New Page 1
10/23/03
NATIONAL UNION FIRE INS. CO. OF PITTSBURGH, PA v RED APPLE GROUP
New York
State Supreme Court, Appellate Division, First Department
Claimant is Third-Party
Beneficiary of Indemnity Agreement under Lease and Additional Insured Provisions
Where the indemnitee fails to notify the indemnitor of a
settlement with the claimant, indemnification is conditioned upon the
indemnitee’s demonstration that it would have been liable to the claimant, that
there was no good defense, and that the settlement was in a reasonable amount.
Neither side contested that a question of fact existed as to the reasonableness
of the amount of the settlement. The only issues on appeal were whether National
Union had demonstrated that it would have been liable to the claimant (HELM) and
that there were no good defenses to the action by HELM against National Union
and defendants. Court held that National Union has made such a showing. HELM had
standing to assert a claim under the policy as a third-party beneficiary.
Although HELM was not named as a third-party beneficiary, the policy
endorsement, the certificate of insurance, the indemnification agreement and the
lease clearly demonstrated an intent that HELM was to be a third-party
beneficiary. The Policy endorsement was specifically and expressly created to
satisfy the terms of the lease between defendants and HELM, which lease required
that insurance on the property be maintained for the “mutual benefit” of HELM
and the tenant defendants. Furthermore, defendants waived any right to make a
claim under the policy endorsement at the time of its making, leaving HELM as
the only possible claimant, thus evidencing its intended status as a third-party
beneficiary.
10/21/03
AJ CONTRACTING CO., INC. v FOREST
DATACOM SERVICES
New York State Supreme Court, Appellate Division,
First Department
Issue Concerning Carrier’s
Willingness to Accept Oral Notice of Claim Precludes Summary Judgment
In this coverage dispute
concerning whether an additional insured gave timely notice of the claim, the
court concluded that a question of fact existed whether the insurer evinced to
the additional insured and its agents a willingness to permit a claimant to
tender a claim orally, rather than strictly enforce its policy requirement of
written notice. A letter by the third-party claims administrator, while
rejecting another carrier’s tender of the claim pursuant to the named insured’s
contractual indemnification obligation, advised that the carrier was evaluating
whether the tender will be accepted pursuant to the insurance procurement
obligation. This reservation of rights letter on behalf of the carrier
acknowledged Travelers’ “oral request of May 14, 1998,” and contained no
indication that the carrier required written notice of the claim in order to
evaluate it. Both letters tended to show that the carrier received notice of the
claim being tendered by the additional insured and, rather than rejecting the
tender outright because it was not in writing, had decided to proceed with an
evaluation of its merits. While the affidavit of the carrier stated that the
carrier demanded compliance with the policy’s notice requirements, it made no
specific reference to the requirement that notice be in writing.
10/20/03
VILLAGE MALL AT HILLCREST CONDOMINIUM v MERRIMACK MUT.
FIRE INS. CO.
New York
State Supreme Court, Appellate Division, Second Department
Issue of Fact Whether Asbestos
is Pollutant under “Pollution Exclusion”
Although the Court of Appeals, as well as this court, has
acknowledged that asbestos may be a thermal irritant, the term “asbestos” is not
specifically included within the definition of “pollutants” under the pollution
exclusion provision of the subject policies. Merrimack’s interpretation of the
pollution exclusion clauses under the subject policies presents an ambiguity
which must be resolved against it as insurer. As such, there was an issue of
fact whether asbestos fell within the definition of a “pollutant” as defined
under the terms of the policies.
10/14/03
BELLAMY v KAPLAN
New York State Supreme Court, Appellate Division, First
Department
Jury’s Award of Future Damages
Consistent with Finding that Plaintiff Sustained Significant Limitation of Use
of Body Function or System under Insurance Law’s “Serious Injury” Threshold;
Permanent Injury Not Excluded from Definition
On the threshold issue of “serious injury” under Insurance
Law § 5102(d), the jury found that plaintiff did not suffer a permanent and
significant limitation of use of a body organ or member that is both permanent
and significant, but did sustain a significant limitation of use of a body
function or system. The jury also awarded plaintiff damages for future pain and
suffering based on a 21 ½ year life expectancy. Defendant moved to set aside the
verdict as against the weight of the evidence, but the court, sua sponte,
raised the issue whether the jury’s verdict was inconsistent. Because the award
for future damages, given the plaintiff's age, was the equivalent of a finding
of permanency, the court believed the verdict to be inconsistent. However, the
court properly instructed the jury that plaintiff met the threshold issue of
“serious injury” if he sustained either a permanent and significant limitation
of use of a body organ or member or a significant limitation of use of a body
function or system. Indeed, “[a] permanent injury is not excluded” from the
definition of a significant limitation of use of a body function or system.
Therefore, the jury’s verdict was not inconsistent and was reinstated.
10/09/03
MJ FRENZY, LLC v UTICA NATIONAL INS. GROUP
New York State Supreme Court, Appellate Division, First
Department
Availability of Justification
Defense to Assault Claim Excused Insured’s Late Notice of Occurrence
Insured’s bartender was involved in an altercation after a
drunk, disorderly and abusive patron grabbed him. Police responded and the
patron was eventually removed from the premises complaining of an injury to his
ankle. Thereafter, plaintiff was served with a summons and complaint by the
patron alleging assault and battery, negligent hiring and supervision and
violation of the Dram Shop Act. Insured forwarded the suit papers to its insurer
two days later. The insurer disclaimed coverage, relying on the exclusion for
intentional acts and asserting that notice was untimely. The policy contained an
exclusion for “bodily injury … intended from the standpoint of the insured,”
which exempted from the exclusion “bodily injury resulting from the use of
reasonable force to protect persons or property.” As to late notice, the court
held that because of the availability of justification as a defense to the
assault claim, plaintiff’s belief that no lawsuit would be brought was
reasonable and its duty to notify defendant of the incident was not triggered
until its receipt of the complaint. Moreover, the policy exclusion did not
apply. The cases cited by the insurer in support of its contention that the
policy's intentional acts exclusion relieved it of any duty to defend or
indemnify plaintiff for the acts of its employee were inapposite, since they
dealt with the assault and battery exclusion.
