Coverage Pointers - Volume IX, No. 9

Dear Coverage Pointers Subscribers:

 

Congratulations to the Red Sox fans.  Fabulous Series.

 

We welcome another dozen subscribers this week, bring our total direct mailing list to 1345.  We know we have probably three or four times that number in readers who are forwarded this publication by claim managers and supervisors.  Wherever our coverage team travels, we find people who read our publication and we really love the feedback we receive.  Thanks for reading. 

 

Legislative Update

 

On the legislative front, the New York State Assembly and Senate adjourned (actually recessed) without acting upon the late-notice / prejudice bill.  The legislative session was focused on drivers' licenses and illegal aliens rather than insurance law changes, so the bill has been pushed back on the agenda.  Legislative leaders might yet call the houses back into session before year's end, but otherwise, this bill may not see action until January.  Tinkering with language continues and if we hear of new changes proposed, we will pass the news along.

 

Spring Ahead, Fall Back

 

The Institute for Dynamic Educational Advancement (IDEA) has posted web-site information about Daylight Saving Time which caught my attention.  You'll remember to set your clock back an hour Saturday night, as we leave Daylight Saving Time and return to Standard Time.  Ben Franklin came up with the concept of DST a couple of years back and it eventually caught on.

 

You may be curious why, as of 2007, Daylight Saving time has been extended to November.  On August 8, 2005, President George W. Bush signed the Energy Policy Act of 2005. This Act changed the time change dates for Daylight Saving Time in the U.S. One of the concerns expressed by Congress was that trick-or-treaters were getting into too many accidents because of darkness on October 31, so our legislators, concerned about an up-tick in insurance premiums, made the change.  In other words, you're to blame.

 

By the way, the official spelling is Daylight Saving Time, not Daylight SavingS Time.   The IDEA people tell us that Saving is used here as a verbal adjective (a participle). It modifies time and tells us more about its nature; namely, that it is characterized by the activity of saving daylight. It is a saving daylight kind of time. Because of this, it would be more accurate to refer to DST as daylight-saving time. Similar examples would be a mind-expanding book or a man-eating tiger. Saving is used in the same way as saving a ball game, rather than as a savings account.  I was absent the day they taught grammar.

 

Anyway, I knew you were curious.

 

News from the No Fault Front-lines from Audrey Seeley, the Queen of No Fault:

 

Many of the decisions this edition focus on the plaintiff's and defendant's ability, or lack thereof, to submit sufficient evidence to survive a summary judgment motion.  It comes down to having the proper affidavit and supporting documentation to demonstrate verification was requested and remains outstanding or that the bill was mailed to the insurer for payment.  There is also a good arbitration decision regarding the medical necessity of spinal surgery.  Understanding the angle on this decision will help ensure that your IME physician actually advises whether surgery will be required as a result of the accident.

 

Dan and I recently provided a program to a local carrier on tips for obtaining a good IME as well as investigating pre-existing and subsequent conditions.  This was a good program that applies to not only no-fault adjusters but also to bodily injury adjusters.  If anyone is interested in the program please let us know.

 

Finally, if you are interested in attending the Westchester Community College Center for Insurance Education and Westchester CPCU Chapter Seminar day on November 16, 2007 at Westchester Community College but do not have the application let me know.  I will be speaking at this seminar on additional insured issues and the status of late notice.  Jerry Trupin put an excellent panel together and it is going to be more than the basics.  In addition, you can receive NYS Insurance CE credit. 

 

Audrey

 

Earl's Pearls:  Protecting Privileges & Work Product

 

Earl Cantwell's article this week focuses on a very important topic, electronic discovery and privileges.  I highly recommend it to your attention.  We are all wallowing in electronic data and knowing how to deal with inadvertent disclosure of this material is critically important.

 

To the Moon, Alice...

 

I enjoy old time radio -- the Shadow, Burns and Allen, Gunsmoke, Jack Benny and so on. Many of those wonderful radio actors made the transition from radio to television. For example, Jack Webb played Sgt. Joe Friday on the radio version of Dragnet, and continued in the TV role. The Great One, Jackie Gleason, was another.  Gleason's break-out role in radio was as the voice of Chester A. Riley, on the Life of Riley, a role later made famous by William Bendix.  For those who remember Chester Riley, he was a bumbling but good-natured blue collar fellow who usually meant well, but generally ended up tripping his way through one pseudo-crisis or another. 

 

On TV, Gleason perfected those characteristics as bus driver Ralph Cramden, in The Honeymooners and some suggest that Carroll O'Connor continued that role as Archie Bunker in All in the Family. 

 

In the cartoon world, Jackie Gleason's successor was the Stone Age rock star, Fred Flintstone, who had many of Ralph's traits.  If you think about it, Wilma Flintstone and Alice Cramden may well be related through DNA.  Fred Flintstone's successor was Homer Simpson. Homer was followed by Peter Griffin, the star of Family Guy.  Not everyone has seen Family Guy, a cartoon that has been canceled twice and brought back by popular demand.  A fabulous show, its 100^th episode aired this week.

 

Peter Griffin's wife is Lois, a perfect match for Alice Cramden.  The family consists of daughter Meg, son Chris and the evil baby Stewie (who seeks world domination, the death of his mother and speaks in an uppity British accent).  But my favorite character in the show is Brian Griffin, the talking dog, who is part pet and part family.  He walks on two legs, drinks martinis, smokes cigarettes and often serves as Peter's straight man or side-kick.

 

So why Jackie Gleason?

 

If you closely read this week's issue, you will be as surprised as I was to find out that anthropomorphic Brian Griffin is a plaintiff is one of this week's reported decisions.  Apparently, he is now working construction. Brian apparently fell of scaffold on a construction site, which led to an E&O claim against a broker who failed to provide coverage for the general contractor. I'm sure it's the dog, or at least I believe so. Anyway, Brian made me think of Peter who made me think of Homer who made me think of Archie who made me think of Ralph Cramden who made me think of Jackie Gleason.  Sometimes I think too much.

 

This Week's Issue:

 

This week's issue, attached, is another healthy one, with all kinds of interesting appellate decisions for your edification:

 

• In Toxic Popcorn Case, How Many Occurrences?  How Many Deductibles (SIR's)?
• Certificate of Insurance Does Not Create Coverage; Penalty for Failing to Provide Coverage to Party, Where Party has Other Coverage, is Only Out-of-Pocket Expenses
• Notice Given to Carrier, One Year After Accident, Breaches Obligations to Provide Prompt Notice, Particularly Where Insured Knew of Accident and Failed to Inquire About Potential Liability
• What's Clear is Clear:  Give Policy Provisions Ordinary Meaning
• Where Subcontractor's Broker Fails to Obtain Coverage for Contractor, Contractor has No Standing to Sue Broker without Proof of Fraud or Privity.
• Can't We All Just Get Alone (I)?  Carrier Improperly Raises Insured's Lack of Cooperation as Defense to Coverage
• Question of Fact on Whether Delayed Notice to Carrier was Reasonable or Not
• Additional Insured Clause Only Covered Ongoing Operations of Named Insured
• Venue Battle over Lead Paint Coverage Lawsuits; Jurisdiction With Most Action Wins
• New Jersey "Hit and Run" Rules for Uninsured Motorists Apply to New Jersey Accident Involving New York Insured
• Can't We All Just Get Alone (II)?  Carrier Properly Raises Insured's Lack of Cooperation as Defense to Coverage
• Framed Issue Hearing Necessary to Resolve Question Relating to Status of Vehicle, in Uninsured Motorist Proceeding
• Agreement to Arbitrate SUM Claim in Policy Not Clear Enough to Enforce
• Can't Tell the Players Without a Scorecard; Can't Determine Priority of Coverage without Policies
• Disclaimer Letter Withstands Attack and Broker Remains in Lawsuit 

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

 

• Plaintiff's Cessation of Treatment & Defendant's Doctor's Affirmation Leads to SJ
• SJ Partially Granted Except as to the 90/180 Category of Serious Injury
• 'Significant Limitations' in Plaintiff's ROM Leads to Summary Judgment Denial
• Plaintiffs' Complaint Dismissed for Failure to Raise a Triable Issue of Fact
• Doctor, Doctor: Differences in Medical Opinion Leads to Summary Judgment Survival
• Plaintiff's Injuries Must Relate to Subject Motor Vehicle Accident to Recover Damages
• Even Had Plaintiff Properly Introduced his Evidence, Result is the Same: SJ Granted
• Issue of Fact Raised as Plaintiff's Expert Rules Out Other Causes of Plaintiff's Injuries
• No Adequate Explanation of Gap in Medical Treatment = Summary Judgment

AUDREY'S ANGLES ON NO-FAULT

Audrey Seeley

[email protected]  

 

Arbitration

 

• Lack of Opinion that Surgery not Required Leads to Insufficient Denial 

Litigation

 

• Evidence of Outstanding Verification Request Renders Action Premature
• We Will Not Disturb It - Another Lower Arbitration Award Upheld on Rational Basis
• Investigator's Affidavit Raises Issue of Fact on Whether Injuries from an Insured Incident
• Both Parties' Fail to Submit Sufficient Evidence to Prevail on Summary Judgment
• Low Impact Study Fails to Raise an Issue of Fact.

 

EARL'S PEARLS

Earl K. Cantwell, II

[email protected]

 

Protecting Privileges & Work Product

 

That's all the news there is this week.  Best wishes and welcome to November.

 

Dan

 

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
Earl’s Pearls

Across Borders

 

10/30/07          International Flavors & Fragrances, Inc. v. Royal Ins. Co. of America
Appellate Division, First Department
In Toxic Popcorn Case, How Many Occurrences?  How Many Deductibles (SIR’s)?
A number of employees of a manufacturing plant claimed toxic exposure to substance found in butter flavoring.  The battle, not uncommon in claims of this nature, was between the insurer and the insured over the number of occurrences as each was subject to its own deductible for products liability claims. 

 

International Flavors & Fragrances, Inc. (IFF) a declaratory judgment action against its insurers, including AIG seeking a declaration of coverage under eight general liability insurance policies in connection with a class action lawsuit filed against plaintiffs in Missouri by 30 current and former employees of nonparty Gilster. The underlying plaintiffs alleged that IFF manufactured and sold butter flavoring to Gilster used in microwave popcorn packaged in its Missouri facility. The butter flavoring contains diacetyl was alleged to cause lung impairment and other respiratory system injuries. IFF admitted that at least 18 separate shipments of butter flavoring were sent to the Missouri plant from 1992 through 1996.  In dispute is the application of deductibles or "self-insured retentions" (SIRs) in the amount of $100,000 or $50,000 for each "occurrence," which is uniformly defined in all of the policies as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions."

AIG claimed each personal injury claim was a separate occurrence which applied a separate deductible.  IFF claimed that the exposure was a single occurrence with one deductible.

After a long and fairly well-reasoned discussion, the court determined that under the language of the policy, there was no occurrence without injury and there was no injury until there was exposure and illness.  Accordingly, the court found that each individual plaintiff suffered an accident upon being injured by the exposure so there were 30 accidents, and not one.
Editor’s Note: For those who follow toxic exposure, lead paint, asbestos and mass-product liability cases, this one’s a must-read.

 

10/30/07          International Couriers Corporation v. The North River Insurance Company Appellate Division, First Department
Certificate of Insurance Does Not Create Coverage; Penalty for Failing to Provide Coverage to Party, Where Party has Other Coverage, is Only Out-of-Pocket Expenses
The possibility that North River's insured could be found liable for the injury to the International Couriers in the underlying action arising from a construction site accident establishes that the court properly declared that North River was required to defend plaintiffs in that action. The truth is not important; it’s the possibility of recovery, “no matter how remote".

 

However, Assurance is found not to have an obligation to defend or indemnify.  The policy language makes it clear that International is not an insured under the policy, either named or additionally insured. The Certificate of Insurance which named International as additional insureds cannot create coverage where the policy does not provide it. 

 

Assurance’s named insured, Target, was contractually obligated to provide International with insurance coverage and failed to do so.  However, the penalty for that failure is only its out-of-pocket expenses.

 

10/30/07          Reg-Tru Equities, Inc., d/b/a The Tennis Club, v. Valley Forge Ins. Co.
Appellate Division, First Department
Notice Given to Carrier, One Year After Accident, Breaches Obligations to Provide Prompt Notice, Particularly Where Insured Knew of Accident and Failed to Inquire About Potential Liability
Insured’s notice, made more than one year after the occurrence in question, constituted a breach of the notice provisions of policy. Insured’s excuse that it had a reasonable belief that it would not be liable for the accident as an excuse for its late notice fails, where the insured never made inquiry about the possibility of liability.
Editor’s Note:  This is becoming a trend:  examining what efforts the insured made to find out whether or not it was or could be held liable.  We’ve reported on other cases recently with similar examinations of the insured’s conduct.

 

10/30/07          Marshall v. Tower Insurance Company of New York

Appellate Division Second Department
What’s Clear is Clear:  Give Policy Provisions Ordinary Meaning
Clear policy terms ought to be given their plain and ordinary meaning.  Ambiguous terms are to be construed against party who drafted them, usually the insurer. Here the term at issue was “residence premises." The term was defined as follows:

 

8. Residence premises' means:

a. The one family dwelling, other structures, and grounds; or

b. That part of any other building;

where you reside and which is shown as the residence premises' in the Declarations.

The Declarations identify the insured as the plaintiff Joseph Gerard-Jean with a specific Brooklyn address. It further stated that the “residence premises covered by this policy is located at the above insured address."

Contrary to the plaintiff's contention, the set-off clause beginning "where you reside" clearly applies to and modifies sections 8(a) and (b) quoted above. Neither section 8(a) nor 8(b) identifies a specific location without also adding the underlined clause beginning "where you reside." Since the named insured did not reside at the subject premises, the defendant Tower Insurance Company of New York properly concluded that the subject premises were not covered under the policy and properly disclaimed on that basis.
Editor’s Note:  Good work, Max.

10/30/07          Brian Griffin v. DaVinci Development, LLC
Appellate Division Second Department

Where Subcontractor’s Broker Fails to Obtain Coverage for Contractor, Contractor has No Standing to Sue Broker without Proof of Fraud or Privity.
DaVinci and Cipoletti appeal from so much of an order dismissing their lawsuit. DaVinci had a contract with Action Siding to perform work on its premises. Action was supposed to provide liability insurance to protect DaVinci.  Acton hires insurance broker, RMS to obtain the coverage. RMS provided DaVinci with a series of certificates of liability insurance indicating that the coverage had been obtained.

 

On or about May 7, 2004, the plaintiff was injured on DaVinci's premises while working for Action. After DaVinci is sued, it learns that there were no policies in force protecting it from these claims and sues RMS. RMS convinces the Court to uphold the dismissal of the lawsuit. There was no proof of fraud, collusion or other circumstances that would allow DaVinci to recover costs against Action’s broker.  Moreover, it failed to set forth sufficient allegations that it was an intended third-party beneficiary of the contract between Action and RMS
Editor’s Note for Family Guy Fans Only:  What is Peter Griffin’s talking dog doing up on a scaffold anyway?

 

10/30/07          In the Matter of State Farm Mutual Automobile Ins. Co. v. Campbell

Appellate Division, Second Department

Can’t We All Just Get Alone (I)?  Carrier Improperly Raises Insured’s Lack of Cooperation as Defense to Coverage

No. It’s not THAT State Farm v. Campbell.

 

Another “cooperation” case.  Another recitation of the Thrasher standard.

 

An insurer who seeks to disclaim coverage on the ground of non-cooperation "must demonstrate that it acted diligently in seeking to bring about the insured's co-operation . . . that the efforts employed by the insurer were reasonably calculated to obtain the insured's co-operation . . . and that the attitude of the insured, after his co-operation was sought, was one of willful and avowed obstruction'" (Thrasher v United States Liab. Ins. Co., 19 NY2d 159, 168-169

 

Here the carrier failed to establish diligence, or that its efforts were “reasonably calculated” or that the insured’s inaction proved the requisite attitude.  State Farm was able, therefore, to permanently stay the arbitration of the uninsured motorist claim of its insured because the disclaimer of the offending carrier was not upheld.

