Coverage Pointers - Volume VI, No. 10

 

1/13/05            Maroney v. New York Central Mutual

New York State Court of Appeals

Court of Appeals Accepts “Business Pursuits” and “Insured Location” Case for Review

In our 9/24/04 issue of Coverage Pointers (Volume VI, Number 2) we reviewed a decision of the Apellate Division, Third Department which discussed business pursuits and insured locations under a homeowner’s policy.  New York’s high court has granted a motion by the insured’s for leave to appeal and will take this case up in the coming term.  The link above will take you to the issue of CP where the full text of the Third Department’s decision is reported:

Maroney v. New York Central Mutual
Court Considers Disclaimer Based on Business Pursuits Exclusion Which Mentions Only One of Two Businesses.  Also, What IS an Insured Location
Disclaimer letter mentioned one of two of insured’s businesses when the letter cited the “business pursuits exclusion” under a homeowner’s policy.  Eventually, it was OTHER business that became in important in coverage dispute.  Appellate Division held that reference to the business pursuits exclusion was broad enough to encompass to put insured of notice of reason for denial of coverage, even though second business wasn’t specifically mentioned.  Moreover, since accident occurred across the road from the insured premises, in a barn (coincidentally insured under another carrier’s policy) accident did not occur on insured premises so that exclusion barred coverage as well.

 

1/13/05            Fulton v. Allstate Insurance Company
Appellate Division, First Department
Punitive Damages Against Insurance Company First Party Cases Difficult to Obtain, Even in the Bronx
Punitive damages are not recoverable for an ordinary breach of contract as their purpose is not to remedy private wrongs but to vindicate public rights. Thus, a private party seeking to recover punitive damages must not only demonstrate egregious tortious conduct by which he or she was aggrieved, but also that such conduct was part of a pattern of similar conduct directed at the pubic generally,"  Defendant insurer offered a good faith basis for its conclusion that Fulton's insurance claim may have been fraudulent; in opposition, Fulton merely contended that "these practices affect a class of consumers particularly in the Bronx," and sought discovery. Plaintiff's entirely unsupported assertion falls far short of the showing needed to withstand a motion for summary judgment on the ground of a need for discovery. Moreover, plaintiff offered nothing to refute the insurer's assertion that she had failed to disclose having previously filed two automobile theft claims. Similarly, plaintiff's cause of action, seeking attorneys' fees based upon alleged violations of General Business Law § 349, should also have been dismissed. A claim under the statute applies to fraudulent consumer-oriented practices directed at the public at large. The insurer's alleged conduct is certainly not the materially deceptive or misleading conduct required to permit the General Business Law claim.

1/13/05            American Transit Insurance Company v. Hinds

Appellate Division, First Department
Different Cancellation Rules Apply for Vehicles for Hire

In general, Vehicle & Traffic Law § 313 governs what notice is required for termination of a motor vehicle insurance policy. That section mandates that an insurer notify the insured prior to canceling the policy, presumably to allow the insured to fight the cancellation or to procure alternative insurance. Vehicle & Traffic Law § 313(2)(a) obligates the insurer to notify the Commissioner of the Department of Motor Vehicles and the insured no later than 30 days after the effective date of the cancellation.  However, Vehicle & Traffic Law § 313 does not apply to this case, because the subject policy covered a vehicle for hire. Vehicle & Traffic Law § 321 exempts policies covering such vehicles from the notification provisions under Vehicle & Traffic Law § 313. The cancellation of an insurance policy for a vehicle for hire is governed by Vehicle & Traffic Law § 370. That section requires the insurer to file a certificate of cancellation with the Commissioner of Motor Vehicles. The Department of Motor Vehicles then provides notification to the owner.

 

1/13/05            Engle v. Clapper
Appellate Division, Third Department
Quebec Automobile Law and New York No Fault Law Are Not In Conflict
Quebec law did not preclude Quebec resident from bring suit in New York, if plaintiff suffered serious injury.  Even though such a lawsuit would not be permitted in the province, provincial law permits Quebec residents to take advantage of foreign state laws for excess or additional claims beyond that permitted in Quebec.

 

1/10/05            Wright v. Evanston Insurance Company

Appellate Division, Second Department

Insurer’s Policy Interpretation Would Render Coverage Illusory

Documentary evidence submitted by Evanston failed to establish by "clear and unmistakable language" capable of "no other reasonable interpretation" that an exclusion applies to negate coverage for the underlying incident.  The ambiguous and conflicting provisions of the policy presented to the Supreme Court for review must be construed against the insurer.  Moreover, the Lower Court found that in light of the additional premium paid by the insured, the interpretation advanced by Evanston would render the coverage illusory, a result which “the public policy of this state cannot abide.”  The denial of Evanston’s motion to dismiss the complaint was affirmed and coverage must be provided.

 

1/10/05            In the Matter of AIU Insurance Company v. Henry

Appellate Division, Second Department

Correspondence From Attorney and Submission of No-Fault Claim Insufficient Notice

Here, a permanent stay of an UM arbitration is upheld.  The Court holds that correspondence between the insured’s attorney and the insurance company, and the insured’s submission of an application for no-fault benefits, did not provide the insurance company with the requisite notice of her claim for uninsured motorist.  Moreover, the claimant did not offer a valid excuse for her failure to give the insurance company timely notice. Accordingly, the Supreme Court properly granted the petition to stay arbitration.

 

1/10/05            Ocasio v. Zorbas

Appellate Division, Second Department

Serious Injury and Causation Questions for the Jury

The Second Department reverses the Lower Court’s grant of plaintiff’s CPLR 4401 motion on the issues of serious injury and causation.  While several physicians testified that the plaintiff sustained a herniated disc as a result of the accident, and thus, was required to undergo fusion surgery, the radiologist who testified on behalf of the defendants maintained that there was no evidence of any disc herniation, and that the plaintiff's condition was degenerative. In view of this conflicting medical evidence, the issues of whether the plaintiff sustained a serious injury within the meaning of Insurance Law § 5102(d), and whether the injury was causally related to the accident, should have been submitted to the jury.

1/10/05            Terry v. Unum Life Insurance of America
Second Circuit Court of Appeals

Contractual Provision in Insurance Contract Limiting Time in Which to Bring Legal Challenge to Three Years Has No Applicability to a Legal Challenge to a Rescission, Which is Governed Instead by a Six Year Statute of Limitations
In January 1998, Terry, now disabled, submitted a notice of claim and proof of loss to National. Initially, National paid disability benefits to Terry but subsequently informed her that an investigation conducted by Unum Life Insurance Company, which provided claim services for National’s disability policies, had determined that Terry had misrepresented her health history in her initial policy application and further informed her that it was rescinding her policy and refunding her previously-paid premiums. Terry, however, did not accept the rescission or cash the refund check. Eventually, she commenced the instant suit against National and Unum, which in turn removed to federal court. Terry alleged wrongful rescission and breach of contract, and that Unum engaged in a fraudulent practice of denying claims that were meritorious. The district court dismissed Count Two for failure to state a claim and Count One as time-barred based on a three year limitation provision in the insurance contract. Terry only appealed the determination as to Count One, alleging that the applicable statute of limitations was New York's six year statute rather than the three year provision in the contract. The Court noted that "although the wording of such policy provisions may, with the approval of the superintendent of insurance, differ from the statutory language, the substance of the policy provision may “not [be] less favorable in any respect to the insured.'" The Court found that the provision in Terry's policy had a broader reach than the statute and was thus more unfavorable. The Court held that the six year statute of limitations applied to her claims, which were therefore timely.

Submitted by: Steve Farrar and Rebecca Zabel (Leatherwood Walker Todd & Mann, P.C.)

 

 

1/6/05              Pfoh v. Electric Insurance Company
Appellate Division, Third Department
Intrafamily Exclusion in Umbrella Policy Enforced in Auto Case
Inasmuch as Pfoh's primary automobile liability insurance provided coverage as required by law and no statute required him to carry the additional amount provided by defendant, Court would not cannot agree with plaintiff that the resident-relative exclusion in defendant's policy violates the legislative intent and public policy underlying the liability insurance coverage for motor vehicles mandated by Vehicle and Traffic Law § 311 (4) (a) and 11 NYCRR 60-1.1 (c) (2).

 

1/6/05              Bickham v. Ventura

Appellate Division, First Department

Serious Injury Threshold not Met in Light of Three Year Treatment Gap

The lack of a contemporaneous showing that plaintiff sustained a serious injury, the substantial gap in treatment and the two-year interval between the chiropractor's findings and affidavit, with no indication of further examination or treatment rendered plaintiff's submission inadequate to defeat summary judgment.

 

1/6/05              Sharpe v. Allstate Insurance Company
Appellate Division, Third Department
No Fault Wage Loss Claim Denied for Delay in Police Academy Training
The language of both the No Fault statute and the regulation contemplates a degree of certainty in the calculation of lost wages and they apply to reimburse a claimant for wages actually lost from employment engaged in at the time of the accident and those lost wages from that employment can be increased if the claimant can demonstrate a reasonable projection that his or her future earnings from said employment will increase. Here, that degree of certainty is entirely lacking. Plaintiff's entry into the State Police Academy and its deferral as a result of the knee injury could not have been reasonably contemplated by either party at the time of the accident, rendering his claim entirely speculative.

 

1/4/05              3405 Putnam Realty Corp. v. Chubb Custom Insurance Company

Appellate Division, First Department
Penalty for Unlicensed Broker’s Conduct is NOT to Refuse to Enforce its Policy Exclusions

Lower court held that failure of broker to have proper license with NYS Insurance Department is grounds to refuse to enforce exclusions and restrictions in policy.  Appellate Division disagrees, holding that penalty, if one is deserved, for failing to retain proper license would be one issued by Insurance Department.  New York case law does not recognize, as an appropriate penalty, a refusal to enforce valid and clear policy exclusions or conditions.

