Coverage Pointers - Volume VII, No. 13

12/29/05          Durant v. North Country Adirondack Cooperative Insurance Company

Appellate Division, Third Department

Insurer's Duty to Defend Much Broader than Duty to Indemnify, But Not Unlimited

Plaintiff in the underlying action caught his foot in a corn chopper at plaintiffs' farm, requiring the amputation of his leg below the knee. He commenced a negligence action against plaintiffs, alleging that his injuries occurred while he was "assisting" Durant in the repair of the chopper. Plaintiffs' insurer, defendant North Country Adirondack, disclaimed coverage for the negligence action based on an exclusion in plaintiffs' farm owners' policy for claims arising from bodily injury to a farm employee.  It is well established that an insurer's duty to defend is much broader than the duty to indemnify and will arise "whenever the allegations in a complaint state a cause of action that gives rise to the reasonable possibility of recovery under the policy" or where "the insurer has actual knowledge of facts establishing . . . a reasonable possibility of coverage"   Further, "[e]ven where there exist extrinsic facts suggesting that the claim may ultimately have no merit or outside the policy's coverage, the insurer cannot avoid its commitment to provide a defense" (Fitzpatrick v American Honda Motor Co., supra at 66).

Here, no dispute existed that the allegations of negligence in the complaint invoked a duty to defend, unless one of the policy exclusions applies in this case the exclusion in plaintiffs' policy for liability "resulting from bodily injury to a farm employee." The burden was on defendant to demonstrate that the complaint could only be interpreted to deny coverage under that policy exclusion. Although it was permissible for defendant to rely on the underlying pleadings where he stated that he was employed by the farm, his unsworn admissions to defendant's employee cannot be relied upon to defeat defendant's duty to defend. His assertion that he was employed by plaintiffs is insufficient to establish in the context of this action between plaintiffs and defendant that he was so employed.  Thus, defendant's duty to defend was established by the complaint and defendant failed to present conclusive evidence that the farm employee exclusion applied.  

 

12/27/05          Becker v. Colonial Cooperative Insurance Company

 Appellate Division, Second Department

Question of Fact as to When Injured Party Had Notice of Insurer to Provide Reasonable Notice of the Claim

Becker allegedly sustained personal injuries when he slipped and fell on the insured’s premises (a Bakery). The Bakery didn’t notify their insurer, Colonial, of the claim and a default judgment was entered against the insured.  Becker commenced an action to collect the judgment against the insured pursuant to Insurance Law § 3420(a) (2).  Becker did not dispute that the Bakery had failed to provide notice of the occurrence as required by the Colonial policy. However, he argued that pursuant to the rule of Lauritano v American Fid. Fire Ins. Co. (3 AD2d 564, affd 4 NY2d 1028), the Bakery's notice failure did not preclude the injured party’s action against Colonial. Rather, insofar as the plaintiff was concerned, he could provide notice of his claim to Colonial within a reasonable time after learning the identity of the Bakery's carrier. Accordingly, he argued that the Bakery's notice failure did not warrant dismissal of the complaint, but that it was Becker who deserved summary judgment.

Colonial argued that Becker’s reliance upon Lauritano was misplaced because, while that case may permit an injured claimant to notify an insurer within a reasonable time after discovering the insurer's identity, here the plaintiff never even alleged that it ever notified Colonial. Rather, Colonial's first notice came from the Bakery when it submitted the default judgment.  Moreover, Colonial provided the plaintiff notice of its identity as the Bakery's insurer by sending him a copy of its disclaimer letter, but Becker still failed to send any notice to Colonial until five months later when it served Colonial with the pleadings commencing this action.

The Court finds a question of fact.  It holds that Colonial “wholly failed to even address the issue of the plaintiff's independent right to give notice” (as the injured party), so clearly Colonial did not prove its prima facie entitlement to summary judgment dismissing the complaint. Likewise, Becker focused almost exclusively on his argument that unlike an automobile insurer, Colonial's identity as the bakery's carrier could not be ascertained independently. But he failed to offer any proof as to when he first provided notice to Colonial or as to his alleged due diligence in attempting to ascertain Colonial's identity as the Bakery's insurer.

 

12/27/05          Paulino v. Dedios

Appellate Division, Second Department

Defendants Fail to Meet their Burden to Dismiss on Serious Injury Where Examining Physician Didn’t Compare Observed Range of Motion to Normal Range

Defendants failed to establish prima facie entitlement to judgment as a matter of law dismissing the complaint on the ground 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). The affirmed medical reports of the defendants' examining physicians specified the degrees of range of motion in the plaintiff's cervical and lumbar spine without comparing these findings to the normal range of motion.

 

12/27/05          Magarin v. Kropf

Appellate Division, Second Department
Failure of Plaintiff’s Physician to Reconcile Findings of Restrictions with Prior Findings of the Absence of Restrictions Earns Dismissal on Serious Injury Grounds

Plaintiffs' evidence was insufficient to raise a triable issue of fact and avoid dismissal on the ground that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d). Although plaintiffs' physician reported finding restrictions in the ranges of motion of the cervical and lumbar regions of the plaintiffs' spines when he examined them in May of 2004, he failed to reconcile these findings with his findings of little or no restrictions when he examined the plaintiffs just six months earlier.  Furthermore, the plaintiffs' physician relied upon unsworn medical reports and records provided by others in arriving at his determination.

 

12/22/05          Merchants Mutual Insurance Group v. Travelers Insurance Company
Appellate Division, Fourth Department

Insurer Found Not Acting Under Mistake of Law and Fact Is a Volunteer with No
Right to Recovery for the Period Prior to the Time it Retenders

Plaintiff in underlying action was injured during the course of his employment with Finnefrock and while working on property owned or controlled by Springcreek. Finnefrock was insured by Merchants Mutual and Springcreek was insured by Hartford (AIC), incorrectly sued as Travelers.  The underlying action was commenced against Springcreek and AIC tendered the defense of the action to Merchants. Merchants assumed the defense and indemnification of Springcreek. Four years later (January 18, 2002), Merchants attempted to retender the defense and indemnification to AIC, alleging that it had initially assumed based on mistakes of material fact and law. AIC refused to assume the defense. 

 

When an insurer who is not acting under a mistake of material fact or law assumes the defense and indemnification of an insured when there is no obligation to do so, that insurer becomes "a volunteer with no right to recover the monies it paid on behalf of [the] insured" (National Union Fire Ins. Co., 190 AD2d at 397).  The Court finds that the mistakes of material fact and law alleged by Merchants were unsupported, and thus Merchants acted as a volunteer in assuming the defense of Springcreek and continuing with that defense with respect to the period before January 18, 2002.  But, the Court finds that for the period beginning January 18, 2002, when Merchants attempted to retender the defense to AIC, Merchants was no longer in the same position because once an insurance company that has voluntarily assumed the defense in an action attempts to retender the defense to the appropriate party, the insurance company is no longer a volunteer. AIC argued that Merchants was estopped from obtaining their relief due to the delay.  The Court concluded that there was a question of fact whether AIC failed to establish that it lost all “meaningful opportunity to control its defense” inasmuch as Merchants retendered the defense of the action to AIC at a time when AIC might have been able to control the defense in a meaningful way.

 

12/22/05          Appolino v. Delorbe

Appellate Division, First Department

Attorneys Need Not Work for Free
In a victory for defense lawyers everywhere, the First Department held that where one court determines, even if by default judgment, that an insurer no longer must defend or indemnify its insured, another court should respect that determination and allow insurer-appointed defense counsel to withdraw from the case.

 

12/22/05          Baez v. Rahamatali

Appellate Division, First Department

Carriers Continue to Buy Serious Injury Motions at the “Gap” – Pommels Strikes Again in a Split Decision

The majority held that plaintiff's unexplained 20-month gap in treatment is fatal to her claim of serious injury (see Pommells v Perez, 4 NY3d 566). The dissent would have held the matter for a jury, citing proof in the record that the plaintiff stopped treatment because there was no further benefit to continuing physical therapy.

12/22/05          Pianka  v. Pereira
Appellate Division, Third Department
Bulging Discs Do Not Necessarily Qualify for a Serious Injury under Toure
In response, plaintiff asserted that she sustained a serious injury in the categories of permanent consequential and significant limitations of use of her cervical spine, and that objective medical evidence of those limitations is provided by the MRI reports. However, since proof of a bulging disc or degenerative disc condition is not enough to establish a serious injury, plaintiff must further provide either "an expert's designation of a numeric percentage of [her] loss of range of motion . . . [or] [a]n expert's qualitative assessment of [her] condition . . ., provided that the evaluation has an objective basis and compares [her] limitations to the normal function, purpose and use of the affected body organ, member, function or system" (Toure v Avis Rent A Car Sys., 98 NY2d 345, 350 [2002]; Clements v Lasher, 15 AD3d 712, 713 [2005]; John v Engel, 2 AD3d 1027, 1029 [2003]). Here, neither the quantitative nor the qualitative standard was met.

 

12/19/05          Bloom v. St. Paul Travelers Companies, Inc.

Appellate Division, Second Department

Motion to Disqualify Insurer’s Former Counsel Denied as Information Related to the Prior Representation Were not Material to the Present

St. Paul’s moved to disqualify the law firm representing the plaintiffs in this uninsured/ underinsured motorist coverage case on the ground that the members of the Law Firm had previously represented St. Paul’s.  The Court affirms the denial of the motion to disqualify.  The Court indicated that “defendants' conclusory assertions that one of the Law Firm's attorneys ‘worked closely with’ certain unidentified employees of one or more of the defendants in connection with a number of cases that were more or less related to the general area of uninsured or underinsured motorist coverage failed to establish” that information material to the evaluation, prosecution, settlement or accomplishment of the former representations were material to the evaluation, prosecution, settlement or accomplishment of the current representation.

 

12/19/05          Grove Hill Associates v. Colonial Indemnity Insurance Co.

Appellate Division, Second Department
Carrier Raises the Roof(ing Exclusion) and Walks Free
A roofing exclusion in a general liability policy is given effect and a claim arising out of a fire caused by use of a torch during a roofing operation falls within the exclusion and therefore outside of coverage

 

12/19/05          In the Matter of Allstate Insurance Company v. Lichtenstein

Appellate Division, Second Department
Remember the 20-Day Time Period to Move to Stay Uninsured Motorist Arbitrations
At least once every six months, a case is reported where an auto carrier fails to make an application to court to move to stay an uninsured motorist arbitration within 20 days after its receipt of the arbitration demand.  Here’s the semi-annual reminder.  Remember, if an insurer receives a demand for arbitration for Uninsured Motorist (UM) Benefits and believes that the applicant is not entitled to those benefits because , for example, (a) there was in fact a policy of insurance in place and the applicant therefore is not an uninsured motorists or (b) the applicant claims that there was a hit-and-run accident and there was not physical contact or (c) any number of other reasons that would go to the question of “entitlement” to benefits, the carrier MUST file a application in state Supreme Court to stay arbitration.  Those issues are not arbitrable and must be ruled on by a judge, not an arbitrator.  However, it this case, the applicant confused the carrier by claiming that he was filing a claim for underinsured motorists (UIM) benefits, not UM benefits and the carrier did not move to stay within 20 days.  Once it became clear that, in fact, the applicant was filing a claim for UM benefits, the carrier was given the right to file the application to stay.  A UIM arbitrator has greater power than a UM arbitrator, and rarely has to deal with questions of arbitrability. 

