Coverage Pointers - Volume IX, No. 6

Dear Coverage Pointer Subscribers:

 

To those who have asked.  The answer is "yes."  We handle matters throughout New York State, from NYC to Watertown, from Albany to Binghamton, from Syracuse to Chautauqua County and everywhere in between.

 

This week's issue, the 9/21/07 offering, is attached. 

 

Those who know me well, recognize my deep and abiding interest in history and historical events.  We should never forget what makes our nation and our world special.

 

Friday, the 21^st of September is the International Day of Peace.  Surely that is a day of reflection and hope.  I should have been satisfied with knowing that and that alone, but that ain't me.

 

I wondered about the days close by.

 

The previous day, September 20^th, is National Punch Day but I could not determine whether the "punch" involves a devise that makes holes, a sweet drink from Hawaii or a closed fist.  Maybe someone else knows.  I doubt anyone cares.

 

But I was much more interested in Wednesday, the 19^th which is a day in which two very important celebrations took place.  It was National Butterscotch Pudding Day and, most significantly, it was also International Talk Like a Pirate Day.  You probably missed it.  I suggest you check out this link http://www.piratequiz.com and complete the quiz to find out your pirate name.   I did, of course. Mine is Dirty Sam Rackham and they say of me:

 

You're the pirate everyone else wants to throw in the ocean -- not to get rid of you, you understand; just to get rid of the smell. You have the good fortune of having a good name, since Rackham (pronounced RACKem, not rack-ham) is one of the coolest sounding surnames for a pirate. Arr!

 

Thought you would want to know.  Who wouldn't?

 

How do I climb back onto the tree from that limb?  Not sure.

 

By next issue, we should have the next draft of the Insurance Department's 3420 amendments.  They are still in flux with the Department continuing to consider expanding the obligation to disclaim promptly from NY bodily injury and wrongful death cases to accidents occurring anywhere in the nation and involving, in addition to BI and WD cases, property damage, E&O, D&O and other claims.  Not a good thing.  The Department will press forward with a "prejudice bill" and we're working as hard as we can to balance it.  Stay tuned.

 

From Audrey, the Queen of No Fault:

 

FINALLY, the courts are back and issuing some interesting no-fault decisions!  This issue includes a few cases up on appeal from New York City Civil Kings County where the insurer's motion to strike the plaintiff's complaint was granted.  I note that the cases all had similar fact patterns which aided in the court granting the motion. There is another case up on appeal from New York City Civil Queens County where the insurer was successful on a summary judgment motion on the basis of fraudulent incorporation of a professional service limited liability company.

 

We hope that you enjoy this issue as it is packed with interesting cases.

           

            Audrey

 

Hey, the courts are back in session, just as I promised, and our issue is back up to snuff, complete with lots of interesting appellate decisions:.

 

• What is Maintenance of an Automobile, so as to Invoke Auto Exclusion in CGL Policy?
• It's Too Late Baby; Now It's Too Late
• Second Verse, Same as the First:  It's Too Late Baby; Now It's Too Late
• Premium Finance Cancellation Effective; No Obligation to Advise of Right to Review
• What is the Contractual Penalty for Failure to Provide Promised Coverage?
• Arbitration Forums, Inc. Fails to Follow its Own Rules and That's Unacceptable
• Carrier Not a Party to Declaratory Judgment Action, Not Bound by Result
• What's Good for the Goose, Ought to be Good for the Gander.  Late Notice Sinks Carrier
• Question of Fact Surrounding Broker Malpractice
• New York Does Not Recognize a Theory Which Would Allow a Wrongful Death Claim Against a Life Insurance Company for Negligently Issuing a Policy
• Exclusion Means What Exclusion Says

STAROSIELEC'S  SERIOUS (INJURY) SIDE OF NEW YROK NO FAULT
Mark Starosielec
[email protected]

 

• Simply Put, Failure to Explain Seriousness of Injury Leads to Summary Judgment
• Two Years Too Late: Plaintiff's Doctor's Findings Not Enough to Survive SJ Motion
• Address Plaintiff's Claim: Failure to Do So Leads to Summary Judgment Denial
• Initial ROM Tests Must Be Contemporaneous with the Accident
• Continuing Medical Treatment Leads to Granting of Plaintiff's Motion to Vacate
• Treating with Doctor Every Eight Months is No Gap in Treatment.
• Court to Parties: Plaintiffs Must Mind the Gap Too

 

AUDREY'S ANGLES ON NO-FAULT

Audrey Seeley

[email protected]

 

• Plaintiff's Failure to Provide Adequate Discovery Responses or Respond to Supplemental Discovery Demands as well as Submit Written Opposition to Motion Warrants Striking Complaint
• Another Complaint Struck for Failure to Respond to Discovery and Submit Written Opposition to Pending Motion.
• Acupuncturist's Fee Argument Rejected when Insurer Demonstrated Reliance Upon Workers' Compensation Fee Schedule for Acupuncture Services by Chiropractor
• Insurer Prevails on Cross-Motion Based Upon Fraudulent Incorporation of a Professional Service Limited Liability Company
• Plaintiff's Action Premature as Time Frame in Which to Pay or Deny had not Expired

Hurwitz & Fine, P.C. is a full-service law firm
providing legal services throughout the State of New York.

Newsletter Editor

Dan D. Kohane
[email protected]

 

Insurance Coverage Team

Dan D. Kohane, Team Leader
[email protected]

Michael F. Perley
Audrey A. Seeley
Steven E. Peiper

Fire, First-Party and Subrogation Team
Andrea Schillaci, Team Leader
[email protected]
Jody E. Briandi
Steven E. Peiper

NO-FAULT/UM/SUM TEAM
Audrey A. Seeley, Team Leader
[email protected]
Tasha Dandridge
Mark Starosielec

APPELLATE TEAM
Dan D. Kohane
Scott M. Duquin

Index to Special Columns

 

Starosielec’s Serious Side of “Serious Injury”

 Audrey’s Angles on No Fault

Peiper on Property

Across Borders

 

 

9/11/07            Guishard v. General Security Insurance Company

New York State Court of Appeals
What is Maintenance of an Automobile, so as to Invoke Auto Exclusion in CGL Policy?

Does a General Liability Policy require its carrier to defend a lawsuit involving an eye injury that occurred when a van was being converted into a Mr. Softee ice cream truck?  “No,” says the CGL carrier because our policy excludes bodily injury "arising out of the ownership, maintenance, use or entrustment to others of any . . . 'auto' . . . owned or operated by or rented or loaned to any insured."  “Yes,” said the Appellate Division.  Since the carrier had not submitted the policy schedule defining the term "auto," it had not demonstrated that the van fell within the relied-upon policy exclusion. Not a strong decision.

 

The Court of Appeals affirmed (requiring the CGL carrier to defend) but for a different reason.  The work being performed by the injured person did not constitute "maintenance" of an auto. "Maintenance," as that term is used in an insurance policy, means performance of work on "an intrinsic part of the mechanism of the car and its overall function." Example would be removing, replacing or repairing a tire. Riveting metal to a van in furtherance of its conversion to an ice cream truck aids in transforming the auto's function, an activity distinct from "maintenance."

 

Editor’s Note:  It has been long the rule that simply because someone in injured in and about a car or truck, doesn’t necessarily mean that the injuries would be covered by the auto policy.  Assaults within a vehicle, for example, do not fall within auto coverage.  If a car is being used as something else (perhaps as a ladder) and an injury occurs, the auto policy will not apply.  The standard is, generally, that an accident must arises out of the use of a vehicle as a vehicle (vehicle qua vehicle).  As an aside, when we reported on the decision at the Appellate Division back in Volume VIII, No. 5 (9/8/06) our  “Editor’s note” wondered how the definition of “auto” would have made a difference in the final decision by the court, had the schedule been provided.  The Court of Appeals apparently wondered the same thing, and decided the case with an entirely different approach.

 

9/20/07            Macro Enterprises, Ltd., v. QBE Insurance Corp.

Appellate Division, First Department
It’s Too Late Baby; Now It’s Too Late
With apologies, of course, to Carole King.

 

Two years after the construction site accident involving its employee, the subcontractor advises its insurer of the accident, claiming that it believed the employee’s only remedy was Workers Compensation.  “Nah,” sayeth the court.  Plaintiff's failure to notify defendant for more than two years of the underlying occurrence, in which plaintiff's employee was injured in a construction site accident, constituted noncompliance with the condition precedent to coverage and vitiated the contract of insurance. Plaintiff's claimed belief of nonliability, on the basis that its injured employee's exclusive remedy was under the Workers' Compensation Law, was simply not reasonable.

 

9/18/07            In the Matter of Liberty Mutual Insurance Company v. Rapisarda

Appellate Division, Second Department
Second Verse, Same as the First:  It’s Too Late Baby; Now It’s Too Late
Court upholds decision of lower court granting permanent stay of underinsured motorist arbitration (SUM) claim because insured failed to notify carrier, as soon as reasonably practicable, of potential UM claim. Accordingly, insured loses right to recover UM benefits.

 

9/18/07            In the Matter of AIU Insurance Company v. Rodriguez

Appellate Division, Second Department
Premium Finance Cancellation Effective; No Obligation to Advise of Right to Review
A premium finance company cancelled a policy, as it is entitled to do, for non-payment of premium.  When a subsequent uninsured motorists claim was filed against another carrier, that carrier sought to stay arbitration, claiming that the policy had not been properly cancelled because of a failure to advise the insured of a right to seek review of the cancellation.  There is no such rule that requires notice to be given of a right to review, when the cancellation is for non-payment of premium.  Accordingly, the cancellation was effective and the UM claim can proceed.

 

9/18/07            Netjets, Inc. v. Signature Flight Support, Inc.

Appellate Division, Second Department
What is the Contractual Penalty for Failure to Provide Promised Coverage?
In an earlier proceeding, it was established that Sharp failed to honor a contractual obligation and provide liability coverage to Signature.  Signature had other coverage for the loss through Global Aerospace. Sharp's agreement with Signature specified the nature of the insurance coverages Sharp was supposed to maintain, and further specified that Sharp was to name Signature as an additional insured. Pursuant to Sharp's obligation to procure appropriate insurance naming Signature as an additional insured, Sharp's insurer would have had the duty to defend Signature in this action, to the same extent that a properly named additional insured would have been entitled to a defense in this action.  Since Sharp failed to get the coverage, Global was forced to defend Signature.

As the courts have held before, Signature's damages for Sharp's breach were limited to Signature's out-of-pocket expenses in obtaining and maintaining its own separate insurance underwritten by its own insurance carrier, Global Aerospace, as well as the costs of the premiums and any additional costs it incurred such as deductibles, co-payments and increased future premiums.  Global Aerospace may ultimately have a subrogation claim against Sharp to recoup its costs of defending Signature in the instant action. Pursuant to the indemnification clause, Sharp's promise to defend and indemnify Signature arose upon "any act or failure to act or negligence" committed by Sharp.

 

9/18/07            In the Matter of Liberty Mutual Ins. Co. v. Sedgewick of New York Appellate Division, Second Department
Arbitration Forums, Inc. Fails to Follow its Own Rules and That’s Unacceptable
An inter-company arbitration claim was being handled by Arbitration Forums, Inc. (AFI).  A decision was rendered in September 2004 in favor of one party.  In October 2004, AFI modified the award, against the same part.  However, since AFI did not follow its own procedures in modifying the first award, the September 2004 award should have been confirmed.  Modification is only permitted, under AFI rules if there is a clerical or jurisdictional error. Here, the modification was based on “conflicting evidence” and that is not an acceptable reason to modify an award, anyway.  In addition, the party that lost on the first award did not comply with the arbitration article of the CPLR (Civil Practice Law & Rules) to seek modification (CPLR 7509).  All in all the court reinstates the first award.

