Coverage Pointers - Volume VI, No. 13

 

2/22/05            Boles v. Dormer Giant, Inc., d/b/a Dormers Are Us

New York State Court of Appeals
Employer is Not Protected by Grave Injury Limitation on Third Party Actions if it Does Not Provide Workers Compensation Coverage
Since 1996, Section 11 of the Workers Compensation Law has shielded employers in New York from third-party actions for contribution in lawsuits commenced by their employers except in cases where the employee has suffered a “grave injury.”   This appeal called upon the high court to decide whether section 11 shields an employer that has failed to secure workers’ compensation or its injured employee.  The Court concluded that such an employer does not enjoy the protection from third-party liability afforded by section 11.

 

2/22/05            New York University Hospital Tisch Institute v. Merchants Mutual Insurance Co,
Appellate Division, Second Department
In Rare Showing, Court Shows Kindness to Inexperienced Adjuster
Inexperienced No Fault adjustor thought that plaintiff’s lawyer was convinced to drop lawsuit for PIP benefits because adjuster told lawyer that benefits were exhausted.  Instead, kind lawyer took default judgment against insurer.  Appellate Division agreed with carrier that inexperience of claims handler established excusable neglect and claim that benefits were otherwise exhausted demonstrated a potentially meritorious defense.  Accordingly, default was vacated and carrier permitted to respond in lawsuit.

 

2/22/05            Fliegman v. Traveler's Property Casualty Insurance Company
Appellate Division, Second Department
In “Direct Action” Against Liability Carrier, Plaintiff has Burden of Proof to Establish Coverage
Liability carrier denied coverage and plaintiff took default judgment against insured.  In accordance with the provisions of Insurance Law §3420, plaintiff, now a judgment creditor, brought a direct action against the insurer, challenging the disclaimer and seeking to enforce the judgment under the policy.  The Court held that the plaintiff had the burden of establishing coverage and had failed and accordingly, the lawsuit against the insurer was properly dismissed.

 

 

2/22/05            Barnes v. Cisneros
Appellate Division, Second Department
Again, Unexplained Gap in Treatment, and Plaintiff’s Doctor’s “Tailored Affidavit” Leads to Dismissal Based on Lack of Serious Injury
In yet another case where the Court tossed plaintiff’s case on lack of serious injury, a finding of an unexplained gap in the course of treatment coupled with tailored and conclusory medical affidavits gave the Court a reason to dismiss a lawsuit.  Here, the defendant provided enough proof to shift the burden to the plaintiff and the plaintiff failed to meet it.

 

 

 

2/22/05            Nozine v Sav-On Car Rentals

Appellate Division, Second Department

And Yet Again, a Rather Ancient Examination and Unsworn Reports Guarantee Dismissal on Serious Injury Grounds

Plaintiff's evidence submitted in opposition to the serious injury threshold motion was inadequate and the complaint was properly dismissed.  The plaintiff’s papers consisted of unsworn reports and an affirmed report based upon an examination that took place 3 1/2 years after the conclusion of the plaintiff's medical treatments.  The plaintiff’s physician failed to establish that any objective tests were performed to support the determination of certain alleged restrictions in the plaintiff's range of motion.

 

2/22/05            Pipo Bar and Restaurant, Inc v. Certain Underwriters at Lloyd's at London

Appellate Division, Second Department

In Light of Proof of Fraud by the Insured, Denial of First Party Claim Was Proper

The policy issued to the plaintiff insured was rendered void where the plaintiff "'willfully and fraudulently placed in the proofs of loss a statement of property lost which did not possess, or has placed a false and fraudulent value upon the articles which [it] did own'" Saks & Co. v Continental Ins. Co., 23 NY2d 161, 165.  The plaintiff's fraudulent misrepresentations regarding the total loss of two pool tables following a fire vitiated the policy in accordance with its terms, and the appellant insurers properly disclaimed coverage.

 

2/22/05            Royal Sun Alliance v. Travelers Insurance Co

Appellate Division, Second Department

Clear and Unambiguous Terms of Agreement Govern When Policy Available

Where the terms of an agreement are clear and unambiguous, the agreement should be enforced according to the plain meaning of its terms without the need to examine extrinsic evidence to determine the parties' intent. Greenfield v Philles Records, 98 NY2d 562. Here, Royal Sun expressly agreed to "fully defend [Travelers Insurance Company's insured] and to fully indemnify [it] without any reservation, to the limit of the applicable insurance coverage" in connection with the underlying personal injury action. Royal Sun issued a general liability policy and an umbrella policy, both of which were applicable to the underlying action. The unambiguous terms of the agreement indicated that Royal Sun intended to have its policies exhausted before resorting to the policy issued by Travelers and so Travelers made a prima facie showing of entitlement to judgment as a matter of law.