10/09/03
HARRIMAN ESTATES DEVELOPMENT CORP. v GENERAL ACCIDENT INS. CO.
New York State Supreme
Court, Appellate Division, First Department
Decision that Named Insured Not
Liable for Indemnification in Underlying Action Binding in Additional Insured’s
Action for Coverage
A contract between
Harriman and X Traire provided that X Traire was to indemnify Harriman for
liabilities “arising out of or in any way relating to the work performed … by [X
Traire] … under this contract.” The obligation to indemnify was the same as, or
broader than that imposed under the additional insured clause in the insurance
policy procured by X Traire, which was limited to liabilities “arising out of …
‘[X-Traire’s] work’ for [Harriman].” Thus, in granting X Traire’s motion in the
underlying action for summary judgment dismissing Harriman’s third-party
complaint, the court necessarily decided that the injuries claimed did not arise
out of X Traire’s work for Harriman, and therefore were not covered by the
additional insured clause. Therefore, the court held it was appropriate to
collaterally estop Harriman from asserting coverage.
10/07/03
CABREJA
v MORRIS
New York State Supreme
Court, Appellate Division, First Department
Unsworn Medical Affidavit
Inadequate to Defeat Serious Injury Threshold Motion
Court held that summary
judgment dismissing the complaint on the ground that plaintiff did not sustain a
serious injury as required by Insurance Law § 5102(d), was properly granted. In
opposition to defendant’s prima facie showing of no serious injury, plaintiff
submitted the report of his treating physician which was not affirmed or sworn,
and thus failed to provide the requisite medical evidence of serious injury.
Moreover, the physical limitations described therein were not supported by
clinical findings of decreased range of motion, or shown to be causally related
to the accident by the medical evidence submitted by defendant.
10/06/03
EAGLE INS. CO. v BROWN
New York State Supreme
Court, Appellate Division, Second Department
Arbitration of Uninsured
Motorist Claim Stayed for Respondent’s Failure to Report Hit-and-run and Notify
Carrier
Petition to stay
arbitration of uninsured motorist claim should have been granted where
petitioner made unopposed showing that respondent failed to report the alleged
hit-and-run accident to the police within 24 hours, and failed to notify the
petitioner of the uninsured motorist claim as soon as practicable.
Visit the
HOT CASES
section of the Federation of Defense and Corporate Counsel website for cases
covering a broad range of legal issues from other jurisdictions.
10/22/03
WHITEHEAD v ZURICH AM. INS. CO.
Fifth Circuit (applying
Mississippi law)
Claim against Workers
Compensation Carrier for Intentional Tort Dismissed Because of Failure to
Exhaust Administrative Remedies
The district court’s
dismissal of plaintiff’s claim and denial of motion to amend were affirmed where
plaintiff failed to exhaust the administrative remedial process before bringing
an intentional tort claim against his workers compensation carrier.
10/21/03
DELK v MARKEL INSURANCE CO.
Oklahoma Supreme Court
Less Than 100% Ownership Does
Not Preclude Full Recovery of Policy Limits of Insurance on Real Property
Delk owned a 1/6 interest
in a home. She was the sole named insured on a policy of homeowners’ insurance
for the dwelling. The home was completely destroyed by fire. Defendant insurance
company, upon learning she was only a 1/6 co-tenant denied payment of the policy
limits. The question certified to the Oklahoma Supreme Court from the US
District Court for the Western District of Oklahoma, was whether Delk could
recover the policy’s dwelling coverage limits even though she was not the sole
owner. The court determined that she could recover the full policy limits,
reasoning that a co- tenant is obligated to use ordinary care in the use of the
common property and stands liable to the other joint tenants for damage to or
destruction of the property. A cotenant in possession may hence become subject
to pecuniary loss in tort if the dwelling is damaged or destroyed. This legal
liability provides an insurable interest for purposes of property insurance.
Karen White and
Jacqueline Jauregui of Sedgwick, Detert, Moran & Arnold
10/21/03
OKULY v USF&G INSURANCE CO.
Montana Supreme Court
Workers Compensation Exclusive
Remedy, Even if Motorist Uninsured
Appellant’s wife was
killed while traveling as a passenger in a car, in the course and scope of her
employment, which was hit by another vehicle. The other vehicle was also driven
by a person in the course and scope of their employment. Both the deceased and
the driver of the other vehicle worked for the same employer. Appellant received
worker’s compensation benefits, and also brought suit against the employer’s
insurance carrier for wrongful death under the policy provision for uninsured
motorists. The court decided that Appellant was not legally entitled to recover
damages, and was limited to the exclusive remedy of worker’s compensation, which
he had received.
Karen White and
Jacqueline Jauregui of Sedgwick, Detert, Moran & Arnold
10/20/03
AUTO-OWNERS INS. CO. v CARL BRAZELL BUILDERS, INC.
