Coverage Pointers - Volume VII, No. 11

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12/1/05            Indemnity Insurance Company  v.Transcontinental Insurance Company

Appellate Division, First Department

Primary Carrier Did Not Act in Bad Faith But Fairly Evaluated Claim and Refused to Tender Policy During Settlement Negotiations – No Pattern of Activity Established

In citing to the key Court of Appeals case on bad faith, the court here found that the record “lacks any pattern or indicia of defendants' reckless or conscious disregard for plaintiff's rights” (see Pavia v State Farm Mut. Auto. Ins. Co., 82 NY2d 445, 453-454, 456 [1993]), an essential element of the cause of action. This is an action by an excess insurer against the primary insurers for bad-faith failure to accept a settlement offer within defendants' policy limit.  Court finds no bad faith on the part of the primary insurer.  The underlying plaintiff's vehicle hit the insured's vehicle in the rear. While the underlying plaintiff's injuries were serious, the primary insurer fairly evaluated the potential damages based upon sustained verdicts for comparable injuries, and, given their evaluation of liability, reasonably determined that an apportioned verdict would likely be within the primary  policy's limits.  The Court also noted that upon a liability verdict wholly adverse to the insured, defendants tendered their policy.

 

11/28/05          Halloway v. State Farm Insurance Companies

Appellate Division, Second Department
Disclaimer Timely as it was Issued Contemporaneously to Completion of Investigation – Even Five Months After Notice

State Farm disclaimed coverage for plaintiff’s injuries pursuant to a policy which excluded coverage for liability arising out of the ownership and operation of a vehicle while it is being used to carry persons or property for a fee. Here, the police report pertaining to the accident stated that immediately after the accident Osborne allegedly stated to the passengers in the vehicle "that there would be 'no charge' for [the] fare." However, the police report and Osborne each indicated that there were no passengers in his vehicle.  State Farm conducted an investigation and upon completion of it, five months later, disclaimed. The timeliness of a disclaimer is measured from the point at which the carrier first learns of facts that give it a reasonable basis upon which to disclaim liability or deny coverage.  In light of the contradiction between the insured’s alleged statement at the time of the accident and the insured’s subsequent denial that passengers were present and the police report, it was reasonable for State Farm to investigate the incident to determine whether the livery vehicle exclusion applied. Moreover its disclaimer was issued contemporaneously upon the completion of its investigation and, therefore, was timely as a matter of law.

 

11/28/05          Kennedy v. Brown

Appellate Division, Second Department
Threshold Motion Fails as Defendant’s Examining Physician Provides No Objective Tests

The reports of defendant's examining physician failed to set forth the objective tests which were performed to support his conclusion that neither of plaintiffs suffered from any limitation of range of motion. Although the doctor "ascribe[s] the degree of range of motion in certain areas to some objective testing, he does not compare [either of the plaintiffs'] range of motion with a normal range of motion".   The defendant not meeting his initial burden that plaintiff did not meet the serious injury threshold under Insurance Law § 5102[d], the burden never shifted to the plaintiffs to raise a triable issue of fact.

 

11/28/05          Murray v. Hartford Insurance Company

Appellate Division, Second Department

Threshold Motion Successful as Plaintiff’s Four Year Old Medical Examination and an Unaffirmed MRI Reports Not Sufficient To Raise Question of Fact

The Court finds that plaintiff's deposition testimony, as well as the affirmed medical reports of the defendants' examining physicians, sufficiently established a prima facie case that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) (citing Toure v Avis Rent A Car Sys., 98 NY2d 345).  The affidavit of the plaintiff's physician was based upon examinations conducted nearly four years prior to the date of the affidavit as well as upon unaffirmed MRI reports which had not been placed before the court by the defendants.  In addition, plaintiff's physician failed to set forth the objective tests used in finding limitations in motion and failed to account for the plaintiff's medical history subsequent to the accident.

 

11/28/05          Selective Insurance Company v. Merchants Insurance Group

Appellate Division, Second Department

Policy Provision Indicating it’s Primary Resolves Issue as Matter of Law

Selective established its entitlement to judgment as a matter of law, as the insurance policy issued by Merchants stated that Merchants would act as a primary insurer. In opposition, Merchants failed to raise a triable issue of fact.

 

11/28/05          Eagle Insurance Company v. Sanchez

Appellate Division, Second Department

Disclaimer Based Upon Lack of Cooperation Improper Where Insufficient Proof of Insurer’s Diligence to Obtain Cooperation and Mere Inaction by Insured Not Willful

This was a CPLR article 75 to permanently stay arbitration of a claim for uninsured motorist benefits.  Remember, for an insurer to disclaim on the ground of lack of cooperation, the insurer must demonstrate (1) that it acted diligently in seeking to bring about the insured's cooperation, (2) that the efforts employed by the insurer were reasonably calculated to obtain the insured's cooperation, and (3) that the attitude of the insured, after his or her cooperation was sought, was one of willful and avowed obstruction (see Thrasher v United States Liab. Ins. Co., 19 NY2d 159, 168-169).  Here, the insurer failed to meet the Thrasher test in that it failed to establish that it was sufficiently diligent in seeking to bring about its insured's cooperation or that its efforts were reasonably calculated to obtain its insured's cooperation.  Further, the inaction of the insured did not, in this case, constitute "willful and avowed obstruction".

 

11/23/05          McCoy v. Hall

Appellate Division, First Department

Dismissal on Serious Injury Grounds where Absence of Medical Treatment and Delay of Eleven Years to Diagnose Ligament Injury

Although plaintiff underwent physical therapy for a month before returning to work, there was no competent medical evidence detailing the course of this therapy, its necessity or its outcome. Despite a positive MRI test in 1994, plaintiff was not diagnosed with ligament injury in his left knee until 2004, 11 years after the accident. These circumstances rendered plaintiff's expert's opinions as to causation, significance and permanence “conclusory and inadequate to raise a triable issue sufficient to defeat summary judgment on the issue of whether plaintiff suffered a serious injury under Insurance Law § 5102[d].

11/22/05          Continental Insurance Company v. Garlock Sealing Technologies, LLC
Appellate Division, First Department
NY Courts Can Render Opinions on Pennsylvania Insurance Law, if That Becomes Necessary
Attempt to have New York declaratory judgment action dismissed in favor of a Pennsylvania forum is rejected.  There is a substantial nexus between this action and New York, five of the insurance policies at issue having been issued, negotiated, brokered and paid for here and the circumstances giving rise to the underlying actions having in large part occurred here .  There was no showing that the NY courts would be burdened by this lawsuit.  While the court did not yet rule on which state’s law would apply, NY courts would be perfectly capable of and would not be unduly burdened by applying Pennsylvania law, should the need arise.”

