Coverage Pointers - Volume VII, No. 16

2/9/06              Boss v. American Express Financial Advisors, Inc.
New York State Court of Appeals
High Court Upholds “Choice of Forum” Clause in Commercial Contract
While this is not a “coverage” case or one specifically dealing with insurance, it is one which may have implications in the insurance arena. The issue here is whether a contract which selected Minnesota as the place where disputes between the parties would be resolved should be enforced.  Three plaintiffs, all of whom lived in Syracuse, brought a class action against an insurance company with whom they had employment or agency contracts for expense allowances.  They are argued that the allowances were in volation of New York State law.  The contract signed selected Minnesota, the home office of the defendant, as the forum where litigation was to be resolved between the parties and Minnesota law as the choice of law to be followed in resolving disputes. The Court of Appeals upheld the "forum selection clause” and dismissed the case, sending the parties to Minnesota to fight their battle.  Such clauses are “enforced because they provide certainty and predictability in the resolution of disputes." The Court noted that the training and employment too place in Minnesota so it was certainly a place where the parties contemplated when contracting.  The Court did not rule on whether the choice of Minnesota law to resolve the dispute would be upheld, leaving that for the Minnesota courts.

Will insurers try harder to move dispute into friendlier jurisdictions by having policies choose more favorable courts to resolve disputes?  Will choice of forum clauses be upheld if they are found in insurance policies, particularly those which are between commercial insureds and insurers?  Stay tuned …

 

 

2/7/06              National Union Fire Insurance  v. Ferrell & Myers, Inc
Appellate Division, First Department
Hard to Believe, But Court Determines Hip-Hop Artist is Entertainer
The injuries occurred during a spectator stampede outside a celebrity basketball game at which the teams were to be coached by defendants Dwight "Heavy D" Myers and Sean "Puff Daddy" Combs. The trial court found "no question that the policy covers Heavy D as an entertainer" and rejected the argument that the policy specifically limits coverage to claims against the corporate entity (Ferrell & Myers) when acting as "an entertainer, theatrical manager &/or agent," whereas Heavy D was acting only in an individual capacity. 

 

2/7/06              In re Eagle Insurance Company v. Gueye

Appellate Division, First Department
When Liability Carrier Denies Coverage Because of “Staged Accident,” Injured Person Cannot Recover Uninsured Motorists Benefits Either
State Farm denied coverage to its insured because it believed the so-called “accident” was staged (and for other reasons as well).  Injured party then sought Uninsured Motorists Benefits, alleging that it was entitled to receive them because of the denial of coverage for “other reasons.”  Eagle moved for permanent stay and Appellate Division agreed that record clearly supports claim that there was no accident at all.  Stay granted and UM claim denied.

 

2/3/06              Caruana v. Oswego County Board of Cooperative Education Services (BOCES)
Appellate Division, Fourth Department
Serious Injury Need Not be Proven in Action Against Non-Covered Person
We don’t see too many of these, and it’s always a good reminder.  Plaintiff was driving a car and was injured when the front wheel of her car came off.  The day previous, the defendants, BOCES and those learning auto mechanics at the school, has changed the tire (and apparently forgotten to replace the lug nuts).  While the plaintiff was entitled to no fault benefits, in the action against the defendants (who were neither the owners or operators of a motor vehicle) she need not establish a serious injury in order to recover for pain and suffering.  The serious injury requirement is only in cases involving covered persons v. covered persons.  The defendants in this case were non-covered persons.  For a refresher in this area, see Kohane's No Fault Primer which originally appeared in the November 18, 2005 issue of Coverage Pointers.

 

2/3/06              Rohlin v. Nationwide Mutual Insurance Company
Appellate Division, Fourth Department

Meaning of “Household” in Auto Policy is Ambiguous and Best Left to Fact Finder

Supreme Court properly denied plaintiff's cross motion seeking summary judgment but erred in granting the motion of Nationwide seeking summary judgment dismissing the complaint against it. The term "household," as used in insurance policies, is ambiguous and "its interpretation requires an inquiry into the intent of the parties." The term should therefore be interpreted in a manner favoring coverage, as should any ambiguous language in an insurance policy.  In the Court’s veiew, the issue of whether the driver was a member of plaintiff's household cannot be resolved as a matter of law and is issue is best resolved by the trier of fact, "taking into account the reasonable expectations of the average person purchasing [automobile liability] insurance, as well as the particular circumstances of [this] case." .

 

2/3/06              Allstate Insurance Copmany v. Marrano Development Corp.

Appellate Division, Fourth Department

Insurer’s Subrogation Case Dismissed, When Counsel Failed to Servc Timely Verified Complaint or Show Merit for Default

Subrogation case – plaintiff’s counsel started the lawsuit with a Summons with Notice.  Defendant was served with a summons with notice on November 19, 2003 and, on or about December 11, 2003 a complaint was demanded. Plaintiff served an untimely and unverified complaint upon defendant on March 1, 2004 and defendant rejected service thereof. Approximately five months later, defendant moved to dismiss the complaint and, approximately two months later, plaintiff cross-moved for an extension of time to serve the complaint upon defendant and another defendant. Appellate Division tosses subrogation lawsuit finding that plaintiff failed to establish that the delay in serving the complaint was excusable, failed to prove that there was an agreement to accept late service, failed to submit an affidavit of a person with firsthand knowledge of the facts, and failed to establish that it has a meritorious cause of action against defendant.

 

2/3/06              A.B. Medical Services  v. Motor Vehicle Accident Indemnification Corp

Appellate Division, Second Department

To Recover No-Fault Benefits, The Claimant Must Prove Timely Notice Despite Untimely Denial of the Claim

In an action seeking to recover first-party no-fault benefits, claimants failed to file a timely notice of claim, "a condition precedent to the right to apply for payment from [MVAIC]" (see Insurance Law § 5208 [a] [1], [3]).  Compliance with the statutory requirement of timely filing a notice of claim must be established in order to demonstrate that the claimant is a "covered person," within the meaning of the statute, entitled to recover no-fault benefits from the MVAIC (see Insurance Law § 5221 [b] [2].  MVAIC's failure to timely deny plaintiffs' claims is of no consequence and does not preclude dismissal of plaintiffs' causes of action based upon lack of coverage as MVAIC's submissions made a prima facie showing that the  assignors of the claim failed to timely file their notices of claim within 180 days of the accident and did not seek leave to file a late notice of claim (see Insurance Law § 5208 [b], [c]).

 

2/2/06              Delta Diagnostic Radiology, P.C. v. GEICO

Appellate Division, Second Department

And Once Timely Notice of No-Fault Claim is Proved by Claimant, Burden Shifts to Respondent as to Timely Denial

Here, Delta did establish a prima facie entitlement to summary judgment by proof that it submitted a claim, setting forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was overdue.  So, the burden shifted to GEICO to establish timely denial of the no-fault claim.  The Court finds GEICO failed to establish that a denial was timely mailed within the 30-day prescribed claim determination period.  The defendant also failed to submit any documentary proof or an affidavit from one with personal knowledge establishing that the denial was sent to plaintiff nor did defendant create a presumption of mailing by submission of an affidavit describing the standard operating procedures it uses to ensure that its denial was mailed.  In the absence of this proof, GEICO was precluded from raising the defense that the procedure was not medically necessary because defendant neither denied the claim within 30 days of receipt of the claim nor effectively extended the 30-day period. 

See Also: Modern Psychiatric Services P.C. v. Progressive Insurance Company (defendant failed to establish that the verification requests were timely mailed and absent proof of a tolling of the 30-day claim determination period,  Progressive was precluded from raising most defenses, including any deficiency in the assignment).

 

2/2/06              Terman  v. Gonta
Appellate Division, First Department

Prior Liability Determination in Subrogation Action Not Bnding on Injured Plaintiff

As tort plaintiff had not control over his insurance carrier’s property damage subrogation action and did not have a “full and fair opportunity” to litigate it, liability finding against carrier was not binding on injured plaintiff.

 

2/1/06              Maximum Care Chiropractic Care v.  Granite State Insurance Company

Appellate Division, First Department

No Fault Benefits Denied as Claimant Failed to Provide Prompt Written Notice or Reason for Delay

Plaintiff sought recovery of no-fault benefits allegedly due its assignor as a result of an automobile accident. The Lower Court denied defendant's unopposed summary judgment motion, finding the existence of an unspecified "triable issue of fact." The record reveals that neither plaintiff nor its assignor submitted written notice of the accident to defendant within the requisite time period, nor did they submit proof that they were unable to comply with such time limitation due to circumstances beyond their control. Therefore, defendant's motion for summary judgment should be granted.

 

2/1/06              Star Medical Services P.C. v. Allstate Insurance Company

Appellate Division, Second Department

Despite Untimely Denial of No-Fault Claim, Fraud Defense Can Be Raised, if Carrier had a “Founded Belief”

In this action to recover no-fault benefits, Star Medical established a prima facie entitlement to summary judgment.  The Court found no merit to Allstate’s contention that the failure of one of plaintiff's assignors to appear for an examination under oath (EUO) precluded summary judgment.  The submissions of Allstate’s claims representative and counsel failed to establish that they had personal knowledge EUO request letters were mailed to the claimant nor did they create a presumption of mailing by setting forth the standard office practice or procedures. Despite the untimely denial of the claim, Allstate was not precluded from asserting the defense that the collision was in furtherance of an insurance fraud scheme, but the Court holds that Allstate failed to establish that it possessed a "founded belief that the alleged injuries did not arise out of an insured incident" (citing Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]). The Court specifically mentioned Allstate’s references to EUO testimony of a passenger in attempt to raise a question of fact.  A copy of the EUO transcript was not attached to Allstate’s motion and thus the Majority finds the motion insufficient on evidentiary grounds.

 

The Dissent disagrees with the Majority’s refusal to address the fraud defense.   The Dissent points out that the Court of Appeals decision in Central Gen. Hosp requires that in order for a defendant to have a "founded belief that the alleged injur[ies] do[] not arise out of an insured incident" the defendant must submit sworn statements establishing those findings. The Dissent finds that Central Gen. Hosp. does require Allstate provide a sworn affidavit which establishes that the affiant has a belief which is "founded" upon information obtained by a reasonable investigation. But, the “source materials uncovered by that investigation such as interviews, documents, examination under oath transcripts etc...” need not be submitted in evidentiary form or even submitted at all to meet defendant’s burden.

 

1/31/06            Perez v. Rodriguez

Appellate Division, First Department

Majority Determines Gap in Treatment Left Unexplained, but Dissent Strongly Disagrees

Here is a case that addresses the observation in the Court of Appeals case of Pommells v Perez, 4 NY3d 566, 574 (2005), that "the law surely does not require a record of needless treatment in order to survive summary judgment" to prove that a plaintiff sustained a serious injury as defined in Insurance Law § 5102(d).  In this matter, defendant’s cross-motion to dismiss the complaint as on the ground that plaintiff did not sustain a serious injury was denied by the Lower Court.

 

The Appellate Division reverses.  The Majority finds that the defendant met his burden of proof through the submission of reports from an orthopedist, neurologist and a radiologist. An example of the doctor’s reports included that after examining plaintiff, "there is no evidence of injury to the cervical spine, lumbosacral spine, left shoulder or left knee. All injuries allegedly related to the accident . . . are resolved by objective clinical criteria . . . [b]ased on today's examination, it is my opinion that [plaintiff] is not disabled."  The Majority finds the plaintiff’s response inadequate.  The plaintiff submitted an affirmation from an orthopedic and arthropedic surgeon who examined plaintiff approximately three and one-half years after the accident and more than three years after she discontinued treatment. Plaintiff’s doctor never stated that he reviewed plaintiff's MRI films and relied solely on the unsworn reports of the doctors who reviewed those films three years earlier. He also failed to discuss the prolonged gap in treatment.