South Carolina
Supreme Court
Suit for Diminution of Value Due
to Chemical Pollutants Not “Physical Injury” to Property
Claimants purchased homes
from contractors that were built on land they allege contains potentially
hazardous materials of which the contractors were aware. Claimants brought an
action against contractors for economic damages and diminution of value of their
property. Contractors’ insurers seek declaratory relief, asserting that the
policies issued to Contractors preclude coverage for the claims in the
underlying litigation. The policies provide coverage for “property damage”
caused by an “occurrence.” “Property damage” was defined as physical injury to
tangible property, including all resulting loss of use of that property.
Claimant property owners did not allege physical damage to property, but rather
alleged economic damage and diminution of value. Diminished value of tangible
property does not constitute property damage within the meaning of CGL policies
which define property damage as physical injury, therefore the claims do not
fall within the policies held by the contractors.
Karen White and
Jacqueline Jauregui of Sedgwick, Detert, Moran & Arnold
10/20/03
GEORGIA NORTHEASTERN RAILROAD, INC. v LUSK
Georgia Supreme Court
Recovery for Diminution in Value
and Restoration Costs Amounts to Impermissible Double Recovery
Lusk owned just over 90
acres on a riverfront, a portion of which property was damaged by Georgia
Northeastern. He was awarded approximately $5,000 to compensate him for
diminution of value of property as a result of erosion caused by Georgia
Northeastern, and also awarded over $180,000 for the estimated costs to repair
the property. Because the injury to the property would have been remedied by the
restoration costs, the recovery for diminution constituted an impermissible
double recovery.
Karen White and
Jacqueline Jauregui of Sedgwick, Detert, Moran & Arnold
10/20/03
CSX TRANSPORTATION, INC. v CITY OF GARDEN CITY
Georgia Supreme
Court
Sovereign Immunity May be Waived
by Purchase of Liability Insurance Covering Occurrence to Which Defense Applies
Garden City contracted
with CSX to use railroad right-of-way to install sewer lines; agreement required
Garden City to indemnify CSX for all liabilities suffered in connection with the
project and to maintain insurance covering indemnity obligations. The Court held
that agreements to indemnify by municipalities are void as ultra vires,
but the purchase of liability insurance for occurrences that may be subject to
the sovereign immunity defense becomes a waiver of sovereign immunity.
Erin Adrian
and Jacqueline
Jauregui of Sedgwick, Detert, Moran & Arnold
10/17/03
DICKSON v SELECTIVE INS. GROUP, INC.
New Jersey Appellate
Division
Corporate Executive Not Entitled
to
UM/UIM
Coverage Even Though Shareholder of Insured Corporation and Authorized Driver of
Covered Vehicle
Plaintiff was injured in
accident in a third party’s car; his injuries exhausted the policy limits of
both the driver of the car he was in and the other car involved. His personal
vehicle was purchased for him by the corporation and was covered by a corporate
policy for business and personal use. But, since he was not specifically named
in the policy and had no additional “drive other car” coverage (one of the other
executives did), the court held he could not be covered by the policy’s
uninsured/underinsured motorist coverage as the vehicle was not owned or insured
by his employer and it was not being used for business purposes.
Erin Adrian
and Jacqueline
Jauregui of Sedgwick, Detert, Moran & Arnold
10/17/03
RICHARDS v MONTGOMERY
Kentucky Court of Appeals
Auto Policy Covers Vehicle Even
if Certificate of Title Has Not Yet Passed to Policyholder
Title to log truck
involved in an accident had not yet passed from prior owner to purchaser. As a
result, vehicle was covered by two policies-that of the certificate owner as
well has the new owner who had purchased and paid premiums for a policy covering
the vehicle. Carrier of certificate owner’s policy settled with the injured
party and filed suit for indemnification by new purchaser’s carrier. The new
owner’s carrier argued they had no liability because their policyholder did not
own the vehicle. The Court held both policies covered the vehicle, and the
amount of coverage would be determined proportionally by the amount of their
policy limits.
Erin Adrian
and Jacqueline
Jauregui of Sedgwick, Detert, Moran & Arnold
10/15/03
CDM INVESTORS v AMERICAN NATIONAL FIRE INS. CO.
California Court of
Appeal
Insured’s Payment of Response
Costs not Covered under Damages-Only Liability Policies; Insurers’ Duty to
Defend not Triggered By Purely Defensive Affirmative Defenses
The California Court of
Appeal, Sixth Appellate District, affirmed demurrers sustained by the Santa
Clara County Superior Court which had been filed by insurers on the ground that
the insurers’ obligations to indemnify for “damages” and to defend “suits” did
not cover (1) costs incurred in response to an environmental claim, or (2) costs
allegedly incurred to defend against affirmative defenses which could not have
been asserted independently in a suit for damages. The court of appeal first
discussed the California Supreme Court’s decisions in Foster-Gardner, Inc. v.
National Union Fire Ins. Co. (1998) 18 Cal.4th 857 (Foster-Gardner) and Certain
Underwriters at Lloyd’s of London v. Superior Court (2001) 24 Cal.4th 945
(Powerine). It found that read together, Foster-Gardner and Powerine stand for
the proposition that the duty to defend a “suit” seeking “damages” under
pre-1986 CGL policies is restricted to lawsuits prosecuted in a court and does
not include claims, which can denote proceedings conducted by administrative
agencies under environmental statutes. Likewise, the duty to indemnify for “all
sums that the insured becomes legally obligated to pay as ‘damages’” is limited
to money ordered by a court, and does not include “expenses” such as may be
incurred in responding to administrative agency orders.