 

1/4/05              Thompson v. Abbasi
Appellate Division, First Department
Bitterly Divided Appellate Court Calls Upon High Court to Help Clarify Serious Injury Threshold 

In finding that the plaintiff did not sustain his burden of proof in establishing a “serious injury” after defendant filed appropriate proof that qualifying injury was not sustained, a split court seemed to take it “personal”.  In this case, majority was not persuaded that plaintiff established reason for late discovery of injury and justified discontinuance of medical treatment. , The four judge majority “respectfully and simply urge that the "serious injury" threshold be the subject of High Court interpretation or statutory reform aimed at drawing a brighter line between those cases where a plaintiff's injuries are truly and verifiably "serious" within the meaning and intent of section 5102(d), and those which are neither.”  The lone but vocal dissenter, took issue, claiming that the “majority presses a relentless assault on the serious injury threshold requirement …by increasing the legal proof requirements beyond those which have previously existed. Characterizing its discussion as merely "respectfully urging" further review by the Legislature or High Court, the majority uses the expression of this lofty concern to convey a neutral high-mindedness while imposing upon injured plaintiffs new impediments to litigation, which will have the effect of shutting the door on legal claims to which they are now entitled under existing law. “  Starting to get HOT in here [and they “went at it” again in Bent v. Jacskon, an opinion also handed down on 4 January].

 

1/4/05              Simms v. APA Truck Leasing Corporation
Appellate Division, First Department
It is Fatal for Plaintiff to Fail Submit Properly Affirmed or Sworn Doctor’s Affidavit in Response to Defendant’s Sufficient Proof to Dismiss on Basis of Serious Injury
Plaintiff needs to submit evidentiary proof – doctor’s affidavit or affirmation – to adequately respond to motion for summary judgment establishing lack of serious injury.  Here, plaintiff submitted only reports, neither sworn nor affirmed (nor otherwise sufficient) to respond to motion made by defendant.

 

 

Across Borders

 

Visit the Hot Cases section of the Federation of Defense & Corporate Counsel website, www.thefederation.org recently ranked among the top five legal research websites in an article published in the January 2004 issue of Litigation News, a publication of the Litigation Section of the American Bar Association. Dan Kohane serves as the FDCC’s Website Editor.

 

 

1/12/05            Fireman’s Fund Insurance Co. v. Travelers Indemnity Co.
Eighth Circuit Court of Appeals

Expert Reports Inadmissible In Products Liability Case When Reports Do Not Connect The Defect To The Injury
A fire destroyed a video rental store located in a strip mall in and damaged the three other businesses in the strip mall. The mall’s owner was insured by Travelers, the sole appellant in this case. The insurers of the three other tenants, as well as the video store, were also plaintiffs in the suit below. A Canon model NP 6016 copier was located in the storeroom of the video store and had been jamming frequently with heavy paper, but infrequently with regular paper. A video store employee apparently set the copier to print 80 copies on regular paper and left the room. Sometime later, another employee entered the room and lit a cigarette, although he claimed to have left the room for the back area of the store to smoke the cigarette. The city fire department investigated and determined that the fire was unintentional and was most likely set by the copier. Three other fire scene investigators, hired separately by Travelers, Home Video and two other tenants’ insurers, also identified the copier as the source of the fire. Travelers and the other plaintiffs brought suit against Canon on theories of strict product liability, negligent design, manufacturing and testing, and breach of warranty. Canon moved for summary judgment on the basis that the expert opinions of plaintiffs' experts were inadmissible, leaving the plaintiffs with no evidence of a defect, a necessary element of each of Travelers’ claims. The district court granted Canon’s motion, concluding that the expert opinions were unreliable and potentially confusing to a jury. The district court further held that, even if the expert opinions were admitted into evidence, the plaintiffs could not demonstrate that the alleged defects caused the fire. Travelers appealed the district court’s grant of summary judgment to Canon. The Court of Appeals found that the National Fire Protection Association's Guide for Fire and Explosive Investigations requires that hypotheses of fire origin must be carefully examined against empirical data obtained from fire scene analysis and appropriate testing. The Court held that the district court did not abuse its discretion in concluding that plaintiffs' experts did not apply this standard reliably to the facts of the case, and thus their reports were unreliable and properly excluded.

Submitted by: Steve Farrar and Rebecca Zabel (Leatherwood Walker Todd & Mann, P.C.)

1/10/05            Progressive Casualty Insurance Co. v. Leachman

Supreme Court of South Carolina

In Making A Meaningful Offer, It Is Sufficient For An Insurer To Offer An Insured All Of The Coverage Amounts That The Insurer Is Authorized To Sell By The Department Of Insurance
The United States District Court for the District of South Carolina certified two questions to the South Carolina Supreme Court asking whether an insurer made a meaningful offer of under insured motorist coverage. Louis Leachman purchased a $300,000 combined single limits liability automobile insurance policy from Progressive Casualty Insurance Company and selected UIM coverage by marking a line designated $100,000 / $300,000 / $50,000 on the offer form. He also signed the form at the bottom, noting that the UIM coverage was lower than his liability coverage. After Leachman signed an acknowledgement of his selection, Progressive issued Leachman the policy. Available amounts of UIM coverage were described on the first page of Progressive’s form. Furthermore, the form explained that increased coverage was available, it had a page for the insured to select the amount of coverage they desired, and it allowed the insured to acknowledge that they had selected or rejected UIM coverage. Leachman was seriously injured when he was hit by an automobile while taking a walk and sought UIM coverage for which Progressive paid $100,000. Leachman also sought additional coverage up to the amount of his liability coverage. Progressive filed a declaratory judgment motion in federal district court, and the court certified the following questions to the SC Supreme Court: (1) In attempting to make an insured a “meaningful offer” of UIM coverage, is it sufficient for an insurer to offer all of the options of UIM coverage that the insurer is authorized to sell, up to the limits of the insured’s liability policy, or must an insurer provide a blank line, or some equivalent, that allows the insured to select any increment of UIM coverage up to the insured’s liability limits? (2) Does the form used in this case constitute a meaningful offer? Answering the second question first, the Court held that since Progressive’s form allowed Leachman to choose from eleven different amounts of UIM coverage up to the amount of liability coverage, including $300,000, it gave the insured the opportunity to make an intelligent and informed decision on whether to purchase UIM coverage, and thus Progressive made a meaningful offer. As to the first question, the Court held that when an insurer offers all amounts of coverage authorized by the Department of Insurance, insurers have provided the insured with the opportunity to make an intelligent decision as to whether to accept or reject UIM coverage, and the insurer does not need to include a blank line. The Court reasoned that the governing statute does not require a blank line, and if the legislature had intended that for insurers to provide a blank line allowing the insured to choose any amount of coverage, the blank-line mandate would have been included in the statute.

Submitted by: Steve Farrar and Rebecca Zabel (Leatherwood Walker Todd & Mann, P.C.)

1/4/05              Ferrell v. West Bend Mutual Insurance Co.
Eighth Circuit Court of Appeals

In Breach Of Insurance Policy Dispute, Defendant Insurer Has Sufficient Minimum Contacts In Foreign State To Subject It To Personal Jurisdiction Under State’s Long-Arm Statute
In a breach of an insurance policy dispute, the Eighth Circuit found that the defendant insurer had sufficient minimum contacts with Arkansas to subject it to personal jurisdiction under Arkansas's long-arm statute. The insurer argued that its principal place of business was in Wisconsin; it did not conduct business in Arkansas; it did not have bank accounts or property in Arkansas or solicit business there; it was not licensed to conduct business in Arkansas; it was not a party to the contract at issue in the underlying action; and the insurance policy was sold and paid for in Wisconsin. The insurance policy’s territory-of-coverage clause provided insurance coverage within foreign States, including Arkansas, presumably to make its policies more marketable and profitable. The Eighth Circuit found that it was foreseeable that West Bend might be sued in Arkansas in connection with a dispute relating to its policy. The Court of Appeals therefore found that the insurance coverage territory-of-coverage clause established sufficient contact between the insurer and Arkansas to satisfy the Due Process Clause’s requirement of “minimum contacts” between a defendant and the forum State.

Submitted by: Bruce D. Celebrezze & Teresa Hu (Sedgwick, Detert, Moran & Arnold LLP)

12/30/04          Southern Hospitality Inc. v. Zurich American Ins. Co.
Tenth Circuit Court of Appeals

Civil Authority and Dependant Property Clauses Did Not Provide Coverage for Hotel Chain’s Downturn in Business as a Result of Restrictions on Air Travel in Connection with Post - September 11, 2001 Regulations
Southern Hospitality manages a number of hotels throughout the United States which are highly dependent on air travel. Southern Hospitality’s fee is based on the hotels’ gross room revenues, which declined following September 11, 2001 due to the cancellation of flights by the Federal Aviation Administration (FAA) and resulted in customers canceling their visits to hotels operated by Southern Hospitality. Southern Hospitality filed a claim with its property insurer, Zurich American Insurance Company, seeking coverage for its business income losses under the “civil authority” and “dependent property” provisions contained the Zurich Policies. Zurich denied the claim contending that Southern Hospitality’s losses were not covered under the Policies, and Southern Hospitality filed an action against Zurich for Breach of Contract. The district court granted Zurich’s motion for summary judgment holding that Zurich’s Policies did not apply to this matter. The Tenth Circuit upheld the lower court’s decision. The Tenth Circuit stated that the FAA order prohibited access to airplane flight; it did not prohibit access to hotel operations. As such, the civil authority provision did not apply to this matter. Further, the Tenth Circuit noted that Southern Hospitality did not offer evidence to dispute Zurich’s contention that there was no proof of physical loss or damage to a dependent property, which is a necessary component of coverage under the Policies’ dependent property provision. Therefore, neither the civil authority nor dependent property provisions provided coverage in this matter.

Submitted by: Bruce D. Celebrezze and Michelle M. Hancharik (Sedgwick, Detert, Moran & Arnold LLP)

12/29/04          Bell v. Agee Construction
Court of Appeal of California, Fourth Appellate District, Division One

Where an Injured Subcontractor’s Employee Had Access to Compensation Under an Uninsured Employer’s Fund, Vicarious Liability Was Not Imposed on an Innocent General Contractor
 Douglas Bell was injured while working at a construction site. Bell’s employer was the roofing subcontractor on the project, and it was determined that roofing subcontractor personnel were responsible for Bell’s injury. At the time of the accident, the roofing subcontractor was not carrying worker’s compensation insurance. Bell sued the general contractor, among others, asserting causes of action for negligence, “special risk” and premises liability. The lower court granted summary judgment in favor of the general contractor, in part due to the fact that there was no triable issue of material fact as to Bell’s negligence and premises liability causes of action in that the general contractor did not affirmatively contribute to Bell’s injuries. The lower court also held that the roofing subcontractor’s failure to hold workers’ compensation insurance at the time of the accident did not impact the general contractor’s liability. The Fourth Appellate District determined that the lower court properly granted the general contractor’s summary judgment and stated that, although his employer failed to carry workers’ compensation insurance, Bell was not prevented from seeking compensation from the Uninsured Employer’s Fund. Since the fundamental social policy of providing compensation to an injured employee is achieved by the works’ compensation system, there was no justification for imposing vicarious liability on the general contractor in this matter.