Editor’s Note:  See the Preferred Mutual case below to review a case where lack of cooperation was established

 

10/30/07          St. James Mechanical, Inc v. Royal & Sunalliance
Appellate Division, Second Department
Question of Fact on Whether Delayed Notice to Carrier was Reasonable or Not
In May 1996, Sheraton hires St. James Mechanical to renovate HVAC system in New York hotel.  A worker employed by Budd Contracting fell off a scaffold while removing a curtain wall in garage to accommodate a new exhaust system. St. James insured by Royal under CGL policy which required the insured provide notice "as soon as practicable" of an occurrence that may result in a claim.

While Budd sued the Sheraton in October 1997, he did not sue St. James until August 1998. St. James then notified Royal and Royal disclaimed based on late notice.  St. James commenced the present action against Royal and an affiliated insurance carrier for a judgment declaring that they were obligated to defend and indemnify it in the underlying personal injury action brought by Budd's employee. When St. James moved for summary judgment in its favor, the insurance carriers cross-moved for summary judgment.

The insurance carrier made a prima facie showing of entitlement to judgment as a matter of law based on St. James's two-year delay in reporting the underlying accident. However, St. James raised a triable issue of fact as to whether the delay was reasonably based on a good-faith belief in non-liability. Matter sent back for trial on the reasonableness of the delay.

10/25/07          New York City Housing Authority v. Merchants Mutual Insurance Co.
Appellate Division, First Department
Additional Insured Clause Only Covered Ongoing Operations of Named Insured
There is hope yet for those carriers fearing the breadth of additional insured clauses in CGL policies.

Esteves was shot on premises owned by the Housing Authority.  He claims that he was injured as a result of a faulty electromagnetic locking system installed at the entrance of his building by defendant Stonewall. The Housing Authority claims coverage as an insured or additional insured under three separate insurance policies: a commercial general liability (CGL) policy issued to Stonewall, an excess commercial catastrophic liability policy issued to Stonewall (the excess policy), and an owners and contractors protective liability (OCP) policy issued to the Housing Authority.

Section II of the CGL policy, "Who is an Insured," was amended by an endorsement for "Additional Insured Owners, Lessees or Contractors (Form B)," to "include as an insured the person or organization shown in the Schedule, but only with respect to liability arising out of your ongoing operations performed for that insured." The Housing Authority was listed in the declarations as an additional insured owners, lessees or contractors.

The court found no coverage under any policy since the allegations in Esteves' complaint do not allege liability arising out of Stonewall’s ongoing operations.  The contract between the Housing Authority and Stonewall called for the installation of the security system and a two year guarantee period thereafter. The locking system was also guaranteed for two years, excluding vandalism. The court made a factual determination that the system was inoperative due to vandalism, and thus the claims did not arise out of Stonewall’s ongoing operations.

The excess policy contained the same “ongoing operations” language in its grant of coverage so the policy was similarly inapplicable.  The OCP policy covered a different location, so it did not respond either.

Finally, the claim that Stonewall failed to procure CGL coverage is dismissed because Stonewall did provide the coverage, it just did not apply to this loss. While Stonewall did not procure the OCP policy required under its contract with the Housing Authority, the Housing Authority was not damaged by the failure to procure the coverage because the policy would not have covered the risk anyway.

Editors Note:  This is a very narrow reading of an additional insured clause but underscores the importance of closely reviewing policy language.  Language in additional insured clauses has, most recently, been crafted more and more narrowly.

 

The original CG 20 10 11 85, defined insured to include as an insured the person or organization shown in the Schedule, but only with respect to liability arising out of "your work" for that insured by or for you.

 

In 2004, the CG 20 10 form revised and provides more limited coverage to the additional insured than the CG 20 10 11 85 form. It defines insured to include the … person(s) or organization(s) shown in the Schedule, but only with respect to liability for "bodily injury," "property damage" or "personal and advertising injury" caused, in whole or in part, by:

1. Your acts or omissions; or

2. The acts or omissions of those acting on your behalf; in the performance of your ongoing operations for the additional insured(s) at the location(s) designated above.

 

10/25/07          Certain Underwriters at Lloyds, London v. Millennium Holdings, LLC
Appellate Division, First Department

Venue Battle over Lead Paint Coverage Lawsuits; Jurisdiction With Most Action Wins

This was a venue battle in declaratory judgment actions over lead paint claims.  With respect to one insured, the court held that New York was the appropriate forum to litigate the coverage issues.  The insured’s policies were issued, negotiated, brokered, executed or paid for in New York at a time when it was headquartered in New York, and New York law has been held to apply to these policies. With respect to other defendants, the lower court had held that Ohio was a more appropriate forum because the manufacture of lead paint, took place, the majority of the subject policies were issued, extensive court files and corporate documents are located, and the parties have been litigating similar issues since the early 1990's. The appellate court did not find that determination had been an abuse of discretion/ Apparently, there had been a “race to the courthouse” on this one and a New York action had been started before one in Ohio.  Since the actions were commenced “reasonably close in time” and as the Ohio action was more comprehensive,  the court chose not to follow the general rule that the first action commenced is the one that survives, if two similar lawsuits are started.

 

10/25/07          Atlantic Mutual Insurance Cov. v. Goglia
Appellate Division, First Department
New Jersey “Hit and Run” Rules for Uninsured Motorists Apply to New Jersey Accident Involving New York Insured
Goglia, a resident of New York, was driving a commercial truck owned by his employer in New Jersey then the car in front of him stopped short.  Goglia was caused to swerve into a utility pole, which fell across his truck and that eventually led to the amputation of his right leg.  Goglia’s vehicle and the other car never came into contact. In a different suit, Goglia sued his employer’s SUM carrier, Atlantic Mutual (Atlantic), for coverage under the SUM endorsement of its policy, which had a limit of $1 million.

 

The instant action was thereafter commenced by Atlantic seeking a declaration that (1) this matter is governed by New York's rule requiring contact with the offending vehicle as a prerequisite for UM benefits.
 

New York law requires every NY policy to meet the minimum requirement of other state’s laws. automobile insurance policy procured in New York must provide the minimum uninsured motorist coverage mandated by the law of another State when the insured automobile is involved in an accident in that state.  New Jersey, in contrast with New York, does not require a showing of physical contact with another vehicle to trigger uninsured motorist coverage when the identity of the offending vehicle owner cannot be identified. 

 

10/23/07          Preferred Mutual Insurance Company v. SAV Carpentry, Inc.

Appellate Division, Second Department
Can’t We All Just Get Alone (II)?  Carrier Properly Raises Insured’s Lack of Cooperation as Defense to Coverage
To effectively deny coverage based upon lack of cooperation, an insurance carrier must demonstrate (1) that it acted diligently in seeking to bring about the insured's cooperation, (2) that the efforts employed by the insurer were reasonably calculated to obtain the insured's cooperation, and (3) that the attitude of the insured, after his or her cooperation was sought, was one of willful and avowed obstruction."  This is knows as the Thrasher standard.

Here, the insurer presented evidence that it sent the insured numerous letters regarding its discovery obligations, and hired two separate investigators to locate and interview the principal of the insured. One of these investigators stated, in an affidavit, that the insured avoided all attempts by the investigator to contact him for a one month. This demonstrated that the plaintiff diligently sought the insured's cooperation by means reasonably calculated to obtain that cooperation, and that the insured's non-cooperation consisted of willful and avowed obstruction.

Editor’s Note:  Establishing a lack of cooperation on the part of an insured is difficult, but not necessarily impossible.  The three point Thrasher standard outlined above is the roadmap.  Inaction on the part of the insured is not enough to establish the defense.  The insurer must be aggressive and clear in its effort to contact the insured and secure cooperation.

 

10/23/07          In the Matter of Nationwide Insurance Enterprise v. Harris
Appellate Division, Second Department
Framed Issue Hearing Necessary to Resolve Question Relating to Status of Vehicle, in Uninsured Motorist Proceeding
A car accident occurred in 1999 when a vehicle owned by Harris and driven by Lattray collided with a car owned and operated by Washington. Harris and Welds, a passenger in the Harris vehicle, allegedly were injured in the accident. They demanded arbitration of their uninsured motorists claim under the policy issued by Nationwide covering the vehicle owned by Harris. 

Nationwide moved to stay arbitration, asserting that the Washington car was, in fact insured.  Nationwide presented two exhibits, a copy of a report of the National Insurance Crime Bureau indicating that, on the date of the accident, Washington's vehicle was insured by an insurer with code number "999" and the police accident report with the same code.  That “999” code identifies the insurer as the Assigned Risk Plan (New York Automobile Insurance Plan -- AIP).  The court found that this proof was sufficient to make out a prima facie case to establish that the Washington car was, in fact, insured.

However, the Assigned Risk Plan offered proof that in 1995, the AIP had assigned the responsibility of providing coverage for this insured and car to New York Central Mutual (NYCM) but in February 1996, NYCM had canceled the policy and that no application was thereafter filed for a new AIP-assigned policy. That evidence raised enough of a question of fact to require a framed issue hearing to resolve the dispute.

10/23/07          In the Matter of State Farm Mutual Automobile Ins. Co. v. Juma
Appellate Division, Second Department

Agreement to Arbitrate SUM Claim in Policy Not Clear Enough to Enforce
A party will not be compelled to arbitrate absent evidence affirmatively establishing that the parties expressly agreed to arbitrate their disputes. Here, the contract did not make it clear that this underinsurance claim had to be resolved by arbitration and therefore refused to compel arbitration of the claim.

Editors Note: The facts are not clear from the opinion and an attempt to contact the lawyers for clarification has so far been unsuccessful.  Because of a citation to the Torcivia case, the editors presume that this was an out-of-state accident and the carrier attempted to compel arbitration of the matter under a New York SUM policy.  We do not believe this was a situation where the court found the New York endorsement unclear with respect to a New York accident.

 

10/23/07          Tower Insurance Company of New York v. T & G Contracting Inc.
Appellate Division, Second Department
Can’t Tell the Players Without a Scorecard; Can’t Determine Priority of Coverage without Policies
In order to determine the priority of coverage among different insurance policies, a court must review and consider all of the relevant policies at issue.  Here, since the policies were not submitted in support of the insurer’s application for summary judgment, priority of coverage could not be established.  A subsequent motion to renew was denied.  It had to be based on new facts not offered on the prior motion and a reasonable justification for the failure to present such facts in the first place.
Editor’s Note:  It is critically important when submitting a motion for a determination on coverage that a properly authenticated copy of the policy (or policies) is presented in the motion papers.

 

10/18/07          Lavandier v. Landmark Insurance Company

Appellate Division, First Department
Disclaimer Letter Withstands Attack and Broker Remains in Lawsuit
Landmark's disclaimer notices complied with Insurance Law § 3420 in advising the principal of the property owners (plaintiffs' assignors) that the claims were being rejected due to late notice. This met the specificity required by the statute.  Action against insurance broker was not necessarily barred by statute of limitations.  The limitations period does not begin to run until Landmark refused to pay claims.

 

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

 

10/25/07          DeLeon v. Ross

Appellate Division, First Department

Plaintiff’s Cessation of Treatment & Defendant’s Doctor’s Affirmation Leads to SJ Defendants’ summary judgment motion is upheld by the Appellate Division. They satisfied their burden of establishing prima facie that plaintiff in this motor vehicle accident case had not sustained a “significant impairment” under Insurance Law § 5102(d), submitting an affidavit and reports from Dr. Crane that concluded there was “no objective evidence of any orthopedic residuals related to the accident of 4/4/03” (see Perez v Hilarion, 36 AD3d 536 [2007]). Plaintiff counters that Dr. Crane’s affirmation is deficient, as it failed to show range-of-motion tests that are compared to “the norm.” Plaintiff’s argument is unavailing since an expert’s qualitative assessment of a patient’s condition may suffice, “provided that the evaluation has an objective basis and compares the limitations to the normal function, purpose and use of the affected body organ, member, function or system” (Toure v Avis Rent A Car Sys., 98 NY2d 345, 350 [2002]).

Further, plaintiff’s so-called gap in treatment was, in reality, a cessation of all treatment. While a cessation of treatment is not dispositive, a plaintiff who terminates therapeutic measures following the accident, while claiming “serious injury,” must offer some reasonable explanation for having done so. Failure to appear at an IME is not a reasonable explanation.

10/25/07          Felton v. Kelly

Appellate Division, Third Department

SJ Partially Granted Except as to the 90/180 Category of Serious Injury
In a lengthy opinion, defendant was somewhat successful appealing lower court order which denied its motion for summary judgment dismissing the complaint. Defendant alleged that plaintiff did not suffer a serious injury under: (1) the permanent consequential limitation of use, (2) significant limitation of use, and (3) 90/180-day categories. Among other things, defendant submitted plaintiff’s prior medical reports indicating a history of back problems that culminated in spinal disc surgery in 1997 and a post-accident lumbar MRI which indicated only post-operative changes in the lumbar region, with no disc herniation. Defendant met her burden.

The burden then shifted to plaintiff to submit sufficient objective medical evidence to create a question of fact. Specifically, under the permanent consequential limitation and significant limitation categories, plaintiffs were required to submit medical proof containing “objective, quantitative evidence with respect to diminished range of motion or a qualitative assessment comparing plaintiff's present limitations to the normal function, purpose and use of the affected body organ, member, function or system.” In this regard, plaintiff relies heavily on the report of neurologist Mustafa Khan However, while Khan noted that mobility of plaintiff’s cervical spine was “limited,” he provided no qualitative or quantitative assessment of this limitation which would support a conclusion that it was either permanent or significant. Regarding the 90/180-day category, plaintiff met this burden with (1) plaintiff’s own deposition testimony that, following the accident, he suffered from headaches, blurry vision, and pain in his neck and back and (2) Khan’s report, which indicated that he had placed plaintiff on total disability during at least four of the six months following the accident. Accordingly, the Appellate Division held that defendant’s motion to dismiss the 90/180-day claim was properly denied.

10/23/07          Friedman v. Albert

Appellate Division, Second Department

‘Significant Limitations’ in Plaintiff’s ROM Leads to Summary Judgment Denial

Here, defendants were unsuccessful in their appeal from a lower court order which had denied their motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury. The Appellate Division held the defendants failed to meet their prima facie burden. In support of their motion, the defendants relied on the affirmed medical report of their examining neurologist, which described significant limitations in the plaintiff’s cervical and lumbar spine range of motion.  Since the defendants failed to satisfy their prima facie burden, it is unnecessary to consider whether the plaintiff’s papers were sufficient.

 

10/23/07          Munoz v Koyfman

Appellate Division, Second Department

Plaintiffs’ Complaint Dismissed for Failure to Raise a Triable Issue of Fact

Mother and infant son appeal a lower court order which granted defendants’ motion for summary judgment dismissing the complaint. Their appeal was dismissed as the lower court correctly concluded that the defendants met their prima facie burden of establishing that the plaintiff-mother did not sustain a serious injury. In opposition, the affidavit of her treating chiropractor failed to raise a triable issue of fact. His conclusions were speculative because he failed to account for the numerous accidents, both before and after the subject one, in which she injured the same parts of her body that she alleges were injured in this action. Plaintiff’s reliance on her MRI reports was insufficient since the radiologist who prepared them did not establish what caused the pathology described therein.  

 

10/23/07          Sanon v Moskowitz
Appellate Division, Second Department

Doctor, Doctor: Differences in Medical Opinion Leads to Summary Judgment Survival

The lower court order denying defendants’ summary judgment was affirmed by the Appellate Division. Here, the lower court properly determined that the defendant failed to establish her prima facie entitlement to judgment. One of the plaintiffs’ physicians, Dr. Schwartz, opined, that both of the plaintiffs suffered measurable losses in lumbar and cervical ranges of motion. The defendant’s expert orthopedist, Dr. Farkas, opined that the plaintiffs’ cervical and lumbar sprains had resolved. However, there is no evidence that he measured the plaintiffs’ lumbar extension or cervical lateral flexion. Further, where Dr. Schwartz had considered 60 degrees to be the normal range of cervical flexion and extension, Dr. Farkas considered anything above 30 degrees to be normal. Since Dr. Farkas’s reports failed to resolve all triable issues of fact, summary judgment was properly denied.

