Coverage Pointers - Volume VIII, No. 23

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Dear Coverage Pointers Subscribers:

Greetings from London where I am attending the Joint International Conference sponsored by the Federation of Defense & Corporate Counsel, the International Association of Defense Counsel, the Defense Research Institute and the Association of Defense Trial Attorneys. I had the honor of moderating a very interesting panel discussion yesterday on the discovery of electronically stored information, with panelists from the US and Europe discussing develops in US and EU rules on discovery and production of computerized records as well as some of the technical issues relating to collecting and certifying the completeness of computer records maintained on hard drives, tapes, PDA's, etc. I can be reached this week and next on my cell at 716.445.2258 or via e-mail at [email protected].

Do you think that would prevent Coverage Pointers from reaching your desk? Not a chance.

In this issue, I am delighted to introduce yet another column for your education and enjoyment. Joining my eclectic and unnamed potpourri of insurance coverage summaries as well as Audrey's Angles on No Fault, Mark Starosielec's Serious (Injury) side of New York No Fault and Across Borders, is our newest offering, Peiper on Property. For those of you who have the pleasure of working with Steve Peiper, you will know that we have added a thoughtful and incisive attorney to our staff who adds yet another dimension to our Insurance Coverage Team. He will offer a regular column focusing on property insurance decisions and his first offering is in today's edition. Feel free to drop him a note at [email protected] with your feedback and suggestions.

This week's issue provides an interesting collection of diverse coverage decisions. We'd recommend a close reading of a few. The Travelers Indemnity summary the second one reported below provides you with a review of the formula by which coverage cases can be analyzed and coverage letters crafted. The Physicians Reciprocal decision, the fifth one reported below, contains an interesting discussion relating to named insureds not receiving coverage because they were sued in a different capacity than as a named insured. There are two cases dealing with claims of bad faith (both dismissed: one third party and one first party) and you will find the usual collection of late notice cases.

Here are the headlines:

No Coverage for Non-Resident Deed Holder
If Injuries Do Not Arise out of an Accident, No Coverage Exists in the First Place; Accordingly No Penalty for Not Disclaiming in Timely Manner
Documentation Relating to Disclaimer is Discoverable and Not-Privileged. Co-Defendants Entitled to Notice of Disclaimer
Wholesale Insurance Broker May be Liable to Insurance Agent for Decrease in Coverage Limits Upon Policy's Renewal
While Physician was Stockholder of Named Insured and While Stockholders (Sued Within the Scope of Their Duties) are Insureds, Professional Liability Carrier has no Duty to Physician Who is Sued in his Capacity as Physician (Rather than Stockholder)
Bad Faith Claims Dismissed on Motion Against Pleadings. No Pattern of Egregious Conduct Alleged Against Plaintiff or General Public
Can't Win a Coverage Battle Without Policy Before the Court; Requirement that Subcontractor be Insured Does not Mean Subcontractor Must Provide Additional Insured Status
Two and a Half Months Late Notice Leads to Loss of Liability Coverage; Believe in Non-Liability was Unreasonable
Trial Determination that Injuries Did Not Arise out of Work of Named Insured Leads to Finding of No Additional Insured Status
No Defense Under "Personal Injury" Coverage for Antitrust Claims
Survivorship Policy Required Consent of All to be Transferred
Default Judgment Against Liability Carrier Determining Coverage Exists in Uninsured Motorists Matter is Enforceable, Where Liability Carrier Never Sought to Vacate Default
We've Said it Many Times Before: A Reservation of Rights Letter is No Substitute for a Disclaimer

STarosieleC'S serious (Injury) Side of New York No-FaulT
Mark Starosielec
[email protected]

Defendants' Doctor's Report is Good But Not That Good: Only Partial SJ is Granted
Tie Goes to the Plaintiff: Award of Partial Summary Judgment Keeps Case Alive
What's Normal? Defendant's Doctor's Failure to Compare Findings Sinks SJ Hopes
Failure to Make Prima Facie Showing Dooms Defendants' Hopes for Summary Judgment
Trial Discussion in Judge's Chambers Leads to Case Being Remitted Back to Trial Court
Using Plaintiff's Doctors Reports Doesn't Help Defendants on Summary Judgment
Court to Doctors: Affirm, Quantify and Be Contemporaneous or Else!
Not Enough Proof: Order Granting Summary Judgment is Reversed
How Not to Try A Case: Plaintiff's Lawsuit Dismissed for a Number of Reasons
Failing to Address Plaintiff's Allegations Proves Fatal to Defendant's SJ Motion
Doctors Must Quantify and Qualify Their Findings to Meet Prima Facie Showing
Speculation Doesn't Cut It: Summary Judgment is Denied
Ruptured Breast Implant and Depression Are Not 'Serious Injuries'
Doctor's Examination of Plaintiff More than Two Years After the Accident is Too Late
Short and Sweet: Plaintiff Failure to Raise A Triable Issue of Fact Leads to Suit Dismissal
Plaintiff Raised Triable Issue of Fact: Order Granting Summary Judgment is Reversed

Audrey's Angle on No-Fault

Audrey Seeley

[email protected]

Insurer's Verification Right is not Limited to Applicant for No-Fault Benefits
Court Issues Primer on Summary Judgment Motions in No-Fault Context
Statute of Limitations on Loss Transfer is Three Years from Accrual of Claim Irrespective of Municipal Status
Insurer's Admission in Pleadings on Receipt of No-Fault Claim Bars Ability to Argue Plaintiff Failed to Submit Proof that Claims Mailed and Received

PEIPER on PROPERTY

Steven E. Peiper

[email protected]

Coverage Confirmed for Property Loss Caused by Excessive Weight from Waterlogged Soil, however, Carrier's Disclaimer based upon Exclusions Contained within the Policy WAS NOT a Repudiation of the Insuring Agreement
Claims for Punitive and Consequential Damages for Failure to Timely Pay "Wrap-Up" Policy Claims Dismissed

Hope all is well and best wishes from across the Pond.