 

12/19/05          In the Matter of Met Life Auto & Home v. Leonorovitz
Appellate Division, Second Department

SUM Coverage from Two Policies cannot be “Stacked”

This was a proceeding pursuant to CPLR article 75 to permanently stay arbitration of a claim for supplementary uninsured/underinsured motorist benefits. GEICO was the insurer of the claimant’s vehicle involved in the accident.   At issue was whether the insured could claim additional SUM benefits from Met Life pursuant to a policy issued to him on another one of his vehicles. The Met Life policy provided for SUM benefits in amounts identical to those provided for in the GEICO policy (i.e. $100,000 per person/$300,000 per accident). The Court finds the Supreme Court properly granted the petition based upon the anti-stacking provisions of the Met Life policy which provided that "[i]f an insured is entitled to uninsured motorist coverage or supplementary uninsured/underinsured motorists coverage under more than one policy, the maximum amount such insured may recover shall not exceed the highest limit of such coverage for any one vehicle under any one policy."  The fact that the insured was claiming SUM benefits from two different policies issued by two different carriers did not mean that the SUM coverage from each policy may be "stacked" to provide additional SUM coverage.

 

12/19/05          Rodriguez v. Virga

Appellate Division, Second Department

No Serious Injury Under 90/180 Category Due to Early Cessation of Treatment and Return to Work within 90 Days of Accident

The judgment reversed, defendants' motion granted, and complaint dismissed, because the plaintiff failed to establish a prima facie case that she sustained an injury under the 90/180-day category of serious injury (see Insurance Law § 5102[d]).  The Court finds that viewing the evidence in the light most favorable to the plaintiff, no rational jury could have found in her favor as it was undisputed that the plaintiff received no medical treatment beyond the fifth or sixth week following her accident. She returned to her job as a letter carrier less than 90 days after the accident, was able to resume her usual functions and activities, and continued to work for approximately one year thereafter.

 

12/19/05          Karabchievsky v. Crowder

Appellate Division, Second Department

Once Defendant Puts Forward Prima Facie Case, Plaintiff Needs More than Aged Physician Exam and Unsworn Medical Reports in Opposition

Defendants' evidence consisted of the affirmed medical report of their examining physician and the plaintiff's deposition testimony.  This was sufficient to establish 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.  The plaintiff's evidence in opposition was insufficient to raise a triable issue of fact. The affirmation of the plaintiff's physician was based upon an examination of the plaintiff that was conducted two years after the cessation of medical treatments, and the plaintiff failed to account for this lapse in time (see Pommells v Perez, 4 NY3d 566).  The plaintiff's physician also relied upon unsworn medical reports provided by others in arriving at his determination.

 

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.

 

12/28/05          In the Matter of the Arbitration between the Applicant and Respondent

Arbitrator Glen A. Cacchioli, Esq.

Insurer’s Denial For Electrodiagnostic Testing Conducted Within Four Weeks Of the Accident and Office Visits Upheld Based upon Peer Review and Independent Medical Examination.

 

Here is the Angle:      This decision provides, yet again, the standard used to ascertain whether an Applicant has met its burden in demonstrating medical necessity for an electrodiagnostic test.

 

The Analysis:              The Applicant sought $2,699.12 for medical expenses to the EIP for electrodiagnostic testing and various office visits.  On October 5, 2005, the EIP was involved in a motor vehicle accident and treated with Dr. Albis complaining of weakness, muscle pain, and neck and low back stiffness with restricted range of motion.  Upon examination, the EIP’s neurological examination was essentially normal.

 

On October 25, 2004, the EIP followed-up with Dr. Albis with the same complaints.  Dr. Albis recommended electrodiagnostic testing, which was performed on October 29, 2004.

 

The insurer denied the electrodiagnostic testing claiming lack of medical necessity based upon a peer review.

 

Further, the EIP treated with Dr. Dynoff on December 7 and 28, 2004, for evaluations as well as a physical performance test.  The insurer denied these evaluations and the physical performance test claiming lack of medical necessity based upon an IME.

 

With respect to the electrodiagnostic testing, Arbitrator Cacchioli upheld the insurer’s denial.  The Applicant must submit the following to establish medical necessity for the electrodiagnostic testing:

 

1.         A narrative report from the treating physician clearly explaining the test’s medical purpose and why it is being utilized on the particular patient;

2.         The test results must be part of the hearing record with a clear interpretation of the findings;

3.         The test must be medically linked to the injuries the patient sustained in the motor vehicle accident; and

4.         The test must be distinguished from other studies previously or contemporaneously rendered.

 

Citing, Arbitrator Ritzer, Citroenbaum a/a/o DeLaRosa and General Accident.

Arbitrator Cacchioli found that the peer review of Dr. Csillage was more persuasive.  Dr. Csillage opined that the testing was premature and not based upon significant neurological symptoms.  Further, electrodiagnostic testing is usually performed after a decline in neurological function based upon multiple physical examinations.  In this case, the testing was performed after two examinations and within seven days of each other.  Moreover, the testing was essentially negative for significant neurological abnormalities.  Also, there was no evidence to demonstrate a decline in neurological function over a period of time that justified extensive neurological testing.   In addition, conservative care should have been provided and time provided to assess it before extensive testing was performed.  Arbitrator Cacchioli also notes:

 

Here, the studies were recommended before the full effectiveness, or lack thereof, of physical therapy could be properly assessed.  It is inconceivable, given the lack of significant neurological findings that these tests were recommended within four weeks of the accident.  There was simply no immediate and compelling reason for the extensive testing that was recommended and performed here.

 

With respect to the claim for various office visits and the physical performance test, Arbitrator Cacchioli upheld the insurer’s denial, finding the IME physician’s opinion more persuasive.  Arbitrator Cacchioli notes that there were conflicting opinions regarding the treatment’s medical necessity and it is the arbitrator’s duty to resolve factual issues in dispute.  The IME physician’s report revealed that the EIP had no significant injuries to the cervical or lumbar spine warranting continued care or even a follow up office visit.

 

 12/27/05         In the Matter of the Arbitration between the Applicant and Respondent

Arbitrator Toby Susan DeSimone, Esq.

Treating Chiropractor’s Testimony Coupled With Other Treating Physicians’ Records To Establish Medical Necessity For NCV Testing More Persuasive Than A Lonely Peer Review, BUT Denial of Chiropractic Benefits Upheld Because Chiropractor Failed To Submit Evidence of Treatment Progress and Response.

 

Here is the Angle:     The Applicant chiropractor seeking reimbursement for his services must submit evidence of the patient’s progress notes demonstrating actual progress and a response to the treatment.  If the range of motion testing is essentially the same for an extended period of time, it is not enough to demonstrate medical necessity for the chiropractic care.

 

The Analysis: The Applicant, chiropractor, sought $2,589.38 in medical benefits for chiropractic services provided to the eligible injured person (“EIP”) as well as an NCV test.  The Applicant testified at the no-fault arbitration hearing.  Between the Applicant’s testimony and the evidence submitted by the parties it was revealed that the EIP was involved in a January 9, 2003, motor vehicle accident.  The following day, the EIP consulted with Dr. Madgy Shady, a neurosurgeon with thoracic spine pain complaints.  Then three weeks after the motor vehicle accident, the EIP was evaluated and examined by the Applicant chiropractor.  Interestingly, the EIP revealed a history of prior accidents as well as a thoracic spine surgery and lung removal.  The EIP also had other medical issues unrelated to the motor vehicle accident.  The EIP apparently had received prior chiropractic care from the Applicant.

 

Upon the EIP’s initial examination with the Applicant, three weeks post motor vehicle accident, she complained of headaches, mid back pain, neck pain, right arm pain, and bilateral leg weakness with paresthesias.  Upon examination, the EIP demonstrated a restricted range of motion of the cervical, thoracic, and lumbar spine.  Sensory deficit testing elicited pain at the C5 – C7 dermatomes.  The EIP also had muscle weakness and sensory deficits in the upper and lower extremities.  The Applicant noted that some prior medical issues that were resolved returned after the motor vehicle accident coupled with new injuries.  The EIP was started a course of chiropractic care.

 

Thereafter, the EIP treated again with the neurosurgeon complaining of neck and right arm pain.  The EIP advised to continue conservative care and in the event that the treatment failed she may require C5/6 anterior cervical discectomy fusion.

 

On March 7, 2003 and March 14, 2003, the Applicant performed lower and upper extremity NCV studies.  The Applicant noted that the EIP’s symptoms increased over time in spite of conservative care.  Arbitrator DeSimone noted that the Applicant’s treatment notes were illegible.

 

Thereafter, on March 17, 2003, the EIP was referred to an orthopedist regarding her lumbosacral spine injury with neurological complaints in the lower left extremity.  The orthopedist recommended an EMG/NCV study of the lower extremities.  Arbitrator DeSimone also noted that the Applicant had already performed the NCV study on March 7, 2003.

 

The insurer improperly denied the Applicant’s claim for the NCV studies performed on March 7, 2003 and March 14, 2003, based upon Dr. Robert A. Sohn’s peer review reports.  Dr. Sohn’s reports indicated that there was no follow-up examination report to demonstrate progression in the neurological deficits that warranted electrodiagnostic studies.  Incidentally, Dr. Sohn was not provided with the Applicant’s treatment notes.  Despite this, Dr. Sohn opined that there was no alternative treatment program presented that was dependent upon the outcome of the electrodiagnostic studies.

 

The Applicant did testify that after the electrodiagnostic studies were conducted the EIP was considered a candidate for epidural steroid injections and her treatment changed to include spinal traction.

 

Arbitrator DeSimone found that in light of the fact that the neurosurgeon found the EIP a surgical candidate, the examining orthopedist’s recommendations, and the Applicant’s testimony regarding progressive neurological deficits, the electrodiagnostic testing was medically necessary.

