Coverage Pointers - Volume VIII, No. 11

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Dear Coverage Pointers Subscribers:

Goodness gracious. There was an explosion of coverage cases from the New York appellate court in the past two weeks. The Courts have certainly been busy, cleaning out their shelves in anticipation of the holiday hiatus. Do we have an interesting potpourri of cases for your consumption this week? Our December 1 issue is attached. Ever up-to-date, you'll find decisions handed down as recently as yesterday and none older than two weeks.

First, a bit of great news and then a time for a heartfelt thanks.

We are delighted to announce that Audrey Seeley, the undisputed Queen of No Fault, has been named Team Leader of our No Fault/UM/SUM Team. H&F believes in developing teams of lawyers with special knowledge and expertise in areas of practice. With her skill, knowledge and charm, Audrey has developed a state-wide client base of insurers and TPA's and is on the lecture circuit presenting No Fault tips to insurers throughout New York State. Feel free to call on Audrey should you need representation or advice in this challenging arena.

We bid a fond adieu to Scott Billman, our CP editor, who joins the Buffalo city attorney staff. We wish him well as he associates with one of our former partners who was appointed Corporation Counsel on January 1, 2006. Great work by Scott over the years as Coverage Pointers editor. Yours truly will retake the reins for a time, ably assisted by Audrey "I Have the Angles" Seeley, and our newest staffer, Mark Starosielec, who will assist in our "Serious Injury" column beginning next issue.

Now, back to business ...

For coverage mavens and aficionados, you will surely enjoy this week's offering. Let us know who else might want to receive copies of Coverage Pointers and we'd be delighted to add them to our mailing list. We welcome several new subscribers this week, as we do issue, and remind you all that past issues, dating back to mid-1999, are available on the H&F Website.

Often imitated, never duplicated, we are your oldest and most timely and comprehensive source of New York insurance information available anywhere, at any cost (and there is surely no cost here to you .)

What will you find in the attached edition? We review about 25 brand-spanking new appellate and arbitration decisions.

COVERAGE POINTERS HEADLINES
December 1, 2006 Edition

Trend Alert! Trend Alert! Where Request is Made to GL Carrier for Co-Insurance by Another Carrier (Rather than Insured) and Responding Insurer Does Not Deny Coverage Timely, Untimely Denial Will Not Waive Coverage Defense Unless Requesting Carrier is Prejudiced
Bambi Thumped for Late Notice of Both Accident and Suit
Paperwork Counts: Failure to Document Repairs in Replacement Cost Policy When Terms Require Documentation Leads to Denial of that Portion of Recovery Under Policy
The Proof is in the Pudding and Substance Wins Over Form - No Fault Carrier Does it Right
Collecting Premiums for Nothing Not a Good Thing
Excellent Win for Insurer. Timing is Everything and Insurer Does it Right in SUM Proceeding Denial
Read the Policy, the Entire Policy. No SUM Coverage Purchased So No SUM Coverage Available. Mistake in Admitting Coverage Does Not Create Coverage
Right Idea, Wrong Proof. Carrier Need Not Provide SUM Coverage if Insured Injured on Owned Vehicle Not Insured for SUM Coverage, but Carrier Did Not Establish Issue of Fact to Establish Ownership
Believe What You Read - Shorter Time Limit to Commence Lawsuit Contained in First Party Policy is Enforceable
The Eighth Wonder of the World, The Carrier's Duty to Defend Comes to an End!
No Liability Attaching to Named Insured? CGL Carrier's Duty to Defend and Indemnify Under Additional Insured Provision Ends When Named Insured is Found Free of Liability
Progressive Dancing Round Apple Tree; Secures Protective Order with Respect to Production of Liability File

The Serious (Injury) Side of New York No-FaulT

Defense Gets Goosed in Serious Injury Motion
What's Good for the Goose, is Good for the Gander - Unless Defense Doc Quantifies Limitations, Can't Establish Lack of Serious Injury
Is There an Echo in Here? What's Good for the Goose, is Good for the Gander - Unless Defense Doc Quantifies Limitations, Can't Establish Lack of Serious Injury
Lots of Docs Do Not Equate to 90 Day Disability
Pommells Strikes Again - Preexisting Condition and Breaks in Treatment Quash Serious Injury Claim
Defense Doctor's Report Puts Defendants in Proverbial Soup -- Establishes Possibility Fracture Thus Defeating Serious Injury Motion
No Bones About it: Chiropractor's Affidavit Sufficient to Defeat Motion for SJ on Serious Injury
This Time Defendant's Proof Sufficient to Discredit Serious Injury Claim but Plaintiff's Response Sufficient to Leave Questions for Jury
Another Mixed Bag of Proof Results in Some Categorical Claims Dismissed, Others Remain
Where Plaintiff Establishes One Category of Serious Injury Without Opposition, Why Does Court Struggle with Others?

Audrey's Angle on No-Fault

Independent Examination Opinion of Chiropractor More Persuasive On Whether Electrodiagnostic Testing Medically Necessary.
To Submit Evidence Or Not To Submit Evidence - That Is The Question
Chiropractor's Well-Reasoned and Multiple Re-Examinations of the Applicant Demonstrated the Insurer Did Not "Rush To Discontinue Treatment"

Keep those cards and e-mails coming in.

Dan

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11/30/2006 Sixty Sutton Corp. v Illinois Union Insurance Co.,
Appellate Division, First Department

Trend Alert! Trend Alert! Where Request is Made to GL Carrier for Co-Insurance by Another Carrier (Rather than Insured) and Responding Insurer Does Not Deny Coverage Timely, Untimely Denial Will Not Waive Coverage Defense Unless Requesting Carrier is Prejudiced

Julio was the Plaintiff
Sixty Sutton was the Owner
Goodstein was the Manager
Tower was the General Contractor, insured by Illinois Union Insurance Company
Jerez was a subcontractor to Tower, and Julio’s employer, insured by Utica First

Julio, injured during construction, brought an action against Sixty Sutton and Goodstein. They subsequently brought a third-party action against Tower Building Services, Inc., the general contractor for the construction project, and its insurance carrier, Illinois Union Insurance Company.

GC’s carrier, Illinois, demand that Jerez’ insurer, Utica, indemnify Tower in personal injury action. There was a certificate of insurance indemnify Tower in the underlying personal injury action. That letter also stated that the contract between Tower and Jerez contained an indemnification provision, and that a certificate of insurance was issued to Jerez, listing Tower as an additional insured under Jerez's policy with Utica. The stars were lined up in Tower’s favor here.

Utica responded to both Tower and Illinois on January 3, 2005. It stated that its policy with Jerez did not require it to provide coverage for any claims arising out of Julio’s, citing the "Employee Exclusion" in the policy, which provides:

"This insurance does not apply to:

Bodily injury to an employee of an insured . . . if such claim for bodily injury arises out of and in the course of his/her employment or retention of such contractor by or for an insured, for which any insured may become liable in any capacity (emphasis supplied)."

Utica also added that Tower was not a named additional insured under Jerez's policy. Further, Utica informed Illinois that Tower does not fall within the class of entities included in the section of the Utica policy governing "blanket additional insured[s]." That section includes "[a]ny person or organization whom [Jerez is] required to name as an additional insured on this policy under a written contract or written agreement" (emphasis supplied). Utica informed Illinois that nothing in Jerez's contract with Tower required it to procure insurance in favor of the general contractor.

Utica’s argument had arguable merit.

Illinois argued that Utica’s disclaimer was untimely.

The appellate court held:

Utica did not waive its right to disclaim nor was its disclaimer untimely, because Illinois was requested defense and indemnity and the obligation to deny coverage timely – established in Insurance Law Section 3420(d) doesn’t apply when the request for defense and indemnification is coming from a co-insurer (AIU Ins. Co. v Inv. Ins. Co., 17 AD3d 259 [2005]);
In any event, Illinois’s notice to Utica was on 11/22/04 and the disclaimer was on 1/3/05, five days after its investigation was complete (and it didn’t matter, because the insured was being defended by Ilinois, so there was no prejudice to Illinois)
The Utica policy established that Tower was not an insured under the policy, either by name or by additional insured status;
The employee exclusion exempts Utica from providing coverage for Julio’s accident;
The Certificate of Insurance does not create coverage where the policy doesn’t provide it.

Editor’s Note: There is a developing trend of case law suggesting that a request for contribution from one carrier to another does not require the same kind of prompt response as does a request for coverage by an insured or claimant. Those cases seem to suggest that a late disclaimer with respect to another’s insurer’s request for contribution will only be a problem if the insurer requesting the co-insurance has been prejudiced.

The AIU decision held:

While an insurer must give timely notice of disclaimer to its insured even where, as here, the insurer has not in the first instance received timely notice of the accident, the duty to disclaim as soon as is reasonably possible (Insurance Law § 3420[d]) is not triggered where, as here, the request is for contribution by a co-insurer. "The purpose of Insurance Law § 3420(d) is to protect the insured, the injured person, 'and any other interested party who has a real stake in the outcome' from prejudice resulting from a belated denial of coverage." The protection of the statute is inapplicable to a co-insurer's request for contribution is demonstrated by the facts of this case. AIU received notice of the accident, conducted an investigation, undertook the defense of the lawsuit and managed the defense on its own for four years. Manifestly, it has not been prejudiced by any late disclaimer by Investors.

11/30/06 The Doe Fund v. Royal Indemnity Company

Appellate Division, First Department

Bambi Thumped for Late Notice of Both Accident and Suit
Accident in 2003 with injured plaintiff taken to hospital. The Doe Fund was the insured employer and its CFO was aware of the accident, and complaint filed by another party revealed serious injuries. Insurer was not notified until some eight months after the incident, and three months after plaintiffs herein were served with a summons and complaint. The requirement of timely notice to the insurer is a condition precedent to coverage. Without a valid excuse, failure to satisfy this requirement vitiates the policy.

11/30/06 Bartholomew v. Sterling Insurance Company

Appellate Division, Third Department
Paperwork Counts: Failure to Document Repairs in Replacement Cost Policy When Terms Require Documentation Leads to Denial of that Portion of Recovery Under Policy
Fire loss in 2004. Homeowner submitted claim to carrier and insurer retain independent adjuster Winne to investigate claim. Winne estimated cost of repair and insurer paid, holding back 20% of full costs until repairs were completed. When homeowners submitted a claim for the retained moneys, they failed to provide defendant with requested receipts or other proof of the actual repair or replacement cost due to the fact that they had performed some of the repairs themselves. Citing the absence of documentation, defendant denied the claim.

The Replacement Cost Provision in the policy states that defendant will pay the smallest of three amounts: (1) the policy limit, (2) "the cost . . . to repair or replace the damage on the same premises using materials of equivalent kind and quality," or (3) "the amount . . . actually and necessarily spent to replace or repair the damage." Inasmuch as plaintiffs agreed in the policy to receipt of the lowest of three figures, it necessarily follows that they agreed to permit defendant to calculate which of the three figures it was obligated to pay. Given that plaintiffs did not document the cost of repair or comply with defendant's reasonable request for that documentation, they failed to state a cause of action for breach of contract arising out of defendant's refusal to pay their supplemental claim.

11/28/06 Montifiore Medical Center v. Government Employees Insurance Company

Appellate Division, Second Department
The Proof is in the Pudding and Substance Wins Over Form – No Fault Carrier Does it Right

No Fault Insurer’s request for additional verification, which followed the plaintiff's submission of an N-F5 verification, did not have to be set forth in a prescribed form. Therefore, the additional verification request tolled the defendant's time within which to pay or deny the claim (see Insurance Law § 5106[a]; 11 NYCRR § 65-3.8 [a][1],[2]) until the defendant received all of the relevant information requested.. Since the defendant sent a partial payment and denial of benefits to the plaintiff after the requested material was provided and within the applicable time period, its response to the claim was not untimely.

