Cas. Ins. Co.
Appellate Term, Second Department
Statutory Interest and Attorney’s Fees Still Owed in Light of Insurer’s Admissions Even if Paid Claim After Suit Filed
Plaintiff’s summary judgment was granted on its cause of action to recover statutory interest and attorney’s fees. The plaintiff did not submit sufficient evidence to establish a prima facie case. Yet, this was excused due to the insurer’s concession of receipt of the plaintiff’s claim. Furthermore, the insurer conceded that it did not issue a timely denial of the claim. Rather, the insurer paid this claim together with what it believed was the accrued interest.
The Court agreed that the plaintiff was entitled to summary judgment on the issue of statutory interest and attorney’s fees due to the insurer’s admissions and the fact that it paid the claim after litigation was commenced.
12/31/07 Dilon Med. Supply Corp. v. New York Central Mut. Ins. Co.
Appellate Term, Second Department
Medical Expert’s Preclusion Improper at Time of Trial
At trial, the parties stipulated to the plaintiff’s prima facie case as well as defendant’s timely denials based upon lack of medical necessity as demonstrated by peer reviews. The defendant advised the court that the doctors who conducted the peer reviews were unavailable but defendant was producing a medical expert. The plaintiff immediately moved to preclude the expert’s testimony on the grounds that the expert’s opinion would be hearsay and the plaintiff was prejudiced by the inability to cross-examine the physicians who conducted the peer reviews. The trial court granted plaintiff’s motion and issued a verdict in the plaintiff’s favor.
The appellate term reversed on the ground that the defendant preserved its defense of lack of medical necessity by issuing a timely denial upon the peer reviews. Further, the court held that the medical expert the defendant produced, who was subject to cross-examination, would have testimony limited to the basis for the denial was upon the peer review reports. Accordingly, the defendant’s medical expert should be permitted to testify. The appellate term reversed and ordered a new trial.
Steven E. Peiper
Appellate Division, First Department
Non-Negligent Retailer Entitled to Contractual Indemnification
Plaintiff’s insurance carrier commenced this lawsuit in subrogation seeking to recover for damages plaintiff sustained to property as a result of a leaking washing machine. Although the leak was caused by tenants of the building, plaintiff named the retailer where the machine was purchased, as well as the company that delivered the machine, as defendants. Not surprisingly, plaintiff’s claims against retailer and deliverer where summarily dismissed.
However, at the same time it moved against plaintiff, the retailer of the machine also sought contractual indemnification from the deliverer pursuant to a written agreement between the two entities. The agreement also provided that deliverer would name the retailer as an additional insured on its insurance policy for any and all damages arising for the delivery of the retailers merchandise.
The trial court dismissed retailer’s cross-claims against deliverer when the claims advanced by plaintiff were dismissed. In turn, the retailer pursued an appeal of its insurance coverage and contractual indemnification rights. The Second Department reversed the trial part’s decision, finding that retailer was entitled to contractual indemnification. In support of this conclusion, the Second Department indicated that it reached its position because the retailer was free from negligence.
Appellate Division, Second Department
Policy Means what it Says: Two-Year Contestability Clause Precludes Carrier’s Challenge
Carrier issued a life insurance policy to plaintiff’s grandmother in September of 2000, and under which plaintiff was the sole beneficiary. The policy in question contained a provision barring the carrier from contesting the policy’s validity at the expiration of two years from the date of issue.
After the insured’s death in April of 2004, the beneficiary naturally sought payment under the policy. Carrier, however, sought to rescind the policy based on alleged misrepresentation in the application process.
Not so fast said the Trial Court who granted plaintiff summary judgment on the fact that the two-year contestability period had expired. In affirming the underlying judge’s ruling, the Second Department indicated that plaintiff had the opportunity to investigate the insured’s statements within the contestability period. Because the carrier could have challenged the validity of policy prior to the expiration of the time-period, it was precluded from doing so at a later date.
U.S. Court of Appeals, Second Circuit
Twelve-Month Delay for Coverage when Damage arises from a Pre-existing Condition is Valid Under the Insurance Law; a Complete Denial is Not
After receiving an answer from the Court of Appeals (see, infra), the Second Circuit vacated the US District Court’s earlier decision that a carrier was entitled to complete bar to coverage for injuries which arose from a pre-existing injury. However, the matter was remanded back to the District Court for a determination of attorney’s fees which are recoverable pursuant to ERISA.
Benesowitz v. Metropolitan Life Insurance Company
New York State Court of Appeals
For Group Disability Policies, Pre-existing Condition Statute Permits Benefit Toll of Up to 12 Months, Not Permanent Coverage Bar
Section 3234(a) of the Insurance Law authorizes a group disability insurer to preclude coverage for benefits, for the first 12 months of coverage, if the disability suffered by the policyholder pre-existed the issuance of the policy. The question certified by the United States Court of Appeals for the Second Circuit was whether or not the insurer could deny benefits for that pre-existing disability thereafter.
The Court sided with the policyholder and determined that the 12 month period was a tolling statute and the only benefits that could be denied for pre-existing disability would be for that 12 months period only and after that, the policy benefits are payable
Earl K. Cantwell, II
New Year’s Resolution: Be Careful!
New Year’s Solution: Amendments to Federal Rules of Civil Procedure
As we enter the new year of 2008, everyone resolves to be better people, better lawyers, better looking, better everything. That’s fine, although lawyers usually tend to hold themselves up to ridiculously high standards of competency and intelligence. Resolving to try to do better in your practice, with clients, and appeasing courts is a good thing. However, if you fail in your resolution and problems arise, the tonic may be two recent amendments to the Federal Rules of Civil Procedure (FRCP) which just took effect December 1, 2007.