11/22/05          US Pack Network Corp. v. Travelers Property Casualty
Appellate Division, First Department
“Prompt,” Means Prompt – Isn’t that Clear?
The property policy required that notice of any loss be "prompt," and the undisputed record shows that the insurer did not receive written notice of plaintiffs' two losses until six and fifteen months after they occurred. Insured’s claim that the word "prompt" is ambiguous is rejected and notice was not “prompt.” The insured’s president asserts that he "verbally notified" defendant broker, allegedly the insurer's agent, "shortly after each loss." This fails to raise a bona fide issue of fact as to whether there was prompt notice. The phrase "shortly after" is for present purposes too vague to be a workable approximation of time, and no specifics are provided as to the identity of the person with whom plaintiffs' president spoke.

11/21/05          Nyack Hospital, a/a/o Stacey Gersten v. Encompass Insurance Company
Appellate Division, Second Department
No Fault Insurer Must Complain, Reject or Pay Hospital Bills Within 30 Days, or be Liable for Interest and Attorneys Fees

The defendant, Encompass Insurance, waived any defense based on lack of a valid assignment by the claimant to the hospital, by failing to timely object to the completeness of the forms or seek verification of the assignment.  Two letters from the insurance company to the hospital stating that the claimant's hospital records had been received but that payment was delayed pending completion of the insurance company's investigation, did not toll the 30-day statutory period for paying or denying the claim.  Insurance carrier can not delay payments while awaiting receipt of completed no-fault application as 11 NYCRR 65.15(d) (6) specifically states that "in lieu of a prescribed application for motor vehicle no-fault benefits submitted by an applicant and a verification of hospital treatment (NYS Form N-F 4), an insurer shall accept a completed hospital facility form (NYS Form N-F 5) . . . submitted by a provider of health services with respect to the claim of such provider."

 

11/22/05          Russo v. Chang

Appellate Division, Second Department

Qualitative Medical Assessment of Plaintiff’s Condition Meets Plaintiff’s Burden on Threshold Motion

The medical evidence submitted by the defendants in support of their motion and cross motion for summary judgment made out a prima facie case that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102 (d).  The affirmed medical reports submitted by the defendants set forth objective tests and found no limitation of motion of plaintiff's cervical spine. The burden, therefore, shifted to plaintiff and the plaintiff sustained her burden.

She submitted an affirmation from a physician who presented a qualitative assessment of plaintiff's condition which had an objective basis and compared plaintiff's limitation of motion of her cervical spine to normal function.

 

Audrey’s Angle on No-Fault

 

In this feature to the newsletter, we highlight recent no-fault arbitration awards.   The compilation and publication of these awards is not at the same level as traditional reported case law.  There is no single source to conduct comprehensive research in the area.  This feature seeks out notable current awards and judicial determinations and provides them to our subscribers.

 

We encourage the submission of no-fault awards, including Master Arbitration awards that address interesting issues.  These can be submitted to Audrey Seeley at [email protected].   With all submissions, we ask that you forward a redacted version of the award omitting the parties’ names and that the document be in PDF format.  For copies of these decisions, contact Audrey.

 

11/30/05          In the Matter of the Arbitration between the Applicant and Respondent

Arbitrator James J. Skelton, Esq.

The Dispute Regarding What Constitutes A Prima Facie Case of Medical Necessity Continues - Applicant Failed To Meet Burden

Here is the Angle:     

Yet again, the tension continues between the arbitration system and the court system on what an applicant/plaintiff must establish to demonstrate a prima facie case of medical necessity.  Arbitrator Skelton’s decision provides a good sense of the frustration in the no-fault community over the lack of a uniform standard for establishing a prima facie case of medical necessity.  Ultimately, Arbitrator Skelton reasons that since no uniform standard exists it is the Arbitrator’s discretionary power to ascertain if Applicant met his burden.  We note that in this case the Applicant did not meet that burden and Arbitrator Skelton specifically notes the Applicant failed to submit any medical records in support of his claim. 

 

The Analysis:

The Applicant sought payment for EMG/NCV testing.  In support of his position, Applicant submitted three unsigned NF-3 (verification by treating physician or other health service provider) forms.  Applicant did not submit any medical records.  Respondent submitted its denial based upon a peer review.

 

Arbitrator Skelton denied Applicant’s claim finding that Applicant’s proof was “woefully inadequate” to establish a prima facie case of medical necessity.  More importantly though, Arbitrator Skelton provides a well reasoned decision as to what Applicant’s burden of proof in when establishing medical necessity. 

 

The Applicant must demonstrate that the injuries claimed are a result of the motor vehicle accident and that the treatment rendered was medically necessary.  The determination as to what constitutes a case of medical necessity is the source of great debate between the arbitration system and the court system.  The court system has held that the Applicant merely submit a completed claim form, with evidence that the form was mailed to the insurer for payment.  See, Mary Immaculate Hosp. v. Allstate Ins. Co., 2004 NY Slip Op 02359 (2d Dept. 2004).

 

Arbitrator Skelton, relying upon an arbitration decision of Arbitrator Glen Wiener in Algar Medical Supplies, P.C. a/a/o Bernadette Yerrell, notes that the Insurance Department has issued an Opinion Letter in January 2000, that indicates the aforementioned case law and the Department’s Opinion Letter are not inapposite.  The Insurance Department indicated in the Opinion Letter that this type of proof may be insufficient to meet Insurance Law §5102’s requirements.  Unfortunately, the Insurance Department has not taken a definitive position on this issue.

Further, taking an excerpt from Arbitrator Wiener’s decision:

 

certainty, predictability and stability in the law are chief objectives of the American Jurisprudence and to the extent possible these goals are advanced by utilizing the long-standing principles of stare decisis and precedent.  Parties should be able to regulate their conduct and engage in business transactions with reasonable assurances of the governing rules of law.  The credibility of this tribunal suffers when arbitrators and judges appear to operate under radically different rules.

 

Arbitrator Skelton’s reasoning continues that since the Superintendent of Insurance has not set forth a uniform standard the discretion is provided to the fact finder to make the determination if Applicant has sustained the burden. 

 

Therefore, Arbitrator Skelton concludes that since the discretion on whether Applicant has met his burden of establishing a prima facie case of medical necessity falls upon the Arbitrator a weighing of the evidence.  In this case, Arbitrator Skelton, in denying Applicant’s claim, specifically mentions the fact that the Applicant failed to submit any medical records in support of the claim.