11/28/06 Harvey v. Metropolitan Life Insurance Company

Appellate Division, First Department

Collecting Premiums for Nothing Not a Good Thing

Plaintiff purchased from defendant a term life insurance policy that included coverage for his listed children up to their respective 25th birthdays. He alleged a deceptive practice for the manner in which this "Child Rider" endorsement was marketed, in violation of General Business Law § 349, in that consumers could reasonably believe their children might still be covered, even after age 25, as long as premiums continued to be paid. Why would he do that? Because the company continued taking premiums into 2003, even though the child turned 25 in 1999. Oops.

Insurer argued that the lawsuit was untimely because the child turned 25 in 1999 and therefore it was too late to bring the lawsuit. Tough argument. Court holds that since collection of premiums continued for years thereafter, what is alleged is a "continuing wrong," which — for purposes of our statute of limitations (CPLR 203) — is "deemed to have accrued on the date of the last wrongful act". Accordingly, the commencement of this action in 2004 was timely. We have considered defendant's other contentions and find them without merit.

11/28/06 Matter of New York Central Mutual Fire Insurance Company v. Gonzalez

Appellate Division, Second Department

Excellent Win for Insurer. Timing is Everything and Insurer Does it Right in SUM Proceeding Denial
The insured failed to complete and return a sworn "Notice of Intention to Make Claim" form, which their insurer promptly provided to the appellants' attorney on September 9, 2004, after receiving the attorney's letter dated September 2, 2004. That was a breach of the SUM condition of coverage and provided a basis for disclaimer or denial of coverage. Chalk one up for the insurance company. The carrier gets kudos a second time too. Claimant filed notice of intention to arbitrate and insurer moved, in court, to stay arbitration, within 20 days. SUM claim denied. For all you plaintiff’s counsel, beware or you may see a rise in E&O premiums next year.

11/17/06 Ward v. County of Allegany

Appellate Division, Fourth Department
Read the Policy, the Entire Policy. No SUM Coverage Purchased So No SUM Coverage Available. Mistake in Admitting Coverage Does Not Create Coverage

Plaintiff’s decedent killed in the line of duty as a deputy sheriff by another motorist who ran a stop sign and rammed patrol car. Plaintiff seeks a judgment declaring that defendant is liable to pay supplementary underinsured motorist (SUM) benefits to plaintiff as a result of the fatal accident on the ground that the $250,000 "Self-Insured Retention" (SIR) of defendant provides SUM coverage. Alternatively, in the event that the SIR does not provide SUM coverage, by her second cause of action plaintiff seeks a judgment declaring that defendant is nonetheless liable to pay the subject SUM benefits because it has waived its right to deny the existence of SUM coverage.

The proof submitted established that NYMIR (the New York Municipal Insurance Reciprocal) did not issue SUM applicable to decedent's accident. While plaintiff cited to the declaration page and endorsements comprising the main, or general liability, portion of the policy issued by NYMIR, the policy did contain exclusions coverage for or on behalf of employees of defendant, such as decedent, who have been injured or killed on the job. The issue of underinsurance coverage hinges on the declarations and endorsements of the portion of the NYMIR policy that is denominated "Municipal Automobile Policy." Those declarations make clear that no SUM endorsement is part of the automobile insurance coverage and that defendant did not in fact procure such coverage from NYMIR.

A mistake made by the defendant relative to the existence of such coverage does not constitute a waiver of the right to deny the existence of SUM coverage. The “ill-advised admission” cannot be regarded as the intentional relinquishment of a known right. Moreover, where there is no coverage under the policy, the doctrines of waiver and estoppel may not operate to create such coverage, and where the issue is the existence or nonexistence of coverage the doctrine of waiver is simply inapplicable.

11/1706 Walts v. Masullo-George and State Farm Mutual Insurance Company

Appellate Division, Fourth Department
Right Idea, Wrong Proof. Carrier Need Not Provide SUM Coverage if Insured Injured on Owned Vehicle Not Insured for SUM Coverage, but Carrier Did Not Establish Issue of Fact to Establish Ownership
SUM policy does not provide coverage if insured injured on vehicle owned by insured and not insured for SUM.. Here, plaintiff submitted evidence that he was not the owner of the dirt bike he was riding, and State Farm failed to submit evidentiary proof in admissible form sufficient to raise a triable issue of fact to the contrary.

11/17/06 Blaner v. State Farm Insurance

Appellate Division, Fourth Department

Believe What You Read – Shorter Time Limit to Commence Lawsuit Contained in First Party Policy is Enforceable

It is undisputed that plaintiffs failed to commence this action for first-party coverage under their homeowner’s insurance policy within two years after the occurrence causing the loss or damage, as required by a provision in the policy and such limitations periods are enforceable. It makes no difference that there is a six-year statute of limitations, generally, for breach of contract actions. A party who signs a written contract is conclusively presumed to know its contents and to assent to them. An insurer’s failure to comply with Fair Claim Practices regulations does not change outcome.

11/17/06 City of Niagara Falls v. Merchants Insurance Group

Appellate Division, Fourth Department
The Eighth Wonder of the World, The Carrier’s Duty to Defend Comes to an End!

No Liability Attaching to Named Insured? CGL Carrier’s Duty to Defend and Indemnify Under Additional Insured Provision Ends When Named Insured is Found Free of Liability

A curious conclusion but one worth studying.

City of Niagara Falls (City), commenced this action seeking a declaration that defendant has a duty to defend and indemnify it in the underlying action. The plaintiff in the underlying action was injured in a vacant lot. The injured party claimed that the City and the carrier’s named insured, a debris removal contractor (contractor) were negligent in maintaining the lot. The City was an additional insured on the contractor’s CGL policy with Merchants, but "only with respect to liability arising out of [the named insured's] ongoing operations performed for [the City]."

Here, the complaint in the underlying action alleges that the City and defendant's named insured maintained property owned by the City in a "careless, reckless and negligent manner," and the court concludes that the claim is within the embrace of the policy. Accordingly, carrier has duty to defend City. However, its duty to defend the City ended when contractor was found not to have liability for the accident. The court concludes that inasmuch as defendant's named insured has been absolved of liability in the underlying action, defendant is relieved of its duty to both defend and indemnify the City.

Editors Note: When undertaking an additional insured’s defense based on a limited additional insured provision such as this one, carrier should indicate that it’s obligation to defend and indemnity will end if named insured found not liable for underlying accident.

11/17/06 HealthNow NY, Inc., as Subrogee of Webb v. White and Progressive Ins. Co.

Appellate Division, Fourth Department
Progressive Dancing Round Apple Tree; Secures Protective Order with Respect to Production of Liability File

Progressive Insurance Company (Progressive), a nonparty, appealed from an order denying its cross motion seeking an order quashing the judicial subpoena duces tecum served upon it by plaintiff and directing Progressive to produce its "entire liability/bodily injury file relative to" the underlying personal injury action commenced by plaintiff's subrogor, Webb, against Eckrote, Progressive's insured. The personal injury action was settled, plaintiff commenced the instant action seeking to recover medical expenses it paid on behalf of Webb, and Eckrote raised the settlement as a defense. A portion of the file had already been reviewed by the Court, in camera.

The Appellate Division holds that the lower court erred in denying the cross motion in its entirety and directing Progressive to produce its "entire liability/bodily injury file relative to" the underlying action without reviewing in camera those documents not previously submitted by Progressive to determine whether they are relevant to plaintiff's subrogation action.

The Serious (Injury) Side of New York No-FaulT

11/28/06 Museau v. New York City Transit Authority

Appellate Division, Second Department

Defense Gets Goosed in Serious Injury Motion

The defendants failed to establish their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident The defendants' examining orthopedic surgeon conceded the existence of limitations in motion of the plaintiff's lumbar spine and neither defense medical expert addressed his claim that as a result of the accident the plaintiff sustained a medically determined injury which prevented him from performing substantially all of the material acts which constituted his usual and customary daily activities for not less then 90 days during the 180 days immediately following the injury or impairment.

11/28/06 McCrary v. Street

Appellate Division, Second Department

What’s Good for the Goose, is Good for the Gander – Unless Defense Doc Quantifies Limitations, Can’t Establish Lack of Serious Injury

11/28/06 Cruz v. Williams

Appellate Division, Second Department

Is There an Echo is Here? What’s Good for the Goose, is Good for the Gander – Unless Defense Doc Quantifies Limitations, Can’t Establish Lack of Serious Injury

Another defense Toure failure (see Toure v Avis Rent A Car Sys., 98 NY2d 345). The affirmed medical reports of the defendants' examining neurologist concerning both plaintiffs established that there were limitations in range of motion of the lumbar spine of the plaintiff Shante Cruz and limitations in the range of motion of the cervical spine of the plaintiff Sandra Ramos, which were not adequately quantified or qualified so as to establish that these limitations were enough to raise questions of fact.

11/21/06 Rodriguez v. Herbert

Appellate Division, First Department
Lots of Docs Do Not Equate to 90 Day Disability
While there was proof that plaintiff spent time under a number of physicians during 90 of the first 180 days following the accident, there was still no proof that he was prevented from performing substantially all of the material acts constituting his customary daily activities during that time. Accordingly, case dismissed.

11/21/06 Henry v. Rivera

Appellate Division, First Department
Pommells Strikes Again – Preexisting Condition and Breaks in Treatment Quash Serious Injury Claim

Preexisting degenerative conditions plagued all the plaintiffs and none were able to link their purportedly disabling conditions to car accident. An unexplained break of five months in treatment didn’t help.

11/17/06 Wheeler v. Laechner

Appellate Division, Fourth Department

Defense Doctor’s Report Puts Defendants in Proverbial Soup -- Establishes Possibility Fracture Thus Defeating Serious Injury Motion

While the Court properly dismissed the claim of 90 day disability after defendant’s examining physician established, without contravention, that none existed, complaint is reinstated because of claim and proof of fracture. While defendant initially established that plaintiff did not suffer a fracture, plaintiff submits affirmed report of defendants' examining physician stating that, in his opinion, x-rays taken of plaintiff on the day of the accident demonstrated that she sustained "a probable minor fracture at her left pubic symphysis as a result of the . . . motor vehicle accident."

11/17/06 Jedrysik v. Panorama Tours, Ltd.

Appellate Division, Fourth Department
No Bones About it: Chiropractor’s Affidavit Sufficient to Defeat Motion for SJ on Serious Injury
Interesting decision relating to liability for rear-end collisions. We’ll leave that for your reading below. However, the insurance question is less so.

Although defendants met their initial burden with respect to the various categories of serious injury allegedly sustained by plaintiff, Court concludes that plaintiff raised an issue of fact with respect to each category by submitting the affidavit of the chiropractor who treated her after the accident. The opinions of the treating chiropractor were supported by the requisite objective medical findings and diagnostic tests

11/17/06 Frizzell v. Giannetti

Appellate Division, Fourth Department

This Time Defendant’s Proof Sufficient to Discredit Serious Injury Claim but Plaintiff’s Response Sufficient to Leave Questions for Jury

11/17/06 Ellis v. Emerson

Appellate Division, Fourth Department

Another Mixed Bag of Proof Results in Some Categorical Claims Dismissed, Others Remain

Defendants established that plaintiff's injury did not constitute a total loss of use of a body organ, member, function or system and plaintiffs failed to raise a triable issue of fact. Defendants also established that plaintiff's injury did not constitute a permanent consequential limitation of use of a body organ or member, and plaintiffs did not oppose that part of the motion. We thus conclude that plaintiffs abandoned their claim based on that category and therefore the court should have granted defendants summary judgment with respect to it. The court properly denied defendants' motion insofar as it is based on a preexisting condition. Because the reports of defendants' examining physician, submitted by defendants, raise the possibility that the accident aggravated a prior medical condition, they create questions of fact. Defendants met their initial burden with respect to the significant limitation of use category of serious injury, but plaintiffs' submissions, which included objective medical evidence, raised a question of

11/17/06 Ellithorpe v. Marion

Appellate Division, Fourth Department

Where Plaintiff Establishes One Category of Serious Injury Without Opposition, Why Does Court Struggle with Others?
Following a developing trend, Plaintiff moved for summary judgment to establish that he had suffered a serious injury in any of a number of categories. Court concluded plaintiff established his entitlement to judgment with respect to three categories of serious injury and that defendants failed to raise an issue of fact sufficient to defeat the motion. Having so found that, the Court could have written no more. Instead, it spent multiple paragraphs discussing the categories where serious injury was not established or where there were questions of fact. Why? Once a serious injury is established in one category, it isn’t necessary to establish a qualifying injury in another.