Cheers.

Dan

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Hurwitz & Fine, P.C. is a full-service law firm
providing legal services throughout the State of New York.

Newsletter Editor

Dan D. Kohane
[email protected]

Insurance Coverage Team

Dan D. Kohane, Team Leader
[email protected]

Michael F. Perley
Audrey A. Seeley
Vivian Perry Roché

Steven E. Peiper

Fire, First-Party and Subrogation Team
Andrea Schillaci, Team Leader
[email protected]
Jody E. Briandi
Philip M. Gulisano

NO-FAULT/UM/SUM TEAM
Audrey A. Seeley, Team Leader
[email protected]
Vivian Perry Roché
Mark Starosielec

APPELLATE TEAM
Dan D. Kohane
Scott M. Duquin

5/3/07 Rodless Properties, L.P., v. Westchester Fire Insurance Company
Appellate Division, First Department
Blanket Additional Insured Endorsement Required Contract Executed Before Loss, and that Means (a) Written and Signed or (b) Completed
The plaintiff in the underlying action was injured when he fell from an elevated height while working at site owned by Rodless. Westchester, the general liability insurer of general contractor, American Pipe, refused to defend Rodless in the underlying action on the ground that its policy did not include Rodless as an additional insured. The Westchester policy provided, with respect to "Additional Insured - Owners, Lessees or Contractors":

This endorsement modifies insurance provided under the following:

COMMERCIAL GENERAL LIABILITY COVERAGE PART.

SCHEDULE

Name of Person or Organization:

AS REQUIRED BY CONTRACT, PROVIDED THE CONTRACT IS EXECUTED PRIOR TO LOSS.

(If no entry appears above, information required to complete this endorsement will be shown in the Declarations as applicable to this endorsement.)

WHO IS AN INSURED (Section II) is amended to include as an insured the person or organization shown in the Schedule, but only with respect to liability arising out of "your work" for that insured by or for you (emphasis added).

The question that was before the court related to the definition of the term executed. The lower court concluded that the term "executed," as employed in the Westchester policy, was ambiguous because it could mean either (a) a contract that has been signed or (b) a contract that has been fully performed by both parties. The Appellate Division found that under either definition of executed, Rodless was not an additional insured under that policy.

The contract was never reduced to a writing and the accident occurred five days before the end of the job, so it was not “fully performed.” The court noted, interestingly, that even if there were ambiguities in the insurance policy, they would not be construed against the insurance company because the argument for coverage was really being made by another insurer, Seneca, Rodless’ CGL carrier and not the insured.

The Certificate of Insurance, issued after the accident, was not proof of insurance.

5/3/07 Town of Massena v. Healthcare Underwriters Mutual Ins. Co..
Appellate Division, Third Department
Under Professional Liability Policy, Carrier had Obligation to Defend Members of Accreditation Committee Sued for Defamation and Civil Rights Violations
The underlying action involved a claim by a doctor who sued Massena Memorial Hospital, its governing committees and members of the committees (the defendants). The plaintiff contended that, in retaliation for Dr. Franzon, the plaintiff, having advocated an enhanced role for nurse-midwives at the hospital, the defendants engaged in tortious conduct including defamation, violation of civil rights, interference with business relations and interference with contract.

A complex array of lawsuits ensued involving Healthcare Underwriters Mutual Insurance Company (HUM) and others, seeking coverage for these claims. HUM’s contract with the hospital involved a number of policies, including a hospital professional liability policy.

Eventually, Dr.Franzon dropped all claims against the defendants except one which claimed that the doctor’s civil rights had been violated through a concerted campaign of retaliation and harassment to punish him for his comments. HUM then sought a determination that its policy of professional liability did not cover these claims, and the defendants submitted affidavits from their peer review committee members denying any intent to injure Franzon.

The Third Department discussed the breadth of a liability carrier’s obligation to defend its insured: "'If, liberally construed, the claim is within the embrace of the policy, the insurer must come forward to defend its insured no matter how groundless, false or baseless the suit may be.'"

The court noted that the policy’s coverage included the work of peer review committees. Such committees consider complaints about medical care and determine whether to limit hospital privileges of doctors. The court noted that the Legislature has afforded qualified statutory immunity to members of such committees. It decided that an insurer covering committee members could anticipate allegations in litigation attempting to avoid immunity-based dismissal, and members of those committees would reasonably expect litigation coverage for their narrow exposure.

5/3/07 Stone v. Rullo Agency, Inc.

Appellate Division, Third Department
Homeowner’s Suit Against Insurance Agent for Not Securing Coverage for Artwork is Dismissed. Once Insured Receives Policy, He has “Conclusive Presumptive Knowledge” of its Contents
Insured collected artwork and related items of value. He sues his insurance agent for failure to procure insurance sufficient insurance coverage after theses items were destroyed by fire. Plaintiff asserts claims for breach of contract and negligence arguing that the agent knew the contents of his home was valuable. The policy provided replacement cost for most items in the house but excluded "articles of art or rarity that cannot be duplicated." These items were apparently covered only under the more restrictive actual cash value provisions of the policy.

The policy holder loses. The insured has an obligation to read the policy and in this case specifically request additional coverage for his artwork. Once the insured received the policy, he is presumed to know its contents – there is a "'conclusive presumptive knowledge of the terms and limits of the policy.”

5/1/07 Kiladze v. Country-Wide Insurance Company

Appellate Division, First Department

Question of Fact Abound About Timeliness of Injured Party’s Notice and Carrier’s Denial

Questions of fact exist as to whether the insurer was liable for the judgment against its insured. The records were not clear when the insurer first received notice of the claim or whether the injured party made diligent efforts to locate both the insured and is carrier. Since it is unclear whether the injured party acted reasonably and whether the carrier denied promptly, the matter is sent back for trial. Punitive damage claims against the insurer are dismissed.