Michael Lucey of Gordon &
Rees, LLP
10/21/03
STRIEGEL v HILLCREST HEIGHTS DEVELOPMENT
New York State Court of
Appeals
Slip Down (But Not Off) Slanted
Roof is Elevation-Related Risk Subjecting Owner and General Contractor to Labor
Law Section 240(1) Liability
The New York high court
determined that where a roofer slips down a slanted roof as a result of a lack
of protective equipment, his claim falls within the “Scaffolding Law” even
though he did not fall to the ground.
10/21/03
PRATS v PORT AUTHORITY OF NEW YORK AND NEW JERSEY
New York State Court of
Appeals
In Second of Two Labor Law
§240(1) Decisions, New York High Court Gives Broadened Protection to
“Inspection” Activities
As an assistant mechanic,
plaintiff worked on overhauling air conditioning systems, and return and exhaust
units. He also assisted a more senior mechanic in changing bearings, motor
sheaves and flywheels. His specific tasks varied as he received each day’s
assignments when signing in for work. On the day of the injury, plaintiff and
co-worker Bob Card were readying air handling units for inspection, using tools
(wrenches, a welder set and “Craftsman-type” tools) to perform any work that had
to be done. Card set up a ladder to inspect an air conditioning return fan about
eight feet tall, suspended at a height of approximately 20 feet. Plaintiff held
the ladder while Card climbed up and on to the unit. Card then asked plaintiff
to give him a wrench, and plaintiff began to climb the ladder. When he was about
15 feet off the ground, the ladder slid out from under him, and he fell. The
ladder bounced off the floor and hit plaintiff in the face before he fell to the
ground. Since the contract required his employer to level floors, lay concrete
and rebuild walls to replace large air filtering systems, Court finds that
plaintiff was involved in “alteration” of building. Court finds that
“inspection” in preparation for “alteration” of building was within ambit of
Labor Law §240(1) protection.
10/22/03
New Legislation Eliminates Statement of
Specific Dollar Amount of Damages from Pleadings
Governor Pataki signed a
bill that eliminates demands for the amount of damages in all actions for
personal injuries or wrongful death, and allows attorneys to make reference,
during opening statements and/or closing statements, to a specific dollar amount
that the attorney believes to be appropriate compensation. The law will go into
effect on November 21, 2003.
Hurwitz & Fine, P.C. is a full-service law
firm
providing legal services throughout the State of New York.
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Kevin T. Merriman
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© COPYRIGHT 2003 Hurwitz
& Fine, P.C., ALL RIGHTS RESERVED
Text of Reported Decisions
BELLAMY v KAPLAN
Order, Supreme Court,
Bronx County (Alan Saks, J.), entered on or about April 4, 2002, which granted
defendant's motion to set aside the jury verdict and directed a new trial on the
issue of serious injury, unanimously reversed, on the law, without costs, the
motion denied and the verdict reinstated.
On the threshold issue of serious injury (see Insurance Law § 5102[d]),
the jury found that plaintiff did not suffer a permanent and significant
limitation of use of a body organ or member that is both permanent and
significant, but did sustain a significant limitation of use of a body function
or system. The jury also awarded plaintiff damages for future pain and suffering
based on a 21 1/2 year life expectancy. Defendant moved to set aside the verdict
as against the weight of the evidence, but the court, sua sponte, raised the
issue whether the jury's verdict was inconsistent. Because the award for future
damages, given the plaintiff's age, was the equivalent of a finding of
permanency, the court believed the verdict to be inconsistent. However, the
court properly instructed the jury that plaintiff met the threshold issue of
serious injury if he sustained either a permanent and significant limitation of
use of a body organ or member or a significant limitation of use of a body
function or system. Indeed, "[a] permanent injury is not excluded" from the
definition of a significant limitation of use of a body function or system (see
Preston v Young,
239 AD2d 729, 732). Therefore, the jury's verdict was not inconsistent and is
reinstated.
This constitutes the
decision and order of the Supreme Court, Appellate Division,
First Department.
MJ FRENZY, LLC v UTICA
NATIONAL INS. GROUP
Judgment, Supreme Court,
New York County (Joan Madden, J.), entered April 4, 2003, which, inter
alia, denied defendant's motion for summary judgment
and declared that defendant was obligated to provide plaintiff with a defense to
the underlying action against it, unanimously affirmed, with costs.
Plaintiff jazz club is
insured under a policy issued by defendant that contains an exclusion for
"bodily injury * * * intended from the standpoint of the insured" but which
exempts from such exclusion "bodily injury resulting from the use of reasonable
force to protect persons or property." On April 23, 2000, plaintiff's bartender
was involved in an altercation after a drunk, disorderly and abusive patron
grabbed him. Police responded and the patron was eventually removed from the
premises complaining of an injury to his ankle. On or about March 21, 2001,
plaintiff was served with a summons and complaint by the patron alleging assault
and battery, negligent hiring andsupervision and
violation of the Dram Shop Act (General Obligations Law § 11-101[1]), which
plaintiff forwarded to defendant two days later. Defendant disclaimed coverage,
relying on the exclusion for intentional acts and asserting that notice was
untimely.
Because of the
availability of justification as a defense to the assault claim, plaintiff's
belief that no lawsuit would be brought was reasonable and its duty to notify
defendant of the incident was not triggered until its receipt of the complaint (see
Merchants Mut. Ins. Co. v
Hoffman, 56 NY2d 799, 801).