 

9/18/07            In the Matter of New York Central Mut. Fire Insurance Company v. Steiert

Appellate Division, Second Department
Carrier Not a Party to Declaratory Judgment Action, Not Bound by Result
Steiert claims injury when a car upon which she was sitting suddenly accelerated and she fell off and her head struck the payment. She made an underinsured motorist claim (SUM) against her mom’s carrier, New York Central.

 

New York Central brought an application to stay the SUM arbitration claiming that Steiert had not exhausted all of the available liability coverage.  NY Central argued that there was coverage available to the driver of the car on which she was sitting through Kemper.  Steiert and Kemper responded by claiming that the stay should be denied because Kemper had issued a disclaimer and that Steiert had commenced a declaratory judgment action challenging the disclaimer and lost.

The Court refused to bind New York Central to the holding in the declaratory judgment action in which it was not a party.  New York Central was not in privity with a party to that action, was not given a full and fair opportunity to contest the determination in the DJ action and therefore, is not bound by the decision.   New York Central is allowed to litigate that question.

9/11/07            Delphi Restoration Corporation v. Sunshine Restoration Corporation

Appellate Division, Second Department

What’s Good for the Goose, Ought to be Good for the Gander.  Late Notice Sinks Carrier.

While investigation by an insurer can justify a delay in disclaiming, not denying coverage for 43 days was determined to be unreasonable as a matter of law.  Accordingly, the carrier lost its right to disclaim based on policy exclusions and breaches of policy conditions.

 

Editor’s Note: 

 

To fill in some of the missing facts, we contacted counsel involved in this appeal and learned the following facts:

 

• Delphi was a roofing contractor; On January 13, 2002, while doing roofing work, planks fell off the building and struck a pedestrian;
• Delphi knew of the accident the day it occurred but did not give notice of the accident to Utica, its carrier;
• In May 02, Delphi is sued;  Delphi doesn't give notice of the lawsuit to Utica, but instead to a different carrier, Admiral (the owner's agent's carrier) who assumes the defense of Utica;
• On December 30, 2002, almost a year after the accident, Delphi first gives notice to Utica.  The notice arrives January 2, 2003.
• On February 13, 2003, some 43 days after receiving notice, Utica denies coverage on three grounds:  a roofing exclusion in the policy, the eleven plus month’s late notice of the incident and the eight months late notice of the lawsuit.
• It is noteworthy that Utica disclaimed four days after it received its investigator's report establishing that the loss was caused by roofing operations.
• Lower court and, on 9/11, the App Div, held that the insurer lost is right to deny coverage based on a valid exclusion because of the slight delay.
• The insurer had lost its right to investigate or control the defense.  In fact, this action was being pressed by Admiral, who settled the case for almost $500,000 and was now seeking to recover those amounts from Utica.
• Clearly, there was NO prejudice to the insured, who was being represented by counsel, retained by another carrier and was fully protected by Admiral;
• Think about this case, in light of current legislative initiatives

 

We have no quarrel with the decision based on established precedent.  An insurer that fails to disclaim and has no excuse for that failure is likely to lose many of its rights to do so, if as little as 43 days go by.  What we remind the Legislature is the inequity of amending the Insurance Law to require that a carrier show proof of prejudice before IT can deny on the basis of an insured’s late notice, without a corresponding change in the statute to protect the insurer from an honest mistake.  Why should a carrier lose its right to deny coverage based on clear policy exclusion for a short delay in giving notice, if the insured has not been prejudiced?  Let’s make certain that any legislation that comes before that august body this year or next is balanced.  We know that there is “balancing language” currently under consideration with the Insurance Department.  Let’s hope that any change on the prejudice question is bilateral.

 

9/11/07            Dweck v. Friedlander Group, Inc.

Appellate Division, Second Department

Question of Fact Surrounding Broker Malpractice

Broker placed risk with insurer that went into liquidation and, accordingly, insured’s subsequent building loss was not fully paid.  Broker was sued, with claim that there was an agreement to place policy with A-rated Company.  Since there was conflicting evidence on the issue, summary judgment dismissing case against broker was reversed and the matter sent back for trial.

 

9/11/07            Katchalova v. Perchikov and Union Central Life Ins. Co.

Appellate Division, Second Department
New York Does Not Recognize a Theory Which Would Allow a Wrongful Death Claim Against a Life Insurance Company for Negligently Issuing a Policy
Katchalova, as Administratrix of the Estate of the late Laryssa commenced an action for wrongful death against a life insurance company.  That should be enough to get your interest!  The claim was that the insurer negligently issued a policy to the decedent and thereby helped bring about her death.  Perchikov was Laryssa’s lover.  Anyway, the complaint alleges that Perchikov became intimate with Laryssa and convinced her to apply for a large life insurance policy naming him as the beneficiary. During the application processes, the decedent misrepresented her income, her occupation, and her relationship with Perchikov. After securing $1,000,000 policies with Union Central and two other companies, it is claimed that Perchikov allegedly murdered the decedent in order to obtain the proceeds of the life insurance policies.

The Appellate Division dismisses the wrongful death and pain and suffering causes of action, premised upon the alleged negligent issuance of life insurance policies.  New York does not recognize such a theory based on the negligent issuance of an insurance policy.

Editor’s Note:  The Adminstratrix, Katch-a-lova, could not ...

9/11/07            Makan Exports, Inc., v. U.S. Underwriters Insurance Company
Appellate Division, Second Department
Exclusion Means What Exclusion Says
Arciero, an employee of a framing subcontractor hired by home owner Makan Exports, (Makan) was injured during construction of the house.  He commenced an action against Makan for personal injuries. Makan turned the suit over to its carrier, U.S. Underwriters (Underwsriters).

Underwriters disclaimed coverage on the basis of an exclusion in the policy the L-310 exclusion, which removed coverage for employees of subcontractors injured in course of employment.  Makan subsequently commenced the instant action, contending that another provision of the policy, an endorsement entitled "Supplemental Condition-Contractors'/Owners' Subcontracted Work" (hereinafter the L-257s endorsement), provided coverage to employees of subcontractors so long as Makan complied with the L-257s endorsement that it obtain a Certificate of Insurance from the subcontractor. It is undisputed that Makan complied with this condition. Alternatively, Makan contended that the L-310 exclusion and the L-257s endorsement were in conflict, resulting in an ambiguity that should be construed against Underwriters, and, as a result, Underwriters was obligated to defend and indemnify Makan on that basis.

The L-310 exclusion clearly excluded coverage for bodily injury claims by employees of subcontractors sustained in the course of employment.  The court found no conflict between the endorsements.  The L-257 endorsement did not provide coverage to employees of subcontractors for claims of bodily injury sustained in the course of employment.

STAROSIELEC’S  SERIOUS (INJURY) SIDE OF NEW YROK NO FAULT
Mark Starosielec
[email protected]

 

9/18/07            King v. Islam

Appellate Division, Second Department
Simply Put, Failure to Explain Seriousness of Injury Leads to Summary Judgment

Here, the appellate division held the defendants made prima facie showings of their entitlement to judgment as a matter of law by demonstrating that the plaintiff did not sustain a serious injury. In opposition, the plaintiff failed to raise a triable issue of fact. In particular, the plaintiff failed to offer any medical evidence, generated at or near the date of her accident, documenting her alleged injuries and explaining why they were serious within the meaning of the statute. The only medical evidence she provided was a doctor’s affirmation who examined the plaintiff. Yet, there is no record of any objective evidence of the extent of the alleged physical limitations revealed in a 1998 MRI and physical examinations, resulting from the disc injuries, and their duration (see Furrs v Griffith,AD3d [2d Dept, Aug. 7, 2007]; Duke v Saurelis, 41 AD3d 770). In addition, no explanation was offered for the approximately seven-year gap in treatment.

 

9/13/07            Guadalupe v Blondie Limo, Inc.

Appellate Division, First Department

Two Years Too Late: Plaintiff’s Doctor’s Findings Not Enough to Survive SJ motion
The Appellate Division affirmed lower court’s order which granted defendants’ motion for summary judgment dismissing the complaint. Here, defendants established a prima facie entitlement to summary judgment by submitting evidence demonstrating that plaintiff did not sustain a serious injury. Specifically, defendants submitted the affirmed report of a neurologist who concluded that she had a normal range of motion of the lumbar and cervical spine, despite positive MRI findings.

In response, plaintiff failed to raise a triable issue of fact. Despite the positive MRI report, there were no objective findings immediately following the accident to demonstrate any initial range-of-motion restrictions on plaintiff’s cervical and lumbar spine, or any detailed explanation for their omission. The quantitative range-of-motion assessment plaintiff did submit was made more than two years after the accident by a physician who examined her only on that one occasion (see Atkinson v Oliver, 36 AD3d 552 [2007]). There is thus a failure of proof relating this doctor’s findings to an accident that occurred more than two years prior to his examination.

9/11/07            Koulouris v. IMS Car Serv., Inc.

Appellate Division, Second Department

Address Plaintiff’s Claim: Failure to Do So Leads to Summary Judgment Denial

Defendants’ failure to address the plaintiff’s claim, clearly set forth in her bill of particulars, that she sustained a serious injury under the 90/180 category led the Appellate Division to affirm a lower court order which had denied defendants’ summary judgment motion. The accident happened on March 13, 2002, and the plaintiff alleged she was out of work for more than three years. Defendants’ reliance on the affirmed medical report of their examining neurologist, who conducted his examination of the plaintiff four years after the accident, was misplaced because he failed to relate his findings for the period of time immediately following the subject accident.

 

9/11/07            Lea v. Cucuzza

Appellate Division, Second Department

Initial ROM Tests Must Be Contemporaneous with the Accident

Order granting defendants’ summary judgment is affirmed as they established prima facie that the plaintiff did not sustain a serious injury. In response, plaintiff failed to raise a triable issue of fact. Any restrictions in the plaintiff’s range of motion were attributed by the defendants’ examining neurologist to pre-existing degenerative changes and were not causally related to the accident. In opposition, the plaintiff's orthopedist did not examine the plaintiff until more than four years after the accident, so that neither he nor the plaintiff proffered competent medical evidence of initial range of motion restrictions contemporaneous with the accident.

 

9/11/07            Quintero v. Kim

Appellate Division, Second Department

Continuing Medical Treatment Leads to Granting of Plaintiff’s Motion to Vacate
The Appellate Division granted plaintiff’s motion to vacate a lower court order which had granted defendants’ unopposed motion for summary judgment. CPLR 5015(a) permits a court to vacate a default in opposing a motion where the moving party demonstrates both a reasonable excuse for the default and the existence of a meritorious cause of action. Here, plaintiff met both requirements. The certified medical report of her treating osteopath, who had begun treatment within 10 days of the accident, as well as the report of her neurologist, who examined the plaintiff nearly four years later, constituted medical evidence of continuing, quantified significant limitations in range of motion of the plaintiff’s cervical spine. Therefore, the plaintiff demonstrated that she had a meritorious cause of action.