 

 

2/22/05            New York Central Mutual Fire Insurance Company v. Caddigan

Appellate Division, Second Department

Untimely Demand for Pre-Arbitration Discovery Results in Denial of Petition for Stay

New York Central moved for a stay of a UM arbitration for the opportunity to conduct pre-arbitration discovery.  The petition was denied.  New York Central had failed to submit a copy of a letter with its reply papers although it argued and asserted the facts allegedly set forth in that letter and so made a motion to renew, which was also denied.  The Court found that the denial of leave to renew was improper.  But the missing letter, now considered by the Court, failed to show that New York Central timely demanded pre-arbitration discovery and thus denial of the original petition for stay was upheld.

 

 

2/17/05            Commissioners of the State Insurance Fund v. Beyer Farms, Inc.
Appellate Division, First Department
In “Retrospective Premium” Challenge, No Cause of Action Based on Failure of Carrier to Properly Investigate Claims

There is no indication that defendants ever objected to the premiums allegedly due until after plaintiff initiated this action.  Moreover, New York has never recognized a cause of action or defense based on breach of an insurer's implied covenant of good faith and fair dealing where, as here, defendants maintain that the insurer's failure to reasonably investigate claims against the insured results in an increased retrospective premium. This is particularly the case here since "the manner in which plaintiff performed this function was a matter of business judgment within the discretion of its management."

 

Across Borders

 

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

 

 

2/18/05            Lincoln General Ins. v. Reyna
Fifth Circuit Court of Appeals

No Duty to Defend When Complaint Alleges That Bus Accident Occurred Outside the Coverage Territory
 

The Policy only provided coverage for accidents occurring within the coverage territory, which did not include Mexico. Because the insured’s alleged negligence would not exist but for the bus crash in Mexico, there can be no coverage, regardless of the claimants argument that some of the negligent acts, such as negligent hiring, actually occurred in Texas.

Submitted by: James K. Horstman [Iwan Cray Huber Horstman & VanAusdal LLC}

 

2/17/05            Redland Insurance Co. v. Zurich American Ins. Co.
Supreme Court of Illinois

Primary Carrier Not Entitled To Pay Less Than Its Stated Value Under The Policy And Forcing Payment From Excess Carrier With Lower Agreed Value
The Redland policy would not be triggered until the Zurich policy was exhausted, yet Zurich asserted that it could pay less than the agreed value stated in its policy by forcing payment from Redland, the excess insurer, with a lower agreed value. The Court noted that Zurich's desired relief looked more like a claim for equitable contribution from Redland, but such a claim could not be pursued because the carriers did not insure the same risks.

 

Submitted by: James K. Horstman (Iwan Cray Huber Horstman & VanAusdal LLC)

 

2/17/05            Ross v. United Services Automobile Association
Court of Appeal, Second District, California

Insured’s Assertion That He Was Insane Did Not Entitle Him To Coverage For Claims Of Intentional Conduct
Insured argued that insurer had duty to defend him against claims of sexual harassment because insured’s insanity made Section 533 of the Insurance Code inapplicable (because his acts were not “willful”). However, insured’s argument failed to recognize that coverage, not intent, is the threshold question in a coverage action, and the insured was unable to identify any conduct alleged in the complaint that was outside the exclusions for sexual misconduct under the policy.

Submitted by: James K. Horstman (Iwan Cray Huber Horstman & VanAusdal LLC)

 

 

2/17/05            Allstate Indem. Co. v. Oser et al.
The Court of Appeal of Florida, First District

Precedent Prohibiting the Simultaneous Adjudication of Tort Claims and Certain Bad Faith Claims Did Not Apply to the Matter at Issue
In a bad faith litigation action initiated by respondents, which involved a dispute in connection with an automobile insurance policy issued by Allstate Indemnity Company, the trial court, among other things, denied Allstate’s motion to dismiss and motion for protective order. Allstate filed a motion to dismiss or abate bad faith counts alleged against it until a final determination was made with respect to allegations involving negligent failure to procure “full coverage,” breach of contract, and vicarious liability. The court identified that two proceedings were not being simultaneously litigated in the present matter; thus, precedent did not apply which states that a tort action against an insured cannot proceed simultaneously with an action by the insured against the insurer alleging bad-faith failure to settle or properly defend for the reason that the insurer cannot be found to have acted in bad faith unless it is established that the insured had the coverage at issue. Due to the fact that the identified rule did not apply to the present matter, the appellate court held that the trial court’s denial of Allstate’s motion for protective order in connection with claim file information was proper.