The cases cited by defendant in support of its contention that the policy's
intentional acts exclusion relieved it of any duty to defend or indemnify
plaintiff for the acts of its employee are inapposite, since the governing
policies in those cases expressly provide for the exclusion of any claims
arising out of assault and battery (see U.S. Underwriters v Val-Blue
Corp., 85 NY2d 821, 823; Perez-Mendez v Roseland Amusement & Dev. Corp.,
__ AD2d __, 757 NYS2d 848; Handlebar Inc. v Utica First Ins. Co., 290
AD2d 633, lv denied 98 NY2d 601).
This constitutes the
decision and order of the Supreme Court, Appellate Division,
First Department.
HARRIMAN ESTATES
DEVELOPMENT CORP. v GENERAL ACCIDENT INS. CO.
Order, Supreme Court, New
York County (Diane Lebedeff, J.), entered July 19,
2002, which, in a declaratory judgment action involving defendant insurer
(Transcontinental)'s obligation to defend and indemnify plaintiff home builder
(Harriman) in an underlying personal injury action brought against Harriman and
others by an employee of Transcontinental's insured
(X Traire), one of Harriman's contractors, granted
Transcontinental's motion for summary judgment dismissing the complaint
on the ground of collateral estoppel, unanimously affirmed, with costs.
The contract between
Harriman and X Traire provides that X Traire is to indemnify Harriman for
liabilities "arising out of or in any way relating to the work performed . . .
by [X Traire] . . . under this contract." Such obligation to indemnify is the
same as, if not broader than that imposed under the additional insured clause in
the Transcontinental insurance policy procured by X
Traire, which is limited to liabilities "arising out of . . . '[X-Traire's]
work' for [Harriman]." Thus, in granting X Traire's motion in the underlying
action for summary judgment dismissing Harriman's third-party complaint, the
court necessarily decided that the injuries claimed therein did not arise out of
X Traire's work for Harriman, and therefore are not covered by the additional
insured clause. Indeed, given an indemnity clause in a construction contract
that requires the subcontractor to obtain insurance naming the general
contractor as an additional insured, it should come as no surprise that the
issue of liability under the contract's indemnity clause would have consequences
on the issue of liability under the policy's additional insured clause. Thus, it
is appropriate to collaterally estop Harriman from asserting coverage in this
action even though, for unstated reasons, it chose not to oppose X Traire's
motion for summary judgment in the underlying action (see
Buechel v Bain, 97 NY2d 295, 303-305,
cert denied 535 US 1096).
In any event, it appears
that X Traire's employee was working on a completely different job when injured,
and merely returned to Harriman's job site to retrieve some items that had been
left behind after the Harriman job had been completed. Given these facts we
would find, in the absence of collateral estoppel, that the claimed injuries did
not arise out of X Traire's work for Harriman (see Glynn v
United House of Prayer for All People, 292 AD2d 319, 323), and declare that
Transcontinental is not obligated to defend and indemnify Harriman.
This constitutes the
decision and order of the Supreme Court, Appellate Division,
First Department.
CABREJA v MORRIS
Order, Supreme Court,
Bronx County (Gerald Esposito, J.), entered April 16, 2002, which, insofar as
appealed from, granted defendant's motion for summary judgment dismissing the
complaint on the ground that plaintiff did not sustain a serious injury as
required by Insurance Law § 5102(d), unanimously affirmed, without costs.
In opposition to
defendant's prima facie showing of no serious injury, plaintiff submitted the
report of his treating physician which, while denominated an affirmation, is
neither affirmed (CPLR 2106) nor sworn (see
Merrill/New York Co. v Celebrity Sys., 300 AD2d 206), and thus failed to
provide the requisite medical evidence of serious injury (see
Grasso v Angerami,
79 NY2d 813; Charlton v Almaraz, 278 AD2d
145). In any event, the physical limitations described therein are neither
supported by clinical findings of decreased range of motion (see
Toure v Avis Rent A Car
Sys., 98
NY2d 345, 350), nor shown to becausally related to
the accident by the medical evidence of record submitted by defendant (see
Chrisomalides v Ekow,
291 AD2d 202).
This constitutes the
decision and order of the Supreme Court, Appellate Division,
First Department.
EAGLE INS. CO. v BROWN
In a proceeding pursuant
to CPLR article 75 to stay arbitration of a claim
for uninsured motorist benefits, the petitioner appeals from (1) an order of the
Supreme Court, Westchester County (Nastasi, J.),
entered September 20, 2002, which denied the petition and dismissed the
proceeding, and (2) an order of the same court dated December 11, 2002, which
denied its motion for leave to reargue or renew the prior motion.
ORDERED that the order
entered September 20, 2002, is reversed, on the law, without costs or
disbursements, the petition is granted, and arbitration is permanently stayed;
and it is further,
ORDERED that the appeal
from so much of the order dated December 11, 2002, as denied that branch of the
defendant's motion which was for leave to reargue is dismissed, without costs or
disbursements, as no appeal lies from an order denying leave to reargue, and the
appeal from so much of the order dated December 11, 2002, as denied that branch
of the motion which was for leave to renew is dismissed as academic, without
costs or disbursements, in light of our determination on the appeal from the
order dated September 20, 2002.
Contrary to the Supreme
Court's determination, the petitioner established that it properly commenced
this proceeding to stay arbitration by filing the petition with the Clerk of the
Supreme Court and purchasing an index number (see
CPLR 304). Moreover, since the petitioner made an unopposed showing that
the respondent failed, among other things, to report the alleged hit-and-run
accident to the police within 24 hours, and failed to notify the petitioner of
the uninsured motorist claim as soon as practicable, the petition for a
permanent stay of arbitration should have been granted (see Matter of
Interboro Mut.
