Coverage Pointers - Volume VII, No. 9

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10/27/05          Maroney v. New York Central Mutual Fire Insurance Company

New York Court of Appeals

“Arising out of” Exclusionary Language Broadly Construed:  not Limited to Physical Condition of Premises But Also Includes Conduct Related to Use

The issue before the court was the meaning of the words "arising out of" in an "uninsured premises" exclusion contained in a homeowners insurance policy. Here New York’s highest court holds that "arising out of" includes use of the premises, and is not limited to the physical condition of the premises.

 

Deborah Morris was an owner of a business that boarded horses for a fee. The barn and stable was built on property owned by the Morrises, located across the road from their residence. Prior to establishment of the business the  property was insured as part of a homeowners policy secured from New York Central. Once the Morrises began boarding horses for a fee, the policy was amended to remove coverage for the property where the barn and stable were located. The Morrises obtained a separate policy covering the barn and stable from Broome County Co-operative Fire Insurance Company. The agent (Deborah Morris's mother) testified the change was made because of the horse-boarding business on the property and that New York Central does "not do that type of insurance."  Subsequently, a horse being led by one of the premises owners kicked a six-year-old plaintiff in the forehead.  NYCM disclaimed based on the policy's "business pursuits," "uninsured premises" and "home day care services" exclusions.

 

The insured argued that the uninsured premises exclusion applied only to injuries causally connected to the physical condition of the premises thus the exclusion would be inapplicable here because the allegedly tortious conduct of Deborah Morris, not the physical condition of the premises, caused plaintiff's injuries. The insurer argued that the term "arising out of" is broader and pertains to both the physical condition of the premises and the conduct related to the use of the uninsured premises that is causally connected to the injury.

 

In reviewing the injurious conduct and its causal relationship to the premises in this case, the court finds that it is clear that the infant plaintiff's injury, the consequence of a horse's kick, was not a bargained-for risk. “This injury was causally related to the purpose for which the uninsured premises was being used — the care and boarding of horses in the barn and stable.”  The Court finds the New York Central policy was intended to exclude coverage for bodily injury "arising out of" the barn and stable premises. The Morrises had removed the barn and stable from the New York Central policy and rewrote it into the Broome policy. Only one policy covered the risk (Broome policy) and as there existed a sufficient causal connection between the injury to the child and the purpose for which the premises was used, the injury "arose out of" such premises, and the "uninsured premises" exclusion precluded coverage.

 

10/25/05          Hiraldo v. Allstate Insurance Company

New York Court of Appeals

Non-Cumulation Clause in Successive Policy Renewals Prevents a Tripling of the Policy Limits for Single Loss

Allstate provided the owners of the building with liability coverage. The first of the policies at issue here took effect on February 15, 1991, and its "policy period" extended for one year. A second one-year policy became effective on February 15, 1992 and a third on February 15, 1993. Each policy provided $300,000 in liability coverage, and the policies were identical in all other relevant respects. Each policy provided: "This policy applies only to losses which occur during the policy period, as shown on the declarations page." The Court found that there was $300,000 not $900,000(300k policy limit for each policy period) in coverage available for the insured.

 

Each policy contained a standard "non-cumulation clause" which read as follows:

 

Regardless of the number of insured persons, injured persons, claims, claimants or policies involved, our total liability under Business Liability Protection coverage for damages resulting from one loss will not exceed the limit of liability for Coverage X shown on the declarations page. All bodily injury, personal injury and property damage resulting from one accident or from continuous or repeated exposure to the same general conditions is considered the result of one loss. (emphasis added)

 

The Court of Appeals holds that although some courts have held that successive policy limits may be cumulatively applied to a single loss, where the policies do not clearly provide otherwise. See Natl. Union Fire Ins. Co. v Farmington Cas. Co., 1 Misc 3d 671 [Sup Ct, NY County 2003]; Riley v United Services Automobile Ass'n., 161 Md App 573, 871 A2d 599 [Ct Spec Apps 2005]), here the policy specifically provides otherwise and is fatal to plaintiffs' claim.  The inclusion of the word “policies” in the clause, a word not found in most ISO forms, provided the deciding factor.

 

11/03/05          Brooklyn Union Gas Company v. American Home Assurance Company

Appellate Division, First Department

Coverage Counsel Beware – Your Files – and Your Client’s -- May Be Discovered

Documents prepared in the ordinary course of an insurance company's investigation to determine whether to accept or reject coverage and to evaluate the extent of a claimant's loss are not privileged, and, therefore, discoverable. In addition, such documents do not become privileged "merely because an investigation was conducted by an attorney." A review of the documents in question reveals that carrier’s attorneys were acting as claims investigators, not attorneys, and were investigating the issue of whether coverage should be provided and the costs of such coverage. Contrary to appellants' conclusory assertions, there is no legal advice, no legal recommendations or attorney thought processes revealed in these documents, nor do they appear to have been "solely" prepared for settlement purposes, as insurer assert, inasmuch as no litigation had been commenced. Nor can insurer rely on their anticipation of litigation, since they had not yet made a coverage decision. Thus, these documents were prepared in the ordinary course of the insurance companies' business of evaluating claims, and the fact that the investigation was performed by attorneys will not shield them from discovery.

 

10/31/05          Matter of New York Central Mutual Insurance Company v. Peerless Insurance Company
Appellate Division, Second Department

In Battle of “Other Insurance” Clauses, Temporary Substitute is Still Non-Owned
When insured is driving his daughter’s car while his auto is off the road for repair, it is a “temporary substitute” under his policy and where there are matching “other insurance” clauses, his carrier’s policy will be excess over his daughter’s policy for an owned car.

 

10/31/05          Matter of Eagle Insurance Company v. Davis

Appellate Division, Second Department
Fraud In SUM Claim Would Establish Lack of Covered Accident

In an application to stay Underinsured Motorist Arbitration, carrier claimed, among other defenses, that insured was engaged in fraud.  Court refused to hear the claim of fraud and Appellate Division reverses.  A collision caused in the furtherance of an insurance fraud scheme is not a covered accident under a policy of insurance. When a petition raises an issue of fact as to whether the automobile collision giving rise to the underlying request for arbitration was deliberate or intentional, the issue of fraud should be considered in determining the broader coverage issue.

 

10/31/05          DiFilippo v. Jones
10/31/05          Kinchler v. Cruz
10/31/05          Sclafani v. City of New York

10/31/05          Springer v. Arthurs

Appellate Division, Second Department

Four More “Serious Injury” Cases: Two for the Plaintiff, Two For the Defendant, All Consider Toure
The Toure trend continues as the Appellate Division, Second Department, tosses out two more cases claiming “serious injury” under the No Fault law, and allows two more to continue through to trial.  In DiFilippo, the defendant made a prima facie showing of her entitlement to summary judgment on the basis of the plaintiff's medical records, as well as the affirmed reports of her examining physicians, an orthopedist and a neurologist (see Toure v Avis Rent A Car Sys., 98 NY2d 345). However, the affidavit of the plaintiff's chiropractor, was sufficient to defeat the motion. In the Kinchler case, the affidavit of the plaintiff’s doctor was insufficient to raise a triable issue of fact as to whether the plaintiff sustained a serious injury because it was based only on subjective complaints of pain. In Scalfani affirmation of the plaintiff's physician, who, on the basis of recent computerized range-of-motion testing, determined that the plaintiff had sustained restrictions in motion, was sufficient to raise a triable issue of fact as to serious injury.  In Springer the plaintiff's physician improperly relied upon unattached and unsworn records and reports by other medical providers and failed to set forth the objective medical tests utilized at his most recent examination of the plaintiff which led him to conclude that the plaintiff continued to experience limitations in the functioning and use of her neck and back.