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.

11/20/06 In the Matter of the Arbitration between the Applicant and Respondent

Arbitrator Thomas J. McCorry, Esq. (Erie County)

Independent Examination Opinion of Chiropractor More Persuasive On Whether Electrodiagnostic Testing Medically Necessary.

Here is the Angle: In this case, the independent examination by a chiropractor was more persuasive on the issue of medical necessity. The examination revealed full and pain free range of motion and the patient continuing to work full time. We note that the decision is void of any discussion on what proof, if any, the Applicant presented on medical necessity.

The Analysis: The Applicant, medical provider, sought payment for electrodiagnostic testing. The patient, a 25 year old male was involved in an October 19, 2004, motor vehicle accident. He treated at the emergency room the same day with complaints of neck, back, and head pain. He followed up with his primary care physician whose treatment regime was medication. Thereafter, the patient was referred to a chiropractor for adjustments two to three times per week.

The patient was referred by his treating chiropractor to the Applicant for electrodiagnostic testing after complaining of lower back pain radiating into the upper legs.

The insurer denied the Applicant payment of the electrodiagnostic testing based upon the independent medical examination of Julius Horvath, D.C. Mr. Horvath’s report indicated that the patient was treating with a chiropractor once a week and was working full time. A review of the x-rays taken at the emergency room revealed no fracture. Also, a review of the CT scan taken at the emergency room revealed no abnormalities. Further, a review of a lumbar spine MRI on January 12, 2005, revealed a mild posterior annular bulge at L4/5. Upon examination, Mr. Horvath found that the patient exhibited full and pain free ranges of motion of the lumbar spine with the exception of end range of extension. Mr. Horvath concluded that there was an unremarkable physical examination and opined that no further chiropractic treatment or diagnostic testing was necessary.

Arbitrator McCorry found the independent medical examiner’s opinion more persuasive and that the insurer’s denial was appropriate.

11/20/06 In the Matter of the Arbitration between the Applicant and Respondent

Arbitrator Thomas J. McCorry, Esq. (Erie County)

To Submit Evidence Or Not To Submit Evidence – That Is The Question.

Here is the Angle: In this arbitration it is not entirely clear why the insurer never interposed an arbitration submission or even if it did whether it would have resulted in a different outcome. For example, with respect to the lost wage claim there is a timeframe where a claim was allegedly submitted to the insurer but never denied. There is no indication from the insurer through the form of an affidavit as to whether it received the claim. Another example is the multiple medical bills that were submitted but no denial was in the evidence submission. It is unclear whether the insurer received the bills for the first time with the arbitration filing or whether the Applicant never submitted the denial with the arbitration demand.

The Analysis: The Applicant, eligible injured person, was involved a motor vehicle accident on May 1, 2003, with a cow. At the time of the accident, he was working for Pactiv Corp. The Applicant worked from May 2 through May 4, 2003 and May 8 through May 12, 2003. His “base pay” was $744.00 biweekly. The Applicant failed to report for work on May 13, 2003 and was terminated on May 14, 2003. The Applicant’s treating physician rendered him disabled from May 13 through June 30, 2003.

The Applicant sought lost wages from May 13, 2003 through June 18, 2003 and October 12, 2005 through May 1, 2006. The Applicant also sought payment of medical bills from orthopedic treatment, neurology treatment, diagnostic testing, as well as hospital visits.

Interestingly, the insurer was represented by counsel at the arbitration but the insurer had not made an evidence submission. Arbitrator McCorry noted that the insurer was presented with additional time to make an evidence submission relative only to the amendment of Applicant’s AR-1 but failed to do so as of the date of the award.

The Applicant’s lost wage claim from May 13 through June 18, 2003, based upon the treating physician’s opinion on disability. However, the Applicant’s lost wage claim from October 12, 2005 through May 1, 2006, was dismissed without prejudice due to the lack of any evidence in Applicant’s submission that the claim was submitted to the insurer and never denied.

The Applicant’s medical expenses were found to be necessary as the insurer’s independent medical examination report indicated that the Applicant was continuing to complain of chronic cervical spine pain. The report further indicated that the Applicant should be permitted to treat with an orthopedic surgeon every six months for the following year. This report coupled with the treating physician’s records that the Applicant needed surgery to decrease his chronic cervical spine pain resulted in the finding that the treatment was necessary. Unfortunately, there were also a number of bills that were submitted to the insurer for which there was no denial.

11/20/06 In the Matter of the Arbitration between the Applicant and Respondent

Arbitrator Thomas J. McCorry, Esq. (Erie County)

Chiropractor’s Well Reasoned and Multiple Re-Examinations Of The Applicant Demonstrated The Insurer Did Not “Rush To Discontinue Treatment.”

Here is the Angle: The chiropractic treatment in this case was found to be not medically necessary. The independent examination by a chiropractor on three different occasions over the course of one year and subsequent denial of care was found not to be a “rush to discontinue treatment.” We also note that the chiropractor conducting the independent examination recommended, at the second examination, that the Applicant be weaned off of care to see if he could tolerate it. The chiropractor then noted in her third examination that the treating chiropractor never attempted to decrease treatment frequency to see if the Applicant would tolerate it.

The Analysis: On March 23, 2003, the Applicant, eligible injured person, was involved in a motor vehicle accident wherein her vehicle was side-swiped by an intoxicated driver. The Applicant complained of neck pain that went from the back of her neck to the upper trapezius muscles and into the interscapular region.

On March 25, 2003, Applicant began treating with Mr. Cox, a chiropractor. According to Mr. Cox’s May 2, 2005, report he manually adjusted Applicant’s cervical, thoracic, and lumbar spine.

The insurer sent the Applicant for an independent medical examination with Tina Ribakove, D.C. Ms. Ribakove’s first examination on July 22, 2003, revealed a diagnosis of cervical and thoracic sprain/strain, joint dysfunction and cervical disc and cerviocranial syndrome. Ms. Ribakove opined that the Applicant would benefit from chiropractic care twice a week for the next 16 weeks.

Ms. Ribakove re-examined the Applicant on February 10, 2004. Ms. Ribakove opined that the Applicant made progress with Mr. Cox but recommended weaning her off of the treatment. Ms. Ribakove recommended continued chiropractic care no more than once a week for the next eight weeks.

Ms. Ribakove conducted a final re-examination of the Applicant on August 20, 2004. She opined that the Applicant’s condition stabilized but that the treating chiropractor took no steps to ascertain if the Applicant could tolerate less frequent care. Even though the Applicant had not reached pre-accident status Ms. Ribakove concluded that the Applicant had reached an endpoint of her improvement with chiropractic care.

Arbitrator McCorry held in favor of the insurer stating that Ms. Ribakove’s reports did not demonstrate any rush to discontinue treatment.

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.

11/21/06 Ferguson v. Pioneer State Mutual of Michigan
Michigan Court of Appeals

MCL 600.1621 Determines Proper Venue Where an Insured Files Suit Against His Insurer to Receive Coverage Under the Insurance Policy.
Where an insured files suit against his insurer to recover underinsured motorist and first-party personal protection benefits pursuant to a no-fault insurance policy, the action is not a claim for personal injuries, but for breach of contract. “Damages” are defined as the “pecuniary compensation or indemnity, which may be recovered in the courts by any person who has suffered a loss, detriment or injury, whether to his person, property or rights,” and a defendant is only liable for personal injury damages in an amount based on a proportional determination of its fault causing Plaintiff’s injury. In a breach of contract action, the parties are entitled to the benefit of the bargain as set forth in the agreement. The present action is therefore a contract claim, and proper venue is determined by MCL 600.1621, not by MCL 600.1629.

Submitted by: Mills Gallivan of Gallivan, White & Boyd, P.A.

11/21/06 Wirth v. Aetna U.S. Healthcare
Third Circuit Court of Appeals

Pennsylvania Motor Vehicle Financial Responsibility Law, Section 1720, Inapplicable to HMOs
Plaintiff was injured in an automobile accident caused by a third-party. Plaintiff recovered a settlement from the third-party tortfeasor. Defendant insurer asserted a subrogation lien to recover monies from the settlement based on a HMO agreement issued by it. Plaintiff asserted this was in violation of Pennsylvania’s Motor Vehicle Financial Responsibility Law ("MVFRL") which disallowed the right of subrogation from a claimant’s tort recovery in actions arising out of the use of a motor vehicle. Defendant argued that the statute was inapplicable to it, because Pennsylvania’s Health Maintenance Organization Act ("HMO Act") provides that a HMO will not be governed by a state law regulating insurance unless such law specifically provides that it is to apply to a HMO, which the MVFRL did not. The court held that plaintiff’s claims were preempted by ERISA, and that pursuant to the Pennsylvania Supreme Court’s ruling the MVFRL’s language did not bring HMO’s within its ambit.

Submitted by: Bruce D. Celebrezze and Supriya Sundarrajan (Sedgwick, Detert, Moran & Arnold LLP)

11/20/06 LDF Food Group, Inc. v. Liberty Mutual Fire Insurance Company

Kansas Court of Appeals

An Insurer Must Look Beyond the Effect of the Pleadings and Must Consider Any Facts Brought to Its Attention or Any Facts Which It Could Reasonably Discover In Determining Whether It Has a Duty to Defend.
If the facts brought to the insurer’s attention or those from which the insurer could have reasonably discovered give rise to a 'potential of liability' under the policy, the insurer bears a duty to defend. The possibility of coverage must be determined by a good-faith analysis of all information known to the insured or all information reasonably ascertainable by inquiry and investigation. Although an insurer may not rely solely on the formal pleadings in determining its duty to defend, mere conjecture or imagined facts do not support a duty to defend. Insurer did not breach the duty to defend where claimant’s complaint did not allege and she did not suffer “bodily injury.”

Submitted by: Mills Gallivan of Gallivan, White & Boyd, P.A

CASES IN FULL TEXT

BLANAR v. STATE FARM INSURANCE COMPANIES

Appeal from an order of the Supreme Court, Erie County (Eugene M. Fahey, J.), entered November 9, 2005. The order granted defendant's motion to dismiss the complaint.

It is hereby ORDERED that the order so appealed from be and the same hereby is unanimously affirmed without costs.

Memorandum: Supreme Court properly granted defendant's motion seeking dismissal of the complaint as time-barred. It is undisputed that plaintiffs failed to commence this action for first-party coverage under their homeowners insurance policy within two years after the occurrence causing the loss or damage, as required by a provision in the policy. "Such limitations periods are enforceable" (Schunk v New York Cent. Mut. Fire Ins. Co., 237 AD2d 913, 914; see Blitman Constr. Corp. v Insurance Co. of N. Am., 66 NY2d 820, 823) and, although the action was commenced within the six-year statute of limitations for breach of contract actions (see CPLR 213 [2]), "[i]t is well settled that parties to a contract may agree that a lawsuit must be commenced within a shorter period than that prescribed by law" (Renee Knitwear Corp. v ADT Sec. Sys., Northeast, 277 AD2d 215, 216). We note "[i]n addition [that] a party who signs a written contract is conclusively presumed to know its contents and to assent to them'. . ., and the signer is bound by its terms unless there is a showing of fraud, duress, or some other wrongful act on the part of any party to the contract" (id.). Contrary to plaintiffs' contention, the fact that the policy contains a different limitations period with respect to third-party coverage does not create an ambiguity that would have the effect of extending the limitations period with respect to first-party coverage (see generally U.S. Fid. & Guar. Co. v Annunziata, 67 NY2d 229, 232; State Farm Mut. Auto. Ins. Co. v Westlake, 35 NY2d 587, 591).