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

 

2/15/05            Gomes v. Mass. Bay Ins. Co.
The Court of Appeal of Connecticut

Connecticut Statutory Underinsured Motorist Coverage Exception to the Workers’ Compensation Exclusivity Provision was Not Applicable to Plaintiff Injured While Outside of a Covered Vehicle
Plaintiff, while working in his capacity as a volunteer fire policeman, alleged that he responded to an emergency call, parked his vehicle at a nearby intersection, and began directing traffic to carry out his assigned duties. While standing in the middle of the road directing traffic, plaintiff was struck from behind by a vehicle and seriously injured. Defendant moved for summary judgment arguing that plaintiff was not entitled to underinsured motorist coverage under its policy because Connecticut General Statutes § 31-284(a), the workers’ compensation exclusivity provision, limited plaintiff’s remedies to those provided by Connecticut Workers’ Compensation Act, General Statutes § 31-275 et seq. Defendant further argued that, the underinsured motorist coverage exception to the workers’ compensation exclusivity provision provided by § 38a-336(f) was not applicable to plaintiff because he was not occupying a covered motor vehicle at the time of the accident. The lower court granted defendant’s motion for summary judgment. On appeal, plaintiff argued, in essence, that § 38a-336(f) should be construed to provide coverage to any person insured under the liability portion of the policy, and not only those occupying a covered motor vehicle at the time of an accident. The appellate court disagreed and held that the language of the statute at issue was plain and unambiguous and would be applied on its face, which limited the exception to employees that were injured while occupying a covered vehicle.

Submitted by: Bruce D. Celebrezze and Michelle M. Hancharik [Sedgwick, Detert, Moran & Arnold LLP] -

 

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Commissioners of the State Insurance Fund v. Beyer Farms, Inc., et al.

.

Amended judgment, Supreme Court, New York County (Barbara R. Kapnick, J.), entered December 23, 2003, which awarded plaintiff Commissioners the principal sum of $370,218.58, plus interest, costs and disbursements, due under certain workers' compensation and employers' liability policies issued by the State Insurance Fund, unanimously affirmed, without costs.

Plaintiff presented unrebutted business records, in the form of the insurance application, the policies and endorsements thereto, the audit reports and resulting invoices, including retrospective accountings, which were sufficient to make out a prima facie showing of entitlement to judgment as a matter of law (Commissioners of State Ins. Fund v Country Carting Corp., 265 AD2d 158 [1999]). In opposition, defendants failed to demonstrate the existence of triable issues of fact concerning the propriety and reasonableness of the State Insurance Fund's processing of claims to the Special Disability Fund under Workers' Compensation Law § 15(8) (see Commissioners of State Ins. Fund v J.D.G.S. Corp., 253 AD2d 368 [1998]). Indeed, not only is there is no indication that defendants ever objected to the premiums allegedly due until after plaintiff initiated this action, but New York has never recognized a cause of action or defense based on breach of an insurer's implied covenant of good faith and fair dealing where, as here, defendants maintain that the insurer's failure to reasonably investigate claims against the insured results in an increased retrospective premium. This is particularly the case here since "the manner in which plaintiff performed this function was a matter of business judgment within the discretion of its management" (Insurance Co. of Greater N.Y. v Glen Haven Residential Health Care Facility, 253 AD2d 378, 379 [1998]).

We have considered defendants' remaining arguments and find them unavailing

Boles v. Dormer Giant, Inc., d/b/a Dormers Are Us,

 

READ, J.:

 

 

Workers' Compensation Law ' 11 limits an employer's liability to third parties for contribution or indemnity to those cases of workplace injury where its employee has suffered a grave injury.  This appeal calls upon us to decide whether section 11 shields an employer that has failed to secure workers' compensation for its injured employee.  For the reasons that follow, we conclude that such an employer does not enjoy the protection from third-party liability afforded by section 11.

I.

On April 5, 2001, plaintiff Douglas Boles was installing vinyl siding on a two-story one-family house when the scaffold on which he was standing collapsed, causing him to fall eight feet to the ground and suffer a crush injury of his right foot with multiple fractures, ankle dislocation and related nerve damage.  The homeowners on whose house plaintiff was installing the siding had hired The Dormer Giant, Inc. d/b/a Dormers Are Us as their general contractor for this remodeling project.  Dormer Giant subcontracted the siding work to Personal Touch Home Improvements, Inc., and plaintiff was working for Personal Touch at the time of his accident.