Judge Saxe provides a compelling argument in the Dissent.  Here, he concludes that taking the test results, physiological observations, and plaintiff's subjective complaints together, a claim of serious physical injury is sufficiently made out to create a question of fact. It is true that "the existence of a herniated disc does not per se constitute serious injury" (Noble v Ackerman, 252 AD2d 392, 394 [1998]), so that claims may be dismissed for lack of serious injury in the absence of proof that the herniated disc has substantially affected the plaintiff's physical abilities (see Kearse v New York City Tr. Auth., 16 AD3d 45 [2005]). However, here, he points out, there was proof of anterior disc herniation with and a focal disc herniation at L4-L5, as well as an interstitial tears involving the posterior horn of the medial meniscus. Additionally, testing performed shortly after the accident, in conjunction with the diagnosis and treatment of plaintiff's injuries, disclosed significant range-of-motion reductions confirmed not just by reports of pain, but by muscle spasms. Furthermore, Judge Saxe concludes that it seems inappropriate to rely on the concept of a "gap in treatment" in this case. It appears from the records that the clinic itself terminated plaintiff's treatment after five months, neither scheduling nor directing any further follow-up consultations or examinations, despite the objectively confirmed injuries to her discs and medical meniscus, the existence of which the clinic clearly recognized, and the substantial radiating pain plaintiff claimed.  Judge Saxe state that ‘by issuing what it termed a "final report," the clinic implicitly abandoned the prospect of treating plaintiff further, relegating her to the prescribed at-home therapeutic exercises and over-the-counter analgesics. The clinic's abandonment of the attempt to treat plaintiff does not call into question that plaintiff is suffering from several serious objective injuries which are causing her disabling pain and severe limitations.’

1/31/06            State Farm Mutual v. Sparacio

Appellate Division, Second Department

Declaratory Judgment Action to Determine Validity of Disclaimer Entitled to Jury Trial

On a prior appeal, the Court determined that the Lower Court failed to determine the issue of whether there had been a timely written notice of claim, and remitted the matter for that purpose. Subsequently, State Farm filed a note of issue requesting a nonjury trial to determine whether they could properly deny uninsured or underinsured motorist benefits to the defendants on the ground that they failed to provide timely written notice of claim. The defendants then filed a jury demand. State Farm moved to strike the defendant's jury demand and the Lower Court granted that motion.  A bench trial was held and the Court held State Farm was not obligated to provide uninsured or underinsured motorist benefits to the defendants.

The Second Department holds that a declaratory judgment action can be legal or equitable in nature, and to determine whether a party is entitled to a jury trial, "it is necessary to examine which of the traditional actions would most likely have been used to present the instant claim had the declaratory judgment action not been created".  Applying that analysis, the Court concludes that the underlying claim at issue was legal rather than equitable in nature, and the defendants were entitled to a jury trial

 

1/31/06            Thomas v. Smith

Appellate Division, Second Department

Defendants Fail to Make Prima Facie Showing on Serious Injury Motion Where Defendants’ Doctors’ Opinions Don’t Gibe with their own Findings

Defendants failed to make a prima facie showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d). The opinions of the defendants' examining physicians were contradicted by those physicians' own findings of the plaintiff's restrictions of range of motion, which, when compared to the normal range of motion.  In light of the defendants' failure to meet their initial burden, we need not consider whether the plaintiff's papers were sufficient to raise a triable issue of fact.

 

1/31/06            Browdame v. Candura

Appellate Division, Second Department

Defendants Fail to Make Prima Facie Showing on Serious Injury Motion Where Defendants’ Doctors’ Failed to Specify Objective Findings

Defendants failed to establish prima facie that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d). The report submitted by defendants’ orthopedist failed to specify the degree of range of motion in the plaintiff's cervical spine in support of his conclusion that the plaintiff did not sustain a serious injury. With respect to his examination of the plaintiff's lumbosacral spine, in those instances where he assigned a numerical value to the range of motion, the orthopedist failed to compare his findings against the range of normal.

The report submitted by the defendants’ neurologist was also lacking. In addition, after defendants acknowledged in part the findings contained in the reports of the plaintiff's MRI scans that documented a disc herniation, defendants' physicians failed to examine the scans and did not allege that the disc herniations were not causally related to the accident.

 

1/31/06            Ayach v. Ghazal

Appellate Division, Second Department

Again, Defendants’ Physicians must be Able to Provide an Opinion that Objectively Finds Absence of Serious Injury

Yet again, Defendant fails to establish their entitlement to judgment as a matter of law on the issue of serious injury. Here, plaintiffs alleged an aggravation of an underlying degenerative condition. Defendants' orthopedist stated in his affirmed report that as a result of the accident, the injured plaintiff suffered "significant changes in the neck and back" with a "guarded" prognosis. Also, he opined that  the accident caused "a strain to her neck" which was "superimposed" on degenerative changes and based upon the information he had been given he could not determine what symptoms related to the accident and what symptoms were pre-existing.  Finally, the defendants' neurologist stated in his affirmed report that the accident "produced an acute cervical strain syndrome activating preexisting degenerative spine disease" which included difficulty in swallowing.

 

1/31/06            Joseph v.  Insureco, Inc.

Appellate Division, Second Department

Policy of Insurance May Shorten Statute of Limitations for Action against Insurer

In this Article 78 proceeding, the Lower Court granted that branch of the cross motion of Insureco to dismiss the claims asserted against them as time-barred.  Parties to a contract may agree to limit the period of time within which an action must be commenced to a shorter period than that provided by the applicable statute of limitations (see CPLR 201; Matter of Incorporated Vil. of Saltaire v Zagata, 280 AD2d 547). Pursuant to the limitations provisions contained in the policy issued to Joseph and the endorsement, the claim against Insureco et al was properly dismissed as time-barred.

 

1/31/06            Ocean Partners v. North River Insurance Company

Appellate Division, First Department

Prompt Notice of Claim by Managing Agent of Insured Did Not Qualify as Prompt Notice by the Insured despite Insurer Having Actual Knowledge of Claim

The managing agent of the insured, listed as a separate insured under the building's insurance policy, filed a notice of loss.  Unfortunately, the insured made no such filing.  But, notice by the managing agent did not satisfy the insured’s own obligation to supply prompt notice of its particular damage claims to the insurer. The record failed to establish a between the two entities and the building agent's property manager testified that he had no authority to act on plaintiff's behalf. As the record reflected that the agent and insured had separate interests and disparate claims, no principal-agent relationship existed. In fact, the managing agent withdrew its claim when its $5,000 deductible was not met. Therefore, the insured failure to provide notice of its claim until 28 months after the fire constituted an unreasonable delay and a failure to satisfy a condition precedent to coverage under the policy.  The insurer's actual knowledge of the fire at the subject building did not relieve plaintiff of its independent obligation to give timely notice of its own claims.

1/30/06            Wilson v. 21st Century Insurance Co.
Second Circuit Court of Appeals

Fact Question Found as to Whether Defendant Insurance Company Acted in Bad Faith in Evaluation and Adjustment of Plaintiff's Claim
Plaintiff alleged that the defendant insurer delayed unreasonably in paying the policy limits under her coverage, as the result of a failure to thoroughly investigate her claim by conducting its own medical evaluation of her injuries. Defendant maintained that it acted reasonably because it considered all evidence supplied by plaintiff. The Appellate Court ruled, however, that relying solely on the insured to provide evidence of her claim does not satisfy the insurer's duty to thoroughly investigate the claim where, as in the matter at bar, there appear to be obvious avenues of inquiry in support of the claim which the insurer could have pursued but did not. Accordingly, the Appellate Court overturned the District Court's grant of summary judgment, and remanded the case for further proceedings.

 

Submitted by: Michael A. Tanenbaum and Ross E. Marlin (Sedgwick, Detert, Moran & Arnold, LLP)

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.

 

2/8/06  In the Matter of the Arbitration between the Applicant and Respondent

Arbitrator Aaron D. Maslow, Esq. (Kings County)

Medical Provider Bears Burden of Submitting Its Own Physician’s Qualifications For Performing Biofeedback – Insurer May Deny Without Seeking Verification.

Here is the Angle:      If a medical provider seeks payment for biofeedback treatment it must submit the physician’s qualifications who performed the biofeedback with the claim.  The provider’s failure to do so is grounds for an insurer to deny the claim.  The insurer is not required to obtain the information through the verification protocols before denying the claim.

 

The Analysis:              The Applicant sought, inter alia, payment of $3,959.77 for performing biofeedback.  The insurer denied all five service dates on the basis that “biofeedback claims require a narrative report documenting the required criteria outlined in the Workers’ Compensation fee schedule, including the certification, training and experience of the person performing the service.”

 

The Applicant argued that it did not bear the burden of providing proof of the qualification of the person performing the biofeedback.  Rather, the insurer bore the burden of requesting such qualifications through a verification request under 11 NYCRR §§65-3.5(b) and 65-3.6(b).

 

Arbitrator Maslow held that a medical provider, if it wishes to be compensated for biofeedback, must submit evidence of the physician’s qualifications.  Arbitrator Maslow reasoned that 11 NYCRR §68.1(b) (1) mandates compliance with the Workers’ Compensation Medical Fee Schedule.  Further, Ground Rule 1 to Chapter 7 of the Workers’ Compensation Fee Schedules provides that biofeedback administration is limited to qualified physicians.  Moreover, the physicians administering the treatment should submit evidence of their training and expertise to the insurer to “expedite processing.”

 

In addition, Arbitrator Maslow held that an insurer may deny a claim for biofeedback if a provider does not provide the requisite information.  The insurer is not required to seek the information through a verification protocol.

 

2/8/06  In the Matter of the Arbitration between the Applicant and Respondent

Arbitrator Aaron D. Maslow, Esq. (Kings County)

Lack of Execution Date of Assignment Of Benefits Fatal To Claim – By The Way, The Issue Was Raised By The Arbitrator Sua Sponte.

Here is the Angle:      An Arbitrator has the right to independently raise an issue that the Arbitrator deems relevant to rendering an award that is consistent with the Insurance Law and Department regulations.  Here, the issue of standing was raised by Arbitrator Maslow sua sponte and the entire claim denied for lack of standing.  The basis for the denial was that the assignment of benefits submitted by the Applicant failed to has an execution date therefore Applicant lacked standing.

 

The Analysis:             The Applicant sought payment of an upper and lower EMG/NCV testing performed on December 10, 2002, in the amount of $3,543.80.

 

At the no-fault arbitration, Arbitrator Maslow independently raised the issue of standing questioning the sufficiency of an assignment of benefits with no execution date.  Relying upon Matter of Medical Society v. Serio, 100 NY2d 854 (2003), 563 Grand Medical, P.C. v. Allstate Ins. Co., 6 Misc3d 1019 (Civ. Ct. Kings 2005), and an Insurance Department Opinion dated January 11, 2000, Arbitrator Maslow held that an arbitrator must scrutinize the record to ascertain if an Applicant has standing.  In the event that the Applicant lacks standing the arbitrator must raise the issue, even if the Respondent failed to do so.

 

Furthermore, with respect to the assignment of benefits’ insufficiency, an assignment of benefits must, at the very least, include the assignor and assignee’s name, the accident date, and signed AND dated by the assignor.  See, Inwood Hill Med. P.C. v. Allstate Ins. Co., 3 Misc3D 1110 (Civ. Ct. Bronx 2004).  Arbitrator Maslow stated:

 

It is fundamental that a date of execution be set forth on an assignment.  In the event an inquiry is made into the bonafides of the assignment, the assignor can be questioned as to whether he or she was at the facility of the assignee named in the assignment on the date of execution.

 

Therefore, Applicant’s claim was denied based upon lack of standing.

 

 

2/7/06  In the Matter of the Arbitration between the Applicant and Respondent

Arbitrator Kent L. Benziger, Esq. (Orange County)

Applicant’s Nearly Six Year Delay In Providing Insurer With Notice of Lost Wage Claim Coupled With Applicant’s Failure To Provide Requested Wage Verification and Appear At Arbitration Upon Arbitrator’s Direction Results In Denial of An Almost $50,000.00 Claim.

Here is the Angle:      The Applicant’s lost wage claim was denied for her failure to provide any verification to the insurer of her wage claim; her failure to place the insurer on notice of a lost wage claim until nearly six years; and her failure to appear for the arbitration pursuant to the Arbitrator’s directive.

 

The Analysis:              In this arbitration Applicant sought $49,881.60 in lost wages from October 1999 through April 27, 2000.  The Applicant was involved in an April 28, 1997, motor vehicle accident.  Applicant contended that at the time of the motor vehicle accident she was a computer consultant and self employed as a farmer at her home address.  She initially claimed she was out of work from April 28, 1997 through May 12, 1997.  The insurer sent Applicant the requisite verification of lost wage forms.  The Applicant failed to submit any verification of payments to substitute workers on her farm.