Finally, we reject plaintiffs' further contention that defendant is estopped from relying on the shorter limitations period contained in the policy based on its alleged failure to comply with 11 NYCRR 216.6 (c) and (h). "It is well settled that no private cause of action exists for . . . an alleged violation of part 216 of the Insurance Regulations," and an insurer's failure to comply with section 216.6 does not estop the insurer from relying on the limitations period in the insurance policy (De Marinis v Tower Ins. Co. of N.Y., 6 AD3d 484, 486; see Schunk, 237 AD2d at 914-915; May v Aetna Life & Cas. Co., 204 AD2d 1007).
Entered: November 17, 2006

City of Niagara Falls v. Merchants Insurance Group

Appeal from an order of the Supreme Court, Niagara County (Richard C. Kloch, Sr., A.J.), entered February 15, 2006. The order denied defendant's motion for summary judgment.

BROWN & KELLY, LLP, BUFFALO (LISA T. SOFFERIN OF COUNSEL), FOR DEFENDANT-APPELLANT.
MINTZER, SAROWITZ, ZERIS, LEDVA & MEYERS, LLP, HICKSVILLE (THOMAS P. MC DAID, JR., OF COUNSEL), FOR PLAINTIFF-RESPONDENT. It is hereby ORDERED that the order so appealed from be and the same hereby is unanimously modified on the law by granting the motion in part and granting judgment in favor of defendant as follows: It is ADJUDGED AND DECLARED that, with respect to the period after September 20, 2005, defendant has no duty to defend plaintiff in the underlying action, and that defendant has no duty to indemnify plaintiff in the underlying action

and as modified the order is affirmed without costs.

Memorandum: Plaintiff, City of Niagara Falls (City), commenced this action seeking a declaration that defendant has a duty to defend and indemnify it in the underlying action, and defendant thereafter moved for summary judgment seeking a declaration that it has no such duty. We conclude that Supreme Court erred in denying defendant's motion in its entirety. The plaintiffs in the underlying action alleged that the City and defendant's named insured, an entity with which the City contracted to mow and clear debris from vacant lots owned by the City, were negligent in the maintenance of a vacant lot where one of the plaintiffs in the underlying action was injured. The City is named as an additional insured on the commercial liability policy issued to defendant's named insured and, as such, receives coverage "only with respect to liability arising out of [the named insured's] ongoing operations performed for [the City]." By an order granted September 20, 2005, the motion of defendant's named insured for summary judgment dismissing the complaint and cross claims in the underlying action against it was granted and, in support of its instant motion for summary judgment, defendant contends that it therefore has no duty to defend or indemnify the City in the underlying action.

"It is well settled that an insurance company's duty to defend is broader than its duty to indemnify. Indeed, the duty to defend is exceedingly broad' and an insurer will be called upon to provide a defense whenever the allegations of the complaint suggest . . . a reasonable possibility of coverage' . . . . If, liberally construed, the claim is within the embrace of the policy, the insurer must come forward to defend its insured' " (Automobile Ins. Co. of Hartford v Cook, 7 NY3d 131, 137; see BP A.C. Corp. v One Beacon Ins. Group, 33 AD3d 116; Pavarini Constr. Co. v Liberty Mut. Ins. Co., 270 AD2d 98, 99; 79th Realty Co. v X.L.O. Concrete Corp., 247 AD2d 256). An additional insured "enjoy[s] the same protection as the named insured" with respect to the duty of an insurer to provide a defense (Pecker Iron Works of N.Y. v Traveler's Ins. Co., 99 NY2d 391, 393 [internal quotation marks omitted]).

Here, the complaint in the underlying action alleges that the City and defendant's named insured maintained property owned by the City in a "careless, reckless and negligent manner," and we therefore conclude that the claim is " within the embrace of the policy' " (Automobile Ins. Co. of Hartford, 7 NY3d at 137, quoting Ruder & Finn v Seaboard Sur. Co., 52 NY2d 663, 670, rearg denied 54 NY2d 753). Although defendant failed to establish its entitlement to judgment declaring that it had no duty to defend the City prior to September 20, 2005, the date on which the order absolving defendant's named insured of liability in the underlying action was granted (see generally Zuckerman v City of New York, 49 NY2d 557, 562), we nevertheless conclude that defendant's duty to defend the City ended when that order was granted (see generally BP A.C. Corp., 33 AD3d at ___; 79th Realty Co., 247 AD2d at 257). We further conclude that, inasmuch as defendant's named insured has been absolved of liability in the underlying action, defendant is "relieved . . . of its duty of indemnity" with respect to the City (City of New York v Consolidated Edison Co. of N.Y., 238 AD2d 119, 121; see BP A.C. Corp., 33 AD3d at ___). We therefore modify the order accordingly.
Entered: November 17, 2006

Ellis v. Emerson

Appeal from an order of the Supreme Court, Cattaraugus County (Michael L. Nenno, A.J.), entered March 6, 2006 in a personal injury action. The order, among other things, denied defendants' motion for summary judgment dismissing the complaint, granted plaintiffs' cross motion for partial summary judgment on the issue of negligence and granted plaintiffs' motion for leave to amend the bill of particulars.

HURWITZ & FINE, P.C., BUFFALO (SHAWN P. MARTIN OF COUNSEL), FOR DEFENDANTS-APPELLANTS.
LAW OFFICE OF CRAIG Z. SMALL, BUFFALO (CRAIG Z. SMALL OF COUNSEL), FOR PLAINTIFFS-RESPONDENTS.

It is hereby ORDERED that the order so appealed from be and the same hereby is unanimously modified on the law by granting defendants' motion in part and dismissing the complaint, as amplified by the bill of particulars, with respect to the permanent loss of use of a body organ, member, function or system and permanent consequential limitation of use of a body organ or member categories of serious injury within the meaning of Insurance Law § 5102 (d) and as modified the order is affirmed without costs.

Memorandum: Plaintiffs commenced this action seeking to recover for personal injuries sustained by Matthew D. Ellis (plaintiff) when the vehicle driven by plaintiff was rear-ended by a vehicle operated by defendant Craig Alan Emerson and owned by defendant Postlewait Logging Company. Supreme Court erred in denying defendants' motion for summary judgment dismissing the complaint, as amplified by the bill of particulars, insofar as plaintiffs allege that plaintiff sustained a serious injury within the meaning of Insurance Law § 5102 (d) under the permanent loss of use and permanent consequential limitation of use categories of serious injury. We therefore modify the order accordingly. Defendants established that plaintiff's injury did not constitute a total loss of use of a body organ, member, function or system (see Oberly v Bangs Ambulance, 96 NY2d 295, 299), and plaintiffs failed to raise a triable issue of fact (see Constantine v Serafin, 16 AD3d 1145). Defendants also established that plaintiff's injury did not constitute a permanent consequential limitation of use of a body organ or member, and plaintiffs did not oppose that part of the motion. We thus conclude that plaintiffs abandoned their claim based on that category and therefore the court should have granted defendants summary judgment with respect to it (see generally Oberly, 96 NY2d at 297; Genovese v Gambino, 309 AD2d 832, 833). The court properly denied defendants' motion insofar as it is based on a [*2]preexisting condition. Because the reports of defendants' examining physician, submitted by defendants, raise the possibility that the accident aggravated a prior medical condition (see Evans v Mendola, 32 AD3d 1231; Matter of Olmstead v Royal Ins. Co., 130 AD2d 852), they create questions of fact rather than eliminate them (see Aleksiejuk v Pell, 300 AD2d 1066, 1067).

We conclude, however, that defendants met their initial burden with respect to the significant limitation of use category of serious injury, but plaintiffs' submissions, which included objective medical evidence, raised a question of fact (see Toure v Avis Rent A Car Sys., 98 NY2d 345, 350). Defendants failed to meet their initial burden with respect to the 90/180 category of serious injury (see Rienzo v La Greco, 11 AD3d 1038, 1039; Zeigler v Ramadhan, 5 AD3d 1080, 1081). Finally, we conclude that the court did not abuse its discretion in granting plaintiffs leave to amend their bill of particulars (see Blake v Wieczorek, 305 AD2d 989, 990).

Ellithorpe v. Marion

Appeal from an order of the Supreme Court, Onondaga County (William R. Roy, J.), entered November 16, 2005 in a personal injury action. The order granted defendants' motion for leave to renew and, upon renewal, adhered to the court's prior determination.

JAMES F. GAUL, SYRACUSE, FOR DEFENDANTS-APPELLANTS.
NOTTINGHAM, ENGEL & KERR, LLP, SYRACUSE (RICHARD L. ENGEL OF COUNSEL), FOR PLAINTIFF-RESPONDENT.

It is hereby ORDERED that the order so appealed from be and the same hereby is unanimously modified on the law by providing that plaintiff's motion is granted with respect to the permanent consequential limitation of use of a body organ or member, significant limitation of use of a body function or system, and 90/180 categories of serious injury within the meaning of Insurance Law § 5102 (d) and with respect to causation of those injuries and by providing that a trial shall be held on damages only and as modified the order is affirmed without costs.

Memorandum: Plaintiff commenced the instant action seeking damages for injuries he allegedly sustained in a motor vehicle accident wherein his vehicle collided with a vehicle driven by John A. Marion (defendant) and owned by defendant's wife, defendant Cecilia M. Marion. Plaintiff's complaint, as amplified by the bill of particulars, alleges that plaintiff sustained a serious injury under the permanent loss of use, permanent consequential limitation of use, significant limitation of use, and 90/180 categories of serious injury. Supreme Court granted plaintiff's motion seeking summary judgment on liability insofar as it determined "that liability for the accident is solely upon the defendants" and, without specifying the statutory category, that plaintiff "sustained a serious injury in the accident." The court nevertheless ordered that a trial be held to determine not only damages but also "the proximate cause of plaintiff's injuries . . . ." Defendants contend that the court erred in determining that plaintiff sustained a serious injury within the meaning of Insurance Law § 5102 (d) as a result of the accident.

We conclude that plaintiff failed to establish that he had a total loss of a body function, and therefore that he failed to establish his entitlement to judgment with respect to the permanent loss of use category (see Oberly v Bangs Ambulance, 96 NY2d 295, 299). We further conclude, however, that plaintiff established his entitlement to judgment with respect to the remaining three categories of serious injury and that defendants failed to raise an issue of fact sufficient to defeat the motion. Indeed, we note that defendants' examining physician concurred with the findings of plaintiff's treating neurosurgeon that plaintiff's injuries are causally related to the accident and that surgical intervention is appropriate. We therefore modify the order accordingly.

With respect to the permanent consequential limitation of use and significant limitation of use categories, plaintiff's deposition testimony establishes that, despite a history of weightlifting and a prior work-related accident, plaintiff did not have back pain prior to the accident. He testified that, although he eventually returned to work as a personal trainer after the accident, he was unable to perform necessary duties, and was therefore terminated from his employment. The affidavit of plaintiff's treating neurosurgeon, which is supported by various reports he made to other physicians treating plaintiff, various MRI reports, and postoperative reports from discography and intradiscal electrothermal therapy (IDET), establishes that the 26-year-old plaintiff sustained a herniated disc at L4-5 with an annular tear to the posterior annulus and a bulging disc at L5-S1 with a posterior tear. Although we recognize that proof of a herniated disc is not alone sufficient to establish a serious injury (see Pommells v Perez, 4 NY3d 566, 574), here postoperative reports confirmed the discogenic pain at L4-5 and L5-S1, and the failure of the IDET to relieve the discogenic pain. In his affidavit, plaintiff's treating neurosurgeon states that plaintiff is unable to work as a result of his injuries and that the injuries are causally related to the motor vehicle accident and are not attributable to plaintiff's past medical history (cf. Franchini v Palmieri, 1 NY3d 536). Plaintiff's treating neurosurgeon recommends surgical intervention to replace the discs at L4-5 and L5-S1 with artificial discs, a procedure recently approved by the FDA.