Plaintiff, with his wife suing derivatively, commenced a personal injury action against Dormer Giant, the general contractor.  Dormer Giant, in turn, brought a third-party action against the subcontractor, Personal Touch, seeking, among other things, common-law indemnification and contribution.  When plaintiff moved for partial summary judgment on liability under Labor Law ' 240(1), Personal Touch cross-moved against Dormer Giant for summary judgment to dismiss the third-party complaint on the basis that Dormer Giant=s claim for common-law indemnification and contribution was barred by Workers= Compensation Law ' 11.  Dormer Giant opposed the motion, arguing that section 11 did not apply because plaintiff was a self-employed, independent contractor, not an employee of Personal Touch; or, alternatively, that section 11 did not bar the third-party action because Personal Touch had failed to secure workers' compensation for plaintiff.

Supreme Court granted plaintiff=s motion for partial summary judgment "to the extent that it shall be deemed resolved that [Dormer Giant=s] violation of Labor Law ['] 240(1) was the sole proximate cause of plaintiff's fall"; and granted Personal Touch=s cross motion for summary judgment dismissing the third-party complaint.  The trial court held that there was "no real question but that plaintiff was an employee of [Personal Touch] and [Dormer Giant=s] claims are barred by [section 11]."

 

On appeal, Dormer Giant argued that plaintiff was not an employee of Personal Touch or, alternatively, that the question of whether he was an employee should have been determined initially by the Workers' Compensation Board, not the courts;[1] and that, in any event, plaintiff=s use of a makeshift scaffold was the sole proximate cause of his fall.  Dormer Giant also again contended that Personal Touch should not benefit from the protection of section 11 of the Workers= Compensation Law because it did not secure workers= compensation for plaintiff. 

The Appellate Division affirmed (5 AD3d 417 [2d Dept 2004]), concluding that Dormer Giant had failed to raise a triable issue of fact as to its liability under the Labor Law; that Personal Touch was plaintiff=s employer; and that plaintiff did not sustain a "grave injury" within the meaning of Workers= Compensation Law ' 11.  Opining that the "statutory bar [under section 11], unlike the bar on personal injury actions by employees, is not affected by the failure of Personal Touch to secure the payment of workers= compensation for [plaintiff]@ (id. at 418-419), the Appellate Division affirmed Supreme Court's dismissal of Dormer Giant's third-party complaint against Personal Touch.  We granted Dormer Giant's motion for leave to appeal the dismissal, and now reverse.

II.

 

Section 10 of the Workers' Compensation Law provides that

 

A[e]very employer subject to this chapter shall . . . secure compensation to his employees and pay or provide compensation for their disability or death from injury arising out of and in the course of the employment without regard to fault as a cause of injury. . . .@   

 

Section 11, entitled AAlternative Remedy,@ is composed of several undesignated paragraphs, the first of which specifies that

 

A[t]he liability of an employer prescribed by [section 10] shall be exclusive and in place of any other liability whatsoever, to such employee . . . or any person otherwise entitled to recover damages, contribution or indemnity . . . except that if an employer fails to secure the payment of compensation for his or her injured employees and their dependents as provided in section fifty of this chapter,[[2]] an injured employee . . . may, at his or her option, elect to claim compensation under this chapter, or to maintain an action in the courts for damages on account of such injury . . .@ (emphasis added).              

 

This provision derives from section 11 in the original Workers= Compensation Law enacted in 1913 (see L 1913, ch 816; see also L 1922, ch 615).  The underscored wording has changed hardly at all and its substance has remained unchanged in the ensuing decades. 

 

The third paragraph of section 11 was enacted in 1996 as part of the Omnibus Workers= Compensation Reform Act.  This paragraph provides that A[a]n employer shall not be liable for contribution or indemnity to any third person based upon liability for injuries sustained by an employee acting within the scope of his or her employment," unless the employee suffered a Agrave injury@ as defined by the statute. 

 

            Personal Touch emphasizes that the first paragraph of section 11 expressly authorizes an injured employee to sue an employer that fails to secure workers' compensation.  Pointing out that this is the singular so-called Aexception@ in section 11, Personal Touch reasons that the Legislature did not similarly intend to condition an employer=s immunity from third-party liability on the securing of workers= compensation.  Dormer Giant takes the position that an employer may not benefit from section 11's protections against third-party liability unless it first complies with section 10 and secures workers= compensation for its employees.  We agree with Dormer Giant.

           

            Long after the Workers' Compensation Law was originally enacted, we decided Dole v Dow Chem. Co. (30 NY2d 143 [1972]), which recognized the right of a third party to seek contribution or indemnity from an employer for its employees= on-the-job injuries.  In adopting the third paragraph of section 11 in 1996, the Legislature sought to reduce employers= insurance premiums by restricting such third-party suits to those situations where the employee suffered a Agrave injury@ (see Majewski v Broadalbin-Perth Cent. School Dist., 91 NY2d 577, 584-585 [1998]).  As we observed in Castro v United Container Mach. Group (96 NY2d 398, 401-402 [2001], citing Governor's Mem approving L 1996, ch 635, 1996 NY Legis Ann at 460), the 1996 legislation was the result of a conscious deal struck between labor and management: 

 

"[T]he bill restores the basis of the bargain between business and labor -- that workers obtain necessary medical care benefits and compensation for workplace injuries regardless of fault while employers obtain a degree of economic protection from devastating lawsuits."