4/26/07 American Transit Insurance Company v. B.O. Astra Management Corp.

Appellate Division, First Department

Here’s an Awful Decision: Ignoring Years of Precedent, First Department Decides that a Liability Carrier that Receives Timely Notice of the Occurrence Must Demonstrate Prejudice Before Denying Coverage if it Does Not Receive Timely Notice of the Lawsuit

Citing Rekemeyer and Matter of Brandon, two uninsured/underinsured (SUM) cases, the First Department had taken a strange and we would suggest, unprecedented position with respect to late notice of a lawsuit. Here, the insured gave prompt notice of the claim but late notice of the lawsuit. The court held that having received timely notice of claim, plaintiff insurer was not entitled to disclaim coverage based on untimely notice of the claimant's commencement of litigation unless it was prejudiced by the late notice. The court held, without explanation, that in enacting Insurance Law § 3420, the Legislature has made it clear that the right of a claimant to seek recovery of insurance proceeds is not defeated by the insured's failure to perform its claim-related obligations.

Editor’s note: I’ve read that statute perhaps 1,000 times and I have not found that clarity! I don't recall any court finding it before. Indeed, the Court of Appeals, our highest court, said something entirely differently a couple of years ago in Argo Corp. v. Greater N.Y. Mut. Ins. Co., 4 N.Y.3d 332, 340 (N.Y. 2005):

The rationale of the no-prejudice rule is clearly applicable to a late notice of lawsuit under a liability insurance policy. A liability insurer, which has a duty to indemnify and often also to defend, requires timely notice of lawsuit in order to be able to take an active, early role in the litigation process and in any settlement discussions and to set adequate reserves. Late notice of lawsuit in the liability insurance context is so likely to be prejudicial to these concerns as to justify the application of the no-prejudice rule. Argo's delay was unreasonable as a matter of law and thus, its failure to timely notify GNY vitiates the contract. GNY was not required to show prejudice before declining coverage for late notice of lawsuit.

4/26/07 In the Matter of the Arbitration between New South Ins. Co. and Krum

Appellate Division, Third Department

Yes, it is Possible to Establish Lack of Cooperation

The context of this case was a motion to permanently stay uninsured motorist arbitration. Progressive had denied coverage based on two separate grounds, late notice and lack of cooperation and insured filed claim for UM benefits. UM carrier moved to stay arbitration by challenging Progressive’s denial. Court found notice of incident was not untimely because injured party gave notice promptly, even though insured did not. However, court then searched the record and found that Progressive was justified in denying coverage based on lack of cooperation. What efforts did Progressive make? Herculean by any standard and they satisfied the famous Thrasher test for establishing lack of cooperation:

Progressive, in an effort to discuss the matter with and obtain assistance from Williams, placed unsuccessful telephone calls to him at the home and work numbers which he had provided. Also to no avail, Progressive sent three letters via certified and regular mail to Williams' last known address, which was confirmed through, among other things, Progressive's database and directory assistance. In addition, on two separate occasions, Progressive personnel visited Williams' home address. In the first instance, nobody appeared to be in the house and, in the second instance, a woman who identified herself as Williams' mother answered the door and explained that Williams was aware of the accident and had received Progressive's letters. The mother then advised that she would stress to Williams that his cooperation with the matter was necessary. Despite these efforts by Progressive, Williams never responded or assisted in the investigation.

Editors Note: For a discussion on the Thrasher test, see the Garcia case reported in Vol. VIII, No. 16 of Coverage Pointers.

4/26/07 In the Matter of the Arbitration between Progressive Ins. Co. and Nemitz
Appellate Division, Third Department

No SUM Coverage Available for ATV Accident

ATV not a “motor vehicle” under auto liability policy definition, by all accounts. However, insured argued that it still could be a motor vehicle under SUM endorsement. Court doesn’t buy the argument. The definition of an "uninsured motor vehicle" in the SUM section of the policy nonetheless references the phrase "motor vehicle," which is already unambiguously defined in the policy in a manner that excludes ATVs.

4/26/07 Cirone v. Tower Insurance Company of New York

Appellate Division, First Department
Court Accepts Injured Party’s Excuses for Giving Notice to Liability Carrier Late, Even Though Injured Party Never Gave Written Notice at All
Bicyclist was make a delivery for the Tower’s insured and injured two pedestrians. Plaintiffs and their lawyer and their investigator tried to identify the insurer for the employer, without success. A lawsuit was then brought against the bicyclist and the employer and then notice was given to the insurer, Tower. Tower conducted an investigation and disclaimed because of late notice by the insured. Of course, in its investigation, Tower spoke to plaintiff’s counsel.

Tower defends the insured under a non-waiver agreement and, in the meantime, successfully prosecutes a declaratory judgment action establishing the insured’s late notice. The injured party’s late notice was not litigated there, since the injured party never GAVE notice.

The claimants then obtain a judgment against the insured and sue Tower to recover, alleging that their diligence in seeking Tower's identity and subsequent fielding of the phone call from Tower constitutes sufficient notice by the injured parties and therefore the carrier’s coverage is in place. The appellate court buys the argument.

Editor’s Note: Does this decision make any sense? The Insurance Law surely gives the injured party the right to give notice and perhaps the injured party had a difficult time identifying the carrier. However, notice was never given by the injured party, in writing, as required by the Insurance Law. Does this mean that a carrier will be shooting itself in the foot if it conducts and investigation after receiving late notice from the insured?

For a more articulate discussion of the rules relating to denying coverage based on an injured party’s failure to give notice, see the Second Department’s decision in Maldonado which is reported below.

4/24/07 Maldonado v. C.L.-M.I. Properties, Inc.