 

9/11/07            Seecoomar v. Ly

Appellate Division, Second Department

Treating with Doctor Every Eight Months is No Gap in Treatment

In a lengthy decision, the Appellate Division reversed a lower court order which had granted defendant’s motion for summary judgment dismissing the complaint. Defendant submitted the affirmed report of a radiologist who disagreed with the findings in the original MRI report of the plaintiff, which stated that the plaintiff suffered a herniated disc at L5-S1 and disc bulges at L1 through L4. In opposition, the plaintiff submitted an affidavit stating that prior to the accident he never had pain in his neck or back. Subsequent to the accident, plaintiff immediately sought treatment and physical therapy until September 2004 when there was “no improvement other than temporary symptomatic relief.”

The lower court had granted the defendant’s motion finding that in opposition to the defendant’s prima facie showing, the plaintiff failed to provide objective evidence of the extent or degree of limitations of range of motion and his submissions failed to “establish a continuous treatment plan” and was not based upon a recent examination. Contrary to the determination of the Supreme Court, the plaintiff submitted objective evidence of the extent of the alleged physical limitations resulting from the disc injury and its duration, corroborated by a recent examination. Finally, there were no “gaps” in medical treatment (see Pommells v Perez, 4 NY3d 566, 574) since the plaintiff regularly saw his orthopedist about every eight months and was taking prescription pain medication. The plaintiff explained that active physical therapy was discontinued after six months on the ground that he experienced no further improvement. As such, there are issues of fact that preclude summary judgment.

9/11/07            Wei-San Hsu v. Briscoe Protective Sys., Inc.

Appellate Division, Second Department

Court to Parties: Plaintiffs Must Mind the Gap Too

A gap in treatment is one thing; a failure to adequately explain the gap is quite another. Here the Appellate Division held the defendants established, prima facie, their entitlement to judgment as a matter of law that the plaintiff did not sustain a serious injury to her jaw. In opposition, the plaintiff failed to raise a triable issue of fact. Neither the plaintiff nor her examining dentist adequately explained the lengthy gap in the plaintiff’s treatment between her termination of treatment two to three months post-accident and the evaluation by her examining dentist in October 2005.
  

AUDREY’S ANGLES ON NO-FAULT

Audrey Seeley

[email protected]

 

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. 

 

Litigation

 

9/14/07            Lexington Acupuncture, P.C. a/a/o Fidel Ramirez v. State Farm Ins. Co., 2007 NYSlipOp 51758(U) (2d Dept. App. Term)

 

Plaintiff’s Failure to Provide Adequate Discovery Responses or Respond to Supplemental Discovery Demands as well as Submit Written Opposition to Motion Warrants Striking Complaint.

 

The Court granted defendant’s motion striking plaintiff’s complaint pursuant to CPLR §3126 for failure to provide adequate discovery responses, amend or supplement inadequate responses, and to offer any response to defendant’s supplemental discovery demands.

 

The defendant sufficiently demonstrated in its motion papers the issue of plaintiff’s potential ineligibility to receive reimbursement for no-fault benefits.  Further, defendant’s discovery sought was material and necessary to that defense.

 

The Court noted that dismissal of plaintiff’s complaint under CPLR §3126 is a drastic measure and warranted where the party’s conduct is willful, contumacious, OR in bad faith.  Rowell v. Joyce, 10 AD3d 601 (2004).

 

Here, the Court inferred willful and contumacious conduct from plaintiff’s “utterly inadequate response” to defendant’s discovery demands; plaintiff’s failure to supplement or amend its responses when defendant rejected them; plaintiff’s failure to respond to defendant’s supplemental interrogatories; and plaintiff’s failure to submit written opposition to this motion.  The Court noted that under these circumstances defendant’s motion should have been granted.

 

9/14/07            AVA Acupuncture, P.C. a/a/o Carlton Edwards v. State Farm Mut. Auto. Ins. Co., 2007 NYSlipOp 51756 (U) (2d Dept. App. Term)

 

Another Complaint Struck for Failure to Respond to Discovery and Submit Written Opposition to Pending Motion.

 

Yet another case involving an acupuncture provider whose complaint was struck pursuant to CPLR §3126! 

 

Here, the Court held that defendant’s motion striking plaintiff’s complaint should have been granted as plaintiff’s conduct was willful and contumacious.  The plaintiff failed to even respond to defendant’s discovery demands and submit written opposition to defendant’s motion.

 

 

ANGLE:          Before filing such a motion note that in these decisions there are a few common threads –

 

1.         Defendant’s motion demonstrated that plaintiff may be ineligible for reimbursement of no-fault benefits – i.e., fraudulent incorporation under State Farm Mut. Auto. Ins. Co. v. Mallela, 4 NY3d 313 (2005)

 

2.         Defendant’s motion demonstrated that the outstanding discovery was material and necessary to the above defense.

 

3.         The plaintiff either wholly failed to respond to discovery or its responses were completely inadequate and rejected by defendant.

 

4.         The plaintiff failed to submit any written opposition to the pending motion.

 

9/14/07            AVA Acupuncture, P.C. a/a/o Dmitriy Barvinok v. GEICO Gen. Ins. Co., 2007 NYSlipOp 27371 (2d Dept. App. Term)

 

Acupuncturist’s Fee Argument Rejected when Insurer Demonstrated Reliance Upon Workers’ Compensation Fee Schedule for Acupuncture Services by Chiropractor.

 

The plaintiff sought to recover the unpaid balance from 23 acupuncture sessions which were provided from February 9, 2004 to April 4, 2004.

 

The Court held that plaintiff demonstrated a prima facie case through proof of submission of a claim form, the amount of the loss sustained, and that payment of the no-fault benefits is overdue.  Mary Immaculate Hosp. v. Allstate Ins. Co., 5 AD3d 742 (2004).  The Court further held that plaintiff is not required as part of its prima facie case to demonstrate that the fees it charged were within the prevailing fees for acupuncture services performed by a licensed acupuncturist in plaintiff’s geographic area.

 

Defendant asserted that the 23 acupuncture session fees were in excess of the maximum allowance under the Workers’ Compensation fee schedule.  The Court determined that the defendant properly relied upon the Workers’ Compensation fee schedule for acupuncture services performed by chiropractors.  Therefore, plaintiff’s argument that fees were reasonable and within the range of prevailing fees for licensed acupuncturists in plaintiff’s geographic area lacked merit.  Accordingly, defendant demonstrated that it fully paid for the 23 acupuncture sessions and plaintiff’s complaint as to those sessions was dismissed.

 

9/12/07            Multiquest, P.L.L.C. a/a/o Abdou Dieng v. Allstate Ins. Co.,

2007 NYSlipOp 27366 (2d Dept. App. Term)

 

Insurer Prevails on Cross-Motion Based Upon Fraudulent Incorporation of a Professional Service Limited Liability Company.

 

Defendant cross-moved for summary judgment on the ground that the plaintiff was ineligible for reimbursement of no-fault benefits due to fraudulent incorporation of a professional service limited liability company.  The defendant’s motion was denied in New York City Civil Queens on the ground that defendant failed to raise this as a defense in its answer.  The appellate term disagreed stating that the defendant’s answer was amended asserting this defense.

 

Further, the Court noted that this defense is not waived merely because the insurer’s denial of claim failed to assert it or the insurer issued a late denial of claim.  Crossbay Acupuncture, P.C. v. State Farm Mut. Auto. Ins. Co., 15 Misc3d 110 (2007); Midwood Acupuncture, P.C. v. State Farm Mut. Auto. Ins. Co., 14 Misc3d 131[A] (2007).

 

The Court then addressed the merit of defendant’s cross-motion for summary judgment.  Despite the Mallela case addressing fraudulent incorporation of a professional service corporation the Court held that 11 NYCRR §65-3.16(a)(12) also applied to professional limited liability companies.  Under Limited Liability Company Law §1203(b) a member of the company must be licensed for any professional services the company is organized to provide.

 

Here, the professional limited liability company provided psychology services to patients.  Discovery revealed that the plaintiff’s articles of incorporation provided that the company’s professional service was psychology as well as listed a licensed psychologist as the provider of the service.  Yet, the named psychologist testified that she was never an owner or member of plaintiff.  She also never received a stock certificate or any compensation for an ownership interest.

 

Further, defendant presented proof that plaintiff’s ownership changed since it was initially organized but the same psychologist continued to be listed as a member and manager.  This was in spite of other health services being added and dropped.

 

Interestingly, plaintiff did not dispute this evidence.  Rather, plaintiff submitted a hearsay affidavit from an individual who attempted to present the owner’s non-fraudulent intentions.  The Court noted that the affidavit failed to excuse the initial fraudulent act of listing the psychologist as a member of plaintiff.  Further, the affidavit failed to excuse continuing to list the psychologist through successive ownership changes including the timeframe in which the services at issue were provided.  Based on the above the Court held that defendant was entitled to summary judgment.

 

9/11/07            Mount Sinai Hosp. a/a/o Sidney Weingarten v. Chubb Group of Ins. Co.,

2007 NYSlipOp 06650 (2d Dept.)

 

Plaintiff’s Action Premature as Timeframe in Which to Pay or Deny had not Expired.

 

Plaintiff commenced this action on November 19, 2004, seeking reimbursement of a medical bill for services rendered to the assignor.  The insurer, upon receipt of the medical bill, timely sent a request for verification to plaintiff.  The plaintiff admittedly sent the requested verification material to defendant on December 21, 2004.

 

The defendant had 30 days to either pay or deny the claim which was January 21, 2004.  Since the plaintiff commenced this action nearly two months before the defendant’s timeframe to pay or deny the claim expired this action was premature.

 

PEIPER ON PROPERTY

Steven E. Peiper

[email protected]

 

No reported cases this week.

 ACROSS BORDERS

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.

 

 

9/14/07            Scottsdale Insurance Co. v. Mason Parks Partners, LLP
Fifth Circuit

Landlord Not Covered Under Lessee’s Insurance Policy
The Fifth Circuit affirmed the district court’s grant of summary judgment for Scottsdale Insurance Company, holding that the landlord was not a covered insured under Scottsdale’s policy insuring the lessee. After a fire at the lessee’s restaurant, the landlord and owner of the premises claimed insurance proceeds under lessee’s policy for property losses. The Fifth Circuit, applying Texas contract law, held that ambiguity will not be found where the insurance policy can be given a definite or certain legal meaning. The court found that the policy was not ambiguous that the landlord was not covered under the property coverage part of the policy. The landlord was not identified as a loss payee and nothing in the insurance policy otherwise gave Scottsdale notice that the landlord was the intended loss payee.

Submitted by: Sedgwick, Detert, Moran & Arnold LLP (Bruce D. Celebrezze & Michelle Y. McIsaac)

 

9/13/07            Harrington v. Michigan Millers Mutual Ins. Co.

Michigan Court of Appeals
No Recovery For Failure to Obtain No-Fault Insurance
The Court of Appeals affirmed summary judgment in favor of Michigan Millers Mutual Insurance Company on grounds that plaintiff’s failure to obtain no-fault insurance, as owner of a motor vehicle involved in the subject accident, precluded her recovery of personal protection insurance benefits under Michigan law. A Michigan statute provides that every motor vehicle, subject to certain exceptions, driven on Michigan roadways must be registered with the state. Additionally, under the no-fault act, the owner of a motor vehicle that is required to be registered in Michigan must carry personal protection insurance, property protection insurance, and residual liability insurance. Plaintiff failed to register her vehicle and obtain no-fault insurance after owning and operating her vehicle in Michigan for more than 30 days. Therefore, she could not recover personal protection insurance benefits.