 

            Indeed, "[t]he central component of the reform initiative was relief in the form of immunization from tort liability to employers . . . who provide workers' compensation coverage" (Castro, 96 NY2d at 401 [emphasis added]).

 

In view of the deal struck between labor and management in 1996 and the Legislature's desire to revive the statute's original purpose, we read the term Aan employer@ in the third paragraph of section 11 to mean employers that comply with section 10 and secure workers= compensation for their employees.  This is consistent with the first paragraph of section 11, which conditions an employer=s protection from employee lawsuits B- the employer=s only potential tort exposure for an employee=s workplace injuries prior to Dole B- on the securing of workers= compensation for its employees. 

 

Under Personal Touch's reading of the statute, an employer would have had exposure to third-party liability under Dole when workers' compensation was not secured for the injured employee, and the 1996 legislation freed the non-compliant employer from such tort liability.  This proposition makes no sense.  Employers that do not secure workers= compensation for their employees are not holding up their end of the bargain between business and labor that undergirds section 11.  The Legislature can not have intended to extend the statute's heavily negotiated protections from third-party liability to scofflaws, which would be unfair to law-abiding employers and might discourage compliance with section 10.

 

Accordingly, the order of the Appellate Division should be reversed, with costs, and third-party defendant Personal Touch's motion for summary judgment dismissing the third-party complaint should be denied.

*   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *

Order reversed, with costs, and third‑party defendant's motion for summary judgment dismissing the third‑party complaint denied.

Opinion by Judge Read.  Chief Judge Kaye and Judges Smith, Ciparick, Graffeo and Smith concur.  Judge Rosenblatt took no part.

 

 

Decided February 22, 2005

 

Barnes v. Cisneros

 

In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Queens County (Weiss, J.), dated February 23, 2004, which granted the defendant's motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is affirmed, with costs.

The affirmations of the defendant's examining physicians, when considered with the plaintiff's deposition testimony, made out a prima facie showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955; Fragale v Geiger, 288 AD2d 431; Hodges v Jones, 238 AD2d 962; Gleason v Huber, 188 AD2d 581; Pagano v Kingsbury, 182 AD2d 268). The affidavits of the plaintiff's physicians submitted in opposition to the defendant's motion were insufficient to raise a triable issue of fact as, inter alia, they failed to adequately account for the gap of time between the conclusion of the plaintiff's medical treatments and their examinations (see Jimenez v Kambli, 272 AD2d 581; Smith v Askew, 264 AD2d 834), failed to adequately account for the plaintiff's having been injured in a subsequent accident (see e.g. Dimenshteyn v Caruso, 262 AD2d 348), appeared to be solely based upon the plaintiff's subjective complaints of pain (see Barrett v Howland, 202 AD2d 383; LeBrun v Joyner, 195 AD2d 502; Coughlan v Donnelly, 172 AD2d 480), [*2]and appeared to have been tailored solely to meet the statutory requirements (see Giannakis v Paschilidou, 212 AD2d 502; Powell v Hurdle, 214 AD2d 720).

Accordingly, the defendant's motion for summary judgment dismissing the complaint was properly granted.

Fliegman v. Traveler's Property Casualty Insurance Company

In an action pursuant to Insurance Law § 3420(a)(2) and (b) to recover an unpaid judgment against Agi Fliegman, a person alleged by the plaintiffs to be insured under a policy issued by the defendant, the plaintiffs appeal from an order of the Supreme Court, Kings County (Harkavy, J.), dated March 17, 2004, which denied their motion for summary judgment and granted the defendant's cross motion for summary judgment dismissing the complaint.

ORDERED that the appeal by the plaintiff Moses Fliegman is dismissed as abandoned (see 22 NYCRR 670.8[e]); and it is further,

ORDERED that the order is affirmed insofar as appealed from by the plaintiff Masuda Fliegman; and it is further,

ORDERED that one bill of costs is awarded to the defendant payable by the plaintiff Masuda Fliegman.