 

The Applicant returned to work two weeks after the motor vehicle accident.  Then Applicant went out on maternity leave and after the birth of her child did not return to work.

 

The insurer’s first notice of Applicant’s lost wage claim from October 1999 through April 27, 2000, was in the arbitration request form filed almost six years later.

 

The Applicant’s claim was denied on multiple grounds.  The first ground was failure to provide the insurer with the proper verification of payment for substitute workers on Applicant’s farm.  Thus, the claim was not ripe for determination.  The second ground was that Applicant’s claim was barred by the doctrine of laches in her failure to place the insurer on notice of the lost wage until almost six years after the initial alleged period of lost wages.  Also, the claim was denied on Applicant’s failure to establish a causal relationship between the accident and her injuries.  Applicant’s medical records provided that she injured her neck and back during a fall as a teenager in gymnastics.  Thereafter, she was involved in this motor vehicle accident.  Then in 1998, Applicant had a sudden onset of neck pain after sleeping in an awkward position.  More importantly, a November 2000 report from Applicant’s treating physician fails to even mention the April 28, 1997, motor vehicle accident.  Finally, the Applicant failed to appear for the arbitration to provide testimony as to her lost wage claim.  Arbitrator Benziger noted that he is permitted to take a negative inference from Applicant’s failure to abide by an arbitrator’s directive.

 

2/3/06  In the Matter of the Arbitration between the Applicant and Respondent

Arbitrator Kent Benziger, Esq. (Orange County)

New York Resident Involved In New Jersey Accident Can Elect To Pursue New Jersey PIP Coverage ($250,000 PIP requirement) But Under New Jersey Law Deemed Not An Eligible Injured Person As Applicant Was Operating The Motor Vehicle Without A Valid License.

Here is the Angle:      A New York resident involved in a New Jersey accident may elect to obtain New Jersey no-fault benefits.  It appears to be a great option since New Jersey’s “Deemer Statute” has a $250,000 basic PIP requirement whereas New York’s basic PIP requirement is only $50,000.  However, if the Applicant elects New Jersey no-fault benefits she is also subject to New Jersey law.  Here, the law was not in Applicant’s favor.  New Jersey’s statute excludes as an eligible injured person anyone who is involved in a motor vehicle accident that was operating the motor vehicle without a license.  The Applicant was operating the motor vehicle without a license.  Accordingly, the Applicant was not awarded any benefits under the New Jersey law.

 

The Analysis:             On December 21, 2003, the Applicant, a New York resident, was involved in a motor vehicle accident in New Jersey.  The Applicant was the operator of the motor vehicle and was unlicensed.  Applicant sought payment in the amount of $162,763.55 for health expense claims from Hackensack University Medical Center after being hospitalized from December 21, 2003 through January 5, 2004.  The insurer made a partial payment of the bill and the aforementioned amount is in dispute.  The insurer’s denial stated that the Applicant’s claim was initially submitted as a New Jersey no-fault claim, but since the Applicant was an unlicensed driver she did not qualify as an eligible injured person to obtain New Jersey no-fault benefits.  Therefore, New York basic no-fault benefits were extended to her, which were exhausted.

 

Not surprisingly, the Applicant argued that she was entitled to New Jersey no-fault benefits but that New York law applied in determining whether she was an eligible injured person.

 

Arbitrator Benziger held that Applicant was entitled to elect New Jersey no-fault benefits, but was also subject to the New Jersey no-fault laws.  Arbitrator Benziger reasoned that under New York and New Jersey case law a New York resident involved in a motor vehicle accident in New Jersey may elect to obtain New Jersey no-fault benefits.  See, Cooper Hosp. v. Prudential Ins. Co., 378 NJ Super. 510, 515 (AD 2005); American Transit Ins. v. Abdelghany, 173 AD2d 611 (2d Dept. 1991).  Moreover, if the New York resident elects to obtain New Jersey no-fault benefits she is also be subject to New Jersey law.  See, State Farm Mut. Auto. Ins. Co. v. Crocker, 288 NJ Super 240 (1996).  Applicant was not an eligible injured person as she was operating the motor vehicle at the time without a license.  The definition of eligible injured person under the New Jersey law specifically excludes anyone operating a motor vehicle without a license.  Therefore, the Applicant was not entitled to no-fault benefits under New Jersey law.

 

Across Borders

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

2/1/06              Urethane International Products v. Mid-Continent Casualty Co.
Texas Court of Appeal, Tenth Judicial District

Court Strictly Construes Terms in Pollution Exclusion to Find Coverage for Chemical Spill

The Texas Court of Appeal reversed a trial court’s ruling that a pollution exclusion applied to preclude coverage for injuries resulting from a chemical spill. The chemical, MDI, spilled from a container whose lid did not properly tighten and seal. The insurer denied defense on the basis of the pollution exclusion. The insured argued that the pollution exclusion did not apply to the transportation of a chemical which is not waste. The appellate court agreed, construing the terms of the exclusion in question to be limited to pollutants that are included within the definition of waste. Because it is undisputed that the chemical at issue in the case, MDI, was not waste, the provision of the exclusion at issue had no applicability and did not exclude coverage.

 

Submitted by: Bruce D. Celebrezze & Vanessa L. O'Brien (Sedgwick, Detert, Moran & Arnold LLP)

2/1/06              Johnson v. Braddy
New Jersey Supreme Court

An Insurance Policyholder is Personally Liable in excess of the $300,000 Maximum Liability Under the New Jersey Property- Liability Insurance Guaranty Association Act
Plaintiff filed suit against defendant for injuries incurred when defendant drove his truck into a vehicle where plaintiff was seated. After plaintiff filed suit, defendant's insurer became insolvent and was liquidated, which triggered the New Jersey Property- Liability Insurance Guaranty Act, N.J.S.A. 17:30A-1 to -20, which was established "to minimize financial loss to claimants or policyholders because of the insolvency of an insurer." The Act covers claims up to $300,000 against an insolvent insurer. The Act is silent, however, as to whether policyholders are personally liable for judgments in excess of that amount. Plaintiff claimed that the tortfeasor essentially becomes a self-insurer beyond the $300,000 statutory amount. The trial judge agreed and therefore denied defendant's motion for summary judgment and an Appellate Division panel affirmed that ruling. The New Jersey Supreme Court affirmed the decision of the Appellate Division, deeming it "legally unassailable". However, in recognition of the potentially catastrophic effect this ruling could have on citizens who responsibility purchased insurance to protect themselves, the Court also commended the issue to the Legislature for possible remedial action.

Submitted by: Michael A. Tanenbaum and Ross E. Marlin (Sedgwick, Detert, Moran & Arnold, LLP

1/31/06            Freeman v. State Farm
Eighth Circuit Court of Appeals

Household exclusion clause applied to the accident that occurred during move from one dwelling place to another
State Farm filed this declaratory action seeking a determination that a household exclusion clause applied to an accident that resulted in the death of the defendant’s son. At the time of the accident defendant’s wife and son were moving. On Appeal the Court rejected the defendant’s argument that the terms "residing" and "household" are ambiguous and because his son was in the process of moving he was not a resident of a specific household. Specifically, the Appellate Court found that the language of the household exclusion clause is unambiguous and that the district court properly concluded that defendant’s son and wife resided in the same household under the plain meaning of the terms.

 

Submitted by: Michael A. Tanenbaum and Zachary M. Barth (Sedgwick, Detert, Moran & Arnold, LLP)

 

 

 

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 State Farm Mutual v. Sparacio

David Horowitz, P.C., New York, N.Y. (Steven J. Horowitz of
counsel), for appellants.
Martin, Fallon & MullÉ (Rivkin Radler LLP, Uniondale, N.Y.
[Evan H. Krinick, Cheryl F.
Korman, and Stuart M. Bodoff] of
counsel), for respondents.

In an action, inter alia, for a judgment declaring that the plaintiffs are not obligated to provide uninsured or underinsured motorist benefits to the defendants, the defendants appeal from (1) a decision of the Supreme Court, Nassau County (Cozzens, J.), dated July 29, 2004, and (2) a judgment of the same court entered September 13, 2004, which, upon an order of the same court dated November 5, 2003, granting the plaintiffs' motion to strike the defendants' jury demand, in effect, declared that the plaintiffs are not obligated to provide uninsured or underinsured motorist benefits to the defendants.

ORDERED that the appeal from the decision is dismissed, as no appeal lies from a decision (see Schicchi v Green Constr. Corp., 100 AD2d 509); and it is further,

ORDERED that the judgment is reversed, on the law, without costs or disbursements, the order dated November 5, 2003, is vacated, the motion to strike the defendants' jury demand is denied, and the Clerk of the Supreme Court, Nassau County, is directed to restore the action to the jury trial calendar.

On a prior appeal (see State Farm Mut. Auto. Ins. Co. v Sparacio, 297 AD2d 284), this Court determined, inter alia, that the Supreme Court failed to determine the issue of whether there had been a timely written notice of claim, and remitted the matter to the Supreme Court, [*2]Nassau County, for that purpose. Subsequently, the plaintiffs filed a note of issue requesting a nonjury trial to determine whether they could properly deny uninsured or underinsured motorist benefits to the defendants on the ground that they failed to provide timely written notice of claim. The defendants then filed a jury demand. The plaintiffs moved to strike the defendant's jury demand. The Supreme Court granted that motion, and after a nonjury trial, in effect, declared that the plaintiffs are not obligated to provide uninsured or underinsured motorist benefits to the defendants. We reverse.

NY Constitution, article I, § 2 provides that "[t]rial by jury in all cases in which it has heretofore been guaranteed by constitutional provision shall remain inviolate forever." "The effect of this provision was to freeze' the right to a jury trial to those types of cases in which it was recognized at common law or by statute as of the adoption of the Constitution of 1894" (Independent Church of Realization of Word of God v Board of Assessors of Nassau County, 72 AD2d 554). However, "it has been held that the right to a jury trial is not strictly limited to those instances in which it was actually used in 1894, but also extends to new cases that are analogous to those traditionally tried by a jury" (Matter of DES Mkt. Share Litig., 79 NY2d 299, 305). The declaratory judgment action, which was created in 1921, can be legal or equitable in nature, and to determine whether a party is entitled to a jury trial, "it is necessary to examine which of the traditional actions would most likely have been used to present the instant claim had the declaratory judgment action not been created" (Independent Church of Realization of Word of God v Board of Assessors of Nassau County, supra at 555; see Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C3001:17; Siegel, NY Prac § 439, at 744 [4th ed]). Applying that analysis here, we conclude that the underlying claim at issue was legal rather than equitable in nature, and the defendants were entitled to a jury trial (see Martell v North Riv. Ins. Co., 107 AD2d 948; Azoulay v Cassin, 103 AD2d 836; Gordon v Continental Cas. Co., 91 AD2d 987; Zook v Hartford Acc. Ins. & Indem. Co., 55 AD2d 641; Aetna Cas. & Sur. Co. v Lauria, 54 AD2d 183; see generally Simler v Conner, 372 US 221; R.C.P.S. Assoc. v Karam Devs., 213 AD2d 612; cf. Matter of State Farm Mut. Auto. Ins. Cos. v Jackson, 12 AD3d 1142; Anthony Drugs of Bethpage v Local 1199 Drug & Hosp. Union, AFL-CIO, 34 AD2d 788).

We note that pursuant to the doctrine of law of the case, the defendants improperly raised before the trial court the issue of whether the underlying insurance policy was ambiguous (see Hall v Cucco, 5 AD3d 631), and whether the doctrine of equitable estoppel applied to the case (see Matter of Jackson v DeSouza, 18 AD3d 551, lv granted 5 NY3d 707).

In light of our determination, we need not reach the parties' remaining contentions.
H. MILLER, J.P., ADAMS, LUCIANO and RIVERA, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Court

 

Thomas v. Smith

Orlow, Orlow & Orlow, P.C., Flushing, N.Y. (Adam M. Orlow
of counsel), for appellant.
Norman Volk & Associates, P.C., New York, N.Y. (Holly E.
Peck of counsel), for respondents
Leonard Smith and Foumba Limo
Car Service and Rental Corp.
Brand Glick & Brand, P.C., Garden City, N.Y. (Robert S.
Muzzuchin of counsel), for
respondents Cory Jenkins and Clifford
Jenkins.