Submitted by: Sedgwick, Detert, Moran & Arnold LLP (Bruce D. Celebrezze & Michelle Y. McIsaac)

 

 

Reported Decisions

 

Guishard v. General Security Insurance Company

Submitted by S. Dwight Stephens, for appellant.
Submitted by Natale J. Tartamella, for respondents.


MEMORANDUM:

The order of the Appellate Division should be affirmed, with costs.

Plaintiffs seek a judgment declaring that defendant General Security Insurance Company is obligated under the terms of a commercial general liability policy to defend and indemnify them in a pending personal injury action. In the underlying lawsuit, the plaintiff alleges that he severely injured his eye while riveting metal to a van for the purpose of converting it into a "Mr. Softee" ice cream truck. Plaintiffs owned the van.

The policy excludes coverage for bodily injury "arising out of the ownership, maintenance, use or entrustment to others of any . . . 'auto' . . . owned or operated by or rented or loaned to any insured." General Security moved for summary judgment declaring that it was not obligated to defend or indemnify plaintiffs because the conversion work performed by the injured party constituted "maintenance." Plaintiffs cross-moved for summary judgment, arguing [*2]contrariwise.

Without written opinion, Supreme Court denied General Security's motion and granted plaintiffs' cross motion for summary judgment, and judgment was entered declaring that General Security was obligated to defend and indemnify plaintiffs. Upon appeal, the Appellate Division affirmed, reasoning that because General Security had not submitted the policy schedule defining the term "auto," it had not demonstrated that the van fell within the relied-upon policy exclusion.

We affirm, but for a different reason. The work performed by the injured plaintiff did not constitute "maintenance" of an auto. "Maintenance," as that term is used in an insurance policy, means performance of work on "an intrinsic part of the mechanism of the car and its overall function" (Farmers Fire Ins. Co. v Kingsbury, 105 AD2d 519, 520 [3d Dept 1984] [removing tire from rim constitutes maintenance] [citation omitted], lv denied 64 NY2d 607 [1985]; see Pennsylvania Millers Mut. Ins. Co. v Manco, 63 NY2d 940, 942 [1984] [changing a tire constitutes maintenance]). Riveting metal to a van in furtherance of its conversion to an ice cream truck aids in transforming the auto's function, an activity distinct from "maintenance."

Delphi Restoration Corporation v. Sunshine Restoration Corporation

Farber Brocks & Zane, LLP, Mineola, N.Y. (Audra S. Zane of
counsel), for appellant.
Kral, Clerkin, Redmond, Ryan, Perry & Girvan, LLP, Mineola,
N.Y. (Andrew J. Mihalick of counsel),
for respondents.

 

DECISION & ORDER

In an action, inter alia, for a judgment declaring that the defendant Utica First Insurance Company is obligated to defend and indemnify the plaintiffs in an underlying action entitled Kaplan v Dorchester Towers Tenants Council, Inc., pending in the Supreme Court, New York County, under Index No. 110743/03, the defendant Utica First Insurance Company appeals from so much of an order of the Supreme Court, Queens County (O'Donoghue, J.), dated January 18, 2006, as denied that branch of its motion which was for summary judgment declaring that it is not obligated to defend and indemnify and granted the plaintiffs' cross motion for summary judgment on that cause of action.

ORDERED that the order is affirmed insofar as appealed from, with costs, and the matter is remitted to the Supreme Court, Queens County, for the entry of a judgment declaring that the defendant Utica First Insurance Company is obligated to defend and indemnify the plaintiffs in the underlying action entitled Kaplan v Dorchester Towers Tenants Council, Inc., pending in the Supreme Court, New York County, under Index No. 110743/03.

Insurance Law § 3420(d) requires an insurer to provide a written disclaimer "as soon as is reasonably possible." The reasonableness of any delay in providing such written disclaimer is measured from the time when the insurer "has sufficient knowledge of facts entitling it to disclaim, [*2]or knows that it will disclaim coverage" (First Fin. Ins. Co. v Jetco Contr. Corp., 1 NY3d 64, 66). The insurer bears the burden of justifying any delay (id. at 69). "While Insurance Law § 3420(d) speaks only of giving notice as soon as is reasonably possible,' investigation into issues affecting an insurer's decision whether to disclaim coverage obviously may excuse delay in notifying the policyholder of a disclaimer" (id.; [citations omitted]). The failure of an insured to timely notify the insurer of a claim does not excuse the insurer's failure to timely disclaim coverage (see Mount Vernon Fire Ins. Co. v Gatesington Equities, 204 AD2d 419). The Supreme Court properly found that the appellant's 43-day delay in disclaiming coverage in the instant case was unreasonable as a matter of law (see Matter of Colonial Penn Ins. Co. v Pevzner, 266 AD2d 391; Matter of Nationwide Mut. Ins. Co. v Steiner, 199 AD2d 507; cf. New York Cent. Mut. Fire Ins. Co. v Majid, 5 AD3d 447).

The appellant's remaining contention is unpreserved for appellate review (see New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 571) and, in any event, is without merit.

Since this is, in part, a declaratory judgment action, we remit the matter to the Supreme Court, Queens County, for the entry of a judgment declaring that the appellant is obligated to defend and indemnify the plaintiffs in the underlying action (see Lanza v Wagner, 11 NY2d 317, 334, cert denied 371 US 901).

Dweck v. Friedlander Group, Inc.

The Dweck Law Firm, LLP, New York, N.Y. (H. P. Sean Dweck
and Jack S. Dweck, pro se, of counsel), for appellants.
Lustig & Brown, New York, N.Y. (Ellen Nimaroff of counsel),
for respondent.

 

DECISION & ORDER

In an action, inter alia, to recover damages for breach of contract, the plaintiffs appeal from an order of the Supreme Court, Westchester County (Rudolph, J.), entered January 23, 2007, which granted the motion of the defendant Friedlander Group, Inc., for summary judgment dismissing the cause of action alleging breach of contract insofar as asserted against it.

ORDERED that the order is reversed, on the law, with costs, and the motion for summary judgment dismissing the cause of action alleging breach of contract insofar as asserted against the defendant Friedlander Group, Inc., is denied.

In or about August 1996, the plaintiffs, Jack S. Dweck and Harvey Sladkus, d/b/a Omni Properties, requested, inter alia, that the defendant Freidlander Group, Inc. (hereinafter the defendant), obtain insurance for certain of their properties. Thereafter, an electrical fire at one of the properties caused significant damage. Due to the liquidation of the insurance company with which the defendant had placed the risk, the plaintiffs recovered only a portion of the alleged loss that they sustained.

The plaintiffs then commenced this action, alleging, inter alia, that the defendant breached its purported oral agreement with the plaintiffs by failing to place the risk with an "A-rated" company and not assisting in the adjustment of their claim regarding the fire. Subsequently, the defendant moved for summary judgment dismissing the cause of action alleging breach of contract insofar as asserted against it. The Supreme Court granted the defendant's motion. We reverse.

The Supreme Court improperly granted the defendant's motion since the defendant failed to establish its prima facie entitlement to judgment as a matter of law (see Alvarez v Prospect Hosp., 68 NY2d 320; Zuckerman v City of New York, 49 NY2d 557). As the defendant's own submissions established, questions of fact exist with respect to whether the parties entered into an oral agreement and, if so, the terms of such agreement. Given the defendant's failure to establish its prima facie entitlement to judgment as a matter of law, we need not consider the sufficiency of the plaintiffs' submissions in opposition to the motion (see Winegrad v New York University Med. Ctr., 64 NY2d 851).

In light of our determination, we need not address the parties' remaining contentions.

Katchalova v. Perchikov

Debrot & Siris, P.C., New York, N.Y. (Jacques L. Debrot of  counsel),
for appellant.McElroy, Deutsch, Mulvaney and Carpenter, LLP,
New York, N.Y. (Steven P. Del Mauro of  counsel),
for respondents Union Central Life Insurance Company
and John Hancock Life Insurance Company.  Levi Lubarsky & Feigenbaum LLP,
New York, N.Y. (Andrea  Likwornik Weiss and Mary Ann Doyle of counsel),
for respondents Chase  Insurance Agency, Inc., and John M.  Clancy.

DECISION & ORDER

In an action, inter alia, to recover damages for wrongful death and pain and suffering, the plaintiff appeals (1) from an order of the Supreme Court, Kings County (Jackson, J.), dated March 15, 2006, which, among other things, granted the motion of the defendants Union Central Life Insurance Company and John Hancock Life Insurance Company, and the separate motion of the defendants Chase Insurance Agency, Inc., and John M. Clancy, for summary judgment dismissing the causes of action alleging wrongful death and pain and suffering asserted against them, respectively, (2) from an order of the same court dated March 31, 2006, which denied as academic her motion for an extension of time to complete discovery and to file a note of issue, and (3) from so much of an order of the same court dated October 27, 2006, as (a) upon reargument, in effect, adhered to stated portions of the original determination in the order dated March 15, 2006, and (b) upon renewal and reargument of her motion for an extension of time to complete discovery and to [*2]file a note of issue, granted the motion for an extension of time to complete discovery and to file a note of issue only to the extent of directing all parties to appear for a preliminary conference on December 6, 2006.

ORDERED that the appeals from the orders dated March 15, 2006, and March 31, 2006, are dismissed, as those orders were superseded by the order dated October 27, 2006; and it is further,

ORDERED that the appeal from so much of the order dated October 27, 2006, as, upon renewal and reargument, granted the plaintiff's motion for an extension of time to complete discovery and to file a note of issue only to the extent of directing all parties to appear for a preliminary conference on December 6, 2006, is dismissed as academic; and it is further,

ORDERED that the order dated October 27, 2006, is affirmed insofar as reviewed; and it is further,

ORDERED that one bill of costs is awarded to the respondents.

The plaintiff, as personal representative of and administratrix of the estate of Laryssa Vasserman, a/k/a Larysa Vasserman (hereinafter the decedent), commenced this action, inter alia, to recover damages for wrongful death and pain and suffering under a theory that the defendant insurance companies and insurance agents negligently issued life insurance policies to the decedent and thereby helped to bring about her death. The complaint alleged that the defendant Eugene Perchikov became intimate with the decedent and "importune[d]" her to apply for large amounts of life insurance naming him as the beneficiary. Perchikov accompanied the decedent to meet with various insurance agents, including the defendants Chase Insurance Agency, Inc. (hereinafter Chase), and its employee John M. Clancy, agents for the defendant John Hancock Life Insurance Company (hereinafter John Hancock), and served as her translator during the various application processes for life insurance policies. During the application processes, the decedent misrepresented her income, her occupation, and her relationship with Perchikov. After procuring one million dollar life insurance policies from the defendants Union Central Life Insurance Company (hereinafter Union Central), John Hancock, and Metropolitan Life Insurance Company, Perchikov allegedly murdered the decedent in order to obtain the proceeds of the life insurance policies.

Union Central and John Hancock moved to dismiss the wrongful death and pain and suffering causes of action asserted against them premised on their alleged negligent issuance of the life insurance policies on the ground, inter alia, that New York does not recognize such a theory of recovery. Chase and Clancy separately moved to dismiss the wrongful death and pain and suffering causes of action asserted against them. The court granted the motions. We affirm.