The first amendment, FRCP 26(b)(5)(B), now inserts a statutory prescription for what to do if confidential or privileged information is inadvertently produced in discovery. This is particularly relevant in the present day due to the large volume of documents and electronic data which may be retrieved and produced in certain cases. Before this amendment, there was no sanctioned or “official” rule on what to do if you inadvertently produced documents protected by attorney-client privilege or trial preparation materials, or if you were the lucky (unlucky?) recipient of such documents. These matters were usually handled on an ad hoc basis by conferences with the court, motions for protective orders, motions to preclude, etc.
FRCP 26(b)(5)(B) now provides that, if information is produced in discovery which is subject to a claim of privilege or protection as trial preparation material, the party making the claim may notify any party that received such information of the claim of privilege or protection and the basis for it. After being so notified, the recipient must promptly return, sequester, or destroy the information and any copies it has made or received, and may not use or disclose the information until the claim of privilege or protection is resolved. For its part, the receiving party may promptly send the information to the court under seal for determination of the claim. This new amendment gives some official sanction to the “clawback” concept, at least in federal court, of documents and information which may be inadvertently produced despite best efforts and your well-meaning New Year’s resolutions.
Another common headache to go along with your New Year’s Eve hangover is inadvertent loss or destruction of electronic information which may be of relevance to the case. If there is a “litigation” hold in place on the information, this new rule may not be helpful, but at least new rule FRCP 37(e) provides a limited “safe harbor” with respect to electronic information that becomes unavailable because of a client’s electronic information system. FRCP 37(e) now provides that, absent exceptional circumstances, a court may not impose sanctions under the Federal Rules on a party for failing to provide electronically stored information that is lost because of the “routine, good faith operation” of an electronic information system. This amendment also became effective December 1, 2007. This new rule may be of use to avoid penalties if electronically stored information becomes lost or irretrievable before a litigation hold is put in place, or information was not originally believed to be relevant or subject to the litigation hold and is lost or inaccessible.
So, make all the New Year’s resolutions you want, but if in trouble and in a pinch, these new rules may help you avoid being penalized if your resolutions go awry.
Visit the Hot Cases section of the Federation of Defense & Corporate Counsel website, www.thefederation.org. Dan Kohane serves as the FDCC’s Immediate Past President and Board Chair and past Website Editor
1/8/2008 Aten v. Scottsdale Ins. Co.
Seventh Circuit Court of
Dismissal Under “Your Work” Exclusion Reversed
Aten contracted with Castlerock Construction for construction of a home. Aten discovered a wide variety of construction defects and filed suit against Castlerock. Because Castlerock did not appear, Aten could not conduct discovery to determine what work was performed by subcontractors. Aten then sued Scottsdale Insurance seeking payment of the default judgment against Castlerock. Scottsdale’s motion to dismiss based on the “your work” exclusion was granted. Court of Appeals reversed finding there was an occurrence and the your work exclusion applied, but there was evidence that the exception for work of subcontractors may apply.
Submitted by: Joanne Thomas Blackburn and Jennifer D. Loynd (Jackson & Wallace LLP)
1/4/2008 Essex Insurance Company v. Doe
DC Circuit Court of Appeals
Number of Claims Under Sexual
Abuse Endorsement Depends on Number of Occurrences
Insurance coverage claims arising out of sexual abuse of seven-year-old child at a children’s residential facility. Doe was sexually assaulted on four occasions by four different older boys. Doe settled his claims against the home and took an assignment of rights under its liability policy. Doe sought payment under liability policy which had a sublimit endorsement for sexual abuse claims with a $300,000 "aggregate limit" per year and a $100,000 "each claim limit." Court held the insurance contract unambiguously supports Doe’s position that the number of claims for an individual sexual abuse victim depends on the number of occurrences.
Submitted by: Joanne Thomas Blackburn and Jennifer D. Loynd (Jackson & Wallace LLP)
Calendar Date: October 19, 2007
Before: Mercure, J.P., Peters, Carpinello, Lahtinen and Kane, JJ.
Pennock, Breedlove & Noll, L.L.P., Clifton Park (William C. Firth of counsel), for appellants.
Anderson, Moschetti & Taffany, Latham (Jeffrey K. Anderson of counsel), for respondents.
MEMORANDUM AND ORDER
Appeal from an order of the Supreme Court (Stein, J.), entered October 24, 2006 in Albany County, which partially denied defendants' motion for summary judgment dismissing the complaint.
In November 2000, defendant Charles T. Kriss was driving a vehicle owned by his wife, defendant Marilyn J. Kriss, in an easterly direction on Route 396 in the Town of Bethlehem, Albany County, when the road conditions caused his vehicle to enter into a skid, cross into the westbound lane and collide with a vehicle driven by plaintiff Robert E. Haack (hereinafter plaintiff). Plaintiff was brought to Albany Medical Center and released the same day. Plaintiff, and his wife derivatively, thereafter commenced this action to recover for his injuries. Following discovery, defendants moved for summary judgment, challenging the claims of serious injury within the meaning of Insurance Law § 5012 (d). Plaintiffs, having asserted both a significant limitation of use of a body function or system as well as a failure to perform plaintiff's usual and customary activities for at least 90 of the 180 days following the accident, only opposed defendants' challenge to the 90/180-day claim. Accordingly, Supreme Court dismissed the significant limitation of use claim, yet denied defendants' motion for dismissal of the 90/180-day claim. Defendants appeal.