Indemnity Ins. Co. v Brown,
300 AD2d 660; Matter of Government Employees Ins. Co. v Snell,
286 AD2d 682; State Farm
Mut. Ins. Co. v
Genao, 210 AD2d
340; Matter of United States Fire Ins. Co. v Williams,
166 AD2d 538).
FLORIO,
J.P., S. MILLER, FRIEDMANN and
LUCIANO, JJ.,
concur
S T A T E O F N E
W Y O R K
________________________________________________________________________
4404
2003-2004 Regular
Sessions
I N
S E N A T E
April 14,
2003
___________
Introduced
by Sen. DeFRANCISCO -- read twice and
ordered printed, and when printed to be committed to the Committee on
Codes
AN ACT to amend the civil
practice law and rules, in relation to eliminating
demands for the amount of damages sought in all actions for personal injuries
or wrongful death
THE PEOPLE OF THE STATE
OF NEW YORK, REPRESENTED IN SENATE AND ASSEMBLY, DO
ENACT AS FOLLOWS:
1 Section
1. Section 3017 of the civil practice law and rules, as
2 amended by chapter 955 of the laws of 1976 and subdivision (c)
as
3 amended by chapter 442 of the laws of 1989, is amended to read as
4 follows:
5 S 3017. Demand
for relief. (a) Generally. Except as
otherwise
6 provided in subdivision (c) of this section,
every complaint, counter-
7
claim, cross-claim, interpleader complaint,
and third-party complaint
8
shall contain a demand for the relief to which the pleader deems himself
9
entitled. Relief in the alternative or of several different types may
10
be demanded. Except as provided in section 3215, the court may grant
11 any type of relief within its jurisdiction
appropriate to the proof
12
whether or not demanded, imposing such terms as may be just.
13 (b)
Declaratory judgment. In an action for a declaratory
judgment, the
14 demand for relief in the complaint shall specify the rights and other
15 legal relations on which a declaration is requested and state whether
16 further or consequential relief is or could be claimed and the nature
17 and extent of any such relief which is claimed.
18 (c) {Medical or
dental malpractice action or action against a munici-
19 pal corporation} PERSONAL INJURY OR WRONGFUL DEATH ACTIONS. In an action
20 TO RECOVER DAMAGES for {medical or dental malpractice or in an action 21
against a municipal corporation, as defined in section two of the
gener-
22 al municipal law} PERSONAL INJURIES OR WRONGFUL DEATH, the complaint,
23 counterclaim, cross-claim, interpleader
complaint, and third-party
24 complaint shall contain a prayer for general relief but shall not state
EXPLANATION--Matter in
ITALICS (underscored) is new; matter in brackets
{ } is old law to be
omitted.
LBD13788-02-3
S.
4404 2
1
the amount of damages to which the pleader deems himself entitled. If
2 the action is brought in the supreme court, the pleading shall also
3 state whether or not the amount of damages sought exceeds the
jurisdic-
4 tional limits of all lower courts which would
otherwise have jurisdic-
5 tion. Provided, however, that a party against
whom an action TO RECOVER
6 DAMAGES for {medical or dental malpractice} PERSONAL INJURIES OR WRONG-
7 FUL DEATH is brought {or the municipal
corporation}, may at any time
8 request a supplemental demand setting forth the total damages to which
9 the pleader deems himself entitled. A supplemental
demand shall be
10 provided by the party bringing the action within fifteen days of the
11 request. In the event the supplemental demand is not served within
12 fifteen days, the court, on motion, may order that it be served. A
13 supplemental demand served pursuant to this subdivision shall be treated
14 in all respects as a demand made pursuant to subdivision (a) of this
15 section.
16 S 2. Rule 4016 of the civil practice law and rules, as
renumbered by
17 chapter 318 of the laws of 1962, is amended to read as follows:
18 Rule 4016. Opening and closing statements. (A)
Before any evidence is
19 offered, an attorney for each plaintiff having a
separate right, and an
20 attorney for each defendant having a separate right, may make an opening
21 statement. At the close of all the evidence on the issues tried, an
22 attorney for each such party may make a closing statement in inverse
23 order to opening statements.
24 (B) IN ANY ACTION TO RECOVER DAMAGES FOR PERSONAL INJURIES OR WRONGFUL
25 DEATH, THE ATTORNEY FOR A PARTY SHALL BE PERMITTED TO MAKE REFERENCE,
26 DURING OPENING STATEMENT AND/OR DURING CLOSING STATEMENT, TO A SPECIFIC
27 DOLLAR AMOUNT THAT THE ATTORNEY BELIEVES TO BE APPROPRIATE COMPENSATION
28 FOR ANY ELEMENT OF DAMAGE THAT IS SOUGHT TO BE RECOVERED IN THE ACTION.
29 IN THE EVENT THAT AN ATTORNEY MAKES SUCH A REFERENCE IN AN ACTION BEING
30 TRIED BY A JURY, THE COURT SHALL, UPON THE REQUEST OF ANY PARTY, DURING
31 THE COURT`S INSTRUCTIONS TO THE JURY AT THE
CONCLUSION OF ALL CLOSING
32 STATEMENTS, INSTRUCT THE JURY THAT:
33 (1) THE ATTORNEY`S REFERENCE TO SUCH SPECIFIC
DOLLAR AMOUNT IS PERMIT-
34 TED AS ARGUMENT;
35 (2) THE ATTORNEY`S REFERENCE TO A SPECIFIC
DOLLAR AMOUNT IS NOT
36 EVIDENCE AND SHOULD NOT BE CONSIDERED BY THE JURY AS EVIDENCE; AND
37 (3) THE DETERMINATION OF DAMAGES IS SOLELY FOR THE JURY TO DECIDE.