Submitted by: Bruce D. Celebrezze and Michelle M. Hancharik (Sedgwick, Detert, Moran & Arnold LLP)

12/29/04          Florida Insurance Guaranty Association v. Super Nice Cab
Court of Appeal of Florida, Third District

The Filing of an Answer on Behalf of an Insured Did Not Create Prejudice to the Insured Which Would Estop an Insurer or the FIGA from Subsequently Denying Coverage
The court was faced with the issue of whether the Florida Insurance Guaranty Association (FIGA), as the statutory successor to an insolvent insurer, was vicariously estopped from denying the insurer’s duty to defend and indemnify its insured after the insurer had filed an answer on behalf of its insured in an underlying negligence action. The court noted that prior case law dictates that when an insurer erroneously begins to carry out the duties of defending a party claiming to be its insured, and the insured relies upon the insurer to its detriment, the insurer should not be able to deny the coverage that was earlier acknowledged. [citation omitted.] However, the insured must demonstrate that the insurer’s assumption of its defense has prejudiced the insured, and that it is the prejudice to the insured which estops the insurer from denying its obligations. [citation omitted.] In the underlying matter, the only action taken by the insurer on behalf of the insured was the filing of an answer. The court held that the filing of an answer in a pending action did not prohibit the insurer or FIGA from denying coverage.

Submitted by: Bruce D. Celebrezze and Michelle M. Hancharik (Sedgwick, Detert, Moran & Arnold LLP)

 

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3405 Putnam Realty Corp. v. Chubb Custom Insurance Company

Order, Supreme Court, Bronx County (Janice Bowman, J.), entered on or about August 20, 2003, which denied defendant Chubb's motion for summary judgment and, sua sponte, declared that Chubb was obligated to defend and indemnify plaintiff pursuant to an insurance policy issued by a nonparty broker on behalf of Chubb, unanimously reversed, on the law, without costs,  and Chubb's motion for summary judgment declaring that it is not required to defend or indemnify plaintiff under the subject policy is granted. The Clerk is directed to enter judgment accordingly. Appeal from order, same court and Justice, entered April 21, 2004, which denied defendant Chubb's motion for, inter alia, renewal, unanimously dismissed, without costs, as academic. In this declaratory judgment action commenced by plaintiff insured Putnam against defendant insurer Chubb, the latter disclaimed coverage on the basis of a policy exclusion applicable to bodily injury resulting from exposure to lead. After Chubb moved for summary judgment based on the exclusion, Putnam opposed the motion by submitting evidence showing that neither Chubb nor the broker acting on its behalf were licensed to do insurance business in New York. Supreme Court denied Chubb's motion and, sua sponte, declared that Chubb was obligated to defend and indemnify Putnam in the underlying action commenced by defendant Kelly against Putnam, which alleged bodily injury resulting from lead exposure at premises owned by Putnam. The court held the lead exclusion unenforceable due to Chubb's failure to fulfill the requirements of Insurance Law § 2105, which pertains to the licensing requirements for excess line brokers. Chubb's motion for reargument and renewal was denied in an order entered April 21, 2004.

Supreme Court erred in failing to enforce the provision in the subject policy which excludes from coverage in "clear and unmistakable language" (Cont. Cas. Co. v Rapid-American Corp., 80 NY2d 640, 652 [1993]) liability for bodily injury resulting from lead exposure. As the complaint in the underlying Kelly action alleges precisely this type of injury, the court should have given effect to this exclusionary language and declared that Chubb had no duty to defend or indemnify Putnam (Travelers Indemn. Co. of Illinois v The Related Cos., L.P., 9 AD3d 325 [2004]).

Chubb's status as an unlicensed insurer afforded no basis to deny enforcement of the policy exclusion. Although the Insurance Law generally prohibits the sale in New York of insurance underwritten by insurers not authorized to conduct business in New York (see Insurance Law § 1102[a]; § 2117[a]), an exception to this rule permits certain licensed brokers, known as excess line brokers, to procure insurance from unauthorized insurers under limited circumstances (see Insurance Law § 2105[a]; § 2117[h]). Since, under the excess line statutory scheme, it is the excess line broker, not the unauthorized insurer, that must be licensed (Insurance Law § 2105[a]), the motion court erred in penalizing Chubb, which is not an excess line broker, for failing to comply with the licensing requirements of Insurance Law § 2105(a).

Even if Chubb were properly chargeable with the excess line broker's failure to secure proper licensing, the court imposed an unauthorized penalty in refusing to enforce the lead exclusion in the policy. As this Court has previously noted, "Insurance Law
§ 1102(a) specifically sets forth the penalties to be imposed with respect to each violation" of the licensing requirements of the Insurance Law (People v Am. Motor Club, Inc., 209 AD2d 183, 184 [1994], lv dismissed 85 NY2d 858 [1995]), and those penalties consist of a fine of $1,000 for the first violation and $2,500 for each subsequent violation.

Although § 1102(a) further provides that these penalties shall be imposed "in addition to any other penalty provided by law," it can hardly be assumed that the Legislature's mention of "any other penalty provided by law" was a reference to a judicially created penalty that selectively enforces the terms of an insurance contract, and finds little support in case law (see Certain Underwriters at Lloyd's, London v Plasmanet Inc., 2002 US Dist LEXIS 14190,*9 [SD NY 2002] [private right of action to recover premiums for insurer's violation of regulation should not be sanctioned "where it is incompatible with the enforcement mechanism chosen by the legislature or discordant with some other aspect of the overall statutory scheme"]). The court's penalty was especially inequitable here where it effectively rewrote the coverage terms of the policy to afford coverage that plainly would have been unavailable had the policy been enforced according to its original terms.

The cases and authorities cited by plaintiff are either inapposite or do not reflect the current state of the law in New York. For instance, although Putnam contends that a prominent treatise supports its view that an insurance contract entered into by an unlicensed insurer is either unenforceable or may not be sued upon by the insurer (see Couch on Insurance, § 3:40 [3d ed] [and authorities cited therein]), for the most part these rules are derived from specific statutory provisions of other jurisdictions and have no bearing in New York (id.).

Moreover, the weight of authority in New York holds that an insurance company's failure to comply with the licensing scheme of this State does not invalidate the insurance contract, but rather subjects the insurer to the available statutory penalties and sanctions that may be imposed by the Superintendent of Insurance (see e.g. City of New York v Britestarr Homes, Inc., 150 Misc 2d 820, 826 [1991] ["there is nothing which invalidates a policy issued by an insurer in violation of the Insurance Law"]; Certain Underwriters at Lloyd's, London, supra [initial failure to satisfy notice requirements of New York's regulatory scheme did not invalidate policy, but may subject broker to statutory penalties]).

Accordingly, as there was no basis to deny enforcement of the lead exclusion that undeniably applies in the instant case, Chubb's motion for summary judgment declaring that it has no obligation to defend or indemnify Putnam in the underlying Kelly action should have been granted. This conclusion renders the appeal from the motion court's denial of renewal academic.

Thompson v. Abbasi

 

Plaintiff appeals from an order of the Supreme Court, Bronx County (Betty Owen Stinson, J.), entered on or about July 9, 2003, which granted the motion of defendant N&A Taxi for summary judgment dismissing the complaint on the ground that plaintiff did not sustain a serious injury.


Law Office of Daniel Chavez, Bronx (Lawrence B. Lame of
counsel), for appellant.
Thomas Torto and Jason Levine, New York (of
counsel), and Gerber & Gerber, LLP, Brooklyn, for respondent.

MARLOW, J. [*2]

In the context of this appeal, we engage in the perennial debate over the issue of whether a plaintiff's evidence of personal injury meets the statutory threshold set by Insurance Law § 5102(d), "an elusive standard that all too frequently escapes facile and final resolution" (Brown v Achy, 9 AD3d 30, 31 [2004]). Consequently, we respectfully and simply urge that the "serious injury" threshold be the subject of High Court interpretation or statutory reform aimed at drawing a brighter line between those cases where a plaintiff's injuries are truly and verifiably "serious" within the meaning and intent of section 5102(d), and those which are neither. One need only examine the scores of repetitive judicial and legal debates on this issue to conclude reasonably and quickly that the status quo is a diversion of precious court resources which is correctable in the interests of fairness, justice and efficiency.

Defendant N&A Taxi established a prima facie entitlement to summary judgment by submitting evidence demonstrating that plaintiff did not sustain a serious injury arising from a car accident involving the parties (see Insurance Law § 5102[d]; Licari v Elliott, 57 NY2d 230 [1982]). Specifically, N&A submitted affidavits of two medical doctors who, upon examining plaintiff, concluded that, although there were positive MRI findings of plaintiff's cervical spine, plaintiff had normal range of motion in his cervical spine as well as his lumbosacral spine and wrists (see Noble v Ackerman, 252 AD2d 392 [1998] [existence of herniated disc does not per se constitute serious injury]). In addition, N&A submitted plaintiff's bill of particulars (see Dan v Luke, 237 AD2d 165 [1997]), which indicates that plaintiff missed only one week of work following the accident. N&A thus met its initial burden that plaintiff did not sustain an injury which prevented him from performing substantially all his customary activities during 90 of the first 180 days following the accident.

The burden then shifted to plaintiff to raise a triable issue of fact that a serious injury was sustained within the meaning of the Insurance Law (see Gaddy v Eyler, 79 NY2d 955 [1992]). Failure to raise a triable issue of fact requires the granting of summary judgment and dismissal of the complaint (see Licari v Elliott, 57 NY2d 230, supra). Plaintiff has not met his burden. Accordingly, we affirm the motion court's dismissal of the complaint.