In an effort to demonstrate that plaintiff did not suffer a serious injury within the parameters of Insurance Law § 5102 (d) (see Parks v Miclette, 41 AD3d 1107, 1109-1110 ; Tuna v Babendererde, 32 AD3d 574, 575 ), defendants submitted the pleadings and deposition testimony of plaintiff and the affirmation of orthopedist Bryan Bilfield who conducted an independent medical examination of plaintiff on June 3, 2005. Focusing on plaintiff's claims of cervical strain, lumbar strain, thoracic strain, posttraumatic headaches and left knee trauma/contusion as a result of the subject accident, the record reflects that throughout the relevant time frame, plaintiff was treated by his primary physician, Philip Drew, neurologist David Hart and orthopedists Mark Fuchs and Robert Cheney, who ultimately sent him for physical therapy. Plaintiff's deposition testimony details how these injuries affected his ability to return to work as a draftsman a determination certified by Drew from the time of the accident until May 2001 and how these injuries affected his avocational activities.
While Bilfield's affirmation acknowledges plaintiff's claimed injuries as well as his limitations on his avocational activities, he failed to review Drew's medical records or those from plaintiff's physical therapist during the relevant period. Instead, Bilfield focused on plaintiff's medical records from 1988 through 1991 as they pertained to a prior lumbar injury and those from May 1996 regarding stiffness in his neck, leg and lower back, attributed to a motor vehicle accident at that time. With respect to the present accident, only some of plaintiff's medical records were reviewed. Bilfield specifically noted that he was not provided with follow-up office records after August 2004 regarding plaintiff's left shoulder complaints for which he was sent for a MRI, and had no X rays or MRI studies regarding plaintiff's other complaints. Yet, Bilfield opined that "[b]ased on the medical records," plaintiff had an "on-going problem with his neck and lower back. The motor vehicle accident would have produced an exacerbation of these problems for a period of six to eight weeks."
In our view, Bilfield's failure to review plaintiff's medical records from his physical therapist and his diagnosing and treating physician, which certified him not to return to work and unable to perform substantially all of his ususal and customary activities for 90 of the 180 days following the accident, was fatal. Bilfield could not adequately address plaintiff's limitations during that period or express an opinion concerning the disabling effect that these injuries had on him (see Ames v Paquin, 40 AD3d 1379, 1380 ; Tornatore v Haggerty, 307 AD2d 522, 523 ). Hence, Bilfield's speculative conclusion, rendered after an examination 4½; years after the subject accident, that plaintiff's claimed limitations were merely an exacerbation of his prior problems which would have lasted for a period of six to eight weeks was insufficient (compare Davis v Evan 304 AD2d 1023, 1024-1025 ). As this determination requires a denial of defendants' motion, regardless of the sufficiency of plaintiffs' opposing papers (see Ames v Paquin, 40 AD3d at 1380), we affirm.
Mercure, J.P., Carpinello, Lahtinen and Kane, JJ., concur.
ORDERED that the order is affirmed, with costs.
Ilyaich v Bankers Life Insurance Company of New York
Windels Marx Lane & Mittendorf, LLP, New York, N.Y. (Robert
D. Mercurio and Delton L. Vandever of counsel), for appellant.
Lifshutz & Lifshutz, P.C., New York, N.Y. (William E. Betz
and Paul Stuart Haberman of counsel),
DECISION & ORDER
In an action to recover the proceeds of a life insurance policy, the defendant appeals from (1) an order of the Supreme Court, Queens County (Grays, J.), entered October 17, 2006, which granted the plaintiff's motion for summary judgment on the complaint, and (2) a judgment of the same court dated November 27, 2006, which, upon the order, is in favor of the plaintiff and against it in the total sum of $1,013,528.49.
ORDERED that the appeal from the order is dismissed; and it is further,
ORDERED that the judgment is affirmed; and it is further,
ORDERED that one bill of costs is awarded to the plaintiff.
The appeal from the intermediate order must be dismissed because the right of direct appeal therefrom terminated with the entry of judgment in the action (see Matter of Aho, 39 NY2d 241). The issues raised on the appeal from the order are brought up for review and have been considered on the appeal from the judgment (see CPLR 5501[a]).
On September 28, 2000, the defendant issued a one million dollar life insurance policy covering the life of the plaintiff's grandmother, and naming the plaintiff as the beneficiary. As required by Insurance Law § 3203(a)(3), the policy contained a two-year incontestability clause, that is, a provision barring the defendant from contesting the validity of the policy after it had been continuously in effect for at least two years. The insured died on April 12, 2004, after the contestability period had expired. In response to the plaintiff's demand for the proceeds, the defendant purported to rescind the policy, based on alleged misrepresentations in the initial application for coverage with respect to the insured's assets and the purpose of the insurance.
The plaintiff commenced this action to recover the proceeds of the policy, and subsequently moved for summary judgment on the complaint. Relying upon the expiration of the contestability period, the Supreme Court granted the plaintiff's motion for summary judgment on the complaint. We affirm.
The defendant issued the life
insurance policy based upon the representations in the application for coverage,
and the burden rested upon it to investigate, within the two-year contestability
period, the veracity of the representations concerning the insured's financial
condition (see New England Mut. Life Ins. Co. v Caruso, 73 NY2d 74). The
insured's finances were a condition of insurance, which were ascertainable by
the defendant at the time that the policy was issued, and which it is precluded
from contesting more than two years thereafter (see Simpson v Phoenix Mut.