38 S
3. This act shall take effect on the
thirtieth day after it shall
39 have become a law.
National Union Fire
Ins. Co. of Pittsburgh, PA, v Red Apple Group, Inc.
Order, Supreme Court, New
York County (Karla Moskowitz, J.), entered April 9,
2003, which denied defendants' motion for summary judgment, and implicitly
granted plaintiff insurer's motion for partial summary judgment on the issue of
defendants' liability to indemnify it for a settlement entered into with a third
party to the extent of finding that the only issue left for trial was the
reasonableness of the settlement amount paid by plaintiff, unanimously affirmed,
with costs.
Where, as here, the
indemnitee fails to notify the indemnitor of a settlement with the claimant,
indemnification is conditioned upon the indemnitee's demonstration that it would
have been liable to the claimant, that there was no good defense, and that the
settlement was in a reasonable amount (see Chase Manhattan Bank v 264
Water St. Assocs., 222 AD2d 229, 231; Feuer
v Menkes Feuer Inc.,
8 AD2d 294, 299). Neither side contests that a question of fact exists as to the
reasonableness of the amount of the settlement, as the motion court found. The
only issues on appeal, apparently resolved by the motion court in plaintiff
National Union's favor, are whether National Union has demonstrated that it
would have been liable to the claimant (HELM) and that there were no good
defenses to the action by HELM against National Union and defendants. We find
that National Union has made such a showing.
HELM had standing to
assert a claim under the policy as a third-party beneficiary. Although HELM was
not named as a third-party beneficiary, the Policy endorsement, the Certificate
of Insurance, the indemnification agreement and the lease clearly demonstrate an
intent that HELM was to be a third-party
[*2]beneficiary
(see Fourth Ocean Putnam Corp. v Interstate Wrecking Co., 66 NY2d
38, 44). The Policy endorsement was specifically and expressly created to
satisfy the terms of the lease between defendants and HELM, which lease required
that insurance on the property be maintained for the "mutual benefit" of HELM
and the tenant defendants. Furthermore, defendants waived any right to make a
claim under the Policy endorsement at the time of its making, leaving HELM as
the only possible claimant, thus evidencing its intended status as a third-party
beneficiary (Alicea v City of New York,
145 AD2d 315, 318 citing Fourth Ocean Putnam Corp. v Interstate Wrecking Co.,
supra at 45). Additionally, it is uncontested that the property was
destroyed and that defendant tenants were liable for its repair or replacement,
and that, as the insurer of the property, National Union became obligated to
make the payment.
Defendants'
contention that there were good defenses to the action with
HELM are conclusory and speculative, and as
such, fail to raise a triable issue of fact. Furthermore, defendants' assertion
that National Union breached the Policy by paying the settlement money, in
escrow, to HELM, instead of defendants' related company, was expressly rejected
when defendants' breach of contract counterclaim was dismissed on a prior
motion, which disposition was affirmed by this Court (281 AD2d 296).
We have examined
defendants' remaining contentions and find them unavailing.
THIS CONSTITUTES THE
DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST
DEPARTMENT.
Village Mall at Hillcrest Condominium v
Merrimack
Mut.
Fire Ins. Co.
In an action, inter
alia, for a judgment declaring that the defendant
Merrimack Mutual Fire Insurance Company is obligated to defend and indemnify the
plaintiff in an underlying action entitled Pitcairn v
A.C. & S., Inc., pending in the Supreme Court, New York County, under
Index No. 111557/99, the defendant Merrimack Mutual Fire Insurance Company
appeals from an order of the Supreme Court, Queens County (Dollard,
J.), dated May 24, 2001, which denied its
[*2]motion
for summary judgment.
ORDERED that the order is affirmed, with costs.
The plaintiff commenced
this action, inter alia, for a judgment declaring
that the defendant Merrimack Mutual Fire Insurance Company (hereinafter
Merrimack) was obligated under seven successive annual insurance policies to
provide a defense and/or indemnify it in connection with an underlying personal
injury action brought against it arising out of asbestos inhalation. Merrimack
disclaimed coverage based upon the pollution exclusion clauses under the subject
policies.
The pollution exclusion
clauses under the subject policies indicated that coverage did not apply to
"'bodily injury' or 'property damage' arising out of the actual, alleged or
threatened discharge, dispersal, release or escape of pollutants." Pollutants
were defined as "any solid, liquid, gaseous or thermal irritant or
contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and
waste. Waste includes materials to be recycled, reconditioned or reclaimed"
(emphasis added).
Merrimack moved for
summary judgment in the declaratory judgment action. The Supreme Court denied
the motion, finding that while Merrimack established, prima facie, its
entitlement to judgment as a matter of law, there
were issues of fact as to whether asbestos was considered a "pollutant," as that
term was defined under the subject policies.
"To negate coverage by
virtue of an exclusion, an insurer must establish that the exclusion is stated
in clear and unmistakable language, is subject to no other reasonable
interpretation, and applies in the particular case" (Continental
Cas. Co. v Rapid-Am. Corp., 80 NY2d 640, 652;
see Belt Painting Corp. v TIG Ins. Corp., 100
NY2d 377; Westview Assocs. v Guaranty
Natl. Ins. Co., 95 NY2d 334, 340). Where the language of the policy "is
doubtful or uncertain in its meaning, any ambiguity must be resolved in favor of
the insured and against the insurer" (see Westview
Assocs. v Guaranty Natl. Ins. Co., supra at 340). Further, if the
exclusionary clause fails to include the particular loss that the insurer
alleges, then the insured is entitled to be defended and possibly indemnified (id.
at 340; see also Servidone
Constr. Corp. v Security Ins. Co. of Hartford,
64 NY2d 419, 425; Seaboard Sur. Co. v Gillette
Co., 64 NY2d 304; Cepeda v
Varveris, 234 AD2d 497).