 

10/23/07          Smith v Cherubini

Appellate Division, First Department

Plaintiff’s Injuries Must Relate to Subject Motor Vehicle Accident to Recover Damages

Plaintiff’s failure to explain pre-existing migraines and prior and subsequent accidents led the Appellate Division to affirm a lower court order which had granted defendant’s motion to set aside a $320,000 jury verdict and dismiss the action. Here, plaintiff failed to show that she suffered a “serious injury” within the meaning of Insurance Law § 5102(d). She alleged multiple injuries, including migraine headaches. The evidence showed a pre-existing history of migraines, and prior and subsequent accidents. Plaintiff’s medical expert failed to explain or address how the intervening accidents and history of progressively worsening migraines were not the cause of her complaints, and failed to testify as to any current, causally related limitation experienced by plaintiff.  

 

 

10/18/07          Pulgram v Reisner

Appellate Division, First Department

Even Had Plaintiff Properly Introduced his Evidence, Result is the Same: SJ Granted

A lower court order which granted defendants’ motion for summary judgment dismissing the complaint was affirmed by the Appellate Division. On their initial motion, defendants established prima facie entitlement to summary judgment by sufficiently demonstrating that plaintiff had not sustained a serious injury from this accident. Plaintiff failed to raise an issue of fact by countering with “objective medical findings based on a recent medical examination” (Thompson v Abbasi, 15 AD3d 95, 98 [2005]) in admissible form. The Appellate Division held the denial of the motion to renew was a provident exercise of discretion. Plaintiff offered no explanation, reasonable or otherwise, for his failure to submit admissible evidence in opposition to defendant’s summary judgment motion. Even if the court had considered the evidence offered by plaintiff, it would have been properly denied as insufficient.

 

10/18/07          Sung v Mihalios

Appellate Division, First Department

Issue of Fact Raised as Plaintiff’s Expert Rules Out Other Causes of Plaintiff’s Injuries

Here, the Appellate Division held that the lower court properly denied defendant’s motion for summary judgment because triable issues exist about whether each plaintiff sustained a serious injury as a result of the subject automobile accident. The court properly considered plaintiffs’ evidentiary submissions in opposition to the motion. The passing reference in the report of plaintiffs’ expert to an unsubmitted physician report was not improper (see Navedo v Jaime, 32 AD3d 788, 789-790 [2006]), likely having no effect on the court’s ruling, and the no-fault denial of benefits for medical treatment was not the only evidence submitted in opposition. The detailed tests conducted by plaintiffs’ expert were objective and he sufficiently stated his opinion about the cause of plaintiffs’ injuries while also ruling out other causes. Any discrepancies between the assertions in the expert’s affidavits and his office records raise credibility issues that may not be resolved on summary judgment.

 

10/18/07          Baker v Elite Ambulette Serv., Inc.
Appellate Division, First Department

No Adequate Explanation of Gap in Medical Treatment = Summary Judgment

In a brief opinion, the Appellate Division affirmed a lower court order which had granted defendants’ motion for summary judgment dismissing the complaint. Here, defendants established prima facie entitlement to summary judgment by submitting evidence demonstrating that plaintiffs did not sustain a serious injury as a result of the subject car accident. Plaintiffs failed to raise a triable issue of fact. The affidavit of plaintiffs’ medical expert failed to explain adequately the reason for the three-year gap in plaintiffs’ treatment, and the excuse is not supported by the record (see Black v Regalado, 36 AD3d 437 [2007]).

 

 

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. 

 

Arbitration

 

10/19/07          In the Matter of the Arbitration Between Applicant and Respondent

Arbitrator Thomas J. McCorry (Erie County)

Lack of Opinion that Surgery not Required Leads to Insufficient Denial.

 

The Applicant, eligible injured person (“EIP”), sought $23,590.46 in medical expenses for spine surgery.  The Applicant testified in support of her claim that she was the wife of disabled husband and had three young children.  She further testified that she needs the spine surgery to get on with her life.  The Applicant also presented her lumbar spine MRI which revealed a slight annular bulge at L2/3 with slight compression of the thecal sac and small broad based disc herniation at L4/5 causing mild compression on the thecal sac.  The Applicant’s treating surgeon, Dr. Capicotto, noted that the Applicant’s pain level was 10/10 and was causing lack of sleep.  The Applicant was prescribed four Dilaudid tablets per day.  Dr. Capicotto further opined that if the Applicant underwent surgery she should have moderate pain relief which would help her care for her family and “get on with her life.”

 

The insurer denied the surgery based upon an independent medical examination (“IME”) by Dr. Stephen Joyce.  In Dr. Joyce’s March 24, 2006, IME report he opined that further treatment in the form of surgery was no longer medically necessary as a result of the injuries from the motor vehicle accident.  Dr. Joyce recommended physical therapy and then found that no surgery was needed at that time.  Then, in an August 31, 2006, addendum Dr. Joyce opined that surgery could be deferred and an alternative form followed.

 

Arbitrator McCorry noted that Dr. Joyce’s IME report does not rule out surgery but hedged on when surgery would be needed resulting in the denial not being upheld.

 

Litigation

 

10/23/07          Hospital for Joint Diseases  v. New York Cent. Mut. Fire Ins. Co.,

Appellate Division, Second Department

Evidence of Outstanding Verification Request Renders Action Premature
The plaintiff moved for summary judgment on the first cause of action, which sought payment of an outstanding medical bill.  The Court held that plaintiff established its prima facie case through submission of its billing forms, a certified mail receipt referencing the patient, a signed return receipt card referencing the patient, and an affidavit from plaintiff’s biller that the insurer failed to pay the bill.

 

The defendant however submitted evidence that it timely requested additional verification that remained outstanding.  The defendant further demonstrated that it timely followed up on its initial additional verification request.  In addition, there was unrebutted proof that the plaintiff ignored the request.  Accordingly, the plaintiff’s action was premature.

 

It is noted that the plaintiff raised for the first time on appeal the issue of the reasonableness of the verification.  The Court declined to address the issue since it was not raised in the lower court.

 

10/19/07          Alpha Healthcare Plus Med., P.C. a/a/o Melvina Mason v. Allstate Ins. Co.,

Appellate Term, Second Department

We Will Not Disturb It – Another Lower Arbitration Award Upheld on Rational Basis

Yet another decision wherein the lower arbitrator’s award in the insurer’s favor was upheld by not only the Master Arbitrator but also the Appellate Term Court.

 

10/19/07          Rockaway Med. & Diag., P.C.  v. State Farm Mut. Ins. Co.,

Appellate Term Second Department

Investigator’s Affidavit Raises Issue of Fact on Whether Injuries from an Insured Incident

The issue on appeal was only whether the insurer had offered sufficient evidence to raise an issue of fact regarding whether the injuries arose out of an insured incident.  The Court held that the insurer did raise an issue of fact through the affidavit of its investigator.  The investigator’s affidavit demonstrated a founded belief that the alleged injuries did not arise out of an insured incident.

 

10/19/07          Allstate Social Work, etc. v. Utica Mut. Ins. Co.,

Appellate Term, Second Department

Both Parties’ Fail to Submit Sufficient Evidence to Prevail on Summary Judgment

Plaintiff’s motion for summary judgment was denied as it failed to submit an affidavit laying to proper foundation for the admission of its records.  Likewise, the insurer’s cross-motion was denied as it failed to demonstrate that it mailed timely verification requests.

 

10/17/07          Central Bronx Med., P.C. a/a/o Luis Perez v. New York Cent. Mut. Ins. Co.,
Appellate Term, Second Department

Low Impact Study Fails to Raise an Issue of Fact

Accident analysis report or low impact study was insufficient to raise issue of fact pertaining to lack of coverage defense.

 

 

PEIPER ON PROPERTY

Steven E. Peiper

[email protected]

 

No reported decisions during the past two weeks.

 

EARL’S PEARLS

Earl K. Cantwell, II

[email protected]

 

Protecting Privileges & Work Product

 

            Someone hit the “Send” key by accident. A pre-trial report to an adjuster got mixed up with documents produced to opposing parties. Are there remedies you and counsel can use to protect against inadvertent disclosure of confidential or privileged case documents and information?

 

The amount of documents and electronically stored information, and the time and

expense of reviewing massive amounts of potentially privileged material, can greatly increase the cost, inconvenience and perils of discovery.  There is also risk of accidentally producing an investigator’s report, confidential adjuster-attorney report, or trial preparation materials.  Given the sometimes harsh and embarrassing court cases involving disclosure and waiver, parties need to do extensive document and privilege reviews.  But what if a worst case scenario occurs? There are (at least) two options to consider proactively to seek to preserve and protect privileged and trial preparation materials that might get disclosed by accident, especially in large and voluminous cases such as product liability, mass torts, class actions, construction cases, and multi-district litigation.

 

            First, the Federal Rules of Civil Procedure now (as of 12/1/07) expressly provide that, if information is inadvertently produced in discovery subject to a claim of privilege or protection as trial preparation material, the party making the claim may notify any party that received information of the claim and the basis for it.  After being notified, the recipient party must promptly return, sequester, or destroy the specified information and any copies it has, and may not use or disclose the information until the claim of privilege is resolved.  FRCP 26(b)(5)(B). A receiving party may promptly present the information to the court under seal for a determination of the claim.  Accordingly, the Federal Rules now contain a Rule and structure to protect and retrieve protected or privileged information produced inadvertently. 

 

      Second, in federal court and in complicated state court cases, the parties and the court may seek to include a formal and specific “clawback” provision in the case management order, which can set a procedure for resolving such disputes if they arise.  If the problem is inadvertent disclosure and/or unintended waiver of privileged materials, one solution is to have counsel negotiate and prepare a discovery or case management order with a “clawback” provision which can form the framework for correcting inadvertent disclosures, in addition to and to complement the provisions now contained in FRCP 26(b)(5)(B) or similar state court rules. 

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These are at least two options to put the “genie back in the bottle.”

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.

 

10/25/07          Garcia v. Federal Insurance Company

Florida Supreme Court
Additional Insured Status Under Homeowner’s Policy Limited To Vicarious Liabilities
On a certified question from the Eleventh Circuit, the Florida Supreme Court has ruled that where a liability policy extended coverage to "any other person or organization because of the acts or omissions" of the named insured, the rights of the additional insured were limited to claims of vicarious liability and did not extend to independent acts of negligence on the part of the putative additional insured. The court held that coverage was unambiguously restricted by the use of terms such as "only with respect to" and noted the absence of the broader language of "arising out of" that courts in some other states have relied on in adopting a more expansive interpretation of coverage.

Submitted by: Michael F. Aylward (Morrison Mahoney LLP)

 

10/25/07          Utica Mutual Insurance Company v. Fontneau

Massachusetts Appeals Court

Adjoining Lot Owned By Insured Fell Within Definition of Insured Location
Despite the fact that a landowner had allowed coverage to lapse on an adjoining parcel of property where he stored antique cars, the Appeals Court of Massachusetts had ruled that he could obtain coverage under a policy insuring the other parcel for liability claims arising out of injuries suffered by a police officer while investigating the vandalism of the cars. Although Utica’s policy excluded coverage for bodily injury involving premises owned by the insured that are not listed as "insured locations," the Court held that the adjoining non-scheduled parcel of property fell within the definition of "insured location" as being used "in connection with" the listed premises, both due to its proximity and the storage of cars on it.

Submitted by: Michael F. Aylward (Morrison Mahoney LLP)

 

 

Reported Decisions

 

Lavandier v. Landmark Insurance Company

 

Order, Supreme Court, New York County (Alice Schlesinger, J.), entered April 13, 2007, which denied defendant Sobel's motion for summary judgment and granted the cross motions by defendants Landmark and York for summary judgment, unanimously modified, on the law, Sobel's motion granted to the extent of dismissing all claims arising under the 1994-95 insurance policy issued by Landmark, and otherwise affirmed, without costs.

Landmark's disclaimer notices complied with Insurance Law § 3420 in advising the principal of the property owners (plaintiffs' assignors) that the claims were being rejected due to late notice. This met the specificity required by the statute (cf. Paul M. Maintenance, Inc. v Transcontinental Ins. Co., 300 AD2d 212 [2002]).

Due to confusion in the references in the correspondence, it cannot be said, as a matter of law, that the contract claim against Sobel, the broker, was time-barred. The limitations period on the negligence claim did not begin to run until plaintiffs suffered injury by Landmark's refusal of the claims (see Kronos v AVX Corp., 81 NY2d 90, 94 [1993]). There is nothing in the record to indicate that Sobel or the principal of plaintiffs' assignors had advised defendant York of the claims in a timely fashion.

In view of the findings of fact in the underlying negligence action, however, the claims asserted under the 1994-95 policy should have been dismissed. The argument of plaintiffs (who, in any event, have not appealed) that the underlying acts constitute more than one occurrence is unavailing. Plaintiffs lived in the same apartment, and both were exposed to lead at the same time, thus meeting the "close temporal and spatial relationship" criterion discussed in Appalachian Ins. Co. v General Elec. Co. (8 NY3d 162, 171 [2007]).

DeLeon v. Ross

The Law Office of Carl Maltese, Smithtown (C. Alex Maltese of counsel), for appellant.
Molod Spitz & DeSantis, P.C., New York (Marcy Sonneborn of counsel), for respondents.

Order, Supreme Court, Bronx County (Howard R. Silver, J.), entered July 19, 2006, which granted defendant's motion for summary judgment dismissing the complaint, unanimously affirmed, without costs.

Defendants satisfied their burden of establishing prima facie that plaintiff in this motor vehicle accident case had not sustained a "significant impairment" under Insurance Law § 5102(d), submitting an affidavit and reports from Dr. Crane that concluded there was "no objective evidence of any orthopedic residuals related to the accident of 4/4/03" (see Perez v Hilarion, 36 AD3d 536 [2007]). Plaintiff counters that Dr. Crane's affirmation is deficient, as it failed to show range-of-motion tests that are compared to "the norm." In addition to being improperly raised for the first time on appeal (see Vasquez v Reluzco, 28 AD3d 365 [2006]), plaintiff's argument is unavailing since an expert's qualitative assessment of a patient's condition may suffice, "provided that the evaluation has an objective basis and compares the limitations to the normal function, purpose and use of the affected body organ, member, function or system" (Toure v Avis Rent A Car Sys., 98 NY2d 345, 350 [2002]). Dr. Crane's report did provide such an objective assessment, clearly comparing plaintiff's diminished range of motion in his right shoulder to the norm. It also provided an objective assessment of plaintiff's diminished range of motion in his cervical and lumbar spine.

The report by plaintiff's expert, Dr. Haque, noted the degenerative conditions identified on plaintiff's October 27, 2003 MRI, yet failed to explain his current findings in light of medical evidence that suggests preexisting degenerative conditions (see Shinn v Catanzaro, 1 AD3d 195, 197 [2003]).

Moreover, plaintiff's so-called gap in treatment was, in reality, a cessation of all treatment. While a cessation of treatment is not dispositive, a plaintiff who terminates therapeutic measures following the accident, while claiming "serious injury," must offer some reasonable explanation for having done so (Pommells v Perez, 4 NY3d 566, 574 [2005]). Here, there was an undisputed, 20-month gap before plaintiff's last examination, beginning 17 months after the accident and continuing until the submission of defendants' motion for summary judgment. By way of explanation, plaintiff offers only the irrelevant claim, unsupported by any documentation from defendants' insurance carrier, that he failed to appear at an independent medical examination scheduled by defendants' insurance carrier because he forgot the date, and was not given an opportunity for a makeup.

Without more, plaintiff's affidavit, stating that he is unable to teach kickboxing or play racquetball or handball, must be viewed as insufficient to establish a serious injury within the meaning of the statute (see Gjelaj v Ludde, 281 AD2d 211, 212 [2001]).

 

Felton v. Kelly

Calendar Date: September 11, 2007
Before: Cardona, P.J., Mercure, Peters, Spain and Carpinello, JJ.


McCabe & Mack, L.L.P., Poughkeepsie (Kimberly Hunt Lee of counsel), for appellant.
Basch & Keegan, L.L.P., Kingston (Derek J. Spada of counsel), for respondents.