Life Ins. Co., 24 NY2d 262).
SPOLZINO, J.P., RITTER, MILLER and DICKERSON, JJ., concur.
Benesowitz v. Metropolitan Life Insurance Company
Before: WINTER, CABRANES, and POOLER, Circuit Judges.
In a previous opinion, we certified to the New York Court of Appeals the dispositive
question of “[w]hether New York Insurance Law § 3234(a)(2) means that (1) a policy may
impose a twelve-month waiting period during which no benefits will be paid for disability
stemming from a pre-existing condition and arising in the first twelve months of coverage or (2)
Eliot Spitzer is now the governor of New York, and Andrew M. Cuomo is the attorney *
general. The solicitor general is now Barbara Underwood.
a policy may lawfully include a permanent absolute bar to coverage of disabilities resulting from
pre-existing conditions that trigger disability within the first twelve months of the employee’s
coverage.” Benesowitz v. Metro. Life Ins. Co., 471 F.3d 348, 353 (2d Cir. 2006). Because the
New York Court of Appeals “conclude[d] that the statute allows insurers to toll benefits during
the first [twelve] months of coverage, but does not permit them to impose an absolute bar to
coverage for disabilities stemming from preexisting conditions and arising during that [twelve]-
month period,” we vacate the district court judgment. Benesowitz v. Metro. Life Ins. Co., 839
N.Y.S.2d 706, 707-08 (N.Y. 2007).
EVE-LYNN GISONNI, Gisonni & Harms, LLP (Richard Harms on the brief), Woodbury, NY,
AMY POSNER, Metropolitan Life Insurance Company, Long Island City, NY (Allen M.
Marcus, Lester Schwab Katz & Dwyer LLP, New York, NY, on the brief) for
ROBERT H. EASTON, Deputy Solicitor General (Eliot Spitzer, Attorney General of the State of
New York, Caitlin J. Halligan, Solicitor General, Benjamin N. Gutman, Assistant *
Solicitor General, on the brief), New York, NY, for Amicus Curiae State of New York in
Support of Appellant.
Richard H. Streeter, Carolyn Doppelt Gray, Theresa L. Jakubowski, Barnes & Thornburg, LLP,
Washington, DC; Lisa Tate, American Council of Life Insurers, Washington, DC, for
Amicus Curiae American Council of Life Insurers in Support of Appellees.
Plaintiff Mitchell Benesowitz appeals a judgment of the United States District Court for
the Eastern District of New York (Thomas C. Platt, Judge) dismissing his claim for long-term
disability (“LTD”) benefits. We assume familiarity with the underlying facts and procedural
history, which are provided at Benesowitz v. Metropolitan Life Insurance Company, 471 F.3d
348, 350-51 (2d Cir. 2006) (“Benesowitz I”), certified question answered by Benesowitz v.
Metropolitan Life Insurance Company, 839 N.Y.S.2d 706 (N.Y. 2007) (“Benesowitz II). In
Benesowitz I, we certified the following question to the New York Court of Appeals: “Whether
New York Insurance Law § 3234(a)(2) means that (1) a policy may impose a twelve-month
waiting period during which no benefits will be paid for disability stemming from a pre-existing
condition and arising in the first twelve months of coverage or (2) a policy may lawfully include
a permanent absolute bar to coverage of disabilities resulting from pre-existing conditions that
trigger disability within the first twelve months of the employee’s coverage.” Benesowitz I, 471
F.3d at 353. The New York Court of Appeals held that the statute was properly interpreted to
allow “insurers to toll benefits during the first [twelve] months of coverage, but does not permit
them to impose an absolute bar to coverage for disabilities stemming from preexisting conditions
and arising during that [twelve]-month period.” Benesowitz II, 839 N.Y.S.2d at 707-08.
The New York Court of Appeals’ decision requires us to vacate the district court’s
judgment, which was premised on the district court’s conclusion that a permanent bar could be
imposed. See Benesowitz v. Metro. Life Ins. Co., 386 F. Supp. 2d 132, 136-37 (E.D.N.Y. 2005).
Benesowitz also asks that we award him attorney’s fees and pre-judgment interest. The
Employee Retirement Income Security Act of 1974 (“ERISA”) authorizes “the court in its
discretion [to] allow a reasonable attorney’s fee and costs of action to either party.” 29 U.S.C. §
1132(g)(1). Pre-judgment interest is also available in the court’s discretion. See Jones v. Unum
Life Ins. Co. of Am., 223 F.3d 130, 139 (2d Cir. 2000). Because the district court determined
that Benesowitz should not prevail, it had no occasion to consider his entitlement to attorney’s
fees or pre-judgment interest. We therefore remand in order that the district court may make
these determinations in the first instance. See Connors v. Conn. Gen. Life Ins. Co., 272 F.3d
127, 137 (2d Cir. 2001) (declining to address attorney’s fees or prejudgment interest where the
district court had not done so).
Based on the New York Court of Appeals’ answer to our certified question, we vacate the
judgment of the district court and remand for further proceedings consistent with this opinion.
Charles C. Khym, P.C. (Sidrane & Schwartz-Sidrane, LLP,
Hewlett, N.Y. [Steven D. Sidrane] of counsel), for appellant-respondent.
Sullivan Papain Block McGrath & Cannavo, P.C., New York,
N.Y. (Stephen C. Glasser and
Stephanie Hatzakos of counsel), for
Mulholland, Minion & Roe, Williston Park, N.Y. (Taryn M.