In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Kings County (Jackson, J.), dated October 19, 2004, which granted the separate motions of the defendants, Leonard Smith and Foumba Limo Car Service and Rental Corp., Cory Jenkins and Clifford Jenkins, and Salvator Cento, for summary judgment dismissing the complaint insofar as asserted against each of them 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 one bill of costs, the motions are denied, and the complaint is reinstated.

The defendants failed to make a prima facie showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) (see Toure v Avis Rent A Car Sys., 98 NY2d 345, 350; cf. Gaddy v Eyler, 79 NY2d 955, 957). The opinions of the defendants' examining physicians were belied by those physicians' own findings of the plaintiff's restrictions [*2]of range of motion, which, when compared to the normal range of motion, contradicted their conclusions that the plaintiff did not suffer a serious injury within the meaning of Insurance Law § 5102(d) (see Karminsky v Waldner, 19 AD3d 370, 371; McDowall v Abreu, 11 AD3d 590, 591). In light of the defendants' failure to meet their initial burden, we need not consider whether the plaintiff's papers were sufficient to raise a triable issue of fact (see Black v Robinson, 305 AD2d 438, 439; Coscia v 938 Trading Corp., 283 AD2d 538; Chaplin v Taylor, 273 AD2d 188; Mariaca-Olmos v Mizrhy, 226 AD2d 437, 438).

Accordingly, the Supreme Court erred in granting the defendants' separate motions for summary judgment.
H. MILLER, J.P., CRANE, KRAUSMAN, RIVERA and LIFSON, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Court

 

 

Joseph v.  Insureco, Inc.

 

In a hybrid action, inter alia, to recover damages for breach of contract, and a proceeding pursuant to CPLR article 78 in the nature of mandamus, to compel the New York State Superintendent of Insurance to require certain insurance companies to settle the plaintiff's insurance claim arising from water damage to his property, the plaintiff appeals from an order and judgment (one paper) of the Supreme Court, Queens County (Dollard, J.), dated August 16, 2004, which granted that branch of the cross motion of Insureco, Inc., St. Paul Insurance Company, s/h/a St. Paul Property and Liability Insurance, and United States Fidelity Guaranty Company, s/h/a United States Fidelity and Guaranty Insurance Underwriters, Inc., which was to dismiss the claims insofar as asserted against them as time-barred pursuant to CPLR 3211(a)(5), granted that branch of the cross motion of the New York State Insurance Department and the New York State Superintendent of Insurance which was to dismiss the claims insofar as asserted against them as time-barred pursuant to CPLR 3211(a)(5), and dismissed the proceeding insofar as asserted against them. [*2]

ORDERED that the order and judgment is affirmed, with one bill of costs.

Pursuant to the limitations provisions contained in the insurance policy issued to the plaintiff and the endorsement, his claim against Insureco, Inc., St. Paul Insurance Company, s/h/a St. Paul Property and Liability Insurance, and United States Fidelity Guaranty Company, s/h/a United States Fidelity and Guaranty Insurance Underwriters, Inc., was properly dismissed as time-barred. Parties to a contract may agree to limit the period of time within which an action must be commenced to a shorter period than that provided by the applicable statute of limitations (see CPLR 201; Matter of Incorporated Vil. of Saltaire v Zagata, 280 AD2d 547). The claims asserted against the New York State Insurance Department and the New York State Superintendent of Insurance were likewise time- barred (see CPLR 217).

The plaintiff's remaining contentions are without merit.
SCHMIDT, J.P., KRAUSMAN, LUCIANO and COVELLO, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Court

Browdame v. Candura

Bader, Yakaitis & Nonnenmacher, LLP, New York, N.Y. (Scott A.
Steinberg of counsel), for appellant.
Downing & Peck, P.C., New York, N.Y. (John M. Downing of
counsel), for respondent Lewis J.
Candura.
Robert P. Tusa (Sweetbaum & Sweetbaum, Lake Success, N.Y.
[Marshall D. Sweetbaum] of counsel),
for respondent Danny Perez.

In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Kings County (Hurkin-Torres, J.), dated August 19, 2004, which granted the defendants' separate motions for summary judgment dismissing the complaint against each of them 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 motions are denied, and the complaint is reinstated.

The defendants failed to establish prima facie that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d). Accordingly, their motions should have been denied (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955) without consideration of the plaintiff's opposition (see Sequeira v W & E Auto Repair, Inc., 17 AD3d 442, 443; Aronov v Leybovich, 3 AD3d 511, 512; Junco v Ranzi, 288 AD2d 440). [*2]

The report submitted by the defendant Lewis J. Candura's expert orthopedist, adopted by the defendant Danny Perez, failed to specify the degree of range of motion in the plaintiff's cervical spine in support of his conclusion that the plaintiff did not sustain a serious injury. With respect to his examination of the plaintiff's lumbosacral spine, in those instances where he assigned a numerical value to the range of motion, the orthopedist failed to compare his findings against the range of normal. The report submitted by the defendant Lewis J. Candura's expert neurologist, adopted by the defendant Danny Perez, was also lacking. Accordingly, the "defendants' proof failed to objectively demonstrate that the plaintiff did not suffer a permanent consequential or significant limitation of use of his [lumbosacral] cervical spine[s] as a result of the subject accident" (Aronov v Leybovich, supra at 512; see Baudillo v Pam Car & Truck Rental, Inc., 23 AD3d 420; Minlionica v Shahabi, 296 AD2d 569, 570). Moreover, after having acknowledged, at least in part, the findings contained in the reports of the plaintiff's magnetic resonance imaging scans documenting disc herniation, the defendants' expert physicians failed to examine the scans and did not allege that the disc herniations were not causally related to the accident (see Zavala v DeSantis, 1 AD3d 354, 355; Black v Robinson, 305 AD2d 438, 439).
ADAMS, J.P., RITTER, GOLDSTEIN, SKELOS and DILLON, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Court

 

Ayach v. Ghazal

Patrick Colligan (Carol R. Finocchio, New York, N.Y. [Mary Ellen
O'Brien] of counsel), for appellants-respondents.
Anthony J. Scarcella & Associates, P.C., White Plains, N.Y. (M.
Sean Duffy of counsel), for
respondents-appellants.

In an action to recover damages for personal injuries, etc., the defendants appeal, as limited by their brief, from so much of an order of the Supreme Court, Westchester County (Bellantoni, J.), entered March 24, 2005, as denied their cross motion for summary judgment dismissing the complaint on the ground that the plaintiff Seeham Ayach did not sustain a serious injury within the meaning of Insurance Law § 5102(d), and the plaintiffs cross-appeal, as limited by their notice of appeal and brief, from so much of the same order as denied their motion for summary judgment on the issue of liability and directed them to provide a duplicate copy of "MRI films dated December 29, 1999."

ORDERED that the plaintiffs' notice of cross appeal is also treated as an application for leave to cross-appeal from the provision of the order which directed the plaintiffs to provide a duplicate copy of "MRI films dated December 29, 1999," and leave to cross-appeal is granted; and it is further,

ORDERED that the order is affirmed insofar as appealed from; and it is further,

ORDERED that the order is reversed insofar as cross-appealed from, on the law, the [*2]plaintiffs' motion for summary judgment on the issue of liability is granted, and the plaintiffs are directed to provide a duplicate copy of "X-ray films dated December 29, 1999," if they have not done so already; and it is further,

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

The accident occurred on a one-lane exit ramp leading from I-287 to the Sprain Brook Parkway during rush hour. The defendant driver claimed at her examination before trial that she saw a car cut in front of the plaintiffs' vehicle, causing the plaintiffs' vehicle to come to an abrupt stop in front of the defendants' vehicle. There was one car length between the defendants' vehicle and the plaintiffs' vehicle. The defendants' vehicle was unable to stop in time to avoid hitting the plaintiffs' vehicle in the rear.

The law is well-settled that "[a] rear-end collision with a stopped vehicle establishes a prima facie case of negligence on the part of the operator of the moving vehicle" (see Russ v Investech Sec., 6 AD3d 602). "A claim that the driver of the lead vehicle made a sudden stop, standing alone, is insufficient to rebut the presumption of negligence" (Russ v Investech Sec., supra at 602; see Belitsis v Airborne Express Frgt. Corp., 306 AD2d 507; Dickie v Pei Xiang Shi, 304 AD2d 786). The defendants' claim that the plaintiffs' vehicle was cut off by a third vehicle supported the plaintiffs' position that the plaintiff driver may not be charged with comparative fault, and did not provide a non-negligent explanation for the defendant driver's conduct. Accordingly, the plaintiffs were entitled to summary judgment on the issue of liability.

On the issue of serious injury, the plaintiffs asserted in their bill of particulars that the injured plaintiff suffered an aggravation of an underlying degenerative condition. On the question of whether the injured plaintiff suffered an aggravation of a pre-existing degenerative condition which constituted a serious injury, the defendants failed to establish their entitlement to judgment as a matter of law.

The defendants' orthopedist stated in his affirmed report that as a result of the accident, the injured plaintiff suffered "significant changes in the neck and back" with a "guarded" prognosis. In his opinion, the accident caused "a strain to her neck" which was "superimposed" on degenerative changes. Based upon the information he had been given he could not determine what symptoms related to the accident and what symptoms were pre-existing. The defendants' neurologist stated in his affirmed report that the accident "produced an acute cervical strain syndrome activating preexisting degenerative spine disease" which included difficulty in swallowing.

Since the defendants failed to establish, prima facie, their entitlement to judgment as a matter of law, the sufficiency of the opposing papers need not be addressed.

However, we note that the plaintiffs' physician compared the injured plaintiff's X-rays dated December 29, 1999, with X-rays taken subsequent to the accident. Therefore, the Supreme Court misspoke when it directed the plaintiffs to provide copies of "MRI films dated December 29, 1999," and should instead have directed the plaintiffs to provide copies of "X-ray films dated December 29, 1999."
ADAMS, J.P., RITTER, GOLDSTEIN, SKELOS and DILLON, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Court

 

Ocean Partners v. North River Insurance Company

Weg and Myers, P.C., New York (Joshua L. Mallin of counsel),
for appellant.
James T. Ferrini, Chicago, IL, of the Illinois Bar, admitted pro
hac vice, for respondent.

Order, Supreme Court, New York County (Shirley Werner Kornreich, J.), entered November 9, 2004, which granted defendant North River Insurance Company's motion for summary judgment, unanimously affirmed, without costs.

The court properly rejected plaintiff's argument that the notice of loss filed by its managing agent — which was listed as a separate insured under the building's insurance policy — satisfied plaintiff's own obligation, as an insured, to supply prompt notice of its particular damage claims. The record fails to establish a principal-agent relationship between these two entities. In fact, the building agent's property manager testified that he had no authority to act on plaintiff's behalf. The record reflects that the managing agent and plaintiff had separate interests in the building and disparate claims to assert in connection with the fire. Ultimately, the managing agent unilaterally withdrew its claim when its $5,000 deductible was not met.

Plaintiff's failure to provide notice of its claim until 28 months after the fire constituted an unreasonable delay and a failure to satisfy a condition precedent to coverage under the policy (Travelers Ins. Co. v Volmar Constr. Co., 300 AD2d 40 [2002]). The insurer's actual knowledge [*2]of the fire at the subject building did not relieve plaintiff of its independent obligation to give timely notice of its own claims (id. at 44).

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

ENTERED: JANUARY 31, 2006

CLERK

Terman  v. Gonta
 

Order, Supreme Court, New York County (Leland DeGrasse, J.), entered July 27, 2004, which denied defendants' motion for summary judgment, unanimously affirmed, without costs.

Defendants, seeking the benefit of collateral estoppel, failed to demonstrate that the decisive issue had necessarily been decided in the prior subrogation action against plaintiffs, that plaintiffs were in privity with the insurance company, and that plaintiffs, as the party against whom the prior determination was to be asserted, had a "full and fair  opportunity" to contest the prior determination (see Buechel v Bain, 97 NY2d 295, 303-04 [2001], cert denied 535 US 1096 [2002]; Gramatan Home Invs. Corp. v Lopez, 46 NY2d 481 [1979]). Plaintiffs had no opportunity to litigate the property damage subrogation action because they lacked control over, or a financial interest in, that action (see e.g. Anderson v Snyder Tank Corp., 44 AD2d 761, 762 [1974]).

THIS CONSTITUTES THE DECISION AND ORDER

Allstate Insurance Copmany v. Marrano Development Corp.