10/28/05          Turner Construction v. Ace Property & Casualty

Second Circuit Court of Appeals

Wind Deductible Only Applicable When Damage Directly Caused By Wind
This dispute requires the Courtto construe an insurance policy issued by Defendant-Appellee ACE Property & Casualty Insurance Co. to Plaintiff-Appellant Turner Construction Co. to insure against property damage to a Texas construction 6 project. ACE argues that the policy’s high “wind deductible” applies to damages caused by rain where rain entered the insured premises by way of wind-caused openings; Turner argues that the policy’s much lower general deductible applies. In February 2004, Turner sued ACE in the United States District Court for the Southern District of New York based on ACE’s failure to pay Turner’s claim for damages to the insured premises. In December 2004, the district court granted summary judgment to ACE, holding that the policy’s wind deductible applied to Turner’s claim and that, because the amount of the deductible exceeded the amount of the claim, ACE owed nothing to Turner. On appeal, the Court reversed, reasoning that since the damage at issue was directly caused by rain and only indirectly caused by wind, the wind deductible was inapplicable. In other words, although wind created the opening through which the rain entered, it was the rain alone that caused the damage at issue. The Court noted that nothing in the policy suggested that the wind deductible applies to damages only indirectly caused by wind. Since the policy was ambiguous in this respect, it was to be construed against the insurer; thus the lower deductible applied.

Submitted by: Steve Farrar and Rebecca Zabel (Leatherwood Walker Todd & Mann, P.C.)

10/27/05                      Curanovic v. New York Central Mutual Fire Insurance Company

Appellate Division, Third Department

Jury Charge On Material Misrepresentation is Trial Court Error, But Must Properly Object to the Charge at Trial

The action proceeded to trial with the parties stipulating to these pertinent facts: that the insured’s application for insurance contained misrepresentations; he failed to advise defendant that there had been a fire at his residence approximately one month prior to his application; and that the residence was unoccupied and that there were uncorrected fire code violations. At trial, the insured took an exception to a jury charge, asserting that the court failed to explain the requirement that the misrepresentations on the insurance application be material.  On appeal, the insured argued that Supreme Court erred in failing to charge the jury that it should consider defendant's past practices in determining whether knowledge of the true facts would have led defendant to refuse to issue the policy.

Indeed, the Insurance Law provides that "evidence of the practice of the insurer which made such contract with respect to the acceptance or rejection of similar risks shall be admissible" in determining whether a misrepresentation is material (Insurance Law § 3105 [c]). Therefore, the court finds it was error to refuse a request to charge that the jury should consider defendant's practice in similar cases in determining whether knowledge of the true facts would have led the insurer to refuse to issue the policy when, as here, evidence regarding that practice has been submitted.

Unfortunately, no such request was made before Supreme Court in the instant case. Although plaintiff did except to the charge on the ground that the court did not use the word "material," his exception was “generalized and wholly failed to advance the specific argument for reversal.” Thus, plaintiff failed to preserve the claimed error for our review by appropriate request or exception before the jury

10/27/05          Brewster v. Skiba
Appellate Division, First Department

Where Plaintiff Moves for Summary Judgment Seeking to Establish “Serious Injury,” Defendant is Entitled to IME

In a rare case where the plaintiff moved for summary judgment seeking to establish a “serious injury” under the No Fault law, as compared to the more common defense motion to determine that there isn’t a qualifying injury, the court denied the motion to allow the defense to conduct an independent medical examination of the plaintiff, since it did not have the opportunity to do so before the motion was made.

 

10/24/05          Cennamo v. Themistokleous

Appellate Division, Second Department

Plaintiff’s Subjective Complaints of Pain and 1 ½ Year Old Examination Report Not Sufficient to Withstand Threshold Motion

Defendants' orthopedist and neurologist examined the injured plaintiff and determined that she had normal mobility and no neurological deficits, no disabilities, and that she was able to fully work and perform her daily activities without any limitations. Together with her deposition testimony, which further demonstrated the lack of a serious injury, the evidence was sufficient to establish the defendants' prima facie entitlement to summary judgment. The affidavit of plaintiff’s treating chiropractor was based upon the injured plaintiff's subjective complaints of pain and the affidavit of her neurologist was based upon one examination made approximately three months after the accident and 1 1/2 years before the defendants moved for summary judgment.

 

Audrey’s Angle on No-Fault

 

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

 

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

 

11/2/05            In the Matter of the Arbitration between the Applicant and Respondent

Arbitrator Kent L. Benziger, Esq.

An Applicant Can Voluntarily Relocate And Still Receive Lost Wage Benefits.

Here is the Angle:

An eligible injured person is not required to continue residing in the same geographic location as his or her place of employment to receive lost wage benefits.  However, there must be proof that the voluntary re-location is related to disability as a result of the motor vehicle accident.

 

The Analysis:

The Applicant was involved in a February 2, 2004, motor vehicle accident and was paid lost wages until February 1, 2005.  At the time of the accident, the Applicant was working at a County adult care center.  However, on January 31, 2005, the Applicant resigned from her position stating she was “unable to come back to work.”  Thereafter, the Applicant voluntarily relocated to Florida.

 

The insurer denied further lost wage benefits on the basis that under 11 NYCRR §65-1.1 the insurer was only obligated to pay “…Loss of Earning benefits to earnings from work which an eligible injured person would have performed had he or she not been injured.”  The fact that the Applicant voluntarily resigned from her job and chose to move out of state was an action that affirmatively caused her employment to cease and was not accident related.  Moreover, the Applicant’s intention to gain employment in her new state was not sufficient proof of loss of earnings.

 

Arbitrator Benziger’s decision notes that the Applicant submitted proof that she was resigning from her job due to a disability related to the February 2, 2004, motor vehicle accident.  Specifically, the Applicant submitted a treating physician’s verification that the motor vehicle accident was the basis for her disability.  Therefore, Applicant established that she did lose wages that she would have earned but for the injuries sustained in the motor vehicle accident.  Moreover, Arbitrator Benziger notes that the fact that the Applicant chose to recuperate in Florida does not affect her ability to collect lost wage benefits.  We note that the insurer did not offer evidence disputing the lost wage verification or an independent medical examination addressing disability. 

 

11/2/05            In the Matter of the Arbitration between the Applicant and Respondent

Arbitrator Gary D. Peters, Esq.

Provider’s Claim For Payment Of MRI Bill Denied Due To Failure To Submit Evidence From Referring Physician To Establish Medical Necessity

Here is the Angle:

When a provider who performed an MRI seeks payment of its bill, it must establish medical necessity for that bill, which is done through medical records from the referring physician, not the provider performing the MRI.

 

The Analysis:

The eligible injured person was involved in an August 6, 2004, motor vehicle accident and on August 18, 2004, came under the medical care of Dr. Gibinsky.  Dr. Gibinsky’s record noted that the eligible injured person complained of neck pain radiating into the right shoulder as well as low back pain radiating into the right lower extremity.  The doctor opined that the eligible injured person sustained an acute cervical and lumbosacral paraspinal muscle and ligament sprain.  Dr. Gibinsky wanted to rule out cervical and lumbosacral radiculopathy, therefore cervical and lumbar spine MRIs were ordered.