 

11/30/05          In the Matter of the Arbitration between the Applicant and Respondent

Arbitrator Stacey E. Charkey, Esq.

Again, Lack of Uniform Rule Regarding Prima Facie Case of Medical Necessity Discussed

Here is the Angle:     

Arbitrator Charkey discusses how there is a lack of a uniform rule outlining the elements Applicant must establish to demonstrate a prima facie case of medical necessity.  Arbitrator Charkey concludes that, in this claim for reimbursement of medical supplies, a prima facie case for entitlement to no-fault compensation must, at a minimum, include “qualitative prima facie proof that the supplies were rendered, proximately caused by the assignor’s condition from the covered accident and medically necessary.”  Overall, the angle here is that it is apparent that the no-fault Arbitrators are utilizing their discretion, in the absence of a uniform standard, to determine with evidence is “sufficient” to set for a prima facie case of medical necessity.  More importantly, many of them are finding that medical records are part of the “sufficient” evidence, not just submission of proof of claim.

 

The Analysis

Arbitrator Charkey denied Applicant’s demand for reimbursement of orthopedic/chiropractic supplies as they were medically necessary.  Arbitrator Charkey duly notes that there is no uniform standard as to what constitutes a prima facie case of medical necessity.   However, Arbitrator Charkey points out that the New York State Legislature did not intend no-fault benefits to be available for needless services or supplies.

 

Thereafter, Arbitrator Charkey finds that Applicant can make a prima facie case of medical necessity if, at a minimum, he demonstrates “qualitative prima facie proof that the supplies were rendered, proximately caused by the assignor’s condition from the covered accident and medically necessary.”  Further, the Arbitrator determines whether Applicant’s evidence is sufficient to demonstrate a prima facie case of medical necessity.  Here, Arbitrator Charkey found that Applicant failed to provide sufficient evidence to demonstrate a prima facie case of medical necessity as the Applicant did not submit any further progress notes, treatment notes, or follow-up records to support the necessity of the medical supply. 

 

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.

12/1/05            Aluise v. Nationwide Mutual Insurance Co.

West Virginia Supreme Court of Appeals

Occurrence Does Not Include Economic Loss for Failing to Disclose Defects
Affirming the judgment of the circuit court, the West Virginia Supreme Court of Appeal held that absent policy language to the contrary, a homeowner's policy of insurance defining occurrence as "bodily injury or property damage resulting from an accident" does not provide coverage for an insured homeowner who is sued by a home buyer for economic losses caused the insured negligently or intentionally failed to disclose defects in the home. The Court found no only that no coverage existed under the policy, but that no duty to defend existed either. The Court found that the negligent misrepresentation did not cause any property damage within the home. The bad faith was dismissed as well as a result of the summary judgment on the underlying issues.

 

Submitted by: Jim Varner and Debra Herron (McNeer Highland McMunn and Varner)


11/30/05          State ex rel Erie Insurance Company v. Mazzone

West Virginia Supreme Court of Appeals

Discoverability of Reserve Information Dependent upon Unique Factors of Case

Writ of Prohibition granted by WVSCA on issue of discoverability of reserve information in a bad faith suit. In rendering its decision, the Court held that when presented with a challenge to discovery of insurance reserves information, the trial court is required under Rule 26 to make a preliminary determination as to whether the requested information is relevant in that is admissible or is reasonably likely to lead to the discovery of admissible evidence. The supreme court directs the trial court to take into account the nature of the case, the methods used by the insurer to set the reserves and the purpose for which the information is sought and only grant requests for disclosure when its findings of fact and conclusions of law support a determination that the specific facts of the claim in the case before it directly and primarily influenced the setting of the reserves in question.

 

Submitted by: Jim Varner and Debra Herron (McNeer Highland McMunn and Varner, L.C.


11/29/05          Sokol and Company v. Atlantic Mutual

Seventh Circuit Court of Appeals

No Duty to Indemnify Under Business Risk Exclusion
Atlantic Mutual Insurance Company denied coverage under Comprehensive General Liability policy, citing a number of "business risk" exclusions when Sokol sought indemnification for the costs associated with the replacement of spoiled peanut butter. Continental Mills discovered that the peanut butter supplied by Sokol and Company had gone bad. Continental retrieved the cookie mix, substituted fresh peanut butter packets, and sought reimbursement from Sokol for the costs associated with the replacement. Sokol filed notice of Continental's claim with Atlantic. Atlantic denied coverage and Sokol then paid Continental's claim itself and sought indemnification from Atlantic under the policy. The district court granted summary judgment for Atlantic holding that the insurer had no duty to defend under the policy and this automatically meant there was no duty to indemnify. The Seven Circuit affirmed district court decision on other grounds, holding that the claim at issue does not involve "property damage"within the meaning of the policy, and even if it did, coverage is excluded under certain of the policy's "business risk" exclusions.

 

Submitted by: Greg Cochran (McKenna Storer)


11/23/05          Transamerica Leasing Inc. v. Institute of London Underwriters

Eleventh Circuit Court of Appeals

Absent a Clear Showing that the Other Cases in Which an Insurance Company Took Inconsistent Positions Involved Similarly Worded Policies, the Court Will Not Apply the Doctrine of Judicial Estoppel
Transamerica leased equipment to a company, CAVN. CAVN obtained insurance policies through Underwriters. After CAVN lost the items it had leased, Transamerica submitted insurance claims for the lost equipment. Underwriters denied coverage. In its second Motion for Summary Judgment, Transamerica argued that the standing issue had been waived by not raising it on the first motion. The court held that Underwriters did not waive the standing defense. Transamerica further argued that the District Court erred by not applying the doctrine of judicial estoppel and by refusing to admit evidence indicating the positions Underwriters had taken in the previous cases. The Appellate Court disagreed since they could not find that the potentially inconsistent litigation positions were taken to make a "mockery" of the judicial system.