Appellate Division, Second Department
Carrier has no Obligation to Deny Coverage on Ground of Late Notice by Injured Party if Injured Party Did Not Give Notice
The insurer’s letter advised the insured that coverage was being denied because of late notice by the insured. The letter incorrectly referenced that a witness to the accident was an employee of the insured, but that doesn’t change the fact that the carrier denied coverage, properly, on late notice. A separate argument was made that the carrier failed to deny coverage on the injured party’s late notice. The injured party has the right to put the carrier on notice under provisions of the Insurance Law. Since the injured party didn’t give notice in this case, there was no obligation on the part of the insurer to mention that failure in its disclaimer letter (although apparently it did anyway).

4/24/07 In the Matter of Merchants Insurance Group v. Geralis
Appellate Division, Second Department
Since there was Insufficient Evidence to Establish that Insured had Transferred Ownership of Vehicle, Insurance Policy for Insured, Not Purchaser, Provided Coverage
Deceased was a passenger in a Plymouth Voyager insured by State Farm. The police accident report indicates that the Voyager was insured by State Farm. State Farm denied coverage and Progressive stepped up and defended and indemnified insured. The court held that the police report was prima facie evidence that State Farm was the insurer. The court held further that State Farm did not present evidence establishing that the Voyager’s ownership had transferred and thus its policy was no longer in play. So Progressive gets fully reimbursed by State Farm for all monies it paid on behalf of the insured.

4/24/07 Staten Island Molesi Social Club, Inc., v. Nautilus Insurance Company

Appellate Division, Second Department
Where Insured Says he Didn’t Serve Alcohol in Way Described in CGL Policy, Insurance Carrier Needs to Defend
Nautilus issues CGL policy to Staten Island Molesi Social Club (Club) with liquor liability exclusion. The Club argues that the exclusion was not intended to apply to casual, nonrecurring situations involving the “incidental consumption of alcohol.” The insurer argued that a “simple reading of the exclusion” reveals that any injury arising out of the use of the premises for the purpose of distributing alcohol is excluded. The court found that the Club established did not distribute or permit the premises to be used for the distribution of alcoholic beverages within the meaning of the policy.

The interesting aspect of this case is that the court held that the carrier could not ignore the information supplied by the Molesi Club in assessing its duty to defend. In support of this proposition, the court cites to Fitzpatrick, a Court of Appeals case which doesn’t quite say that. In Fitzpatrick, the Court of Appeals held that a liability carrier cannot ignore the actual knowledge of facts.

Editor’s note: Is the Second Department suggesting that the any time the insured provides information to the insurer that would bring the claim within coverage, the insurer must defend? Imagine the insured that is videotaped beating the plaintiff over the head, repeatedly, with a baseball bat. Can the insured supply information (e.g. a statement) to the insurer that despite the videotape showing he hit the plaintiff 20 times with a bat, it as merely an accident? That’s the problem with looking outside the complaint. What is the difference between “information supplied by the insured” and “actual knowledge of facts?”

4/20/07 Bi-Economy Market, Ltd. v. Harleysville Mut. Ins. Co.

Appellate Division, Fourth Department

Fourth Department Grants Leave to Appeal to Court of Appeal in Matter Involving Coverage for Consequential Damages

In our February 9,2007 edition, we reported on this 2/2/07 decision:

Insured Doesn’t Buy Coverage for Consequential Damages, No Recovery for those Damages Available
The claim against the carrier sought consequential damages. Here, the insurance policy expressly excludes coverage for consequential losses, and thus it cannot be said that such damages were contemplated by the parties when the contract was formed.

The Fourth Department has granted leave appeal to the Court of Appeals. The link above is to the 2/2/07 decision.

4/20/07 Bowker v. NVR, Inc.
Appellate Division, Fourth Department
Carriers Beware – If You Fail to Defend a Covered Claim, You May be Forced to Pay Judgment You’d Not Otherwise Cover

The State Insurance Fund shot itself in the foot by refusing to defend its insured in a case where the insured agreed to waive the “grave injury” requirement in a contract. The court made it clear that it would not have allowed that waiver but since the SIF refused to defend the insured, arguing that the insured assumed this liability under contract, and since a judgment was granted against the insured, the SIF must pay it.

NVR (Ryan Homes) contracted with Harmon to provide dry wall services. In the contract, Harmon agreed to “waive any provision of state workers compensation laws” that would prevent Harmon from being either joined as a defendant or enable it to avoid liability to Ryan. Harmon’s employee, Bowker is hurt in the course of his employment. NVR brings a third party action against Harmon alleging both contractual indemnity and negligence. The State Insurance Fund (SIF), Harmon’s employer’s liability carrier, denies coverage on the alleging that the liability imposed upon Harmon was “assumed by contract” and thus excluded under “Coverage B.” It refused to defend Harmon for any claim. Ryan Homes obtains a judgment against Harmon in the third party action on both contractual and common law contribution with the order providing 100% indemnity for any judgment or settlement and then brings a direct action, pursuant to Insurance Law Section 3420, to enforce the judgment.

The SIF argued that there is no coverage under its policy because the plaintiff did not sustain a “grave injury” as required under Workers Compensation Law Section 11.

The Fourth Department holds that the State Insurance Fund had an obligation to defend the insured on the common law claim and raise the issue of “grave injury” as a substantive defense. Having chosen not to defend the insured because the insured tried to waive a defense, the SIF was stuck with the judgment.

4/20/07 Matter of AIG Claims Services, Inc. v. Bobak
Appellate Division, Fourth Department
Uninsured Motorist Arbitration Stayed Until Coverage Litigation is Resolved in Pennsylvania which Seeks to Determine Whether, in Fact, Trucking Company is Uninsured
AIG on behalf of New Hampshire Insurance Company (NHIC) sought stay of uninsured motorist arbitration, or, in the alternative, sought stay to bring in all other parties and conduct discovery. Injured party was hurt in Pennsylvania when truck he was operating was struck by object that fell from truck leased by B-Right Trucking and owned by Ryder, B-Right’s carrier, Reliance, became insolvent so injured party filed uninsured motorists claim with his employer’s insurer, NHIC.