 

On August 21, 2004, the Applicant performed the MRI of the cervical and lumbar spine.  The cervical spine MRI revealed straightening of the upper and mid cervical curvature.  The lumbar spine MRI revealed an L5-S1 disc bulge.

 

The insurer denied payment based upon the peer review of Dr. Jordan Kramer.  Dr. Kramer, upon review of the medical records, noted that there was no evidence of an “imminent neurological urgency” and no indication that the patient required aggressive treatment, such as an epidural steroid injection or cervical or lumbar decompression.  Also, the treating physician’s record was devoid of any findings of sensory or motor deficits.  In addition, there was no indication that the eligible injured person suffered from any intractable cervical or lumbar pain or even radiating pain.  Rather, the medical records revealed that the treating physician’s treatment plan was physical therapy.  Dr. Kramer further noted that these MRIs are “specialized diagnostic imaging procedures, intended to be used as an extension of the detailed physical examination, when there is a reasonable clinical suspicion for conditions requiring such studies in order to establish a treatment plan.”  Ultimately, Dr. Kramer opined that since the treating physician’s treatment plan was merely physical therapy such specialized diagnostic testing was not required.

 

Arbitrator Peters found that Applicant failed to establish medical necessity for the MRI studies.  He also noted that the treating physician, who referred the eligible injured person for the MRI studies, failed to document a detailed medical necessity letter and the reasons for recommending the MRI studies.

 

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.


11/02/05          Parkview Villas Assn. v. State Farm Fire and Cas. Co.

California Court of Appeal, Second Appellate District, Division Seven

Trial Court Does Not Have Discretion to Enter a Judgment Against a Party Solely for its Deficient Separate Statement of Undisputed Facts
A condominium association brought an action against its insurer in connection with damage suffered in the 1994 Northridge earthquake, including claims for insurance bad faith. After the defendant insurer moved for summary judgment with respect to the bad faith claims, the plaintiff association filed in response a separate statement of undisputed facts that did not comply with the requirements of Code of Civil Procedure section 437c(b)(3) and Rule of Court 342 in that it did not explicitly state the nature of its dispute with the insurer’s proposed undisputed facts or describe the evidence supporting its position with the required specificity. However, the procedural error did not deprive either the insurer or the trial court of notice of the factual disputes and supporting evidence upon which the association’s opposition was based. The court held that in light of the strong policy favoring disposition of cases on their merits, the trial court’s refusal to consider the association’s evidence and resulting dismissal of the bad faith counts was an abuse of discretion.

 

Submitted by: Bruce D. Celebrezze & James Shafer (Sedgwick, Detert, Moran & Arnold LLP)


11/1/05            O’Daniel v. Nau Country Ins. Co.

Eighth Circuit Court of Appeals

Wrongful Conversion and Embezzlement Are Not Ambiguous Policy Exclusions
The Eighth Circuit held that an insurance policy’s exclusions for “wrongful conversion” and “embezzlement” were not ambiguous to warrant coverage for his cattle loss. The insured purchased a policy covering various personal and real property, including numerous calves and cows. The policy covered physical loss due to “theft,” but excluded coverage for loss due to “wrongful conversion or embezzlement.” Due to drought conditions, the insured transferred his cattle to a commercial feedlot which was to feed, water and care for the animals. However, the insured later discovered that some of his cattle were missing, and he reported the loss to authorities and his insurer. The insurer denied coverage of the loss because it was excluded under the wrongful conversion and embezzlement exclusion. The district court found the exclusions to be ambiguous, interpreted the policy in favor of the insured, and declared coverage of the loss. The Eighth Circuit reversed, finding that the conversion exclusion was not ambiguous and that where an entity has lawful control of the property and then converts or embezzles that property, as was the case here, the policy does not provide coverage.

 

Submitted by: Bruce D. Celebrezze & Michelle Y. McIsaac (Sedgwick, Detert, Moran & Arnold LLP)


10/31/05          Flynn v. Unisured Employers’ Fund

Supreme Court of Montana A Claimant May Not Add Three Days To The Period For A Claimant To Request Mediation Following A Determination By The Montana Uninsured Employers’ Fund That Is Mailed.

Flynn injured his back while lifting his employer out of a wheelchair. Flynn filed a claim with the Uninsured Employers’ Fund (UEF). The UEF issued a determination denying Flynn’s claim. UEF’s determination was made on November 21, 2002. The issue on appeal was whether Rule 6(e) of the Montana Rules of Civil Procedure adds three extra days to the ninety-day period provided by § 39-71-520, MCA (2001), of the Workers’ Compensation Act, for a claimant to request mediation following a determination by the UEF that is mailed to the claimant. The Supreme Court of Montana held that § 39-71-520 did not and, as a result, Flynn had until February 19, 2002 to request mediation. Flynn did not request mediation until February 22, 2002. As such, Flynn’s request was time barred, and UEF’s determination became unappealable.

Submitted by: Bruce D. Celebrezze & Serena Stark (Sedgwick, Detert, Moran & Arnold)


10/28/05          Lerette v. American Medical Security, Inc.

Nebraska Supreme Court

Insured’s Good Faith Reliance on the Opinion of Its Experts is Arguable Basis for Denial of Benefits
David and Mary LeRette completed an application for health insurance from United Wisconsin on December 12, 2000 but failed to disclose that Mary had been undergoing treatment for chronic pelvic pain. United Wisconsin issued a health insurance policy to the LaRette’s effective January 15, 2001 and shortly thereafter starting receiving bills for treatments Mary underwent for her chronic pain. In June 2001, United Wisconsin initially denied a pre-certification request for a hysterectomy made by Mary’s treating physician based on independent reviews of Mary’s medical records in which two separate physicians opined that the hysterectomy was not medically necessary. After three requests by the LeRette’s for review of the denial, United Wisconsin reversed its denial and lifted a hold it had placed on payment of Mary’s medical bills. As a result of United Wisconsin’s initial denial of benefits and failure to pay medical bills, the LeRette’s filed a petition against American Medical Security, Inc. and United Wisconsin Life Insurance Company for breach of insurance contract and bad faith. The jury found for United Wisconsin on the breach of contract claim but in favor of Mary LeRette in the amount of $25,000 on the bad faith claim. United Wisconsin appealed from a denial of their motion to set aside the verdict or, in the alternative, for a new trial or entry of an altered amended judgment. The Supreme Court found for United Wisconsin, reversing the judgment on the bad faith claim and remanding the cause with directions to dismiss the bad faith claim. United Wisconsin was allowed to rely in good faith on its own experts’ opinions rather than the opinion of the insured’s expert. As a result, United Wisconsin had an arguable basis for initially denying benefits at the time of each denial, regardless of the manner in which an investigation was or was not conducted.

Submitted by: Bruce D. Celebrezze & Erin J. Meagher (Sedgwick, Detert, Moran & Arnold


10/27/05          Allgood v. Meridian Security Insurance Co.