The plaintiff Masuda Fliegman (hereinafter the plaintiff), recovered a default judgment in the sum of $257,827.50 in a personal injury action in the Supreme Court, Kings County, against her mother-in-law, Agi Fliegman, from whom she rented a condominium unit at the Ashel Lane Condominium. In the personal injury action, the plaintiff alleged that her fall occurred at night [*2]on a stairway leading from the outside front entrance of unit 43A at the condominium, where it was dark because a light was out. It is undisputed that Agi Fliegman did not appear in the personal injury action. Subsequent to recovering that default judgment, the plaintiff's attorney asserted a demand for payment by the defendant of the judgment against Agi Fliegman based on a policy of liability insurance issued by the defendant to the Ashel Lane Condominium. In response, the defendant adhered to its earlier disclaimer of the plaintiff's claim (which was made before the commencement of the personal injury action).

The plaintiff, as a judgment creditor seeking to enforce an insurance policy, has no greater rights than the insured under the policy (see D'Arata v New York Cent. Mut. Fire Ins. Co., 152 AD2d 1004, affd 76 NY2d 659), and it is the plaintiff's burden to establish that coverage under the policy exists (see American Continental Props. v National Union Fire Ins. Co. of Pittsburgh, 200 AD2d 443).

There are no material disputed issues of fact in the record which was before the Supreme Court, upon which both the plaintiffs and the defendant sought summary judgment. The plaintiff's allegations in the personal injury action, which she obtained her default judgment against Agi Fliegman, require that the insurance policy in question be construed as a matter of law as excluding Agi Fliegman as an insured thereunder. As the plaintiff failed to establish coverage, she failed to demonstrate entitlement to judgment as a matter of law. However, the defendant established its entitlement to judgment as a matter of law. Accordingly, summary judgment was properly awarded to the defendant.

New York University Hospital Tisch Institute v. Merchants Mutual Insurance Co.,
 

In an action, inter alia, to recover unpaid no-fault benefits, the defendant appeals from an order of the Supreme Court, Nassau County (Alpert, J.), dated October 26, 2004, which denied its motion to vacate a judgment entered upon its default in appearing or answering.

ORDERED that the order is reversed, on the law and as a matter of discretion, with costs, the motion is granted, the judgment is vacated, the matter is remitted to the Supreme Court, Nassau County, for further proceedings consistent herewith, and the defendant's time to answer the complaint is extended until 20 days after service upon it of a copy of this decision and order.

The denial of the defendant's motion to vacate the judgment entered upon its default in appearing or answering was an improvident exercise of discretion. The defendant insurer's default was not attributable to the insurer's mere delay in forwarding the complaint to counsel (cf. Campbell v Ghafoor, 8 AD3d 316; O'Shea v Bittrolff, 302 AD2d 439; Miles v Blue Label Trucking, 232 AD2d 382), but was occasioned by an inexperienced claims adjuster's reasonable belief that advising opposing counsel, both telephonically and in writing, that no-fault benefits had been exhausted, would suffice to end the matter. The claims adjuster's letter included a copy of the denial of claim form issued to the plaintiff New York University Hospital Tisch Institute, a/a/o Ira Kalfus (hereinafter the plaintiff), and requested that the plaintiff's counsel "withdraw your summonses regarding this matter and advise our office upon doing so." [*2]

Under these circumstances, we find that the defendant demonstrated a reasonable excuse for the default (see Barajas v Toll Bros., Inc., 247 AD2d 242). When coupled with the meritorious defense of exhaustion of benefits, the brief delay involved, and the complete lack of prejudice to the plaintiff, vacatur of the judgment entered upon the defendant's default was warranted. This is consistent with the strong public policy favoring the determination of controversies on their merits (see Heskel's W. 38th St. Corp. v Gotham Constr. Co., AD3d [1st Dept, Jan. 4, 2005]; Ray Realty Fulton, Inc. v Lee, 7 AD3d 772).
SANTUCCI, J.P., KRAUSMAN, MASTRO and SKELOS, JJ., concur.

 

 

Nozine v Sav-On Car Rentals

Thomas D. Wilson, P.C., Brooklyn, N.Y., for appellants.
Wade Clark Mulcahy, New York, N.Y. (Murad Agi of counsel),
for respondents.

In an action to recover damages for personal injuries, the plaintiffs Adina Nozine, M/N/G of Rudolph Nozine, Adina Nozine, M/N/G of Rolph Nozine, Yvaldine Nozine, individually, and Adina Nozine, individually, appeal, as limited by their brief, from so much of an order of the Supreme Court, Kings County (Dowd, J.), dated December 16, 2003, as granted that branch of the motion of the defendants Sav-On Car Rentals and Thrifty Car Rentals which was for summary judgment dismissing the complaint insofar as asserted against them by the plaintiff Rolph Nozine on the ground that Rolph Nozine did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the appeals by the plaintiffs Adina Nozine, M/N/G of Rudolph Nozine, Yvaldine Nozine, individually, and Adina Nozine, individually, are dismissed, as those plaintiffs are not aggrieved by the portion of the order appealed from (see CPLR 5511); and it is further,

