Coverage Pointers - Volume VII, No. 1
Meyers v. Bobower Yeshiva Bnei Zion
Appellate Division, Second Department
Lack of Evidence of the Extent and Degree of Limitation Results in Dismissal on Serious Injury
Defendant established that the respondents' injuries were not causally related to the subject motor vehicle accident through the affirmed reports of a physician who concluded that the respondents' cervical injuries were degenerative in nature and not traumatically induced. The medical evidence submitted by the respondents in opposition to the motion failed to provide objective evidence of the extent or degree of the limitations in the respondents' range of motion and their duration.
7/7/05 Turkow v. Erie Insurance Company
Appellate Division, Third Department
Question of Fact as to Whether Insured Provided Proof of Loss Statement
Defendant denied the claim contending that plaintiff failed to provide a proof of loss statement as required by the policy and also cooperate with its investigation. Plaintiff submitted proof indicating that he never received the proof of loss form or documentation from the claims adjuster and only spoke by telephone with him on August 8, 2001. Plaintiff submitted a transcript of a telephonic conversation he had with the adjuster wherein he discussed the fire and the contents that were destroyed. Further, plaintiff claimed that he timely notified defendant of the losses he sustained and provided one of defendant's claims adjusters with a partial list of the damaged and/or destroyed equipment. Plaintiff also submitted the transcript of an October 2001 telephone conversation with Michael Piontkowski, one of defendant's claim adjusters, in which plaintiff indicated that he was in the process of making a list with Hubal. Piontkowski averred that plaintiff described some of the tools that had been destroyed and he set a reserve of $5,000 as an estimate of plaintiff's losses. The court finds questions of fact as to whether a proof of loss form was submitted or mailed to plaintiff. As to the claim of failure to cooperate, the court finds that the insurer failed to meet the heavy burden of 'willful and avowed obstruction'.
7/7/05 Pepper v. Allstate Insurance Co.
Appellate Division, Third Department
Loss of Garage Did Not Fall Under “Economic Gain” Exclusion
Allstate's denial of coverage for the loss of the garage pursuant to a policy exclusion raised the pivotal issue of whether the insured’s use of his garage to effectuate repairs to the vehicle he used to haul logs unambiguously fell within the definition of "business" contained in the policy, i.e., that the repair activity was "engaged in for economic gain." The insurer did not contend that Pepper was a vehicle mechanic or in the business of vehicle repair or restoration. Instead, they essentially assert that since Pepper used the vehicle he repaired as a means of earning money by charging others to transport their goods, his repair efforts indirectly led to economic gain. The court finds that while the insurer’s construction may be arguably reasonable, it is not the only interpretation, nor is it the "only fair construction of the language" . The court finds that the "average" person in the insured’s situation could reasonably conclude that this was not an excluded use under the policy.
Appellate Division, Second Department
Defendant’s Serious Injury Motion Fails Amidst Defense Expert’s Findings
Defendant's own expert acknowledged that the subject accident might have caused an exacerbation of the plaintiff's pre-existing degenerative pathology. Moreover, defendant’s doctor indicated that more than two years after the accident the plaintiff had only 75% of the normal range of motion of the lumbosacral spine. Under the circumstances, the defendant failed to make a prima facie showing that the plaintiff did not sustain a serious injury from the subject accident.
National Benefit Life Insurance Company
Appellate Division, Fourth Department
Termination of Life Insurance Policy Valid In Light of Monthly Premiums
The life insurance policy insuring plaintiff's husband (decedent) terminated 31 days after the premium was due and remained unpaid. National established its entitlement to judgment as a matter of law by submitting proof that the termination of the insurance policy was based on the failure to pay the premium. The Court rejected plaintiff's contentions that Insurance Law § 3211 (a) (1) required written notice that a premium was due and that the termination of the policy was invalid because written notice was not provided. Insurance Law § 3211 (f) (2) expressly provides that section 3211 does not apply to policies of insurance requiring the payment of monthly premiums. It was undisputed that decedent elected to pay the premiums on a monthly basis. Having made that election, decedent thereafter was required to make monthly payments and the notice requirement of section 3211 (a) (1) was rendered inapplicable.
Appellate Division, Fourth Department
Plaintiff Not Entitled to Unredacted Fire Expert’s Report
In a case successfully argued by Hurwitz & Fine’s own Jody E. Briandi, the Fourth Department reminds us of the proper scope of expert disclosure. In this matter, the defendant’s fire expert was out at the scene prior to demolition of the subject building. The plaintiff sought a “level playing field” through both an examination before trial (EBT) of defendant’s expert as well as a full unredacted copy of the expert’s report provided to defense counsel. The Appellate Division upheld the lower court’s grant of the ebt but reversed the lower court’s decision directing the defense to hand over the unredacted report. The Appellate Division concluded that the plaintiff was entitled to “factual data and test results contained in the expert's report, but not those parts of the report containing the expert's opinions.”