MEMORANDUM AND ORDER


Cardona, P.J.

Appeal from an order of the Supreme Court (Kavanagh, J.), entered October 19, 2006 in Ulster County, which denied defendant's motion for summary judgment dismissing the complaint.

Plaintiff Gregg B. Felton (hereinafter plaintiff) was injured in June 2004 when the car he was driving collided with defendant's vehicle. Specifically, plaintiff alleged that he suffered from back and neck pain, headaches and blurred vision. Plaintiff and his wife, derivatively, commenced this action claiming that plaintiff sustained a serious injury within the meaning of Insurance Law § 5102 (d). Finding that questions of fact existed, Supreme Court denied defendant's motion for summary judgment dismissing the complaint, prompting this appeal.

As the proponent of the summary judgment motion, defendant bore the initial burden of establishing that plaintiff did not suffer a causally-related serious injury under the permanent consequential limitation of use, significant limitation of use, and 90/180-day categories specified in plaintiffs' bill of particulars (see Toure v Avis Rent A Car Sys., 98 NY2d 345, 352 [2002]; Secore v Allen, 27 AD3d 825, 827 [2006]). Among other things, defendant submitted (1) plaintiff's prior medical reports indicating a history of back problems that culminated in spinal disc surgery in 1997, (2) a postaccident lumbar MRI which indicated only postoperative changes in the lumbar region, with no disc herniation, (3) a November 2005 report of orthopedic surgeon Richard Moscowitz stating that plaintiff's symptoms of cervical and lumbosacral strain were mild and were not causally related to the accident, (4) plaintiff's medical records indicating previous vision problems associated with a diagnosis of probable multiple sclerosis, and (5) a postaccident brain MRI indicating features suspicious for multiple sclerosis. We find this evidence sufficient to sustain defendant's initial burden.

The burden then shifted to plaintiff to submit sufficient objective medical evidence to create a question of fact as to whether he sustained a serious injury within the meaning of the No-Fault Law (see Insurance Law § 5102 [d]; Toure v Avis Rent A Car Sys., 98 NY2d at 352; Pugh v DeSantis, 37 AD3d 1026, 1029 [2007]). Specifically, under the permanent consequential limitation and significant limitation categories, plaintiffs were required to submit medical proof containing "objective, quantitative evidence with respect to diminished range of motion or a qualitative assessment comparing plaintiff's present limitations to the normal function, purpose and use of the affected body organ, member, function or system" (John v Engle, 2 AD3d 1027, 1029 [2003]; see Pugh v DeSantis, 37 AD3d at 1029; Clements v Lasher, 15 AD3d 712, 713 [2005]).

In this regard, plaintiffs rely heavily on the report of neurologist Mustafa Khan ^[FN1]. However, while Khan noted that mobility of plaintiff's cervical spine was "limited," he provided no qualitative or quantitative assessment of this limitation which would support a conclusion that it was either permanent or significant. Furthermore, although Khan's report detailed plaintiff's subjective complaints of pain and discomfort and opined that plaintiff's migraine headaches, blurred vision and cervical sprain were related to the accident, neither a subsequent MRI nor any other tests performed by Khan showed abnormalities attributable to the accident. In the absence of such objective evidence, Khan's opinion that plaintiff suffers from a "permanent" "partial disability" lacks sufficient probative value to sustain plaintiffs' burden.

Nor does the November 2005 report of neurologist Gabriel Aguilar, who examined plaintiff at defendant's request, raise a question of fact under these categories. Although Aguilar performed certain objective tests and noted a causal connection between the accident and plaintiff's complaints of neck and back pain, he also found that at the time of the examination plaintiff had a full range of motion and was no longer taking pain medications. Accordingly, Supreme Court should have dismissed plaintiffs' claims based upon the permanent consequential limitation and significant limitation of use categories (see Pugh v DeSantis, 37 AD3d at 1028-1029; Clements v Lasher, 15 AD3d at 713).

With respect to the 90/180-day category, in order to sufficiently raise a triable issue of fact, plaintiffs were required to submit objective evidence of a "medically determined injury or impairment of a non-permanent nature which prevent[ed] [plaintiff] from performing substantially all of the material acts which constitute [his] usual and customary daily activities" for at least 90 of the 180 days immediately following the accident (Insurance Law § 5102 [d]; see Secore v Allen, 27 AD3d at 828; Clements v Lasher, 15 AD3d at 713). Plaintiffs met this burden with (1) plaintiff's own deposition testimony that, following the accident, he suffered from headaches, blurry vision, and pain in his neck and back, and that due to those problems he was out of work for seven months and was unable to work around his house or participate in certain hobbies, (2) Khan's report, which indicated that he had placed plaintiff on total disability during at least four of the six months following the accident, and that he had imposed lifting restrictions upon plaintiff during that time, and (3) the opinion of Aguilar who, after conducting numerous objective tests during his examination of plaintiff, concluded that plaintiff's cervical pain was related to the accident, his preexisting lower back pain was aggravated by the accident, and his headaches were "questionably related" to the accident. Accordingly, we conclude that defendant's motion to dismiss the 90/180-day claim was properly denied (see Pugh v DeSantis, 37 AD3d at 1029-1030; Dooley v Davey, 21 AD3d 1242, 1244-1245 [2005]).

Mercure, Peters, Spain and Carpinello, JJ., concur.

ORDERED that the order is modified, on the law, without costs, by reversing so much thereof as denied defendant's motion for summary judgment dismissing that part of the complaint alleging that plaintiff Gregg B. Felton suffered a serious injury in the permanent consequential limitation and significant limitation of use categories; motion granted to that extent, partial summary judgment awarded to defendant and said claims dismissed; and, as so modified, affirmed.

Footnotes

Footnote 1:We do not agree with defendant's contention that this Court should not consider Khan's report. Although the original copy submitted to Supreme Court was unsworn, we note that plaintiffs thereafter submitted a sworn copy of the same report and we are unpersuaded that the court failed to consider that sworn copy.

 

Friedman v. Albert

Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y.
(Stacy R. Seldin of counsel), for appellants.
Bruce Montague & Partners, Bayside, N.Y. (Joseph D. Levy of counsel), for respondent.

 

DECISION & ORDER

In an action to recover damages for personal injuries, the defendants appeal from an order of the Supreme Court, Kings County (Kramer, J.), entered January 29, 2007, which denied their 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).

ORDERED that the order is affirmed, with costs.

While we affirm the order appealed from, we do so on a ground other than the one relied upon by the Supreme Court. Contrary to the court's determination, the defendants failed to establish, prima facie, that 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 support of their motion, the defendants relied on the affirmed medical report of their examining neurologist, which described significant limitations in the plaintiff's cervical and lumbar spine range of motion (see Jenkins v Miled Hacking Corp., 43 AD3d 393; Bentivegna v Stein, 42 AD3d 555; Zamaniyan v Vrabeck, 41 AD3d 472; Brown v Motor Veh. Acc. Indem. Corp., 33 AD3d 832).

Since the defendants failed to satisfy their prima facie burden, it is unnecessary to consider whether the plaintiff's papers in opposition were sufficient to raise a triable issue of fact (see Jenkins v Miled Hacking Corp., 43 AD3d 393; Coscia v 938 Trading Corp., 283 AD2d 538).
SANTUCCI, J.P., GOLDSTEIN, DILLON and ANGIOLILLO, JJ., concur.

 

 

Munoz v. Koyfman

Mallilo & Grossman, Brooklyn, N.Y. (Christopher Bauer of counsel), for appellants.
John P. Humphreys, Melville, N.Y. (Dominic P. Zafonte of counsel), for respondents.

 

DECISION & ORDER

In an action to recover damages for personal injuries, the plaintiffs, Rosemary Munoz individually, and Sebastian Munoz, an infant under the age of 14 by his mother and natural guardian Rosemary Munoz, appeal, as limited by their brief, from so much of an order of the Supreme Court, Queens County (Rosengarten, J.), dated September 5, 2006, as granted that branch of the defendants' motion which was for summary judgment dismissing the complaint insofar as asserted by the plaintiff Rosemary Munoz individually, on the ground that she did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the appeal by the plaintiff Sebastian Munoz, an infant under the age of 14 by his mother and natural guardian Rosemary Munoz, is dismissed, without costs or disbursements, as he is not aggrieved by the portion of the order appealed from (see CPLR 5511); and it is further,

ORDERED that the order is affirmed insofar as reviewed; and it is further,

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

The Supreme Court correctly concluded that the defendants met their prima facie burden of establishing that the plaintiff Rosemary Munoz (hereinafter Rosemary) 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; see also Kearse v New York City Tr. Auth., 16 AD3d 45, 49-50).

In opposition, the affidavit of Rosemary's treating chiropractor failed to raise a triable issue of fact. His conclusions were speculative because he failed to account for the numerous accidents, both before and after the subject one, in which Rosemary injured the same parts of her body that she alleges were injured in this action (see Moore v Sarwar, 29 AD3d 752, 753; Tudisco v James, 28 AD3d 536; Bennett v Genas, 27 AD3d 601, 601-602; Allyn v Hanley, 2 AD3d 470, 471). Moreover, Rosemary never explained the lengthy gap in her treatment (see Berktas v McMillian, 40 AD3d 563, 564; Waring v Guirguis, 39 AD3d 741, 742; Phillips v Zilinsky, 39 AD3d 728, 729; Allyn v Hanley, 2 AD3d 470, 470-471; see also Pommells v Perez, 4 NY3d 566, 574). Rosemary's reliance on her magnetic resonance imaging reports was insufficient, on its own, to raise a triable issue of fact since the radiologist who prepared them did not establish what caused the pathology described therein (see Collins v Stone, 8 AD3d 321, 322). The statements contained in Rosemary's self-serving affidavit were insufficient to raise a triable issue of fact as well (see Garcia v Solbes, 41 AD3d 426, 427; Fisher v Williams, 289 AD2d 288, 289). Finally, Rosemary failed to proffer competent medical evidence that she sustained a medically determined injury of a nonpermanent nature which prevented her, for 90 of the 180 days following the subject accident, from performing her usual and customary activities (see Sainte-Aime v Ho, 274 AD2d 569, 570).

Sanon v. Moskowitz

Rivkin Radler, LLP, Uniondale, N.Y. (Evan H. Krinick, Cheryl E. Korman, and                  Melissa M. Murphy of counsel), for appellant.
Law Office of Kenneth M. Mollins, P.C., Melville, N.Y.
(Richard D. Saul of counsel), for respondents.

 

DECISION & ORDER

In an action to recover damages for personal injuries, the defendant appeals, as limited by her brief, from so much of an order of the Supreme Court, Nassau County (Winslow, J.), dated October 16, 2006, as denied her motion for summary judgment dismissing the complaint on the ground that neither of the plaintiffs sustained a serious injury within the meaning of Insurance Law § 5102(d).

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

The Supreme Court properly determined that the defendant failed to establish her prima facie entitlement to judgment as a matter of law (see Ayotte v Gervasio, 81 NY2d 1062). One of the plaintiffs' treating physicians, Jeffrey Schwartz, opined, inter alia, after an orthopedic examination and diagnostic imaging, that both of the plaintiffs suffered measurable losses in lumbar and cervical ranges of motion as a result of the subject accident. The defendant's expert orthopedist, S. Farkas, after examining both plaintiffs and reviewing Dr. Schwartz's prior reports, opined that the plaintiffs' cervical and lumbar sprains had resolved. However, there is no evidence that Dr. Farkas measured the plaintiffs' lumbar extension or cervical lateral flexion (left and right)—areas in which Dr. Schwartz previously had noted decreased ranges of motion. Moreover, whereas Dr. Schwartz had considered 60 degrees to be the normal range of cervical flexion and extension, Dr. Farkas considered anything above 30 degrees to be normal. Because Dr. Farkas's reports failed to resolve all triable issues of fact as to whether either plaintiff sustained a serious injury, summary judgment was properly denied (see Ayotte v Gervasio, 81 NY2d 1062). CRANE, J.P., RITTER, FISHER, COVELLO and DICKERSON, JJ., concur.

 

Smith v. Cherubini

Pollack, Pollack, Isaac & DeCicco, New York (Brian J. Isaac of counsel), for appellant.
Mead, Hecht, Conklin & Gallagher, LLP, Mamaroneck (Elizabeth M. Hecht of counsel),           for respondent.

Order, Supreme Court, Bronx County (Edgar G. Walker, J.), entered on or about July 3, 2006, which granted defendant's motion to set aside a $320,000 jury verdict rendered in plaintiff's favor and dismissed the action, unanimously affirmed, without costs.

Plaintiff failed to show that she suffered a "serious injury" within the meaning of Insurance Law § 5102(d) (see Licari v Elliott, 57 NY2d 230 [1982]). She alleged multiple injuries, including migraine headaches and bulging and herniated cervical and lumbosacral discs. The evidence showed a pre-existing history of migraines, and prior and subsequent accidents.

Plaintiff's medical expert failed to explain or address how the intervening accidents and history of progressively worsening migraines were not the cause of her complaints, and failed to testify as to any current, causally related limitation experienced by plaintiff (see Thompson v Abassi, 15 AD3d 95 [2005]). The expert also failed to identify any objective basis for the percentages attributed to the restricted ranges of motion, and did not objectively relate the MRI findings to plaintiff's current complaints (see Taylor v Terrigno, 27 AD3d 316 [2006]).

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

Pulgram v. Reisner

Russo, Keane & Toner, LLP, New York (Thomas F. Keane of counsel), for appellant.
Rivkin Radler LLP, Uniondale (Cheryl F. Korman of counsel), for respondents.

Order, Supreme Court, New York County (Milton A. Tingling, J.), entered August 20, 2006, which granted defendants' motion for summary judgment dismissing the complaint, and order, same court and Justice, entered March 23, 2007, which, to the extent appealable, denied plaintiff's motion to renew, unanimously affirmed, without costs.

On their initial motion, defendants established prima facie entitlement to summary judgment by sufficiently demonstrating that plaintiff had not sustained a serious injury from this accident within the meaning of Insurance Law § 5102(d) (Gaddy v Eyler, 79 NY2d 955, 956-957 [1992]). Plaintiff failed to raise an issue of fact by countering with "objective medical findings
based on a recent medical examination" (Thompson v Abbasi, 15 AD3d 95, 98 [2005]) in admissible form.

Denial of the motion to renew was a provident exercise of discretion. Plaintiff offered no explanation, reasonable or otherwise, for his failure to submit admissible evidence in opposition to defendant's summary judgment motion (see e.g. Cillo v Schioppo, 250 AD2d 416 [1998]). Even if the court had considered the evidence offered by plaintiff, it would have been properly denied as insufficient.

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

Sung v. Mihalios

Buratti, Kaplan, McCarthy & McCarthy, Yonkers (Jeffrey A. Domoto of counsel), for appellants.
Sim & Park, LLP, New York (Sand J. Sim of counsel), for respondents.

Order, Supreme Court, Bronx County (Patricia A. Williams, J.), entered January 16, 2007, which denied defendants' motion for summary judgment dismissing the complaint, unanimously affirmed, without costs.

The IAS Court properly denied defendant's motion for summary judgment because triable issues exist about whether each plaintiff sustained a serious injury as a result of the automobile accident between the parties (Insurance Law § 5102[d]). The court properly considered plaintiffs' evidentiary submissions in opposition to the motion. The passing reference in the report of plaintiffs' expert to an unsubmitted physician report was not improper (see Navedo v Jaime, 32 AD3d 788, 789-790 [2006]), likely having no effect on the court's ruling, and the no-fault denial of benefits for medical treatment was not the only evidence submitted in opposition (see Koren v Weihs, 201 AD2d 268 [1994]). The detailed tests conducted by plaintiffs' expert were objective and he sufficiently set forth his opinion about the cause of plaintiffs' injuries while also ruling out other causes (cf. Shinn v Catanzaro, 1 AD3d 195, 198 [2003]. Any discrepancies between the assertions in the expert's affidavits and his office records raise credibility issues that may not be resolved on summary judgment. The one-year gap in plaintiffs' treatment was adequately explained by the expert's opinion that further treatment would be palliative (see Pommells v Perez, 4 NY3d 566, 577 [2005]).