ORDERED that the order is affirmed insofar as appealed from by the plaintiff Adina Nozine, M/N/G of Rolph Nozine; and it is further,

ORDERED that one bill of costs is awarded to the respondents payable by the plaintiff Adina Nozine, M/N/G of Rolph Nozine. [*2]

The defendants Sav-On Car Rentals and Thrifty Car Rentals made a prima facie showing that Rolph Nozine (hereinafter the plaintiff) did not sustain a serious injury within the meaning of Insurance Law § 5102(d) by submitting copies of the plaintiff's deposition testimony, copies of his medical records, and the affirmed medical report of their own examining physician (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955; Gleason v Huber, 188 AD2d 581, 582). In opposition, the evidence submitted by the plaintiff was insufficient to raise a triable issue of fact. The plaintiff's evidence was comprised, inter alia, of unsworn reports (see Grasso v Angerami, 79 NY2d 813, 814; Pagano v Kingsbury, 182 AD2d 268, 270), and an affirmed report based upon an examination that took place 3 1/2 years after the conclusion of the plaintiff's medical treatments (see Jimenez v Kambli, 272 AD2d 581, 582; Smith v Askew, 264 AD2d 834; Dimenshteyn v Caruso, 262 AD2d 348, 349). In that affirmed report, the physician failed to establish that any objective tests were performed to support the determination of certain alleged restrictions in the plaintiff's range of motion (see Bailey v Ichtchenko, 11 AD3d 419, 420; Kauderer v Penta, 261 AD2d 365, 366).
Accordingly, the Supreme Court properly granted that branch of the motion of the defendants Sav-On Car Rentals and Thrifty Car Rentals which was for summary judgment dismissing the complaint insofar as asserted against them by the plaintiff.
FLORIO, J.P., KRAUSMAN, CRANE, RIVERA and FISHER, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Court

Pipo Bar and Restaurant, Inc v. Certain Underwriters at Lloyd's at London

Gennet, Kallman, Antin & Robinson, P.C., New York, N.Y.
(Michael S. Leavey of counsel), for defendant third-party plaintiff-
appellant.
Matarazzo Blumberg & Associates, LLP, New York, N.Y.
(Barbara A. Matarazzo and Michael Buck of
counsel), for plaintiff-respondent and
third-party defendants-respondents.

In an action to recover damages for breach of an insurance contract, the defendant third-party plaintiff appeals from an order of the Supreme Court, Westchester County (Lefkowitz, J.), entered January 21, 2004, which denied its motion for summary judgment dismissing the complaint and for summary judgment in its favor against the third-party defendants on the issue of liability.

ORDERED that the order is reversed, on the law, with costs, the motion is granted, and the matter is remitted to the Supreme Court, Westchester County, for an inquest on the issue of damages in connection with the third-party claim.

The Supreme Court erred in denying the appellant's motion for summary judgment. After the appellant established its prima facie entitlement to judgment as a matter of law, the plaintiff and third-party defendants failed to raise a triable issue of fact in opposition (see Zuckerman v City of New York, 49 NY2d 557, 562). The policy issued to the plaintiff insured is rendered void where [*2]the plaintiff has "'willfully and fraudulently placed in the proofs of loss a statement of property lost which [it] did not possess, or has placed a false and fraudulent value upon the articles which [it] did own'" (Saks & Co. v Continental Ins. Co., 23 NY2d 161, 165, quoting Domagalski v Springfield Fire & Mar. Ins. Co., 218 App Div 187, 190; cf. St. Irene Chrisovalantou Greek Orthodox Monastery v Cigna Ins. Co., 226 AD2d 624; Kyong Nam Chang v General Acc. Ins. Co. of Am., 193 AD2d 521). The plaintiff's fraudulent misrepresentations regarding the total loss of two pool tables following a fire vitiated the policy in accordance with its terms, and the appellant insurers properly disclaimed coverage.
LUCIANO, J.P., CRANE, FISHER and LIFSON, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Court

Royal Sun Alliance Insurance Company  v. Travelers Insurance Company


Ahmuty, Demers & McManus, Albertson, N.Y. (Brendan T.
Fitzpatrick of counsel), for appellant.
Putney, Twombly, Hall & Hirson, LLP, New York, N.Y.
(Thomas A. Martin and Steven R.
Shapiro of counsel), for respondent
Travelers Insurance Company.
Barry, McTiernan & Moore, New York, N.Y. (Laurel A.
Wedinger of counsel), for
respondent Structure Tone, Inc.