 

However, with respect to the chiropractic treatment rendered by the Applicant, Arbitrator DeSimone found that the insurer properly denied the treatment as not medically necessary.  Relying upon the chiropractic IME report of Rory M. Ciuffo, D.C., the EIP reported that she felt “ok.”  Mr. Ciuffo reported a normal cervical spine examination and restricted lumbar spine range of motion.  Mr. Ciuffo diagnosed resolved cervical and lumbar strain/sprain.  Mr. Ciuffo opined that based upon his examination, the treatment duration, and the fact that the EIP was not reporting complaints further chiropractic care was not warranted.

 

The Applicant testified that the EIP had not reached her pre-accident condition at the time of the chiropractic IME.  Further, the EIP continued to improve with treatment.  Arbitrator DeSimone noted that upon review of the Applicant’s treatment notes, the range of motion exhibited by the EIP remained the same over an extended period of time.  Moreover, Arbitrator DeSimone found that the Applicant failed to document any significant change in the EIP’s status to warrant treatment to continue nearly four months past the insurer’s denial.  Further, the Applicant failed to submit evidence of complete examinations and reports of the EIP’s progress and treatment response. 

 

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.

12/23/05          Faeth v. State Farm Mutual Automobile Insurance Company
Iowa Supreme Court

Because Application of Contractual Limitation On Time to Sue Contained in Policy Would Extinguish Plaintiff’s Uninsured-Motorist Claim Before It Accrued, By Default, Iowa Code Section 614.1(5) Applied
This appeal involved the efficacy of a contractual limitation on the time for bringing suit contained in a State Farm policy, where the policy provision at issue required that actions to recover on uninsured motor-vehicle coverage must be commenced within two years of the date of the accident. The Iowa Supreme Court determined that the mandatory protection against uninsured motorists contained in Iowa Code section 516A.1 (1997) extends to legally sanctioned, self-insured motorists who become insolvent after the accident occurs; and as such, the uninsured-motorist claim did not accrue until the occurrence of the insolvency. The Iowa Supreme Court concluded that because the application of the contractual limitation on time to sue contained in State Farm’s policy would serve to extinguish plaintiff’s uninsured-motorist claim before it accrued, it was unreasonable and may not be enforced; and, as such, by default, Iowa Code section 614.1(5) became the applicable period of limitation.

 

Submitted by: Bruce D. Celebrezze and Jasbina Ahluwalia (Sedgwick, Detert, Moran & Arnold)

 
12/23/05          E.I. Dupont De Nemours & Co. v. Commonwealth

Massachusetts Appellate Court

Employer Who Notified Department of Industrial Accidents That It No longer Would Participate In Workers’ Compensation Trust Fund Neither Required to Pay Future Assessments Nor Entitled to Reimbursement For Injury Occurring After Date of Filing Notice
In this case, the appellate court determined whether an employer who notified the Department of Industrial Accidents that it no longer would participate in the Workers’ Compensation Trust Fund may be reimbursed under G.L. c. 152, § 37, for certain benefits it paid to an employee who sustained a second work-related injury after the date the employer filed its notice of nonparticipation. The appellate court found that the statute plainly and unambiguously provided that upon filing its notice of nonparticipation, the employer chose not to participate further in the trust fund, and consequently was neither required to pay future assessments nor entitled to reimbursement for any injury occurring after the date of filing its notice.

 

Submitted by: Bruce D. Celebrezze and Jasbina Ahluwalia (Sedgwick, Detert, Moran & Arnold)

12/20/05          Purvis v. Progressive Casualty Insurance Company
Massachusetts Appellate Court

Policy Not Ambiguous Where Policy Did Not State Whether It Was Operator’s Policy Or Owner’s Policy, Provided Both Owner’s and Operator’s Coverage, and Stated It Had Non-Standard Restrictions
Purvis obtained a business insurance policy from Progressive insuring his Toyota pick-up truck. Subsequently, Purvis rented a car from Thrifty Car Rental, identified only himself as the “authorized driver” of the rental car, and declined the insurance offered by Thrifty Car Rental. The day after he rented the car, Purvis gave his minor daughter, Ashley, permission to drive it. Ashley and her passenger friend, Kelly Smith (Smith), were involved in an accident that evening. Smith was severely injured in the accident and her parents sued Purvis for Smith’s personal injuries. Progressive refused to defend the suit on Purvis’ behalf because Progressive determined that Ashley was not an “insured driver” and the rental vehicle was not an “insured auto,” as those terms were defined in the policy, thus excluding both from coverage. The issues raised in the appeal were whether the Progressive policy was ambiguous, and whether the policy satisfied Idaho’s motor vehicle financial responsibility law. Purvis claimed the policy was ambiguous in that one could not determine whether it was an owner’s policy or an operator’s policy. Generally, an owner’s policy insures the owner of a particular automobile, while an operator’s policy insures the person or operator while he or she is in the act of operating non-owned automobiles. Because Purvis claimed the policy language included both operator’s and owner’s coverage in a manner that would confuse a layperson, Purvis insisted it should be construed against Progressive. The Idaho Supreme Court determined that the policy was not ambiguous where the policy did not state whether it was an operator’s policy or an owner’s policy, provided both owner’s and operator’s coverage, and stated it had “some non-standard restrictions.” Purvis claimed Progressive’s policy did not satisfy Idaho’s motor vehicle financial responsibility law, I.C. § 49-1212, because the policy did not provide the coverage required for either an owner’s policy or an operator’s policy. I.C. § 49-1212 distinguishes between the two types of policies and requires different kinds of coverage for each. The Idaho Supreme Court found that Progressive’s policy (a) designated the Toyota as the insured vehicle, and (b) covered Purvis (the person named therein) and Ashley when she was using the Toyota with Purvis’ permission, thus complying with the owner’s policy requirements of I.C. § 49-1212(1). In addition, the Idaho Supreme Court determined that the Progressive policy issued to Purvis was an owner’s policy, not an operator’s policy, so it need not comply with the requirements of I.C. § 49-1212(2). Accordingly, the Idaho Supreme Court concluded that the Progressive policy was an unambiguous owner’s policy affording the coverage required by Idaho’s motor vehicle financial responsibility law.

 

Submitted by: Bruce D. Celebrezze and Jasbina Ahluwalia (Sedgwick, Detert, Moran & Arnold)

 

 

 

Merchants Mutual Insurance Group v. Travelers Insurance Company

 

Appeal from a judgment (denominated order) of the Supreme Court, Monroe County (Andrew V. Siracuse, J.), entered January 6, 2005. The judgment, inter alia, denied plaintiff's motion for summary judgment.


CHELUS, HERDZIK, SPEYER, MONTE & PAJAK, P.C., BUFFALO (GREGORY V. PAJAK OF COUNSEL), FOR PLAINTIFF-APPELLANT.
KENNEY, SHELTON, LIPTAK & NOWAK, LLP, BUFFALO (TIMOTHY E. DELAHUNT OF COUNSEL), FOR DEFENDANT-RESPONDENT. It is hereby ORDERED that the judgment so appealed from be and the same hereby is unanimously modified on the law by vacating the provision dismissing the amended complaint and granting judgment in favor of defendant Automobile Insurance Company of Hartford, incorrectly sued herein as Travelers Insurance Company, as follows: It is ADJUDGED AND DECLARED that, with respect to the period before January 18, 2002, said defendant is not obligated to contribute toward the defense on behalf of defendant Springcreek Associates in the underlying action and by denying the cross motion insofar as it seeks a declaratory judgment with respect to the period beginning January 18, 2002  and as modified the judgment is affirmed without costs.

Memorandum: In July 1994 Martin Torres was injured during the course of his employment as an employee of defendant Rodney Finnefrock, doing business as Finnefrock Excavating & Paving (Finnefrock), and while working on property owned or controlled by defendant Springcreek Associates and Home Properties of New York, Inc. (Springcreek). Finnefrock was insured by plaintiff, Merchants Mutual Insurance Group (Merchants), and Springcreek was insured by defendant Automobile Insurance Company of Hartford (AIC), incorrectly sued herein as Travelers Insurance Company. In June 1997 Torres commenced a Labor Law and common-law negligence action against, inter alia, Springcreek (hereinafter, Torres action), and in November 1997 AIC tendered the defense of the action to Merchants. In January 1998 Merchants assumed the defense and indemnification of Springcreek. Four years [*2]later, in January 2002, Merchants attempted to retender the defense and indemnification to AIC, alleging that it had initially assumed the defense and indemnification based on mistakes of material fact and law. AIC refused to assume the defense, and Merchants commenced this declaratory judgment action seeking a declaration that it has no duty to defend or indemnify Springcreek in the Torres action and that it is entitled to reimbursement and restitution from AIC for all attorneys' fees expended in the defense of the Torres action in addition to any indemnity payment made therein.

Merchants thereafter moved for summary judgment declaring that AIC must provide primary insurance coverage in the Torres action, including the defense of the action and indemnification therein. AIC opposed the motion and cross-moved for summary judgment dismissing the amended complaint and declaring that AIC is not obligated to contribute any amount on behalf of Springcreek and that Merchants must pay the settlement in the Torres action in its entirety as well as all defense costs incurred in that action. Supreme Court denied the motion and, although the court purported to grant the cross motion, it issued no declaration. We conclude that the court properly denied Merchants' motion but erred in dismissing the amended complaint and in failing to declare the rights of AIC and Merchants with respect to the period before January 18, 2002.

The voluntary payment doctrine "bars recovery of payments voluntarily made with full knowledge of the facts, and in the absence of fraud or mistake of material fact or law" (Dillon v U-A Columbia Cablevision of Westchester, 100 NY2d 525, 526; see Solomon v Bell Atl. Corp., 9 AD3d 49, 55). We have applied that doctrine in insurance cases such as this, holding that " [o]ne cannot ask for subrogation with success, unless either he or his property was in some way lawfully answerable for the claim paid'" (National Union Fire Ins. Co. v Ranger Ins. Co., 190 AD2d 395, 397, quoting Koehler v Hughes, 148 NY 507, 511; see also Gerseta Corp. v Equitable Trust Co. of N.Y., 241 NY 418, 425-426). Therefore, when an insurer who is not acting under a mistake of material fact or law assumes the defense and indemnification of an insured when there is no obligation to do so, that insurer becomes "a volunteer with no right to recover the monies it paid on behalf of [the] insured" (National Union Fire Ins. Co., 190 AD2d at 397).

Contrary to the contention of Merchants, it failed to establish that it assumed the defense under mistakes of material fact or law and thus failed to establish its entitlement to judgment as a matter of law. The documents submitted by Merchants in support of its motion do not constitute admissible evidence establishing that the assumption of the defense was based on the alleged mistakes of material fact or law. In any event, AIC established as a matter of law that Merchants assumed the defense when it was not obligated to do so and thus was a voluntary insurer for the period before January 18, 2002.