Another carrier provided excess coverage over the Reliance policy and there was no evidence that the other carrier had disclaimed and similarly, no evidence that Reliance’s assets were gone. Those questions are being resolved in a Pennsylvania proceeding and the Appellate Division agreed that the SUM arbitration be stayed until the Pennsylvania coverage case is resolved.

4/20/07 Pennsylvania Manufacturers’ Association Ins. Co. v. Liberty Mutual Ins. Co.
Appellate Division, Fourth Department
One Carrier Cannot Seek Co-Insurance from Another Carrier, that Provided Coverage for Different Risk to Same Additional Insured
Pennsylvania seeks recover of one half of costs paid in settlement of underlying lawsuit. Pennsylvania insured Textar Painting Corp. (Textar) that named the NYS Thruway Authority as an additional insured. Liberty insured KTA-Tator (KTA) and also insured the Authority as an AI. Textar was hired to clean and paint a bridge and KTA was hired as an inspector of Textar’s work. A Textar employee was killed while painting and sued the Authority. Pennsylvania paid the settlement and sought to recover proceeds under the Liberty policy.

Liberty argued that the two policies insured different risks and the court agreed. Liberty’s policy provided coverage for inspection services by KTA-Tator and the Pennsylvania policy provided the Authority coverage for painting operations. This was not co-insurance for the same risk.

Editor’s Note: The right way for Pennsylvania to have secured contribution from KTA’s policy was for Textar to implead KTA-Tator into underlying lawsuit.

4/20/07 Philadelphia Indemnity Ins. Co. v. Genesee Valley Improvement Corp.

Appellate Division, Fourth Department
Fourth Department Establishes Test to Determine “Good Faith Believe in Non-Liability” in Late Notice Cases. Question is Whether Insured Should have Anticipated a Claim Rather That Whether Insured Should have Anticipated Liability

This one is a must read.

Burke was injured on 9/24/01 when he fell some 20 feet off a building. The structure was owned by Genesee (GVIC). The building housed Allegany County Community Opportunities and Rural Development Corporation. Burke was insured by Parker d/b/a Construction Plus, hired by GVIC to do roofing work. Ambulance came to the scene and both Construction Plus and GVIC employees were on the scene. Burke suffered serious injuries to his left arm, requiring immediate surgery. On the following day, the secretary/treasurer of GVIC was informed of Burke's accident by one of his staff members.

In early June of 2002, Burke sues GVIC alleging violations of the Labor Law -- Sections 200, 240(1) and 241(6). On 6/21/06, GVIC advises its carrier Pennsylvania of the accident and loss for the first time and on July 30, after conducting an investigation, Pennsylvania denies coverage based on late notice of accident. GVIC argues that it had a “good faith belief in non-liability” and that was its excuse for not giving notice.

A wise and judicious Fourth Department sides with the carrier. While a good-faith belief in non-liability may excuse a failure to give timely notice, the issue here is whether the insured should have anticipated a claim even if it believes it may not be found liable for the accident.

The court establishes a test to determine whether the insured’s conduct is or in not unreasonable as a matter of law. Did the insured make an adequate inquiry into injured party’s condition to determine seriousness? Did the insured make a “deliberate determination” as to potential liability? Would the ordinary prudent person believe that he was “immune from potential civil liability” under the circumstances?

Here, GVIC’s senior staff admitted that they conduct no investigation, had no idea about potential liability and only assumed that Burke’s employer would be responsible. Assumptions don’t cut it. Thus, GVIC failed to raise a triable issue of fact whether its nine-month delay in providing notice to plaintiff was reasonably founded upon a good-faith belief that it should not have anticipated a claim. Carrier wins.

STarosieleC’S serious (Injury) Side of New York No-FaulT
Mark Starosielec
[email protected]

5/03/2007 Davis v Giria

Appellate Division, First Department

Uncontradicted Evidence of Plaintiff's Preexisting Condition Leads to Dismissal of Complaint

In a brief opinion, the Appellate Division affirmed the lower court's order which granted defendant Giria's motion for summary judgment dismissing the complaint. Even if an issue of fact were raised as to whether plaintiff's alleged injuries are "serious", summary judgment is correct in light of the persuasive and essentially uncontradicted evidence adduced by defendants showing that the plaintiff's injuries are attributable, not to the alleged automobile accident, but to a preexisting degenerative condition.

5/03/2007 Towers v. Hoag

Appellate Division, First Department

Split Court Rules, Inter Alia, Plaintiffs Did Not Sustain a Serious Injury

In a very lengthy opinion, Appellate Division modified the lower court's order thereby reducing the municipal defendants' liability to 20% of the damages awarded, but otherwise affirmed. In this personal injury action, plaintiffs were passengers in a cab which was struck by a Fire Department ladder truck. The jury, after trial, awarded plaintiff Tillie damages, and found that the remaining plaintiffs did not suffer serious injuries and, therefore, denied recovery as to those plaintiffs.

In a concurring opinion, Judge Nardelli wrote about the CPLR 1602(6) and (7) and its impact on municipal liability as well as proper jury instructions regarding recklessness. In terms of the serious injury threshold, the Court also held that there is no basis to disturb the jury's finding that the plaintiffs Towers and Tillie did not sustain serious injury. The trial court properly excluded from admission into evidence portions of Tillie's warehoused medical records relating to his treatment at Greater Metropolitan Medical Services, since he failed to produce the requisite certification from the warehouseman (see CPLR 4518[c]). Although Tillie's MRI film from that time should have been admitted pursuant to CPLR 4532-a as self-authenticated, its exclusion was harmless. The medical testimony concerning examinations of Tillie afforded the jury an ample evidentiary basis to determine whether he had sustained a serious injury. With respect to plaintiff Towers, the evidence at trial was inconclusive as to whether his alleged injuries, i.e., two tooth fractures, were causally related to the accident. The dissenting opinions did not address the serious injury issue.