In an action for a judgment declaring that the defendant Travelers Insurance Company is obligated to indemnify the defendant Structure Tone, Inc., in an action entitled Nieves v Structure Tone, commenced in the Supreme Court, Kings County, under Index No. 3108/99, after the plaintiff's $1 million primary policy is exhausted and before the plaintiff's $6 million policy is applied, the plaintiff appeals from an order of the Supreme Court, Westchester County (Bellantoni, J.), entered October 9, 2003, which denied its motion for summary judgment and granted the cross motion of the defendant Travelers Insurance Company for summary judgment.

ORDERED that the order is affirmed, with one bill of costs payable to the defendants Travelers Insurance Company and Structure Tone, Inc., and the matter is remitted to the Supreme Court, Westchester County, for the entry of a judgment declaring that the defendant Travelers Insurance Company is not obligated to indemnify the defendant Structure Tone, Inc., in an action entitled Nieves v Structure Tone, commenced in the Supreme Court, Kings County, under Index No. [*2]3108/99 until after the plaintiff's $1 million primary policy is exhausted and after the plaintiff's $6 million policy is exhausted.

Where the terms of an agreement are clear and unambiguous, the agreement should be enforced according to the plain meaning of its terms without the need to examine extrinsic evidence to determine the parties' intent (see Greenfield v Philles Records, 98 NY2d 562, 569). Here, the plaintiff expressly agreed to "fully defend [Travelers Insurance Company's insured] and to fully indemnify [it] without any reservation, to the limit of the applicable insurance coverage" in connection with the underlying personal injury action. The plaintiff had issued a general liability policy and an umbrella policy, both of which were applicable to the underlying action. The unambiguous terms of the agreement indicate that the plaintiff intended to have its policies exhausted before resorting to the policy issued by the defendant Travelers Insurance Company to the defendant Structure Tone, Inc., covering the same occurrence. Thus, Travelers Insurance Company made a prima facie showing of entitlement to judgment as a matter of law. In opposition, the plaintiff failed to raise an issue of fact.

Since this is a declaratory judgment action, the matter must be remitted to the Supreme Court, Westchester County, for the entry of a judgment declaring that the defendant Travelers Insurance Company is not obligated to indemnify the defendant Structure Tone, Inc., in an action entitled Nieves v Structure Tone, commenced in the Supreme Court, Kings County, under Index No. 3108/99 until after the plaintiff's $1 million primary policy is exhausted and after the plaintiff's $6 million policy is exhausted(see Lanza v Wagner, 11 NY2d 317, appeal dismissed 371 US 74, cert denied 371 US 901).
PRUDENTI, P.J., COZIER, RITTER and SPOLZINO, JJ., concur.

ENTER:

James Edward Pelzer

 

New York Central Mutual Fire Insurance Company v. Caddigan

Jacobson & Schwartz, Rockville Centre, N.Y. (David G. Seman of
counsel), for appellant.
Paul A. Burg, New York, N.Y., for respondent.

In a proceeding pursuant to CPLR article 75 to stay an uninsured motorist arbitration, the petitioner appeals from (1) an order of the Supreme Court, Suffolk County (Dunn, J.), dated September 15, 2003, which denied the petition and dismissed the proceeding, and (2) an order of the same court entered November 21, 2003, which denied its motion for leave to renew and/or reargue the petition.

ORDERED that the appeal from so much of the order entered November 21, 2003, as denied that branch of the defendant's motion which was for reargument is dismissed, without costs or disbursements, as no appeal lies from an order denying reargument; and it is further,

ORDERED that the order dated September 15, 2003, is affirmed, without costs or disbursements; and it is further,

ORDERED that the order entered November 21, 2003, is affirmed insofar as reviewed, without costs or disbursements.

As the Supreme Court noted, and as the petitioner, New York Central Mutual Fire [*2]Insurance Company (hereinafter NYCMFI), admitted, the petitioner failed to submit a copy of a certain letter along with its reply papers although it argued and asserted the facts allegedly set forth in that letter. Thereafter, in a motion, inter alia, for leave to renew, it admitted that failure and supplied a copy of the missing letter in support of that branch of its motion which sought renewal. On appeal, the petitioner argues that the denial of leave to renew was improper.

We agree with NYCMFI that it showed a sufficient excuse for failing originally to submit the letter it now relies on to support of that branch of its motion which was for leave to renew. However, since that letter failed to show that NYCMFI timely demanded pre-arbitration discovery, i.e., the examination under oath and independent medical examination, the Supreme Court properly denied leave to renew (see Stocklas v Auto Solutions of Glenville, 9 AD3d 622; Matter of New York Cent. Mut. Fire Ins. Co. v Gershovich, 1 AD3d 364; Matter of Allstate Ins. Co. v Urena, 208 AD2d 623).
FLORIO, J.P., ADAMS, S. MILLER and GOLDSTEIN, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Court