We have considered and rejected appellants' remaining contentions.

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

Baker v. Elite Ambulette Serv., Inc.

Dubow & Smith, Bronx (Steven J. Mines of counsel), for appellants.
Burke, Lipton, McCarthy & Gordon, White Plains (Gail R.
Lipton of counsel), for Elite Ambulette Service, Inc., respondent.

Order, Supreme Court, Bronx County (Wilma Guzman, J.), entered April 24, 2006, which granted defendants' motion for summary judgment dismissing the complaint, unanimously affirmed, without costs.

Defendants established prima facie entitlement to summary judgment by submitting evidence demonstrating that plaintiffs did not sustain a serious injury as a result of the car accident between the parties (Gaddy v Eyler, 79 NY2d 955, 956-957 [1992]. Plaintiffs failed to raise a triable issue of fact that a serious injury was sustained within the meaning of Insurance Law § 5102(d). The affidavit of plaintiffs' medical expert failed to explain adequately the reason for the three-year gap in plaintiffs' treatment, and the excuse is not supported by the record (see Black v Regalado, 36 AD3d 437 [2007]; see also Wei-San Hsu v Briscoe Protective Sys., Inc., 2007 NY App Div LEXIS 9560, 2007 WL 2669226).

Atlantic Mutual Insurance Cov. v. Goglia

Order, Supreme Court, New York County (Sherry Klein Heitler, J.), entered October 24, 2005, which granted the motion of plaintiff Atlantic Mutual Insurance Company (Atlantic Mutual) for summary judgment declaring that it is not liable to defendant for uninsured motorist (UM) or supplemental uninsured motorist (SUM) coverage, unanimously reversed, on the law, with costs, the declaration vacated, and judgment granted to defendant declaring that plaintiff is liable to defendant for UM/SUM coverage.

Defendant, a New York resident, was driving a commercial truck owned by his employer when, while in New Jersey, the vehicle in front of him came to a short stop at a traffic signal, causing him to swerve and strike a utility pole, which then fell across his vehicle and trapped him inside. Defendant's truck and the offending "hit-and-run" vehicle never made physical contact with one another. As a result of the accident, defendant's right leg was amputated below the knee.

In a separate action, defendant sued plaintiff Atlantic Mutual, his employer's carrier, for coverage under the SUM endorsement of its policy, which had a limit of $1 million. In addition, defendant applied for and received workers' compensation benefits.

The instant action was thereafter commenced by Atlantic Mutual for a declaration that (1) this matter is governed by New York's rule requiring contact with the offending vehicle as a prerequisite for UM benefits; (2) New Jersey, by now authorizing the issuance of basic automobile insurance policies that have no mandatory UM requirements, is no longer a mandatory UM state and thus New York law applies; (3) even if it is determined that New Jersey is a mandatory UM state, defendant does not meet New Jersey's definition of a "hit-and-run" accident because he received workers' compensation benefits; and (4) New Jersey's minimum requirements for standard insurance policies of $15,000 per person would be the extent of coverage available to defendant.

In opposition to summary judgment, defendant claimed that Atlantic Mutual's arguments ignored the explicit language of New York Insurance Law § 5103(e), mischaracterized the changes in New Jersey's insurance law, misapplied New Jersey's definition of a "hit and run" to the instant accident, and misconstrued the Court of Appeals' decision in Matter of Atlantic Mut. Ins. Co. v Finker, 80 NY2d 162 (1992).

The motion court granted plaintiff summary judgment and declared that it was not required to provide uninsured motorist benefits. It did not reach the question of whether New Jersey's shift from a mandatory to an optional uninsured motorist state relieved a New York insurer of providing coverage in the circumstances presented here, because it was constrained to find that defendant's claim was barred by New York Insurance Law § 5103(e) on the sole ground that NJ Stat Ann § 17:28-1.1(e)(2)(c) and § 39:6-78(b) barred UM claims brought by those who had recovered workers' compensation benefits. As this finding conflicts with our interpretation of those statutes and New Jersey case law, we reverse.

Every automobile insurance policy procured in New York must provide the minimum uninsured motorist coverage mandated by the law of another State when the insured automobile is involved in an accident in that State (Insurance Law § 5103[e]; 11 NYCRR 60-1.1[e]). As such, "the statutory and regulatory scheme contemplates that the New Jersey requirements for uninsured motorists coverage should be incorporated into [this] New York contract[]" (Finker, 80 NY2d at 167).

New Jersey, in contrast with New York, does not require a showing of physical contact with another vehicle to trigger uninsured motorist coverage when the identity of the offending vehicle owner cannot be ascertained (compare NJ Stat Ann § 17:28-1.1 with New York Insurance Law § 5217). In New Jersey, the term "uninsured motor vehicles" includes "a hit and run motor vehicle as described in [NJ Stat Ann § 39:6-78]" (NJ Stat Ann § 17:28-1.1[e][2][c] [emphasis added]). NJ Stat Ann § 39:6-78, in turn, states that:

"When the death of, or personal injury to, any person arises out of ownership, maintenance or use of a motor vehicle in this State on or after April 1, 1955, but the identity of the motor vehicle and of the operator and owner thereof cannot be ascertained or it is established that the motor vehicle was, at the time said accident occurred, in the possession of some person other than the owner without the owner's consent and that the identity of such person cannot be ascertained, any qualified person who would have a cause of action against the operator or owner or both in respect to such death or personal injury may bring an action therefor against the association in any court of competent jurisdiction, but no judgment against the association shall be entered in such an action unless the court is satisfied, upon the hearing of the action, that— (a) The claimant has complied with the requirements of section 5, (b) The claimant is not a person covered with respect to such injury or death by any workers' compensation law, or the personal representative of such a person, (c) The claimant was not at the time of the accident the owner or registrant of an uninsured motor vehicle, or was not operating a motor vehicle in violation of an order of suspension or revocation, (d) The claimant has a cause of action against the operator or owner of such motor vehicle or against the operator who was operating the motor vehicle without the consent of the owner of the motor vehicle, (e) All reasonable efforts have been made to ascertain the identity of the motor vehicle and of the owner and operator thereof and either that the identity of the motor vehicle and the owner and operator thereof cannot be established, or that the identity of the operator, who was operating the motor vehicle without the owner's consent, cannot be established, (f) The action is not brought by or on behalf of an insurer under circumstances set forth in paragraph (1) of section 10 [emphasis added]."

Plaintiff points to subsection (b) as precluding defendant's claim for uninsured motorist benefits based upon his receipt of workers' compensation benefits. We reject this argument. Subsections (a) through (f), delineated above, spell out the requirements to be met by those filing claims with the "association," referring to the New Jersey Property-Liability Insurance Guaranty Association, the entity charged with maintaining and administering the Unsatisfied Claim and Judgment Fund. However, since defendant is seeking benefits not from the Fund, but from a private insurance carrier, plaintiff's reliance upon NJ Stat Ann § 39:6-78 is misplaced since "anyone who is an insured under an insurance policy providing uninsured motorist [] protection" is specifically excluded from coverage under NJ Stat Ann § 39:6-62 (Transport of NJ v Watler, 161 NJ Super 453, 457, 391 A2d 1240, 1241 [1978], mod 79 NJ 400, 400 A2d 61 [1979]). As the subject incident fits within the definition of a hit-and-run accident as described in NJ Stat Ann § 39:6-78, and there are numerous New Jersey cases in which claimants who have received workers' compensation also recovered uninsured motorist benefits after being involved in hit-and-run accidents (see e.g. Midland Ins. Co. v Colatrella, 102 NJ 612, 510 A2d 30 [1986]; Christy v City of Newark, 102 NJ 598, 510 A2d 22 [1986]), we vacate the motion court's declaration finding plaintiff not liable to defendant based upon § 17:28-1.1 and § 39:6-78.

Although the motion court specifically did not reach it, we reject plaintiff's additional argument that this matter is governed by New York's no-contact rule by virtue of New Jersey's change from a mandatory to optional UM state. By virtue of New York's rule requiring that every New York automobile insurance policy provide the minimum uninsured motorist coverage mandated by the law of another State when the insured automobile is involved in an accident in that State (see supra), the New York policy at issue here must provide the minimum UM coverage mandated by the law of New Jersey, the situs of the accident. Under New Jersey law, "uninsured motorist coverage . . . requires motor vehicle liability policies to provide coverage up to certain minimums for payment of . . . sums which the insured shall be legally entitled to recover as damages from the operator or owner of an uninsured motor vehicle, or hit and run motor vehicle" (Shaw v City of Jersey City, 174 NJ 567, 572 [2002] [internal quotation marks and ellipsis omitted] [emphasis added], citing NJ Stat Ann 17:28-1.1[a])^[FN1]. Thus, we find, for purposes of this matter, that the applicable requirements for uninsured motorist coverage are not those of New York, but those of New Jersey. Accordingly, defendant is entitled to a judgment declaring plaintiff liable for uninsured motorist coverage up to the full measure of the policy endorsement (Finker, 80 NY2d at 168-169). Contrary to plaintiff's argument, NJ Stat Ann § 17:28-1.1(a) prescribes the minimum, not maximum, requirements of the insurer's obligation to provide uninsured motorist coverage.

Plaintiff's remaining argument that common-law choice of law principles apply, raised for the first time on appeal, is not preserved for review (Murray v City of New York, 195 AD2d 379, 381 [1993]). In any event, the contention is without merit.

 

Footnotes

Footnote 1:New Jersey law affords two insurance coverage options, a basic policy and a standard policy (NJ Stat Ann 39:6A-1.1). The basic policy offers minimum coverage options to insureds and need not include UM coverage (Rider Ins. Co. v First Trenton Cos., 354 NJ Super 491, 496, 808 A2d 143, 146 [2002]). Policies cannot exclude UM coverage except when an insured voluntarily selects and purchases a basic policy (id.). Since the New York policy here is not a "basic policy," UM coverage is mandatory.

 

Certain Underwriters at Lloyds, London v. Millennium Holdings, LLC

Order, Supreme Court, New York County (Helen E. Freedman, J.), entered August 10, 2006, which, in a declaratory judgment action involving plaintiffs insurers' obligations to indemnify
defendants manufacturers of lead paint or pigment for certain public nuisance claims, insofar as appealed from, denied defendant-appellant's motion pursuant to CPLR 3211(a)(4) to dismiss the complaint as against it, and granted defendants-respondents' motion pursuant to CPLR 327 and 3211(a)(4) to dismiss the complaint as against them, unanimously affirmed, without costs. 

Concerning appellant, NL Industries, the action has a stronger connection to New York than Texas, where another action, temporally proximate to this one, is pending (see Continental Ins. Co. v Garlock Sealing Tech., LLC, 23 AD3d 287, 288 [2005]). Appellant's policies were issued, negotiated, brokered, executed or paid for in New York at a time when it was headquartered in New York, and New York law has been held to apply to these policies. However, concerning defendants-respondents, we can not  say that the court abused its discretion in concluding that Ohio is an appropriate forum, given that that is where the activity underlying the claims, namely, the manufacture of lead paint, took place, the majority of the subject policies were issued, extensive court files and corporate documents are located, and the parties have been litigating similar issues since the early 1990's (see Continental Ins. Co. v Polaris Indus. Partners, 199 AD2d 222, 223 [1993]). We reach this result regardless of whether the Ohio action can be deemed first-commenced, where the Ohio action was commenced reasonably close in time and is more comprehensive (see id.).

In the Matter of State Farm Mutual Automobile Insurance Company v. Juma

Martin, Fallon & MullÉ;, Huntington, N.Y. (Richard C. MullÉ; of
counsel), for appellant.
Kelner & Kelner, New York, N.Y. (Joshua D. Kelner of counsel),
for respondent.

 

DECISION & ORDER

In a proceeding pursuant to CPLR article 75, in effect, to permanently stay arbitration of a claim for supplemental underinsured motorist benefits, the petitioner appeals from an order of the Supreme Court, Suffolk County (Weber, J.), dated August 10, 2006, which denied the petition and granted the respondent's cross motion to compel arbitration.

ORDERED that the order is reversed, on the law, with costs, the petition, in effect, to permanently stay arbitration is granted, and the cross motion to compel arbitration is denied.

A party will not be compelled to arbitrate absent evidence affirmatively establishing that the parties expressly agreed to arbitrate their disputes (see Matter of Waldron, 61 NY2d 181; Schubtex, Inc. v Allen Snyder, Inc., 49 NY2d 1). "The agreement to arbitrate must be express, direct, and unequivocal as to the issues or disputes to be submitted to arbitration" (see Gangel v DeGroot, 41 NY2d 840, 841). Similarly, " where the provisions of the policy are clear and unambiguous, they must be given their plain and ordinary meaning, and courts should refrain from rewriting the agreement'" (Raino v Navigators Ins. Co., 268 AD2d 419, 420, quoting Geico v Kligler, 42 NY2d 863, 864). Here, it is clear that there was no agreement to arbitrate contained in the subject automobile insurance policy issued by the petitioner to the respondent. Accordingly, since the subject policy did not provide for arbitration of the subject underinsured motorist claim, the Supreme Court erred in, inter alia, denying the petition, in effect, to permanently stay arbitration (see Matter of State Farm Mut. Auto. Ins. Co. v Torcivia, 277 AD2d 321).

In the Matter of Nationwide Insurance Enterprise v. Harris

DECISION & ORDER

In a proceeding pursuant to CPLR article 75, inter alia, to permanently stay arbitration of an uninsured motorist claim, Mavis Harris and Iris Welds appeal, as limited by their brief, from so much of an order of the Supreme Court, Kings County (Schneier, J.), dated September 27, 2000, as, without a hearing, granted that branch of the petition which was to permanently stay arbitration, and, in effect, denied as academic that branch of the petition which was to temporarily stay arbitration in order to conduct a hearing on the issue of insurance coverage of the vehicle owned by the nonparty Tracey L. Washington, and for a permanent stay of arbitration thereafter.

ORDERED that the order is reversed, on the law, with costs payable by the petitioner to the appellants, that branch of the petition which was to permanently stay arbitration, without a hearing, is denied, that branch of the petition which was to temporarily stay arbitration in order to conduct a hearing on the issue of insurance coverage is granted, and the matter is remitted to the Supreme Court, Kings County, for a hearing on the issue of whether the vehicle owned by the nonparty Tracey L. Washington was insured on June 17, 1999, and a new determination thereafter on that branch of the petition which was for a permanent stay of arbitration.

This matter involves an automobile accident that occurred on June 17, 1999, between a vehicle owned by Mavis Harris, and operated by nonparty Ivanhoe Lattray, and a vehicle owned and operated by nonparty Tracey L. Washington. Harris and Iris Welds, a passenger in the Harris vehicle, allegedly were injured in the accident. Harris and Welds subsequently demanded arbitration of their claim for uninsured motorist coverage under the policy issued by the petitioner covering the vehicle owned by Harris. 

In response to the demand, the petitioner commenced this proceeding seeking a temporary stay of arbitration pending a hearing as to insurance coverage and a permanent stay of arbitration thereafter or, in the alternative, a judgment immediately and permanently staying arbitration without a hearing. In support of the petition, the petitioner submitted, inter alia, a copy of a report of the National Insurance Crime Bureau indicating that, on the date of the accident, Washington's vehicle was insured by an insurer with code number "999." Additionally, the petitioner submitted a copy of the relevant police accident report, which recorded "999" as the insurance code for Washington's car. It is undisputed that code number "999" identifies the insurer as the New York Automobile Insurance Plan, commonly known as the Assigned Risk Plan (hereinafter the Plan). This was sufficient to make out the petitioner's prima facie case that Washington's vehicle was insured on the day of the accident, and that uninsured motorists' coverage was thus unavailable (see Matter of Utica Mut. Ins. Co. v Colon, 25 AD3d 617, 618; Matter of New York Cent. Mut. Fire Ins. Co. v Licata, 24 AD3d 450, 451; cf. Matter of Progressive Northwestern Ins. v Gjonaj, ___ AD3d ___ [2d Dept, Sept. 25, 2007]).