Audrey’s Angle on No-Fault
The reporting of No-Fault arbitration awards is not at the same level of reported case law, meaning there is no one source to turn to for comprehensive research of arbitration awards. We encourage you to submit to us, in a PDF format, at [email protected], any recent no-fault arbitration awards that address interesting no-fault issues. We kindly request that you omit the Applicant’s name as well as counsel’s name upon submission to us.
5/23/05 In the Matter of the Arbitration between the Applicant and Royal Insurance Company
Arbitrator Cathryn Ann Cohen
Applicant Fails To Meet Functional Capacity Evaluation Eligibility Requirements
Here is the Angle: When evaluating payment of a claim for a Functional Capacity Test ensure that the provider has established:
· Applicant is preparing to return to their previous job;
· Applicant has been offered a new job (verified); and
· Applicant is working with a rehabilitation provider and has an established vocational objective.
Applicant sought payment of the functional capacity evaluation performed on the Assignor, eligible injured person. Arbitrator Cohen denied payment of same based upon the Applicant’s failure to safety the New York State Workers’ Compensation Fee Schedule eligibility requirements.
On December 5, 2003, the Assignor was involved in a motor vehicle accident and complained of neck as well as mid and low back pain. Upon examination by his treating physician, Assignor had restricted range of motion in the cervical and lumbar spine but had a normal neurological examination. The Assignor was referred for physical therapy with documented continued improvement with conservative treatment.
On January 12, 2004, Assignor complained of neck pain with right arm radiation as well as low back pain with right leg radiation. The Assignor had a normal neurological evaluation.
On February 13, 2004, Assignor complained of intermittent neck pain with right shoulder radiation as well as low back pain with radiation to the right leg. The Assignor had a normal neurological evaluation.
On March 1, 2004, Assignor was referred to Filipinas Nacianceno, PT for a functional capacity evaluation to “determine the level of safe maximal function, establish restrictions, and recommend further intervention or case closure.”
Interestingly, Assignor submitted a prescribed N-F 2 form indicating he did not lose any time from work as a result of the motor vehicle accident.
Arbitrator Cohen in denying Applicant’s claim reasoned that the New York State Workers’ Compensation Fee schedule provides for specific eligibility requirements for functional capacity evaluations, of which all claimants must at least establish that they are preparing to return to work, have been offered a new job, which is verified, and are working with a rehabilitation provider with an established vocational objective.
Here, Applicant failed to satisfy the eligibility criteria as the Assignor admitted he never lost any time from work as a result of the motor vehicle accident.
12/8/04 In the
Matter of the Arbitration between the Applicant and Allstate Insurance Company
Arbitrator Kent L. Benziger
Independent Medical Examination Notice Sent Directly To Infant Renders Denial on Failure to Appear for Exam Invalid
Here is the Angle: If the eligible injured person is an infant ensure that all communication is directed to the infant’s parent having legal custody or legal guardian. We note this rule is subject to change if legal authority can be presented to the contrary. Further, if the insurer is going to argue that the eligible injured person’s counsel was aware of the independent medical examination (“IME”) it should ensure that the IME notification carbon copies counsel.
Respondent, Allstate Insurance
Company, denied chiropractic benefits to a 7-year old boy involved in an April
21, 2000, motor vehicle accident after he failed to appear for two scheduled
IMEs. The IME scheduling letters were addressed to the infant only.
Applicant’s counsel argued, and Arbitrator Benziger agreed, that the denials were invalid because the IME scheduling letters should have been addressed to the infant’s parent or legal guardian. Arbitrator Benziger reasoned that pursuant to CPLR §§105 and 1201, an infant is a person under 18 years of age and is represented in a proceeding either by their parent or legal guardian. Therefore, any correspondence should be directed only to the infant’s parents unless the insurer is placed on notice of a legal guardian.
Further, it is respondent’s burden to document that it properly notified the eligible injury person of the IME that were not attended. Since no legal authority was submitted that the respondent did not have to notify the infant’s parent or legal guardian, notification only to the infant is not sufficient. Also, respondent’s argument that counsel was aware of the scheduled IMEs through carbon copy of the scheduling letter could not be substantiated by any of the submitted IME scheduling letters.