Indiana Supreme Court

Dimunition in Value Not Compensable Under Collision Coverage of Automobile Insurance Policy
Cynthia Allgood’s automobile was damaged while insured by Meridian Security Insurance Company. Meridian paid the cost of repairs to Allgood’s vehicle under its collision coverage but did not compensate All-good for any diminution in value of the repaired car as a result of its having been damaged. All-good initiated a class action seeking damages and a declaration that diminution in value was compensable under the collision coverage of Meridian’s automobile policy. Meridian moved to dismiss or for judgment on the pleadings on the ground that the policy provided for costs of repair or replacement of the car but not for reimbursement of any decline in its value. The trial court found that Allgood’s policy “is not ambiguous, and diminished value is not included as a ‘loss.’” Accordingly, the trial court dismissed Allgood’s complaint for failure to state a claim and denied her motion for partial summary judgment. The Court of Appeals reversed, concluding that the policy required payment for diminished value. Noting that an insurance company’s obligation to indemnify requires it to restore the insured to the same position as before the event only to the extent required by the policy terms, the Supreme Court held that that the “Limit of Liability” provision in the policy was unambiguous and therefore barred Allgood’s claim for diminished value.

Submitted by: Steve Farrar and Rebecca Zabel (Leatherwood Walker Todd & Mann, P.C.)

 

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Hiraldo v. Allstate Insurance Company



R. S. SMITH, J.:

Allstate Insurance Company issued a $300,000 liability policy for a term of one year. Upon its expiration, the policy was renewed for another year, and then again for a third. Plaintiff Christopher Hiraldo was allegedly exposed to lead paint continuously during the terms [*2]of all three policies. The question is whether, if that allegation is true, the available insurance coverage is $300,000 or $900,000.

The clear language of the policies answers the question: the exposure caused only a single loss, and Allstate's liability is limited to $300,000, even though several policies are involved.

Facts and Procedural History

Christopher was born on August 21, 1990, and lived with his mother, plaintiff Alexandria Hiraldo, at 156 Norwood Avenue in Brooklyn until November 1993. Plaintiffs allege that Christopher was exposed to lead paint throughout the time he lived in the building, and suffered neurological injuries as a result.

Allstate provided the owners of the building with liability coverage. The first of the policies at issue here took effect on February 15, 1991, and its "policy period" extended for one year. A second one-year policy became effective on February 15, 1992 and a third on February 15, 1993. Each policy provided $300,000 in liability coverage, and the policies were identical in all other relevant respects. Each policy provided: "This policy applies only to losses which occur during the policy period, as shown on the declarations page." Each also included a so called "non-cumulation clause," as follows:

"Regardless of the number of insured persons, injured persons, claims, claimants or policies involved, our total liability under Business Liability Protection coverage for damages resulting from one loss will not exceed the limit of liability for Coverage X shown on the declarations page. All bodily injury, personal injury and property damage resulting from one accident or from continuous or repeated exposure to the same general conditions is considered the result of one loss."


(Emphasis added.)

Christopher and his mother sued their landlords for Christopher's injuries, and obtained judgments totaling approximately $700,000. Allstate paid $300,000 into court, and asserted that that payment discharged its liability. Plaintiffs disagreed and brought this action to recover from Allstate the rest of the landlords' obligation. Supreme Court granted summary judgment dismissing the complaint, and the Appellate Division affirmed. We granted leave to appeal, and now affirm.

Discussion

Christopher's injuries allegedly resulted from "continuous . . . exposure to the same general conditions" and so from "one loss" within the meaning of each policy. Plaintiffs [*3]contend, however, that, since the loss occurred during each of three policy periods, and each policy applies "to losses which occur during the policy period," Allstate is liable up to its policy limit under each policy. We disagree.

But for the non-cumulation clause in the policies, this would be a difficult case. Intuitively it does not seem right that an insurer that never issued more than $300,000 in coverage could be liable for $900,000 for a single loss. Thus, an Appellate Division case involving claims for exposure to asbestos holds that "the limit of liability, where an insurer has issued renewal policies, shall be the policy limits for one policy" (Matter of Liquidation of Midland Ins. Co., 269 AD2d 50, 60 [1st Dept 2000]). Yet this result is also counterintuitive: If each of the successive policies had been written by a different insurance company, presumably each insurer would be liable up to the limits of its policy. Why should plaintiffs recover less money because the same insurer wrote them all? Some courts have held that successive policy limits may be cumulatively applied to a single loss, where the policies do not clearly provide otherwise. (Natl. Union Fire Ins. Co. v Farmington Cas. Co., 1 Misc 3d 671 [Sup Ct, NY County 2003]; Riley v United Services Automobile Ass'n., 161 Md App 573, 871 A2d 599 [Ct Spec Apps 2005]).

But here, the policies do clearly provide otherwise. The non-cumulation clause says that "[r]egardless of the number of . . . policies involved, [Allstate's] total liability under Business Liability Protection coverage for damages resulting from one loss will not exceed the limit of liability . . . shown on the declarations page." That limit is $300,000, and thus Allstate is liable for no more. We agree with the recent decisions of three Federal District Court judges, applying New York law and interpreting identical policy language, that the non-cumulation clause is fatal to plaintiffs' claim (see Bahar v Allstate Ins. Co., 2004 WL 1782552 [SD NY, Aug. 9, 2004]; Greene v Allstate Ins. Co., 2004 WL 1335927 [SD NY, June 15, 2004]; Greenidge v Allstate Ins. Co., 312 F Supp 2d 430 [SD NY 2004]).

Accordingly, the order of the Appellate Division should be affirmed, with costs.
* * * * * * * * * * * * * * * * *
Order affirmed, with costs. Opinion by Judge R.S. Smith. Chief Judge Kaye and Judges G.B. Smith, Ciparick, Rosenblatt, Graffeo and Read concur.
Decided October 25, 2005

 

Maroney v. New York Central Mutual Fire Insurance Company




CIPARICK, J.:

The issue presented by this appeal is the meaning of the words "arising out of" in an "uninsured premises" exclusion contained in a homeowners insurance policy. Here we hold that "arising out of" includes use of the premises (as urged by the insurer), and is not limited to the physical condition of the premises (as urged by the insured). [*2]

On June 19, 1997, a horse being led by Deborah Morris kicked the six-year-old plaintiff, Mark Maroney, in the forehead. Deborah Morris was an owner of Soft Meadow Stables, a business that boarded horses for a fee. The barn and stable had been built on property owned by the Morrises, located across the road from their residence. Before the establishment of Soft Meadow Stables, that property had been insured as part of a homeowners policy secured from defendant, New York Central Mutual Fire Insurance Company (NYCM). In May 1997, once the Morrises began boarding horses for a fee, the policy was amended to remove coverage for the property where the barn and stable were located. The Morrises obtained a separate property and liability policy covering the barn and stable from Broome County Co-operative Fire Insurance Company (BCC). The agent who placed the insurance was Deborah Morris's mother; she testified that the change was made because of the horse-boarding business on the property, explaining that NYCM does "not do that type of insurance."

Fourteen-year-old Ashley Hoke, daughter of insured Deborah Morris, had agreed to care for the infant plaintiff during the summer of 1997. On the day of his injury, coincidentally the first day Ashley was to care for the child, Mark and his mother arrived at the Morris residence at about 6:30 a.m. While Ashley was getting herself ready for the day, Deborah Morris took the child across the road to the barn and stable where she proceeded to feed and turn out two boarded horses. As Deborah Morris was leading one of the horses to pasture, the horse kicked the infant plaintiff in the forehead, causing serious injury.