Fitzgerald of counsel), for respondent.
DECISION & ORDER
In an action to recover damages for personal injuries, etc., the defendant D & W Shin Realty Corp. appeals, as limited by its brief, from so much of an order of the Supreme Court, Queens County (Polizzi, J.), dated January 25, 2006, as denied those branches of its motion which were for summary judgment on its cross claims against the defendant ACP Seafood Corp. for common-law indemnification and to recover damages for breach of a lease provision requiring ACP Seafood Corp. to procure liability insurance naming it as an additional insured and, in effect, upon searching the record, awarded summary judgment in favor of the defendant ACP Seafood Corp. dismissing the cross claim for common-law indemnification and to recover damages for breach of the insurance procurement provision, and denied, as untimely, those branches of its separate motion which were for summary judgment dismissing the causes of action based on Labor Law §§ 200, 240(1), and 241(6) insofar as asserted against it, and the plaintiffs cross-appeal, as limited by their brief, from so much of the same order as granted those branches of the motion of the defendant ACP Seafood Corp. which were for summary judgment dismissing the causes of action based on Labor Law §§ 200, 240(1), and 241(6) insofar as asserted against it.
ORDERED that the order is modified, on the law, (1) by deleting the provision thereof denying that branch of the motion of the defendant D & W Shin Realty Corp. which was for summary judgment on its cross claim to recover damages for breach of the lease provision requiring the defendant ACP Seafood Corp. to procure liability insurance naming D & W Shin Realty Corp. as an additional insured, and substituting therefor a provision granting that branch of the motion, (2) by deleting the provision thereof, in effect, upon searching the record, awarding summary judgment in favor of the defendant ACP Seafood Corp. dismissing the cross claims of the defendant D & W Shin Realty Corp. for common-law indemnification and to recover damages for breach of the insurance procurement provision, and (3) by deleting the provision thereof granting those branches of the motion of the defendant ACP Seafood Corp. which were for summary judgment dismissing the Labor Law § 240(1) cause of action insofar as asserted against it, and the Labor Law § 241(6) cause of action insofar as asserted against it, to the extent it is based on violations of 12 NYCRR 23-1.7(d) and 23-1.21(b)(4)(ii) and substituting therefor a provision denying those branches of the motion; as so modified, the order is affirmed insofar as appealed and cross-appealed from, with one bill of costs payable to the plaintiffs by ACP Seafood Corp.
The defendant ACP Seafood Corp. (hereinafter ACP) contracted with the employer of the plaintiff Kwang Ho Kim (hereinafter the plaintiff) to perform siding work at a building leased to it by the defendant D & W Shin Realty Corp. (hereinafter D & W). According to the plaintiff, he was working alone on the fifth or sixth rung of an unsecured 12-foot ladder when it slipped out from underneath him, causing him to fall to the ground and break his feet. According to Dan Woo Shin, the president and sole shareholder of ACP, prior to the plaintiff's fall, Shin had asked or told the plaintiff to stop working because the plaintiff was alone and it was raining. Subsequently, the plaintiff and his wife, who asserted a derivative claim, commenced this action alleging violations of Labor Law §§ 200, 240(1), and 241(6). D & W cross-claimed against ACP for common-law and contractual indemnification and to recover damages for breach of a lease provision requiring ACP to procure liability insurance naming D & W as an additional insured.
The Supreme Court properly denied as untimely those branches of D & W's motion which were for summary judgment dismissing the causes of action based on Labor Law §§ 200, 240(1), and 241(6) insofar as asserted against it. The motion was submitted beyond the court-ordered time limit of July 1, 2005 (see CPLR 3212[a]), and D & W failed to offer any good cause for its delay in making the motion (see CPLR 2004; DiBenedetto v Lowe's Home Ctrs. Inc., 43 AD3d 853).
The Supreme Court erred in granting those branches of ACP's motion which were for summary judgment dismissing the Labor Law §§ 240(1) and 241(6) causes of action insofar as asserted against it on the ground that ACP was not an owner. The meaning of "owners" under Labor Law §§ 240(1) and 241(6) has not been limited to titleholders but has "been held to encompass a person who has an interest in the property and who fulfilled the role of owner by contracting to have work performed for his benefit" (Copertino v Ward, 100 AD2d 565, 566; see also Guzman v L.M.P. Realty Corp., 262 AD2d 99). Here, ACP was acting as an "owner" when it hired the plaintiff's employer pursuant to an oral contract to perform the siding work on the building, from which it derived a benefit in the operation of its business (see Bush v Goodyear Tire & Rubber Co., 9 AD3d 252, 253; Fisher v Coghlan, 8 AD3d 974, 975-976; DeFreece v Penny Bag, 137 AD2d 744, 745; Buonassisi v Sears, Roebuck & Co., 43 AD2d 701).
ACP's contention that it is entitled to summary judgment dismissing the Labor Law § 240(1) cause of action insofar as asserted against it is without merit, as it failed to satisfy its prima facie burden establishing that the ladder provided "proper protection" under Labor Law § 240(1) (see Blake v Neighborhood Hous. Servs. of N.Y. City, 1 NY3d 280, 289; see also Peralta v American Tel. & Tel. Co., 29 AD3d 493, 494; MacNair v Salamon, 199 AD2d 170, 171).