5/26/2005 Insurance Department Opinion on Physician Acceptance of No-Fault Fee Schedule
If a physician renders treatment to an eligible injured person that is medically necessary arising out of a motor vehicle accident in New York then under Insurance Law §5108(a) the physician can only charge a fee in accordance with the permissible fee schedule. Insurance Law §5108(c) prohibits a physician from demanding additional payment from an eligible injured person in excess of the permissible fee schedule and renders such an action reportable to the Department of Health. In addition, the existence of an assignment of benefits from the eligible injured person in favor of the physician has no bearing on application of the permissible fee schedule.
Hot Cases section of the Federation of Defense & Corporate Counsel
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
7/8/05 Webb v. Witt
New Jersey Superior Court, Appellate Division
Absent An Express Contractual Right Of Settlement Approval, An Insured Has No Right To Object To A Settlement.
Medical malpractice action was brought against a hospital and attending physicians. The hospital was the only named insured under a liability policy which covered the physicians as other insured. Under the terms of the policy, the insured was required to obtain consent only from the named insured for any settlement. As to the other insureds, the policy required only to make a reasonable attempt to consult with them. Held, a physician or health practitioner whose only status is that of other insured under such a policy has no right to object to settlement or to demand apportionment of responsibility before the settlement is reported either to the National Practitioner Data Bank or the New Jersey Division of Consumer Affairs
Submitted by: Kathryn P. Broderick (Broderick, Stirn & Regan) - Posted: 07/11/2005
7/7/05 Home Ins. Co. v. Liberty Mutual Ins. Co.
Mass. Supreme Judicial Court
Special Employer Not Insured Under Plain Language Of Workers’ Compensation Policy
An employee of Abel Leasing Company, Inc. (“Abel”) was leased to Pure Tech International, Inc. (“Pure Tech”) for employment at Pure Tech’s Massachusetts facility. The employee sustained injuries while leased to Pure Tech and filed a workers’ compensation claim against Abel and received compensation for his claims through Abel’s insurer, Liberty Mutual. The employee also filed a third-party civil action against Pure Tech, alleging negligence. Before the civil action settled, Pure Tech’s CGL insurer, Home Insurance sent a demand letter to Liberty Mutual, demanding that Liberty Mutual acknowledge its obligations to Pure Tech, assume full responsibility for the defense and indemnification of Pure Tech and control any negotiations to settle the case. Liberty Mutual never responded. Home then filed a complaint against Liberty Mutual seeking a declaration as to Liberty’s obligations. The motion judge granted summary judgment in favor of Liberty, holding that the policy imposed no duty on Liberty to defend and indemnify against a negligence claim filed by an injured employee who had not rejected the workers’ compensation system. The Massachusetts Supreme Judicial Court transferred the case on its own motion and discussed the regulations addressing the responsibilities of employee leasing companies to provide workers’ compensation insurance to their employees. The regulations provide that it is the responsibility of the employee leasing company to purchase and maintain a separate policy providing workers’ compensation insurance for each client company. Each policy written to cover leased employees shall be issued to the employee leasing company as the named insured. The client company shall be identified on the policy by attachment of an appropriate endorsement indicating that the policy provides coverage for leased employees in accordance with Massachusetts law. The court then stated that the Liberty Mutual policy named Abel as the sole insured and listed the insured as located at Abel’s corporate address. The line designated other workplaces referred to attach schedules for each client company. Liberty issued a separate policy to Abel, naming the insured as “Abel Leasing Company, Inc. L/C/F/ [labor company for] Pure Tech of Massachusetts. The address was identified as Abel’s corporate address and the line designating other workplaces referred to the location of Pure Tech’s Massachusetts operation where Abel employees reported to work. The court then stated: “’Named insured’ has a clear and explicit meaning. It is the individual or entity who is listed on the declarations page….Neither of the policies … named Pure Tech as an insured nor recited Pure Tech’s Mass. location or corporate address as that of the insured….Pure Tech was not insured by these policies.” Thus, the court concluded that Liberty had no liability to defend Pure Tech or to indemnify Home for the expenses it incurred in settling the civil action.
Submitted by: Bruce D. Celebrezze & Vanessa O'Brien (Sedgwick, Detert, Moran & Arnold LLP) - Posted: 07/12/2005
7/7/05 O’Riordan v. Federal Kemper Life Assurance Co.