After the accident, Deborah Morris notified both BCC and NYCM of the injury. NYCM subsequently disclaimed coverage based on the policy's "business pursuits," "uninsured premises" and "home day care services" exclusions. The infant plaintiff, represented by his mother, Marsha Maroney, initiated a personal injury action against the Morrises. Marsha Maroney then brought suit against NYCM seeking a declaration that NYCM had a duty to defend and indemnify the Morrises in the underlying personal injury action. NYCM counterclaimed and commenced a third-party action against the Morrises, also seeking a declaration of its obligations under the policy.[FN1]

Supreme Court held that the exclusions did not apply, and ordered NYCM to [*3]defend and indemnify the Morrises. A divided Appellate Division reversed, concluding that the injury "arose out of" the uninsured premises and, therefore, the exclusion was applicable. We granted plaintiffs leave to appeal and now affirm.

Initially, "'in policies of insurance ... if any one exclusion applies there can be no coverage'" (Monteleone v Crow Constr. Co., 242 AD2d 135, 140-141 [1st Dept 1998] quoting Zandri Constr. Co. v Firemen's Ins. Co., 81 AD2d 106, 109 [3d Dept 1981] affd sub nom Zandri Constr. Co. v Stanley H. Calkins, Inc., 54 NY2d 999 [1981]). Here, the homeowners policy's "uninsured premises" exclusion provides in pertinent part that coverage for personal liability does not apply "to bodily injury or property damage . . . arising out of a premises. . . owned by an insured. . . that is not an insured location."

Plaintiff argues that the uninsured premises exclusion applies only to injuries that are causally connected to the physical condition of the premises. Under such a reading, the exclusion would be inapplicable here because the allegedly tortious conduct of Deborah Morris, not the physical condition of the premises, caused plaintiff's injuries. Defendant, by contrast, argues that the term "arising out of" is broader and pertains to both the physical condition of the premises and conduct related to the use of the uninsured premises that is causally connected to the injury. In this case of first impression, we agree with defendant insurer.
As used in a homeowners liability policy's automobile exclusion clause, "the words 'arising out of' have 'broader significance . . . and are ordinarily understood to mean originating from, incident to, or having connection with" (Aetna Cas. & Sur. Co. v Liberty Mut. Ins. Co., 91 AD2d 317, 320 [4th Dept 1983]; see also 8A Couch on Insurance, § 119:33 at 50 [3d ed]). We conclude that, in the uninsured premises realm, the phrase "arising out of" similarly requires only that there be some causal relationship between the injury and the risk for which coverage is provided (see e.g. St. Paul Fire and Marine Ins. Co. v Insurance Co. of North America, 501 F Supp 136, 139 [WDVA 1980]; see also National Farmers Union Prop. and Cas. Co. v Western Cas. and Sur. Co., 577 P2d 961, 963 [Utah 1978]). That interpretation allows an insurer to reasonably define the "universe of possibilities to which it can apply its risk analysis . . . and determine a premium" (7 Couch on Insurance, § 101:40 at 127 [3d ed]).

An insurer does not wish to be liable for losses arising from risks associated with a premises for which the insurer has not evaluated the risk and received a premium — or, as in this case, for a premises that contained risks the insurer when underwriting the homeowners insurance policy declined to accept. Thus, when injury-causing conduct is causally related to the purposes for which the premises are used, then the injury is deemed to "arise" from the premises. If the injurious conduct is so causally related to the use of the premises, and deemed to "arise" from the premises, then it is likely that the conduct would be insured by a policy that [*4]contemplated the risk.

When reviewing the injurious conduct and its causal relationship to the premises in this case, it is clear that the infant plaintiff's injury, the consequence of a horse's kick, was not a bargained-for risk. This injury was causally related to the purpose for which the uninsured premises was being used — the care and boarding of horses in the barn and stable. The NYCM homeowners policy as amended in May 1997 was intended to exclude coverage for bodily injury [or property damage] "arising out of" the barn and stable premises. The Morrises had removed the barn and stable from the NYCM policy and rewrote it into the BCC policy. Only one policy, the BCC policy, covered the risk here, not two, as the plaintiff contends, and we cannot create coverage where none was intended by the insured or insurer. As there exists a sufficient causal connection between the injury to the child and the purpose for which the premises was used, the injury "arose out of" such premises, and the "uninsured premises" exclusion precludes coverage.

The narrow interpretation of "arising out of" urged by the plaintiff and the dissent would extend coverage beyond the fair intent and meaning of the insurance contract. The lack of supervision of the child, and the injury, all of which gave rise to the underlying claim, occurred on the uninsured premises and were directly related to the activities carried on at premises specifically excluded from coverage.

Nor can the language of the policy be deemed ambiguous. If the insurer intended to limit the exclusion to injury resulting from a condition of the uninsured premises, it could have done so explicitly, as it does in the very same policy's medical payments coverage provisions. There, the policy limits the coverage to injury that "arises out of a condition" on the insured location and injury "caused by the activities of an insured." By not identifying "condition" and "activities" in the liability coverage provisions, NYCM indicated an intent not to limit the term "arising out of" but rather give it a broader meaning that would encompass losses incurred as a result of both a condition of the uninsured premises and conduct related to the purpose for which the uninsured premises is utilized. The conduct of Deborah Morris on the uninsured premises — allegedly failing to adequately supervise the child while she was tending to the horses — certainly "arises out of" the uninsured premises.

Neither is it significant that the care of the child commenced in the Morris residence, the insured premises. Here there is no direct causal connection between the injury and the insured premises. Rather, the direct connection is between the injury and the uninsured location, the barn and stable. (see Bianco v Travelers Ins. Co., 99 AD2d 629, 630 [3d Dept 1984]).

We conclude that no defense or indemnification is owed the insured as the language of the policy exclusion is clear and unambiguous and subject to no other reasonable [*5]interpretation. Since the uninsured premises exclusion operates to deny coverage to plaintiffs, we need reach no other issue.

Accordingly, the order of the Appellate Division should be affirmed, with costs.


ROSENBLATT, J. (dissenting):

An insurance carrier invoking a policy exclusion must "establish that the exclusion is stated in clear and unmistakable language, is subject to no other reasonable interpretation, and applies in the particular case" (Cont'l Cas Corp v Rapid-Am Corp, 80 NY2d 640, 652 [1993]). To my mind, the phrase "arising out of a premises" does not, without strain, refer to the conduct of the insured. It is more easily read to refer to injuries causally connected to a dangerous condition of the premises. While I grant that the issue is debatable, the phrase is at least ambiguous and the exclusion should be construed against the carrier.

In deciding that the "arising out of" exclusion applies, the Court does not reach the "business pursuits" exclusion that the carrier invokes [FN2]. However, I agree with Supreme Court and the dissent of the Presiding Justice at the Appellate Division that the carrier waived the business pursuits exclusion because of its insufficient notice of disclaimer.

The notice of disclaimer, in which a carrier seeks to activate the exclusion, must be highly specific (Gen Accident Ins Group v Cirucci, 46 NY2d 862, 864 [1979]). Here, the disclaimer specifically referred only to a home day care business, making no mention of the horse-boarding business. The carrier thus created an ambiguity that could lead an insured to believe that a home day care business was the only basis on which the carrier was relying in order to deny coverage under the business pursuits exclusion. The ambiguity should be construed against the carrier and result in waiver.

Moreover, on the merits of the business pursuits issue, the carrier has also not met its burden of specificity. The business pursuits exclusion contains an exception for "activities which are usual to non-business pursuits." Here, the plaintiff alleged that Morris was negligent in supervising her child, a non-business activity. Again, where the policy's language could reasonably be interpreted in favor of the plaintiff, it is the carrier rather than the plaintiff who should bear the consequences of ambiguity.