The wrongful death and pain and suffering causes of action, premised upon the alleged negligent issuance of life insurance policies, fail to state a cause of action. New York does not presently recognize such a theory of recovery based on the negligent issuance of an insurance policy (see Katchalova v Borger, 7 Misc 3d 966). Indeed, the circumstances of this case do not even fall under any of the scenarios pursuant to which other jurisdictions have recognized such a theory of recovery (see Katchalova v Borger, supra; Bajwa v Metropolitan Life Ins. Co., 208 Ill 2d 414; Bacon v Federal Kemper Life Assur. Co., 400 Mass 850; Life Ins. Co. of Georgia v Lopez, 443 So [*3]2d 947, 948 [Fla. 1983]; Burton v John Hancock Mut. Life Ins. Co., 164 Ga App 592 [1982]; Ramey v Carolina Life Ins. Co., 135 SE 2d 362 [S.C. 1964]; Liberty Natl Life Ins. Co. v Weldon, 100 So 2d 696 [Ala. 1957]). Thus, the plaintiff seeks to recover pursuant to a theory of negligent issuance of an insurance policy under circumstances in which no other court has recognized such a claim. We decline to recognize such a claim in this case.

Contrary to the plaintiff's contention, further discovery is not required. Even taking the facts as alleged by the plaintiff in her complaint to be true, and providing her with every favorable inference which reasonably may be drawn therefrom (see Leon v Martinez, 84 NY2d 83, 87-88), the subject claims cannot be sustained.

The plaintiff's further contention that the motions for summary judgment should have been denied because the motion papers failed to include copies of the answer (see CPLR 3212[b]) is improperly raised for the first time in her reply brief; hence, we decline to consider it (see Culpepper v Allstate Ins. Co., 31 AD3d 490; Williams v City of White Plains, 6 AD3d 609; Patino v Lockformer Co., 303 AD2d 731, 733; Panzella v Shop Rite Supermarkets, 238 AD2d 490).

Pursuant to an order dated December 6, 2006, the Supreme Court extended the time by which discovery must be completed until August 31, 2007, and the time to file a note of issue was extended to September 28, 2007. In light of this order, the plaintiff correctly concedes that the portion of her appeal which relates to the court's determination of her motion for an extension of time to complete discovery and to file a note of issue has been rendered academic.

The parties' remaining contentions either are without merit or need not be reached in view of the foregoing.

Makan Exports, Inc., v. U.S. Underwriters Insurance Company

Miranda Sokoloff Sambursky Slone Verveniotis, LLP, Elmsford,
N.Y. (Richard S. Sklarin of counsel), for appellant.
Christopher E. Gurda, Middletown, N.Y., for plaintiff-
respondent, and DupÉ;e & Monroe, P.C.,
Goshen, N.Y. (Jon C. DupÉ;e, Jr., of
counsel), for defendants-respondents
(one brief filed).

 

DECISION & ORDER

In an action for a judgment declaring, inter alia, that the defendant U.S. Underwriters Insurance Company is obligated to defend and indemnify Makan Exports, Inc., in an underlying personal injury action entitled Arciero v Makan Exports, Inc., pending in the Supreme Court, Orange County, under Index No. 3069/02, the defendant U.S. Underwriters Insurance Company appeals, as limited by its brief, from (1) so much of an order of the Supreme Court, Orange County (Lubell, J.), dated March 29, 2006, as denied its motion for summary judgment declaring that it is not obligated to defend and/or indemnify Makan Exports, Inc., in the underlying personal injury action, and granted the plaintiff's separate motion for summary judgment declaring that it is so obligated, and (2) so much of an order of the same court dated August 10, 2006, as denied its motion which was, in effect, for leave to reargue its motion for summary judgment and its opposition to the plaintiff's separate motion for summary judgment.

ORDERED that the appeal from the order dated August 10, 2006, is dismissed, as no appeal lies from an order denying reargument (see Companion Life Ins. Co. of N.Y. v All State Abstract Corp., 35 AD3d 519, 520); and it is further, [*2]

ORDERED that the order dated March 29, 2006, is reversed insofar as appealed from, on the law, the motion of the defendant U.S. Underwriters Insurance Company for summary judgment declaring that it is not obligated to defend and/or indemnify Makan Exports, Inc., in the underlying personal injury action is granted, and the plaintiff's separate motion for summary judgment declaring that it is so obligated is denied, and the matter is remitted to the Supreme Court, Orange County, for the entry of a judgment declaring that the defendant U.S. Underwriters Insurance Company is not obligated to defend and indemnify Makan Exports, Inc., in the underlying personal injury action entitled Arciero v Makan Exports, Inc., pending in the Supreme Court, Orange County, under Index No. 3069/02; and it is further,

ORDERED that one bill of costs is awarded to the appellant payable by the plaintiff-respondent.

On January 18, 2001, Mark Arciero allegedly was injured while performing construction on a home being built by the plaintiff, Makan Exports, Inc. (hereinafter Makan). Arciero was an employee of a subcontractor hired by Makan to perform framing work on the house. In 2002, Arciero and his wife, derivatively, commenced an action against Makan to recover damages for personal injuries. Makan informed its insurance company, the defendant U.S. Underwriters Insurance Company (hereinafter Underwriters), and sought coverage for the injuries allegedly sustained by Mark Arciero.

Underwriters disclaimed coverage on the basis, inter alia, that an exclusion to its policy with Makan (hereinafter the L-310 exclusion), provided that coverage was not available to employees of subcontractors for injuries sustained in the course of employment. Makan subsequently commenced the instant action, contending that another provision of the policy, an endorsement entitled "Supplemental Condition-Contractors'/Owners' Subcontracted Work" (hereinafter the L-257s endorsement), provided coverage to employees of subcontractors so long as Makan complied with the L-257s endorsement that it obtain a Certificate of Insurance from the subcontractor. It is undisputed that Makan complied with this condition. Alternatively, Makan contended that the L-310 exclusion and the L-257s endorsement were in conflict, resulting in an ambiguity that should be construed against Underwriters, and, as a result, Underwriters was obligated to defend and indemnify Makan on that basis.

The Supreme Court agreed that the two policy provisions were in conflict, denied Underwriters' motion for summary judgment declaring that it was not obligated to defend and/or indemnify Makan in the underlying action, and granted Makan's separate motion for summary judgment that Underwriters was so obligated. The Supreme Court subsequently denied Underwriters' motion which was, in effect, for leave to reargue.

The L-310 exclusion clearly excluded coverage for bodily injury claims by employees of subcontractors sustained in the course of employment. Thus, Underwriters met its prima facie burden on its motion for summary judgment (see Console v Wyckoff Hgts. Med. Ctr., 19 AD3d 637, 638) of establishing that the exclusion was specific, clear, and unambiguous, and that it should apply in this case (see Technicon Elecs. Corp. v American Home Assur. Co., 74 NY2d 66, 73-74; Belt Painting Corp. v TIG Ins. Co., 100 NY2d 377, 387; Guachichulca v Laszlo N. Tauber & Assoc., LLC, 37 AD3d 760, 761-762; cf. Westview Assoc. v Guaranty Natl. Ins. Co., 95 NY2d 334, 340; Continental Cas. Co. v Rapid-American Corp., 80 NY2d 640, 653-655). [*3]

The L-257s endorsement did not provide coverage to employees of subcontractors for claims of bodily injury sustained in the course of employment, and, contrary to the Supreme Court's conclusion, there was no conflict between the L-310 exclusion and the L-257s endorsement (see U.S. Underwriters Ins. Co. v Affordable Housing Foundation, Inc., 256 F Supp 2d 176, 181-183, affd 88 Fed Appx 441). The L-310 exclusion modified the scope of coverage provided in Section I of the policy. In contrast, the L-257s endorsement constituted a "supplemental condition" that Makan was required to meet before the coverage provided for in Section I of the policy, as amended by the L-310 exclusion, would attach. The L-257s endorsement was an addition to the conditions set forth in Section IV of the policy. It did not in any way change, extend, or expand the coverage provided by Section I of the policy (see United States Underwriters Ins. Co. v Affordable Housing Foundation, Inc., 256 F Supp 2d, supra at 182-183). The L-310 exclusion applies to the underlying personal injury action, and the L-257s endorsement does not provide coverage to an employee of a subcontractor for injuries sustained during the course of employment. Thus, the Supreme Court should have granted Underwriters' motion and denied Makan's motion.

Since this is an action for a declaratory judgment, we remit the matter to the Supreme Court, Orange County, for the entry of a judgment declaring that Underwriters is not obligated to defend and indemnify Makan in the underlying personal injury action (see Lanza v Wagner, 11 NY2d 317, 334, appeal dismissed 371 US 74, cert denied 371 US 901).

Guadalupe v. Blondie Limo, Inc.

Geller & Segall, P.C., Hartsdale (Richard L. Geller of counsel), for appellant.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York
(Stacy R. Seldin of counsel), for respondents.

Order, Supreme Court, Bronx County (Edgar G. Walker, J.), entered on or about May 25, 2006, which granted defendants' motion for summary judgment dismissing the complaint, unanimously affirmed, without costs.

Defendants established a prima facie entitlement to summary judgment by submitting evidence demonstrating that plaintiff did not sustain a serious injury as a result of the car accident between the parties. Specifically, defendants submitted the affirmed report of a neurologist who, upon examining plaintiff and performing objective tests, concluded that she had a normal range of motion of the lumbar and cervical spine, despite positive MRI findings (see Thompson v Abbasi, 15 AD3d 95, 96 [2005]). They also submitted plaintiff's bill of particulars and deposition testimony, which reveal that plaintiff was confined to bed and home for only a few weeks after the accident.

Plaintiff failed to raise a triable issue of fact that a serious injury was sustained within the meaning of Insurance Law § 5102(d). Despite the positive MRI report, there were no objective findings immediately following the accident to demonstrate any initial range-of-motion restrictions on plaintiff's cervical and lumbar spine, or any detailed explanation for their omission (Thompson, 15 AD3d at 98). The quantitative range-of-motion assessment plaintiff did submit was made more than two years after the accident by a physician who examined her only on that one occasion (see Atkinson v Oliver, 36 AD3d 552 [2007]). There is thus a failure of proof relating this doctor's findings to an accident that occurred more than two years prior to his examination.

Plaintiff also failed to raise a triable issue of fact as to whether she was incapacitated from performing substantially all of her usual and customary activities for at least 90 of the first 180 days after the accident. The subjective claims of pain and "unsubstantiated claim of inability to perform [her] customary daily activities are insufficient to raise a triable issue of fact" (Thompson, 15 AD3d at 101).

THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: SEPTEMBER 13, 2007

Koulouris v. IMS Car Serv., Inc.

Baker, McEvoy, Morrissey & Moskovits, P.C. (Thomas Torto, New York, N.Y., of counsel),        for appellants.
Davoli & Vesnaver, LLP, Baldwin, N.Y. (Susan R. Nudelman and Paul Vesnaver of counsel), for respondent.

 

DECISION & ORDER

In an action to recover damages for personal injuries, the defendants IMS Car Service, Inc., and Mohammad Salih appeal, as limited by their brief, from so much of an order of the Supreme Court, Kings County (Bayne, J.), dated December 5, 2006, as denied their motion for summary judgment dismissing the complaint insofar as asserted against them on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is affirmed insofar as appealed from, with costs.