California Supreme Court
Grant Of Summary Judgment In Favor Of Life Insurer Was In Error. Disputed Material Facts Existed As To Whether Decedent Concealed Her Cigarette Smoking From The Insurer
Decedent, insured under life insurance policy issued by defendant, applied for insurance at nonsmoker rate. Decedent responded in the negative to application inquiry about tobacco use within past 36 months; she had quit smoking 5 years earlier, but had smoked a couple of times in the past year. Blood and urine samples taken in connection with the application showed no nicotine. Following decedent’s death, her beneficiary sued for the insurance proceeds, alleging breach of good faith and fair dealing and other causes of action. Reversing grants of summary judgment for the insurer at the trial and intermediate appellate levels, the Supreme Court held that the application inquiry could reasonably be construed as aimed at habitual use only. Moreover, there was evidence that decedent had advised insurance agent of her limited smoking and that the agent had advised her to respond negatively to the smoking question.
Submitted by: Kathryn P. Broderick (Broderick, Stirn & Regan) - Posted: 07/08/2005
Hurwitz & Fine, P.C. is a full-service law firm
providing legal services throughout the State of New York.
Scott C. Billman
Insurance Coverage Team
Dan D. Kohane, Team Leader
Michael F. Perley
Scott C. Billman
Audrey A. Seeley
Fire, First-Party and Subrogation Team
Andrea Schillaci, Team
Jody E. Briandi
Philip M. Gulisano
No-Fault/SUM Arbitration Team
Dan D. Kohane, Team Leader
Audrey A. Seeley
Scott C. Billman, Team Leader
Dan D. Kohane
Turkow v. Erie Insurance Company
Appeal from an order of the Supreme Court (Dowd, J.), entered April 1, 2004 in Broome County, which denied defendant's motion for summary judgment dismissing the complaint.
After a July 25, 2001 fire destroyed certain tools and equipment that plaintiff used in his business, he sought damages under an insurance policy issued by defendant. In April 2002, defendant denied the claim contending that plaintiff failed to provide, inter alia, a proof of loss statement as required by the policy and also cooperate with its investigation. In August 2003, plaintiff commenced this action seeking to enforce the policy. Following joinder of issue, defendant moved for summary judgment. Finding questions of fact, Supreme Court denied that motion, prompting this appeal.
Initially, we are unpersuaded that defendant established, as a matter of law,
that plaintiff breached the contract condition requiring a signed and sworn
proof of loss statement.
"Insurance Law § 3407 provides that the failure to produce proof of loss will not invalidate the claim unless the insurer gives a written notice and a blank form. Failure of the insured to file the proof of loss is an absolute defense for the insurer in an action on the policy unless there has been a waiver of the requirement by the insurer or conduct on its part estopping its assertion of the [*2]defense" (Bailey v Nationwide Mut. Fire Ins. Co., 133 AD2d 915, 916  [citations omitted]; see Igbara Realty Corp. v New York Prop. Ins. Underwriting Assn., 63 NY2d 201, 210 ).
Here, defendant met its initial burden on its summary judgment motion (see CPLR 3212 [b]) by submitting, among other things, an affidavit from Joel Hubal, one of its claims adjusters, averring that on August 8, 2001 he personally gave plaintiff a copy of a proof of loss form, a personal property inventory form and a signed credit authorization. He further indicated that plaintiff was requested to complete and return the documentation. In addition, defendant alleges that, despite several requests for the necessary documentation to investigate his claim, plaintiff failed to respond.
On the other hand, plaintiff submitted proof indicating that he never received the proof of loss form or documentation from Hubal and only spoke by telephone with him on August 8, 2001. Plaintiff submitted a transcript, dated August 8, 2001, of a telephonic conversation he had with Hubal wherein he discussed the fire and the contents that were destroyed. Further, plaintiff claims that he timely notified defendant of the losses he sustained and, thereafter, provided one of defendant's claims adjusters with a partial list of the damaged and/or destroyed equipment. Plaintiff also submitted the transcript of an October 2001 telephone conversation with Michael Piontkowski, one of defendant's claim adjusters, in which plaintiff indicated that he was in the process of making a list with Hubal. Piontkowski averred that plaintiff described some of the tools that had been destroyed and he set a reserve of $5,000 as an estimate of plaintiff's losses.
Contrary to defendant's claim, the record contains questions of fact as to whether a proof of loss form was submitted or mailed to plaintiff (see Bailey v Nationwide Mut. Fire Ins., supra at 917). In addition, there are unresolved issues as to, inter alia, whether the information that plaintiff provided to defendant was "sufficient to enable the insurer to consider its rights and liabilities" (P.S. Auctions v Exchange Mut. Ins. Co., 105 AD2d 473, 474-475 ; see D.C.G. Trucking Corp. v Zurich Ins. Co., 81 AD2d 990, 991 , lv denied 54 NY2d 605 ). It is well settled that "provisions in an insurance contract for furnishing notice and proof of loss are to be liberally construed in favor of the insured" and "[s]ubstantial and not strict compliance with the provisions of such forms is all that is required" (P.S. Auctions v Exchange Mut. Ins. Co., supra at 475).