 

Submitted by: Ralph A. Zappala (Lewis Brisbois Bisgaard & Smith LLP)


11/23/05          Mercury Insurance v. Cooper

Florida Third District Court of appeal

Insurer Must Pay Attorney’s Fees to Insured’s Counsel where Insurance Company Settles Claim and Voluntarily Dismisses Related DJ Action

Insurer must pay attorney’s fees to insured’s counsel where insurance company settles a claim and voluntarily dismisses a related declaratory judgment action pursuant to Fl. Stat. § 627.428(1), despite allegations of fraud on the part of the insured. Mercury Insurance filed a declaratory judgment action against its insured, Charles Cooper. Cooper was the sole authorized driver under a primary auto policy issued by Mercury to Cooper. Cooper initially told Mercury that his wife was driving the automobile at the time of an accident involving injury to the driver of another vehicle (Aldor Charles), but later under oath testified that his sister, who was unlicensed, was the actual driver. Charles then made a claim to Mercury demanding Cooper’s policy limits of $25,000. Mercury then filed a declaratory judgment action against Cooper. While the action was pending, Mercury settled Charles’ claim for $2,500 as full settlement. Mercury did not negotiate a global settlement, which could have contained a reservation of rights concerning attorney’s fees. After settling with Charles, Cooper’s counsel then filed a motion for attorney’s fees pursuant to § 627.428(1), which the trial court granted. In granting the motion, the trial court cited to cases holding that where an insurance company settles and dismisses a related declaratory judgment action, the provisions of 627.428(1) are triggered, entitling an insured’s counsel to attorney’s fees under the statute. Mercury sought a judicially crafted exception to 627.428(1) in cases involving insurance fraud. The appellate court refused to do so, and stated any modification of the statute to address false statements by an insured was best left to the legislature.

 

Submitted by: Bruce Celebrezze and Daniel Ryan of Sedgwick, Detert, Moran and Arnold LLP

 

 

 

Continental Insurance Company v. Garlock Sealing Technologies, LLC

 

Order, Supreme Court, New York County (Judith J. Gische, J.), entered on or about April 22, 2005, which, to the extent appealed from as limited by the brief, denied defendants' motion to dismiss the complaint pursuant to CPLR 3211(a)(4) or CPLR 327, unanimously affirmed, with costs.

Defendants did not demonstrate, in support of their motion to dismiss on the ground of forum non conveniens, that the interests of substantial justice would be served by moving the action to the proposed alternative forum of Pennsylvania (see CPLR 327; Grizzle v Hertz Corp., 305 AD2d 311, 312 [2003]). Indeed, our review of the record (see Nguyen v Banque Indosuez, 19 AD3d 292, 294 [2005]) indicates that there is a substantial nexus between this action and New York, five of the insurance policies at issue having been issued, negotiated, brokered and paid for here and the circumstances giving rise to the underlying actions having in large part occurred here (see Seneca Ins. Co., Inc. v Lincolnshire Mgt., Inc., 269 AD2d 274, 275 [2000]; Employers Ins. of Wausau v Am. Home Prods. Corp., 207 AD2d 1, 2 [1994]). Defendants made no showing that retention of the action would unduly burden New York courts (see Islamic Republic of Iran v Pahlavi, 62 NY2d 474, 479 [1984], cert denied 469 US 1108 [1985]). While any choice of law issues presented by this litigation are not yet ripe for adjudication, New York courts would be perfectly capable of and would not be unduly burdened by applying Pennsylvania law, should the need arise (see Yoshida Printing Co, Ltd. v Aiba, 213 AD2d 275 [1995]).

In view of this action's strong connection to this jurisdiction, the motion court properly exercised its discretion in declining to grant that branch of defendants' motion seeking dismissal of the action on the ground that another similar action between the parties, temporally proximate [*2]to this one, is pending in Pennsylvania (see CPLR 3211[a][4]; and see San Ysidro Corp. v Robinow, 1 AD3d 185, 187 [2004]; White Light Prods., Inc. v On the Scene Prods., Inc., 231 AD2d 90, 93 [1997]).

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

ENTERED: NOVEMBER 22, 2005

CLERK

US Pack Network Corp. v. Travelers Property Casualty
 

Order, Supreme Court, New York County (Richard B. Lowe III, J.), entered October 25, 2004, which, in an action by a courier to recover under a policy of commercial property insurance for loss of certain commercial documents, granted defendant-respondent insurer's motion for summary judgment dismissing the complaint as against it, unanimously affirmed, with costs.

The policy required that notice of any loss be "prompt," and the undisputed record shows that the insurer did not receive written notice of plaintiffs' two losses until six and fifteen months after they occurred. We reject plaintiffs' argument that the word "prompt" is ambiguous (see DeGuglielmo v Travelers Prop. Cas., 6 AD3d 344, 345 [2004], lv denied 3 NY3d 608 [2004]), and, absent any excuse or mitigating circumstances for the delays, find that the notices were not prompt as a matter of law (see id. at 346; Power Auth. v Westinghouse Elec. Corp., 117 AD2d 336, 339-340 [1986]). Plaintiffs offer no excuse or mitigating circumstances. Instead, their president asserts that he "verbally notified" defendant broker, allegedly the insurer's agent, "shortly after each loss." This fails to raise a bona fide issue of fact as to whether there was prompt notice. The phrase "shortly after" is for present purposes too vague to be a workable approximation of time, and no specifics are provided as to the identity of the person with whom plaintiffs' president spoke (see DeGuglielmo, 6 AD3d at 345). Nor can it avail plaintiffs to take the broker's deposition. In answer to plaintiffs' interrogatories, the broker indicated that its first [*2]receipt of notice was virtually contemporaneous with the insurer's, and plaintiffs' president should know when he contacted the broker and to whom he spoke (see id.).

 

Nyack Hospital, a/a/o Stacey Gersten v. Encompass Insurance Company

 

In an action to recover no-fault benefits under an insurance contract, the plaintiff appeals from an order of the Supreme Court, Nassau County (McCarty, J.), dated March 30, 2005, which denied its motion for summary judgment on its claim for statutory interest and an award of an attorney's fee, and granted the defendant's cross motion for summary judgment dismissing the complaint.

ORDERED that the order is reversed, on the law, with costs, the motion is granted, the cross motion is denied, the complaint is reinstated, and the matter is remitted to the Supreme Court, Nassau County, for further proceedings consistent herewith.

The plaintiff, Nyack Hospital (hereinafter the hospital), as assignee of Stacey Gersten, made a prima facie showing of entitlement to judgment as a matter of law on its claim for statutory interest and an attorney's fee, by submitting evidentiary proof that the prescribed statutory billing forms were mailed and received, and that payment of no-fault benefits was overdue when made (see Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., 16 AD3d 564, lv denied NY3d [Oct. 25, 2005]).