Initially, we note that the motion court erred in rejecting plaintiff's unsworn MRI reports submitted in opposition to the dismissal motion. N&A had presented plaintiff's MRI results through its experts' affirmations in support of its motion for summary judgment. Therefore, these results were properly before the motion court (see Brown v Achy, 9 AD3d 30, supra; Gonzalez v Vasquez, 301 AD2d 438 [2003]; see also Ayzen v Melendez, 299 AD3d 381 [2002]; Pietrocola v Battibulli, 238 AD2d 864 [1997]). Moreover, plaintiff's doctor averred that he personally reviewed the film and reports (see Dioguardi v Weiner, 288 AD2d 253 [2001]; Lesser v Smart Cab Corp., 283 AD2d 273 [2001]; cf. Sherlock v Smith, 273 AD2d 95 [2000]).

Notwithstanding that plaintiff's MRI reports were properly reviewable on summary judgment, positive MRI findings alone are insufficient to raise an issue of fact (see Noble v Ackerman, 252 AD2d 392, supra). In order to raise a triable issue of fact, plaintiff must demonstrate a limitation of range of motion sustained by objective medical findings that are "based on a recent examination of the plaintiff" (Grossman v Wright, 268 AD2d 79, 84 [2000]; cf. Verderosa v Simonelli, 260 AD2d 293 [1999] [doctor's opinion of significant limitations [*3]based upon recent personal examination of plaintiff]). Other than an initial evaluation of plaintiff on December 3, 1999, eight days after the accident, by a neurologist referred to plaintiff by his chiropractor, a follow-up visit 2½ years later, the MRIs of plaintiff's cervical spine and left wrist, and plaintiff's own allegation in his affidavit that he "attended physical therapy" for about five months, the record is devoid of any competent evidence of plaintiff's treatment, need for treatment, or why his alleged treatment ended after five months.

The neurologist, Dr. Gutstein of Neuro Care Associates, P.C., averred that he conducted an examination of plaintiff on December 3, 1999. However, plaintiff stated that Dr. Velasquez of Neuro Care Associates, P.C., conducted the initial examination and evaluation. In any event, regardless of who performed the initial examination, plaintiff's submissions are insufficient to raise a triable issue of fact. Dr. Gutstein averred that he performed a straight-leg raising test in which plaintiff demonstrated a 70% restriction of range of motion on the left side. However, plaintiff submitted no MRI results of his lumbar spine. Moreover, upon re-evaluation 2½ years later, on July 5, 2002, Dr. Gutstein performed no straight-leg raising tests or any other tests relating to plaintiff's lumbar spine, nor did the doctor conclude that plaintiff sustained any back injury as a result of the subject car accident. Therefore, plaintiff has failed to set forth any objective medical finding based upon a recent examination which raises a triable issue of fact regarding a serious injury, i.e., significant or permanent, to his back (see Grossman, 268 AD2d at 84, supra).

In light of plaintiff's otherwise lack of proof in this regard, we need not reach the question whether, in the wake of Toure v Avis Rent A Car Sys. (98 NY2d 345 [2002]), straight-leg raising tests alone can ever constitute objective evidence of serious injury (see Brown, 9 AD2d at 33 [court need not reach issue whether straight-leg raising tests alone would be sufficient under Toure, and whether our own past decisions, see e.g. Aguilar v N.Y.C. Water Works (298 AD2d 245 [2002]) and Adetunji v U-Haul Co. of Wis. (250 AD2d 483 [1998]), are consistent with Toure's reasoning]).

In addition to this deficiency in proof, at the initial examination Dr. Gutstein failed to report any range-of-motion restrictions regarding plaintiff's cervical spine. Thus, despite the positive MRI findings as to plaintiff's cervical spine two months after the accident, there are no objective findings contemporaneous with the accident showing any initial range-of- motion restrictions on plaintiff's cervical spine (see Pajda v Pedone, 303 AD2d 729 [2003]) or any detailed explanation for their omission. Consequently, there is a failure of proof relating to the subsequent range-of-motion restrictions in the cervical spine 2½ years after the accident.

The dissent's assertion that we require plaintiff to undergo immediate objective examinations in all cases in order to successfully carry the burden to prove a serious injury, misses the key fact that this plaintiff waited over 2½ years to uncover evidence of the limitations to his neck which he now claims meets the threshold. The proof gives us no way to determine that the July 2002 alleged limitation was occasioned by the November 1999 accident, as there is no proof of what plaintiff's post-accident limitations were, if any. By "post-accident" we mean limitations suffered within a reasonable time after the accident under all the relevant circumstances. Dr. Gutstein's conclusory assertion, more than 2½ years after the accident, that "it is my opinion that the motor vehicle accident of November 26, 1999 was a competent producing cause of these injuries," without any detail, rationale, or reasonable explanation, cannot serve to supply what plaintiff's objective proof clearly lacks. On this particular record it appears obvious to us that it is general and boilerplate language tailored simply to meet decisional and/or statutory requirements (see Lopez v Senatore, 65 NY2d 1017 [1985]).

The record is also devoid of any competent evidence of plaintiff's treatment, other than two visits to a neurologist 2½ years apart, which appear to be for examination only. We have held that a gap in treatment goes to the weight of the evidence, not its admissibility (see Brown, 9 AD3d at 33). Here, however, there is not just a gap in treatment, but, apparently, a total lack of competent proof of any treatment whatsoever. While plaintiff himself refers to a visit to his chiropractor the day after the accident, a visit to an orthopedic surgeon, and a five- month course of physical therapy between November 1999 and April 2000, he inexplicably has provided no competent supporting documentation of this "medical treatment," as required by Friends of Animals v Associated Fur Mfrs.(46 NY2d 1065 [1979]). By way of explanation, plaintiff himself claimed his chiropractor advised him that he attained the maximum potential in terms of therapy, which provided only temporary relief. However, plaintiff's reliance on his chiropractor's claimed assertion is rank hearsay and therefore insufficient to raise a triable issue of fact (see Zuckerman v City of New York, 49 NY2d 557 [1980]). In addition, plaintiff's self-serving explanation that he stopped going to physical therapy because it provided only temporary relief is "entitled to little weight, and [is] certainly insufficient to raise a triable issue of fact" (Zoldas v Louise Cab Corp., 108 AD2d 378, 383 [1985]; compare Toure, 98 NY2d at 355 [plaintiff established serious injury where plaintiff's doctor concluded that injuries were permanent and there was no benefit to continued treatment]; see also Brown, 9 AD3d at 34 [plaintiff's chiropractic opinion that plaintiff was treated until she reached maximal medical improvement sufficient to explain gap in treatment]).

As for the dissent's assertion that we "impl[y] that a cessation of treatment conclusively demonstrates an absence of serious injury as a matter of law," we intend no such breathtaking implication, simply because the problem is not the mere absence or ending of treatment. Rather, the problem is born of the absence of any related explanation for the lack or cessation of treatment and, beyond that, an absence of adequate medical proof in this case. We also respectfully disagree with our dissenting colleague's statement that the record contains an adequate explanation for plaintiff's discontinuation of physical therapy. Plaintiff's only proof consists of his hearsay claim that "Dr. Kazdan . . . advised me that I had attained the maximum potential in terms of therapy and suggested that I continue my exercises and restriction of activities at home and at work." First, as noted above, plaintiff's assertion is incompetent hearsay and, for that reason, must be disregarded (see Zuckerman v City of New York, 47 NY2d 557, supra). Second, its language is too general and obviously tailored to meet statutory and decisional requirements in any event (see Lopez v Senatore, 65 NY2d 1217, supra).

Moreover, in this case there is no competent proof of any treatment by a health care professional which is related to any condition allegedly caused by this accident. Even plaintiff's own affidavit gives us no details or frequency of treatment, and is unaccompanied by any description of plaintiff's alleged treatment by, or associated opinions of the physical therapist he claims he saw.

On appeal, plaintiff claims that he has a "left wrist injury." Plaintiff offers no argument, legal or factual, to persuade us how this meets the threshold for serious injury under the Insurance Law. In addition, plaintiff's neurologist's reliance on what plaintiff informed him was his orthopedist's diagnosis (i.e., "traumatic synovitis left wrist") is "clearly hearsay" (Zoldas, 108 AD2d at 383) is not supported by the MRI of plaintiff's left wrist, and lacks probative value on summary judgment (see Zuckerman v City of New York, 49 NY2d 557, supra).

Finally, plaintiff has failed to raise a triable issue of fact as to 90/180-day claim. When construing the statutory definition of a 90/180-day claim, the words "substantially all" should be construed to mean that the person has been prevented from performing his usual activities to a great extent, rather than some slight curtailment (see Gaddy v Eyler, 79 NY2d 955, supra; Licari v Elliott, 57 NY2d 230, supra; Berk v Lopez, 278 AD2d 156 [2000], lv denied 96 NY2d 708 [2001]). In light of plaintiff's admission that he only missed one week of work, his unsubstantiated claim that his injuries prevented him from performing substantially all of the material acts constituting his customary daily activities during at least 90 of the first 180 days following the accident is insufficient to raise a triable issue of fact (see Graham v Shuttle Bay, 281 AD2d 372 [2001]; Hernandez v Cerda, 271 AD2d 569 [2000]; Ocasio v Henry, 276 AD2d 611 [2000]). In addition, plaintiff's affidavit in opposition, in which he describes a curtailment of various activities based on restriction of motion and at times "excruciating" pain in his neck, is not supported by his earlier deposition testimony, annexed to his affidavit, in which he only describes back pain while jogging. Plaintiff's self-serving affidavit, prepared in opposition to defendant's summary judgment motion, was clearly tailored to avoid the consequences of his earlier testimony, and is therefore insufficient to raise an issue of fact (see Phillips v Bronx Lebanon Hosp., 268 AD2d 318, 320 [2000]). Given plaintiff's prompt return to work and the absence of any medically objective evidence (see Toure, 98 NY2d at 357), his subjective claims of pain and his unsubstantiated claim of inability to perform his customary daily activities are insufficient to raise a triable issue of fact (see Copeland v Kasalica, 6 AD3d 253 [2004]).