Finally, we find unavailing defendant's claim that the record conclusively established that plaintiff willfully violated the cooperation clause of the insurance policy. In order to sustain such a contention, defendant's burden is a heavy one (see Levy v Chubb Ins., 240 AD2d 336, 337 ). It requires a showing that the insured's attitude was one of "'willful and avowed obstruction'" (Thrasher v United States Liab. Ins. Co., 19 NY2d 159, 168-169 , quoting Coleman v New Amsterdam Cas. Co., 247 NY 271, 276 ; see State Farm Fire & Cas. Co. v Imeri, 182 AD2d 683, 683 ) involving "'a pattern of noncooperation for which no reasonable excuse [is] offered'" (Ingarra v General Acc./PG Ins. Co. of N.Y., 273 AD2d 766, 767-768 , quoting Argento v Aetna Cas. & Sur. Co., 184 AD2d 487, 488 ). Notably, plaintiff presented proof indicating that he had at least two telephone conversations with defendant's agents and permitted them to inspect the damaged premises on various occasions. Therefore, inasmuch as defendant did not meet its heavy burden as a matter of law and questions of fact exist regarding credibility issues surrounding receipt of the proof of loss form and the reasonableness of plaintiff's cooperation (see Ingarra v General Acc./PG Ins. Co. of N.Y., supra at 768), Supreme Court's denial of defendant's motion for summary judgment need not be disturbed. [*3]
Mercure, Carpinello, Lahtinen and Kane, JJ., concur.
ORDERED that the order is affirmed, with costs.
Harold Chetrick, P.C., New York, N.Y., for appellant.
Robert J. Cava, P.C., West Babylon, N.Y., for respondent.
In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Suffolk County (Underwood, J.), dated July 23, 2004, which granted the defendant's motion for summary judgment dismissing the complaint on the ground that he did not sustain a serious injury within the meaning of Insurance Law § 5102(d) and denied, as untimely, his cross motion for summary judgment on the issue of liability.
ORDERED that the order is reversed, on the law, with costs, the motion is denied, the complaint is reinstated, and the matter is remitted to the Supreme Court, Suffolk County, for determination of the cross motion on the merits.
The defendant's expert Dr. Michael Brooks acknowledged that the subject accident might have caused an exacerbation of the plaintiff's pre-existing degenerative pathology. Moreover, Dr. Brooks indicated that more than two years after the accident the plaintiff had only 75% of the normal range of motion of the lumbosacral spine. Under the circumstances, the defendant failed to make a prima facie showing that the plaintiff did not sustain a serious injury from the subject accident (see Kearse v New York City Tr. Auth., 16 AD3d 45; Meely v 4 G's Truck Renting Co., 16 AD3d 26; Trunk v Spross, 306 AD2d 463; Mangum v Trabulsi, 294 AD2d 472). Accordingly, the Supreme Court should have denied the defendant's motion for summary judgment dismissing the complaint. [*2]
Supreme Court denied, as untimely, the plaintiff's cross motion for summary
judgment on the issue of liability based on an assumption that the note of issue
had been filed. However, the record indicates that this assumption was
incorrect. Therefore, we remit the matter to the Supreme Court for determination
of the cross motion on the merits.
ADAMS, J.P., COZIER, RITTER and SKELOS, JJ., concur.
James Edward Pelzer
Clerk of the Court
Appeal from an order of the Supreme Court, Erie County (Patrick H. NeMoyer, J.), entered February 20, 2004. The order granted defendant's motion for summary judgment dismissing the complaint and denied plaintiff's cross motion for summary judgment in a breach of contract action.
GALBO & ASSOCIATES, BUFFALO (RICHARD A. GALBO OF COUNSEL), FOR PLAINTIFF-APPELLANT.
LOCKE & HERBERT, NEW YORK (STEPHEN R. HERBERT OF COUNSEL), FOR DEFENDANT-RESPONDENT.
It is hereby ORDERED that the order so appealed from be and the same hereby is unanimously affirmed without costs.