4/26/07 Lopez v. Simpson

Appellate Division, First Department

To Hold Water, Range of Motion Limitations Must Be Close in Time to Subject Accident
Defendants appeal order denying their motion for summary judgment. The Appellate Division reverses lower court order, thereby dismissing plaintiff’s complaint because she failed to raise an issue of fact as to whether she sustained a serious injury in response to defendant’s showing that, 19 months after the accident, cervical and lumbar strains had resolved with “above normal” and “excellent” range of motion.

While plaintiff submitted evidence of pain and herniated and bulging discs, she failed to submit the requisite contemporaneous quantitative assessment of range-of-motion limitations based on objective testing. The objectively tested range-of-motion limitations submitted by plaintiff were not assessed until two years after the accident, too remote to raise an issue of fact as to whether the limitations were caused by the accident. Nor did plaintiff raise an issue of fact as to whether she experienced any substantial curtailment of her daily activities for 90 out of the 180 days following the accident. Plaintiff, a police officer, went to work the day after the accident, and, although put on limited duty for several months, never missed any work.

4/24/07 Cordero v. Ford Credit Titling Trust Insurance Center

Appellate Division, Second Department

Summary Judgment Denied as MRI Reports Show Multiple Disc Herniations and Bulges
Defendants appeal from an order which denied their motion for summary judgment dismissing the complaint insofar as asserted against them on the ground that the plaintiff did not sustain a serious injury. Here, defendants made a prima facie showing that the plaintiff did not sustain a serious injury as a result of the subject accident. In opposition, the plaintiff raised a triable issue of fact by submitting the affirmed report of a neurologist quantifying the decreased range of motion in his cervical and lumbar spines based upon a recent examination and affirmed MRI reports finding multiple disc herniations and bulges.

4/24/07 Montas v. Tuelia
Appellate Division, Second Department

Competent Medical Evidence to the Rescue: Plaintiff Survives Summary Judgment
Plaintiff appealed order which had granted defendants’ summary judgment motion. In a brief opinion, the Appellate Division held that the defendants established their prima facie entitlement to judgment as a matter of law by demonstrating that the plaintiff did not suffer a serious injury. In opposition, the plaintiff raised a triable issue of fact as to whether she sustained a serious injury by submitting competent medical evidence in admissible form.

4/20/07 Downs v. Kehoe

Appellate Division, Fourth Department

Defendant’s Own Submissions Raise Triable Issue of Fact, Defeat SJ Motion
Plaintiff appealed order granting summary judgment for defendant. Appellate Division modified the order by reinstating the complaint with respect to the 90/180 category of serious injury within the meaning of Insurance Law § 5102 (d).The lower court properly granted defendant’s motion with respect to the other categories of serious injury.

However, defendant failed to meet his initial burden with respect to the 90/180 category. His own submissions raise a triable issue of fact. Defendant submitted evidence establishing that, within the requisite time period, plaintiff suffered mild to moderate restriction in various ranges of motion in her cervical and lumbar spine, which was verified through objective diagnostic testing and was manifested in spasms that were “objectively ascertained”. Defendant also submitted evidence establishing that two of plaintiff’s treating physicians determined that plaintiff was “temporarily totally disabled” within the first 180 days after the accident. Thus there is a triable issue of fact whether plaintiff was prevented from performing her usual and customary activities during the requisite time period.

4/20/07 Faso v. Fallato
Appellate Division, Fourth Department

Summary Judgment Granted: Second MVA Did Not Cause Plaintiff’s Injuries
Here, defendant appealed order by lower court denying his motion for summary judgment. Plaintiff was involved in two motor vehicle accidents. Defendant involved in second motor vehicle accident moved for summary judgment. The Appellate Division held that defendant met his initial burden on the motion with respect to each of the four categories of serious injury alleged by plaintiff by submitting the deposition testimony of plaintiff in which she stated that her “complaints after the first accident stayed the same” after the second accident and the affirmation of an orthopedic surgeon who found no injury as the result of the second accident and no aggravation of any preexisting injury as the result of that accident.

4/20/07 Jaromin v Northrup
Appellate Division, Fourth Department

Despite Plaintiff’s Physician’s Findings Differing from Defendant’s Expert’s Findings, Court Affirms Order Granting Summary Judgment
Here, plaintiff appealed order by lower court granting defendant’s motion for summary judgment dismissing the complaint. He had been a passenger in a rear-end motor vehicle accident. Appellate Division held the defendant met her initial burden by establishing that plaintiff did not sustain a qualifying serious injury that was causally related to the accident, and plaintiff failed to raise any issues of fact. In opposition, plaintiff submitted the affidavit of a physician who first examined him more than 3½ years after the accident. That physician failed to address the gap in treatment, and failed to address the finding of defendant’s expert that the abnormality at L4-5 was caused by plaintiff’s preexisting chronic and long-term degenerative condition. Plaintiff was correct in arguing that, as a general principle, ‘conflicting expert opinions may not be resolved on a motion for summary judgment.’ Nevertheless, plaintiff’s physician failed to “provide either a numeric percentage of plaintiff’s loss of range of motion or a qualitative assessment of plaintiff's condition” nor did plaintiff's physician “compare the plaintiff's limitations to the normal function, purpose and use of the affected body organ, member, function or system.”

4/20/07 McCarthy v. Bellamy

Appellate Division, Fourth Department

Plaintiff’s Expert Report is ‘Speculative’ if it Fails to Address Preexisting Condition
Appellate Division reverses lower court order which denied in part defendants’ summary judgment motion. Here, plaintiffs and defendants were involved in a motor vehicle accident. As a result of the motor vehicle accident, plaintiff sustained injuries to her cervical spine.