In addition to the report of defendants' examining physician that concurred with findings made by plaintiff's treating neurosurgeon (see generally Zeigler v Ramadhan, 5 AD3d 1080, 1081), defendants also submitted the report of their subsequent examining physician wherein he stated that he could not determine whether the condition of plaintiff was "just as likely . . . due to his confounding variables as it is due to the motor vehicle accident . . . ." Contrary to the contention of defendants, the report of their subsequent examining physician is equivocal, and therefore insufficient to raise an issue of fact with respect to whether plaintiff sustained a serious injury as a result of the accident (cf. Carrasco v Mendez, 4 NY3d 566, 579; see generally Brown v Dunlop, 4 NY3d 566, 577-578).

With respect to the 90/180 category, plaintiff met his initial burden on the motion by providing objective evidence of a medically determined injury and establishing that his injuries prevented him from performing substantially all of the material acts that constituted his usual and customary daily activities for at least 90 of the 180 days immediately following the accident (cf. Nitti v Clerrico, 98 NY2d 345, 357; see generally Leahey v Fitzgerald, 1 AD3d 924, 926), and defendants failed to raise an issue of fact sufficient to defeat the motion.
Entered: November 17, 2006

Figueroa v. Castillo

Mitchell Dranow, Mineola, for appellant.
Abrams, Gorelick, Friedman & Jacobson, New York (John O.
Fronce of counsel), for Jose Castillo, respondent.
Picciano & Scahill, P.C., Westbury (Robin Mary Heaney of
counsel), for Milagros Torres, respondent.

Order, Supreme Court, Bronx County (Nelson S. Roman, J.), entered December 22, 2005, which granted defendants' motions for summary judgment dismissing the complaint, unanimously affirmed, without costs.

Defendants' submissions included excerpts from plaintiff's deposition, as well as medical reports by plaintiff's doctors, and described another automobile accident one month before the subject accident, wherein she sustained similar knee and back injuries, and a fall on the same knee subsequent to the latest accident. These established additional contributing factors, interrupting the chain of causation between the subject accident and claimed injury, thereby shifting the burden of proof to plaintiff (Pommells v Perez, 4 NY3d 566, 572 [2005]; Franchini v Palmieri, 1 NY3d 536 [2003]). Plaintiff's experts failed to address how her current medical problems were causally related to the subject accident, in light of her past medical history (see Style v Joseph, 32 AD3d 212, 214 [2006]; Carter v Full Serv., Inc., 29 AD3d 342 [2006], lv denied 7 NY3d 709 [2006]; Montgomery v Pena, 19 AD3d 288 [2005]). Furthermore, the reports of defendants' experts sufficed to establish that plaintiff had not suffered a serious injury within the meaning of Insurance Law § 5102(d), and plaintiff's submissions failed to raise an [*2]issue of fact in that regard (see Perez v Rodriguez, 25 AD3d 506 [2006]; Suarez v Abe, 4 AD3d 288 [2003]).

Frizzell v. Giannetti

Appeal from an order of the Supreme Court, Jefferson County (Hugh A. Gilbert, J.), entered September 13, 2005 in a personal injury action. The order granted defendants' motions for summary judgment dismissing the complaint and denied plaintiffs' cross motion.

STANLEY LAW OFFICES, SYRACUSE (BRIANNE M. CARBONARO OF COUNSEL), FOR PLAINTIFFS-APPELLANTS.
MACKENZIE HUGHES LLP, SYRACUSE (MARK R. SCHLEGEL OF COUNSEL), FOR DEFENDANT-RESPONDENT GEORGE T. GIANNETTI.
SUGARMAN LAW FIRM, LLP, SYRACUSE (SANDRA L. HOLIHAN OF COUNSEL), FOR DEFENDANT-RESPONDENT CORINNE M. MULLIGAN.

It is hereby ORDERED that the order so appealed from be and the same hereby is unanimously modified on the law by denying the motions in part and reinstating the complaint with respect to the permanent consequential limitation of use of a body organ or member and significant limitation of use of a body function or system categories of serious injury within the meaning of Insurance Law § 5102 (d) and reinstating the derivative cause of action and granting that part of the cross motion with respect to the issue of negligence against defendant George T. Giannetti and as modified the order is affirmed without costs.

Memorandum: Plaintiffs commenced this action seeking damages for injuries sustained by Debra A. Frizzell (plaintiff) in a motor vehicle accident. According to plaintiffs, a vehicle driven by defendant Corinne M. Mulligan rear-ended plaintiff's vehicle, which was stopped at a red light. Plaintiffs alleged that a vehicle driven by defendant George T. Giannetti then rear-ended Mulligan's vehicle, which in turn again rear-ended plaintiff's vehicle.

Supreme Court erred in granting those parts of defendants' motions for summary judgment dismissing the complaint with respect to two of the three categories of serious injury allegedly sustained by plaintiff, i.e., a permanent consequential limitation of use and a significant limitation of use (see Insurance Law § 5102 [d]), and we therefore modify the order accordingly. Mulligan met her initial burden with respect to those two categories of serious injury by submitting the report of defendants' examining physician, who stated that plaintiff sustained "causally related cervical and lumbar strains . . . that would have been healed within the first six weeks after the motor vehicle accident." The physician further stated that "[a]ll of the imaging [*2]studies showed only degenerative changes" that were not related to the accident and that plaintiff's nerve compression disorders shown by the nerve conduction tests and the EMG study were not related to the accident. The medical records submitted by Giannetti in support of his motion and by plaintiffs in opposition to defendants' motions raised a triable issue of fact with respect to those two categories of serious injury. The physician who treated plaintiff for her back and neck injuries diagnosed plaintiff with fibromyalgia and documented plaintiff's decreased reflexes, positive straight leg tests, and a positive Flip test (see Pagels v P.V.S. Chems., 266 AD2d 819). Moreover, an EMG study showed objective findings of injuries to plaintiff's arms. The physician who treated plaintiff for her back and neck injuries documented plaintiff's limited range of motion and noted that plaintiff's condition would not "improve very much," and the physician who treated plaintiff for her arm injuries provided a qualitative assessment of plaintiff's condition (see Toure v Avis Rent A Car Sys., 98 NY2d 345, 353). In addition, plaintiff's treating physicians opined that plaintiff's injuries were causally related to the accident.

The court properly granted the motions insofar as plaintiffs alleged that plaintiff sustained a serious injury under the 90/180 category of serious injury. Defendants met their initial burden with respect to that category, and plaintiffs failed to raise a triable issue of fact (see Parkhill v Cleary, 305 AD2d 1088, 1090).

We agree with plaintiffs that the court erred in denying that part of their cross motion for summary judgment against Giannetti on the issue of negligence, and we therefore further modify the order accordingly. Plaintiffs made a prima facie showing of negligence on his part, and he failed to submit a nonnegligent explanation for the collision (see Ruzycki v Baker, 301 AD2d 48, 49-50). The court, however, properly denied that part of the cross motion for summary judgment against Mulligan on the issue of negligence. In support of the cross motion, plaintiffs submitted the deposition testimony of both plaintiff and Giannetti in which they testified that Mulligan rear-ended plaintiff's vehicle and that, after the initial collision, Giannetti struck Mulligan's vehicle, causing Mulligan's vehicle to rear-end plaintiff's vehicle a second time. However, plaintiffs also submitted the deposition testimony of Mulligan in which she testified that she applied her brakes as she approached the intersection and that, when her vehicle was a few feet from plaintiff's vehicle, her vehicle was rear-ended, causing her vehicle to strike plaintiff's vehicle only once. Plaintiffs' submissions thus raised a triable issue of fact whether Mulligan was negligent (see generally Negros v Brown, 15 AD3d 994; Piazza v D'Anna, 6 AD3d 1161).

HealthNow NY, Inc. as Subrogree, et al v. White and Progressive Insurance Company AS SUBROGEE OF HAROLD G. WEBB, PLAINTIFF-RESPONDENT

Appeal from an order of the Supreme Court, Erie County (Donna M. Siwek, J.), entered October 14, 2005. The order denied the cross motion of Progressive Insurance Company seeking an order quashing a judicial subpoena duces tecum.

LAW OFFICES OF DANIEL GUARASCI, DEPEW (PHYLISS A. HAFNER OF COUNSEL), FOR APPELLANT.
WEBSTER SZANYI LLP, BUFFALO (JACOB J. HERSTEK OF COUNSEL), FOR PLAINTIFF-RESPONDENT.

It is hereby ORDERED that the order so appealed from be and the same hereby is unanimously modified on the law by vacating the first ordering paragraph and the direction that Progressive Insurance Company produce that portion of its liability/bodily injury file not previously reviewed in camera and as modified the order is affirmed without costs, and the matter is remitted to Supreme Court, Erie County, for further proceedings in accordance with the followingMemorandum: Progressive Insurance Company (Progressive), a nonparty, appeals from an order denying its cross motion seeking an order quashing the judicial subpoena duces tecum served upon it by plaintiff and directing Progressive to produce its "entire liability/bodily injury file relative to" the underlying personal injury action commenced by plaintiff's subrogor, Harold G. Webb, against, inter alia, defendant Maureen Eckrote, Progressive's insured. The personal injury action was settled, plaintiff commenced the instant action seeking to recover medical expenses it paid on behalf of Webb, and Eckrote raised the settlement as a defense. It is undisputed that Progressive previously submitted a portion of its file relative to the underlying action for in camera review by Supreme Court. We conclude that the court erred in denying the cross motion in its entirety and directing Progressive to produce its "entire liability/bodily injury file relative to" the underlying action without reviewing in camera those documents not previously submitted by Progressive to determine whether they are relevant to plaintiff's subrogation action (see generally Spectrum Sys. Intl. Corp. v Chemical Bank, 78 NY2d 371, 378; Geary v Hunton & Williams, 245 AD2d 936, 939). We further conclude, however, that the court properly directed Progressive to produce that portion of the file previously reviewed in camera. We therefore modify the order accordingly, and we remit the matter to Supreme Court for in camera review of the remainder of the file to determine if any of the documents therein are subject to disclosure.

Henry v. Rivera

Order, Supreme Court, Bronx County (Betty Owen Stinson, J.), entered November 18, 2005, which granted defendants' motion and cross motion for summary judgment dismissing the complaint, unanimously affirmed, without costs.

Defendants satisfied their initial burden by establishing, prima facie, that none of the plaintiffs sustained "serious injury" within the definition of Insurance Law § 5102(d), and plaintiffs failed to meet their consequent burden to show, through the submission of admissible medical evidence, the existence of a triable question of fact. Plaintiffs all suffered from preexisting degenerative conditions; one of the plaintiffs suffered from diabetic neuropathy. None of the plaintiffs, however, adduced medical evidence adequately linking their purportedly disabling conditions to the subject automobile accident (see Pommells v Perez, 4 NY3d 566, 579-580 [2005]; Franchini v Palmieri, 1 NY3d 536, 537 [2003]). Moreover, plaintiffs never accounted for the total cessation of their treatment for the alleged serious injuries some four or five months after the accident (see Pommells v Perez, 4 NY3d at 574; Agramonte v Marvin, 22 AD3d 322 [2005]). Even if it were accepted that the accident caused plaintiffs certain cervical, dorsal or lumbosacral spine injuries, there is no objective medical proof that they endured significant resultant physical limitations, and subjective complaints are insufficient to raise a triable issue (see Scheer v Koubek, 70 NY2d 678, 679 [1987]; Rivera v Benaroti, 29 AD3d 340, 342 [2006]).

Jedrysik v. Panorama Tours, Ltd.

Appeal from an order of the Supreme Court, Erie County (John P. Lane, J.), entered November 3, 2005. The order, among other things, granted in part plaintiff's motion for partial summary judgment.

It is hereby ORDERED that the order so appealed from be and the same hereby is unanimously modified on the law by denying that part of the motion with respect to the third affirmative defense and reinstating that affirmative defense and as modified the order is affirmed without costs.

Memorandum: Plaintiff commenced this action seeking damages for injuries she sustained when the stopped vehicle in which she was seated was rear-ended by a tour bus owned by defendant Panorama Tours, Ltd. and driven by defendant John A. Perakis. Plaintiff moved for partial summary judgment on the issue of liability and sought to strike the affirmative defenses, which alleged, inter alia, that the culpable conduct of plaintiff contributed to the accident. Defendants cross-moved for summary judgment dismissing the complaint on the ground that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102 (d). Supreme Court granted plaintiff's motion in part, granting the motion "on the issue of negligence only" and dismissing two of the three affirmative defenses, and the court denied defendants' cross motion.