Memorandum: In this breach of contract action,
Supreme Court properly granted defendant's motion for summary judgment
dismissing the complaint and denied plaintiff's cross motion for summary
judgment. As the court properly determined, the life insurance policy insuring
plaintiff's husband (decedent) terminated 31 days after the premium due February
7, 2001 remained unpaid. Defendant thus established its entitlement to judgment
as a matter of law by establishing the termination of the insurance policy based
on the failure to pay the premium. Contrary to the contention of plaintiff, she
failed to raise a triable issue of fact whether the termination of the policy
was invalid. We reject plaintiff's contentions that, in this case, Insurance Law
§ 3211 (a) (1) required written notice that a premium was due and that the
termination of the policy was invalid because written notice was not provided.
Insurance Law § 3211 (f) (2) expressly provides that section 3211 does not apply
to policies of insurance requiring the payment of monthly premiums. It is
undisputed that decedent had elected to pay the premiums on a monthly basis.
Having made that election, decedent thereafter was required to make monthly
payments and the notice requirement of section 3211 (a) (1) was rendered
inapplicable (see § 3211 [f] ; Elston v Allstate Life Ins. Co. of
N.Y., 274 AD2d 938, 939; Brecher v Mutual Life Ins. Co. of N.Y., 120
AD2d 423, 427). Because no notice was required, the notice that was allegedly
sent by defendant during the grace period was a "gratuitous, 'friendly
reminder'" that did not retroactively convert the policy to one requiring
notice under section 3211 (a) (1) (Brecher, 120 AD2d at 426). Nor did the
notice allegedly sent during the grace period change the amount of the premium
due, in breach of the terms of the insurance policy. It merely afforded the
insured the option to pay the premium on a monthly, quarterly, semiannual or
Entered: July 1, 2005
JoAnn M. Wahl
Clerk of the Court
Appeal from an order of the Supreme Court, Erie County (Joseph R. Glownia, J.), entered December 2, 2004. The order granted plaintiffs' cross motion and directed defendants Finley's Inc., Finley Cooperwood and John Miller to disclose an unredacted report prepared by their fire investigator and permitted plaintiffs to conduct an oral examination of the fire investigator limited to his factual findings.
HURWITZ & FINE, P.C., BUFFALO (JODY E. BRIANDI OF COUNSEL), FOR DEFENDANTS-APPELLANTS.
SMITH, KELLER, MINER & O'SHEA, BUFFALO (BRIAN C. MAHONEY OF COUNSEL), FOR PLAINTIFFS-RESPONDENTS.
It is hereby ORDERED that the order so appealed from be and the same hereby is unanimously modified on the law by denying the cross motion in part and providing that defendants Finley's Inc., Finley Cooperwood and John Miller shall disclose the report of their fire investigator with his opinions redacted and as modified the order is affirmed without costs.
Memorandum: Plaintiffs Tracy McDonald and Romaine Jackson, individually and as administrators of the estate of their infant daughter, Shaquanna Jackson, plaintiff Tracy McDonald, individually and as parent and natural guardian of Lakisha Moye, and Ferman Moye commenced this action to recover damages for personal injuries and the wrongful death of Shaquanna resulting from a fire at their residence. The expert, a fire investigator hired by Finley's Inc., Finley Cooperwood and John Miller (defendants), was able to conduct an investigation prior to the demolition of the building two days after the fire, but plaintiffs' expert had no such opportunity.
Supreme Court properly granted plaintiffs' cross
motion insofar as it sought an oral examination of defendants' expert, limited
to his factual findings (see Flex-O-Vit USA v Niagara Mohawk Power Corp.,
281 AD2d 980; Tedesco v Dry-Vac Sales, 203 AD2d 873, 874). The
[*2]court erred, however, in granting the cross
motion insofar as it sought an unredacted report prepared by defendants' expert.
Plaintiffs are entitled to factual data and test results contained in the
expert's report, but not those parts of the report containing the expert's
opinions (see Perfido v Messina, 125 AD2d 654; Stevens v Metropolitan
Suburban Bus Auth., 117 AD2d 733). We therefore modify the order
Entered: July 1, 2005
JoAnn M. Wahl
Clerk of the Court
MEMORANDUM AND ORDER
Calendar Date: May 2, 2005
Before: Cardona, P.J., Mercure, Crew III, Carpinello and Mugglin, JJ.
Hiscock & Barclay L.L.P., Albany (Jessica R. Wilcox
of counsel), for Allstate Insurance Company, appellant.
Lustig & Brown L.L.P., Buffalo (David J. Sleight of
counsel), for David J. Vogel, appellant.
McMahon & Coseo P.C., Saratoga Springs (Peter L.
Coseo of counsel), for respondents.
Appeal from an order of the Supreme Court (Ferradino, J.), entered March 18, 2004, which, inter alia, denied defendants' motions for summary judgment dismissing the complaint.