AIC also established as a matter of law that, under the circumstances of this case, the reliance by Merchants on purported mistakes of material fact and law does not alter that volunteer status. First, none of the employees of Merchants handling the matter in 2002 knew the reasons for the assumption of the defense by Merchants in 1998 and thus could only speculate concerning the reasons therefor. Second, although Merchants alleged that it had initially believed that its insured was contractually obligated to indemnify Springcreek, AIC conclusively refuted that allegation by establishing as a matter of law that the policy between Merchants and its insured in fact precluded coverage for liability assumed by contract. Finally, Merchants alleged that it assumed the defense based on confusion concerning whether a recent change in the law applied retroactively, but AIC established that, although the Court of Appeals ruled on that issue several months after Merchants assumed the defense, Merchants did not attempt to retender the defense to AIC for another 3½ years. Thus, we agree with AIC that the mistakes of material [*3]fact and law alleged by Merchants are post hoc and unsupported, and we conclude that Merchants acted as a volunteer in assuming the defense of Springcreek and continuing with that defense with respect to the period before January 18, 2002.

We further conclude, however, that AIC failed to establish that Merchants acted as a volunteer for the period beginning January 18, 2002, when Merchants attempted to retender the defense to AIC. Once an insurance company that has voluntarily assumed the defense in an action attempts to retender the defense to the appropriate party, the insurance company is no longer a volunteer (see Wausau Ins. Cos. v Feldman, 213 AD2d 179, 180; see also United States Fire Ins. Co. v CNA, 300 AD2d 1054, 1056; General Acc. Ins. Co. v United States Fid. & Guar. Ins. Co., 193 AD2d 135, 137; cf. National Union Fire Ins. Co., 190 AD2d at 396-397), unless that insurance company is estopped from denying or disclaiming coverage (see Schiff Assoc. v Flack, 51 NY2d 692, 699; Sedgwick Ave. Assoc. v Insurance Co. of State of Pa., 203 AD2d 93; see also Utica Mut. Ins. Co. v 215 W. 91st St. Corp., 283 AD2d 421, 422-423; General Acc. Ins. Co., 193 AD2d at 138).

Although Merchants is correct that estoppel will not apply to create coverage "[w]here there is no coverage ... because the policy was not in existence at the time of the accident" (Tantillo v U.S. Fid. & Guar. Co., 155 AD2d 970, 971; cf. Brooklyn Hosp. Ctr. v Centennial Ins. Co., 258 AD2d 491, lv denied 93 NY2d 814), estoppel may apply if an insurance company seeks to deny or disclaim coverage based on a defense or an exclusion (see Schiff Assoc., 51 NY2d at 699; Utica Mut. Ins. Co., 283 AD2d 421; Sedgwick Ave. Assoc., 203 AD2d at 94; General Acc. Ins. Co., 193 AD2d at 138). Pursuant to the terms of the insurance policy between Merchants and Finnefrock, which was in existence at the time of the accident, if Finnefrock was required to defend and indemnify Springcreek based on common-law indemnification, then Merchants was required to cover that loss. Because the policy was in existence and Merchants is relying on a defense or an exclusion under the policy, estoppel may apply to preclude Merchants from denying or disclaiming coverage.

The doctrine of estoppel precludes an insurance company from denying or disclaiming coverage where the proper defending party relied to its detriment on that coverage and was prejudiced by the delay of the insurance company in denying or disclaiming coverage based on "the loss of the right to control [its] own defense" (General Acc. Ins. Co., 193 AD2d at 138). We conclude that AIC failed to establish that it lost all meaningful opportunity to control its defense inasmuch as Merchants retendered the defense of the action to AIC at a time when AIC might have been able to control the defense in a meaningful way (see id.). We therefore conclude that AIC failed to establish entitlement to judgment as a matter of law with respect to the period beginning January 18, 2002, when Merchants attempted to retender the defense to AIC, and we modify the judgment accordingly.

We note that the same issues of fact that preclude the entitlement of AIC to summary judgment on that part of the cross motion with respect to the period beginning January 18, 2002 also preclude the entitlement of Merchants to summary judgment with respect to its alternative request for contribution for that same time period.
Entered: December 22, 2005
JoAnn M. Wahl
Clerk of the Court

 

Appolino v. Delorbe

Isserlis & Sullivan, Bethpage (Lawrence R. Miles of counsel),
for appellants.
Mkrtchian and Broderick, P.C., Forest Hills (Kenneth R.
Berman of counsel), for respondents.

Order, Supreme Court, New York County (Milton A. Tingling, J.), entered June 14, 2004, which denied the motion of the non-party law firm that is house counsel for defendants' insurance carrier to be relieved as defendants-appellants' counsel, unanimously reversed, on the law, without costs, the motion granted and the law firm discharged.

The Nassau County default judgment declaring that defendants-appellants' insurer, Eagle Insurance Company, had no duty to defend was law of the case, and the motion court erred in failing to give it effect in determining the law firm's motion to withdraw. The motion court's ruling placed the insurer's house counsel in an untenable position by being directed to continue an attorney/client relationship that was no longer viable by virtue of the Nassau County Supreme Court determination that the insurer had no duty to defend or indemnify defendants (see Torres v Bratcher, 35 AD2d 922 [1970]). Plaintiffs, who opposed the motion, relied on Barksdale v New York City Tr. Auth. (273 AD2d 43 [2000]) for the proposition that the Nassau County judgment should be vacated as having been obtained in violation of the Uniform Rules for Trial Courts (22 NYCRR) § 202.3(a). Their reliance is misplaced since, among other things, the facts in that case are readily distinguishable from the matter at bar. In Barksdale, the issue before the two courts was the same, thereby creating the potential for conflicting rulings. Here, the Nassau County declaratory judgment action addressed only coverage issues under the insurance policy, while the New York County action addressed the related personal injury action. Although it might have been desirable for the same judge to hear both actions, it was not required under the circumstances. In any event, the default judgment could not be attacked collaterally, and
apparently no motion to vacate was ever filed (see e.g. Jackson v Jackson, 7 AD3d 404 [2004]; Matter of Eagle Ins. Co. v Facey, 272 AD2d 399 [2000]). [*2]

Finally, plaintiffs' cited no prejudice or any other basis for opposing the law firm's motion, and none is apparent.

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

ENTERED: DECEMBER 22, 2005

CLERK

 

 

Baez v. Rahamatali

 

Order, Supreme Court, Bronx County (Alexander W. Hunter, Jr., J.), entered March 8, 2004, which granted defendants' motions for summary judgment dismissing the complaint, affirmed, without costs.

Plaintiff's unexplained 20-month gap in treatment is fatal to her claim of serious injury (see Pommells v Perez, 4 NY3d 566, 574 [2005]; Colon v Kempner, 20 AD3d 372, 374 [2005]). The dissent's assumption that plaintiff stopped treatment because there was no further benefit to continuing physical therapy is not supported by any evidence, medical or otherwise, but rather, is based on mere speculation. Dr. Graziosa never stated that plaintiff's MRI films of November 2000 and June 2001 indicated she needed surgery, not physical therapy, at that time; he only affirmed, "[w]e, at this point in time [November 2003], clearly indicate an arthroscopy of the knee." Moreover, Dr. Graziosa did not provide an explanation demonstrating that plaintiff's initial, accident-related injury was the cause of her subsequent two injuries, in February and May 2001, and thus did not establish that the prescribed surgery was occasioned by the automobile accident injury.

All concur except Saxe and Ellerin, JJ. who dissent in a memorandum by Ellerin, J. as follows:

ELLERIN, J. (dissenting) [*2]

I find that plaintiff raised an issue of fact as to whether she suffered a serious injury within the meaning of Insurance Law § 5102(d), and accordingly would reverse the order appealed and reinstate the complaint.

Plaintiff, then 19 years old, was involved in a three-car accident on November 8, 2000, when a vehicle owned and operated by defendant Torres in which she was a passenger struck the rear of a vehicle operated by defendant Rahamatali and in turn was struck from behind by a vehicle operated by defendant Smith. The impact of the first collision caused plaintiff's left knee to strike the dashboard of Torres's car. She subsequently sought medical attention for pain in the knee and in her neck and back.

In opposition to defendants' motion for summary judgment on the issue of whether she suffered "serious injury" within the meaning of Insurance Law § 5102(d), plaintiff submitted her own affidavit and the affirmation of Albert Graziosa, an orthopedic surgeon. In her affidavit, plaintiff averred that since the accident she has had constant pain, weakness and clicking in her knee and that her knee always feels as though it will "give way or buckle." She said that it especially hurts when she goes up and down stairs, which she does at work as a salesperson in a shoe store where the shoes are kept in the basement. Plaintiff further averred that she has difficulty sleeping because of the pain, and that since the accident she has not played handball, jogged or done the stretching and squatting exercises she was used to doing frequently.

Plaintiff averred that in May 2001 her left knee collapsed after she rose from a sitting position, causing her "exquisite pain." She was given pain medication at a hospital emergency room and discharged with crutches. On June 25, 2001, she returned to the hospital for an MRI.

Dr. Graziosa examined plaintiff on November 24, 2003 and reviewed both the MRI film that was taken of her left knee shortly after the accident, on November 28, 2000, and the aforementioned June 25, 2001 MRI film. Comparing the two, Dr. Graziosa stated that the first study revealed "what can be interpreted as a grade I to grade II changes of the medial meniscus, which may have been a partial tear, which was treated conservatively. That tear obviously progressed to the point where it became a grade III signal, an obvious medial meniscal tear on the second evaluation." He affirmed that his physical examination revealed medial joint line discomfort, crepitus and a palpable click extending posteriorly, and stated that the range of motion in plaintiff's knee was "significant for an extension of 0, flexion of about 120 degrees, which is somewhat tender at the extremes."

Dr. Graziosa affirmed that it was his opinion with a reasonable degree of medical certainty that the November 8, 2000 car accident was the direct competent cause of plaintiff's injuries, and that the injuries caused, and continue to cause, her limitation of motion and restricted ability to perform her daily activities, which include climbing and descending stairs, walking more than two or three blocks without discomfort, and athletic activities. Indeed, he indicated that an arthroscopy of plaintiff's knee was needed to address the medial meniscal tear and to prevent plaintiff from continuing to be active on a torn meniscus, which would require further, more aggressive surgery in the future.