The proof offered by the appellants in opposition, however, demonstrated that in 1995, the Plan had assigned the responsibility for providing insurance coverage for the Washington vehicle to New York Central Mutual Insurance Company (hereinafter Central), but that in February 1996, Central had submitted documents properly reflecting cancellation of the policy. The appellants also submitted proof showing that, at least since that time, no application had been submitted to the Plan for an insurer to be assigned to Washington. This was sufficient to show the existence of a factual issue as to whether or not Washington's vehicle was insured at the time of the accident, requiring a framed-issue hearing to resolve the dispute (see Matter of New York Cent. Mut. Fire Ins. Co. [Rozenberg], 281 AD2d 330, 331; Matter of Eagle Ins. Co. v Sadiq, 237 AD2d 605; cf. Matter of Government Empls. Ins. Co. v Williams-Staley 288 AD2d 471, 472).

Accordingly, the Supreme Court should not have permanently stayed the arbitration without a hearing. Rather, as the appellants argued both to the Supreme Court and to this Court, the Supreme Court should have held the issue of a permanent stay in abeyance, temporarily stayed arbitration, and directed a hearing on the issue of insurance coverage.

We note that no notice of appeal has been filed by the Plan. Accordingly, there is no basis to examine its contentions as to the propriety of its having been joined as a party to this proceeding (see NYCTL 1998-1 Trust v Prol Properties Corp., 308 AD2d 478, 479).

New York City Housing Authority v. Merchants Mutual Insurance Co.

Order, Supreme Court, Bronx County (Sallie Manzanet, J.), entered February 28, 2006, which, inter alia (1) denied motions for summary judgment by plaintiff Housing Authority and defendant Merchants Mutual Insurance (Merchants) declaring whether the Housing Authority is covered under certain insurance policies, (2) declared that Merchants owed the Housing Authority a defense in the underlying action but declined to order immediate payment of defense costs; and (3) granted defendant Stonewall's motion for summary judgment dismissing the Housing Authority's claim for breach of contract based on failure to procure insurance, unanimously modified, on the law, to declare that the subject policies do not afford coverage for the claims asserted in the underlying action, and that Merchants has no obligation to defend the Housing Authority in the underlying action, and otherwise affirmed, without costs.

The Housing Authority seeks a declaration that Merchants is obligated to defend and indemnify it in an underlying action in which the plaintiff (Esteves) alleges that he was shot on the Housing Authority's premises as a result of a faulty electromagnetic locking system installed at the entrance of his building by defendant Stonewall. The Housing Authority claims coverage as an insured or additional insured under three separate insurance policies: a commercial general liability (CGL) policy issued to Stonewall, an excess commercial catastrophic liability policy issued to Stonewall (the excess policy), and an owners and contractors protective liability (OCP) policy issued to the Housing Authority.

Section II of the CGL policy, "Who is an Insured," was amended by an endorsement for "Additional Insured Owners, Lessees or Contractors (Form B)," to "include as an insured the person or organization shown in the Schedule, but only with respect to liability arising out of your ongoing operations performed for that insured." The Housing Authority was listed in the declarations as an additional insured owners, lessees or contractors.

The allegations in Esteves' complaint do not fall within the covered risk of liability arising out of Stonewall's ongoing operations, and thus did not trigger Merchants' duty to defend the Housing Authority (see City of New York v Certain Underwriters at Lloyd's of London, 15 AD3d 228 [2005]). Accordingly, we modify to declare that Merchants is not liable for the Housing Authority's defense costs.

As indicated, Merchants' cross motion for a declaration that no coverage exists under the relevant policies should have been granted. Concerning the CGL policy, the contract between Stonewall and the Housing Authority, which called for the installation and maintenance of both intercom and door locking systems at the project and other housing projects, provided that the intercom systems were guaranteed for a period of two years from the issuance of a certificate of final completion, and that the locking systems were guaranteed for a period of two years from final acceptance, excluding vandalism. "Final acceptance" occurred no later than spring 1997. Thus, at the time of the shooting, the installation work was complete and the parties were within the contractual two-year guarantee period. During this period, Stonewall was obligated to respond to maintenance calls from the Housing Authority within 24 hours, and to effect repairs to the system within 48 hours. The record contains no evidence of any such calls after 1997. Furthermore, what record evidence does exist shows that the locking system in Esteves' building was inoperable due to vandalism, which was a pervasive problem at the project, as admitted by the Housing Authority's witness. There is no record evidence that the doors were faulty due to poor workmanship or installation. Thus, we find that Esteves' injuries did not arise out of Stonewall's "ongoing operations performed for [the Housing Authority]."

Nor is the Housing Authority entitled to coverage under either the excess or OCP policy. The excess policy provides coverage for anyone to whom Stonewall was obligated by written contract to provide liability insurance "but only with respect to operations by or on behalf of [Stonewall]," and for any insured under the CGL policy subject to the coverage limitations of that policy, i.e., "only with respect to liability arising out of [Stonewall's] ongoing operations performed for that insured." As discussed, Esteves' injuries did not arise out of Stonewall's operations, ongoing or otherwise, and thus, no coverage is afforded under the excess policy. The OCP policy, issued in the name of the Housing Authority, only afforded coverage for claims relating to Stonewall's work on a senior citizens center, at a different location, and does not apply to the premises on which Esteves was shot.

The Housing Authority's claim against Stonewall for failure to procure insurance coverage was properly dismissed. Stonewall procured the CGL coverage, which named the Housing Authority as an additional insured for claims arising out of Stonewall's "ongoing operations," satisfying Stonewall's obligation to procure liability insurance alleged to have been caused by or in the course of Stonewall's "operations" under the contract. While it is clear that Stonewall failed to procure the OCP coverage also contemplated by the contract, since the policy procured covered a senior citizens center, not the housing projects where Stonewall installed locks, such failure cannot be the proximate cause of any damages to the Housing Authority. Stonewall obligation was to procure OCP insurance covering the Housing Authority against "liability claims for bodily injury, ... arising from the operations of the Contractor and his subcontractors for the limits of liability set forth in the preceding paragraph" (i.e., a $500,000 per occurrence limit for bodily injury)" (emphasis added). As discussed, plaintiff's injuries did not arise from Stonewall's operations, and thus, even if Stonewall had maintained such a policy on the date of the shooting, it would not have afforded coverage for the Housing Authority's claim. Furthermore, although the CGL and excess policies were in effect at the time of the shooting, Stonewall had no contractual obligation to maintain such coverage. The Housing Authority's contract with Stonewall only required that Stonewall maintain liability coverage through the time that a certificate of final acceptance was issued.

We have considered and rejected the Housing Authority's other arguments.

Preferred Mutual Insurance Company v. SAV Carpentry, Inc.

White, Quinlan & Staley, LLP, Garden City, N.Y. (Christopher M.
Otton of counsel), for appellant.
Methfessel & Werbel, New York, N.Y. (William J. Rada of
counsel), for respondent.

 

DECISION & ORDER

In an action for a judgment declaring that the plaintiff has no obligation to defend or indemnify the defendant SAV Carpentry, Inc., in an underlying action entitled Galarza v Saddle Cove Associates, LLC, pending in the Supreme Court, Suffolk County, under Index No. 2003-13613, the defendant Saddle Cove Associates, LLC, appeals from an order of the Supreme Court, Suffolk County (Spinner, J.), dated July 10, 2006, which granted the plaintiff's motion for summary judgment declaring that it has no obligation to defend or indemnify the defendant SAV Carpentry, Inc., in the underlying action.

ORDERED that the order is affirmed, with costs, and the matter is remitted to the Supreme Court, Suffolk County, for the entry of a judgment declaring that the plaintiff has no obligation to defend or indemnify the defendant SAV Carpentry, Inc., in the underlying action.

"To effectively deny coverage based upon lack of cooperation, an insurance carrier must demonstrate (1) that it acted diligently in seeking to bring about the insured's cooperation, (2) that the efforts employed by the insurer were reasonably calculated to obtain the insured's cooperation, and (3) that the attitude of the insured, after his or her cooperation was sought, was one of willful and avowed obstruction" (Allstate Ins. Co. v United Intl. Ins. Co., 16 AD3d 605, 606; see Utica First Ins. Co. v Arken, Inc., 18 AD3d 644, 645). "[M]ere inaction by an insured, by itself, will not justify a disclaimer of coverage on the ground of lack of cooperation" (New York State Ins. Fund v Merchants Ins. Co. of N.H., 5 AD3d 449, 451).

Here, the plaintiff presented evidence that it sent the insured numerous letters regarding its discovery obligations, and hired two separate investigators to locate and interview the principal of the insured. One of these investigators stated, in an affidavit, that the principal of the insured avoided all attempts by the investigator to contact him for approximately one month. This demonstrated that the plaintiff diligently sought the insured's cooperation by means reasonably calculated to obtain that cooperation, and that the insured's non-cooperation consisted of willful and avowed obstruction. The appellant failed to raise a triable issue of fact in opposition (see generally Zuckerman v City of New York, 49 NY2d 557, 562). Therefore, the Supreme Court properly granted the plaintiff's motion for summary judgment.

The appellant's argument that the Supreme Court erred in failing to perform a conflicts-of-law analysis, and in failing to apply New Jersey law, is not properly before us since it is being raised for the first time on appeal (see New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568) and, in any event, is without merit.

The appellant's remaining contentions are without merit.

Since this is a declaratory judgment action, the matter must be remitted to the Supreme Court, Suffolk County, for the entry of a judgment declaring that the plaintiff has no duty to defend and indemnify the defendant SAV Carpentry, Inc., in the underlying action entitled Galarza v Saddle Cove Associates, LLC, pending in the Supreme Court, Suffolk County, under Index No. 2003-13613 (see Lanza v Wagner, 11 NY2d 317, 334, appeal dismissed 371 US 74, cert denied 371 US 901).

Tower Insurance Company of New York v. T & G Contracting Inc.

Melito & Adolfsen, P.C., New York, N.Y. (S. Dwight Stephens and
Ignatius John Melito of counsel), for defendants third-party
plaintiffs-appellants.

 

DECISION & ORDER

In an action for a judgment declaring, inter alia, that the general liability policy issued by the third-party defendant Admiral Insurance Company affords primary additional insured coverage to the defendants third-party plaintiffs 3402 Land Acquisition, LLC, 3402 Queens Boulevard Associates, LLC, and Meringoff Properties, Inc., in an underlying personal injury action entitled Andramunio v 3402 Land Acquisition LLC, pending in the Supreme Court, New York County, under Index No. 108557/04, the defendants third-party plaintiffs 3402 Land Acquisition, LLC, 3402 Queens Boulevard Associates, LLC, and Meringoff Properties, Inc., appeal from (1) an order of the Supreme Court, Queens County (Grays, J.), dated December 15, 2005, which denied their motion for summary judgment on their third-party complaint insofar as asserted against the third-party defendant Admiral Insurance Company, and (2) so much of an order of the same court dated May 18, 2006, as denied their motion, denominated as one for leave to reargue, but which was, in effect, one for leave to renew their prior motion for summary judgment.

ORDERED that the order dated December 15, 2005, is affirmed, without costs or disbursements; and it is further,

ORDERED that the order dated May 18, 2006, is affirmed insofar as appealed from, without costs or disbursements.

In order to determine the priority of coverage among different insurance policies, a court must review and consider all of the relevant policies at issue (see State Farm Fire & Cas. Co. v LiMauro, 65 NY2d 369). Here, since the relevant policies were not submitted in support of the appellants' motion for summary judgment, the priority of coverage could not be determined (see BP A.C. Corp. v One Beacon Ins. Group, 8 NY3d 708, 716). Thus, the Supreme Court properly denied the appellants' motion.

The Supreme Court properly denied the appellants' subsequent motion, in effect, for leave to renew. A motion for leave to renew must be based upon new facts not offered on the prior motion that would change the prior determination, and the motion must also contain a reasonable justification for the failure to present such facts on the prior motion (see CPLR 2221[e]; Williams v Nassau County Med. Ctr., 37 AD3d 594; Hart v City of New York, 5 AD3d 438). Here, the new facts proffered by the appellants would not have changed the prior determination (see Steinberg v Steinberg, 15 AD3d 388).

International Couriers Corporation v. The North River Insurance Company

Carroll, McNulty & Kull L.L.C., New York (Kristin V.
Gallagher and Ann Odelson), for appellants-respondents.
Lustig & Brown LLP, New York (Jeffrey Lesser of counsel),
for respondent-appellant.
Smith & Laquercia, LLP, New York (Bryan F. Tiggs of
counsel), for respondents.

Order and judgment (one paper), Supreme Court, New York County (Shirley Werner Kornreich, J.), entered August 10, 2006, which, to the extent appealed from, denied the motion of defendant North River Insurance Company (North River) for summary judgment and granted plaintiffs' cross motion for summary judgment to the extent of declaring that North River and defendant Assurance Insurance Company (Assurance) were obligated to provide a defense to plaintiffs International Courier Corp., and Regional Construction Corp., in the underlying action, unanimously modified, on the law, to the extent of denying plaintiffs' cross motion for summary judgment declaring that Assurance was obligated to provide a defense to plaintiffs in the underlying action, and, upon a search of the record, summary judgment granted to Assurance and it is declared that Assurance is not obligated to provide a defense in the underlying action, and otherwise affirmed, without costs.

The possibility that North River's insured could be found liable for the injury to the plaintiff in the underlying action arising from a construction site accident establishes that the court properly declared that North River was required to defend plaintiffs in that action. The ultimate validity of the allegations in the underlying complaint is irrelevant inasmuch as "the duty to defend arises not from the probability of recovery, but from its possibility, no matter how remote" (American Home Assur. Co. v Port Auth. of N.Y. & N.J., 66 AD2d 269, 278 [1979]; Continental Cas. Co. v Rapid-American Corp., 80 NY2d 640, 648 [1993]).

However, we modify to the extent of vacating that part of the motion court's decision to grant summary judgment to plaintiffs on their claim against Assurance, and, upon a search of the record, we conclude that Assurance is entitled to summary judgment declaring that it has no obligation to provide a defense in the underlying action. The unambiguous language of the Assurance policy comports with its position that plaintiffs are not covered under the policy, either as named or additional insureds (see Stainless, Inc. v Empls. Fire Ins. Co., 69 AD2d 27, 33 [1979], affd 49 NY2d 924 [1980]; Sixty Sutton Corp. v Ill. Union Ins. Co., 34 AD3d 386 [2006]). That the certificate of insurance named plaintiffs as additional insureds is not sufficient to confer coverage in light of the clear language of the policy (id. at 389; see also Tribeca Broadway Assoc., LLC v Mount Vernon Fire Ins. Co., 5 AD3d 198, 200 [2004]). Although Assurance's insured, Target Group of Central New York (Target), breached its obligation to provide plaintiffs with insurance coverage, plaintiffs obtained their own policies, and accordingly, Target is only required to reimburse them for their out-of pocket expenses (see Inchaustegui v 666 5th Ave. Ltd. Partnership, 96 NY2d 111 [2001]).

We have considered the parties' remaining contentions for affirmative relief, including North River's argument that plaintiffs' cross motion was untimely, and find them unavailing.

Reg-Tru Equities, Inc., d/b/a The Tennis Club, v. Valley Forge Insurance Company

Colliau Elenius Murphy Carluccio Keener & Morrow, New
York (Marian S. Hertz of counsel), for appellant.
Lester Schwab Katz & Dwyer, LLP, New York (Ellen M.
Spindler of counsel), for respondent.

Order, Supreme Court, New York County (Carol Edmead, J.), entered November 28, 2006, which, to the extent appealed from, denied defendant's motion for summary judgment, unanimously reversed, on the law, without costs, defendant's motion granted and the complaint dismissed. The Clerk is directed to enter judgment accordingly.

The court improperly denied defendant's motion for summary judgment dismissing the complaint wherein plaintiff seeks, inter alia, a declaratory judgment that it was entitled to a defense and indemnity coverage in an underlying personal injury action. Defendant established that plaintiff's notice, made more than one year after the occurrence in question, constituted noncompliance with the condition precedent to coverage and vitiated the contract of insurance (see Great Canal Realty Corp. v Great Seneca Ins. Co., 5 NY3d 742, 743 [2005]). Plaintiff's opposition to the motion failed to raise a triable issue regarding whether it had a reasonable belief that it would not be liable for the accident to excuse its late notice (id. at 744). Plaintiff was aware of the accident immediately after it occurred and its failure to inquire as to potential liability demonstrates that its belief of nonliability was not reasonable under the circumstances (see Pendill v Furry Paws, Inc., 29 AD3d 453 [2006]).