We conclude that the court properly granted that part of plaintiff's motion with respect to the issue of defendants' negligence. "It is well established that when the driver of an automobile approaches another automobile from the rear, he or she is bound to maintain a reasonably safe rate of speed and control over his or her vehicle, and to exercise reasonable care to avoid colliding with the other vehicle" (Chepel v Meyers, 306 AD2d 235, 236). Here, the tour bus rear-ended the vehicle in which plaintiff was a passenger, which was stopped on the side of a three-lane highway. Thus, there is a rebuttable presumption that defendants were negligent, and the burden shifted to defendants to present a non-negligent explanation for the collision (see Sheffer v Critoph, 13 AD3d 1185, 1186; Ruzycki v Baker, 301 AD2d 48, 49; Pitchure v Kandefer Plumbing & Heating, 273 AD2d 790). Defendants failed to meet that burden. The record establishes that the accident occurred in broad daylight and that, although the nonparty driver of the stopped vehicle may have not activated the vehicle's flashers, there was nothing impeding the tour bus driver's view of the stopped vehicle. The record further establishes that the attention of the driver of the tour bus was diverted just prior to the collision, while he was answering the question of a passenger, and he attempted to swerve to the left but did so too late to avoid the collision.

Contrary to defendants' further contention, the court properly granted that part of plaintiff's motion seeking to strike the first affirmative defense, which alleged that "plaintiff's culpable conduct contributed to the happening of the incident/accident." As a passenger in the stopped vehicle, plaintiff was not in a position to influence the manner in which either the driver of the tour bus or the nonparty driver of the stopped vehicle operated their respective vehicles. We agree with defendants, however, that the court erred in granting that part of plaintiff's motion seeking to strike the third affirmative defense, alleging that the culpable conduct of the nonparty driver of the vehicle in which plaintiff was a passenger "is a separate and complete defense to maintaining this action," and we therefore modify the order accordingly. Defendants submitted evidence raising an issue of fact whether the stopped vehicle of the nonparty driver was in a lane of travel.

Finally, we reject the contention of defendants that the court erred in denying their cross motion. Although defendants met their initial burden with respect to the various categories of serious injury allegedly sustained by plaintiff, we conclude that plaintiff raised an issue of fact with respect to each category by submitting the affidavit of the chiropractor who treated her after the accident. The opinions of the treating chiropractor were supported by the requisite objective medical findings and diagnostic tests (see Chunn v Carman, 8 AD3d 745, 747; Owad v Mayone, 299 AD2d 795; Evans v Hahn, 255 AD2d 751; see generally Toure v Avis Rent A Car Sys., 98 NY2d 345, 350-351).
Entered: November 17, 2006

Rodriguez v. Herbert

Robert W. Abrams, New York, for appellant.
McCabe, Collins, McGeough & Fowler, LLP, Carle Place
(Steven Morgenlender of counsel), for respondents.

Order, Supreme Court, New York County (Milton A. Tingling, J.), entered August 24, 2005, which granted defendants' motion for summary judgment dismissing the complaint, unanimously affirmed, without costs.

Even though the time plaintiff spent under treatment by different physicians after his accident exceeds 90 days, he failed to establish, by competent medical evidence, that during this period he was prevented from performing substantially all of the material acts constituting his customary daily activities during at least 90 of the first 180 days following the accident
(Insurance Law § 5102[d]; see Thompson v Abbasi, 15 AD3d 95, 100-101 [2005]). Plaintiff's deposition testimony excerpts are insufficient to raise a triable issue of fact.

Walts v. Masullo-George and State Farm Mutual Insurance Company

Appeal from an order of the Supreme Court, Onondaga County (William R. Roy, J.), entered May 26, 2005. The order, insofar as appealed from, denied that part of the motion of defendant State Farm Mutual Automobile Insurance Company for summary judgment dismissing the complaint against it and granted plaintiff's cross motion for summary judgment against that defendant.

HARRIS BEACH PLLC, SYRACUSE (CHARLES D. STEINMAN OF COUNSEL), FOR DEFENDANT-APPELLANT.
MICHAEL J. MC DERMOTT, CICERO, FOR PLAINTIFF-RESPONDENT.

It is hereby ORDERED that the order so appealed from be and the same hereby is unanimously affirmed with costs.

Memorandum: Plaintiff commenced this action seeking, inter alia, supplementary uninsured motorist (SUM) benefits under a policy of insurance issued by defendant State Farm Mutual Automobile Insurance Company (State Farm) to plaintiff's parents. State Farm denied plaintiff's claim for SUM benefits based on an exclusion in the policy providing that SUM coverage does not apply "to bodily injury to an insured incurred while occupying a motor vehicle owned by that insured, if such motor vehicle is not insured for SUM coverage . . . ." Supreme Court properly denied that part of the motion of State Farm seeking summary judgment dismissing the complaint against it on the issue of SUM coverage, and granted plaintiff's cross motion for summary judgment against State Farm on the issue of SUM coverage. State Farm contends that there is a triable issue of fact whether plaintiff owned the uninsured dirt bike that he was riding when he was injured, and thus whether the exclusion applies. In support of his cross motion, however, plaintiff submitted evidence that he was not the owner of the dirt bike he was riding, and State Farm failed to submit evidentiary proof in admissible form sufficient to raise a triable issue of fact (see generally Zuckerman v City of New York, 49 NY2d 557, 562).

Ward v. County of Allegany

Appeal from a judgment (denominated order) of the Supreme Court, Allegany County (Larry M. Himelein, A.J.), entered February 7, 2006. The judgment granted defendant's motion for summary judgment and denied plaintiff's cross motion for summary judgment.

DWYER, BLACK & LYLE, LLP, OLEAN (JEFFREY A. BLACK OF COUNSEL), FOR PLAINTIFF-APPELLANT.
COLUCCI & GALLAHER, P.C., BUFFALO (TODD C. BUSHWAY OF COUNSEL), FOR DEFENDANT-RESPONDENT. It is hereby ORDERED that the judgment so appealed from be and the same hereby is unanimously modified on the law by vacating the provision dismissing the complaint and granting judgment in favor of defendant as follows: It is ADJUDGED and DECLARED that defendant is not liable to pay supplementary underinsured motorist benefits to plaintiff

and as modified the judgment is affirmed without costs.

Memorandum: Plaintiff commenced this action on behalf of the estate of decedent, who was killed accidentally in the line of duty as a deputy sheriff employed by defendant when another motorist ran a stop sign and rammed decedent's patrol car. By the first cause of action, plaintiff seeks a judgment declaring that defendant is liable to pay supplementary underinsured motorist (SUM) benefits to plaintiff as a result of the fatal accident on the ground that the $250,000 "Self-Insured Retention" (SIR) of defendant provides SUM coverage. Alternatively, in the event that the SIR does not provide SUM coverage, by her second cause of action plaintiff seeks a judgment declaring that defendant is nonetheless liable to pay the subject SUM benefits because it has waived its right to deny the existence of SUM coverage.

Supreme Court properly granted defendant's motion for summary judgment on the issues before it and denied plaintiff's cross motion for summary judgment on the complaint. Nevertheless, because this is a declaratory judgment action, the court erred in dismissing the complaint and in failing to declare the rights of the parties (see Maurizzio v Lumbermens Mut. Cas. Co., 73 NY2d 951, 954), and we modify the judgment accordingly (see Haines v New York Mut. Underwriters, 30 AD3d 1030).

The documentary evidence establishes as a matter of law that defendant did not procure SUM coverage from New York Municipal Insurance Reciprocal (NYMIR) that is applicable to decedent's accident. In contending otherwise, plaintiff cites the declaration page and endorsements comprising the main, or general liability, portion of the policy issued by NYMIR. However, it is inappropriate for plaintiff to rely on that part of the policy because it excludes coverage for or on behalf of employees of defendant, such as decedent, who have been injured or killed on the job. The issue of underinsurance coverage hinges on the declarations and endorsements of the portion of the NYMIR policy that is denominated "Municipal Automobile Policy." Those declarations make clear that no SUM endorsement is part of the automobile insurance coverage and that defendant did not in fact procure such coverage from NYMIR. Because plaintiff's contention that SUM coverage is provided under defendant's SIR is based on the existence of such coverage under the policy issued by NYMIR, and there is no SUM coverage under the NYMIR policy, we conclude that there is no SUM coverage under the SIR.

The court further properly concluded that defendant has not waived its right to deny the existence of SUM coverage. The County Attorney's ill-advised admission concerning the existence of such coverage cannot be regarded as the intentional relinquishment of a known right of defendant (see Albert J. Schiff Assoc. v Flack, 51 NY2d 692, 698). Moreover, where "there is no coverage under the policy, the doctrines of waiver and estoppel may not operate to create such coverage," and "[w]here the issue is the existence or nonexistence of coverage . . . , the doctrine of waiver is simply inapplicable" (Charlestowne Floors, Inc. v Fidelity & Guar. Ins. Underwriters, Inc., 16 AD3d 1026, 1027 [internal quotation marks omitted]; see Albert J. Schiff Assoc., 51 NY2d at 698; Neil Plumbing & Heating Constr. Corp. v Providence Washington Ins. Co., 125 AD2d 295, 297).
Entered: November 17, 2006

Wheeler v. Laechner

Appeal from an order of the Supreme Court, Monroe County (Thomas A. Stander, J.), entered November 1, 2005 in a personal injury action. The order granted defendants' motion for summary judgment dismissing the complaint and denied plaintiff's cross motion for partial summary judgment on the issue of liability.

LACY KATZEN LLP, ROCHESTER (DUSTY R. TINSLEY OF COUNSEL), FOR PLAINTIFF-APPELLANT.
KENNEY SHELTON LIPTAK NOWAK LLP, BUFFALO (CHRISTOPHER A. JOHNSON OF COUNSEL), FOR DEFENDANTS-RESPONDENTS.

It is hereby ORDERED that the order so appealed from be and the same hereby is unanimously modified on the law by denying the motion in part and reinstating the complaint, as amplified by the bill of particulars, with respect to the fracture category of serious injury within the meaning of Insurance Law § 5102 (d) and as modified the order is affirmed with costs to plaintiff.

Memorandum: Plaintiff commenced this action to recover damages for injuries she sustained in a motor vehicle accident and now appeals from an order that, inter alia, granted defendants' motion 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). Plaintiff contends on appeal that she sustained a serious injury within the meaning of two categories, i.e., the 90/180 and fracture categories set forth in section 5102 (d). We conclude that Supreme Court properly granted that part of defendants' motion with respect to the 90/180 category. Defendants made a prima facie showing of their entitlement to judgment with respect to that category, and plaintiff failed to submit the requisite "objective medical evidence to establish a qualifying injury or impairment" during the period at issue (Nitti v Clerrico, 98 NY2d 345, 357; see Constantine v Serafin, 16 AD3d 1145, 1145-1146). We agree with plaintiff, however, that the court erred in granting that part of defendants' motion with respect to the fracture category, and we therefore modify the order accordingly. Although defendants met their initial burden by establishing that plaintiff did not sustain a fracture, plaintiff raised a triable issue of fact by submitting the affirmed report of defendants' examining physician stating that, in his opinion, x-rays taken of plaintiff on the day of the accident demonstrated that she sustained "a probable minor fracture at her left pubic symphysis as a result of the . . . motor vehicle accident" (see Elston v Canty, 15 AD3d 990; see generally Matott v Ward, 48 NY2d 455, 459-463).

Harvey v. Metropolitan Life Insurance Company

McCarter & English, LLP, New York (Andrew O. Bunn of
counsel), for appellant.
Rose & Rose, P.C., Washington, DC (Joshua N. Rose, of the
District of Columbia Bar, admitted pro hac vice, of counsel), for
respondent.