Plaintiffs are the owners of certain real property located in the Town of Greenfield, Saratoga County. On September 18, 2001, a detached garage located on the property caught fire, destroying the structure and damaging and/or destroying certain property stored therein. The fire apparently occurred while plaintiff Norman Pepper, a self-employed trucker, was attempting to repair an oil leak on his freightliner truck that he used to haul logs [FN1]. At the time of the fire, plaintiffs' property was covered by a homeowner's insurance policy with defendant Allstate [*2]Insurance Company. Allstate paid a portion of the claim, namely, $14,045.55, covering certain undisputed "non-business" personal property and an additional $1,000 representing the policy limit for business-related personal property. Allstate denied the remaining portion of plaintiffs' claim for the destruction of the garage and certain contents based on the business-use exclusions contained in the insurance policy. Specifically, plaintiffs' insurance policy provided, in pertinent part:
"Section I - Your Property
. . .
Coverage B - Other Structures Protection
. . .
Property We Do Not Cover Under Coverage B:
1. Structures used in whole or in part for business purposes.
. . .
Coverage C - Personal Property Protection
. . .
Limitations On Certain Personal Property:
Limitations apply to the following groups of
. . .
3. $1,000 - Property used or intended for use in a business . . ."
The policy defined "business" as "any full or part-time activity of any kind engaged in for economic gain and the use of any part of any premises for such purposes."
Following Allstate's disclaimer, plaintiffs commenced this action against Allstate and defendant David J. Vogel, individually and doing business as Vogel Insurance Agency, Allstate's agent who procured plaintiffs' policy, seeking damages in the amount of $135,829.59 for unpaid insurance claims as to the garage and certain contents. The first cause of action was against both defendants alleging breach of contract for Allstate's failure to pay plaintiffs' claims under the policy. The second and third causes of action were against Vogel alleging breach of contract and negligence with respect to, among other things, Vogel's actions in procuring the policy. Following joinder of issue, Allstate and Vogel moved for summary judgment. Supreme Court denied the motions except to the extent of granting Vogel's motion as to plaintiffs' first cause of action against him, prompting this appeal by both defendants.
It cannot be disputed that "[c]ourts must determine the rights and obligations of parties under an insurance contract based on the policy's specific language" (State Farm Mut. Auto. Ins. Co. v Glinbizzi, 9 AD3d 756, 757 ) and "[u]nambiguous provisions must be given their plain and ordinary meaning" (id. at 757; see Sanabria v American Home Assur. Co., 68 NY2d 866, 868 ). However, when an insurance policy's meaning is not clear or is subject to different reasonable interpretations, ambiguities must be resolved in the insured's favor and against the insurer (see Little v Blue Cross of W. N.Y., 72 AD2d 200, 203 ; see also Boggs v Commercial Mut. Ins. Co., 220 AD2d 973, 974 ). Notably, the test for determining whether an insurance provision is ambiguous "focuses on the reasonable expectations of the average insured upon reading the policy" (Matter of Mostow v State Farm Ins. Cos., 88 NY2d 321, 326-327 ; see Butler v New York Cent. Mut. Fire Ins. Co., 274 AD2d 924, 925-926 ). Exclusionary language is strictly and narrowly interpreted and when an ambiguity is [*3]found, "it is the insurer's burden to prove that the construction it advances is not only reasonable, but also that it is the only fair [one]" (Boggs v Commercial Mut. Ins. Co., supra at 974).
Addressing Allstate's denial of coverage for the loss of the garage pursuant to the Coverage B exclusion, the pivotal issue is whether Pepper's use of his garage to effectuate repairs to the vehicle he used to haul logs unambiguously falls within the definition of "business" contained in the policy, i.e., that the repair activity was "engaged in for economic gain." Notably, defendants do not contend that Pepper was a vehicle mechanic or in the business of vehicle repair or restoration (see e.g. Allstate Ins. Co. v Crouch, 140 NH 329, 666 A2d 964 ). Instead, they essentially assert that since Pepper used the vehicle he repaired as a means of earning money by charging others to transport their goods, his repair efforts indirectly led to economic gain. In our opinion, while defendants' construction may be arguably reasonable, it is not the only interpretation, nor is it the "only fair construction of the language" (Boggs v Commercial Mut. Ins. Co., supra at 974). Significantly, the majority of instances where this phrase has been interpreted has involved business activities that resulted directly in the acquisition of economic gain, such as, for example, day care services (see e.g. Allstate Ins. Co. v Mathis, 302 Ill App 3d 1027, 706 NE2d 893 , lv denied 183 Ill 2d 565, 712 NE2d 816 ; cf. Allstate Ins. Co. v Noorhassan, 158 AD2d 638, 639 ), vehicle repair or restoration (see e.g. Allstate Ins. Co. v Crouch, supra) or music recording (see e.g. Roland v Nationwide Mut. Fire Ins. Co., 286 AD2d 872 ).