This evidence is sufficient to raise an issue of fact as to whether plaintiff suffered a "permanent consequential limitation of use of a body organ or member" or a "significant limitation of use of a body function or system" pursuant to Insurance Law
§ 5102(d). Dr. Graziosa's findings are in direct conflict with the findings of defendants' experts as to whether there is objective evidence to substantiate plaintiff's subjective complaints of pain, discomfort and limited ability to engage in her normal activities, which complaints persist despite [*3]her protracted participation in physical therapy. Dr. Graziosa identified measurements of loss of range of motion in plaintiff's left knee, which he correlated with his finding of a tear in the medial meniscus, and on that predicate opined that plaintiff suffered a permanent partial disability to her knee as a result of the accident (see Pommells v Perez, 4 NY3d 566, 577 [2005]).

Citing Pommells, defendants argue that plaintiff's failure to explain the gap in treatment between her visits to the chiropractor for physical therapy - which began within days after the accident and continued regularly for 17 months thereafter - and her visit to Dr. Graziosa in November 2003, after defendants moved for summary judgment, is fatal to her claim. This argument is rebutted by the fact, as reflected by the record, that despite plaintiff's attending physical therapy sessions three times a week for the first 10 months, twice a week for the next four months, and thereafter once a week for three months, bringing her up to March 2002, she continued to have pain, weakness and clicking in her knee. From this evidence, the inference is at least reasonable that she stopped attending therapy after 17 months because there was no benefit to continuing the therapy (see Cruz v Am. Export Lines, 67 NY2d 1, 13 [1986], cert denied sub nom Bussanich v United States Lines, Inc., 476 US 1170 [1986] [denying defendants' motion for summary judgment, "(m)indful that issue finding and not issue resolution is a court's proper function on a motion for summary judgment, and drawing all inferences in plaintiff's favor, as we are bound to do"]; see also Toure v Avis Rent A Car Sys., Inc., 98 NY2d 345, 355 [2002]). Then, in connection with this case, plaintiff consulted Dr. Graziosa, who concluded, based on his review of the November 2000 and June 2001 MRI films of plaintiff's left knee, that what was needed to address her injury was not further physical therapy but surgery, apparently confirming the futility of continued physical therapy. In the circumstances, and given this reasonable explanation, the cessation of plaintiff's physical therapy should not bar her claim.

Bloom v. St. Paul Travelers Companies, Inc.

Kornstein Veisz Wexler & Pollard, LLP, New York, N.Y.
(Marvin Wexler, Daniel A. Cohen, and Andrew N. Adler of counsel),
for appellants.
Ball & Rubin, LLP, Elmsford, N.Y. (Wayne M. Rubin of
counsel), for respondents.

In an action, inter alia, for a judgment declaring that the uninsured and underinsured motorist coverages provided in certain automobile insurance policies issued by the defendants continue to be in effect, the defendants appeal from an order of the Supreme Court, Rockland County (Sherwood, J.), entered February 10, 2005, which denied their motion to disqualify the plaintiffs' counsel.

ORDERED that the order is affirmed, with costs.

The central issue in this case is whether the defendants adequately complied with the terms of Insurance Law § 3425(d)(3) at the time when, "[i]n and around 2001," they "undertook to substitute" the so-called "SCOPE" excess personal liability policy with the so-called "PLUS" (personal liability umbrella of security) policy. The plaintiffs contend that the "Summary of Major Coverage Changes" that was issued to policyholders at the time in question was not sufficient since, among other things, it failed to make any reference to the elimination of underinsured motorist coverage. The defendants moved to disqualify the law firm representing the plaintiffs in this action (hereinafter the Law Firm), on the ground that the members of the Law Firm had previously represented the defendants. The Supreme Court denied the motion. We affirm.

The defendants failed to meet their burden (see e.g. Zutler v Drivershield Corp., 15 AD3d 397; Unger v Unger, 15 AD3d 389; Nesendoff v Dinerstein & Lesser, P.C., 12 AD3d 427) of showing that this action is "substantially related" to any matter in which they were previously represented by members of the Law Firm (Code of Professional Responsibility DR 5-108[A][1] [22 NYCRR 1200.27(a)(1)]; see e.g. Jamaica Pub. Serv. Co. v AIU Ins. Co., 92 NY2d 631). The [*2]defendants' conclusory assertions that one of the Law Firm's attorneys "worked closely with" certain unidentified employees of one or more of the defendants in connection with a number of cases that were more or less related to the general area of uninsured or underinsured motorist coverage failed to establish "that information material to the evaluation, prosecution, settlement or accomplishment of the former representation[s] given [their] factual and legal issues [might] also [be] material to the evaluation, prosecution, settlement or accomplishment of the current representation given its factual and legal issues" (Farris v Fireman's Fund Ins. Co., 119 Cal App 4th 671, 679, 14 Cal Rptr 3d 618, 622; see Jessen v Hartford Cas. Ins. Co., 111 Cal App 4th 698, 713, 3 Cal Rptr 3d 877, 887-888).

We note that the attorney in question left his previous firm in April 2001, and that it was not until July 2001 that, according to the complaint, the "SCOPE" policy that was issued to the plaintiff Jonathan Bloom expired, to be replaced by the "PLUS" policy. The attorney in question submitted competent proof that he could not recall ever having had any contact with "either the SCOPE or the PLUS policies." He also submitted competent proof that he had "never been involved in litigation [relating to] Insurance Law § 3425."

Not only is there no evidence that the legal issue at the heart of the present action is "essentially the same as" any of the various legal issues with respect to which the Law Firm's attorneys provided legal counsel to the defendants in the past (Lightning Park v Wise Lerman & Katz, 197 AD2d 52, 55, quoting Dinger v Gulino, 661 F Supp 438, 444 [ED NY]), but the defendants failed to demonstrate that the present representation is "substantially related" to the prior representation in any way (Code of Professional Responsibility DR 5-108[A][1] [22 NYCRR 1200.27(A)(1)]). We therefore need not decide whether the formulation of the "substantial relationship" test in Lightning Park (supra) represents a correct statement of New York law (see Sgromo v St. Joseph's Hosp. Health Ctr., 245 AD2d 1096, 1097; Government of India v Cook Indus., Inc., 569 F2d 737, 740 [2d Cir]; cf. Wieme v Eastman Kodak Co., 2003 WL 23163157 [WD NY 2003]; Jessen v Hartford Cas. Ins. Co., supra; Reardon v Marlayne, Inc. 83 NJ 460, 472, 416 A2d 852, 859).

In sum, the Supreme Court providently exercised its discretion (see e.g. Columbus Constr. Co. v Petrillo Bldrs. Supply Corp., 20 AD3d 383; Moccia v Weisfogel, 253 AD2d 800) in denying the defendants' motion to disqualify the plaintiffs' counsel (see Code of Professional Responsibility DR 5-108[A][1] [22 NYCRR 1200.27(A)(1)]; Jamaica Pub. Serv. Co. v AIU Ins. Co., supra).
PRUDENTI, P.J., H. MILLER, MASTRO and LUNN, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Court

 

 

Grove Hill Associates v. Colonial Indemnity Insurance Co.

 

In an action pursuant to Insurance Law § 3420(a)(2) and (b) to recover the amount of an unsatisfied judgment against the defendant's insured, the defendant appeals from an order of the Supreme Court, Nassau County (Dunne, J.), dated October 4, 2004, which denied its motion for summary judgment dismissing the complaint and granted the plaintiff's cross motion for summary judgment.

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

The plaintiff owns an apartment building and hired MSS Construction Corp. (hereinafter MSS) to replace the roof. The application of the replacement roof required the use of propane torches, and during the course of the work, a fire occurred which damaged the building. The plaintiff obtained a default judgment against MSS for those damages. It then commenced this action to recover the amount of the judgment from MSS's insurance carrier, the defendant Colonial Indemnity Insurance Co. (hereinafter Colonial).

In support of its motion for summary judgment dismissing the complaint, Colonial demonstrated a prima facie entitlement to judgment as a matter of law by proffering evidence that it disclaimed coverage for the underlying occurrence based on a policy exclusion for "bodily injury, property damage and products/completed operations liability arising out of your work which involves the removal and/or replacement of roof materials" (see Kay Bee Bldrs. v Merchants Mut. Ins. Co., 10 AD3d 631, 632). Indeed, Colonial asserted that the policy contained that exclusion because MSS represented to Colonial when applying for the policy that it provided only masonry and carpentry services. In opposition, the plaintiff failed to raise a triable issue of fact that the policy was ambiguous, or that the exclusion at issue was no more than a standard "work product" provision which precluded coverage for the ordinary business risk of faulty workmanship only (see e.g. Basil Dev. Corp. v General Acc. Ins. Co., 89 NY2d 1057; Mount Vernon Fire Ins. Co. v Creative Hous., 88 NY2d 347, 351). Thus, the complaint should have been dismissed.
RITTER, J.P., RIVERA, SPOLZINO and COVELLO, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Court

In the Matter of Allstate Insurance Company v. Lichtenstein

In a proceeding pursuant to CPLR article 75 to stay arbitration of an uninsured motorist claim, the petitioner appeals from so much of an order of the Supreme Court, Kings County (Dabiri, J.), dated October 21, 2004, as denied the petition.

ORDERED that the order is modified, on the law, by adding a provision thereto stating that the denial of the petition is without prejudice to renewal; as so modified, the order is affirmed insofar as appealed from, without costs or disbursements.

On March 2, 2001, the respondent, Isaac Lichtenstein (hereinafter the respondent), served a notice of intent to arbitrate upon the appellant, which stated, inter alia, that he intended to arbitrate an underinsured motorist claim based on an accident with an underinsured vehicle. The appellant did not seek a stay of arbitration in response to that notice. Thereafter, on May 11, 2004, the respondent served another demand for arbitration upon the appellant, this time specifying the nature of the dispute as a hit-and-run.

The appellant commenced this proceeding to stay arbitration within 20 days of receipt of the demand served on May 11, 2004. The respondent, however, contended that the proceeding was time-barred since it was not brought within 20 days of the appellant's receipt of the March 2, [*2]2001, notice of intent to arbitrate. The Supreme Court agreed and denied the petition to stay arbitration on that ground.

A hit-and-run vehicle is considered an uninsured vehicle, covered under the uninsured motorist endorsement, and not covered by an underinsured motorist endorsement (see Matter of Government Empls. Ins. Co. v Abbensett, 240 AD2d 578). The respondent's inaccurate specification of the basis for his demand to arbitrate in the March 2, 2001, notice, made "it impossible [for the appellant] to determine if there [was] any basis to move to stay arbitration within the 20 day period" (Matter of Northern Assur. Co. of Am. v Bollinger, 256 AD2d 580), and therefore, did not serve to preclude the appellant from seeking a stay more than 20 days after its receipt.