 

Appeal from an order of the Supreme Court, Erie County (Donna M. Siwek, J.), entered March 11, 2005. The order, insofar as appealed from, denied the motion of defendant Fireplace Distributors, Inc. to dismiss the complaint against it and granted that part of the cross motion of plaintiff for an extension of time to serve the complaint upon defendant Fireplace Distributors, Inc.


WALSH & WILKINS, BUFFALO (NICOLE A. HEARY OF COUNSEL), FOR DEFENDANT-APPELLANT.
KENNEY, SHELTON, LIPTAK & NOWAK, L.L.P., BUFFALO (ERIC C. GENAU OF COUNSEL), FOR PLAINTIFF-RESPONDENT.


It is hereby ORDERED that the order insofar as appealed from be and the same hereby is unanimously reversed on the law without costs, the motion of defendant Fireplace Distributors, Inc. is granted, the complaint against that defendant is dismissed and that part of the cross motion with respect to that defendant is denied.

Memorandum: Supreme Court erred in denying the motion of Fireplace Distributors, Inc. (defendant) to dismiss the complaint in this subrogation action against it on the ground that the complaint was not timely served and in granting that part of plaintiff's cross motion for an extension of time to serve the complaint upon defendant. Defendant was served with a summons with notice on November 19, 2003 and, on or about December 11, 2003, defendant served a notice of appearance and demand for a complaint. Plaintiff served an unverified complaint upon defendant on March 1, 2004, and defendant rejected service thereof. Approximately five months later, defendant moved pursuant to CPLR 3012 (b) to dismiss the complaint and, approximately two months later, plaintiff cross-moved for an extension of time to serve the complaint upon defendant and another defendant. Plaintiff failed to establish that the delay in serving the complaint was excusable, and thus defendant's motion should have been granted on that ground (see Grant v City of N. Tonawanda, 225 AD2d 1089; Fantauzzo v Steimer, 193 AD2d 1125). Although plaintiff's attorney asserted that he believed that defendant's attorney had agreed to accept service of the complaint, that alleged agreement was not reduced to writing and, indeed, defendant's attorney denies that there was such an agreement (see Ward v Quick, 249 AD2d 943, 944). "The conflicting affidavits did not authorize ... Supreme Court to resolve this credibility [*2]issue, or to do so by erring on the side of compelling [defendant] to accept the [complaint]. Rather, ... Supreme Court should have turned for resolution of this issue to CPLR 2104, which requires that all [agreements] be written and subscribed by those to be bound, unless made in open court" (Juseinoski v Board of Educ. of City of N.Y., 15 AD3d 353, 355).

In addition, the complaint served upon defendant was unverified and plaintiff failed to submit an affidavit of a person with firsthand knowledge of the facts, and thus defendant's motion also should have been granted on the ground that plaintiff failed to establish that it has a meritorious cause of action against defendant (see Tonello v Carborundum Co., 91 AD2d 1169, affd 59 NY2d 720, rearg denied 60 NY2d 587; Trendell v Community Gen. Hosp., 278 AD2d 810; Marion v Notre Dame Academy High School, 133 AD2d 614; see generally Dick v Doral Greens Ltd. Partnership, 289 AD2d 74, 76, lv denied 98 NY2d 607).
Entered: February 3, 2006
JoAnn M. Wahl
Clerk of the Court

Rohlin v. Nationwide Mutual Insurance Company

Appeals from a judgment (denominated order) of the Supreme Court, Ontario County (James R. Harvey, A.J.), entered April 12, 2005 in a declaratory judgment action. The judgment granted the motion of defendant Nationwide Mutual Insurance Company to dismiss the complaint against it and denied plaintiff's cross motion for summary judgment.


PHILLIPS LYTLE LLP, ROCHESTER (EDMUND C. BAIRD OF COUNSEL), FOR DEFENDANT-APPELLANT, AND CHRISTOPHER D. TROTTO, FOR PLAINTIFF- APPELLANT.
O'SHEA, REYNOLDS & CUMMINGS, BUFFALO (KIMBERLY D. GENSLER 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 denying the motion and reinstating the complaint against defendant Nationwide Mutual Insurance Company and as modified the judgment is affirmed without costs.

Memorandum: Plaintiff was operating a vehicle owned by Sharol L. Mortensen when the vehicle allegedly encountered rough road and flipped over. Plaintiff's daughter, Tracy M. Rohlin (defendant), was a passenger in the vehicle. Defendant commenced an action against plaintiff and Mortensen seeking damages for injuries she allegedly sustained in the accident. Plaintiff sought coverage from defendant Nationwide Mutual Insurance Company (Nationwide) under separate automobile liability insurance policies issued by Nationwide to her and Mortensen. Although Nationwide agreed to provide coverage under the policy issued to Mortensen, it denied coverage under the policy issued to plaintiff on the ground that Mortensen is a member of plaintiff's household and coverage extends to plaintiff only if plaintiff was operating "a motor vehicle owned by a non-member of [plaintiff's] household." Plaintiff thereafter commenced this action seeking judgment declaring that Nationwide is obligated to provide coverage to plaintiff under her policy.

Supreme Court properly denied plaintiff's cross motion seeking summary judgment but erred in granting the motion of Nationwide seeking summary judgment dismissing the complaint against it. The term "household," as used in insurance policies, is ambiguous (see General Assur. Co. v Schmitt, 265 AD2d 299, 300; Schaut v Fireman's Ins. Co. of Newark, 130 AD2d 477, 478). Thus, "its interpretation requires an inquiry into the intent of the parties" (General [*2]Assur. Co., 265 AD2d at 300), and the term should therefore be interpreted in a manner favoring coverage, as should any ambiguous language in an insurance policy (see Sekulow v Nationwide Ins. Co., 193 AD2d 395, 396; Wrigley v Potomac Ins. Co., 122 AD2d 361, 362). In our view, the issue whether Mortensen is a member of plaintiff's household cannot be resolved as a matter of law (see Kradjian v American Mfrs. Mut. Ins. Co., 206 AD2d 801, 802-803; New York Cent. Mut. Fire Ins. Co. v Kowalski, 195 AD2d 940, 941-942). Rather, that issue is best resolved by the trier of fact, "taking into account the reasonable expectations of the average person purchasing [automobile liability] insurance, as well as the particular circumstances of [this] case" (Sekulow, 193 AD2d at 396).

 

Caruana v. Oswego County Board of Cooperative Education Services

Appeal from an order of the Supreme Court, Oswego County (Norman W. Seiter, Jr., J.), entered August 13, 2004 in a personal injury action. The order, insofar as appealed from, denied that part of plaintiff's cross motion for partial summary judgment determining that plaintiff need not plead or prove that she sustained a serious injury.


LAURENCE A. WANGERMAN, SYRACUSE, FOR PLAINTIFF-APPELLANT.
PETRONE & PETRONE, P.C., UTICA (MARY ANNE DOHERTY OF COUNSEL), FOR DEFENDANTS-RESPONDENTS.


It is hereby ORDERED that the order insofar as appealed from be and the same hereby is unanimously reversed on the law with costs, that part of the cross motion for partial summary judgment determining that plaintiff need not plead or prove that she sustained a serious injury is granted and the third ordering paragraph is vacated.

Memorandum: Plaintiff commenced this negligence action seeking damages for injuries she sustained when the left front wheel came off her car as she drove along the highway. The day before the accident, a student under the supervision of defendant James Loomis at a school operated by defendant Oswego County Board of Cooperative Education Services had changed the tires on plaintiff's car. Defendants moved for summary judgment on the ground, inter alia, that plaintiff did not plead, and could not prove, that she sustained a serious injury (see Insurance Law § 5102 [d]) as assertedly required by Insurance Law § 5104 (a), and plaintiff cross-moved, inter alia, for an order granting partial summary judgment determining that she need not plead or prove that she sustained a serious injury. By its order on appeal, Supreme Court determined, inter alia, that the action is "subject to" the no-fault insurance law, and thus implicitly determined that plaintiff is required to meet the serious injury threshold (see § 5104 [a]). We conclude that the court should have granted that part of plaintiff's cross motion for partial summary judgment determining that plaintiff need not plead or prove that she sustained a serious injury.

Pursuant to Insurance Law § 5104 (a), in an action by one "covered person" against another "covered person," the plaintiff cannot recover for noneconomic injury unless he or she has sustained a "serious injury" as defined in section 5102 (d) of the Insurance Law. A "covered person" is defined as a "pedestrian injured through the use or operation of, or any owner, operator or occupant of, a motor vehicle ...; or any other person entitled to first party benefits" (§ 5102 [j]). Here, plaintiff is a covered person within the meaning of section 5102 (j), but [*2]defendants and their student are not (see generally Hill v Metropolitan Suburban Bus Auth., 157 AD2d 93, 97; Lang v City of New York, 98 AD2d 792).
Entered: February 3, 2006
JoAnn M. Wahl
Clerk of the Court

 

 

Perez v. Rodriguez

Cheven, Keely & Hatzis, New York (William B. Stock of
counsel), for appellant.
Marie R. Hodukavich, Peekskill, for respondents.

Order, Supreme Court, Bronx County (Alan J. Saks, J.), entered March 22, 2004, which, to the extent appealed from, denied defendant Milciadez Rodriguez's cross motion for summary judgment dismissing the complaint as against him on the ground that plaintiffs failed to meet the serious injury threshold of Insurance Law § 5102(d), reversed, on the law, without costs, the cross motion granted and the complaint dismissed. The Clerk is directed to enter judgment accordingly.

This is a personal injury action which arises out of a motor vehicle accident that occurred on November 7, 1999. Plaintiff Dolores Perez alleges that she was a passenger in a vehicle driven by defendant Rodriguez when it struck the rear of a vehicle owned by defendant Silver Spring Service, Inc. and operated by defendant Pablo Sandoval. Plaintiff was apparently treated at the scene of the accident by an "emergency crew" but was not hospitalized. Plaintiff thereafter sought treatment at Webster Comprehensive Medical, P.C., which visits lasted approximately five months.

Plaintiff subsequently commenced this action in October 2000, asserting that she had sustained a serious injury as defined in Insurance Law § 5102(d). Defendants Sandoval and Silver Spring, after issue was joined, moved to dismiss the complaint as against them on the ground that they had no liability as a matter of law since Rodriguez's vehicle hit their vehicle in the rear while it was stopped. Rodriguez then cross-moved to dismiss the complaint as against him on the ground that plaintiff did not sustain a serious injury. The motion court granted Sandoval and Silver Spring's motion, which disposition is not within the scope of this appeal, but denied Rodriguez's cross motion. We disagree with the motion court insofar as it denied the cross motion and, accordingly, reverse.

The Court of Appeals has oft-stated that the " legislative intent underlying the No-Fault Law was to weed out frivolous claims and limit recovery to significant injuries'" (Toure v Avis Rent-A-Car Sys., Inc., 98 NY2d 345, 350 [2002], quoting Dufel v Green, 84 NY2d 795, 798 [1995]). The issue of whether a claimed injury falls within the statutory definition of a "serious [*2]injury" is a question of law for the courts which may be decided on a motion for summary judgment (Licari v Elliott, 57 NY2d 230, 237 [1982]; Martin v Schwartz, 308 AD2d 318, 319 [2003]). Once the proponent of a motion for summary judgment has set forth a prima facie case that the claimed injury is not serious, the burden shifts to the plaintiff to demonstrate, by the submission of objective proof of the nature and degree of the injury, that he/she did sustain such an injury, or that there are questions of fact as to whether the purported injury was "serious" (Toure, 98 NY2d at 350; Cortez v Manhattan Bible Church, 14 AD3d 466, 467 [2005]; Martin v Schwartz, supra). However, "even where there is medical proof, when additional contributing factors interrupt the chain of causation between the accident and claimed injury - such as a gap in treatment . . . summary dismissal of the complaint may be appropriate" (Pommells v Perez, 4 NY3d 566, 572 [2005] [emphasis added]).