In our view, the "average" person in plaintiffs' situation could reasonably read the definition of business in the policy and conclude that, since no payment was received for repairing the truck, his activity in repairing it himself to save the cost of taking it to a professional mechanic was not an excluded use under the policy (see Sincoff v Liberty Mut. Fire Ins. Co., 11 NY2d 386, 390 ; Tri Town Antlers Found. v Fireman's Fund Ins. Co., 158 AD2d 908, 909-910 , affd 76 NY2d 841 ). Given that "the insurer bears the burden of establishing the applicability of an exclusion, and any ambiguity in an exclusion must be strictly construed against the insurer" (Allstate Ins. Co. v Noorhassan, supra at 639), Supreme Court properly denied summary judgment as to this issue.[FN2]
Next, we find no basis to disagree with Supreme Court's conclusion that questions of fact were raised "regarding the classification of items in . . . plaintiffs' garage as business or personal property." For example, Allstate denied coverage as to certain items that plaintiffs asserted had been originally used in the now-defunct landscaping business and were kept as personal items. The policy limits the amount of plaintiffs' recovery for "[p]roperty used or intended for use in a business," however, since the average person could interpret the phrase as only referring to items currently being used for business purposes (cf. Boggs v Commercial Mut. Ins. Co., supra at 976), summary judgment was properly denied.
Finally, we are unpersuaded by Vogel's argument that Supreme Court erred in not [*4]granting summary judgment dismissing the entire complaint against him. Upon review of the depositions and affidavits of plaintiffs and the insurance agent employed by Vogel who procured plaintiffs' policy, we find various questions of fact as to Vogel's alleged liability (see Roland v Nationwide Mut. Fire Ins. Co., supra at 872-873) precluding a grant of summary judgment.
The remaining issues addressed by defendants have been examined and found to be unavailing.
Mercure, Crew III, Carpinello and Mugglin, JJ., concur.
ORDERED that the order is affirmed, with costs.
Footnote 1: It is undisputed that plaintiffs built the garage in 1992 so that Norman Pepper could pursue his woodworking hobby as well as having a place to store and repair equipment used in his landscaping business which ceased in July 2001. Plaintiffs parked vehicles in the garage only when they needed repairs.
Footnote 2: We note additionally that Supreme Court found that the phrase "any full or part-time activity of any kind" in the subject policy's definition of "business" was ambiguous. Given the uncertainty as to whether the policy contemplated a regular schedule of full-time or part-time business activity as opposed to activities that were sporadic or infrequent, we cannot say that Supreme Court erred in so ruling.
Leahey & Johnson, P.C., New York, N.Y. (Peter James Johnson,
Peter James Johnson, Jr., James P. Tenney, and Joanne Filiberti
of counsel), for appellant.
Amabile & Erman, P.C., Staten Island, N.Y. (Anthony A.
Lenza, Jr., of counsel), for
In an action to recover damages for personal injuries, etc., the defendant appeals, as limited by its brief, from so much of an order of the Supreme Court, Kings County (Firetog, J.), dated August 11, 2004, as denied those branches of its motion which were for summary judgment dismissing the complaint insofar as asserted by the plaintiffs Rocko Meyers, Sr., and Stella Meyers, Sr., on the ground that neither of those plaintiffs sustained a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed insofar as appealed from, on the law, with costs, those branches of the motion which were for summary judgment dismissing the complaint insofar as asserted by the plaintiffs Rocko Meyers, Sr., and Stella Meyers, Sr., are granted, and the complaint is dismissed in its entirety.
defendant established, prima facie, that the respondents' injuries were not
causally related to the subject motor vehicle accident through the affirmed
reports of a physician who concluded that the respondents' cervical injuries
were degenerative in nature and not traumatically induced (see Gaddy v Eyler,
79 NY2d 955, 956-957). The medical evidence submitted by the
[*2]respondents in opposition to the motion
failed to provide objective evidence of the extent or degree of the limitations
in the respondents' range of motion and their duration (see Beckett v Conte,
176 AD2d 774). As there is no triable issue of fact, summary judgment should
have been granted to the defendant.
FLORIO, J.P., KRAUSMAN, LUCIANO and FISHER, JJ., concur.
James Edward Pelzer
Clerk of the Court