Defendants moved for summary judgment seeking dismissal of the complaint and lower court granted the motion only in part. Appellate Division stated the lower court should have granted defendants’ motion in its entirety. “[E]ven where there is objective medical proof when additional contributory factors interrupt the chain of causation between the accident and claimed injury——such as a gap in treatment, an intervening medical problem or a preexisting condition——summary dismissal of the complaint may be appropriate.” Prior to the accident, plaintiff had complained of left-sided neck pain resulting in an x-ray showing “minimal spondylosis” and “possible minor cervical degenerative disease.” Plaintiffs’ failure to acknowledge or address that preexisting condition in opposition to the motion renders the opinion of plaintiffs’ expert “speculative.”

4/20/07 Yoonessi v. Givens

Appellate Division, Fourth Department

Plaintiffs Survives Summary Judgment By Offering Objective Medical Findings

Defendant appealed an order denying her motion for summary judgment seeking dismissal of the complaint. Appellate Division modified order, dismissing some categories of serious injury including 90/180 category but affirming lower court’s decision that plaintiff sustained a serious injury to his cervical spine under the permanent consequential limitation of use and significant limitation of use categories of serious injury. There, defendant met her burden by submitting competent medical evidence establishing that plaintiff did not sustain a serious injury under those categories. In response, plaintiffs raised triable issues of fact by presenting the requisite “competent medical evidence based upon objective medical findings and diagnostic tests.” Although defendant established that plaintiff’s condition was preexisting and was not exacerbated by the accident, plaintiffs raised a triable issue of fact with respect to causation.

Audrey’s Angle on No-Fault

Audrey Seeley

[email protected]

The reporting of No-Fault arbitration awards is not at the same level of reported case law, meaning there is no one source to turn to for comprehensive research of arbitration awards. We encourage you to submit to us, in a PDF format, at [email protected], any recent no-fault arbitration awards, especially Master Arbitration awards, that address interesting no-fault issues.

Arbitration

4/25/07 In the Matter of the Arbitration between the Applicant and Respondent

Arbitrator Veronica K. O’Connor, Esq. (Erie County)

Applicant Failed to Demonstrate Employed at Time of Accident

Here is the Angle: This one is simply a good read! The Applicant attempts to recover purported lost wages from his position as a fugitive recovery officer based upon unsigned, undated letters from his step-brother who worked for the employer. Unfortunately, neither the letters nor the Applicant’s taxes demonstrated any income received from the employer before this accident.

The Analysis: On July 15, 2006, the Applicant, eligible injured person (“Applicant”), was involved in a motor vehicle accident and claim lost earnings from July 15, 2006 through December 1, 2006. Applicant claimed he was unable to perform his duties as a fugitive recovery officer/private investigator during that timeframe.

Upon receipt of Applicant’s no-fault application on August 28, 2006, it Applicant claimed 25 days of lost work from Fugitive Recovery in San Antonio, Texas. The insurer timely forwarded an employer wage verification report to Fugitive Recovery but received no response. On October 2, 2006, the insurer sent a second request to Fugitive Recovery for an employer wage verification report. The form was returned to the insurer as not deliverable and could not be forwarded.

Thereafter, the insurer contacted the Applicant requesting the complete name and valid address for the employer. The Applicant responded to this request by providing the insurer with an undated and unsigned letter from a Darin Jamal of Bexar County Fugitive Recovery. This letter indicated that Applicant worked for Fugitive Recovery from January 2005 through July 2005 and earned $12,650. The insurer confirmed the contents of the letter by a telephone call with Mr. Jamal.

On October 26, 2006, the insurer denied the Applicant’s lost wage claim on the basis that his employ, Fugitive Recovery, submitted correspondence stating that the Applicant was not employed on the date of the loss. Therefore, lost wages were not owed to Applicant.

In support of Applicant’s arbitration he submitted another unsigned, undated letter from Mr. Jamal stating that Applicant was self-employed contractor. It came to light that Mr. Jamal was Applicant’s step-brother. The Applicant was contacted in June 2006 and agreed to begin service on July 17, 2006. The letter also identified four jobs that were available for Applicant to investigate but due to the motor vehicle accident the Applicant was unable to begin service. At the arbitration, the Applicant testified that he last worked for Monroe Muffler and quit in June 2006. In July 2005, Applicant started working for Fugitive Recovery but received compensation only if he “located the target.” Applicant intended to return to Fugitive Recovery and relocate to Charlotte, North Carolina.

Furthermore, Applicant’s 2005 tax return failed to identify any income from Fugitive Recovery. The Applicant attempted to explain this away by stating that Fugitive Recovery never sent him a 1099 form and he never reported any of the income received from Fugitive Recovery.

Arbitrator O’Connor determined that Applicant failed to substantiate a lost wage claim for the period of July 15, 2006 through December 1, 2006.

Litigation

4/27/07 Umed Med., P.C. a/a/o Denise T. Reed, et. al. v. State Farm Fire and Cas. Co., 2007 NYSlipOp 50892(U) (2d Dept. Appellate Term)

Special Investigator’s Affidavit Sufficient Despite Hearsay Statements to Demonstrate Founded Belief that Injuries Not Related To Insured Incident to Defeat Summary Judgment.

The insurer raised an issue of fact precluding summary judgment in the plaintiff’s favor on the third cause of action based upon a “founded belief that the alleged injur[ies] do [] (sic) not arise out of an insured incident” through the affidavit of a special investigator. The special investigator’s affidavit was sufficient to demonstrate a founded belief despite the fact that the affidavit contained hearsay statements.

4/26/07 Forrest Chen Acupuncture Services, PC a/a/o Melissa Lugo v. GEICO Ins. Co., 2007 NYSlipOp 50874(U) (2d Dept. Appellate Term)

Fee Schedule for Physical Therapy Applied to Acupuncture Services in Absence of Evidence that Acupuncture Service not sufficiently Similar to Physical Therapy.