Order, Supreme Court, New York County (Herman Cahn, J.), entered April 20, 2005, which, to the extent appealed from, denied defendant's motion to dismiss plaintiff's cause of action based on General Business Law § 349, and order, same court and Justice, entered on or about December 19, 2005, which, to the extent appealed from, denied defendant's motion to dismiss the amended complaint, unanimously affirmed, without costs.

Defendant contends the lawsuit is untimely because plaintiff's youngest child turned 25 in 1999, four years prior to commencement of this suit. However, plaintiff claims to have continued to pay premiums for this Child Rider into 2003, by which time the rider was no longer providing coverage for his children. What is alleged is a "continuing wrong," which — for purposes of our statute of limitations (CPLR 203) — is "deemed to have accrued on the date of the last wrongful act" (Leonhard v United States, 633 F2d 599, 613 [2d Cir 1980], cert denied [*2]451 US 908 [1981]). Accordingly, the commencement of this action in 2004 was timely. We have considered defendant's other contentions and find them without merit.

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

ENTERED: NOVEMBER 28, 2006

HealthNow NY, Inc v. White

Bartholomew v. Sterling Insurance Company

Calendar Date: October 16, 2006
Before: Cardona, P.J., Mercure, Spain, Carpinello and Mugglin, JJ.

Russell A. Schindler, Kingston, for appellants.
Allen, Johnson & Lonergan, L.L.P., Albany (Thomas
J. Johnson of counsel), for respondent.

MEMORANDUM AND ORDER

Mercure, J.

Appeal from an order of the Supreme Court (Kavanagh, J.), entered July 29, 2005 in Ulster County, which, inter alia, granted defendants' motion to dismiss the complaint.

After their home was damaged in a 2004 fire, plaintiffs submitted a claim to defendant Sterling Insurance Company (hereinafter defendant), which had issued them a homeowners' insurance policy. Defendant engaged defendant Richard F. Winne to act as an independent insurance adjuster to investigate the claim. Winne calculated the estimated cost of repair and replacement, which defendant paid in part. Defendant retained $5,516, or approximately 20% of the full cost, until repairs were complete. When plaintiffs thereafter submitted a supplemental claim for the retained moneys, they failed to provide defendant with requested receipts or other proof of the actual repair or replacement cost due to the fact that they had performed some of the repairs themselves. Citing the absence of documentation, defendant denied the claim. Plaintiffs then commenced this action against defendant and Winne, alleging breach of contract and equitable estoppel. Supreme Court granted defendants' motion to dismiss the complaint and plaintiffs now appeal.

We affirm. "[O]n a motion to dismiss for failure to state a claim, the court 'must afford [*2]the complaint a liberal construction, accept as true the allegations contained therein, accord the plaintiff the benefit of every favorable inference and determine only whether the facts alleged fit within any cognizable legal theory'" (Skibinsky v State Farm Fire & Cas. Co., 6 AD3d 975, 976 [2004], quoting 1455 Washington Ave. Assoc. v Rose & Kiernan, 260 AD2d 770, 771 [1999]). In connection with their breach of contract claim herein, plaintiffs assert that the policy was ambiguous because the "Replacement Cost Provision" of the policy provided that defendant would "pay the full cost of repair or replacement of the damaged part without deduction for depreciation" (emphasis added) but the "Statement as to Full Cost" provided by defendant after the fire labeled the amount withheld as both "applicable depreciation" and a "supplemental claim." Plaintiffs argue that this ambiguity led them to believe that they would be entitled to automatic recovery of the remaining 20% of the estimated cost that defendant withheld once the repairs were complete. Contrary to plaintiffs' argument, however, defendant did not refuse to pay the supplemental claim on the ground that the withheld funds represented depreciation. Rather, defendant initially reimbursed plaintiffs for the actual cash value of the damage which plaintiffs accepted as 80% of the estimated cost of repair provided by Winne and refused to pay the supplemental claim because plaintiff failed to provide documentation regarding the actual cost of the repair.

In that regard, the Replacement Cost Provision states that defendant will pay the smallest of three amounts: (1) the policy limit, (2) "the cost . . . to repair or replace the damage on the same premises using materials of equivalent kind and quality," or (3) "the amount . . . actually and necessarily spent to replace or repair the damage." We note that "[r]eplacement cost coverage inherently requires a replacement (a substitute structure for the insured) and [documented] costs (expenses incurred by the insured in obtaining the replacement); without them, the replacement cost provision becomes a mere wager" (Harrington v Amica Mut. Ins. Co., 223 AD2d 222, 228 [1996], lv denied 89 NY2d 808 [1997]). Inasmuch as plaintiffs agreed in the policy to receipt of the lowest of three figures, it necessarily follows that they agreed to permit defendant to calculate which of the three figures it was obligated to pay. Indeed, consistent with that agreement, the policy also contains a section entitled "Additional Duties-Property Coverages" providing that "[a]t [defendant's] request, the insured (and mortgagee, when applicable) must also . . . produce records, including tax returns and bank microfilms of all canceled checks, relating to value, loss and expenses and permit copies and extracts to be made of them as often as [defendant] reasonably request[s]." Given that plaintiffs did not document the cost of repair or comply with defendant's reasonable request for that documentation, we agree with Supreme Court that they failed to state a cause of action for breach of contract arising out of defendant's refusal to pay their supplemental claim.

Plaintiffs further allege that defendant should be equitably estopped from withholding the additional unpaid amount due to Winne's statements to them that defendant's retention of 20% of the cost estimate was customary and that they would receive the remaining 20% when the repair work was complete. Plaintiffs contend that as a result of Winne's statements, they concluded that they were not required to keep detailed records of the time and money spent on repair. Plaintiffs do not deny, however, that they signed statements informing them that their supplemental claim was to be filed in accordance with the policy and that they had access to the policy provisions discussed above that set forth the method in which replacement cost was to be calculated and that they would be required to submit receipts at defendant's request. Accordingly, even presuming that Winne's statements amounted to a false representation and that plaintiffs could demonstrate reliance upon those statements, plaintiffs cannot make the requisite showing that they lacked "knowledge and . . . the means of knowledge of the truth as to the facts in question" (Brelsford v USAA, 289 AD2d 847, 849 [2001] [citations and internal quotation marks omitted]), and their claim was properly dismissed.

Cardona, P.J., Spain, Carpinello and Mugglin, JJ., concur.

ORDERED that the order is affirmed, with costs.

Cruz v. Williams

Schoen & Strassman, LLP, Huntington, N.Y. (Evan J. Polansky of
counsel), for appellants.
Curtis, Vasile, Devine & McElhenny, Merrick, N.Y. (Michael
J. Dorry of counsel), for respondents.
Callahan & Malone, Mineola, N.Y. (Thomas F. Callahan of
counsel), for Sandra Ramos, on the
counterclaim.

DECISION & ORDER

In an action to recover damages for personal injuries, etc., the plaintiffs appeal, as limited by their brief, from so much of an order of the Supreme Court, Suffolk County (Cohalan, J.), dated May 27, 2005, as granted the defendants' motion for summary judgment dismissing the complaint on the ground that neither plaintiff sustained a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and the motion for summary judgment dismissing the complaint is denied.

In support of their motion for summary judgment dismissing the complaint, the defendants failed to satisfy their prima facie burden of showing that neither plaintiff sustained a serious injury within the meaning of Insurance Law § 5102(d) (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955). The affirmed medical reports of the defendants' examining neurologist concerning both plaintiffs established that there were limitations in range of motion of the lumbar spine of the plaintiff Shante Cruz and limitations in the range of motion of the cervical spine of the plaintiff Sandra Ramos, which were not adequately quantified or qualified so as to establish that these limitations were insignificant (see Kaminsky v Waldner, 19 AD3d 370). Since the defendants failed to satisfy their prima facie burden, it is unnecessary for this court to consider whether the papers submitted in opposition to the motion raised a triable issue of fact (see Coscia v 938 Trading Corp., 283 AD2d 538).
ADAMS, J.P., KRAUSMAN, RIVERA and LIFSON, JJ., concur.

ENTER:

James Edward Pelzer

The Doe Fund, Inc. v. Royal Indemnity Company

Calabrese & Calabrese, LLP, White Plains (Salvatore J.
Calabrese of counsel), for appellants.
Cameron Deacon LLP, New York (Lawrence W. Rose of
counsel), for respondent.

Order, Supreme Court, New York County (Herman Cahn, J.), entered March 6, 2006, which denied plaintiffs' motion for summary judgment and granted defendant Royal Indemnity's cross motion for summary judgment, unanimously affirmed, with costs.

In this declaratory judgment action, plaintiffs sought to test the validity of Royal Indemnity's disclaimer of coverage based on late notice of claim. The alleged "occurrence" took place in 2003 when a trainee of plaintiff Doe Fund, operating an electric power utility vehicle, struck defendant Greenberg, the plaintiff in the underlying personal injury action. Greenberg was taken to a hospital by ambulance. Even though Doe Fund's chief financial officer was aware of these facts, and the complaint report by defendant Hudson River Parks Trust indicated serious injuries, the insurer was not notified until some eight months after the incident, and three months after plaintiffs herein were served with a summons and complaint.

It is well settled that when an insurance policy requires notice of an occurrence or action be given promptly, that means within a reasonable time in view of all of the facts and circumstances. Courts have found even relatively short periods of unexcused delay in giving notice to be unreasonable as a matter of law (see Deso v London & Lancashire Indem. Co. of Am., 3 NY2d 127 [1957] [51 days]; US Pack Network Corp. v Travelers Prop. Cas., 23 AD3d 299 [2005] [6 months]; Heydt Contr. Corp. v American Home Assur. Co., 146 AD2d 497 [1989], lv dismissed 74 NY2d 651 [1989] [131 days]).

The requirement of timely notice to the insurer is a condition precedent to coverage (Paramount Ins. Co. v Rosedale Gardens, 293 AD2d 235, 239 [2002]). Without a valid excuse, failure to satisfy this requirement vitiates the policy (Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp., 31 NY2d 436, 440 [1972]).

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

ENTERED: NOVEMBER 30, 2006

In the Matter of New York Central Mutual Fire Insurance Company v. Gonzalez

DECISION & ORDER

In a proceeding, inter alia, to permanently stay arbitration of an uninsured motorist claim, the appeal is from an order of the Supreme Court, Suffolk County (Whelan, J.), dated April 18, 2005, which granted that branch of the petition which was to permanently stay the arbitration.

ORDERED that the order is affirmed, without costs or disbursements.

The appellants' failure to complete and return a sworn "Notice of Intention to Make Claim" form, which their insurer promptly provided to the appellants' attorney on September 9, 2004, after receiving the attorney's letter dated September 2, 2004, constituted a breach of a condition of coverage under the policy's Supplementary Uninsured/Underinsured Motorists endorsement, providing a basis for disclaimer or denial of coverage (see New York Central Mutual Fire Ins. Co. v Aguirre, 7 NY3d 772). The insurer's commencement of the instant proceeding on October 5, 2004, following receipt of the appellants' notice of intention to arbitrate on September 16, 2004, constituted timely, sufficient denial of coverage and disclaimer "as soon as reasonably possible" (Insurance Law § 3420[d]; see Matter of American Cas. Ins. Co. v Silverman, 271 AD2d 528; cf. New York Central Mutual Fire Ins. Co. v Aguirre, supra), which was 26 days after the "Notice of Intention to Make Claim" form was mailed to the appellants' attorney.

Accordingly, the Supreme Court properly granted that branch of the petition which was to permanently stay the uninsured motorist arbitration.

The appellants' remaining contentions are without merit.

McCrary v. Street

Siben & Ferber, Hauppauge, N.Y. (Kenneth Ording of counsel), for
appellants.
Brand Glick & Brand, P.C., Garden City, N.Y. (Kenneth M.
Finkelstein of counsel), for
respondents.

DECISION & ORDER

In an action to recover damages for personal injuries, etc., the plaintiffs appeal from so much of an order of the Supreme Court, Suffolk County (Whelan, J.), dated May 27, 2005, as granted that branch of the defendants' motion which was for summary dismissing the complaint on the ground that the plaintiff Christopher McCrary did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and that branch of the defendants' motion which was for summary judgment dismissing the complaint is denied.