The defendant, Encompass Insurance Company (hereinafter the insurance company), waived any defense based on the lack of a valid assignment by the claimant to the hospital, by failing to timely object to the completeness of the forms or seek verification of the assignment (see Hospital [*2]for Joint Diseases v Allstate Ins. Co., 21 AD3d 348; Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., supra; New York & Presbyt. Hosp. v Amercian Tr. Ins. Co., 287 AD2d 699). Moreover, the two letters from the insurance company to the hospital, dated May 28, 2004, and June 23, 2004, respectively, stating that the claimant's hospital records had been received but that payment was delayed pending completion of the insurance company's investigation, did not toll the 30-day statutory period for paying or denying the claim (see Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11; Ocean Diagnostic Imaging, P.C. v Citiwide Auto Leasing Inc., 8 Misc 3d 138[A]; Melbourne Med., P.C. v Utica Mut. Ins. Co., 4 Misc 3d 92).

We reject the insurance company's argument that it was entitled to delay payment while awaiting a no-fault application to be submitted, as 11 NYCRR 65.15(d)(6) specifically states that "in lieu of a prescribed application for motor vehicle no-fault benefits submitted by an applicant and a verification of hospital treatment (NYS Form N-F 4), an insurer shall accept a completed hospital facility form (NYS Form N-F 5) . . . submitted by a provider of health services with respect to the claim of such provider" (emphasis added).

Therefore, since the hospital established that the insurance company's payment of the no-fault billing was overdue, and the insurance company did not raise a triable issue of fact, the hospital was entitled to summary judgment on its claim for statutory interest and an attorney's fee. Accordingly, we remit the matter to the Supreme Court, Nassau County, to calculate the amount due the hospital.
H. MILLER, J.P., LUCIANO, FISHER and COVELLO, JJ., concur.

ENTER:

McCoy v. Hall

 

Defendants appeal from an order of Civil Court, Bronx County (Francis M. Alessandro, J.), dated July 7, 2004, which denied their motion for summary judgment dismissing the complaint.

 

PER CURIAM:

Order (Francis M. Alessandro, J.), dated July 7, 2004,
reversed, with $10 costs, defendants' motion granted, and the complaint dismissed. The Clerk is directed to enter judgment accordingly.

Plaintiff's contention that he suffered a "serious injury" (Insurance Law § 5102[d]) is undermined by a dearth of competent evidence regarding the injury and treatment at the time of the accident and thereafter. There are no statements in the record from any treating physician (see Beaubrun v New York City Tr. Auth., 9 AD3d 258 [2004]). Although plaintiff underwent physical therapy for a month before returning to work, there is no competent medical evidence detailing the course of this therapy, its necessity or its outcome (see Bent v Jackson, 15 AD3d 46 [2005]; Thompson v Abbasi, 15 AD3d 95 [2005]). Despite a positive MRI test in 1994, plaintiff was not diagnosed with ligament injury in his left knee until 2004, 11 years after the accident (see Shinn v Catanzaro, 1 AD3d 195 [2003]). These circumstances render plaintiff's expert's opinions as to causation, significance and permanence conclusory and inadequate to raise a triable issue sufficient to defeat summary judgment (id.; see also Arjona v Calcano, 7 AD3d 279 [2004]).

This constitutes the decision and order of the Court.
Decision Date: November 23, 2005

 

Russo v. Chang

 

Appeal from an order of the Civil Court of the City of New York, Kings County (Delores J. Thomas, J.), entered December 6, 2004. The order, insofar as appealed from, denied defendant Liang's cross motion for summary judgment.

 

Order, insofar as appealed from, unanimously affirmed without costs.

Defendant Chang moved for summary judgment dismissing the complaint on the ground that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102 (d). Defendant Liang cross-moved for summary judgment adopting all of the factual assertions and legal arguments contained in defendant Chang's moving papers. The motion and cross motion were denied and defendant Liang appeals.

The medical evidence submitted by the defendants in support of their motion and cross motion for summary judgment made out a prima facie case that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102 (d) (see Gaddy v Eyler, 79 NY2d 955 [1992]). The affirmed medical reports submitted by the defendants set forth objective tests and found no limitation of motion of plaintiff's cervical spine. The burden, therefore, shifted to plaintiff to raise a triable issue of fact that she sustained a serious injury (see Gaddy v Eyler, 79 NY2d 955, supra).

The plaintiff successfully opposed the motion by presenting evidence that she sustained a [*2]serious injury. She submitted an affirmation from a physician who presented a qualitative assessment of plaintiff's condition which had an objective basis and compared plaintiff's limitation of motion of her cervical spine to normal function (Toure v Avis Rent A Car Sys., 98 NY2d 345, 350 [2002]). [*3]

It is noted that the defendants have made a showing of good cause for the delay in making the motion in that there was discovery outstanding when the note of issue was filed and the defendant moved promptly to make this motion after discovery was completed (CPLR 3212 [a]; Brill v City of New York, 2 NY3d 648 [2004]).
Decision Date: November 21, 2005

 

 

 

 

 

 

Halloway v. State Farm Insurance Companies



Martin, Fallon & MullÉ, Huntington, N.Y. (Richard C. MullÉ of
counsel), for appellant.
Cheryl Kitton, Bellmore, N.Y., for respondents.

In an action for a judgment declaring that the defendant is obligated to defend and indemnify Newton S. Osborne in a personal injury action entitled Halloway v Osborne, pending in the Supreme Court, Queens County, under Index No. 19772/02, the defendant State Farm Mutual Automobile Insurance Company appeals from an order of the Supreme Court, Queens County (Price, J.), dated August 19, 2004, which granted the plaintiffs' motion for summary judgment.

ORDERED that the order is reversed, on the law, with costs, the motion is denied, and, upon searching the record, summary judgment is awarded to the defendant, and the matter is remitted to the Supreme Court, Queens County, for the entry of a judgment declaring that the defendant is not obligated to defend and indemnify Newton S. Osborne in the personal injury action entitled Halloway v Osborne, pending in the Supreme Court, Queens County, under Index No. 19772/02.

On November 5, 2001, the plaintiff Winifred Halloway was a passenger in a vehicle owned and operated by Newton S. Osborne which collided with a vehicle owned by Ryder Trucks and operated by Craig McGraw. Osborne was insured by the defendant, State Farm Insurance Companies (hereinafter State Farm), pursuant to a policy which excluded coverage for liability arising out of the ownership and operation of a vehicle while it is being used to carry persons or [*2]property for a fee. Halloway and her husband subsequently retained counsel, who notified State Farm of the accident on December 7, 2001. The notice included a copy of the police report pertaining to the accident and stated, inter alia, that immediately after the accident Obsorne allegedly informed Halloway and another unidentified passenger "that there would be 'no charge' for [the] fare." However, the police report and Osborne each indicated that there were no passengers in his vehicle, which prompted State Farm to conduct an investigation. On May 7, 2002, upon the completion of its investigation, State Farm notified the plaintiffs that it was disclaiming coverage for the accident based upon the livery vehicle exclusion.