ACP also failed to satisfy its prima facie burden of establishing that the plaintiff's actions were the sole proximate cause of his injuries (see Blake v Neighborhood Hous. Servs. of N.Y. City, 1 NY3d at 290). The fact that the plaintiff was not holding onto the ladder when he fell does not obviate the statutory requirement to provide proper protection where the plaintiff's work required the use of both hands. Moreover, it cannot be said that the plaintiff was the sole proximate cause of the accident as there is evidence that the failure to secure the ladder contributed to his fall. Likewise, ACP did not establish, as a matter of law, that the plaintiff's failure to heed Shin's instructions to stop working was the sole proximate cause of his injuries (see Gordon v Eastern Ry. Supply, 82 NY2d 555, 563; Wonderling v CSX Transp. Inc., 34 AD3d 1244, 1245; Guaman v New Sprout Presbyt. Church of N.Y., 33 AD3d 758, 759; Adams v Cimato Bros., 207 AD2d 997), and any comparative negligence on the plaintiff's behalf is not a defense to a claim under Labor Law § 240(1) (see Stolt v General Foods Corp., 81 NY2d 918, 920).
Regarding the plaintiff's cause of action pursuant to Labor Law § 241(6), which was premised on violations of 12 NYCRR 23-1.7(d), 23-1.15, 23-1.16, 23-1.17, and 23-1.21(b)(4)(ii), (iii), (iv), and (v), owners and contractors are required to "provide reasonable and adequate protection and safety" for workers, and are required to comply with the specific safety rules and regulations promulgated by the Commissioner of the Department of Labor (see Ross v Curtis-Palmer Hydro-Elec. Co., 81 NY2d 494, 501-502). The rule or regulation alleged to have been breached must be a specific, positive command and be applicable to the facts of the case (see Rizzuto v L.A. Wenger Contr. Co., 91 NY2d 343, 349; Singelton v Citnalta Constr. Corp., 291 AD2d 393, 394).
The regulations set forth at 12 NYCRR 23-1.15, 23-1.16, and 23-1.17, which set standards for safety railings, safety belts, and life nets, respectively, are inapplicable here because the plaintiff was not provided with any such devices (see Dzieran v 1800 Boston Rd., LLC, 25 AD3d 336, 337; Luckern v Lyonsdale Energy Ltd. Partnership, 281 AD2d 884, 887; Avendano v Sazerac, Inc., 248 AD2d 340, 341; Spenard v Gregware Gen. Contr., 248 AD2d 868). Likewise, 12 NYCRR 23-1.21(b)(4)(iii), (iv), and (v) are inapplicable, as there was no evidence that the ladder sagged because it was too weak to support "expected maximum loading conditions," or that the "upper end" of the ladder slipped. Instead, it was the plaintiff's allegation that the ladder slipped out from underneath him. In opposition to ACP's establishment of entitlement to judgment as a matter of law, the plaintiff failed to raise a triable issue of fact.
However, ACP failed to satisfy its prima facie burden establishing that 12 NYCRR 23-1.7(d) and 23-1.21(b)(4)(ii) were inapplicable, as it was undisputed that it was raining while the plaintiff was working alone on an unsecured ladder (see Jicheng Liu v Sanford Tower Condominium, Inc., 35 AD3d 378; Bradley v Morgan Stanley & Co. Inc., 21 AD3d 866, 868; Jamison v County of Onondaga, 17 AD3d 1142, 1143; Sprague v Peckham Materials Corp., 240 AD2d 392, 394).
Labor Law § 200 is a codification of the common-law duty to provide workers with a safe work environment (see Everitt v Nozkowski, 285 AD2d 442, 443). If the allegedly dangerous condition arises from the contractor's methods and the owner exercises no supervisory control over the operation, liability does not attach under the common-law or under Labor Law § 200 (see Peay v New York City School Constr., Auth., 35 AD3d 566, 567; Mas v Kohen, 283 AD2d 616). Here, ACP satisfied its prima facie burden of establishing its entitlement to judgment as a matter of law by demonstrating that it did not direct or control the means or methods of the plaintiff's work (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853). In opposition, the plaintiff failed to raise a triable issue of fact (see Mas v Kohen, 283 AD2d at 617).
Summary judgment on a claim for common-law indemnification is appropriate only where there are no triable issues of fact concerning the degree of fault attributable to each party involved (see Coque v Wildflower Estates Developers, Inc., 31 AD3d 484, 489; La Lima v Epstein, 143 AD2d 886, 888). Thus, the Supreme Court acted prematurely in searching the record and awarding summary judgment in favor of ACP dismissing D & W's cross claim for common-law indemnification (see Coque v Wildflower Estates Developer, Inc., 31 AD3d at 489).
Similarly, the Supreme Court erred by, in effect, upon searching the record, awarding summary judgment in favor of ACP dismissing D & W's cross claim to recover damages for breach of the insurance procurement provision of the lease. While Shin signed the lease on behalf of both lessee and lessor, it was executed in his different capacities as a 50% stakeholder in D & W and the sole shareholder in ACP, and thus was enforceable (see 1 Corbin, Contracts § 3.1, 312). "An agreement to procure insurance is not an agreement to indemnify and hold harmless, and the distinction between the two is well recognized" (Kinney v Lisk Co., 76 NY2d 215, 218). While the Supreme Court found a separate indemnification provision in the lease void and unenforceable under General Obligations Law § 5-322.1, which D & W concedes on appeal, the insurance procurement provision is separable and does not violate General Obligations Law § 5-322.1 (see Kinney v Lisk Co., 76 NY2d 215, 218; Cappellino v Atco Mech., 273 AD2d 265; Mathew v Crow Constr. Co., 220 AD2d 490, 491).