The defendants failed to make a prima facie showing that the injured plaintiff, Christopher McCrary, did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955). The affirmed medical report of the defendants' examining neurologist noted that there was a limitation in the range of motion of the injured plaintiff's neck "on turning," but did not sufficiently quantify the limitation to establish that it was insignificant (see Whittaker v Webster Trucking Corp., AD3d [2d Dept, Oct. 3, 2006]; Connors v Flaherty, AD3d [2d Dept, Sept. 19, 2006]; Cassandra v Dumond, 31 AD3d 476; Kaminsky v Waldner, 19 AD3d 370). Furthermore, the examining neurologist merely stated that the range of motion of the injured plaintiff's neck was otherwise "full in all planes," without setting forth the objective test or tests performed to support this conclusion (see Whittaker v Webster Trucking Corp., supra; Murdakhayeva v Blackstone Limo, AD3d [2d Dept, Sept. 26, 2006]; Russo v Ross, 32 AD3d 386; Ilardo v New York City Tr. Auth., 28 AD3d 610). Since the defendants failed to satisfy their prima facie burden, it is unnecessary to consider whether the papers submitted by the plaintiffs in opposition were sufficient to raise a triable issue of fact (see Whittaker v Webster Trucking Corp., supra; Connors v Flaherty, supra; Cassandra v Dumond, supra; Coscia v 938 Trading Corp., 283 AD2d 538).
ADAMS, J.P., KRAUSMAN, RIVERA and LIFSON, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Court

Montefiore Medical Center v. Government Employees Insurance Company

Teresa M. Spina, Woodbury, N.Y. (Jeanne M. Ortega and P.
Stephanie Estevez of counsel), for appellant.
Joseph Henig, P.C., Bellmore, N.Y., for respondent.

DECISION & ORDER

In an action to recover no-fault medical payments under an insurance contract, the defendant appeals from an order of the Supreme Court, Nassau County (Bucaria, J.), dated September 15, 2005, which granted the plaintiff's motion for summary judgment.

ORDERED that the order is reversed, on the law, with costs, and the plaintiff's motion for summary judgment is denied.

Contrary to the Supreme Court's determination, the defendant's request for additional verification, which followed the plaintiff's submission of an N-F5 verification, did not have to be set forth in a prescribed form (see 11 NYCRR § 65-3.5[b]; Nyack Hosp. v Progressive Cas. Ins. Co., 296 AD2d 482, 483). Therefore, the additional verification request tolled the defendant's time within which to pay or deny the claim (see Insurance Law § 5106[a]; 11 NYCRR § 65-3.8 [a][1],[2]) until the defendant received all of the relevant information requested (see Nyack Hosp. v General Motors Acceptance Corp., 27 AD3d 96, 101; Hospital For Joint Diseases v State Farm Mut. Auto. Ins. Co., 8 AD3d 533, 536; St. Vincent's Hosp. of Richmond v American Tr. Ins. Co., 299 AD2d 338, 340; New York & Presbyt. Hosp. v American Tr. Ins. Co., 287 AD2d 699, 700). Since the defendant sent a partial payment and denial of benefits to the plaintiff after the requested material was provided and within the applicable time period, its response to the claim was not untimely.

Furthermore, the affidavit and documentary evidence submitted by the defendant in opposition to the plaintiff's motion for summary judgment were in admissible form, since the affiant adequately stated her basis of knowledge for the facts asserted in her affidavit and laid a proper foundation for the introduction of the documents. Moreover, those submissions established that other medical providers were properly paid before the plaintiff (see 11 NYCRR § 65-3.15; Nyack Hosp. v General Motors Acceptance Corp., supra at 103). However, a triable issue of fact exists as to whether the no-fault benefits under the subject policy were exhausted, since the affidavit of the defendant's employee indicates that they were, but the payment register maintained by the defendant in the regular course of business reveals a balance of no-fault benefits in excess of the amount billed by the plaintiff. Accordingly, determination of the issue of whether the policy limits were in fact exhausted before full payment could be made to the plaintiff must await further proceedings.

The plaintiff's remaining contentions are without merit.
ADAMS, J.P., RITTER, MASTRO and LIFSON, JJ., concur.

Museau v. New York City Transit Authority

DECISION & ORDER

In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Kings County (Partnow, J.), dated June 22, 2005, which granted the defendants' motion for summary judgment dismissing the complaint on the ground that he did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is reversed, on the law, with costs, and the motion for summary judgment dismissing the complaint is denied.

The defendants failed to establish their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent a Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955). The affirmed medical report of the defendants' examining orthopedic surgeon conceded the existence of limitations in motion of the plaintiff's lumbar spine (see Smith v Delcore, 29 AD3d 890; Sano v Gorelik, 24 AD3d 747; Spuhler v Khan, 14 AD3d 693, 694), and neither defense medical expert addressed his claim that as a result of the accident the plaintiff sustained a medically determined injury which prevented him from performing substantially all of the material acts which constituted his usual and customary daily activities for not less then 90 days during the 180 days immediately following the injury or impairment (see Ins. Law § 5102[d]; Volpetti v Yoon Kap, 28 AD3d 750, 751; Sayers v Hot, 23 AD3d 453, 454). Since the defendants failed to meet their initial burden of establishing a prima facie case, it is unnecessary to consider whether the plaintiff's papers submitted in opposition to the defendants' motion were sufficient to raise a triable issue of fact (see Coscia v 938 Trading Corp., 283 AD2d 538). Accordingly, the Supreme Court erred in granting the defendants' motion for summary judgment dismissing the complaint.
FLORIO, J.P., CRANE, SPOLZINO and COVELLO, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Court

Sixty Sutton Corp. v Illinois Union Insurance Co., et al.

Farber Brocks & Zane, L.L.P., Mineola (Audra S. Zane of
counsel), for appellant.
Ahmuty, Demers & McManus, Albertson (Brendan T.
Fitzpatrick of counsel), for Tower Building Services, Inc., respondent.
Lustig & Brown, LLP, New York (April L. Forbes of counsel),
for Illinois Union Insurance Co., respondent.

Order, Supreme Court, New York County (Karla Moskowitz, J.), entered October 24, 2005, which denied third-party defendant Utica First Insurance Company's motion pursuant to CPLR 3211 (a)(1) and (7) to dismiss the third-party complaint and for summary judgment pursuant to CPLR 3211(c), unanimously reversed, on the law, with costs, the motion to dismiss pursuant to CPLR 3211(a)(1) granted, a declaration issued that Utica First Insurance Company has no obligation to defend or indemnify Tower Building Services, Inc. in the underlying action, and the third- party complaint dismissed. The Clerk is directed to enter judgment accordingly.

Julio Yadaicela was injured while doing construction work at a building owned by Sixty Sutton Corporation and managed by Goodstein Management LLC. He brought an action against Sixty Sutton and Goodstein. They subsequently brought a third-party action against Tower Building Services, Inc., the general contractor for the construction project, and its insurance carrier, Illinois Union Insurance Company.

Yadaicela had worked for Jerez Renovations, a subcontractor of Tower. Jerez was insured by Utica First Insurance Company. In a letter dated November 18, 2004, Illinois demanded that Utica defend and indemnify Tower in the underlying personal injury action. That letter also stated that the contract between Tower and Jerez contained an indemnification provision, and that a certificate of insurance was issued to Jerez, listing Tower as an additional insured under Jerez's policy with Utica.

Utica responded to both Tower and Illinois on January 3, 2005. It stated that its policy with Jerez did not require it to provide coverage for any claims arising out of Mr. Yadaicela's accident. Utica cited the "Employee Exclusion" in the policy, which provides:

"This insurance does not apply to:

Illinois commenced this action, alleging that Utica's denial of coverage was untimely and improper. It sought a declaration that Utica was required to defend and indemnify Tower in the underlying action. In lieu of interposing an answer, Utica moved to dismiss the complaint pursuant to CPLR 3211(a)(1) & (7) for failure to state a claim. Utica also requested that the court treat the motion as one for summary judgment pursuant to CPLR 3211(c), and that it issue a judgment in Utica's favor.

In support of the motion, Utica submitted a copy of the insurance policy, and an affidavit from one of its claims representatives, which stated that Tower was not an insured or an additional insured under the Utica policy. The claims representative also noted that the "employee exclusion" in the Utica policy precluded coverage for Mr. Yadaicela's injuries. Illinois opposed the motion, and sought further discovery. It claimed that its copy of the Utica policy was not correct or complete. Illinois reiterated that a certificate of insurance indicated that Tower was an additional insured under the Utica policy. Tower also opposed the motion, adopting Illinois' arguments, and relying upon a "blanket endorsement" in the Utica policy, which provided that an insured included "any person or organization whom you are required to name as an additional insured on this policy under a written contract or agreement."

In reply, Utica contended that Tower was not insured under its policy with Jerez. It noted that Tower misquoted the language of the blanket endorsement, which requires a "written contract or written agreement" (emphasis supplied). Utica also emphasized that the employee exclusion in the Utica policy precluded coverage to both Jerez and Tower for Mr. Yadaicela's injuries. It confirmed that Tower's contract with Jerez did not require Jerez to procure insurance coverage for Tower, and it denied that its disclaimer was untimely.

The IAS court denied the motion on the ground that it was premature. The court also found an issue as to whether Utica had attached a complete and correct copy of the policy to its motion papers. We reverse. [*3]

Initially, Utica did not waive its right to disclaim coverage, nor was its disclaimer untimely pursuant to Insurance Law § 3420(d). Because Illinois was requesting defense and indemnification from a co-insurer, the requirements of § 3420(d) are inapplicable (see AIU Ins. Co. v Inv. Ins. Co., 17 AD3d 259 [2005]). In addition, Illinois' agent contacted Utica on November, 22, 2004, and Utica disclaimed coverage on January 3, 2005, five days after it confirmed, following an investigation, that Mr. Yadaicela was employed by Jerez. During the six weeks between notice of the claim and Utica's disclaimer, Illinois continued to provide for Tower's defense in the underlying lawsuit. Thus, there was no evidence of prejudice to Illinois.

On the merits, the documentary evidence conclusively established that Tower is not insured under the Utica policy (CPLR 3211[a][1]). Illinois had the burden of establishing that Jerez had procured coverage for Tower, and it failed to do so (Moleon v Kreisler Borg Florman Gen. Constr. Co., Inc., 304 AD2d 337, 339 [2003]). The Utica insurance contract, a copy of which was annexed to its motion, and reproduced in full in the record on appeal, belies Illinois' claim that it did not receive a complete or correct copy of the policy. Notably, neither Illinois nor Tower contends that the document in the record is not correct or complete.

The four corners of an insurance agreement govern who is covered and the extent of coverage (Stainless Inc. v Empl. Fire Ins. Co., 69 AD2d 27, 33 [1979], affd 49 NY2d 924 [1980]). In addition, where a third party seeks the benefit of coverage, the terms of the contract must clearly evince such intent (Stainless, supra). Here, the unambiguous language of the Utica policy comports with Utica's position that Tower is not covered, either as a named or additional insured under the policy. Given that the employee exclusion exempts Utica from providing coverage to Jerez for Mr. Yadaicela's accident, Utica could not have been required to defend or indemnify Tower for that same claim (see Moleon, 304 AD2d at 339-340; and see U.S. Underwriters Ins. Co. v 614 Constr. Corp., 142 F Supp 2d 491, 494 [claim precluded by employee exclusion] [2001], affd 23 Fed Appx 92 [2002]). Moreover, the certificate of insurance's reference to Tower is insufficient to confer coverage where the insurance policy itself does not cover the company (Moleon, supra at 339; Glynn v House of Prayer, 292 AD2d 319 [2002]; American Motorist Ins. Co. v Superior Acoustics, 277 AD2d 97, 98 [2000]).

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

ENTERED: NOVEMBER 30, 2006

CLERK

Coverage Pointers - Volume VIII, No. 11

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