The plaintiffs subsequently commenced an action to recover damages for personal injuries against Obsorne, McGraw, and Ryder Trucks, as well as this action for a judgment declaring that State Farm is obligated to defend and indemnify Osborne in the underlying personal injury action. The Supreme Court granted the plaintiffs' motion for summary judgment in the declaratory judgment action, finding, in effect, that the letter dated December 7, 2001, provided State Farm with sufficient facts to disclaim, and that its delay in disclaiming was therefore unreasonable (see Insurance Law § 3420[d]).

"Pursuant to Insurance Law § 3420(d), an insurance carrier is required to provide the insured with timely notice of its disclaimer or denial of coverage on the basis of a policy exclusion and will be estopped from disclaiming liability or denying coverage if it fails to do so" (Brighton Cent. School Dist. v American Cas. Co. of Reading, Pa., 19 AD3d 528, 529, quoting Moore v Ewing, 9 AD3d 484, 487). The reasonableness of a delay in issuing a disclaimer must be determined from the time the insurer was aware of facts sufficient to disclaim (see Pawley Interior Contr. v Harleysville Ins. Cos., 11 AD3d 595).

Contrary to the conclusion of the Supreme Court, in view of the contradiction between Osborne's alleged statement at the time of the accident as related by the plaintiffs' attorney, and Osborne's subsequent denial that passengers were present and the police report, it was reasonable for State Farm to investigate the incident to determine, inter alia, whether the livery vehicle exclusion applied. Moreover its disclaimer was issued contemporaneously upon the completion of its investigation and, therefore, was timely as a matter of law (see New York Cent. Mut. Fire Ins. Co. v Majid, 5 AD3d 447, 448; Federal Ins. Co. v Provenzano, 300 AD2d 485; State Farm Mut. Auto. Ins. Co. v Daniels, 269 AD2d 860, 861).

Although the defendant did not cross-move for summary judgment, this court has the authority to search the record and award summary judgment to a nonmoving party with respect to an issue that was the subject of the motion before the Supreme Court (see CPLR 3212[b]; Osborne v Zornberg, 16 AD3d 643, 645; Lacy v New York City Hous. Auth., 4 AD3d 455, 456; Micciche v Homes by Timbers, 1 AD3d 326). Accordingly, under the circumstances of this case, and in the absence of any triable issue of fact as to the timeliness of the disclaimer and the applicability of the livery vehicle exclusion, summary judgment is awarded to State Farm.

Since this is a declaratory judgment action, the matter must be remitted to the Supreme Court, Queens County, for the entry of judgment declaring that State Farm is not obligated to defend and indemnify Osborne in the personal injury action entitled Halloway v Osborne, pending in the Supreme Court, Queens County, under Index No. 19772/02 (see Lanza v Wagner, 11 NY2d 317, 334, appeal dismissed 371 US 74, cert denied 371 US 901). [*3]
H. MILLER, J.P., ADAMS and SPOLZINO, JJ., concur.

FISHER, J., dissents and votes to affirm and to remit the matter to the Supreme Court, Queens County, for the entry of a judgment declaring that the defendant is obligated to defend and indemnify Newton S. Osborne in a personal injury action entitled Halloway v Osborne, pending in the Supreme Court, Queens County, under Index No. 19772/02, with the following memorandum:

Because I agree with the Supreme Court that the disclaimer of the defendant, State Farm Insurance Companies (hereinafter State Farm), was untimely as a matter of law, I respectfully dissent.

State Farm issued a policy of insurance covering the subject vehicle, a 1994 Ford van, which was owned by its insured, Newton S. Osborne. It is undisputed that the policy contained an exclusion for liability "arising out of the ownership or operation of [the] vehicle while it is being used to carry persons or property for a fee."

On November 5, 2001, Osborne was operating the van when it was allegedly involved in a collision. State Farm was notified of the accident, not by Osborne, but by an attorney representing the plaintiffs who spoke by telephone to one of State Farm's claim representatives on December 7, 2001. Later that same day, the plaintiffs' attorney wrote a letter to State Farm asserting, inter alia, that the injured plaintiff had been "a passenger in the Osborne van along with another [unidentified] passenger [and that, w]hen this accident occurred, [Osborne] told both passengers to pick up another 'van' and that there would be 'no charge' for this fare" (emphasis supplied).

Upon receiving the letter, State Farm immediately referred the matter to Sandra-Dee Davis, a claim specialist in State Farm's bodily injury unit. On January 14, 2002, Davis wrote a letter to the plaintiffs' attorney stating that the injured plaintiff was not listed on the police report. Nearly four months later, on May 7, 2002, State Farm, in a letter to the plaintiffs' attorney, disclaimed coverage on the ground that Osborne "was using his vehicle as a livery vehicle." On May 19, 2002, a disclaimer was also issued to Osborne. The plaintiffs subsequently commenced this action seeking a declaration that State Farm is obligated to defend and indemnify Osborne in their personal injury action against him.

The governing principles here are familiar. In order effectively to deny coverage or disclaim liability for bodily injuries on the basis of a policy exclusion, an insurance carrier must "give written notice as soon as is reasonably possible of such disclaimer of liability or denial of coverage to the insured and the injured person or any other claimant" (Insurance Law § 3420[d]). A failure to give timely notice will estop the insurer from disclaiming liability or denying coverage on the basis of the exclusion (see Matter of Worcester Ins. Co. v Bettenhauser, 95 NY2d 185). The timeliness of a disclaimer is measured from the point at which the carrier first learns of facts that give it a reasonable basis upon which to disclaim liability or deny coverage (see Matter of Allcity Ins. Co. [Jimenez], 78 NY2d 1054, 1056; Matter of American Express Prop. Cas. Co. v Vinci, 18 AD3d 655; Danna Constr. Corp. v Utica First Ins. Co., 17 AD3d 622, lv denied NY3d [Oct. 27, 2005]). "An insurer who delays in giving written notice of disclaimer bears the burden of justifying the delay" (First Fin. Ins. Co. v Jetco Contr. Corp., 1 NY3d 64, 69). "Moreover, an insurer's explanation is insufficient as a matter of law where the basis for denying coverage was or should have been readily apparent before the onset of the delay" (id.; cf. Matter of Firemen's Fund Ins. Co. of Newark v Hopkins, 88 NY2d 836). The insurer's obligation to issue a timely disclaimer [*4]"cannot be delayed indefinitely until all issues of fact regarding the insurer's coverage obligations have been resolved. When in doubt, an insurer should issue a prompt disclaimer and then seek a declaratory judgment concerning its duty to defend or indemnify" (Republic Franklin Ins. Co. v Pistilli, 16 AD3d 477, 479; see Matter of American Express Prop. Cas. Co. v Vinci, supra).