Initially, we find that defendant shouldered his burden of proof that plaintiff did not sustain a serious injury, within the statutory definition, by the submission of reports from Doctors Dick, Krishna and Eisenstadt, who are, respectively, an orthopedist, neurologist and a radiologist. Doctor Dick found, after examining plaintiff, that despite her claims herein, "there is no evidence of injury to the cervical spine, lumbosacral spine, left shoulder or left knee. All injuries allegedly related to the accident . . . are resolved by objective clinical criteria . . . [b]ased on today's examination, it is my opinion that [plaintiff] is not disabled." Dr. Krishna concluded that: plaintiff had sustained sprain/strain of the cervical and lumbosacral areas, which had resolved; objective findings indicated that plaintiff's "neurological perspective was normal" and she required no further treatment; and plaintiff "is capable of performing all activities of daily living, and is capable of gainful employment without restrictions." Dr. Eisenstadt noted that plaintiff had a normal MRI study of the left knee and as for her lumbar spine, Dr. Eisenstadt found normal lumbar alignment, with desiccation in the intervertebral discs at the L4-5 level, as well as a small central disc herniation at the L4-5 level. Dr. Eisenstadt determined, however, that the desiccation indicated preexisting degenerative disease which takes months to years to develop.

In response, plaintiff, in addition to her own affidavit, submitted an affirmation from Dr. Jay Zaretsky, an orthopedic and arthropedic surgeon, who examined plaintiff on April 25, 2003, approximately three and one-half years after the accident, more than three years after she discontinued treatment at Webster Comprehensive, and in response to defendant's cross motion. Dr. Zaretsky, however, never stated that he reviewed plaintiff's MRI films and, apparently, relied solely on the unsworn reports of the doctors who reviewed those films three years earlier. Dr. Zaretsky also neglected to discuss the prolonged gap in plaintiff's treatment and, indeed, exacerbated the significance of that unexplained gap by stating that plaintiff "is permanently disabled as a result of the automobile accident of November 7, 1999, her condition is chronic and permanent and she has suffered partial but significant impairments to the spine, shoulder and left knee which requires surgery and will necessarily require future medical care at least in the nature of therapy and steroid injections" (emphasis added). Moreover, plaintiff's assertions that when she returned to work at the beauty salon (she could not remember when that was) she could only work for one and one-half hours and could no longer blow-dry hair are merely subjective complaints based upon her testimony, and are unsupported by medical evidence.

Given the absence of admissible evidence that plaintiff suffered a serious injury in 1999, when the accident occurred, the utter failure to explain the gap in plaintiff's medical treatment, and the lack of objective evidence that plaintiff suffered permanent loss of use or permanent consequential limitation of use of a body organ, member or function, or impairment in her daily [*3]activities for 90 days in the 180-day period following the accident (Insurance Law § 5102[d]), the complaint must be dismissed.

All concur except Saxe, J. who dissents in a memorandum as follows:

SAXE, J. (dissenting)

The motion court's denial of summary judgment, on the ground that issues of fact exist as to whether plaintiff suffered a serious injury as defined in Insurance Law § 5102(d), should be affirmed. Plaintiff's showing included sufficient objective medical evidence of serious physical injury, including the results of MRIs and physical range of motion assessments, to avoid dismissal at this juncture.

Plaintiff Dolores Perez was allegedly injured on November 7, 1999, when the vehicle in which she was a passenger, which was operated by defendant Milciadez Rodriguez, struck another vehicle. The radiating pain she began to experience immediately following the accident, in her shoulders, arms, buttocks and legs, has, according to her deposition testimony and affidavit, continued virtually unabated. Beginning two days after the accident, plaintiff was tested and treated by various medical practitioners at the clinic she consulted, Webster Comprehensive Medical, P.C. The clinic also referred her for MRIs of the cervical spine, lumbosacral spine, and left knee, and electrodiagnostic tests.

The MRI of the cervical spine, which was performed on November 16, 1999, revealed an anterior disc herniation at C5-C6 level, and a reversal of the normal cervical curve due to muscular spasm. An MRI of the lumbosacral spine performed on December 14, 1999 revealed a focal disc herniation at the L4-L5 level. An MRI of the left knee performed on February 17, 2000, revealed an interstitial tear involving the posterior horn of the medial meniscus. Although a nerve conduction report and EMG report on December 7, 1999 indicated no abnormalities, a physical musculoskeletal examination performed on that date disclosed myospasm in numerous paraspinal muscles upon palpation, with a positive Spurling's sign on the left side, positive results of a straight leg test on the left side, and positive results of an opposite straight leg raise test. The examining physician at the December 7, 1999 examination observed measurable restrictions in plaintiff's active and passive range of motion in lateral bending, flexion, extension and rotation, with a particularly limited lumbar range of motion due to pain and spasm.

Plaintiff continued to attend Webster Comprehensive Medical for various types of therapy several times each week for the five months after the accident, otherwise remaining at home for the most part, often in bed. During the first three weeks, she wore a brace for her neck; for four weeks she wore a brace for her leg; and she has continually worn a brace for her waist. She has also continually performed her home exercises. But the pain has persisted.

On March 29, 2000, a document entitled "final examination report" was issued by Webster Comprehensive. It fails to indicate any resolution, or any plan for resolution or relief of plaintiff's medical condition. Yet, by the use of the term "final" in the heading, it implicitly presents a view of plaintiff as a patient for whom nothing more can be accomplished beyond what amelioration is achieved by the continued use of at-home exercises and over-the-counter [*4]analgesics. Indeed, plaintiff states that she continues to employ prescribed therapeutic exercises at home as directed, although with little relief resulting.

When after the first five months plaintiff returned to work at her hair styling salon, she did so because of financial pressures. However, even then she could only work for an hour and a half, due to the pain she continues to experience in her back, arm and leg, and she is unable to blow-dry hair because of the resulting pain and numbness. To date, she cannot bend, sit or stand for an extended period. Nor is she able to perform without pain most of the normal household tasks she performed before the accident: she cannot do the lifting and carrying that is entailed in doing laundry and grocery shopping, or the physical motions needed to vacuum, clean, hang curtains, or move furniture. Nor can she enjoy marital relations with her husband without pain.

Taking the test results, physiological observations, and plaintiff's subjective complaints together, a claim of serious physical injury is sufficiently made out to create a question of fact. It is true that "the existence of a herniated disc does not per se constitute serious injury" (Noble v Ackerman, 252 AD2d 392, 394 [1998]), so that claims may be dismissed for lack of serious injury in the absence of proof that the herniated disc has substantially affected the plaintiff's physical abilities (see Kearse v New York City Tr. Auth., 16 AD3d 45 [2005]). However, here, not only is there proof of anterior disc herniation with adjacent spondylitic change at C5-C6, and a focal disc herniation at L4-L5, as well as an interstitial tear involving the posterior horn of the medial meniscus. Additionally, testing performed shortly after the accident, in conjunction with the diagnosis and treatment of plaintiff's injuries, disclosed significant range-of-motion reductions confirmed not just by reports of pain, but by muscle spasms.

Moreover, those results were confirmed when plaintiff went for another consultation on April 25, 2003 with orthopedic surgeon Jay R. Zaretsky in the course of the litigation. This orthopedist affirmed that he not only reviewed plaintiff's medical records, including the MRIs, but also conducted a physical examination, the results of which confirmed that the herniated discs and torn meniscus have substantially affected plaintiff's physical abilities. As in the examination on December 7, 1999, Dr. Zaretsky observed muscle spasms resulting from palpation of the paralumbar musculature, with extremely limited forward flexion and bending capability to left and right. The continued damage to the left knee is confirmed by the quadriceps atrophy, the tenderness to palpation, and positive McMurray test. In other words, plaintiff's seriously disabled physical status is essentially unchanged since the accident.

In this circumstance it seems inappropriate to rely on the concept of a "gap in treatment" to non-suit this clearly injured and disabled individual. It appears from the records that the clinic itself terminated plaintiff's treatment after five months, neither scheduling nor directing any further follow-up consultations or examinations, despite the objectively confirmed injuries to her discs and medical meniscus, the existence of which the clinic clearly recognized, and the substantial radiating pain plaintiff claimed. By issuing what it termed a "final report," the clinic implicitly abandoned the prospect of treating plaintiff further, relegating her to the prescribed at-home therapeutic exercises and over-the-counter analgesics. The clinic's abandonment of the attempt to treat plaintiff does not call into question that plaintiff is suffering from several serious objective injuries which are causing her disabling pain and severe limitations.

As the Court of Appeals observed in Pommells v Perez (4 NY3d 566, 574 [2005]), "the law surely does not require a record of needless treatment in order to survive summary judgment." The cessation of plaintiff's treatment here has the appearance of a determination that further treatment would not provide a resolution of the injuries or the pain. [*5]

Of course, the Court in Pommells also held that a plaintiff has an affirmative obligation to provide an explanation for a cessation of treatment (id.). I submit that the term "final" in the clinic's report provides sufficient implicit explanation, and reflects the clinic's conclusion that nothing more could be medically accomplished.

However, even if we accept for argument's sake that plaintiff's "serious injury" claim under Insurance Law § 5102(d) must be dismissed due to her failure to include a specific explanation of why her treatment ceased on March 29, 2000, the record still supports finding a triable factual issue as to whether plaintiff suffered from a serious injury under the statute's provision regarding "a medically determined injury or impairment of a non-permanent nature which prevents the injured person from performing substantially all of the material acts which constitute such person's usual and customary daily activities for not less than ninety days during the one hundred eighty days immediately following the occurrence of the injury or impairment" (Insurance Law § 5102[d]).

The existence of several injuries is established. The observation of significantly limited range of motion, particularly in the lumbar area, and of related myospasms in the lumbar paraspinal muscles, provides sufficient objective support for the existence of an ongoing significant limitation. It appears to be undisputed that plaintiff did not return to work at her beauty salon for five months, and that even once she returned, she could perform only a small fraction of the tasks she formerly could do, for only a small fraction of the day. She also cannot perform the normal tasks of her home life. It seems unassailable that plaintiff's objectively confirmed injuries prevented her from "performing substantially all of the material acts which constitute such person's usual and customary daily activities for not less than ninety days during the one hundred eighty days immediately following the occurrence of the injury" (Insurance Law § 5102[d]).

Notably, the experts assigned by defendants to evaluate plaintiff's condition offered nothing contradicting the existence of these injuries immediately after the accident preventing her from performing her usual and customary activities.

Radiologist Audrey Eisenstadt, M.D., asserted that she had reviewed Perez's various MRI films and found cervical straightening, and acknowledged the presence of a small central disc herniation at the L4-5 level in plaintiff's lumbar spine. Any suggestion that the small central disc herniation may be pre-existing simply creates a question of fact as to whether the undisputed L4-5 herniation was caused by the accident.

Reliance on Dr. Krishna's report does not avail defendant either, since other than with respect to the straight-leg raising tests and the deep tendon reflexes, he did not state what objective tests he used, or the degree of motion he found in relation to what is considered normal; rather, he merely provided conclusory results (see Toure v Avis Rent A Car Systems, Inc., 98 NY2d 345, 350, 358 [2002]; Webb v Johnson, 13 AD3d 54 [2004]).

Dr. Dick's examination of Perez actually revealed positive results to straight-leg and McMurray's tests. Dr. Dick's failure to reconcile these results with his conclusion that Perez's injuries were resolved undermines his assertion that she suffered no disability.

Review of the record reveals that plaintiffs submitted objective evidence sufficient to raise a triable issue of fact as to serious injury (see Akamnonu v Rodriguez, 12 AD3d 187 [2004]; [*6]Brown v Achy, 9 AD3d 30 [2004]). Accordingly, the denial of summary judgment should be affirmed.

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

ENTERED: JANUARY 31, 2006

CLERK

 

 

Maximum Care Chiropractic Care v.  Granite State Insurance Company

 

Defendant appeals from an order of the Civil Court, Bronx County (Fernando Tapia, J.), entered May 24, 2005, which denied its motion for summary judgment dismissing the complaint.

 

PER CURIAM:
Order (Fernando Tapia, J.), entered May 24, 2005, reversed, with $10 costs, and defendant's motion for summary judgment is granted. The Clerk is directed to enter judgment in favor of defendant dismissing the complaint.

Plaintiff seeks recovery of no-fault benefits allegedly due its assignor as a result of a 2001 automobile accident. Civil Court denied defendant's unopposed summary judgment motion, finding the existence of an unspecified "triable issue of fact." The record reveals that neither plaintiff nor its assignor submitted written notice of the accident to defendant within the requisite 90-day period (cf. Allcity Ins. Co. v Novas, 272 AD2d 116 [2000]), nor did they submit proof that they were unable to comply with such time limitation due to circumstances beyond their control (see Medical Society of State v. Serio, 100 NY2d 854, 868 [2003]). Accordingly, defendant's motion for summary judgment should have been granted.