The defendants IMS Car Service, Inc., and Mohammad Salih (hereinafter the appellants) failed to establish their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident. The appellants' motion papers did not address the plaintiff's claim, clearly set forth in her bill of particulars, that she sustained a medically-determined injury or impairment of a nonpermanent nature which prevented her from performing substantially all of the material acts which constituted her usual and customary daily activities for not less than 90 days during the 180 days immediately following the accident. The accident happened on March 13, 2002, and the plaintiff alleged she was out of work for more than three years, and confined to her home and bed for six months. The appellants' reliance on the affirmed medical report of their examining neurologist, who conducted his examination of the plaintiff four years after the subject accident, was misplaced because he failed to relate his findings for the period of time immediately following the subject accident (see Faun Thai v Butt, 34 AD3d 447; Volpetti v Yoon Kap, 28 AD3d 750, 751; Sayers v Hot, 23 AD3d 453, 454). Under these circumstances, it is not necessary to consider whether the plaintiff's papers submitted in opposition to the appellants' motion were sufficient to raise a triable issue of fact (see Faun Thai v Butt, supra; Coscia v 938 Trading Corp., 283 AD2d 538).
MASTRO, J.P., RITTER, SKELOS, CARNI and McCARTHY, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Courts

 

Lea v. Cucuzza

Richard A. Glickel, West Nyack, N.Y., for appellant.
Wilson, Bave, Conboy, Cozza & Couzens, P.C., White Plains,
N.Y. (Claudine Weis of counsel), for respondents.

 

DECISION & ORDER

In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Rockland County (Weiner, J.), dated June 27, 2006, which granted the defendants' motion for summary judgment dismissing the complaint on the ground that she did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is affirmed, with costs.

The defendants established prima facie that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). Any restrictions in the plaintiff's range of motion were attributed by the defendants' examining neurologist to pre-existing degenerative changes noted on radiologic films, and were not causally related to the subject accident (see Meyers v Bobower Yeshiva Bnei Zion, 20 AD3d 456; Kearse v New York City Tr. Auth., 16 AD3d 45, 49; McNeil v Dixon, 9 AD3d 481, 482).

In opposition, the plaintiff failed to raise a triable issue of fact (see Zuckerman v City of New York, 49 NY2d 557, 562; Cohen v A One Prods., Inc., 34 AD3d 517). The plaintiff's orthopedist did not examine the plaintiff for the first time until more than four years after the accident, so that neither he nor the plaintiff proffered competent medical evidence of initial range of motion restrictions contemporaneous with the accident (see Borgella v D & L Taxi Corp., 38 AD3d 701; Iusmen v Konopka, 38 AD3d 608, 609; Earl v Chapple, 37 AD3d 520, 521). Were the report of the defendants' ear, nose, and throat physician proffered by the plaintiff in opposition to the motion for summary judgment admissible (accord Positko v Krawiec, 6 AD3d 517, 518; Mantila v Luca, 298 AD2d 505; Pagano v Kingsbury, 182 AD2d 268, 271), it would be insufficient to defeat the motion as its conclusions were equivocal (see Matter of Milea v Easy Appliances Div., Murray Corp., 29 AD2d 730, 731; Duffen v State of New York, 245 AD2d 653, 654) and the report failed to qualitatively assess how the plaintiff's alleged exacerbated vertigo compared to the degree of vertigo experienced prior to the accident (see Creech v Walker, 11 AD3d 856, 857; Suarez v Abe, 4 AD3d 288, 289).

The plaintiff's remaining contentions are without merit.
CRANE, J.P., SANTUCCI, FLORIO, DILLON and BALKIN, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Court

Quintero v. Kim

Harmon, Linder, & Rogowsky, New York, N.Y. (Mitchell Dranow of counsel), for appellants.
Stewart H. Friedman, Lake Success, N.Y. (Erin D. Murray of counsel), for respondents.
 

DECISION & ORDER

In an action to recover damages for personal injuries, etc., the plaintiffs appeal from an order of the Supreme Court, Queens County (Satterfield, J.), entered October 25, 2006, which denied their motion to vacate an order of the same court entered April 11, 2006, granting the defendants' unopposed motion for summary judgment dismissing the complaint insofar as asserted by the plaintiff Vivian Gruber on the ground that she did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is reversed, on the law, with costs, the plaintiffs' motion to vacate the order entered April 11, 2006, is granted, the order entered April 11, 2006, is vacated, and the matter is remitted to the Supreme Court, Queens County, for further proceedings consistent herewith.

CPLR 5015(a) permits a court to vacate a default in opposing a motion where the moving party demonstrates both a reasonable excuse for the default and the existence of a meritorious cause of action (see Perez v Han Ki Man, 39 AD3d 521; Costanza v Gold, 12 AD3d 551; Oyebola v Makuch, 10 AD3d 600; Itskovich v Lichenstadter, 2 AD3d 406; Beale v Yepes, 309 AD2d 886; Waaland v Weiss, 228 AD2d 435). The Supreme Court correctly held that the plaintiffs presented a reasonable excuse for their failure to oppose the defendants' motion for summary judgment. We conclude, however, that the Supreme Court erred in holding that the plaintiffs failed to demonstrate a meritorious cause of action alleging a serious injury as it pertained to the plaintiff Vivian Gruber (hereinafter the plaintiff).

The plaintiffs proffered competent evidence establishing that their claim of serious injury as it related to the plaintiff was meritorious. The certified medical report of her treating osteopath, who had begun treatment within 10 days of the accident, as well as the report of her neurologist, who examined the plaintiff nearly four years later, constituted medical evidence of continuing, quantified significant limitations in range of motion of the plaintiff's cervical spine. Therefore, the plaintiff demonstrated that she had a meritorious cause of action within the meaning of Insurance Law § 5102(d) (see LaFalce v Alexandrov, 288 AD2d 271; Grullon v Chang Ok Chu, 240 AD2d 367). Accordingly, the plaintiffs' motion to vacate their default should have been granted.
RIVERA, J.P., SPOLZINO, FISHER, LIFSON and DICKERSON, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Court

Seecoomar v. Ly

Harold Solomon, Rockville Centre, N.Y. (Bernard G. Chambers of counsel), for appellant.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y.
(Stacy R. Seldin of counsel), for respondent.

DECISION & ORDER

In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Queens County (Satterfield, J.), entered May 8, 2006, which granted the defendant's motion for summary judgment dismissing the complaint on the ground that he did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is reversed, on the law, with costs, and the motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) is denied.

On April 3, 2004, the plaintiff was involved in a car accident, allegedly sustaining a herniated disc at L5-S1 and disc bulges at L1 through L4.

In support of its motion for summary judgment made in November 2005, the defendant submitted the affirmed report of a radiologist who disagreed with the findings in the original report of a magnetic resonance imaging examination (hereinafter MRI) of the plaintiff, which stated that the plaintiff suffered a herniated disc at L5-S1 and disc bulges at L1 through L4. Rather, according to the defendant's radiologist, all that was visible on the MRI was a disc bulge at L5-S1 and disc degeneration in the lumbar and thoracic spine. The defendant also submitted the affirmed report of a neurologist quantifying the plaintiff's range of motion in the cervical and lumbar spine as normal and stating that "[s]traight leg raising was normal bilaterally" without quantifying that range of motion.

In opposition, the plaintiff submitted an affidavit stating that prior to the accident he never had pain in his neck or back and had never been treated for any pain in the neck or back. Subsequent to the accident, the plaintiff immediately sought treatment and underwent active physical therapy until September 2004 when there was "no improvement other than temporary symptomatic relief." At the time the motion was made, the plaintiff was doing exercises at home, wore a back brace, and took prescription medication for pain in his neck and back. He was unable to return to his job as a part-time real estate salesman because he could not sit at a desk or go up and down stairs. An affirmation of a radiologist confirmed that an MRI of the plaintiff taken one month after the accident showed a disc herniation at L5-S1 and bulging discs at L1 though L4.

The plaintiff also submitted the affirmation of his treating orthopedist whom he saw regularly about every eight months. The orthopedist noted that the plaintiff's MRI was reviewed and showed a disc herniation at L5-S1 as well as disc degeneration. The disc herniation was consistent with traumatic injury. The orthopedist determined that the plaintiff's straight leg raising was 20 to 25 degrees on the left side, in contrast to a normal range of 90 degrees, and the plaintiff "can ambulate with a stiff heel-toe gait." His finding of a limitation of range of motion of straight leg raising on the left side was confirmed in an examination conducted in December 2005 while the motion for summary judgment was pending.

The orthopedist found that the plaintiff exhibited evidence of cervical myositis as well as lumbar radiculopathy. He stated that the plaintiff used a back brace to control his condition. In the opinion of the orthopedist, the plaintiff "suffered a permanent partial disability to his neck and low back" as a result of the accident. Additionally, the plaintiff's primary treating physician corroborated the orthopedist's findings.

The Supreme Court granted the defendant's motion for summary judgment, finding that in opposition to the defendant's prima facie showing of entitlement to judgment as a matter of law, the plaintiff failed to provide objective evidence of the extent or degree of limitations of range of motion and his submissions failed to "establish a continuous treatment plan" and was not based upon a recent examination.

Contrary to the determination of the Supreme Court, the plaintiff submitted objective evidence of the extent of the alleged physical limitations resulting from the disc injury and its duration, corroborated by a recent examination (see Cordero v Ford Credit Titling Trust Ins. Ctr., 39 AD3d 796; Hyun Jun Kim v Collazo, 38 AD3d 842; Santiago v Rodriguez, 38 AD3d 639; Lim v Tiburzi, 36 AD3d 671; Collado v Pineda, 31 AD3d 684).

Further, there were no "gaps" in medical treatment (see Pommells v Perez, 4 NY3d 566, 574) since the plaintiff regularly saw his orthopedist about every eight months and was taking prescription pain medication. The plaintiff explained that active physical therapy was discontinued after six months on the ground that he experienced no further improvement (see Shpakovskaya v Etienne, 23 AD3d 368; Brown v Achy, 9 AD3d 30).

Accordingly, there are issues of fact which preclude the granting of summary judgment.
SCHMIDT, J.P., KRAUSMAN, GOLDSTEIN, COVELLO and ANGIOLILLO, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Court

Wei-San Hsu v. Briscoe Protective Sys., Inc.

Kurzman Karelsen & Frank, LLP, New York, N.Y. (Paul J. McGeough and Charles Palella of counsel), for appellant.
Epstein, Rayhill & Frankini, Woodbury, N.Y. (Mona C. Haas of counsel), for respondents.
 

DECISION & ORDER

In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Queens County (Weiss, J.), entered June 29, 2006, which granted the defendants' motion for summary judgment dismissing the complaint on the ground that she did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is affirmed, with costs.

The defendants established, prima facie, their entitlement to judgment as a matter of law by tendering proof in admissible form that the plaintiff did not sustain a serious injury to her jaw within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In opposition, the plaintiff failed to raise a triable issue of fact. Neither the plaintiff nor her examining dentist adequately explained the lengthy gap in the plaintiff's treatment between her termination of treatment two to three months post-accident and the evaluation by her examining dentist in October 2005 (see Pommells v Perez, 4 NY3d 566, 574; Zinger v Zylberberg, 35 AD3d 851; Hasner v Budnik, 35 AD3d 366; Caracci v Miller, 34 AD3d 515). Accordingly, the Supreme Court properly granted the defendants' motion for summary judgment dismissing the complaint.
RIVERA, J.P., SPOLZINO, FISHER, LIFSON and DICKERSON, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Court

 

Macro Enterprises, Ltd., v. QBE Insurance Corp.