The policy provision at issue here excludes liability "arising out of the ownership or operation of [the] vehicle while it is being used to carry persons or property for a fee." Such an exclusion is valid provided that it is read to be no broader than the regulatory provision that permits a policy in New York to exclude coverage for a motor vehicle while it is being used "as a public or livery conveyance" (11 NYCRR 60-1.2[a]; see United Servs. Auto. Assn. v Reid, 255 AD2d 990, 991).

On this record, I conclude that the plaintiffs established their prima facie entitlement to judgment as a matter of law. They offered evidence that State Farm was notified in early December 2001 of a claim that the subject vehicle was being driven by the insured carrying two passengers when it was involved in an accident, and that, after the accident, the insured "told both passengers to pick up another 'van' and that there would be 'no charge' for this fare." That notice clearly gave State Farm a reasonable basis upon which to conclude that, at the time of the accident, the van was being operated as a livery vehicle, and that therefore the policy exclusion applied. The plaintiffs further established that State Farm delayed for some five months before ultimately denying liability on the sole ground that Osborne "was in direct violation of his policy agreement as he was using his vehicle as a livery vehicle." The burden therefore shifted to State Farm to justify the delay (see First Fin. Ins. Co. v Jetco Contr. Corp., supra).

In opposition to the plaintiffs' motion for summary judgment, State Farm failed to raise a triable issue of fact as to whether the five-month delay was justified. Indeed, the only evidence offered by State Farm is the affidavit of Nicole Fox, a claim representative familiar with the matter. Fox explained that State Farm had difficulty in contacting Osborne, who initially claimed, on January 11, 2002, and again on February 7, 2002, that there were no passengers in the vehicle. However, neither Fox's affidavit nor any other evidence produced by State Farm offered any explanation as to why it took five months for State Farm to determine that, at the time of the accident, the van was being used as a livery vehicle, or as to what State Farm learned in the course of its investigation that led it to reach that conclusion. In my view, State Farm's failure to offer an adequate explanation for its five-month delay in issuing a disclaimer after having a reasonable basis to conclude that a policy exclusion applied renders the disclaimer untimely as a matter of law (see Brighton Cent. School Dist. v American Cas. Co. of Reading, Pa., 19 AD3d 528). Accordingly, I vote to affirm the order granting summary judgment to the plaintiffs and to remit the matter to the Supreme Court, Queens County, for the entry of a judgment declaring that State Farm is obligated to defend and indemnify Osborne in the underlying personal injury action (see Lanza v Wagner, 11 NY2d 317, 334, appeal dismissed 371 US 74, cert denied 371 US 901).

ENTER:

James Edward Pelzer

Clerk of the Court

 

Kennedy v. Brown



 

In an action to recover damages for personal injuries, etc., the defendant appeals from an order of the Supreme Court, Kings County (Schmidt, J.), dated December 14, 2004, which denied his motion for summary judgment dismissing the complaint on the ground that neither of the plaintiffs sustained a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is affirmed, with costs.

The reports of the defendant's examining physician largely failed to set forth the objective tests which were performed to support his conclusion that neither of plaintiffs suffered from any limitation of range of motion (see Zavala v DeSantis, 1 AD3d 354; Black v Robinson, 305 AD2d 438; Urbanski v Mulieri, 287 AD2d 710). In addition, although the doctor "ascribe[s] the degree of range of motion in certain areas to some objective testing, he does not compare [either of the plaintiffs'] range of motion with a normal range of motion" (Bent v Jackson, 15 AD3d 46, 49; see Toure v Avis Rent-A-Car Sys., 98 NY2d 345). Accordingly, under these circumstances, the defendant failed to make a prima facie showing that neither of the plaintiffs sustained a serious injury within the meaning of Insurance Law § 5102(d) (see Toure v Avis Rent-A-Car Sys., supra; Bent v Jackson, supra; Urbanski v Mulieri, supra). Consequently, the burden never shifted to the plaintiffs to raise a triable issue of fact, and we need not consider the sufficiency of the plaintiffs' opposition [*2]to the motion (see Trantel v Rothenberg, 286 AD2d 325; Papadonikolakis v First Fid. Leasing Group, 283 AD2d 470).

Thus, the motion for summary judgment was properly denied (see generally Alvarez v Prospect Hosp., 68 NY2d 320).
COZIER, J.P., SANTUCCI, LUCIANO, FISHER and COVELLO, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Court

Murray v. Hartford Insurance Company


Shayne, Dachs, Stanisci, Corker & Sauer, Mineola, N.Y. (Jonathan
A. Dachs of counsel), for appellants.
Marvin Emmer, Staten Island, N.Y. (Ronald Cohen of counsel),
for respondent.

In an action to recover damages under the underinsured motorist provision of an insurance policy, the defendants appeal from an order of the Supreme Court, Richmond County (Giacobbe, J.), dated February 22, 2005, which denied their motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is reversed, on the law, with costs, the motion is granted, and the complaint is dismissed.

The excerpts from the plaintiff's deposition testimony, as well as the affirmed medical reports of the defendants' examining physicians, sufficiently established a prima facie case 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; Batista v Olivo, 17 AD3d 494; Grant v Fofana, 10 AD3d 446). The affidavit of the plaintiff's physician submitted in opposition to the motion was insufficient to raise a triable issue of fact. The affidavit was based upon examinations conducted nearly four years prior to the date of the affidavit (see Kauderer v Penta, 261 AD2d 365; see also Frier v Teague, 288 AD2d 177; Mohamed v Dhanasar, 273 AD2d 451), as well as upon unaffirmed MRI reports which had not been placed before the court by the [*2]defendants (see Friedman v U-Haul Truck Rental, 216 AD2d 266; see also D'Amato v Mandello, 2 AD3d 482; Williams v Hughes, 256 AD2d 461; Merisca v Alford, 243 AD2d 613). In addition, the plaintiff's physician failed to set forth the objective tests used in finding limitations in motion (see Johnson v Burke & McCowen, 7 AD3d 674; Ersop v Variano, 307 AD2d 951; Carroll v Jennings, 264 AD2d 494), and failed to account for the plaintiff's medical history subsequent to the accident (see Pommells v Perez, 4 NY3d 566; Barnes v Cisneros, 15 AD3d 514; Mooney v Edwards, 12 AD3d 424).