I would therefore reverse the order appealed from and reinstate Supreme Court's order denying summary judgment to NYCM and granting it to Maroney. [*6]
* * * * * * * * * * * * * * * * *
Order affirmed, with costs. Opinion by Judge Ciparick. Chief Judge Kaye and Judges G.B. Smith, Graffeo, Read and R.S. Smith concur. Judge Rosenblatt dissents and votes to reverse in an opinion.
Decided October 27, 2005

Footnotes



Footnote 1: Because the insurer joined the insured in seeking a declaration of its rights, the Maroneys' failure to obtain a judgment in the underlying personal injury action prior to suing the tortfeasor's insurer as required by Insurance Law § 3420 does not preclude consideration of the coverage issues in this case (see Lang v Hanover Ins. Co., 3 NY3d 350 [2004]).

Footnote 2:The business pursuits exclusion denies coverage for "bodily injury or property damage . . . arising out of business pursuits of an insured or the rental or holding for rental of any part of any premises by an insured."

 

 

Cennamo v. Themistokleous



Dash & Burns, Jericho, N.Y. (Robert E. Dash of counsel), for
appellants.
Cheven, Keely & Hatzis, New York, N.Y. (Mayu Miyashita
of counsel), for respondents.

In an action to recover damages for personal injuries, etc., the plaintiffs appeal from an order of the Supreme Court, Queens County (Kelly, J.), dated April 26, 2004, which granted the defendants' motion for summary judgment dismissing the complaint on the ground that the plaintiff Anna Cennamo did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is affirmed, with costs.

The defendants' orthopedist and neurologist examined the injured plaintiff and determined that she had normal mobility and no neurological deficits, that she had no disabilities, and that she was able to fully work and perform her daily activities without any limitations. Together with her deposition testimony, which further demonstrated the lack of a serious injury, this evidence was sufficient to establish the defendants' prima facie entitlement to summary judgment (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955). The affirmations of the injured plaintiff's doctors failed to raise a triable issue of fact. The affidavit of her treating chiropractor was based upon the injured plaintiff's subjective complaints of pain (see Kivlan v Acevedo, 17 AD3d 321; Barrett v Howland, 202 AD2d 383), and the affidavit of her neurologist was based upon one examination made approximately three months after the accident and 1 1/2 years before the defendants moved for summary judgment (see Constantinou v Surinder, 8 AD3d 323; Mohamed v Dhanasar, 273 AD2d 451). [*2]

Accordingly, the defendants were entitled to summary judgment dismissing the complaint.
ADAMS, J.P., RITTER, GOLDSTEIN, SKELOS and DILLON, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Court

Brewster v. Skiba



Kevin D. Moloney, Scarsdale, for appellant.
James P. Nunemaker, Jr. & Associates, Uniondale (Kathleen E.
Fioretti of counsel), for respondents.

Order, Supreme Court, Bronx County (Janice L. Bowman, J.), entered July 26, 2004, which, insofar as appealed from, denied plaintiff's motion for summary judgment on the issue of whether plaintiff sustained a serious injury within the meaning of Insurance Law § 5102(d), unanimously affirmed, without costs.

Even assuming that plaintiff satisfied his initial burden of proving a prima facie case of serious injury, the court did not abuse its discretion in denying the motion on the ground that defendants did not have an opportunity to examine plaintiff by their own physicians (CPLR 3212[f]).

Brooklyn Union Gas Company v. American Home Assurance Company



Mendes & Mount, LLP, New York (Robert P. Firriolo of
counsel), for appellants.
Dickstein Shapiro Morin & Oshinsky LLP, New York (Edward
Tessler of counsel), for respondent.

Order, Supreme Court, New York County (Paul G. Feinman, J.), entered January 31, 2005, granting renewal of a prior disclosure order (same court and Justice), entered September 23, 2004, which, to the extent appealed from as limited by the briefs, adhered to that prior order, unanimously affirmed, with costs.

The court is vested with broad discretion in supervising the discovery process, and its determinations will not be disturbed absent an improvident exercise of that discretion (see Ulico Cas. Co. v Wilson, Elser, Moskowitz, Edelman & Dicker, 1 AD3d 223 [2003]). Reports of insurance investigators or adjusters, prepared during the processing of a claim, are discoverable as made in the regular course of the insurance company's business (see Roman Catholic Church of the Good Shepherd v Tempco Sys., 202 AD2d 257 [1994]; Karta Indus. v Insurance Co. of State of Pa., 258 AD2d 375 [1999]). Furthermore, attorney work product applies only to documents prepared by counsel acting as such, and to materials uniquely the product of a lawyer's learning and professional skills, such as those reflecting an attorney's legal research, analysis, conclusions, legal theory or strategy (see ACWOO Intl. Steel Corp. v Frenkel & Co., 165 AD2d 752 [1990], citing Hoffman v Ro-Sun Manor, 73 AD2d 207 [1980]). Documents prepared in the ordinary course of an insurance company's investigation to determine whether to accept or reject coverage and to evaluate the extent of a claimant's loss are not privileged, and, therefore, discoverable. In addition, such documents do not become privileged "merely because an investigation was conducted by an attorney" (Spectrum Sys. Intl. Corp. v Chemical Bank, 78 NY2d 371, 379 [1991]; accord Bertalo's Rest. v Exchange Ins. Co., 240 AD2d 452, 455 [1997], lv dismissed 91 NY2d 848 [1997]). Moreover, in order for attorney-client communications to be privileged, the document must be primarily or predominantly a communication of a legal character (Spectrum Sys. Intl. Corp., 78 NY2d at 378, citing Rossi v Blue Cross & Blue Shield, 73 NY2d 588, 594 [1989]). [*2]

The burden of establishing any right to protection is on the party asserting it, and the protection claimed must be narrowly construed (Spectrum Sys. Intl. Corp., 78 NY2d at 377). Here, appellants have failed to satisfy their burden with a detailed explanation sufficient to establish why the information sought is privileged. Rather, a review of the documents in question reveals that appellants' attorneys were acting as claims investigators, not attorneys, and were investigating the issue of whether coverage should be provided and the costs of such coverage. Contrary to appellants' conclusory assertions, there is no legal advice, no legal recommendations or attorney thought processes revealed in these documents, nor do they appear to have been "solely" prepared for settlement purposes, as appellants assert, inasmuch as no litigation had been commenced. Nor can appellants rely on their anticipation of litigation, since they had not yet made a coverage decision. Thus, these documents were prepared in the ordinary course of the insurance companies' business of evaluating claims, and the fact that the investigation was performed by attorneys will not shield them from discovery.

In the Matter of Eagle Insurance Company v. Davis


Samuel K. Rubin, Bethpage, N.Y. (Lawrence R. Miles of
counsel), for appellant.
Michael Janus, Syosset, N.Y., for respondent.

In a proceeding pursuant to CPLR article 75 to permanently stay arbitration of a claim for uninsured motorist benefits, the petitioner appeals from a judgment of the Supreme Court, Nassau County (Alpert, J.), entered July 29, 2004, which, after a hearing, denied the petition and dismissed the proceeding.

ORDERED that the judgment is reversed, on the law, with costs, and the matter is remitted to the Supreme Court, Nassau County, for a framed-issue hearing and a new determination of the petition thereafter.