Sesti & Associates, PC, New York (Robert A. Sesti of
counsel), for appellant.
Mendes & Mount, LLP, New York (Robert J. Brown of
counsel), for respondent.

Order, Supreme Court, New York County (Carol Edmead, J.), entered April 11, 2007, which, insofar as appealed from, denied plaintiff's motion for summary judgment, and granted defendant's cross motion for summary judgment and declared that plaintiff is not entitled to a defense and indemnity coverage in the underlying third-party action, unanimously affirmed, without costs.

The court properly granted defendant's cross motion for summary judgment. Plaintiff's failure to notify defendant for more than two years of the underlying occurrence, in which plaintiff's employee was injured in a construction site accident, constituted noncompliance with the condition precedent to coverage and vitiated the contract of insurance (see Great Canal Realty Corp. v Seneca Ins. Co., 5 NY3d 742, 743 [2005]). Plaintiff's claimed belief of nonliability, on the basis that its injured employee's exclusive remedy was under the Workers' Compensation Law, was not reasonable under the circumstances (cf. Tesler v Paramount Ins. Co., 220 AD2d 334 [1995]).

In the Matter of Liberty Mutual Insurance Company v. Rapisarda

Scott Baron & Associates, P.C., Howard Beach, N.Y. (Andrea R.
Palmer and Stephen Chakwin of counsel), for appellant.
Bee Ready Fishbein Hatter & Donovan, LLP, Mineola, N.Y.
(Joshua M. Jemal and Allyson D.
Johnson-Flash of counsel), for
respondent.

 

DECISION & ORDER

In a proceeding pursuant to CPLR article 75 to permanently stay arbitration of a claim for underinsured motorist benefits, the appeal is from an order of the Supreme Court, Queens County (Rios, J.), dated January 31, 2006, which granted the petition and permanently stayed arbitration.

ORDERED that the order is affirmed, with costs.

The appellant failed to provide the petitioner with notice of his underinsured motorist claim as soon as practicable as required by the insurance policy. Under the circumstances, the court providently exercised its discretion in granting the petition (see Matter of Metropolitan Prop. & Cas. Ins. Co. v Mancuso, 93 NY2d 487, 495; Matter of State Farm Mut. Auto. Ins. Co. v Bombace, 5 AD3d 782; Matter of Nationwide Mut. Ins. Co. v DiGregorio, 294 AD2d 579, 580; Matter of State Farm Mut. Auto. Ins. Co. v Bennett, 289 AD2d 496, 497; Matter of Interboro Mut. Indem. Ins. Co. v Sarno, 277 AD2d 454, 454-455; Matter of Nationwide Mut. Ins. Co. v Wexler, 276 AD2d 490, 490-491).
SCHMIDT, J.P., GOLDSTEIN, COVELLO and DICKERSON, JJ., concur.

 

In the Matter of AIU Insurance Company v. Rodriguez

Law Offices of Brian J. McGovern, LLC, New York, N.Y. (Alison
M. K. Lee of counsel), for additional respondent-appellant.
Bryan M. Rothenberg (Fiedelman & McGaw, Jericho, N.Y.
[Ross P. Masler] of counsel), for
petitioner-respondent.

 

DECISION & ORDER

In a proceeding pursuant to CPLR article 75 to permanently stay arbitration of an uninsured motorist claim, Clarendon National Insurance Company appeals from an order and judgment (one paper) of the Supreme Court, Queens County (Rios, J.), entered May 26, 2006, which, inter alia, after a hearing, granted the petition and, in effect, permanently stayed the arbitration.

ORDERED that the order and judgment is reversed, on the law, with costs, the petition is denied, and the proceeding is dismissed.

Additional respondent Stanley Greene procured an assigned risk automobile insurance policy issued pursuant to the rules of the New York Automobile Insurance Plan (hereinafter NYAIP) from the additional respondent Clarendon National Insurance Company (hereinafter Clarendon). Greene financed the premiums by entering into a premium finance agreement with Arizona Premium Finance Co. (hereinafter Arizona Premium), a premium finance agency. The agreement contained a power of attorney which authorized Arizona Premium to cancel the policy in the event that Greene defaulted on the payments he was required to make under the agreement (see Banking Law § 576[1]).

Arizona Premium sent Greene an "Intent To Cancel Notice" on September 6, 2003, by which it notified him that the Clarendon policy would be cancelled unless Arizona Premium received the past-due amount by September 21, 2003 (15 days later). In a "Notice of Cancellation," Arizona Premium advised Greene that it had cancelled the Clarendon policy effective September 23, 2003, pursuant to the power of attorney for his default under the premium finance agreement. On December 20, 2003, Greene was driving his vehicle when it struck an automobile driven by the respondent Martin Rodriguez, in which the respondents Lissa M. Arias and Rossy Arias were passengers. Thereafter, the respondents demanded uninsured motorist arbitration with the petitioner, AIU Insurance Company (hereinafter AIU), the insurer of the Rodriguez vehicle. AIU then commenced the instant proceeding, inter alia, to permanently stay arbitration on the ground that the notice of cancellation was ineffective because Arizona Premium failed to advise Greene that he had a right to an administrative review of the cancellation under the rules of the NYAIP. After a framed-issue hearing, the Supreme Court found that Arizona Premium's failure to include right of review language rendered the cancellation ineffective, inter alia, granted the petition, and, in effect, permanently stayed the arbitration. We reverse.

Clarendon demonstrated that Arizona Premium properly cancelled the policy of insurance issued to Greene by complying with the requirements of Banking Law § 576, by which an insurance premium finance agency may cancel a policy for the insured's default. At the time Arizona Premium cancelled Greene's assigned risk policy pursuant to the power of attorney, there was no statute or NYAIP rule that required Arizona Premium to notify Greene of a right to review of the cancellation (see Matter of Government Empls. Ins. Co. v Lopez, ____ AD3d ____ [2d Dept, Aug. 21, 2007]; see also Ward v Gresham, 59 NY2d 878; Aetna Cas. & Sur. Co. v Preisigke, 139 AD2d 900).

AIU's argument that the cancellation was ineffective for Arizona Premium's failure to provide notice to Greene's insurance agent is not properly before this court as it is raised for the first time on appeal. Contrary to AIU's contention, the issue does not involve a pure question of law which appears on the face of the record (see Triantafillopoulos v Sala Corp., 39 AD3d 740; cf. Block v Magee, 146 AD2d 730).

Accordingly, the Supreme Court should have denied the petition and dismissed the proceeding.

In the Matter of Liberty Mutual Insurance Company v. Sedgewick of New York

Carman, Callahan & Ingham, LLP, Farmingdale, N.Y. (Michael F.
Ingham of counsel), for appellant.
Lewis Johs Avallone Aviles, LLP, Riverhead, N.Y. (Brian J.
Greenwood of counsel), for
respondent.
 

DECISION & ORDER

In a proceeding, inter alia, pursuant to CPLR article 75 to confirm an arbitration award dated September 23, 2004, and, in effect, to vacate a modified award dated October 29, 2004, the petitioner appeals from an order of the Supreme Court, Suffolk County (Pines, J.), dated April 24, 2006, which, in effect, denied the petition.

ORDERED that the order is reversed, on the law, with costs, those branches of the petition which were to confirm the award dated September 23, 2004, and, in effect, to vacate the modified award dated October 29, 2004, are granted, and the matter is remitted to the Supreme Court, Suffolk County, for a determination of the amount of attorney's fees and costs to be awarded to the petitioner, if any, pursuant to the rules of Arbitration Forums, Inc., and for the entry of a judgment thereafter (see CPLR 7514[a]).

Arbitration Forums, Inc. (hereinafter AFI), rendered an arbitration award dated September 23, 2004, in the petitioner's favor. It subsequently issued a modified award dated October 29, 2004, which was against the petitioner. AFI, however, did not follow proper procedure in modifying the award dated September 23, 2004. Moreover, substantively, the modification was [*2]improper under AFI rules because the modification was not based on a clerical or jurisdictional error. Additionally, the respondent, Sedgewick of New York (hereinafter Sedgewick), did not comply with CPLR 7509 in seeking modification (see CPLR 7509, 7511; Matter of Aetna Cas. & Sur. Co. v Vigilant Ins. Co., 241 AD2d 451, 452).

In addition, the Supreme Court erred in declining to confirm the award dated September 23, 2004. The Supreme Court had no authority to decline to confirm that award on the ground that there was conflicting evidence — "marked discrepancies in the evidence presented to the arbitrators," as the court put it. "Judicial review of an arbitrator's award is extremely limited" (Pearlman v Pearlman, 169 AD2d 825, 826), and a reviewing court may not second-guess the fact- findings of the arbitrator. The award dated September 23, 2004, had an evidentiary basis and was not totally irrational or arbitrary and capricious (see Matter of DiNapoli v Peak Automotive, Inc., 34 AD3d 674, 675; Matter of Hausknecht v Comprehensive Med. Care of N.Y., P.C., 24 AD3d 778, 779; Matter of Osbeck v Westcon, Inc. 284 AD2d 469). Consequently, the Supreme Court should have granted those branches of the petition which were to confirm the award dated September 23, 2004, and, in effect, to vacate the modified award dated October 29, 2004.

Sedgewick's remaining contention is without merit.

In its petition, the petitioner sought to recover an attorney's fee and costs from Sedgewick pursuant to Section 6-2 of AFI's rules. In light of the foregoing, we remit the matter to the Supreme Court, Suffolk County, for a determination of the amount of attorney's fees and costs, if any, to be awarded to the petitioner under that section.

In the Matter of New York Central Mutual Fire Insurance Company v. Steiert

Cullen and Dykman, LLP, Brooklyn, N.Y. (Andrew Giuseppe
Vassalle and Joseph Miller of counsel), for appellant.

 

DECISION & ORDER

In a proceeding pursuant to CPLR article 75, inter alia, to permanently stay arbitration of a claim for supplementary underinsured/uninsured motorist benefits, the petitioner appeals, as limited by its brief, from so much of a judgment of the Supreme Court, Nassau County (Phelan, J.), dated June 22, 2006, as, upon so much of an order of the same court dated February 10, 2005, as determined that New York Mutual Fire Insurance Company was collaterally estopped from challenging a disclaimer of coverage by the proposed additional respondent Kemper Auto and Home Insurance Company in an underlying action entitled Steiert v Bohn, pending in the Supreme Court, Nassau County, under Index No. 5121/01, denied that branch of the petition which was to join Kemper Auto and Home Insurance Company as an additional respondent-respondent.

ORDERED that the judgment is reversed insofar as appealed from, on the law, with one bill of costs payable to New York Mutual Fire Insurance Company by the respondent-respondent Dawn Steiert and the proposed additional respondent-respondent Kemper Auto and Home Insurance Company, that branch of the petition which was to join Kemper Auto and Home Insurance Company as an additional respondent-respondent is granted, and the order dated February 10, 2005, is modified accordingly.

The respondent Dawn Steiert allegedly was injured in the underlying accident when a vehicle upon which she was sitting suddenly accelerated, causing her to fall off and strike her head on the pavement. She claimed insurance coverage for that accident pursuant to the supplementary uninsured/underinsured motorist (hereinafter SUM) provision of a policy issued to her mother by the petitioner, New York Central Mutual Fire Insurance Company (hereinafter New York Central).