The respondent is correct that the appellant's petition failed to establish that there were threshold issues concerning the claim for uninsured motorist benefits based on the alleged hit-and-run accident. However, this was due to the confusion created by the myriad of descriptions of the nature of the claim for which arbitration was sought in the various notices served upon the appellant by the respondent. As such, the denial of the appellant's petition should have been without prejudice to renewal, upon papers addressing any basis it may have for staying arbitration of what has now been identified as an uninsured motorist claim based on an alleged hit-and-run accident.
ADAMS, J.P., S. MILLER, RITTER and RIVERA, JJ., concur.

In the Matter of Met Life Auto & Home v. Leonorovitz

 

In a proceeding pursuant to CPLR article 75 to permanently stay arbitration of a claim for supplementary uninsured/underinsured motorist benefits, the appeal, as limited by the appellants' brief, is from so much of an order of the Supreme Court, Kings County (Dabiri, J.), dated February 7, 2005, as granted the petition and permanently stayed the arbitration.

ORDERED that the order is affirmed insofar as appealed from, with costs.

On October 31, 2003, a vehicle operated by the appellant Rachel Leonorovitz and occupied by her husband and four children was involved in a motor vehicle accident, allegedly with an unidentified hit-and-run vehicle. The appellants' vehicle was insured by Government Employees Insurance Company (hereinafter GEICO), which is not a party to this proceeding, under a policy that provided for supplementary uninsured/underinsured motorist benefits (hereinafter SUM benefits) in the amounts of $100,000 per person/$300,000 per accident. GEICO paid the appellants the full policy limits of $300,000 for SUM benefits.

At issue here is the appellants' claim for additional SUM benefits from the petitioner Met Life Auto & Home (hereinafter Met Life) pursuant to a policy issued to the appellant Solomon Leonorovitz on a vehicle not involved in the accident. The Met Life policy provided for SUM [*2]benefits in amounts identical to those provided for in the GEICO policy (i.e. $100,000 per person/$300,000 per accident). Met Life commenced this proceeding for a permanent stay of arbitration of the appellants' claim. The Supreme Court granted the petition based upon the anti-stacking provisions of the Met Life policy which provided, inter alia, that "[i]f an insured is entitled to uninsured motorist coverage or supplementary uninsured/underinsured motorists coverage under more than one policy, the maximum amount such insured may recover shall not exceed the highest limit of such coverage for any one vehicle under any one policy." We affirm.

Contrary to the appellants' contention, the fact that the appellants are claiming SUM benefits from two different policies issued by two different carriers does not mean that the SUM coverage from each policy may be "stacked" to provide additional SUM coverage (see Matter of Brasco v Nationwide Mut. Ins. Co., 283 AD2d 492, 493; Dudley v Allstate Ins. Co., 281 AD2d 941).

The appellants note that 11 NYCRR 60-2.1(c) states that "[t]he maximum amount payable under SUM coverage shall be the policy's SUM limit reduced and thus offset by motor vehicle bodily injury liability or bond payments received from, or on behalf of, any negligent party involved in the accident." Further, 11 NYCRR 60-2.3(f)(I)(c)(3)(ii) defines an "uninsured" motor vehicle as a vehicle insured for bodily injury liability "the amount of [which] has been reduced, by payments to other persons injured in the accident, to an amount less than the third-party bodily injury liability limit" of the policy from which SUM benefits are sought. However, those provisions are not applicable here. Although GEICO paid the GEICO policy limits to persons injured in the accident, those payments were not paid for "third-party bodily injury liability" on behalf of an insured tortfeasor (see State Farm Mut. Auto. Ins. Co v Sparacio, 297 AD2d 284, 285; Matter of New York Cent. Mut. Fire Ins. Co. v White, 262 AD2d 415). Since GEICO's payments were made pursuant to the SUM endorsement in the GEICO policy, no offset is available.

The appellants' remaining contentions are without merit.
COZIER, J.P., KRAUSMAN, GOLDSTEIN and SKELOS, JJ., concur.

 

Pianka  v. Pereira

Rose, J.

Appeal from an order of the Supreme Court (O'Brien III, J.), entered April 27, 2005 in Otsego County, which, inter alia, granted defendant's motion for summary judgment dismissing the complaint.

Plaintiff commenced this action alleging that she sustained a serious injury within the meaning of Insurance Law § 5102 (d) when her vehicle was hit from behind by a vehicle driven by defendant. Plaintiff was diagnosed with a cervical sprain during her subsequent 40-minute visit to a hospital emergency room and, thereafter, she missed no days of work due to her injury. Defendant ultimately moved for summary judgment dismissing the complaint on the ground that plaintiff had not suffered a serious injury. Supreme Court granted the motion and plaintiff appeals.

Defendant made a prima facie showing that plaintiff suffered no serious injury through the affidavit of Kevin Barron, a neurologist who evaluated plaintiff approximately 14 months after the accident. Barron, while acknowledging the MRI reports showing two bulging discs in plaintiff's cervical spine, opined that such bulges are usually asymptomatic and she has no functional limitations as a result. He also noted that plaintiff had sustained a neck injury with similar pain, spasm and numbness in a 1994 motor vehicle accident. Because there were no CT or MRI scans reported from that accident, Barron could not determine whether the bulges were provoked or, if preexistent, worsened by the later accident. Barron concluded that plaintiff [*2]sustained a cervical strain/sprain that resolved within one year, and he attributed her continuing, nondisabling symptomatology to her mild, degenerative disc disease.

In response, plaintiff asserted that she sustained a serious injury in the categories of permanent consequential and significant limitations of use of her cervical spine, and that objective medical evidence of those limitations is provided by the MRI reports. However, since proof of a bulging disc or degenerative disc condition is not enough to establish a serious injury, plaintiff must further provide either "an expert's designation of a numeric percentage of [her] loss of range of motion . . . [or] [a]n expert's qualitative assessment of [her] condition . . ., provided that the evaluation has an objective basis and compares [her] limitations to the normal function, purpose and use of the affected body organ, member, function or system" (Toure v Avis Rent A Car Sys., 98 NY2d 345, 350 [2002]; Clements v Lasher, 15 AD3d 712, 713 [2005]; John v Engel, 2 AD3d 1027, 1029 [2003]). Here, neither the quantitative nor the qualitative standard was met.

To meet the first standard, plaintiff was required to present, at a minimum, objective evidence of the bulging discs and a medical expert's quantification of the limitations caused thereby (see Durham v New York E. Travel, 2 AD3d 1113, 1115 [2003]). Plaintiff's treating osteopath, Stanley Fox, opined that the bulging discs shown on her MRI scans were a direct result of the accident and caused a degenerative disc disease, and her pain and inability to lift heavy objects are permanent conditions. Fox did not, however, adequately describe either plaintiff's loss of range of motion or her inability to lift more than 20 pounds so as to substantiate a quantitative assessment of her injuries (see Hock v Aviles, 21 AD3d 786, 788 [2005]; Mack v Goodrich, 11 AD3d 846, 848 [2004]; cf. Cenatus v Rosen, 3 AD3d 546, 547 [2004]).

Turning to the question of whether plaintiff provided a sufficient qualitative assessment of her condition, we note that Fox described her physical limitations as radiating neck pain, numbness and reduced lifting ability. However, Fox does not identify any diagnostic tests performed or show that his findings are based on anything other than plaintiff's subjective complaints of pain (see John v Engel, supra at 1029; Serrano v Canton, 299 AD2d 703, 704-705 [2002]; cf. Armstrong v Morris, 301 AD2d 931, 933 [2003]). Fox further opined that plaintiff's limitations are "significant" and make her unable to tend to household chores or participate in recreational activities "in the same manner and as frequently as she did prior to the accident." This opinion, however, is so general that it could be based upon even a minimal or mild physical limitation and, thus, it fails to provide a meaningful comparison with normal function (see Clements v Lasher, supra at 713; June v Gonet, 298 AD2d 811, 812-813 [2002]). Further, it is conclusory and tailored to meet statutory requirements as well (see Bent v Jackson, 15 AD3d 46, 50 [2005]).

Thus, Supreme Court properly found that plaintiff failed to raise an issue of fact as to the existence of a qualifying serious injury and dismissed the complaint.

Crew III, J.P., Peters and Mugglin, JJ., concur.

Rodriguez v. Virga

In an action, inter alia, to recover damages for personal injuries, (1) the defendants appeal, as limited by their brief, from so much of a judgment of the Supreme Court, Kings County (Schneier, J.), entered July 1, 2003, as, upon a jury verdict on the issue of liability finding them 100% at fault in the happening of the accident, and upon the denial of their motion for judgment as a matter of law dismissing the complaint on the ground that the plaintiff Marilyn Rodriguez did not sustain a serious injury within the meaning of Insurance Law § 5102(d), made at the close of the evidence on the issue of damages, is in favor of the plaintiff and against them in the principal sum of $50,000, and (2) the plaintiff Marilyn Rodriguez cross-appeals from a clerk's extract of the trial minutes dated June 6, 2003.

ORDERED that the cross-appeal is dismissed, as no appeal lies from a clerk's extract of the trial minutes (see Rockman v Brosnan, 280 AD2d 591); and it is further,

ORDERED that the judgment is reversed insofar as appealed from, on the law, the defendants' motion is granted, and the complaint is dismissed; and it is further, [*2]

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

The plaintiff Marilyn Rodriguez allegedly was injured when the vehicle she was driving was struck by another vehicle owned by the defendant Joseph Virga and operated by the defendant Jennifer Virga. The plaintiff commenced this action and, following a jury verdict finding the defendants 100% at fault in the happening of the accident, the trial proceeded to the damages phase. Following the close of the evidence, the defendants moved for judgment as a matter of law (see CPLR 4404), which the trial court denied. The jury then determined that the plaintiff did not sustain a permanent consequential limitation of use of a body organ or member, or a significant limitation of use of a body function or system, but found that she sustained a medically-determined injury which prevented her from performing substantially all of the material acts which constituted her usual and customary daily activities for a period of not less than 90 days during the 180 days immediately following the accident.

The judgment must be reversed, the defendants' motion granted, and the complaint dismissed, because the plaintiff failed to establish a prima facie case that she sustained an injury under the 90/180-day category of serious injury (see Insurance Law § 5102[d]). Viewing the evidence in the light most favorable to the plaintiff, no rational jury could have found in her favor on this issue (see Licari v Elliott, 57 NY2d 230; Feeney v Klotz, 309 AD2d 782; Berman v General Elec. Cap Auto, 300 AD2d 522; Crespo v Kramer, 295 AD2d 467, 468; Krakofsky v Fox-Rizzi, 273 AD2d 277, 278; Randazzo v Morris, 269 AD2d 513, 514). It is undisputed that the plaintiff received no medical treatment beyond the fifth or sixth week following her accident. She returned to her job as a letter carrier less than 90 days after the accident, was able to resume her usual functions and activities, and continued to work for approximately one year thereafter.