Accordingly, the order of the Supreme Court, Bronx County (Betty Owen Stinson, J.), entered on or about July 9, 2003, which granted the motion of defendant N&A Taxi for summary judgment dismissing the complaint on the ground that plaintiff did not sustain a serious injury pursuant to Insurance Law § 5102(d), should be affirmed, without costs.

All concur except Saxe, J. who dissents in an Opinion.

SAXE, J. (dissenting)

In its writing, the majority presses a relentless assault on the serious injury threshold requirement (Insurance Law § 5102[d]) by increasing the legal proof requirements beyond those which have previously existed. Characterizing its discussion as merely "respectfully urging" [*6]further review by the Legislature or High Court, the majority uses the expression of this lofty concern to convey a neutral high-mindedness while imposing upon injured plaintiffs new impediments to litigation, which will have the effect of shutting the door on legal claims to which they are now entitled under existing law.

I agree that the reports of defendants' experts satisfied their initial burden of showing that plaintiff did not suffer a serious injury as that term is used for purposes of Insurance Law § 5102. However, plaintiff's submissions in opposition to the summary judgment motion were sufficient to create an issue of fact.

Plaintiff was injured in a car accident on November 25, 1999. He was initially taken by ambulance to Bellevue Hospital's Emergency Room and discharged with pain medication and a cervical collar. The next day, he saw a chiropractor, Jonathan Kazdan, who referred him to a neurologist, Dr. Hal Gutstein.

Dr. Gutstein initially examined plaintiff on December 3, 1999. Plaintiff complained, inter alia, of persistent pain to his neck that traveled to the shoulders and left wrist, and of bilateral back pain. The results of Dr. Gutstein's physical and neurological examination of plaintiff included spasm in the cervical and lumbosacral spine as well as other injury to the right leg, the right arm and the left wrist. His diagnosis was that as a result of the accident, plaintiff sustained a concussion; cervical radiculopathy; lumbar thoracic strain, sprain, and possible radiculopathy; and left wrist injury.

Dr. Gutstein referred plaintiff for diagnostic testing, and advised him to continue chiropractic care and to restrict his activities. On January 28, 2000, he underwent MRIs of his left wrist and cervical spine. The MRI report of radiologist Dr. Charles N. Barax concerning plaintiff's cervical spine reports a left paracentral herniated nucleus pulposus at C3-C4, impinging upon the thecal sac, and a left paracentral herniated nucleus pulposus at C6-C7 impinging upon the cervical cord.

Dr. Gutstein reviewed the MRI films and Barax's report and concluded that they confirmed his medical opinions of plaintiff's condition. Plaintiff attended physical therapy with his chiropractor for approximately five months, until April 2000. Plaintiff explains that the physical therapy had provided only temporary relief for a few hours after each therapy session before the pain would return, sometimes with greater intensity. He still continues to do home exercises, and he takes analgesics and uses a heating pad and hot showers to ease the pain.

On July 5, 2002, Dr. Gutstein re-evaluated plaintiff. His findings at that time included spasm and tenderness in the mid-cervical spine, extending laterally to the trapezius bilaterally; a measurably reduced range of motion of the cervical spine, with flexion 60 degrees of a normal 75 degrees, extension 20 degrees of a normal 30 degrees, right rotation 30 degrees of a normal 45 degrees and left rotation 35 degrees of a normal 45 degrees. Based on his clinical examination and objective testing, Dr. Gutstein concluded that as a result of the 1999 accident, plaintiff had sustained permanent consequential damage to the cervical spine and adjacent musculo-ligamentous tissues: specifically, cervical spine derangement with radiculopathy due to herniated disc at C3-C4 with impingement upon the thecal sac, and herniated disc at C6-C7 with impingement upon the cervical cord. He asserted that plaintiff is likely to have chronic relapsing [*7]symptoms of variable intensity, and that his future treatments would include therapy, medication, a home-care program and medical follow-up for symptomatic relief.

In upholding the dismissal of the complaint, the majority rejects as insufficient plaintiff's medical evidence that he suffered a permanent serious injury, based upon reasoning that must be questioned in several respects. First, the majority asserts that plaintiff failed to provide any objective medical findings based upon a recent examination that raises a triable issue of fact, pointing to a lack of MRIs of plaintiff's lumbar spine and a lack of a repeated straight-leg raising test in the follow-up 2002 exam. However, Dr. Gutstein, having conducted initial and follow-up physical and neurological examinations, including testing range of motion, and having reviewed MRIs which established injury to the cervical spine, was able to point to sufficient support for his conclusion that "as a result of the accident of November 25, 1999," plaintiff had "sustained permanent consequential damage to the cervical spine and adjacent musculo-ligamentous tissues," specifically, "[c]ervical spine derangement with radiculopathy due to herniated disc at C3-C4 with impingement upon the thecal sac and herniated disc at C6-C7 with impingement upon the cervical cord."

The majority next remarks that because Dr. Gutstein's report following his initial examination failed to set forth range-of- motion restrictions regarding plaintiff's cervical spine, "there are no objective findings contemporaneous with the accident showing any initial range-of-motion restrictions on plaintiff's cervical spine." However, the physician initially reported spasms of the cervical spine and cervical radiculopathy, and referred plaintiff for testing, which indeed disclosed serious physical injuries to the cervical spine which were consistent with the pain plaintiff had begun to experience following the accident. The majority's remarks imply that unless the examining physician immediately performs range-of-motion testing and arranges for an MRI very shortly after the accident, there will be a fatal absence of objective proof of serious injury contemporaneous with the accident. However, imposing such a prerequisite to a claim of serious injury places an unreasonable burden on an accident victim who is in substantial pain but can still move about; rather than resting, taking medication and waiting to see whether the injury is of a type that can resolve itself, a plaintiff must now determine immediately, with expensive tests, whether the pain is caused by the type of injury that does not heal itself and may, in fact, be permanent.

The majority questions Dr. Gutstein's conclusion that the accident caused plaintiff's injuries, suggesting that it lacks "detail, rationale, or reasonable explanation." Here, too, the majority requires of a plaintiff and his physician far more than is necessary in the context of deciding this threshold issue. He examined the patient after the accident, found signs of injury, referred him for objective tests, found the test results to establish the presence of an injury consistent with his observations, and even re-confirmed the continued presence of the originally observed physical problem over two years later. One may wonder what more the majority would like the physician to do in order to conclude that an injury is permanent and was caused by the accident.

The majority further implies that a cessation of treatment conclusively demonstrates an absence of serious injury as a matter of law. This clearly makes an unreasonable demand on an accident victim. A plaintiff, having undergone examinations and testing over a period of months or years, whose treating physician has reviewed the results and concluded that the plaintiff suffers identifiable and permanently disabling injuries, should not have to continue to report in for a repetition of the same testing and examinations in order to keep confirming that the same permanent injury remains present.

            Moreover, here plaintiff explains that the physical therapy he began after the accident and stopped going to in April 2000 had only provided temporary relief for a few hours after each therapy session before the pain would return, sometimes with greater intensity. He still continues to do home exercises, and he takes analgesics and uses a heating pad and hot showers to ease the pain. Given the objective proof of the injury causing this ongoing pain, plaintiff's explanation of the failure of the prescribed treatment to ease his pain should be sufficient to prevent the dismissal of his serious injury claim attributable to an observed lack of ongoing treatment. Not every permanent injury can be resolved by treatment; back and neck injuries are frequently handled with the type of ongoing self-administered therapeutic approach that plaintiff ultimately adopted here. The absence of a medical treatment and cure does not negate the existence of the injury, or its permanence.

As to the majority's rejection of hearsay regarding plaintiff's cessation of therapy, and its reference to a lack of "competent evidence," it should be noted that hearsay evidence is permissible in opposition to a summary judgment motion as long as it is not the only proof submitted (see Guzman v L.M.P. Realty Corp., 262 AD2d 899, 100 [1999]).

The definition of "serious injury" in Insurance Law
§ 5102(d) includes, inter alia, "significant limitation of use of a body organ, member, function or system," and "permanent consequential limitation of use of a body function or system."
Proof tending to establish this is adequately contained in plaintiff's submissions. The lack of ongoing treatment, the lack of an immediate discernment of the serious nature of the injury to the cervical spine, and the failure to test for diminished range of motion until a later date should not form the basis for dismissal of the action of a plaintiff who has experienced disabling pain since the accident, which pain was finally determined to be caused by an identified permanent injury to the cervical spine. The hurdles thrown by the majority into plaintiff's path would be appropriate points to be made by defendant at trial, to seek avoidance of liability under Insurance Law § 5102. But they should not be relied upon to non-suit a plaintiff who has established, by objective evidence, that as a result of the accident he suffered a permanent injury, and that this injury has ongoing disabling effects.

 

Simms v. APA Truck Leasing Corporation

            Order, Supreme Court, Bronx County (Jerry L. Crispino, J.), entered August 5, 2003, which granted defendants' motion for summary judgment dismissing the complaint, unanimously affirmed, without costs.

In opposition to defendants' prima facie showing of no "serious injury" (Insurance Law § 5102[d]), plaintiff submitted the report of his examining physician which, while denominated an affirmation, is neither affirmed nor sworn to (CPLR 2106; Grasso v Angerami, 79 NY2d 813 [1991]; Charlton v Almaraz, 278 AD2d 145 [2000]). Thus, the court properly refused to consider the unsworn report. Plaintiff's attempt to submit a corrected affirmation for the first time on appeal to this Court is improper and we decline to consider it. In any event, the measurements of loss of range of motion described therein are not shown to be causally connected to the accident in which plaintiff allegedly sustained the loss (Chrisomalides v Ekow, 291 AD2d 202 [2002]), nor does the affirmation address defendants' radiologist's findings attributing plaintiff's spinal condition to a preexisting degenerative condition (Shinn v Catanzaro, 1 AD3d 195 [2003]), or how that condition may have impacted on his diagnosis (Shaw v Looking Glass Assoc., 8 AD3d 100 [2004]). Additional diagnostic statements in plaintiff's physician's report were conclusory and tailored to meet statutory requirements (Hernandez v Lopez, 9 AD3d 300 [2004]). Plaintiff's radiologist's report is also insufficient since the mere existence of a herniated disc does not per se constitute serious injury (Noble v Ackerman, 252 AD2d 392, 394 [1998]), and plaintiff failed to offer any objective evidence, as is [*2]required, of the extent or degree of her alleged physical limitations and their duration, resulting from the disc injury (Arjona v Calcano, 7 AD3d 279 [2004]).