Although the Court of
Appeals, as well as this court, has acknowledged that asbestos may be a thermal
irritant (see Belt Painting v TIG Ins. Corp.,
supra; Continental Cas.
Co. v
Rapid-[*3]Am.
Corp., supra; A-One Oil v Massachusetts Bay Ins. Co.,
250 AD2d 633), the term
"asbestos" is not specifically included within the definition of "pollutants"
under the pollution exclusion provision of the subject policies. Merrimack's
interpretation of the pollution exclusion clauses under the subject policies
presents an ambiguity which must be resolved against it as insurer. As such,
there is an issue of fact as to whether asbestos falls within the definition of
a "pollutant" as defined under the terms of the policies herein. Accordingly,
the Supreme Court properly denied the motion by Merrimack for summary judgment.
FEUERSTEIN, J.P., S.
MILLER, FRIEDMANN and COZIER,
JJ., concur.
AJ
Contracting Company Inc. v. Forest Datacom Services
Inc.
Order, Supreme Court, New
York County (Paula Omansky, J.), entered January 2,
2002, which, inter alia, granted the motion of
defendant CIGNA Property & Casualty Insurance Company for summary judgment
dismissing the claim of plaintiff AJ Contracting Company against it, and denied
plaintiff's motion for summary judgment and a declaration that CIGNA was
obligated to defend plaintiff in an underlying personal injury action,
unanimously modified, on the law, so as to grant the motion of CIGNA only to the
extent of declaring that CIGNA has no obligation to defend AJ Contracting in the
underlying personal injury action, and otherwise deny defendant-respondent's
motion and reinstate the complaint, and otherwise affirmed, without costs.
The core of the current
dispute regarding insurance coverage initially focuses on whether AJ
Contracting, as an additional insured under the CIGNA insurance policy procured
by Forest Datacom Services, gave proper timely
notice of the claim to CIGNA. CIGNA claims that it did not receive the requisite
written notice until it was served with the third-party summons and complaint in
November 1998, well outside the time frame for proper notice.
The CIGNA policy requires
written notice of a claim, and we agree with the motion court's implicit
conclusion that plaintiff failed to establish written notice to CIGNA as a
matter of law by the testimony of Travelers' representative Mary
Kawas-Rutolo. However, other documentation regarding
communications between CIGNA and Travelers during the spring of 1998 have a
bearing on this claim. Review of these documents leads us to conclude that a
question of fact exists as to whether CIGNA evinced to AJ and its agents a
willingness to permit a claimant to tender a claim orally, rather than strictly
enforce its policy requirement of written notice.
A letter by Forest's third-party claims administrator, ESIS,
dated April 28, 1998, while rejecting Traveler's tender of
AJ's claim pursuant to Forest's contractual indemnification obligation,
advised that "Carolann Myrtetus
of INA [CIGNA] is evaluating whether the tender will be accepted pursuant to the
insurance procurement obligation." Although in her affidavit
Myrtetus denied any knowledge of the correspondence
between ESIS and Travelers, her reservation of
rights letter on behalf of CIGNA on June 3, 1998 acknowledged Travelers' "oral
request of May 14, 1998," and contained no indication that CIGNA required
written notice of the claim in order to evaluate it. Both letters tend to show
that CIGNA received notice of the claim being tendered by AJ Contracting and,
rather than rejecting the tender outright because it was not in writing, had
decided to proceed with an evaluation of its merits. While the affidavit of
CIGNA representative Anne Donohue states that CIGNA demanded compliance with the
policy's notice requirements, the letter to which she refers made no specific
reference to the requirement that notice be in writing. Accordingly, we conclude
that summary judgment should not have been granted on the ground that CIGNA
received no written notice; rather, first there must be a factual determination
as to whether CIGNA's conduct communicated that it
would not rely upon the policy's requirement of written
notice, and if so, whether CIGNA received such notice as was necessary.
CIGNA also claims that it was entitled to summary judgment because the
settlement payment made by AJ was voluntary. However, assuming the notice issue
is resolved against CIGNA, CIGNA's disclaimer of
coverage excused AJ from complying with the term of the policy obligating it to
obtain the insurer's consent before settlement of any matter (see
American Ref-Fuel Co. of Hempstead v Resource Recycling, Inc., 281 AD2d 573,
574).
We agree with CIGNA that its duty to defend is entirely eliminated by policy
Endorsement 70, which states that, in view of Forest's entry into a third-party
agreement with ESIS for purposes of investigation
and adjustment of claims, CIGNA "shall not have any duty to defend any such
'suit.'"
Finally, on this record, there is nothing to support the conclusion that AJ
intentionally spoliated evidence, or, indeed, even
that any evidence was spoliated. At best, all that
is shown is that some boxes listed on a printout were missing from the
warehouse, but nothing is demonstrated as to what was even in the boxes.
Accordingly, the matter must be remanded for trial.
The Decision and Order of this Court entered herein on May 8, 2003, is hereby
recalled and vacated. See M-2881 decided simultaneously herewith.
This constitutes the decision and order of the Supreme Court, Appellate
Division, First Department.