We note that the court disposed of the motion without providing any explanation or reason for its decision, a practice to be avoided (see Nadle v L.O. Realty Corp., 286 AD2d 130 [2001]).

This constitutes the decision and order of the court. [*2]
Decision Date: February 01, 2006

 

National Union Fire Insurance  v. Ferrell & Myers, Inc.

Sedgwick, Detert, Moran & Arnold LLP, New York (Jeffrey M.
Winn of counsel), for appellant.
Preston, Wilkins & Martin, New York (Carmen Victoria
Markakis of counsel), for respondents.

Judgment, Supreme Court, New York County (Louis B. York, J.), entered October 22, 2004, which, after a nonjury trial, declared plaintiff obligated to defend and indemnify defendants Ferrell & Myers and Dwight Myers with respect to certain personal injury and wrongful death actions, unanimously affirmed, with costs.

The injuries occurred during a spectator stampede outside a celebrity basketball game, held at City College in December 1991, at which the teams were to be coached by defendants Dwight "Heavy D" Myers and Sean "Puff Daddy" Combs. The trial court found "no question that the policy covers Heavy D as an entertainer." The court rejected the argument that Endorsement C of the policy specifically limits coverage to claims against the corporate entity (Ferrell & Myers) when acting as "an entertainer, theatrical manager &/or agent," whereas Heavy D was acting only in an individual capacity. Plaintiff contends that rationally interpreted, Endorsement C should be limited to officers or employees of the corporation who were engaged in its business interests. Because this argument is raised for the first time on appeal, we decline [*2]to address it (see Dinneny v Allstate Ins. Co., 295 AD2d 797, 798-799 [2002]; Matter of ELRAC v Edwards, 270 AD2d 414, 415 [2000]).

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

ENTERED: FEBRUARY 7, 2006

CLERK

In re Eagle Insurance Company v. Gueye

 

Law Offices of Peter E. Finning, Bethpage (Lawrence R. Miles
of counsel), for appellant.
Rivkin Radler LLP, Uniondale (Stuart M. Bodoff of counsel),
for State Farm Mutual Automobile Insurance Company,
respondent.

Order, Supreme Court, Bronx County (George D. Salerno, J.), entered December 13, 2004, which, in a proceeding by an insurer (Eagle) for a permanent stay of an uninsured motorist arbitration demanded by its insured (Gueye), in which the insurer for the offending vehicle (State Farm) had been joined as an additional respondent, found that State Farm had properly disclaimed coverage, denied Eagle's application for a permanent stay of arbitration and dismissed Eagle's petition, unanimously modified, on the law, to grant Eagle's application, and otherwise affirmed, without costs.

Gueye demanded arbitration with Eagle after State Farm rejected his claim for bodily injuries on the ground that his injuries were not caused by an accident but rather an "intentional act," and also because unspecified policy violations by the owner and driver of the offending vehicle had resulted in a policy disclaimer. At the framed-issue hearing, while State Farm's claims investigator did speak of the lack of cooperation she received from the offending vehicle's owner and driver, it is clear, indeed undisputed, that the primary reason for State Farm's rejection of Gueye's claim was that the collision was staged. The application court credited the testimony of State Farm's claims investigator, but then inconsistently held that there was no basis for Eagle's application to stay arbitration once it had come into possession of the information obtained by State Farm's investigator. If, as the record amply demonstrates and the application court apparently found, State Farm was entitled to disclaim coverage of Gueye's injuries on the ground that they were not the result of an accident (see State Farm Mut. Auto Ins. Co. v Laguerre, 305 AD2d 490 [2003]), there can be no recovery for the same injuries under the uninsured motorist endorsement of Eagle's policy (see Matter of Allstate Ins. Co. v Massre, 14 AD3d 610 [2005]). We note that the record contains no
sworn statements by Gueye, and that Gueye does not appear on the appeal.

THIS CONSTITUTES THE DECISION AND ORDER [*2]
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: FEBRUARY 7, 2006

CLERK

A.B. Medical Services  v. Motor Vehicle Accident Indemnification Corp

 

Appeal from an order of the Civil Court of the City of New York, Kings County (Manuel J. Mendez, J.), entered October 20, 2004. The order denied plaintiffs' motion for summary judgment and granted defendant's cross motion for summary judgment.

 

Order unanimously modified by providing that defendant's cross motion for summary judgment dismissing the complaint is denied as to plaintiffs A.B. Medical Services PLLC, D.A.V. Chiropractic P.C., Daniel Kim's Acupuncture P.C., and Somun [*2]
Acupuncture P.C., as assignees of Tsilya Lyukhter; as so modified, affirmed without costs.

In this action seeking to recover first-party no-fault benefits, defendant Motor Vehicle Accident Indemnification Corp. (MVAIC) opposed plaintiffs' motion for summary judgment and cross-moved for summary judgment in its favor on the ground, inter alia, that plaintiffs' assignors failed to file a timely notice of claim.

We note initially that the motion for summary judgment by plaintiff Square Synagogue Transportation Inc. was properly denied. Moreover, we find that defendant's cross motion for summary judgment dismissing the claims as to said plaintiff was properly granted. The record herein indicates that plaintiff Square Synagogue Transportation Inc. submitted its transportation costs subsequent to April 5, 2002, the effective date of the revised insurance regulations which "no longer permit the assignment to health care providers of benefits for non-health-related services (typically housekeeping and transportation expenses) (11 NYCRR 65-3.11[a]; Insurance Law § 5102 [a] [1])" (Matter of Medical Socy. of State of N.Y. v Serio, 100 NY2d 854, 871 [2003]). Such costs are "nonassignable" (id.) and must be dismissed (see A.B. Med. Servs. PLLC v Prudential Prop. & Cas. Ins. Co., 7 Misc 3d 14 [App Term, 2d & 11th Jud Dists 2005]).

For the reasons set forth herein, the motion for summary judgment by plaintiffs A.B. Medical Services PLLC, D.A.V. Chiropractic P.C., Daniel Kim's Acupuncture P.C., and Somun Acupuncture P.C., was properly denied, and defendant's cross motion for summary judgment dismissing said plaintiffs' claims pertaining to assignor Nataliya Romanchukevich and Alexander Krupnik was properly granted.

Article 52 of the Insurance Law establishing the MVAIC was enacted "to provide persons injured by financially irresponsible motorists a fund from which they could seek some compensation for their injuries" (Matter of Lloyd [MVAIC], 23 NY2d 478, 481 [1969]). Article 52 was also "intended to provide no-fault benefits for qualified persons for basic economic loss arising out of the use and operation in this state of an uninsured motor vehicle" (Insurance Law § 5201 [b]). Pursuant to Insurance Law § 5221 (b) (2), "[a] qualified person who has complied with all the applicable requirements of this article [Insurance Law article 52] shall be deemed to be a covered person and shall have only such rights as a covered person may have under article fifty-one of this chapter." Moreover, with respect to no-fault benefits, the MVAIC "shall have only those rights and obligations which are applicable to an insurer subject to article fifty-one of this chapter" (Insurance Law § 5221 [b] [3]; see New York Hosp. Med. Ctr. of Queens v Motor Veh. Acc. Indem. Corp., 12 AD3d 429 [2004]).

The filing of a timely affidavit providing the MVAIC with notice of intention to file a claim is "a condition precedent to the right to apply for payment from [MVAIC]" (see Insurance Law § 5208 [a] [1], [3]). Compliance with the statutory requirement of timely filing a notice of claim must be established in order to demonstrate that the claimant is a "covered person," within the meaning of the statute, entitled to recover no-fault benefits from the MVAIC (see Insurance Law § 5221 [b] [2]; Ocean Diagnostic Imaging v Motor Veh. Acc. Indem. Corp., 8 Misc 3d 137[A], 2005 NY Slip Op 51271[U] [App Term, 2d & 11th Jud Dists]). Defendant MVAIC's failure to timely deny plaintiffs' claims is of no consequence and does not preclude dismissal of plaintiffs' causes of action based upon lack of coverage (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199-200 [1997]; Zappone v Home Ins. Co., 55 [*3]NY2d 131 [1982]; Ocean Diagnostic Imaging v Motor Veh. Acc. Indem. Corp., 8 Misc 3d 137[A], 2005 NY Slip Op 51271[U], supra).

MVAIC's submissions in support of its cross motion for summary judgment made a prima facie showing that assignors Romanchukevich and Krupnik failed to timely file their notices of claim within 180 days of the accident (Insurance Law § 5208 [a] [1]; see Matter of ATM One v Landaverde, 2 NY3d 472 [2004]). Said assignors did not seek leave to file a late notice of claim (see Insurance Law § 5208 [b], [c]). The burden thus shifted to plaintiffs to show either 1) the timely filing of a notice of claim within 180 days of the accident, or, if applicable, 2) the timely filing of a notice of claim within 180 days of receipt of notice that the insurer of the person alleged to be liable for damages has disclaimed liability or denied coverage (Insurance Law § 5208 [a] [3]). Plaintiffs' papers in opposition to defendant's cross motion are insufficient to raise an issue of fact as to whether the notices of claim were timely filed within the prescribed statutory time periods. Having failed to satisfy a condition precedent to the right of recovery against the MVAIC, plaintiffs' assignors were not "covered" persons within the meaning of the statute (see Insurance Law § 5221 [b] [2]). Consequently, plaintiffs are not entitled to recover on their claims for no-fault benefits pertaining to assignor Romanchukevich and Krupnik, and the court below properly granted defendant's cross motion for summary judgment dismissing the claims with regard to them (see e.g. Ames v City of New York, 280 AD2d 625 [2001]; Ocean Diagnostic Imaging v Motor Veh. Acc. Indem. Corp., 8 Misc 3d 137[A], 2005 NY Slip Op 51271[U], supra).

With regard to the claims pertaining to assignor Tsilya Lyukhter, there are issues of fact presented on the record as to whether said assignor filed a timely and properly completed notice of claim, and hence whether there has been compliance with a [*4]
condition precedent to commencing a suit against the MVAIC for no-fault benefits. Therefore, while plaintiffs' motion for summary judgment as to assignor Lyukhter was properly denied, defendant's cross motion seeking to dismiss the claims pertaining to this assignor should also have been denied.
Decision Date: February 03, 2006

 

Delta Diagnostic Radiology, P.C. v. GEICO

 

Appeal from an order of the District Court of Nassau County, Third District (Scott Fairgrieve, J.), entered February 28, 2005. The order granted plaintiff's motion for summary judgment.

 

Order affirmed without costs.

In this action to recover first-party no-fault benefits for medical services rendered to its assignor, plaintiff health care provider established a prima facie entitlement to summary judgment by proof that it submitted a claim, setting forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was overdue (see
Insurance Law § 5106; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; Damadian MRI in Elmhurst v Liberty Mut. Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51700[U] [App Term, 9th & 10th Jud Dists]). The burden therefore shifted to defendant to show a triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]).

In the case at bar, the defendant failed to establish that the denial was timely mailed within the 30-day prescribed claim determination period. Defendant failed to submit any documentary proof or an affidavit from one with personal knowledge establishing that the denial was sent to plaintiff (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 226 AD2d 613 [1996]). Nor did defendant create a presumption of mailing by submission of an affidavit describing the standard operating procedures it uses to ensure that its denial was mailed (see e.g. Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]; Ocean Diagnostic [*2]Imaging P.C. v General Assur. Co., 7 Misc 3d 127[A], 2005 NY Slip Op 50435[U] [App Term, 9th & 10th Jud Dists]). Defendant is therefore precluded from raising the defense that the procedure was not medically necessary because defendant neither denied the claim within 30 days of receipt of the claim nor effectively extended the 30-day period (see
[*3]Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]).
Consequently, the motion court properly granted plaintiff's motion for summary
judgment.

Rudolph, P.J., Angiolillo and McCabe, JJ., concur.
Decision Date: February 02, 2006

 

Modern Psychiatric Services P.C. v. Progressive Insurance Company

 

Appeal from an order of the District Court of Nassau County, First District (Erica L. Prager, J.), entered January 26, 2005. The order granted plaintiff's motion for summary judgment and denied defendant's cross motion for summary judgment and to dismiss the complaint.

 

Order affirmed without costs.