 

International Flavors & Fragrances, Inc. v. Royal Insurance Company of America

 

Plaintiff International Flavors & Fragrances Inc. appeals from anorder of the Supreme Court, New York County (Charles Edward Ramos, J.), entered January 20, 2006, which, inter alia, granted summary judgment to defendants American Home Assurance Company and National Union Fire Insurance Company of Pittsburgh, Pennsylvania, declaring that each of the underlying personal injury plaintiffs' claims constitutes a separate "occurrence" under the primary insurance policies issued by said defendants, and from an order, same court and Justice, entered May 8, 2006, which denied said plaintiff's motion to reargue.

TOM, J.P.

At issue on this appeal is whether personal injury sustained by workers employed at the same manufacturing plant resulting from exposure to a toxic substance found in butter flavoring should be considered a single "occurrence" for the purpose of applying a deductible under insurance policies affording products liability coverage.

Plaintiffs International Flavors & Fragrances, Inc. (IFF) and Bush Boake Allen, Inc. commenced this declaratory judgment action against their insurers, including defendants American Home Assurance Company and National Union Fire Insurance Company, members of the American Insurers Group (collectively, AIG). The complaint seeks a declaration of coverage under eight general liability insurance policies in connection with a class action lawsuit filed against plaintiffs in Jasper County, Missouri by 30 current and former employees of nonparty Gilster Mary Lee Corporation (Benavides, et al. v International Flavors & Fragrances, Inc., et al., No. 1CV683025 [8th Cir Mo., filed September 7, 2001]), which owns and operates a microwave packaging plant in Jasper County, Missouri. The Benavides plaintiffs alleged that IFF and its predecessor in interest, Bush Boake Allen, manufactured and sold butter flavoring to Gilster used in microwave popcorn packaged in its Jasper facility. According to the Benavides complaint, the butter flavoring contains diacetyl and other volatile organic compounds, which the Benavides plaintiffs alleged caused lung impairment and other respiratory system injuries. IFF admitted that at least 18 separate shipments of butter flavoring were sent to the Jasper plant from 1992 through 1996.

In dispute is the application of deductibles or "self-insured retentions" (SIRs) in the amount of $100,000 or $50,000 for each "occurrence," which is uniformly defined in all of the policies as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions." The first two policies issued by National Union in 1991 and 1992 apparently provided that the SIR is to be applied on a "per claim" basis, which would require application of the deductible to each of the 30 injured workers' claims ^[FN1]. The remainder of the policies, issued on or after May 1, 1993 and affording coverage through May 1, 1999, provide that a "per occurrence" deductible applies "[t]o all damages because of 'bodily injury' or . . . 'property damage' as the result of any one 'occurrence,' regardless of the number of persons or organizations who sustain damages because of that 'occurrence.'"

AIG brought a motion for summary judgment seeking, inter alia, a declaration that each of the personal injury claims in the underlying action constitutes a separate occurrence under the policy definition. AIG relied on In Re Prudential Lines Inc. (158 F3d 65, 81 [2d Cir 1998]), which applied a separate deductible to each of the persons injured by exposure, at different times, to asbestos on a ship. In opposition, IFF contended that the exposure of the injured employees to the hazardous ingredients in its butter flavoring constitutes a single such occurrence, without regard to the number of employees who were injured. IFF relied on Uniroyal, Inc. v. Home Ins. Co. (707 F Supp 1368, 1369, 1383 [ED NY 1988]), a class action in which injury sustained by approximately 2.5 million Vietnam veterans from contact with Agent Orange as a consequence of a series of product deliveries by the policyholder was held to be the result of a single occurrence.

Supreme Court granted AIG's motion, declaring that each of the underlying personal injury claims constitutes a separate occurrence subject to a separate deductible or SIR. The court reasoned that the event precipitating coverage under the policies is the occurrence resulting in injury, not the actual injury itself (citing Matter of Midland Ins. Co., 269 AD2d 50, 61 [2000]). The court concluded that the injury sustained by each of the employees did not result from a single occurrence because each employee was exposed to the hazardous chemicals at different times (citing Aguirre v City of New York, 214 AD2d 692 [1995] and In re Prudential Lines Inc., 158 F3d at 65). The court therefore held that each worker's individual claim is a separate occurrence under the policy definition (citing Olin Corp. v Insurance Co. of N. Am., 972 F Supp 189 [SD NY 1997], affd 221 F3d 307 [2d Cir 2000]). A subsequent motion by IFF seeking reargument was denied. Plaintiff IFF appeals.

This Court concludes that "occurrence," as defined in the policy as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions," does not reflect the parties' intent to aggregate the individual claims for the purpose of subjecting them to a single policy deductible.

On appeal, plaintiff argues that language similar to that contained in the subject commercial liability policies has been interpreted to contemplate a single occurrence without regard to the number of persons injured where personal injury or property damage arose from exposure to substantially the same general harmful conditions (citing Champion Intl. Corp. v Continental Cas. Co., 546 F2d 502, 505-506 [2d Cir 1976], cert denied 434 US 819 [1977] [policyholder's distribution of defective vinyl paneling resulting in damage to 1,400 vehicles constitutes a single occurrence]). Defendants contend that this controversy is governed by this Court's ruling in Appalachian Ins. Co. v General Elec. Co. (19 AD3d 198 [2005], affd 8 NY3d 162 [2007]), which concerned excess insurance policies containing a similar definition of "occurrence." There, we affirmed an order declaring that each of the injured worker's claims represented a separate occurrence because, under the "unfortunate event" test (Arthur A. Johnson Corp. v Indemnity Ins. Co. of N. Am., 7 NY2d 222, 229 [1959]; see also Hartford Acc. & Indem. Co. v Wesolowski, 33 NY2d 169, 173 [1973]), the exposure of the individual plaintiffs to asbestos over a period of decades at numerous work sites lacked the requisite temporal and spatial proximity to be deemed a single occurrence (see Appalachian, 8 NY3d at 169-170). In affirming, the Court of Appeals noted that, in the absence of language indicating some other standard should be applied for the purpose of grouping incidents into a single occurrence, "the unfortunate-event standard governs the outcome" (id. at 173). Whether a series of losses or injuries are a result of a single or multiple occurrences is determined by:

"whether there is a close temporal and spatial relationship between the incidents giving rise to injury or loss, and whether the incidents can be viewed as part of the same causal continuum, without intervening agents or factors. Common causation is pertinent once the incident—the fulcrum of our analysis—is identified, but the cause should not be conflated with the incident" (id. at 171-172).

Since sophisticated parties to an insurance contract such as these are free to define "occurrence" in such a manner as to provide for the aggregation of claims (id. at 173), analysis begins with the policy language. The general liability policies issued by AIG all provide that "the deductible applies . . . [t]o 'bodily injury' as the result of any one 'occurrence' . . . regardless of the number of persons or organizations who sustain damages because of that 'occurrence.'" Whether a single deductible applies is therefore dependent on whether or not the loss sustained by the insured can be attributed to a single incident, irrespective of the number of persons sustaining injury. The policies equate "an occurrence" with "an accident," which term is defined to "includ[e] continuous or repeated exposure to substantially the same general harmful conditions."

As observed in a case construing the identical definition contained in the subject AIG policies, "Occurrence is not defined by the injury sustained but rather in terms of its cause" (Aguirre, 214 AD2d at 693 [spray-painting of vessel resulting in damage to 40 automobiles from wind-blown paint constitutes a single occurrence]). While the language of the policies' deductible provision makes it clear that it is to be applied without regard to the number of persons injured, the definition of "occurrence" does not require the conclusion that the exposure of multiple individuals "to substantially the same general harmful conditions" constitutes a single event for the purpose of applying the deductible. Fairly construed, the policy definition reflects the parties' intent to construe as a single occurrence the "continuous or repeated exposure" of any one person to "harmful conditions." As pertinent to this dispute, it similarly reflects the intent to treat as a single occurrence the "continuous or repeated exposure" of multiple persons to "harmful conditions" that result from a single "accident." The definition does not, however, extend to the circumstances presented here, where there is no single incident that can be identified as the event resulting in injury to the numerous claimants. The affected employees sustained injury as a consequence of repeated deliveries of IFF's flavoring compound to their workplace over a period of several years, causing them to be exposed to the hazardous chemicals at different times and for periods of unequal duration. In sum, under the definition contained in the AIG policies, the exposure of numerous persons to a hazardous condition cannot be deemed a single "occurrence" in the absence of any identifiable precipitating event or "accident" (cf. Michaels v Mutual Mar. Off., 472 F Supp 26, 30 (SD NY 1979] [unloading of ship was the single occurrence giving rise to 200 dents in cargo holds over a nine-day period]).

Had these sophisticated parties desired to aggregate all claims resulting from the exposure or series of exposures to a set of hazardous conditions, it would have been a simple matter to rewrite the definition of "occurrence." For example, aggregation of individual claims was found to be warranted by the policy language examined in Ramirez v Allstate Ins. Co. (26 AD3d 266 [2006]), cited by IFF, which illustrates the importance of drafting an explicit aggregation provision. In Ramirez, two children sustained injury as a result of ingesting lead paint found in the apartment they occupied. Recoverable damages were limited to the insurance policy's "per occurrence" limit of $200,000. Rather than making application of the deductible subject to a separately defined "occurrence," as in the instant matter, the policy in Ramirez simply provided: "All bodily injury and property damage resulting from continuous or repeated exposure to the same general conditions is considered the result of one occurrence" (id.). "All bodily injury" clearly encompasses the injuries sustained by the two infant plaintiffs as a result of their exposure to the same hazardous substance so as to comprise only "one occurrence" under this provision.

As the Court of Appeals noted in Appalachian (8 NY3d at 173), "the term occurrence is synonymous with accident unless the parties include language in the policy indicating otherwise." In the absence of such language, the "unfortunate-event standard" will be applied to determine whether or not a claim constitutes a single occurrence (id.). The Court went on to state:

"Applying that standard, the asbestos exposure claims GE seeks to join as one occurrence (per policy period) represent multiple occurrences. Using the language adopted by the parties in the . . . policies, the incident that gave rise to liability was each individual plaintiff's 'continuous or repeated exposure' to asbestos. Before the exposures occurred, there was only the potential that some unidentified claimant would someday be harmed by GE's alleged failure to warn. To be sure, the exposure to asbestos was not sudden—it was gradual and, for many plaintiffs, continued over a number of years. But that does not make it any less the operative incident or occasion giving rise to liability in this factual context" (id. at 173-174).

Champion Intl. Corp. v Continental Cas. Co. (546 F2d 502 [2d Cir 1976], supra), urged by IFF to require us to find only a single occurrence, merely illustrates both the need to draft a precise aggregation of claims provision and to identify "the operative incident or occasion giving rise to liability" (Appalachian, 8 NY3d at 174). In Champion, defective vinyl panels delivered to 26 different companies were installed in some 1,400 vehicles resulting in damage to those vehicles. It was held that the sale of the paneling was a continuous and repeated process comprising a single occurrence under the policy (546 F2d at 506). Applying this reasoning, IFF contends that its continuous sale of butter flavoring over the course of several years should likewise be regarded as a single occurrence.

IFF overlooks two crucial distinctions between Champion and the circumstances of the instant matter. First, as in Ramirez, the policy under review in Champion explicitly provided that "all . . . property damage arising out of continuous or repeated exposure to substantially the same general conditions . . . shall be considered as arising out of one occurrence" (id. at 505). Second, the event resulting in the seller's liability was its apparent failure to supply merchandise conforming to contract specifications or to furnish goods reasonably suitable for their intended purpose (UCC 2-314[2][c]). In evaluating the insured's liability, the Circuit Court noted, "Exposure there was, when Champion sold the paneling" (id. at 506). Thus, "the operative incident or occasion giving rise to liability" under Appalachian arose from the insured's breach of contract, and that breach was complete upon delivery of the defective paneling and immediately actionable. Unlike a claim sounding in tort, a contract action does not require the plaintiff to demonstrate injury since nominal damages are available (see Kronos, Inc. v AVX Corp., 81 NY2d 90, 95 [1993]). By comparison, "a tort cause of action cannot accrue until an injury is sustained" and, thus, must be based on actual damages (id. at 94). In the instant matter, the shipment of butter flavoring by IFF presented only the potential for injury; it was the exposure to diacetyl and other volatile compounds, though gradual and continuing over the course of years, that precipitated the actual harm, comprising the "occasion giving rise to liability in this factual context" (Appalachian, 8 NY3d at 174; see also In re Prudential Lines Inc., 158 F3d at 84; Metropolitan Life Ins. Co. v Aetna Cas. & Sur. Co., 255 Conn 295, 305, 765 A2d 891, 896 [2001]).

Examined from this perspective, Uniroyal, Inc. v. Home Ins. Co. (707 F Supp 1368, 1369, 1383 [ED NY 1988], supra), also relied upon by IFF, lends no support to its position. In that case, the claims of Vietnam veterans for injuries sustained due to their exposure to Agent Orange were held to comprise a single occurrence. The plaintiff's insurance policy defined "occurrence" as: 

"'an accident or a happening or event or a continuous or repeated exposure to conditions which unexpectedly and unintentionally results in personal injury, property damage or advertising liability during the policy period. All such exposure to substantially the same general conditions existing at or emanting from one premises location shall be deemed one occurrence.'" (707 F Supp at 1372).

Applying New York law, the federal court observed that "[t]he occurrence is not defined to be the injury; the injury is clearly stated to be the result of the occurrence" (id. at 1380), employing precisely the same analysis as in Aguirre (214 AD2d at 693 ["Occurrence is not defined by the injury sustained but rather in terms of its cause"]). The court then applied the unfortunate event test to find that the occurrence contemplated by the policy was "the delivery of the herbicides by Uniroyal to the military" (707 F Supp at 1382).

This reasoning cannot be reconciled with Appalachian. Under the Court of Appeals' analysis, delivery of the herbicide to the military cannot be regarded as the event precipitating injury because delivery of a hazardous substance merely poses the potential for injury (Appalachian, 8 NY3d at 174); it is subsequent exposure that results in actual injury, which must be demonstrated to impose liability in tort on the insured (Kronos, 81 NY2d at 94). Although the federal court expressed its inability to identify any particular precipitating event resulting in injury, it proceeded to designate one nevertheless ^[FN2]. Prevailing authority gives the parties the latitude to apply a different test to determine whether claims should be aggregated. As the Court of Appeals observed, "sophisticated parties could have chosen to define occurrence in a manner that grouped incidents" (Appalachian, 8 NY3d at 173).

Though Uniroyal is factually similar, it is readily distinguished on the law because it is now clear that, under New York law, the injury imposing liability on the insured does not result until exposure occurs. The policy definition in the instant matter merely defines "occurrence" as an "accident, including continuous or repeated exposure to substantially the same general harmful conditions." Even if exposure to a toxic substance were to be regarded as being tantamount to an accident, as IFF suggests, it hardly compels the conclusion that any and all persons so exposed are victims of the same accident. Here, 30 victims were continuously and repeatedly exposed to diacetyl. In the absence of policy language making it clear that any and all personal injury resulting from such exposure is to be regarded as a single occurrence (cf. Ramirez, 26 AD2d at 266), the exposure of the individual claimants to diacetyl on different occasions, extending over different periods of time, supports the finding that these are 30 discrete occurrences. In short, the language employed in the AIG policy definition is insufficient to require the conclusion that the parties intended to aggregate the individual underlying claims in this matter.