SHARPE v. ALLSTATE INSURANCE COMPANY

Mugglin, J.

Appeal from an order of the Supreme Court (Demarest, J.), entered January 22, 2004 in St. Lawrence County, which, inter alia, granted defendant's cross motion for summary judgment dismissing the complaint.

On August 12, 2000, plaintiff suffered an injury to his right knee when he was struck by an automobile driven by defendant's insured. Nine days later, on his application for no-fault benefits, plaintiff correctly reported that he was not employed, had lost no time from work and was not receiving unemployment insurance benefits. Plaintiff did report, however, that he had lost time looking for work. Plaintiff's subsequent claim for lost wages was denied by defendant on December 15, 2000 and, in January 2001, plaintiff sued for the lost-wage claim.

In March 2001, plaintiff took an examination for entry into the State Police. He was notified in June 2001 that he had passed. Because plaintiff's doctor was fearful that plaintiff could not pass the State Police physical exam, plaintiff sought deferment. When that was granted, plaintiff had his knee surgically repaired and, after a period of rehabilitation, passed the physical exam in April 2003 and entered the State Police Academy.

Asserting that his injury delayed his employment in the State Police and his expected earnings as a trooper exceeded the actual salary he earned during the period, plaintiff sought [*2]summary judgment for approximately $24,000 on his lost-wage claim. Defendant cross-moved for summary judgment dismissing the claim on the basis that it was too speculative. Supreme Court granted the cross motion and plaintiff appeals.

Plaintiff argues that Insurance Law § 5102 (a) (2) as supplemented by 11 NYCRR 65-3.16 (b) (3) mandates reversal. We disagree and affirm. Insurance Law § 5102 (a) (2) provides that an individual who makes a claim under the no-fault provision be compensated for "[l]oss of earnings from work which the person would have performed had he not been injured" (Kursics v Merchants Mut. Ins. Co., 49 NY2d 451, 458 [1980]). Moreover,  11 NYCRR 65-3.16 (b) (3), in interpreting the statute, states that the "[l]oss of earnings from work shall not necessarily be limited to the applicant's level of earnings at the time of the accident, but may also include demonstrated future earnings reasonably projected." However, it is clear that the intent of the Legislature is "to compensate the accident victim for the earnings he or she would have, in fact, realized" at the time of the accident (Kursics v Merchants Mut. Ins. Co., supra at 457).

It is our view that the language of both the statute and the regulation contemplates a degree of certainty in the calculation of lost wages and they apply to reimburse a claimant for wages actually lost from employment engaged in at the time of the accident and those lost wages from that employment can be increased if the claimant can demonstrate a reasonable projection that his or her future earnings from said employment will increase (see Herman v Government Empls. Ins. Co., 115 Misc 2d 146, 149 [1982]). Here, that degree of certainty is entirely lacking. Plaintiff's entry into the State Police Academy and its deferral as a result of the knee injury could not have been reasonably contemplated by either party at the time of the accident, rendering his claim entirely speculative.

PFOH  v. ELECTRIC INSURANCE COMPANY

Rose, J.

Appeal from an order of the Supreme Court (Reilly Jr., J.), entered April 21, 2004 in Schenectady County, which, inter alia, granted defendant Electric Insurance Company's motion for summary judgment dismissing the complaint against it and made a declaration in its favor.

Plaintiff brought an action to recover for personal injuries she sustained while a passenger in a car owned by her father, defendant Armin Pfoh, and driven with permission by Celia Ganey. At the time, Pfoh had an automobile liability insurance policy providing primary coverage of $100,000/$300,000. He also had an excess liability policy issued by defendant Electric Insurance Company (hereinafter defendant) providing umbrella coverage of $3,000,000. When Pfoh notified defendant of a potential claim for plaintiff's injuries, defendant disclaimed coverage because its policy specifically excluded coverage for injuries to a resident relative of a named insured. Plaintiff then commenced this action seeking a declaration that defendant is obligated to indemnify Pfoh in her personal injury action. Defendant moved for summary judgment dismissing the complaint against it, citing the policy's exclusion. Plaintiff opposed the motion, arguing that the resident-relative exclusion is invalid as against public policy and inapplicable because an unrelated person had operated the vehicle. Supreme Court granted defendant's motion and dismissed the complaint against it.

Inasmuch as Pfoh's primary automobile liability insurance provided coverage as required by law and no statute required him to carry the additional amount provided by defendant, we cannot agree with plaintiff that the resident-relative exclusion in defendant's policy violates the legislative intent and public policy underlying the liability insurance coverage for motor vehicles mandated by Vehicle and Traffic Law § 311 (4) (a) and 11 NYCRR 60-1.1 (c) (2) (see Mills v Liberty Mut. Ins. Co., 30 NY2d 546, 547-548 [1972]; Progressive Northeastern Ins. Co. v Motors Ins. Co., 288 AD2d 363, 364 [2001], lv denied 98 NY2d 608 [2002]; Suba v State Farm Fire & Cas. Co., 114 AD2d 280, 284 [1985], lv denied 67 NY2d 610 [1986], appeal dismissed 68 NY2d 665 [1986]; Davis v De Frank, 33 AD2d 236, 239-242 [1970], affd 27 NY2d 924 [1970]). In other words, insurers are prohibited from limiting their contractual liability only as to statutorily mandated coverage (see Slayko v Security Mut. Ins. Co., 98 NY2d 289, 295 [2002]).

The holding in Allstate Ins. Co. v Aetna Cas. & Sur. Co. (191 AD2d 665 [1993], lv denied, lv dismissed 82 NY2d 744 [1993]) does not lead to a contrary conclusion because there, unlike here, the vehicle owner's umbrella liability policy did not include a permissive operator of the vehicle as an insured. Since the statutory and regulatory provisions mandating that permissive operators be insured apply to all automobile liability policies, the Second Department held that the operator was covered as an insured under that policy (id. at 666-667). Here, there is no dispute that Ganey is an insured under Pfoh's umbrella policy and no statute mandates coverage for injuries in excess of the amounts provided by Pfoh's primary liability policy. Thus, the resident-relative exclusion here does not offend public policy.

We also find no merit in the alternate contention by plaintiff and Pfoh that the resident-relative exclusion in defendant's policy is inapplicable because plaintiff was not related to the operator of the vehicle in which she was riding. By clear and unambiguous language, the insurance policy issued to Pfoh states that it does "not provide Liability Coverage for any insured . . . for personal injury to you [the named insured] or your relative" (emphasis added). There can be no dispute that Pfoh is the named insured, plaintiff is Pfoh's daughter and a resident of his household, and the exclusion extends to any insured, including an additional insured such as Ganey. Accordingly, the lack of a family relationship between Ganey and plaintiff is irrelevant to the issue of coverage.

Finally, we have considered the remaining arguments raised by plaintiff and Pfoh regarding the policy's failure to specifically exclude indemnification for the actions of Ganey and defendant's alleged failure to notify Pfoh or Ganey of its disclaimer, and find them to be either unpreserved or unsupported by the record. Thus, Supreme Court correctly concluded that the policy exclusion is valid and applicable.

Mercure, J.P., Crew III, Spain and Kane, JJ., concur.

ORDERED that the order is affirmed, with costs.

 

 

Bickham v. Ventura

 

Defendants Ventura and Isalguez appeal from an order of the Civil Court, New York County, dated June 10, 2004 (Jeffrey K. Oing, J.) which denied their motion for summary judgment dismissing the complaint.

 

PER CURIAM:

Order dated June 10, 2004 (Jeffrey K. Oing, J.) reversed, with $10 costs, defendants-appellants' motion for summary judgment is granted, and the complaint is dismissed.

Defendants-appellants met their burden to establish prima facie that the underlying vehicular collision did not cause plaintiff a "serious injury" within the meaning of [*2]Insurance Law § 5102(d) through submission, inter alia, of affirmed medical reports indicating that plaintiff sustained only back sprains which had "resolved". The lone medical evidence submitted by plaintiff in opposition was the affidavit of a chiropractor who treated plaintiff on several occasions in 2002, more than three years after the accident. The chiropractor described plaintiff's restriction of motion as "mild", and did not offer an opinion as to causation. Absent from plaintiff's submission were any medical records or sworn statement from the orthopedist who treated her in the aftermath of the February 1999 accident. The lack of a contemporaneous showing that plaintiff sustained a serious injury in 1999 (see Pommells v Perez, 4 AD3d 101 [2004]), the substantial gap in treatment (see Beaubrun v New York City Tr. Auth, 9 AD3d 258 [2004]), and the two-year interval between the chiropractor's findings and affidavit, with no indication of further examination or treatment (see Medina-Santiago v Mojovits, 5 AD3d 253 [2004]), rendered plaintiff's submission inadequate to defeat summary judgment.

This constitutes the decision and order of the court.
Decision Date: January 06, 2005

 

Ocasio v. Zorbas

Cheven, Keely & Hatzis, New York, N.Y. (Thomas Torto of
counsel), for appellant-respondent.
Harry I. Katz, P.C. (Paul F. McAloon, P.C., New York, N.Y., of
counsel), for respondent-appellant.

In an action to recover damages for personal injuries, the defendants appeal from a judgment of the Supreme Court, Queens County (Hart, J.), dated March 19, 2003, which upon granting the plaintiff's motion pursuant to CPLR 4401 for judgment as a matter of law on the issues of serious injury and causation at the close of evidence, and upon a jury verdict, is in favor of the plaintiff and against them in the principal sum of $150,000, and the plaintiff cross-appeals, on the ground of inadequacy, from so much of the same judgment as failed to award her damages for future pain and suffering.

ORDERED that the judgment is reversed, on the law, and the matter is remitted to the Supreme Court, Queens County, for a new trial on the issue of damages in accordance herewith with costs to abide the event.