In light of our determination, we do not reach the defendants' remaining contentions.
CRANE, J.P., S. MILLER, RITTER, and FISHER, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Court

Karabchievsky v. Crowder

In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Kings County (Partnow, J.), dated September 29, 2004, which granted the defendants' motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is affirmed, with costs.

Contrary to the plaintiff's contention, the defendants' evidence, which consisted of the affirmed medical report of their examining physician and the plaintiff's deposition testimony, was sufficient to establish 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 plaintiff's evidence in opposition was insufficient to raise a triable issue of fact. The affirmation of the plaintiff's physician was based upon an examination of the plaintiff that was conducted two years after the cessation of medical treatments, and the plaintiff failed to account for this lapse in time (see Pommells v Perez, 4 NY3d 566; Puerto v Omholt, 17 AD3d 650; Guzman v New York City Tr. Auth., 15 AD3d 541; Smith v Askew, 264 AD2d 834). Furthermore, the plaintiff's physician relied upon unsworn medical reports provided by others in arriving at his determination (see Friedman v U-Haul [*2]Truck Rental, 216 AD2d 266; see also Mahoney v Zerillo, 6 AD3d 403; D'Amato v Mandello, 2 AD3d 482; Perovich v Liotta, 273 AD2d 367; Williams v Hughes, 256 AD2d 461; Merisca v Alford, 243 AD2d 613).

Moreover, there was no competent medical evidence to support a claim that the plaintiff was unable to perform substantially all of his daily activities for not less than 90 of the 180 days immediately following the subject accident as a result of the accident (see Sainte-Aime v Ho, 274 AD2d 569; see also Davis v New York City Tr. Auth., 294 AD2d 531; Arshad v Gomer, 268 AD2d 450).

Accordingly, the Supreme Court properly 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

 

Durant v. North Country Adirondack Cooperative Insurance Company

Spain, J.

Appeal from a judgment of the Supreme Court (Demarest, J.), entered December 27, 2004 in Franklin County, upon a decision of the court in favor of defendant North Country Adirondack Cooperative Insurance Company.

In August 1989, defendant Wayne Ashley caught his foot in a corn chopper at plaintiffs' farm, requiring the amputation of his leg below the knee. Ashley commenced a negligence action against plaintiffs in 1992, alleging that his injuries occurred while he was "assisting" plaintiff Robert Durant (hereinafter plaintiff) in the repair of the chopper. Plaintiffs' insurer, defendant North Country Adirondack Cooperative Insurance Company (hereinafter defendant), disclaimed coverage for the Ashley negligence action based on an exclusion in plaintiffs' farm owners' policy for claims arising from bodily injury to a farm employee. Plaintiffs then commenced this action seeking an order requiring defendant to defend plaintiffs in the negligence action. Ashley and plaintiffs eventually entered a stipulation discontinuing the negligence action, with prejudice, but plaintiffs continue, within the context of this action, to seek reimbursement from defendant of those costs incurred in defense of the negligence litigation prior to the stipulation of discontinuance. [*2]

Defendant sought dismissal of the action, relying on certain evidence extrinsic to the complaint. Specifically, in a prior declaratory judgment action which had been discontinued, without prejudice, by stipulation of the parties, Ashley represented that he was an employee of plaintiffs ^[FN1]. Defendant also relied on a statement of plaintiff taken by one of defendant's employees shortly after the accident in which plaintiff stated that Ashley was working for him on a part-time basis, but that they had not yet discussed what his wages would be. A nonjury trial was held where plaintiff testified that although Ashley was a former employee and was helping him on the day he was injured and on the previous day he was merely lending a hand as a friend and not as a compensated employee. Plaintiff was cross-examined concerning his prior inconsistent statement made to defendant's representative following the accident. On this evidence, Supreme Court found that plaintiffs failed to establish that defendant had any obligation to defend plaintiffs against Ashley, and dismissed the complaint. Plaintiffs now appeal.

It is well established that an insurer's duty to defend is much broader than the duty to indemnify and will arise "whenever the allegations in a complaint state a cause of action that gives rise to the reasonable possibility of recovery under the policy" (Fitzpatrick v American Honda Motor Co., 78 NY2d 61, 65 [1991]) or where "the insurer has actual knowledge of facts establishing . . . a reasonable possibility of coverage" (Continental Cas. Co. v Rapid-Am. Corp., 80 NY2d 640, 648 [1993]; see International Paper Co. v Continental Cas. Co., 35 NY2d 322, 326-327 [1974]; Robbins v Michigan Millers Mut. Ins. Co., 236 AD2d 769, 770 [1997]). Further, "[e]ven where there exist extrinsic facts suggesting that the claim may ultimately prove meritless or outside the policy's coverage, the insurer cannot avoid its commitment to provide a defense" (Fitzpatrick v American Honda Motor Co., supra at 66). Indeed, although extrinsic evidence may be used to expand the insurer's duty to defend, the Court of Appeals has stated that "the courts of this State have refused to permit insurers to look beyond the complaint's allegations to avoid their obligation to defend" (id. at 66).

More recently, however, the Court of Appeals held that "a strained, implausible reading of the complaint 'that is linguistically conceivable but tortured and unreasonable'" should not give rise to a duty to defend and, thus, "a court may look to judicial admissions in the insured's [*3]responsive pleadings in the underlying tort action or other formal submissions in the current or underlying litigation to confirm or clarify the nature of the underlying claims" (Northville Indus. Corp. v National Union Fire Ins. Co. of Pittsburgh, 89 NY2d 621, 635 [1997], quoting State of New York v Amro Realty Corp., 936 F2d 1420, 1428 [2d Cir 1991]; see Town of Moreau v Orkin Exterminating Co., 165 AD2d 415, 418 [1991] [prior criminal conviction can be considered to establish intentional conduct which would exclude coverage]; Smith v New York Cent. Mut. Fire Ins. Co., 13 AD3d 686, 688 [2004] [negligence claim stated in a complaint did not give rise to coverage because of the patently intentional conduct of the purported tortfeasor]; Pennsylvania Millers Mut. Ins. Co. v Rigo, 256 AD2d 769, 770 [1998] [same]).

Here, no dispute exists that the allegations of negligence in the complaint invoke a duty to defend, unless one of the policy exclusions applies in this case the exclusion in plaintiffs' policy for liability "resulting from bodily injury to a farm employee." The burden was on defendant to demonstrate that the complaint could only be interpreted to deny coverage under that policy exclusion (see Town of Massena v Healthcare Underwriters Mut. Ins. Co., 98 NY2d 435, 444 [2002]). Although it was permissible for defendant to rely on Ashley's pleading in the prior action where he stated that he was employed by plaintiffs (see Northville Indus. Corp. v National Union Fire Ins. Co. of Pittsburgh, supra at 635), plaintiff's unsworn admissions to defendant's employee cannot be relied upon to defeat defendant's duty to defend (see Pahl v Grenier, 277 AD2d 681, 683 [2000]; State Farm Mut. Auto. Ins. Co. v VanDyke, 247 AD2d 848, 848-849 [1998]; Merrimack Mut. Fire Ins. Co. v Carpenter, 224 AD2d 894, 894 [1996], lv dismissed 88 NY2d 1016 [1996]). Ashley's assertion that he was employed by plaintiffs is insufficient to establish in the context of this action between plaintiffs and defendant that he was so employed (cf. Erdman v Eagle Ins. Co., 239 AD2d 847, 849 [1997], appeal dismissed, lv denied 90 NY2d 1354 [1997]). Thus, no need existed for a trial in this matter; defendant's duty to defend was established by the complaint and defendant failed to present conclusive evidence that the farm employee exclusion applied (see Pahl v Grenier, supra at 683; Robbins v Michigan Millers Mut. Ins. Co., supra at 770).

Crew III, J.P., Peters and Mugglin, JJ., concur.

ORDERED that the judgment is modified, on the law, with costs to plaintiffs, by reversing so much thereof as dismissed the complaint and entered judgment in favor of defendant North Country Adirondack Cooperative Insurance Company for $728.80 with disbursements; it is declared that said defendant has a duty to defend and indemnify plaintiffs in the underlying action and matter remitted to Supreme Court for further proceedings not inconsistent with this Court's decision; and, as so modified, affirmed.

Footnotes

Footnote 1: In 1990, Ashley had commenced a declaratory judgment action against plaintiffs and defendant seeking, among other things, to establish that defendant had a duty to defend and indemnify any claims made by Ashley against plaintiffs. In his complaint in that action, Ashley verified that he was employed by plaintiffs. That action was discontinued by stipulation of the parties, without prejudice. Ashley also filed for workers' compensation benefits, but his claim was ultimately denied on the basis that plaintiffs were not obligated to carry workers' compensation coverage because their farm laborer payroll did not exceed the $1,200 annual threshold (Matter of Ashley v Durant, 252 AD2d 893 [1998]).

 

 

 

 

 

Becker v. Colonial Cooperative Insurance Company

.

In an action pursuant to Insurance Law § 3420(a)(2) to recover the amount of an unsatisfied judgment against the defendant's insured, the plaintiff appeals from an order of the Supreme Court, Kings County (Kramer, J.), dated December 15, 2004, which granted the defendant's motion for summary judgment dismissing the complaint and denied his cross motion for summary judgment.

ORDERED that the order is modified, on the law, by deleting the provision thereof granting the defendant's motion for summary judgment dismissing the complaint, and substituting therefore a provision denying the defendant's motion; as so modified, the order is affirmed, without costs or disbursements.

On December 20, 2000, the plaintiff allegedly sustained personal injuries when he slipped and fell on premises occupied by Weiss Kosher Bakery (hereinafter the Bakery) on 13th Avenue in Brooklyn. At the time of the incident, the Bakery was insured by a policy of liability insurance issued by the defendant Colonial Cooperative Insurance Company (hereinafter Colonial). Notwithstanding that counsel notified the bakery of the plaintiff's injuries within days after his fall, the Bakery failed to notify Colonial. The plaintiff sued the Bakery and, on or about December 10, 2002, obtained a default judgment in the total sum of $261,575.50.

On or about January 14, 2003, the Bakery faxed a copy of the default judgment to [*2]Colonial's agent, KRL Enterprises (hereinafter KRL), which immediately forwarded the judgment to Colonial. On or about January 17, 2003, Colonial disclaimed coverage due to late notice.

The plaintiff commenced this action in June 2003, against Colonial, seeking to compel payment of the Bakery's default judgment pursuant to Insurance Law § 3420(a)(2). Following joinder of issue, Colonial moved for summary judgment, arguing that the first notice it received of the plaintiff's claim was more than two years after the accident, and that the Bakery had defaulted in its contractual notice obligations. Therefore, Colonial contended, it was justified in disclaiming coverage and was entitled to summary judgment dismissing the complaint.