Accordingly, D & W is entitled
to recover from ACP the damages resulting from the breach, including the
prospective damages arising from the liability of D & W to the plaintiff and the
costs incurred by D & W in defending against the plaintiff's action (see
Keelan v Sivan, 234 AD2d 516, 517; DiMuro v Town of Babylon, 210 AD2d
373, 374; Morel v City of New York, 192 AD2d 428, 429).
MASTRO, J.P., RIVERA, DILLON and CARNI, JJ., concur.
Dominick W. Lavelle (Mitchell Dranow, Mineola, N.Y., of
counsel), for appellant.
Karen C. Dodson, Melville, N.Y. (Richard P. McArthur of
counsel), for petitioner-respondent.
DECISION & ORDER
In a proceeding pursuant to CPLR article 75, inter alia, to permanently stay arbitration of an uninsured motorist claim, George Mouchette appeals from an order of the Supreme Court, Nassau County (Brandveen J.), entered April 13, 2007, which, upon finding that the proceeding had been timely commenced, among other things, granted the petition to the extent of directing a framed- issue hearing and temporarily stayed the arbitration pending the framed-issue hearing.
ORDERED that on the Court's own motion, the notice of appeal from so much of the order as directed a framed-issue hearing is deemed an application for leave to appeal from that portion of the order, and leave to appeal is granted (see CPLR 5701); and it is further,
ORDERED that the order is reversed, on the law, the petition is denied, and the proceeding is dismissed as time-barred; and it is further,
ORDERED that one bill of costs is awarded to the appellant.
"CPLR 7503(c) requires that an application to stay arbitration be made within 20 days after service of a demand for arbitration" (Matter of Land of the Free v Unique Sanitation, 93 NY2d 942, 943). Unless a party makes an application for a stay of arbitration within the statutory 20-day period, CPLR 7503(c) precludes it from seeking a judicial determination (see Matter of Fiveco, Inc. v Haber, 42 AD3d 454, lv denied 9 NY3d 814). Here, the proceeding was commenced more than 20 days after service upon the petitioner of the demand for arbitration (see Matter of Transportation Ins. Co. v Desena, 17 AD3d 478, 479).
Moreover, the petitioner failed to establish that the demand for arbitration was deceptive and intended to prevent it from contesting the issue of arbitrability (see Matter of Travelers Indemn. Co. v Castro, 40 AD3d 1005, 1006; Matter of State Farm Ins. Cos. [DeSarbo], 36 AD3d 1193, 1194-1195; Matter of Nationwide Ins. Co. v Singh, 6 AD3d 441, 444). In this regard, the petitioner failed to proffer an affidavit by "someone with knowledge" to support its contention, in effect, that the appellant's service of the demand for arbitration upon the petitioner's Hartford, Connecticut address was deceptive and intended to prevent it from contesting the issue of arbitrability (Matter of Nationwide Ins. Co. v Singh, 6 AD3d 441, 444). Accordingly, under the facts of this case, the petition should have been denied and the proceeding should have been dismissed as untimely (see Matter of United Servs. Auto. Assn. Prop. & Cas. Ins. Co. v DeRosa, 36 AD3d 925).
Melucci, Celauro & Sklar, LLP, New York, N.Y. (Daniel Melucci
of counsel), for appellant.
Lester Schwab Katz & Dwyer, LLP, New York, N.Y. (Eric A.
Portuguese and Aaron Brouk of
counsel), for respondent AIG Claims
Max W. Gershweir, New York, N.Y. (Joseph S. Wiener of
counsel), for respondent Tower
Insurance Company of New York.
DECISION & ORDER
In an action, inter alia, for a judgment declaring that the defendants AIG Claims Services, Inc., and Tower Insurance Company of New York are required to defend and indemnify the plaintiff for any claims asserted against it arising from losses sustained on June 7, 2002, at 208 West 29th Street in the City of New York, the plaintiff appeals from an order of the Supreme Court, Kings County (Ruchelsman, J.), dated March 28, 2006, as amended by an order dated July 19, 2006, which granted those branches of the separate motions of the defendant AIG Claims Services, Inc., and the defendant Tower Insurance Company of New York which were for summary judgment declaring that they were not obligated to defend or indemnify the plaintiff, and denied those branches of the plaintiff's cross motion which were for summary judgment declaring that those defendants were so obligated.
ORDERED that the order, as amended, is affirmed, with one bill of costs.
The plaintiff contracted to provide and install a new boiler in a commercial building. It then arranged to purchase the boiler from the defendants A. L. Eastmond & Sons, Inc., and Easco Boiler Corp. (hereinafter collectively Easco) and to have Easco install it. The boiler required two to four days of assembly at the work site by Easco employees. On the second day of the installation process, an Easco employee allegedly caused an explosion and fire while connecting a welder to an electrical source, with resultant injuries and damages.
The plaintiff's insurer, the defendant Tower Insurance Company of New York (hereinafter Tower) disclaimed coverage for all claims asserted against the plaintiff, in reliance upon an exclusion in the policy for damages "arising out of operations performed for any insured by independent contractors." Easco's insurer, the defendant AIG Claims Services, Inc. (hereinafter AIG), also denied coverage, as the plaintiff was not explicitly listed as a named or additional insured on Easco's policy with AIG (hereinafter the AIG policy). AIG also asserted that the plaintiff was not covered as an additional insured by virtue of the policy language providing for such coverage where the contract with the policyholder required the policyholder to include as an additional insured the other party or parties to that contract (hereinafter the Easco provision).