On September 22, 1999, the plaintiff was driving on the Long Island Expressway when her vehicle was struck in the rear by a vehicle driven by the defendant Panagiota Zorbas. As a result of the accident, the plaintiff allegedly sustained a herniated disc, and subsequently was required to undergo surgery to remove the disc and fuse her cervical vertebrae.

After the plaintiff was awarded summary judgment on the issue of liability, the parties proceeded to trial on the issue of damages. Although several physicians testified that the plaintiff's herniated cervical disc was causally related to the automobile accident, one of the defendants' expert [*2]witnesses, a board certified radiologist, disagreed. The radiologist testified that magnetic resonance imaging films of the plaintiff's cervical spine indicated that she was suffering from disc dehydration or desiccation, caused by "daily wear and activity." The radiologist further maintained that the magnetic resonance imaging films showed no evidence of disc herniation. At the close of the evidence, the plaintiff moved pursuant to CPLR 4401 for judgment as a matter of law on the issues of whether she had sustained a serious injury within the meaning of Insurance Law § 5102(d), and whether her injury was causally related to the accident. The Supreme Court granted the motion, and the question of damages for past and future pain and suffering was submitted to the jury, which awarded the plaintiff $150,000 for past pain and suffering, and no damages for future pain and suffering.

On appeal, the defendants contend, inter alia, that the Supreme Court erred in granting the plaintiff judgment as a matter of law on the issues of serious injury and causation. We agree. A trial court may grant a motion for judgment as a matter of law where it finds that, upon the evidence presented, "there is no rational process by which the fact trier could base a finding in favor of the nonmoving party" (Szczerbiak v Pilat, 90 NY2d 553, 556). In considering the motion, "the trial court must afford the party opposing the motion every inference which may properly be drawn from the facts presented, and the facts must be considered in a light most favorable to the nonmovant" (id. at 556). Here, while several physicians testified that the plaintiff sustained a herniated disc as a result of the accident, and thus, was required to undergo fusion surgery, the radiologist who testified on behalf of the defendants maintained that there was no evidence of any disc herniation, and that the plaintiff's condition was degenerative. In view of this conflicting medical evidence, the issues of whether the plaintiff sustained a serious injury within the meaning of Insurance Law § 5102(d), and whether the injury was causally related to the accident, should have been submitted to the jury (see Parekh v Avis, 271 AD2d 666; Rosabella v Fanelli, 225 AD2d 1007, 1008).

In light of our determination that a new damages trial is warranted, we do not reach the claim raised by the plaintiff on her cross appeal that the jury's failure to award her damages for future pain and suffering was against the weight of the evidence.
RITTER, J.P., KRAUSMAN, GOLDSTEIN and LIFSON, JJ., concur.

ENTER:

James Edward Pelzer

 

 

 

 

Wright v. Evanston Insurance Company

Faust Goetz Schenker & Blee, New York, N.Y. (Erika C. Aljens
of counsel), for appellant.
McMahon, Martine & Gallagher, New York, N.Y. (Patrick W.
Brophy of counsel), for respondent.

In an action for a judgment declaring that the defendant Evanston Insurance Company is obligated to indemnify the defendant Freeport Hudson Anglers, Inc., in an underlying personal injury and wrongful death action entitled Toni Wright, as Administratrix of the Estate of Robert A. Wright v Freeport Hudson Anglers, Inc., pending in the Supreme Court, Nassau County, under Index No. 014164/02, the defendant Evanston Insurance Company appeals from an order of the Supreme Court, Nassau County (Davis, J.), dated September 12, 2003, which denied its motion pursuant to CPLR 3211(a)(1) and (7) to dismiss the complaint.

ORDERED that the order is affirmed, with costs.

The documentary evidence submitted in support of the motion of the defendant Evanston Insurance Company (hereinafter Evanston) to dismiss the complaint failed to resolve all factual issues and conclusively dispose of the plaintiff's claims as a matter of law. Accordingly, the Supreme Court correctly denied that branch of its motion which was to dismiss the complaint pursuant to CPLR 3211(a)(1) (see Arnav Indus., Inc. Retirement Trust v Brown, Raysman, Millstein, Felder & Steiner, 96 NY2d 300, 303; Leon v Martinez, 84 NY2d 83, 87-88; Klein v Gutman, ___ AD3d ___ [2d Dept, Nov. 08, 2004]).

The documentary evidence submitted by Evanston failed to establish by "clear and [*2]unmistakable language" capable of "no other reasonable interpretation" that an exclusion applies to negate coverage for the underlying incident (Continental Cas. Co. v Rapid-Am. Corp., 80 NY2d 640, 652; see Belt Painting Corp. v TIG Ins. Co., 100 NY2d 377, 383). The ambiguous and conflicting provisions of the policy presented to the Supreme Court for review must be construed against the insurer (see Guardian Life Ins. Co. of Am. v Schaefer, 70 NY2d 888, 890; Matter of KSI Rockville v Eichengrun, 305 AD2d 681, 682). Moreover, in light of the additional premium paid by the insured, the interpretation advanced by Evanston would render the coverage illusory, a result which the public policy of this state cannot abide (see Thomas J. Lipton, Inc. v Liberty Mut. Ins. Co., 34 NY2d 356, 362; Matter of Nationwide Mut. Ins. Co. v Davis, 195 AD2d 561, 562).

Evanston's remaining contentions are without merit.
H. MILLER, J.P., CRANE, SPOLZINO and SKELOS, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Court

In the Matter of AIU Insurance Company v. Henry

Annette G. Hasapidis, South Salem, N.Y., for appellant.
Samuel K. Rubin, Bethpage, N.Y. (Lawrence R. Miles of
counsel), for respondents.

In a proceeding pursuant to CPLR article 75 to permanently stay arbitration of a claim for uninsured motorist benefits, Mimose Henry appeals (1) from an order of the Supreme Court, Rockland County (Bergerman, J.), dated April 22, 2003, which granted the petition and permanently stayed the arbitration, and (2), as limited by her brief, from so much of an order of the same court dated October 7, 2003, as, upon reargument, adhered to the prior determination.

ORDERED that the appeal from the order dated April 22, 2003, is dismissed, as that order was superseded by the order dated October 7, 2003, made upon reargument; and it is further,

ORDERED that the order dated October 7, 2003, is affirmed insofar as appealed from; and it is further,

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

A claimant seeking uninsured motorist benefits is required to "give notice to his or her insurer within the time limit provided in the insurance policy or within a reasonable time under all the circumstances" as a condition precedent to the insurer's liability (Matter of Allstate Ins. Co. v Kashkin, 130 AD2d 744, 745; see Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp., 31 NY2d 436, 440; Matter of Eagle Ins. Co. v Garcia, 280 AD2d 476, 477; Matter of Nationwide Ins. Co. v Bietsch, 224 AD2d 623). Absent a valid excuse, the failure to satisfy the notice requirement [*2]of an insurance policy vitiates coverage (see Matter of Eagle Ins. Co. v Garcia, supra; Matter of Nationwide Ins. Co. v Bietsch, supra; Matter of Allstate Ins. Co. v Kashkin, supra). Contrary to the claimant's contention, the correspondence between her attorney and the petitioner insurance company, and her submission of an application for no-fault benefits, did not provide the insurance company with the requisite notice of her claim for uninsured motorist benefits (see Matter of Country-Wide Ins. Co., 277 AD2d 175; Matter of Nationwide Mut. Ins. Co. v Wexler, 276 AD2d 490; Matter of Nationwide Ins. Co. v Bietsch, supra at 624). Moreover, the claimant did not offer a valid excuse for her failure to give the insurance company timely notice. Accordingly, the Supreme Court properly granted the petition to stay arbitration.
H. MILLER, J.P., KRAUSMAN, GOLDSTEIN and SKELOS, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Court

ENGEL v. CLAPPER

Kane, J.

Appeal from an order of the Supreme Court (Spargo, J.), entered December 18, 2003 in Greene County, which, inter alia, denied defendant Calvin G.W. Sandiford's motion for summary judgment dismissing the complaint against him.

Plaintiffs Jessica Engel and Alethea Engel were passengers in a vehicle being driven by their mother, Madelon M. Engel (hereinafter decedent), in Greene County. At the time, the family was domiciled in the province of Quebec, Canada. While decedent was making a U-turn, her vehicle was struck by a vehicle owned by defendant Harold E. Strother and driven by defendant Roy J. Clapper, both New York domiciliaries. Decedent was killed and her daughters were seriously injured. Plaintiffs Robert Zuckerman and Laurie Zuckerman became the guardians of the children. This action was commenced against Clapper, Strother, and the executor of decedent's estate (hereinafter defendant), alleging that both daughters suffered serious injuries and asserting a derivative cause of action by the Zuckermans. Defendant cross-claimed [*2]against Clapper and Strother, then moved for summary judgment seeking dismissal of the complaint asserting that Quebec no-fault law bars the action and a derivative action is not permitted by the guardians. Supreme Court denied the motion, but did amend the title of the action to reflect that Jessica Engel is no longer a minor and a new guardian has been appointed for Alethea Engel. Defendant appeals.

When a potential choice of law issue is raised, the court must first determine whether the laws of the different jurisdictions are actually in conflict (see Matter of Allstate Ins. Co. [Stolarz New Jersey Mfrs. Ins. Co.], 81 NY2d 219, 223 [1993]; Bodea v TransNat Express, 286 AD2d 5, 8 [2001]). We find no conflict in the laws of New York and Quebec on the precise issue relevant here. Quebec's no-fault statute provides compensation under its no-fault system as an exclusive remedy and bars all court actions for bodily injury in Quebec (see Quebec Revised Statutes ch A-25, § 83.57). The statute provides an exception, however, such that anyone entitled to Quebec's no-fault compensation "by reason of an accident that occurred outside Quebec may benefit [from the no-fault] compensation while retaining his [or her] remedy with regard to any compensation in excess thereof under the law of the place where the accident occurred" (Quebec Revised Statutes ch A-25, § 83.59). Thus, Quebec's law permits a person injured outside the province to collect Quebec's no-fault benefits and also maintain an action in the jurisdiction where the accident occurred, so long as that jurisdiction's laws permit such an action, and subject to a right of subrogation for amounts paid by Quebec's insurance department (see Quebec Revised Statutes ch A-25, §§ 83.59, 83.60). New York, the place where this accident occurred, permits persons injured in a car accident within the state to commence a personal injury action if they meet the serious injury threshold (see Insurance Law § 5102), which is not contested here. Based on the exception in Quebec's statute releasing its residents from the tort litigation limitations for accidents which occur outside Quebec, that statute does not conflict with New York law.