The plaintiff cross moved for summary judgment arguing, inter alia, that he was unable to ascertain the identity of the Bakery's liability carrier. The plaintiff did not dispute that the Bakery had failed to provide notice of the occurrence as required by the Colonial policy. However, the plaintiff argued that pursuant to the rule of Lauritano v American Fid. Fire Ins. Co. (3 AD2d 564, affd 4 NY2d 1028), the Bakery's notice failure did not preclude the plaintiff's action against Colonial. Rather, insofar as the plaintiff was concerned, he could provide notice of his claim to Colonial within a reasonable time after learning the identity of the Bakery's carrier. Accordingly, he argued that the Bakery's notice failure did not warrant dismissal of the complaint, but that it was the plaintiff who deserved summary judgment.

In opposition to the cross motion, Colonial argued that the plaintiff's reliance upon Lauritano was misplaced because, while that case may permit an injured claimant to notify an insurer within a reasonable time after discovering the insurer's identity, here the plaintiff never even alleged that it ever notified Colonial. Rather, Colonial's first notice came from the Bakery when it submitted the default judgment to KRL. Moreover, Colonial averred, it provided the plaintiff notice of its identity as the Bakery's insurer by sending the plaintiff a copy of its January 17, 2003, disclaimer letter, but the plaintiff still failed to send any notice to Colonial until five months later when it served Colonial with the pleadings commencing this action. Accordingly, Colonial argued, the plaintiff failed to exercise the due diligence required of him under Lauritano, thereby precluding relief.

In reply, the plaintiff argued that it first notified Colonial of this matter on January 16, 2003, when it mailed Colonial a copy of the default judgment, and thus had not delayed sending notice for five months as alleged by Colonial.

The Supreme Court granted Colonial's motion and denied the plaintiff's cross-motion. The court held that unlike the plaintiff in Lauritano, the instant plaintiff failed to demonstrate that he exercised due diligence in attempting to ascertain Colonial's identity as the Bakery's carrier. Therefore, the court concluded, as a matter of law, that the plaintiff had not provided notice to Colonial as soon as practicable. We modify by denying Colonial's motion.

There is no question that the Bakery wholly and inexcusably failed to give Colonial notice of the plaintiff's claim in violation of the express requirements of the Colonial policy. However, while an insured's failure to provide notice may justify a disclaimer vis-a-vis the insurer and the insured, it does not serve to cut off the right of an injured claimant to make a claim as against the insurer. Insurance Law § 3420(a)(2) expressly permits an injured party to recover any unsatisfied judgment against an insured, directly from the insurer. Insurance Law § 3420(a)(3), in effect, requires insurance companies to accept notice of claims from injured parties. As was made clear [*3]more than 40 years ago, "[t]he statute having granted the injured person an independent right to give notice and to recover thereafter, he is not to be charged vicariously with the insured's delay" (Lauritano v American Fid. Fire Ins. Co., 3 AD2d 564, 568, affd 4 NY2d 1028). "The injured person's rights must be judged by the prospects for giving notice that were afforded him, not by those available to the insured. What is reasonably possible for the insured may not be reasonably possible for the person he has injured. The passage of time does not of itself make delay unreasonable" (id.). "When the injured party has pursued his rights with as much diligence as was reasonably possible' the statute shifts the risk of the insured's delay to the compensated risk-taker." Thus, the pertinent inquiry is whether the plaintiff pursued his rights with "as much diligence as was reasonably possible" (id.).

In determining the reasonableness of an injured party's notice, the notice required is measured less rigidly than that required of the insureds (see GA Ins. Co. of N.Y. v Simmes, 270 AD2d 664). "The sufficiency of notice by an injured party is governed not by mere passage of time but by the means available for such notice" (Appel v Allstate Ins. Co., 20 AD3d 367, 369, see National Grange Mut. Ins. Co. v Diaz, 111 AD2d 700, 701). In support of its motion, Colonial wholly failed to even address the issue of the plaintiff's independent right to give notice, so clearly Colonial did not prove its prima facie entitlement to summary judgment dismissing the complaint. Likewise, in his cross-motion, the plaintiff focused almost exclusively on his argument that unlike an automobile insurer, Colonial's identity as the bakery's carrier could not be ascertained independently. But he failed to offer any proof as to when he first provided notice to Colonial (cf. Potter v North Country Ins. Co., 8 AD3d 1002) or as to his alleged due diligence in attempting to ascertain Colonial's identity as the Bakery's insurer. Indeed, these issue were only addressed, and superficially at that, in the parties' respective reply papers. In short, numerous issues of fact remain to be resolved, thereby precluding judgment to either party at this juncture.
S. MILLER, J.P., RITTER and SKELOS, JJ., concur.

RIVERA, J., dissents and votes to affirm the order, with the following memorandum:

I disagree with my colleagues' determination that "numerous issues of fact remain to be resolved, thereby precluding judgment to either party at this juncture." In my opinion, the defendant established its prima facie entitlement to judgment as a matter of law. "[T]he failure to comply with provisions of an insurance policy requiring timely notice of an accident vitiates the contract, both as to the insured and to one injured or damaged by his acts" (Serravillo v Sterling Ins. Co., 261 AD2d 384; see Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp., 31 NY2d 436, 440). Here, the subject accident allegedly occurred on December 20, 2000. On January 14, 2003, the defendant received a fax from its agent, KRL Enterprises, advising that a default judgment had been obtained by the plaintiff against the defendant's insured, Weiss Kosher Bakery (hereinafter the Bakery). This was the first notice to the defendant regarding the alleged accident. The notice, which was provided more than two years after the subject accident, was late as a matter of law (see Matter of First Cent. Ins. Co., 3 AD3d 494, 495).

In opposition, the plaintiff failed to raise a triable issue of fact. While an injured person has an "independent right" to give notice (see Insurance Law § 3420[a][3]; Lauritano v American Fid. Fire Ins. Co., 3 AD2d 564, 568, affd 4 NY2d 1028), "the injured party has the burden of proving that he or she, or counsel acted diligently in attempting to ascertain the identity of the [*4]insurer and, thereafter, expeditiously notified the insurer" (see American Home Assur. Co. v State Farm Mut. Auto. Ins. Co., 277 AD2d 409, 410). In the case at bar, the plaintiff's efforts in attempting to ascertain the defendant's identity were not diligent. The plaintiff concedes that "no" inquiries were made by him in an effort to obtain the identity of the Bakery's insurer. Essentially, the plaintiff speculates that any efforts on his part would have been fruitless. The record discloses that the plaintiff's efforts consisted only of notifying the Bakery by letter that the plaintiff had retained counsel, commencing the underlying action and serving the Bakery on two separate occasions with the summons and complaint. These scant efforts are not reasonable as a matter of law (see Ringel v Blue Ridge Ins. Co., 293 AD2d 460, 461-462; Massachusetts Bay Ins. Co v Flood, 128 AD2d 683, 684).

I note that in Lauritano v American Fid. Fire Ins. Co. (supra at 569), the plaintiff "constantly and aggressively pressed" a search for the necessary information regarding the insurer, which included, following up a "barrage" of letters with telephone calls, personal visits, and inquiries directed to the Motor Vehicle Bureaus of New York and Alabama, the Police Department, the Public Service Commission and the Interstate Commerce Commission (see Lauritano v American Fid. Fire Ins. Co., supra at 569). In contrast, the plaintiff in the instant case did not conduct any search whatsoever to locate the defendant.

Accordingly, the Supreme Court properly granted summary judgment in favor of the defendant.

ENTER:

James Edward Pelzer

Clerk of the Court

 Paulino v. Dedios

 

In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Kings County (Dabiri, J.), dated October 6, 2004, which granted the defendants' 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 denied, and the complaint is reinstated.

The defendants failed to establish their prima facie entitlement to judgment as a matter of law dismissing the complaint on the ground 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). The affirmed medical reports of the defendants' examining physicians specified the degrees of range of motion in the plaintiff's cervical and lumbar spine without comparing these findings to the normal range of motion (see Baudillo v Pam Car & Truck Rental, Inc., ___ AD3d ___ [2d Dept, Nov. 14, 2005]; Meiheng Qu v Doshna, 12 AD3d 578; Aronov v Leybovich, 3 AD3d 511). Since the defendants failed to meet their initial burden of establishing a prima facie case, the sufficiency of the plaintiff's opposition papers need not be considered (see Walker v Village of Ossining, 18 AD3d 867; Junco v Ranzi, 288 AD2d 440; Coscia v 938 Trading [*2]Corp., 283 AD2d 538).
ADAMS, J.P., RITTER, GOLDSTEIN, SKELOS and DILLON, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Court

 

 

Magarin v. Kropf

 

In an action to recover damages for personal injuries, the plaintiffs appeal from an order of the Supreme Court, Queens County (Weiss, J.), dated September 15, 2004, which granted the defendant's motion for summary judgment dismissing the complaint on the ground that neither plaintiff sustained a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is affirmed, with costs.

Contrary to the plaintiffs' arguments, the defendant's evidence, which consisted of the affirmed medical reports of his examining physician and the respective plaintiffs' deposition testimony, was sufficient to establish a prima facie case that neither plaintiff sustained 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 plaintiffs' evidence, on the other hand, was insufficient to raise a triable issue of fact. Although the plaintiffs' physician reported finding restrictions in the ranges of motion of the cervical and lumbar regions of the plaintiffs' spines when he examined them in May of 2004, he failed to reconcile these findings with his findings of little or no restrictions when he examined the plaintiffs just six months earlier (see Powell v Hurdle, 214 AD2d 720). Furthermore, the plaintiffs' physician relied upon unsworn medical reports and records provided by others in arriving at his determination (see Friedman v U-Haul Truck Rental, 216 AD2d 266; see also Mahoney v Zerillo, 6 AD3d 403; [*2]D'Amato v Mandello, 2 AD3d 482; Perovich v Liotta, 273 AD2d 367; Williams v Hughes, 256 AD2d 461; Merisca v Alford, 243 AD2d 613).

Moreover, there was no competent medical evidence to support the plaintiffs' claim that as a result of the subject accident they were unable to perform substantially all of their usual and customary daily activities for not less than 90 of the first 180 days following the accident (see Sainte-Aime v Ho, 274 AD2d 569; see also Davis v New York City Tr. Auth., 294 AD2d 531; Arshad v Gomer, 268 AD2d 450).

Accordingly, the Supreme Court properly granted the defendant's motion for summary judgment.
SCHMIDT, J.P., S. MILLER, MASTRO, SPOLZINO and LUNN, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Court