Moreover, the plaintiff's claim that she was unable to perform substantially all of her daily and work activities for not less than 90 of the first 180 days as a result of the subject accident was unsupported by any competent medical evidence (see Sainte-Aime v Ho, 274 AD2d 569; Arshad v Gomer, 268 AD2d 450; DiNunzio v County of Suffolk, 256 AD2d 498, 499).

Accordingly, the Supreme Court should have granted the defendants' motion for summary judgment dismissing the complaint.
SCHMIDT, J.P., S. MILLER, MASTRO, SPOLZINO and LUNN, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Court

Selective Insurance Company v. Merchants Insurance Group

 

In an action for a judgment declaring that the defendant Merchants Insurance Group is obligated to defend and indemnify the plaintiff in an underlying personal injury action entitledGanci v Bloomingdale Props., commenced in the Supreme Court, Kings County, under Index No. 705/00, the plaintiff appeals from an order of the Supreme Court, Kings County (Vaughan, J.), dated September 15, 2004, which denied its motion for summary judgment.

ORDERED that the order is reversed, on the law, with costs, the motion is granted, and the matter is remitted to the Supreme Court, Kings County, for the entry of a judgment declaring that the defendant Merchants Insurance Group is obligated to indemnify the plaintiff in the underlying personal injury action.

The plaintiff established its entitlement to judgment as a matter of law, as the insurance policy issued by the defendant Merchants Insurance Group (hereinafter Merchants) stated that Merchants would act as a primary insurer. In opposition, Merchants failed to raise a triable issue of fact (see Zuckerman v City of New York, 49 NY2d 557). [*2]

Since this is a declaratory judgment action, the matter must be remitted to the Supreme Court, Kings County, for the entry of a judgment declaring that Merchants is obligated to indemnify the plaintiff in the underlying personal injury action (see Lanza v Wagner, 11 NY2d 317, appeal dismissed 371 US 74, cert denied 371 US 901). The issue of the defense of this action is now academic.

The parties' remaining contentions are without merit.
H. MILLER, J.P., LUCIANO, DILLON and COVELLO, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Court

 

Eagle Insurance Company v. Sanchez


 In a proceeding pursuant to CPLR article 75 to permanently stay arbitration of a claim for uninsured motorist benefits, Allstate Insurance Company appeals from an order of the Supreme Court, Kings County (Bernstein, J.H.O.), dated August 11, 2004, which determined that its disclaimer of coverage as to its insured, Anthony J. Scarito, was invalid and, in effect, granted the petition and permanently stayed the arbitration.

ORDERED that the order is affirmed, with costs.

For an insurer to disclaim its liability to its insured on the ground of lack of cooperation, the insurer must demonstrate (1) that it acted diligently in seeking to bring about the insured's cooperation, (2) that the efforts employed by the insurer were reasonably calculated to obtain the insured's cooperation, and (3) that the attitude of the insured, after his or her cooperation was sought, was one of willful and avowed obstruction (see Thrasher v United States Liab. Ins. Co., 19 NY2d 159, 168-169). Even assuming that hearsay testimony of the appellant's witnessess adduced at the hearing was admissible to demonstrate diligence, the appellant failed to establish a right to disclaim.

The record reveals that there was insufficient proof of the three-prong test set forth in Thrasher v United States Liab. Ins. Co. (id.). Allstate failed to establish that it was sufficiently diligent in seeking to bring about its insured's cooperation (see Alexander v Stone, 45 AD2d 216, 220; Wallace v Universal Ins. Co., 18 AD2d 121, 125, affd on opinion below 13 NY2d 978), or that its efforts were reasonably calculated to obtain its insured's cooperation (see Coleman v National Grange Mut. Ins. Co., 28 AD2d 1073, 1074, affd 23 NY2d 836; National Grange Mut. Ins. Co. v Lococo, 20 AD2d 785, 786, affd 16 NY2d 585). Further, the nonaction of the insured did not, in this case, constitute "willful and avowed obstruction" (Coleman v New Amsterdam Cas. Co., 247 NY 271, 276; see Matter of Empire Mut. Ins. Co. [Stroud-Boston Old Colony Ins. Co.], 36 NY2d 719, 721-722; Thrasher v United States Liab. Ins. Co., supra at 168; Matter of New York Cent Mut. Fire Ins. Co. v Bresil, 7 AD3d 716, 717; Matter of Metlife Auto & Home v Burgos, 4 AD3d 477; Matter of Statewide Ins. Co. v Ray, 125 AD2d 573, 574).

The appellant's remaining contentions are without merit.
CRANE, J.P., RITTER, GOLDSTEIN and LIFSON, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Court

 

 

 

 

 

 

Indemnity Insurance Company  v.Transcontinental Insurance Company


Molod Spitz & DeSantis, P.C., New York (Marcy Sonneborn of
counsel), for appellant.
Ford Marrin Esposito Witmeyer & Gleser, L.L.P., New York
(Thomas R. Esposito of counsel), for respondents.

Order, Supreme Court, New York County (Walter B. Tolub, J.), entered on or about March 21, 2005, which, in an action by an excess insurer against the primary insurers for bad-faith failure to accept a settlement offer within defendants' policy limit, granted defendants' motion for summary judgment and denied plaintiff's cross motion for summary judgment, unanimously affirmed, with costs.

The record lacks any pattern or indicia of defendants' reckless or conscious disregard for plaintiff's rights (see Pavia v State Farm Mut. Auto. Ins. Co., 82 NY2d 445, 453-454, 456 [1993]). We reject plaintiff's argument that defendants knew they had no defense to liability when the attorney they assigned decided not to call the accident reconstruction expert he had retained. While such an expert might have made the defense of the parties' insured more credible, the depositions in the underlying action, the skid marks left at the scene, the points of impact, and the underlying plaintiff's inconsistent statement to the police presented defendants with a meritorious defense. The underlying plaintiff's vehicle had hit the insured's vehicle in the rear. While the underlying plaintiff's injuries were serious, defendants fairly evaluated the potential damages based upon sustained verdicts for comparable injuries, and, given their evaluation of liability, reasonably determined that an apportioned verdict would likely be within [*2]their policy's limits. We note that upon a liability verdict wholly adverse to the insured, defendants tendered their policy. We have considered plaintiff's remaining arguments and find them to be unavailing.

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

ENTERED: DECEMBER 1, 2005

CLERK

 

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