We do not find the decision in Szeto c La Federation, Compagnie D'Assurances Du Cananda (1985 CarswellQue 79, 16 CCLI 62, [1986] RJQ 218, lv denied 67 NR 240n [Sup Ct Canada 1986]) to be in conflict with this decision. There, the Cour d'appel du Quebec, that province's highest court, dismissed an action filed in a Quebec court by a Quebec resident against another Quebec resident as a result of injuries from an accident which occurred in the province of Ontario. The court held that such an action was not permitted in Quebec courts, but that the statutory exception was not rendered useless because the accident victim could always resort to recourse in the courts of Ontario. The case determines that, under the statutory exception, Quebec residents may file automobile-accident tort actions against other Quebec residents in the jurisdiction where the accident occurred, as long as such actions are permitted by that jurisdiction. Hence, defendant's motion to dismiss the main action here was properly denied.

Additionally, court-appointed guardians of minors or incapacitated persons may commence derivative actions to recover costs expended for the care of such wards, just as parents may. A nonparent may be held legally responsible for failing to provide a minor the appropriate care (see Family Ct Act § 1012 [f] [i] [A] [defining neglect against "parent or other person legally responsible" for the minor's care]). Such a guardian is thus entitled to assert a cause of action to recover costs expended on providing that care if such costs are attributable to another party's negligence. Accordingly, Supreme Court properly denied defendant's motion seeking to dismiss the Zuckermans' derivative cause of action.

American Transit Insurance Company v. Hinds

Robinson & Cole LLP, New York (Katherine C. Glynn of
counsel), for appellant.
Michele A. Vitali & Associates, East Elmhurst (E. Richard
Vieira of counsel), for respondents.

Order, Supreme Court, New York County (Louis B. York, J.), entered on or about July 14, 2003, which denied plaintiff's motion for summary judgment in its action for declaratory judgment and for a default judgment against certain defendants and dismissed the complaint, unanimously reversed, on the law, without costs, the complaint reinstated and summary judgment granted to plaintiff against all of the named defendants declaring that plaintiff has no obligation under the subject policy in connection with the November 9, 2000 accident.

Plaintiff American Transit Insurance Company (American Transit) issued a policy of automobile liability insurance to defendant Lincoln Hinds for the period March 1, 2000 to March 1, 2001. Hinds owned a passenger for hire vehicle, and he failed to pay his premiums for June, July or August 2000. On August 24, 2000, an underwriter for American Transit sent Hinds a notice of cancellation, stating that the liability policy would terminate on October 12, 2000 unless payment of the overdue premiums was made within 15 days of the mailing of the notice. No premiums were received. On August 25, 2000, American Transit filed notice of termination of plaintiff's policy, effective October 12, 2000, with the New York State Department of Motor Vehicles.

On November 9, 2000, Hinds's vehicle, driven by defendant Clifton Brown, was in an accident with three other vehicles. The first of those three vehicles was driven by defendant Pasquale Viscuso and insured by defendant Progressive Northeastern Insurance Company (Northeastern). The second was driven by defendant Mark Kostakis and owned by defendant Angie Kostakis and/or defendant Old Country Dodge, Inc. The third was driven by defendant Karen Morris.

Hinds was a named defendant in two lawsuits stemming from the November 9, 2000 accident. The first was a lawsuit brought by defendant Morris alleging serious personal injuries. The second was an action by defendant Northeastern, as subrogor of defendant Pasquale Viscuso, alleging property damage. Plaintiff mistakenly filed answers on behalf of defendants Hinds and Brown in both actions. [*2]

Thereafter, on or about October 28, 2002, plaintiff brought this action for a declaratory judgment that it did not provide any insurance coverage to Hinds and Brown in connection with the November 9, 2000 accident. On April 8, 2003, plaintiff moved for summary judgment, and for a default judgment against defendants Hinds, Brown and Old Country Dodge on the grounds that they failed to appear, plead or proceed in this action.

The IAS court applied Vehicle & Traffic Law § 313 and denied plaintiff's motion for declaratory judgment on the ground that plaintiff had not effectively canceled Hinds's insurance policy. The Court stated:

It appears that Vehicle & Traffic Law § 313(2)(a) was not complied with in that the Notice of Termination was filed prior to the termination date. Therefore, in searching the record, the court finds that the policy remains in effect and this action is dismissed.

In general, Vehicle & Traffic Law § 313 governs what notice is required for termination of a motor vehicle insurance policy. That section mandates that an insurer notify the insured prior to cancelling the policy, presumably to allow the insured to fight the cancellation or to procure alternative insurance. Vehicle & Traffic Law § 313(2)(a) obligates the insurer to notify the Commissioner of the Department of Motor Vehicles and the insured no later than 30 days after the effective date of the cancellation.

However, Vehicle & Traffic Law § 313 does not apply to this case, because the subject policy covered a vehicle for hire. Vehicle & Traffic Law § 321 exempts policies covering such vehicles from the notification provisions under Vehicle & Traffic Law § 313. The cancellation of an insurance policy for a vehicle for hire is governed by Vehicle & Traffic Law § 370. That section requires the insurer to file a certificate of cancellation with the Commissioner of Motor Vehicles. The Department of Motor Vehicles then provides notification to the owner. It is uncontested that plaintiff complied with § 370 by sending the Commissioner of Motor Vehicles notice that it intended to cancel defendant Hinds's insurance policy effective October 12, 2000. As the policy was effectively canceled when the subject accident took place, plaintiff is not liable for any actions brought as a result thereof.

The holdings in Matter of Wilson v Motor Veh. Acc. Indem. Corp. (242 AD2d 636 [1997]) and Travelers Prop. Cas. Corp. v Eagle Ins. Co. (273 AD2d 65 [2000]) are not to the contrary. In both of these cases, termination notices under § 370 were deemed ineffective because of confusion caused by the insurers' subsequent actions. Here, by contrast plaintiff's actions caused no confusion, and the fact that plaintiff sent Hinds the August 24, 2000 letter notifying him that the insurer intended to cancel the policy effective October 12, 2000 does not render the termination notice filed with the Commissioner of Motor Vehicles ineffective.

Fulton v. Allstate Insurance Company

Order, Supreme Court, Bronx County (Norma Ruiz, J.), entered October 27, 2003, which, insofar as appealed from, denied without prejudice defendants' motion for summary judgment dismissing the causes of action for punitive damages and attorneys' fees, granted plaintiff's cross motion to amend the complaint, and implicitly granted the cross motion to compel discovery, unanimously reversed, on the law, without costs, defendants' motion for summary judgment granted to the extent of dismissing the second, fourth and fifth causes of action, the cross motion to amend the complaint denied, and the cross motion to compel discovery denied without prejudice to review of outstanding discovery demands at a further conference before the IAS court.

No issues of fact preclude summary judgment as to the second and fourth causes of action for punitive damages. "Punitive damages are not recoverable for an ordinary breach of contract as their purpose is not to remedy private wrongs but to vindicate public rights" (Rocanova v Equitable Life Assur. Socy. of the United States, 83 NY2d 603, 613 [1994]). "Thus, a private party seeking to recover punitive damages must not only demonstrate egregious tortious conduct by which he or she was aggrieved, but also that such conduct was part of a pattern of similar conduct directed at the pubic generally" (id. at 613).

Although a motion for summary judgment may be denied if the facts essential to establish opposition "may exist but cannot then be stated" (CPLR 3212[f]), "'[m]ere hope that somehow the plaintiffs will uncover evidence that will prove their case, provides no basis . . . for postponing a decision on a summary judgment motion'" (Jones v Surrey Coop. Apts., Inc., 263 AD2d 33, 38 [1999], quoting Kennerly v Campbell Chain Co., 133 AD2d 669, 670 [1987]).

Defendant insurer offered a good faith basis for its conclusion that Fulton's insurance claim may have been fraudulent; in opposition, Fulton merely contended that "these practices affect a class of consumers particularly in the Bronx," and sought discovery. Plaintiff's entirely unsupported assertion falls far short of the showing needed to withstand a motion for summary judgment on the ground of a need for discovery. Moreover, plaintiff offered nothing to refute the insurer's assertion that she had failed to disclose having previously filed two automobile theft claims.

Similarly, plaintiff's fifth cause of action, seeking attorneys' fees based upon alleged [*2]violations of General Business Law § 349, should also have been dismissed. A claim under the statute applies to fraudulent consumer-oriented practices directed at the public at large. The insurer's alleged conduct is certainly not the materially deceptive or misleading conduct required to permit the General Business Law claim (see Oswego Laborers' Local 214 Pension Fund v Marine Midland Bank, 85 NY2d 20, 25 [1995]).

As to the cross motion seeking leave to amend the complaint, plaintiff has not offered any evidentiary proof that the denial of the claim by Allstate was part of a pattern in which it has consistently refused to pay claims made by residents of the Bronx, or that it has failed to conduct appropriate investigations. Her wholly conclusory assertion does not meet the minimum standards required for permitting an amendment, particularly because, regardless of whether Allstate properly denied the claim, it provided sufficient rationale to demonstrate that its denial of the claim was not in bad faith. The cross motion should therefore have been denied.

The viable causes of action remaining to be litigated are the claims for breach of contract based upon the denial of plaintiff's insurance claim. In view of the substantially more limited nature of the relevant issues, the question of which discovery demands remain to be answered must be reconsidered by the IAS court. However, we note that the unequivocal grant of the cross motion to compel responses by defendants to further discovery demands was improper, since at a minimum, plaintiff should have been required to submit the requisite good faith affirmation pursuant to 22 NYCRR § 202.7, acknowledging that counsel had conferred with his or her adversary in good faith to resolve the issues. No such affirmation was submitted, nor is there any other indication that there were any such discussions between counsel at all. Accordingly, the cross motion to compel discovery is denied and the question of what discovery, if any, remains to be exchanged is remanded to the IAS court to be addressed at a further conference.