After the respondent filed a demand for arbitration under the supplementary uninsured motorist provision of a policy issued by the petitioner, the petitioner moved to stay the arbitration. In its petition, the petitioner submitted a police accident report and a Department of Motor Vehicles registration record abstract demonstrating that the offending vehicle was insured by the proposed additional respondent Progressive Northeastern Insurance Company. The petition also alleged that the accident was intentional and the claim was fraudulent. The Supreme Court granted a temporary stay of arbitration and directed a framed-issue hearing "on the issue of offending vehicle coverage and the right to proceed to arbitration." At the framed-issue hearing, the Supreme Court confined the evidence to the issue of whether coverage existed on the offending vehicle and refused to consider evidence on the issue of fraud. The Supreme Court erred in this regard. [*2]

A collision caused in the furtherance of an insurance fraud scheme is not a covered accident under a policy of insurance (see Matter of Allstate Ins. Co. v Massre, 14 AD3d 610; State Farm Mut. Auto Ins. Co. v Laguerre, 305 AD2d 490; Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751). When a petition raises an issue of fact as to whether the automobile collision giving rise to the underlying request for arbitration was deliberate or intentional, the issue of fraud is subsumed under the coverage issue (see Matter of Government Empls. Ins. Co. v Robbins, 15 AD3d 484, 485). Evidence of such fraud should be considered in determining the broader coverage issue (id.; Matter of AIU Ins. Co. v Nunez, 17 AD3d 668). Accordingly, we remit the matter to the Supreme Court, Nassau County, for further proceedings consistent herewith.

DiFilippo v. Jones



Robert P. Tusa (Sweetbaum & Sweetbaum, Lake Success, N.Y.
[Marshall D. Sweetbaum] of counsel), for appellant.
Tierney & Tierney, Port Jefferson, N.Y. (Stephen A. Ruland
of counsel), for respondent.

In an action to recover damages for personal injuries, the defendant appeals from an order of the Supreme Court, Suffolk County (Molia, J.), dated January 18, 2005, which, upon granting the plaintiff's motion for leave to renew and reargue, vacated its prior order dated June 28, 2004, granting the defendant's motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d), and denied the defendant's motion.

ORDERED that the order is affirmed, with costs.

The defendant made a prima facie showing of her entitlement to summary judgment on the basis of the plaintiff's medical records, as well as the affirmed reports of her examining physicians, an orthopedist and a neurologist (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955; Casella v New York City Tr. Auth., 14 AD3d 585; Petropoulos v New York City Tr. Auth., 11 AD3d 522). However, the affidavit of the plaintiff's chiropractor was sufficient to raise a triable issue of fact as to whether the plaintiff sustained a serious injury.

 

Kinchler v. Cruz


         In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Rockland County (Bergerman, J.), dated October 12, 2004, which granted the defendants' separate motions for summary judgment dismissing the complaint on the ground that she did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

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

The defendants made prima facie showings, through a copy of the plaintiff's deposition testimony and the affirmed reports of their medical experts, that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955; Batista v Olivo, 17 AD3d 494; Grant v Fofana, 10 AD3d 446). The affirmation of the plaintiff's physician was insufficient to raise a triable issue of fact, since his diagnosis of tinnitus was based solely upon the plaintiff's subjective complaints [*2](see Congdon v Preisman, 263 AD2d 808; cf. Preston v Young, 239 AD2d 729).

Accordingly, the Supreme Court properly granted the defendants' separate motions for summary judgment dismissing the complaint.
COZIER, J.P., SANTUCCI, LUCIANO, FISHER and COVELLO, JJ., concur.

ENTER:

New York Central Mutual Fire Insurance Company v. Peerless Insurance Company

In an action for a judgment declaring that the defendant is obligated to provide primary insurance coverage in two related underlying personal injury actions entitled Milteer v Stoddard, pending in the Supreme Court, Orange County, under Index No. 6270/02, and Guay v Stoddard, in the Supreme Court, Orange County, under Index No. 920/02, which has been settled, and that the defendant must reimburse the plaintiff for costs, expenses, and disbursements incurred in those actions, the defendant appeals from an order of the Supreme Court, Orange County (Peter C. Patsalos, J.), dated June 29, 2004, which granted the plaintiff's motion for summary judgment and denied its cross motion for summary judgment.

ORDERED that the order is reversed, on the law, with costs, the motion is denied, the cross motion is granted, and the matter is remitted to the Supreme Court, Orange County, for the entry of a judgment declaring that the defendant, Peerless Insurance Company, is not obligated to provide primary insurance coverage in Milteer v Stoddard, pending in the Supreme Court, Orange County, under Index No. 6270/02, and Guay v Stoddard, in the Supreme Court, Orange County, under Index No. 920/02, and reimburse the plaintiff for costs, expenses, and disbursements incurred in those actions.

Frank Guay, a nonparty, was involved in a motor vehicle accident while driving a vehicle owned by his daughter, Heather Garrison. At all relevant times, Guay was insured by the defendant, Peerless Insurance Company (hereinafter Peerless), and Garrison was insured by the plaintiff, New York Central Mutual Fire Insurance Company (hereinafter New York Central). New York Central commenced this action for a judgment declaring that Peerless is obligated to provide primary insurance coverage in two underlying personal injury actions arising out of the accident and reimburse it for costs, expenses, and disbursements incurred in those actions. The Supreme Court granted the plaintiff's motion for summary judgment and denied the defendant's cross motion for summary judgment. We reverse.

In relevant part, the "other insurance" provision of the policy issued by Peerless to Guay states that any coverage provided by Peerless for a vehicle not owned by Guay "shall be excess over any other collectible insurance, including physical damage insurance provided under this or any other policy." The "other insurance" provision of the policy issued by New York Central to Garrison is essentially the same. Thus, by the plain terms of both policies, the coverage provided by New York Central to Garrison (i.e., the coverage provided on the owned vehicle involved in the accident) is primary (see Lumbermens Mut. Cas. Co. v Allstate Ins. Co., 51 NY2d 651; Government Empls. Ins. Co. v Kligler, 42 NY2d 863; Jacofsky v Travelers Ins. Co., 5 AD3d 557). Contrary to New York Central's contention on appeal, whether or not the Garrison vehicle was a "temporary substitute vehicle" within the meaning of the policy issued by Peerless to Guay is not controlling. Nothing in the plain language of the Peerless policy provides that such a vehicle was to be deemed "owned" by Guay for purposes of determining coverage.
COZIER, J.P., RITTER, SPOLZINO and LUNN, JJ., concur.

Sclafani v. City of New York

In an action to recover damages for personal injuries, the defendants City of New York, New York City Department of Transportation, and Jose Raymond Rivera appeal, and the defendants Sam Zamoshchin and Sovereign Motor Cars, Ltd., separately appeal, as limited by their respective briefs, from so much of an order of the Supreme Court, Kings County (Knipel, J.), dated June 30, 2004, which denied their respective motions for summary judgment dismissing the complaint insofar as asserted against 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 affirmed, with one bill of costs payable by the appellants appearing separately and filing separate briefs.

The affirmed medical reports of a neurologist and an orthopedist who examined the plaintiff approximately three years after the accident, and determined that he had no limitations or disabilities, sufficiently established a prima facie case for summary judgment in the defendants' favor (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955). However, the affirmation of the plaintiff's physician, who, on the basis of recent computerized range-of-motion testing, determined that the plaintiff had sustained restrictions in motion, was sufficient to raise a triable issue of fact as to whether the plaintiff sustained a serious injury (see Kraemer v Henning, 237 AD2d 492).