Plaintiff commenced this action to recover first-party no-fault benefits for medical services it provided to the injured assignor. Plaintiff established a prima facie entitlement to summary judgment by proof that it submitted the statutory claim form, setting forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was overdue (see Insurance Law § 5106; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]). The burden, therefore, shifted to defendant to raise a triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]).

In the case at bar, the defendant failed to establish that the verification requests were timely mailed. Defendant neither submitted an affidavit from one with personal knowledge alleging that the verification requests were mailed to plaintiff (see e.g. Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 226 AD2d 613 [1996]), nor did defendant create a presumption of mailing by submission of an affidavit adequately describing the standard operating procedures it uses to ensure that its verification requests were mailed (see e.g. Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]; Ocean Diagnostic Imaging P.C. v General Assur. Co., 7 Misc 3d 127[A], 2005 NY Slip Op 50435[U] [App Term, 9th & 10th Jud Dists]). Absent proof of a tolling of the 30-day claim determination period (11 NYCRR 65.15 [*2][d], now 11 NYCRR 65-3.8), defendant is now precluded from raising most defenses (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]), including any deficiency in the assignment (see New York Hosp. Med. Ctr. of Queens v New York Cent. Mut. Fire Ins. Co., 8 AD3d 640 [2004]; Presbyterian Hosp. in City of N.Y. v Aetna
Cas. & Sur. Co., 233 AD2d 433 [1996]; A.B. Med. Servs. PLLC v Nationwide Mut. Ins. Co., 6 Misc 3d 70 [App Term, 2d & 11th Jud Dists 2004]). Consequently, the motion court properly granted plaintiff's motion for summary judgment and denied defendant's cross motion.

Rudolph, P.J., Angiolillo and McCabe, JJ., concur.
Decision Date: February 03, 2006

 

Star Medical Services P.C. v. Allstate Insurance Company

Appeal from an order of the Civil Court of the City of New York, Kings County (Eileen Nadelson, J.), entered October 29, 2004. The order granted plaintiff's motion for summary judgment.

 

Order affirmed without costs.

In this action to recover first-party no-fault benefits for medical services rendered to its assignor, plaintiff health care provider established a prima facie entitlement to summary judgment by proof that it submitted a claim, setting forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was overdue (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists]). We find no merit to defendant's contention that the failure of one of plaintiff's assignors, Claire, to appear for an examination under oath (EUO) precludes summary judgment with respect to the claims submitted for treatment rendered to said assignor. The submissions of defendant's claims representative and counsel failed to establish that they had personal knowledge that the letters requesting the EUO were mailed to Claire. Nor did said submissions create a presumption of mailing by setting forth the standard office practice or procedures used to ensure that such letters are properly addressed and mailed (see Amaze Med. Supply Inc. v State Farm Mut. Auto. Ins. Co., 8 Misc 3d 139[A], 2005 NY Slip Op 51315[U] [App Term, 2d & 11th Jud Dists]). Moreover, defendant failed to introduce evidence in admissible form establishing that the insurance policy it issued to its insured actually contained an endorsement entitling it to EUOs (see Careplus Med. Supply Inc. v Travelers Home & Mar. Ins. Co., 7 Misc 3d 133[A], [*2]2005 NY Slip Op 50648[U] [App Term, 2d & 11th Jud Dists]).

Although defendant issued an untimely denial of the claim relating to plaintiff's other assignor, Charmant, defendant is not precluded from asserting the defense that the collision was in furtherance of an insurance fraud scheme (see Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751 [2002]). However, defendant failed to establish that it possessed a "founded belief that [Charmant's] alleged injur[ies] do[] not arise out of an insured incident" (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]). Indeed, although defendant annexed Charmant's EUO testimony, defendant may not rely upon its bare representation as to what another passenger in the car, Phillipe, stated during said passenger's EUO, in an attempt to demonstrate the existence of an issue of fact (see Ocean Diagnostic Imaging P.C. v Allstate Ins. Co., 6 Misc 3d 134[A], 2005 NY Slip Op 50189[U] [App Term, 9th & 10th Jud Dists]; Melbourne Med., P.C. v Utica Mut. Ins. Co., 4 Misc 3d 92 [App Term, 2d & 11th Jud Dists 2004]).

In light of the foregoing, the order should be affirmed because plaintiff was entitled to summary judgment upon both claims.

Rios and Belen, JJ., concur.

Golia, J.P., dissents in a separate memorandum.

Golia, J.P., dissents and votes to reverse the order and deny plaintiff's motion for summary judgment in the following memorandum.

I am in agreement with the majority that an untimely denial does not preclude a defendant from asserting the defense that the claimed collision was in furtherance of a scheme to defraud.

However, I disagree with the majority when they insist that the holding of the Court of Appeals in Central Gen. Hosp. v Chubb Group of Ins. Cos. (90 NY2d 195 [1997]) requires that in order for a defendant to have a "founded belief that the alleged injur[ies] do[] not arise out of an insured incident" (id. at 199), the defendant must submit sworn statements establishing those findings. I submit that the Court of Appeals only requires that the defendant provide a sworn affidavit (affirmation) which establishes that the affiant has a belief which is "founded" upon information obtained by a reasonable investigation. The actual source materials uncovered by that investigation such as interviews, documents, examination under oath transcripts, etc., need not be submitted and certainly not in a form that would constitute sworn testimony. That, in my opinion, is what is going to be required at trial.

Accordingly, I dissent and vote to reverse and deny plaintiff's motion for summary judgment.
Decision Date: February 01, 2006

 

 

 

Boss v. American Express Financial Advisors, Inc., et al.

Leonard Weintraub, for appellants.
Daniel C. Gerhan, for respondents.

G.B. SMITH, J.:

The issue here is whether a forum selection clause requiring that any action be [*2]brought in Minnesota courts should be enforced. We agree with the Appellate Division that the forum selection clause is valid and affirm its order dismissing the action.

 

Facts

The three plaintiffs in this action, all of whom resided in the Syracuse, New York area, sue on behalf of themselves and the putative class action members who are similarly situated (see CPLR 901). At issue is whether the "expense allowance" paid by each advisor for the maintenance of office space and overhead expenses was a violation of the laws of New York State and requires that the matter be heard in New York State courts.

The plaintiffs were all first-year financial advisors at the time that they signed their contracts with IDS Life Insurance Co. ("IDS"). Plaintiffs earned $2000 per month and were required to pay $900 per month for expense allowances. These allowances covered all overhead expenses such as building rent and maintenance, office support staff, and office supplies, among other expenses.

In December 2002, plaintiffs filed suit in Supreme Court, New York County alleging a violation of New York Labor Law § 193 and 12 NYCRR § 195.1. AEFA and IDS filed joint motions to dismiss based, in part, upon inconvenient forum, a defense founded on documentary evidence and a failure to state a cause of action (CPLR 327, 3211[a][1] and 3211[a][7]). Supreme Court granted the motion, stating:

"The Agreement's forum selection language not only affirms Minnesota jurisdiction, it includes a waiver of any contrary privileges. No alternative is permitted. There are no allegations of fraud or overreaching here; there is no evidence plaintiffs will be denied their day in court in Minnesota."

Plaintiffs moved to reargue and vacate the judgment, asserting that the statute of limitations had expired in Minnesota and plaintiffs would not have their day in court as was contemplated in the October 9, 2003 opinion by the court. Supreme Court granted the motion to reargue in order to address the argument that the Minnesota statute of limitations had run and determined that the "statute of limitations" is not the "sort of grave difficulty and inconvenience" that should lead to the application of New York law (see Fidelity & Deposit Co. v Altman, 209 AD2d 195 [1st Dept., 1994]). Thus, Supreme Court denied plaintiffs' motion to vacate the earlier decision.

The Appellate Division affirmed, determining:

"With respect to the forum-selection clause, plaintiffs specifically contracted to litigate their claim in Minnesota. Thus, they have not been deprived of a forum. Rather, they are time-barred from proceeding in the [*3]agreed-upon forum. The fact that New York provides a longer statute of limitations does not avail plaintiffs where they specifically agreed to proceed under Minnesota law.

Discussion

Plaintiffs argue first that the forum selection clause is permissive but not mandatory. It reads as follows:

"This Agreement is a Minnesota contract, governed by Minnesota law. All of the payments you make to IDS are payable in Hennepin County, Minnesota. You expressly waive any privileges contrary to this provision. You agree to the jurisdiction of [the] State of Minnesota courts for determining any controversy in connection with this Agreement."

The contractual language here provides unambiguously that any disputes are to be decided in the courts of Minnesota and that Minnesota law should govern. The parties thus waived any privilege to have their claims heard elsewhere.

Plaintiffs also argue that the wage deductions were in contravention of New York State Labor Law §§ 193[1]^[FN1] and 198-c,^[FN2] section 195.1 of 12 NYCRR,^[FN3] and unreasonable, unjust [*4]and contrary to the public policy concerns of New York. Plaintiffs argue that New York State law forbids deductions of more than 10% from an employee's wages (see 12 NYCRR § 195.1). As a result of these provisions of New York law, plaintiffs argue that defendants should not be able to enforce the forum selection clause.

Plaintiff's argument, however, is misdirected. The issue they raise is really one of choice of law, not choice of forum; it is the choice of law clause that, according to plaintiffs, may not be enforced. They say, in substance, that, since plaintiffs worked in New York, New York law must govern the deductions from their wages, even though the contract contains a Minnesota choice of law clause.

We express no opinion on the merits of plaintiffs' argument. It could and should have been made to a court in Minnesota - the forum the parties chose by contract. If New York's interest in applying its own law to this transaction is as powerful as plaintiffs contend, we cannot assume that Minnesota courts would ignore it, any more than we would ignore the interests or policies of the State of Minnesota where they were implicated. In short, objections to a choice of law clause are not a warrant for failure to enforce a choice of forum clause.

"Forum selection clauses are enforced because they provide certainty and predictability in the resolution of disputes" (see Brooke Group Ltd. V JCH Sysdicate 488, 87 NY2d 530, 534, supra). Both the Supreme Court and Appellate Division noted that all of the proceedings regarding the contract and the employment training took place in Minnesota. Further, defendants, incorporated in Delaware, had their principal places of business in Minnesota. All paychecks were generated from the Minnesota office. There does not appear to be a reason why IDS or AEFA would contemplate coming into New York for litigation. Here it is clear from the set-up of the agreement that plaintiffs' reasonable expectations were that all litigation would take place in Minnesota, not New York.

Accordingly, the order of the Appellate Division should be affirmed, with costs.
* * * * * * * * * * * * * * * * *
Order affirmed, with costs. Opinion by Judge G.B. Smith. Chief Judge Kaye and Judges Ciparick, Rosenblatt, Graffeo, Read and R.S. Smith concur.
Decided February 9, 2006

Footnotes

Footnote 1:Labor Law § 193. Deductions from wages. [1] No employer shall make any deduction from the wages of an employee, except deductions which: a. are made in accordance with the provisions of any law or any rule or regulation issued by any governmental agency; or b. are expressly authorized in writing by the employee and are for the benefit of the employee; provided that such authorization is kept on file on the employer's premises. Such authorized deductions shall be limited to payments for insurance premiums, pension or health and welfare benefits, contributions to charitable organizations, payments for United States bonds, payments for dues or assessments to a labor organization, and similar payments for the benefit of the employee.

Footnote 2:Labor Law § 198-c. Benefits or wage supplements 1. In addition to any other penalty or punishment otherwise prescribed by law, any employer who is party to an agreement to pay or provide benefits or wage supplements to employees or to a third party or fund for the benefit of employees and who fails, neglects or refuses to pay the amount or amounts necessary to provide such benefits or furnish such supplements within thirty days after such payments are required to be made, shall be guilty of a misdemeanor, and upon conviction shall be punished as provided in section one hundred ninety-eight-a of the article. Where such employer is a corporation, the president, secretary, treasurer or officers exercising corresponding functions shall each be guilty of a misdemeanor. 2. As used in this section, the term benefits or wage supplements' includes, but is not limited to, reimbursement for expenses; health, welfare and retirement benefits; and vacation, separation or holiday pay."

Footnote 3:Section 193, subdivision 1 (b), of the New York State Labor Law permits an employer to make deductions from an employee's wages for certain enumerated items and also for similar payments for the benefit of the employee'. Permitted deductions for all such non-enumerated items shall not exceed, in the aggregate, 10 percent of the gross wages due the employee for a payroll period.