New York Central commenced this proceeding, inter alia, to permanently stay arbitration of her claim. New York Central argued that coverage under the SUM provision was not available because Steiert had failed to exhaust all other coverage available for the underlying accident. New York Central asserted that additional coverage was available pursuant to a policy issued by Kemper Auto and Home Insurance Company (hereinafter Kemper). In opposition, Steiert and Kemper argued that a stay should be denied because Kemper had disclaimed coverage, and Steiert had unsuccessfully challenged the disclaimer in a declaratory judgment action. In the judgment appealed from, the Supreme Court, finding that New York Central was collaterally estopped from challenging the disclaimer, denied that branch of the petition which was to join Kemper. We reverse the judgment insofar as appealed from.

"Collateral estoppel precludes a party from relitigating in a subsequent action or proceeding an issue raised in a prior action or proceeding and decided against that party or those in privity. . . . There must be an identity of issue which has necessarily been decided in the prior action and is decisive of the present action, and there must have been a full and fair opportunity to contest the decision now said to be controlling. The litigant seeking the benefit of collateral estoppel must demonstrate that the decisive issue was necessarily decided in the prior action against a party, or one in privity with a party. The party to be precluded from relitigating the issue bears the burden of demonstrating the absence of a full and fair opportunity to contest the prior determination." (Buechel v Bain, 97 NY2d 295, 303-305, cert denied 535 US 1096; see McDonald v Rose, 37 AD3d 781; Goepel v City of New York, 23 AD3d 344; Matter of Atlantic Mut. Ins. Co. v Lauria, 291 AD2d 492; Fandy Corp. v Lung-Fong Chen, 265 AD2d 450).

Here, New York Central was not a party to the declaratory judgment action. Further, it was neither argued nor demonstrated that New York Central was in privity with a party to that action (Russell v New York Cent. Mut. Fire Ins. Co., 11 AD3d 668). In addition, New York Central demonstrated that it was not afforded a full and fair opportunity to contest the determination in the declaratory judgment action. Thus, collateral estoppel was not properly applied, and New York Central is entitled to litigate Kemper's disclaimer on the merits (see generally Maroney v New York Cent. Mut. Fire Ins. Co., 5 NY3d 467; First Fin. Ins. Co. v Jetco Contr. Corp., 1 NY3d 64).

Netjets, Inc. v. Signature Flight Support, Inc.

Harrington, Ocko & Monk, LLP, White Plains, N.Y. (Kevin
Harrington and Michael W. Freudenberg of counsel), for appellant-
respondent.
Dombroff & Gilmore, New York, N.Y. (Raymond L. Mariani
and Karen M. Berberich of counsel),
for respondent-appellant.

 

DECISION & ORDER

In an action, inter alia, to recover damages for breach of contract, the defendant Sharp Details, Inc., i/s/h/a Sharp Detailing, Inc., appeals (1) from so much of an order of the Supreme Court, Westchester County (Barone, J.), entered December 5, 2005, as granted the motion of the defendant Signature Flight Support Corp. for summary judgment on the issue of liability on the cross claims asserted by that defendant against it for contractual indemnification and to recover damages for breach of its obligation to procure insurance naming the defendant Signature Flight Support Corp. as an additional insured and (2), as limited by its brief, from so much of an order of the Supreme Court, Westchester County (Smith, J.), entered March 1, 2006, as, upon reargument, adhered to so much of the determination in the order entered December 5, 2005, as granted that branch of the motion of the defendant Signature Flight Support Corp. which was for summary judgment on the issue of liability on the cross claim asserted by that defendant and against it to recover damages for breach of its obligation to procure insurance naming the defendant Signature Flight Support Corp. as an additional insured, and further directed it to reimburse Global Aerospace, the insurance carrier of the defendant Signature Flight Support Corp., the sum of $91,470.61 for costs and reasonable attorney's fees expended by Global Aerospace in defending the defendant Signature Flight Support Corp., and to reimburse the defendant Signature Flight Support Corp. for all out-of-pocket expenses incurred in the defense of this action, as well as the cost of premiums, copayments, deductibles, and increases in insurance premium rates, and the defendant Signature Flight Support Corp. cross-appeals from so much of the order entered March 1, 2006, as granted that branch of the motion of the defendant Sharp Details, Inc., i/s/h/a Sharp Detailing, Inc., which was for reargument and, upon reargument, vacated so much of the order entered December 5, 2005, as granted that branch of its motion which was for summary judgment on the issue of liability on its cross claim for contractual indemnification insofar as asserted against that defendant, denied that branch of its motion which was for summary judgment on the issue of liability on its cross claim for contractual indemnification insofar as asserted against the defendant Sharp Details, Inc., i/s/h/a Sharp Detailing, Inc., and upon searching the record, awarded summary judgment in favor of the defendant Sharp Details, Inc., i/s/h/a Sharp Detailing, Inc., dismissing that cross claim.

ORDERED that the appeal by the defendant Sharp Details, Inc., i/s/h/a Sharp Detailing, Inc., from the order entered December 5, 2005, is dismissed, without costs or disbursements, as the portion of the order appealed from was superseded by the order entered March 1, 2006, made upon reargument; and it is further,

ORDERED that the order entered March 1, 2006, is modified, on the law, by deleting the provision thereof directing the defendant Sharp Details, Inc., i/s/h/a Sharp Detailing, Inc., to pay Global Aeropsace, the insurance carrier of the defendant Signature Flight Support Corp., the sum of $91,470.61; as so modified, the order entered March 1, 2006, is affirmed insofar as appealed and cross-appealed from, without costs or disbursements.

The Supreme Court correctly determined that, after all of the causes of action asserted by the plaintiff against the defendant Signature Flight Support Corp. (hereinafter Signature), except the first cause of action sounding in breach of contract, were dismissed in a prior order, the defendant Sharp Details, Inc., i/s/h/a Sharp Detailing, Inc. (hereinafter Sharp), had no obligation to indemnify Signature. Moreover, with respect to plaintiff's remaining cause of action alleging Signature's breach of contract, the terms of the indemnification clause in the contract entered into by Sharp and Signature did not obligate Sharp to indemnify Signature for Signature's own breach of its contract with the plaintiff.

However, Sharp does not dispute that its insurance policy failed to name Signature as an additional insured. Sharp's agreement with Signature specified the nature of the insurance coverages Sharp was supposed to maintain, and further specified that Sharp was to name Signature as an additional insured. Such coverages included Sharp's liability for its "acts or omissions while operating on the Airport and Signature's entire leasehold." Pursuant to Sharp's obligation to procure appropriate insurance naming Signature as an additional insured, Sharp's insurer would have had the duty to defend Signature in this action, to the same extent that a properly named additional insured would have been entitled to a defense in this action (see City of New York v Evanston Ins. Co., 39 AD3d 153; cf. Automobile Ins. Co. of Hartford v Cook, 7 NY3d 131, 137). Instead, due to Sharp's failure in this regard, Signature's own insurer was required to carry on Signature's defense.

Signature's damages for Sharp's breach were limited to Signature's out-of-pocket expenses in obtaining and maintaining its own separate insurance underwritten by its own insurance carrier, Global Aerospace, as well as the costs of "the premiums and any additional costs it incurred such as deductibles, co-payments and increased future premiums" (Inchaustegui v 666 5th Ave. Ltd Partnership, 96 NY2d 111, 114; see American Ref-Fuel Co. of Hempstead v Resource Recycling, Inc., 307 AD2d 939, 941).

However, the Supreme Court prematurely awarded Global Aerospace reimbursement of "all of its incurred costs and reasonable attorney's fees expended" up until the time of the court's adjudication. Global Aerospace is not a party to the instant action, which has not yet been finally resolved. Global Aerospace may ultimately have a subrogation claim against Sharp to recoup its costs of defending Signature in the instant action. Pursuant to the indemnification clause, Sharp's promise to defend and indemnify Signature arose upon "any act or failure to act or negligence" committed by Sharp. There has not yet been any finding that Sharp was responsible for the loss that gave rise to the claims against Signature. Thus, until responsibility for the plaintiff's loss is established (see American Ref. Fuel Co. v Resource Recycling, Inc., 307 AD2d at 942), it was premature for the court to reach the issue of whether Signature's insurance carrier is entitled to reimbursement for defense costs from Sharp (cf. Farduchi v United Artists Theatre Circuit, Inc., 23 AD3d 613.

 

King v Islam

Greenberg, Greenberg & Guerrero, LLP, New York, N.Y.                                                          (Luis Guerrero of counsel), for appellant.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y. (Michael I. Josephs of
counsel), for respondents Robiul Islam and Fren Cab Corp.
Epstein, McDonald & McCarthy, New York, N.Y. (Paul
Cohen of counsel), for respondent
Jun K. Diaz.

 

DECISION & ORDER

In an action to recover damages for personal injuries, etc., the plaintiff Cherie Clark-King appeals, as limited by her brief, from so much of an order of the Supreme Court, Kings County (Ruchelsman, J.), dated March 8, 2006, as amended by an order of the same court dated April 11, 2006, as, in effect, upon renewal, adhered to its prior determination in an order dated May 19, 2005, granting those branches of the prior motion of the defendants Robiul Islam and Fren Cab Corp., and the cross motion of the defendant Jun K. Diaz, which were for summary judgment dismissing the complaint insofar as asserted by her against them on the ground that she did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order dated March 8, 2006, as amended by the order dated April 11, 2006, is affirmed insofar as appealed from, with one bill of costs to the respondents appearing separately and filing separate briefs.

The defendants made prima facie showings of their entitlement to judgment as a matter of law by demonstrating that the plaintiff Cherie Clark-King (hereinafter the plaintiff) did not sustain a serious injury within the meaning of Insurance Law § 5102(d) (see Toure v Avis Rent a Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955). In opposition, the plaintiff failed to raise a triable issue of fact. In particular, the plaintiff failed to offer any medical evidence, generated at or near the date of her December 29, 1997, accident, documenting her alleged injuries and explaining why they were serious within the meaning of the statute. The only medical evidence she provided was an affirmation of Dr. Arden Kaisman, who detailed his examination of the plaintiff on September 29, 2005. In that affirmation, Dr. Kaisman stated, inter alia, that the plaintiff came under his care in March 1998, after magnetic resonance imaging (hereinafter MRI) examinations of her lumbar and cervical spine revealed disc herniations, and that he saw her on "numerous" occasions in 1998. However, Dr. Kaisman's affirmation, and the rest of the record, is bereft of any objective evidence of the extent of the alleged physical limitations revealed in those 1998 MRI and physical examinations, resulting from the disc injuries, and their duration (see Furrs v Griffith,AD3d [2d Dept, Aug. 7, 2007]; Duke v Saurelis, 41 AD3d 770). In addition, no explanation was offered for the approximately seven-year gap in her visits to Dr. Kaisman, from 1998 to September 2005 (see Pommells v Perez, 4 NY3d 566, 574).

Accordingly, in effect, upon renewal, the Supreme Court correctly adhered to its prior determination in an order dated May 19, 2005, granting those branches of the prior motion of the defendants Robiul Islam and Fren Cab Corp., and the prior cross motion of the defendant Jun K. Diaz, which were for summary judgment dismissing the complaint insofar as asserted by the plaintiff against them on the ground that she did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

The plaintiff's remaining contentions are either improperly before this court or without merit. MILLER, J.P., RITTER, SANTUCCI and FLORIO, JJ., concur.