Accordingly, the Supreme Court properly denied the defendants' respective motions for summary judgment.
ADAMS, J.P., RITTER, GOLDSTEIN, SKELOS and DILLON, JJ., concur.

Springer v. Arthurs



        In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Kings County (Ruditzky, J.), dated August 31, 2004, which granted the separate motions of the defendants Lynton Arthurs and Marie Paul for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

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

The defendants made a prima facie showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) by submitting the affirmed medical reports of an orthopedist and neurologist who examined the plaintiff for the defendants three years after the subject accident and found that she had no disabilities, deficits, or other limitations (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955; Batista v Olivo, 17 AD3d 494; Grant v Fofana, 10 AD3d 446). The medical evidence submitted by the plaintiff in opposition, an affirmation of her physician, failed to raise a triable issue of fact. The plaintiff's physician improperly relied upon unattached and unsworn records and reports by other medical providers (see Mahoney v Zerillo, 6 AD3d 403; D'Amato v Mandello, 2 AD3d 482; Williams v Hughes, 256 AD2d 461; Merisca v Alford, 243 AD2d 613), and failed to set forth the objective medical tests utilized at his most recent examination of the plaintiff which led him to conclude that the plaintiff continued to experience limitations in the functioning and use of her neck and back (see Ersop v Variano, 307 AD2d 951; Carroll v Jennings, 264 AD2d 494).

Moreover, the plaintiff failed to submit any competent medical evidence which would have shown that she was unable to perform substantially all of her daily activities for not less than 90 of the 180 days immediately following the subject accident as a result of the accident (see Davis v New York City Tr. Auth., 294 AD2d 531; Sainte-Aime v Ho, 274 AD2d 569; Arshad v Gomer, 268 AD2d 450; Bennett v Reed, 263 AD2d 800; DiNunzio v County of Suffolk, 256 AD2d 498, 499).

Accordingly, the Supreme Court properly granted the defendants' separate motions for summary judgment.

Curanovic v. New York Central Mutual Fire Insurance Company



Mercure, J.P.

Appeal from a judgment of the Supreme Court (Lebous, J.), entered June 10, 2004 in Broome County, upon a verdict rendered in favor of defendant.

A detailed recitation of the facts in this action may be found in our prior decision (307 AD2d 435 [2003]), in which we reversed that portion of an order granting summary judgment to defendant upon its assertions that there were material misrepresentations on plaintiff's application for homeowner's insurance (see Insurance Law § 3105 [a], [b]). We concluded that there was a question of fact regarding the materiality of the misrepresentations (307 AD2d 435, 438 [2003], supra). The action then proceeded to trial upon certain stipulated facts, including plaintiff's admission that his application for insurance contained misrepresentations. Specifically, plaintiff failed to advise defendant that there had been a fire at his residence approximately one month prior to his application, that the residence was unoccupied and that there were uncorrected fire code violations.

On this appeal from a jury verdict in favor of defendant, plaintiff's sole claim is that Supreme Court's jury charge was erroneous. Before Supreme Court, plaintiff took an exception to the charge, asserting that the court failed to explain the requirement that the misrepresentations [*2]on the insurance application be material [FN1]. Now, plaintiff argues that Supreme Court erred in failing to charge the jury that it should consider defendant's past practices in determining whether knowledge of the true facts would have led defendant to refuse to issue the policy. Because plaintiff failed to preserve the argument now advanced before us, and the asserted error cannot be said to be fundamental, we affirm.

Indisputably, defendant had the burden of proving that plaintiff's misrepresentations were material (see e.g. Carpinone v Mutual of Omaha Ins. Co., 265 AD2d 752, 754 [1999]; Process Plants Corp. v Beneficial Natl. Life Ins. Co., 53 AD2d 214, 216-218 [1976], affd on op below 42 NY2d 928 [1977]). The Insurance Law provides that "evidence of the practice of the insurer which made such contract with respect to the acceptance or rejection of similar risks shall be admissible" in determining whether a misrepresentation is material (Insurance Law § 3105 [c]). Thus, it is error to refuse a request to charge that the jury should consider defendant's practice in similar cases in determining whether knowledge of the true facts would have led the insurer to refuse to issue the policy when, as here, evidence regarding that practice has been submitted (see Johnson v United States Life Ins. Co. in City of N.Y., 4 AD2d 825, 825 [1957]; 2 NY PJI2d 914 [2005]).

The record reveals, however, that no such request was made before Supreme Court in the instant case. While plaintiff did except to the charge on the ground that the court did not use the word "material," his exception was generalized and wholly failed to advance the specific argument for reversal now urged before this Court (see Bichler v Lilly & Co., 55 NY2d 571, 583-584 [1982]; Liebgott v City of New York, 213 AD2d 606, 606 [1995]; Nelson v City of New Rochelle, 154 AD2d 661, 661 [1989]). Moreover, when the court indicated in response that it would not change the charge, plaintiff's counsel replied, "I'm not going to ask you to," thereby tacitly accepting the charge (see generally Roebuck v Duprey, 274 AD2d 620, 622 [2000]). Thus, plaintiff failed to preserve the claimed error for our review by appropriate request or exception before the jury retired to consider the verdict (see CPLR 4110-b; DeLong v County of Erie, 60 NY2d 296, 306 [1983]).

Further, a new trial is not warranted in the interest of justice. Pursuant to CPLR 4404 (a), this Court has the discretion to order a new trial upon an unpreserved error in a jury charge when that error is fundamental, i.e., "'so significant that the jury was prevented from fairly considering the issues at trial'" (Pyptiuk v Kramer, 295 AD2d 768, 771 [2002], quoting Kilburn v Acands, Inc., 187 AD2d 988, 989 [1992]; see Martin v City of Cohoes, 37 NY2d 162, 165 [1975]). Although plaintiff asserts that the claimed error improperly shifted the burden of proof and that an inquiry by the jury is evidence of confusion created by Supreme Court's instructions, the jury's question involved only one of the stipulated facts herein, rather than the burden of [*3]proof or the definition of materiality. Moreover, the instructions properly set forth the applicable law with respect to both burden of proof and materiality. In our view, there is simply no indication in this record of juror confusion and the purported error in the charge cannot be said to have affected the verdict or otherwise prevented the jury from fairly considering the issues (see Pyptiuk v Kramer, supra at 771 [2002]; cf. Ciarelli v Lynch, ___ AD3d ___ [decided herewith]; Dempsey v Methodist Hosp., 159 AD2d 541, 541-542 [1990]).

Peters, Spain, Mugglin and Rose, JJ., concur.

ORDERED that the judgment is affirmed, with costs.

Footnotes



Footnote 1: Supreme Court, in conformity with the Pattern Jury Instructions (see PJI2d 4:75, at 907-908 [2005]), charged the jury that "[t]he factual question you must decide is whether knowledge of the true facts would have led [defendant] to refuse to issue the policy. On that question, [defendant] has the burden of proof. If you find that knowledge of the truth of the misrepresentations would have led [defendant] to refuse to issue the policy, you will find for the [d]efendant. If you find that knowledge of the misrepresentations would not have led [defendant] to refuse to issue the policy, then you will find for the [p]laint

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