IFF's argument that the lack of certain evidence precludes the award of summary judgment is without merit. The missing deductible provision (1991 policy) and the absence of an amount for the applicable deductible in two policies (1997 and 1998) are not material to the construction of the definition of "occurrence" at issue in this matter, which is identical in all eight policies. IFF advances other contentions that are not evidentiary but merely require this Court to interpret the AIG insurance policies to assess the parties' intent, an exercise that involves only the application of contract law. It is well settled that where an agreement has been reduced to writing, the best evidence of what the parties intended is the contract itself (Slamow v Del Col, 79 NY2d 1016, 1018 [1992], affg 174 AD2d 725 [1991]) and, unless it is ambiguous, construction of a contract is a matter of law for the courts (West, Weir & Bartel v Mary Carter Paint Co., 25 NY2d 535, 540 [1969]).

Accordingly, the order of the Supreme Court, New York County (Charles Edward Ramos, J.), entered January 20, 2006, which, inter alia, granted summary judgment to defendants American Home Assurance Company and National Union Fire Insurance Company of Pittsburgh, Pennsylvania, declaring that each of the underlying personal injury plaintiffs' claims constitutes a separate "occurrence" under the primary insurance policies issued by said defendants, should be affirmed, with costs. Appeal from the order of the same court and Justice, entered May 8, 2006, which denied plaintiff IFF's motion to reargue, should be dismissed, without costs, on the ground that no appeal lies from the denial of a motion to reargue.

All concur.

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

ENTERED: OCTOBER 30, 2007

CLERK

Footnotes

Footnote 1: The briefs indicate that the parties have been unable to locate the deductible provision for the policy issued in 1991, and the copy of the policy issued in 1992 contained in the record is largely illegible. In addition, the policies issued in 1997 and 1998 do not reflect the amount of the applicable deductible.

Footnote 2: The court stated that "the terms of the definition of 'occurrence' are partly ambiguous: they identify a set of possible occurrences, but give little assistance in selecting the proper item from that set" (Uniroyal, 707 F Supp at 1382). The court explained that "[t]he 'unfortunate event' in the Agent Orange context could hence be one of several interrelated causally contributing events; among those are the defective manufacture of dioxin-contaminated herbicides, the delivery of those herbicides to the military, the spraying of the herbicides in Vietnam, and the touching of herbicide molecules to a particular serviceman's skin" (id.).

St. James Mechanical, Inc v. Royal & Sunalliance

Cullen and Dykman, LLP, Brooklyn, N.Y. (Jean-Pierre Van Lent
of counsel), for appellant.
Ahmuty, Demers & McManus, Albertson, N.Y. (Brendan T.
Fitzpatrick and William J. Mitchell of
counsel), for respondents.


DECISION & ORDER

In an action, inter alia, for a judgment declaring that the defendants are obligated to defend and indemnify the plaintiff in an underlying personal injury action entitled Freehill v ITT Sheraton Corp., pending in the Supreme Court, Queens County, under Index No. 24232/97, the plaintiff appeals, as limited by its brief, from so much of an order of the Supreme Court, Suffolk County (Werner, J.), entered December 23, 2005, as granted the defendants' cross motion for summary judgment dismissing the complaint.

ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and the defendants' cross motion for summary judgment dismissing the complaint is denied.

In May 1996 the ITT Sheraton Corp. (hereinafter the Sheraton) hired the plaintiff, St. James Mechanical, Inc. (hereinafter St. James), to renovate the ventilation system in the sub-cellar of the Sheraton New York Hotel & Towers located at 811 Seventh Avenue in Manhattan. On July 25, 1996, a worker employed by Budd Contracting Corp. (hereinafter Budd) fell off a ladder atop a scaffold while he was removing the curtain wall in a garage to accommodate the new exhaust system. At the time of the accident, St. James was insured by the defendant Royal Insurance Company (hereinafter Royal) under a commercial general liability policy that required the insured to provide notice "as soon as practicable" of an occurrence that may result in a claim.

Although Budd's employee sued the Sheraton in October 1997 to recover damages for the injuries he allegedly sustained as a result of the accident, he did not name St. James as a defendant until he filed an amended complaint in August 1998. Upon receiving the amended complaint, St. James notified Royal, which subsequently disclaimed coverage on the ground that St. James failed to provide it with notice of the accident as soon as practicable .

St. James commenced the present action against Royal and an affiliated insurance carrier for a judgment declaring that they were obligated to defend and indemnify it in the underlying personal injury action brought by Budd's employee. When St. James moved for summary judgment in its favor, the insurance carriers cross-moved for summary judgment.

An insurance carrier is not obligated to pay for a loss if the insured does not provide timely notice of the underlying occurrence (see Security Mut. Ins. Co. v Acker-Fitzsimons Corp., 31 NY2d 436, 440). In general, the insured's failure to comply with the requirement in an insurance policy that it give notice as soon as practicable of an incident that may result in a claim constitutes a failure to satisfy a condition precedent which vitiates the policy (see Great Canal Realty Corp. v Seneca Ins. Co. Inc., 5 NY3d 742, 743; White v City of New York, 81 NY2d 955, 957; Deso v London & Lancashire Indem. Co. of AM., 3 NY2d 127, 129; Brennan Bros. Co., Inc. v Lumbermans Mut. Cas. Co., 14 AD3d 525, 526).

The courts have recognized, however, that there may be circumstances where the insured's failure to give timely notice is excusable, such as where the insured does not know about the accident or has a good-faith belief in nonliability (see Security Mut. Ins. Co. v Acker-Fitzsimons Corp., 31 NY2d at 441). The insured's belief in nonliability "must be reasonable under all the circumstances, and it may be relevant on the issue of reasonableness, whether and to what extent, the insured inquired into the circumstances of the accident or occurrence" (id.).

As a general rule, where notice is required, the insured bears the burden of proving that there was a reasonable excuse for the delay in giving notice (see Great Canal Realty Corp. v Seneca Ins. Co., Inc., 5 NY3d at 744; Felix v Pinewood Bldrs, Inc., 30 AD3d 459, 461). Ordinarily, the question of whether the insured had a good faith belief in nonliability, and whether that belief was reasonable, presents an issue of fact and not one of law (see Genova v Regal Mar. Indus., 309 AD2d 733; Mobile Home Estates, v Preferred Mut. Ins. Co., 105 AD2d 883, 884). It is only when the facts are undisputed and not subject to conflicting inferences that the issue can be decided as a matter of law (see Greenwich Bank v Hartford Fire Ins. Co., 250 NY 116, 131; SSBSS Realty Corp. v Public Serv. Mut. Ins. Co., 253 AD2d 583, 584).

In the present case, the insurance carriers made a prima facie showing of entitlement to judgment as a matter of law based on St. James's two-year delay in reporting the underlying accident. However, St. James raised a triable issue of fact as to whether the delay was reasonably based on a good-faith belief in nonliability. Under these circumstances, the Supreme Court should not have granted the insurance carriers' cross motion for summary judgment (see Jordan Constr. Prods. Corp. v Travelers Indem. Co. of AM., 14 AD3d 655, 656; Blue Ridge Ins. Co. v Jiminez, 7 AD3d 652, 653; Genova v Regal Mar. Indus., 309 AD2d at 734; G.L.G. Contr. Corp. v Aetna Cas. & Sur. Co., 215 AD2d 821, 822; Triantafillou v Colonial Coop. Ins. Co., 178 AD2d 925, 926-927).
CRANE, J.P., SPOLZINO, KRAUSMAN and McCARTHY, JJ., concur.

Brian Griffin v. DaVinci Development, LLC

Moritt Hock Hamroff & Horowitz LLP, Garden City, N.Y.
(William P. Laino and Douglas J. Steinke of counsel), for defendants
third-party plaintiffs-appellants.
L'Abbate, Balkan, Colavita & Contini, LLP, Garden City, N.Y.
(Maureen E. O'Connor of counsel), for
third-party defendant-respondent RMS
Insurance Brokerage, LLC.
Wilson, Elser, Moskowitz, Edleman & Dicker, LLP, White
Plains, N.Y. (Nancy Quinn Koba of
counsel), for third-party defendant-
respondent R & W Brokerage, Inc.


DECISION & ORDER

In an action to recover damages for personal injuries, the defendants third-party plaintiffs DaVinci Development, LLC, and Artie Cipoletti appeal from so much of an amended order of the Supreme Court, Suffolk County (Jones, J.), dated September 27, 2006, as granted the motion of the third-party defendant RMS Insurance Brokerage, LLC, to dismiss the third-party complaint insofar as asserted against it and granted the separate cross motions of third-party defendants RMS Insurance Brokerage, LLC, and R & W Brokerage, Inc., to sever the third-party action.

ORDERED that the amended order is affirmed, with one bill of costs.

The defendant third-party plaintiff DaVinci Development, LLC (hereinafter DaVinci), contracted with the third-party defendant Action Siding, Inc. (hereinafter Action), to perform work on its premises. The contract required that Action procure liability insurance to protect DaVinci. Action then contracted with the third-party defendant RMS Insurance Brokerage, LLC (hereinafter RMS), to procure the necessary insurance. RMS provided DaVinci with a series of certificates of liability insurance indicating that the coverage had been obtained. On or about May 7, 2004, the plaintiff was injured on DaVinci's premises while working for Action. The plaintiff commenced this action against DaVinci, among others. DaVinci then learned that it was without any insurance coverage for the accident and commenced a third-party action against Action, RMS, and R & W Brokerage, Inc. (hereinafter R & W), its own insurance broker, for contribution and indemnification. RMS moved pursuant to CPLR 3211(a)(7) to dismiss the third-party complaint insofar as asserted against it. RMS and R & W then cross-moved to sever the third-party action from the underlying Labor Law action. The Supreme Court granted the motion and the cross motion. We affirm.

Accepting as true the facts alleged in support of the causes of action asserted in the third-party complaint against RMS, and according the third-party plaintiff the benefit of every favorable inference, the causes of action asserted against RMS in the third-party complaint were not sufficiently pleaded (see Leon v Martinez, 84 NY2d 83, 87-88). DaVinci, which was not in privity of contract with RMS (see American Ref-Fuel Co. of Hempstead v Resource Recycling, 248 AD2d 420), failed to set forth sufficient allegations that there was "fraud, collusion, or other special circumstances" that would have enabled it to recover for its "pecuniary loss" (Binyan Shel Chessed, Inc. v Goldberger Ins. Brokerage, Inc., 18 AD3d 590, 592; cf. Benjamin Shapiro Realty Co. v Kemper Natl. Ins. Co., 303 AD2d 245; Metral v Horn, 213 AD2d 524, 526). Moreover, it failed to set forth sufficient allegations that it was an intended third-party beneficiary of the contract between Action and RMS (see Superior Ice Rink, Inc. v Nescon Contr. Corp., 40 AD3d 963, 965).

It was a provident exercise of the Supreme Court's discretion to grant the separate cross motions to sever the third-party action (see Golfo v Loevner, 7 AD3d 568).

In the Matter of State Farm Mutual Automobile Insurance Company v. Campbell

 

White Fleischner & Fino, LLP, New York, N.Y. (Jennifer L. Toth
of counsel), for proposed additional respondent-appellant.
Richard T. Lau, Jericho, N.Y. (Joseph G. Gallo of counsel), for
petitioner-respondent.


DECISION & ORDER

In a proceeding pursuant to CPLR article 75 to permanently stay arbitration of a claim for uninsured motorist benefits, the nonparty Acceptance Indemnity Insurance Company appeals from a judgment of the Supreme Court, Queens County (Rios, J.), entered October 12, 2006, which, upon a decision of the same court dated July 17, 2006, made after a hearing, inter alia, granted the petition and permanently stayed the arbitration. The notice of appeal from the decision is deemed to be a premature notice of appeal from the judgment (see CPLR 5512[a]).

ORDERED that the judgment is affirmed, with costs.

An insurer who seeks to disclaim coverage on the ground of noncooperation "must demonstrate that it acted diligently in seeking to bring about the insured's co-operation . . . that the efforts employed by the insurer were reasonably calculated to obtain the insured's co-operation . . . and that the attitude of the insured, after his co-operation was sought, was one of willful and avowed obstruction'" (Thrasher v United States Liab. Ins. Co., 19 NY2d 159, 168-169, quoting Coleman v New Amsterdam Cas. Co., 247 NY 271, 276; see Matter of Eagle Ins. Co. v Sanchez, 23 AD3d 655; Matter of Continental Ins. Co. v Bautz, 29 AD3d 989, 990; City of New York v Continental Cas. Co., 27 AD3d 28; State Farm Fire & Cas. Co. v Imeri, 182 AD2d 683).

Here, the appellant insurer failed to establish that it was sufficiently diligent or that its efforts were reasonably calculated to bring about its insured's cooperation (see Rucaj v Progressive Ins. Co., 19 AD3d 270). In addition, the nonaction of its insured did not, in this case, constitute "willful and avowed obstruction" (Coleman v New Amsterdam Cas. Co., 247 NY 271; see Matter of Empire Mut. Ins. Co. [Stroudy-Boston Old Colony Ins. Co.], 36 NY2d 719, 721-722; Thrasher v United States Liab. Ins. Co., 19 NY2d at 168; Matter of Eagle Ins. Co. v Sanchez, 23 AD3d at 656; Matter of New York Cent Mut. Fire Ins. Co. v Bresil, 7 AD3d 716; Matter of Metlife Auto & Home v Burgos, 4 AD3d 477). Thus, the appellant failed to demonstrate that it met the requirements set forth in Thrasher v United States Liab. Ins. Co. (19 NY2d at 159) to disclaim coverage on the ground of lack of cooperation. As such, the Supreme Court properly granted the petition of State Farm Mutual Automobile Insurance Company to permanently stay the arbitration of the uninsured motorist claim of its insured.

The appellant's remaining contentions either are improperly raised for the first time on appeal, are without merit, or need not be reached in light of our determination.

Marshall v. Tower Insurance Company of New York

Max W. Gershweir, New York, N.Y. (Jennifer Kotlyarsky of
counsel), for appellant.
Matarazzo Blumberg & Associates, LLP, New York, N.Y.
(Barbara A. Matarazzo of counsel), for
respondent and plaintiffs.


DECISION & ORDER

In an action to recover damages for breach of an insurance policy, the defendant Tower Insurance Company of New York appeals from so much of an order of the Supreme Court, Kings County (Schneier, J.), dated June 14, 2006, as denied that branch of its motion which was for summary judgment dismissing the causes of action asserted by the plaintiff Joseph Gerard-Jean against it.

ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and that branch of the motion of the defendant Tower Insurance Company of New York which was for summary judgment dismissing the causes of action asserted by the plaintiff Joseph Gerard-Jean against it is granted.

"The construction of terms and conditions of an insurance policy that are clear and unambiguous presents a question of law to be determined by the court when the only issue is whether the terms as stated in the policy apply to the facts" (Raino v Navigators Ins. Co., 268 AD2d 419, 419-420; see also Briggs v Allstate Ins. Co., 1 AD3d 392). Moreover, "where the provisions of the policy are clear and unambiguous, they must be given their plain and ordinary meaning, and courts should refrain from rewriting the agreement" (Government Empls. Ins. Co. v Kligler, 42 NY2d 863, 864). However, any ambiguity must be construed against the insurer in favor of coverage (see Ace Wire & Cable Co. v Aetna Cas. & Sur. Co., 60 NY2d 390, 398). 

The provisions at issue in the instant policy are not ambiguous. The policy defines the insured location as, inter alia, the "residence premises." The term "residence premises" is defined as follows:

"8. Residence premises' means:

a. The one family dwelling, other structures, and grounds; or

b. That part of any other building;

where you reside and which is shown as the residence premises' in the Declarations."

The Declarations identify the insured as the plaintiff Joseph Gerard-Jean (hereinafter the plaintiff) with an address of 1598 E. 53rd Street, Brooklyn NY (hereinafter the subject premises). It further states that "The residence premises covered by this policy is located at the above insured address."

Contrary to the plaintiff's contention, the set-off clause beginning "where you reside" clearly applies to and modifies sections 8(a) and (b) quoted above. Neither section 8(a) nor 8(b) identifies a specific location without also adding the underlined clause beginning "where you reside" (see Metropolitan Prop. & Cas. Ins. Co. v Pulido, 271 AD2d 57, 58). As the parties do not dispute that the plaintiff, the named insured under the policy, did not reside at the subject premises, the defendant Tower Insurance Company of New York properly concluded that the subject premises were not covered under the policy and properly disclaimed on that basis.