"Generally, it is for the insured to establish coverage and for the insurer to prove that an exclusion in the policy applies to defeat coverage" (Consolidated Edison Co. of N. Y. v Allstate Ins. Co., 98 NY2d 208, 218). Contrary to the plaintiff's contentions Easco was clearly an independent contractor. It performed the work according to its own methods without being subject to the plaintiff's control, except as to the product or result of its work (see Matter of Beach v Velzy, 238 NY 100, 103; Favale v M. C. P., Inc., 125 AD2d 536, 536; G. D. Searle & Co. v Medicore Communications, 843 F Supp 895, 904-905). The record also showed that Easco did not merely supply the boiler, but assumed performance of part of the contract by providing labor and services at the work site (cf. A & J Buyers v Johnson, Drake & Piper, 25 NY2d 265, 271-272). In response to this showing by Tower that it properly relied upon the policy exclusion for independent contractors to disclaim coverage, the plaintiff failed to raise a triable issue of fact. Accordingly, the Supreme Court properly granted summary judgment to Tower (see generally Alvarez v Prospect Hosp, 68 NY2d 320, 324).
AIG also made out a prima facie case showing that the plaintiff was not covered under the AIG policy. The policy does not name the plaintiff as an insured or an additional insured, and the plaintiff does not allege that it was named as an insured or explicitly added as an additional named insured on the AIG policy.
In response, the plaintiff failed to offer sufficient evidentiary proof to show the existence of a triable issue of fact as to its entitlement to coverage under the Easco provision. Moreover, contrary to the plaintiff's contention, Easco's certificate of insurance, which stated that it was issued as a matter of information only, was insufficient to do so and in any event conferred no rights upon the plaintiff as the certificate holder (see Tribeca Broadway Assocs., LLC v Mount Vernon Fire Ins. Co., 5 AD3d 198, 200; Progressive Cas. Ins. Co. v Yodice, 276 AD2d 540, 542-543; Penske Truck Leasing Co., L.P. v Home Ins. Co., 251 AD2d 478, 479). Accordingly, the Supreme Court also correctly awarded summary judgment to AIG declaring that it was not obligated to defend or indemnify the plaintiff (see generally Alvarez v Prospect Hosp., 68 NY2d 320, 324).
Kermanshah Oriental Rugs, Inc. v Gollender
Michelle S. Russo, Port Washington, for appellants.
Fabiani Cohen & Hall, LLP, New York (Joseph J. Rava of
counsel), for respondents.
Orders, Supreme Court, New York County (Louis B. York, J.), entered November 3 and 24, 2006, which, to the extent appealed from as limited by the briefs, dismissed defendant P.C. Richard's cross claims (formerly third-party claims) against defendants Spirit Delivery & Distribution Services, DeMoura and Rolim & Santos Home Delivery Co., unanimously modified, on the law, those cross claims reinstated and summary judgment granted to P.C. Richard on its cross motion and motion therefor, and otherwise affirmed, without costs, and the matters remanded for further proceedings in accordance herewith. Appeals from orders, same court and Justice, entered February 23, May 25 and May 31, 2006, unanimously dismissed, without costs, as superseded by appeals from the November 2006 orders.
Plaintiff Kermanshah, the operator of a retail establishment involved in buying and selling oriental rugs, purportedly sustained damage to its property as a result of a water leak. Even though Kermanshah alleged that the leak had been caused by the installation of a washing machine by tenants in the building, it sued not only those tenants but also the owner of the building, the retail seller of the appliance (P.C. Richard), and the entities responsible for its delivery and installation (collectively referred to as the Spirit defendants). After Kermanshah recovered payment for its loss from its insurer, Sompo Japan Insurance Company, the latter brought suit against the same defendants for recovery. In addition to dismissing summarily the complaints and all cross claims against P.C. Richard and the Spirit defendants, the court also dismissed P.C. Richard's cross claims and denied its requests for summary judgment for contractual indemnification and for damages for the Spirit defendants' failure to obtain required insurance.
Pursuant to its agreement with the retailer, Spirit was required to "indemnify and hold P.C. harmless from any claim or loss to persons or property which is alleged to be caused by, or in connection with Spirit's performance of its duties under this Agreement, including all cost related thereto, and including attorney's fees and court costs." Paragraph 10 of the agreement further required Spirit to obtain insurance on behalf of P.C. Richard. Furthermore, under its subcontract with Spirit, defendant Rolim & Santos Home Delivery Co. agreed to indemnify any of Spirit's clients against "any and all losses, suits, actions, debts, claims, demands, damages" due to "any negligence, act, or omission of" Rolim & Santos.
The court found no indication of any negligence on P.C. Richard's part, thus entitling it to contractual indemnification from Spirit and, as a client thereof, also from Rolim & Santos (see Brown v Two Exch. Plaza Partners, 76 NY2d 172 ). As for Spirit's agreement to procure insurance on behalf of P.C. Richard, while it is undisputed that the Spirit defendants attached a certificate of insurance to their opposition papers, a "certificate of insurance is only evidence of a carrier's intent to provide coverage but is not a contract to insure the designated party nor is it conclusive proof, standing alone, that such a contract exists" (Tribeca Broadway Assoc. v Mount Vernon Fire Ins. Co., 5 AD3d 198, 200 ). Spirit has not challenged P.C. Richard's claim that such insurance was never actually obtained.
Spirit's arguments of lack of privity with the cross claimants as denominated herein and the applicability of New Jersey law in construing this contractual provision are raised for the first time on appeal, and thus have not been preserved for our review. Were we to consider these arguments, we would find them without merit.
CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.