The plaintiff sought to recover the full amount of the charges for acupuncture treatment it rendered to the eligible injured person. The insurer paid the acupuncture charges but at a reduced rate. More specifically, the insurer applied the fee schedule for physical therapy.

The Court upheld the insurer’s denial and declined to award the plaintiff the difference between the amount it billed and the amount the insurer paid for the acupuncture services. The Court reasoned that while acupuncture services are eligible for reimbursement under Insurance Law §5102(a)(1) there was no fee schedule, at the time of this claim, for acupuncture services. While a fee schedule for such services exists today it is limited to services provided by a licensed chiropractor or licensed physician. The Court further reasoned that under 11 NYCRR §68.5(b) where there is no applicable fee schedule then the charge for the service is the prevailing fee in the provider’s geographic location subject to the insurer’s review for consistency with charges permissible for a similar procedure under the fee schedules already established or adopted.

In this case, the insurer invoked the option to apply a rate for a similar procedure under the fee schedules already adopted. The Court held that the plaintiff failed to rebut the insurer’s assertion that physical therapy is a sufficiently similar procedure in order to impose a lower rate than what was billed.

4/26/07 Saldana v. State Farm Fire and Cas. Co., 2007 NYSlipOp 03728 (1^st Dept.)

Insured’s Complaint to American Arbitration Association About Arbitrator’s Delay in Rendering Award Insufficient Basis for Vacating Based Upon Partiality.

The trial court’s vacation of what appears to be a SUM award based upon of arbitral partiality and the award being irrational and not based upon the evidence was reversed. The Appellate Division held that the insured’s contention that the arbitrator failed to make an award in his favor because he complained to the American Arbitration Association about the delay in rendering the award was insufficient to disturb the award. The Court further noted that there was no evidence in the record to indicate that the assigned arbitrator received the insured’s complaints directly or was influenced by them.

4/24/07 A.B. Medical Services, PLLC v. GEICO Cas. Ins. Co., 2007 NYSlipOp 03635 (2d Dept.)

FINALLY – Court Recognizes Regulation Regarding Disclosure of IME/Peer Review Reports!

The Appellate Division held that plaintiff failed to establish a prima facie case entitlement to summary judgment. Moreover, in dicta, the Court states that it disagrees with the Appellate Term’s conclusion that the insurer’s denials were insufficient as they failed to particularize the factual basis and medical rationale upon which the denial was based. The Court further stated:

The applicable regulations provide that if a no-fault claim is denied in whole or in part based upon a medical examination or peer review report requested by the insurer, then the insurer shall release a copy of that report to, among others, the applicant or its attorney, upon written request. Had it been the intent of the Department of Insurance to require the carrier to set forth a medical rationale in the prescribed denial of claim form, it would have so provided.

4/24/07 A.B. Medical Services, PLLC v. Liberty Mut. Ins. Co., 2007 NYSlipOp 03636 (2d Dept.)

Yet Another Decision Where Court Recognizes Regulation Regarding Disclosure of IME/Peer Review Reports.

This decision involves the same issues as the one reported above but directly addresses the issue of whether the IME or Peer Review report must be attached to a denial. Here, the Appellate Division held that the Appellate Term erred to the extent that its decision is understood to require an insurer denying no-fault benefits on the basis of lack of medical necessity must include a medical rationale in its denial of claim form. The Court further reasoned that the insurance regulations, 11 NYCRR §65-3.8(b)(4), do not require automatic disclosure of a peer review or IME report when a no-fault claim is denied based upon that review or report. Instead, a copy of the review or report must be disclosed upon written request of the applicant or its counsel.

4/24/07 Great Wall Acupuncture a/a/o Miguel Zayas v. GEICO Gen. Ins. Co., 2007 NYSlipOp 27164 (2d Dept. Appellate Term)

Reimbursement to Licensed Acupuncturist, in Absence of any Evidence that Services Performed were Dissimilar to Those of Licensed Chiropractor, Limited to Fee Schedule for License Chiropractor Providing Acupuncture.

The Court granted the insurer’s summary judgment motion in this dispute over whether the insurer properly rated and paid an acupuncture bill. The plaintiff, a licensed acupuncturist, treated the eligible injured person 35 times at $90 per session for a total of $3,150. The insurer paid for all 35 sessions but at a rate of $29.30 per session, based upon the rate paid to a licensed chiropractor providing a similar service, for a total of $1,025.50.

The plaintiff sought the $2,124.50 difference alleging that the amounts it charged were not unreasonable and were within the prevailing fee range for the geographic area. The plaintiff’s counsel stated that the prevailing fee range for a licensed acupuncturist in New York City was $85 to $100 per session.

The insurer presented evidence that the fees exceeded the maximum allowance under the fee schedules. An affidavit from a claims adjuster attested to being responsible for reviewing fee schedules. The adjuster noted that since the Workers’ Compensation fee schedule did not specifically address acupuncture services by a licensed acupuncturist not a licensed chiropractor or physician, she reviewed the acupuncture fee schedule already adopted or established by the superintendent. The adjuster concluded that licensed acupuncturists should be reimbursed at a rate consistent with the fee schedule for licensed chiropractors in the geographic region. This amount was $29.30 per session.

The Court agreed with the insurer reasoning that the plaintiff did not demonstrate that the services performed by a licensed acupuncturist were dissimilar from those services for acupuncture provided by a licensed chiropractor or licensed physician thereby entitling plaintiff to charge a higher rate.

The Court continued to implore the Superintendent of Insurance to promulgate a separate fee schedule for health services rendered by a licensed acupuncturist.

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 serves as the FDCC’s President and Website Editor Emeritus.

5/01/2007 Cinergy Corp. v. Associated

Indiana Supreme Court

Insurance Policies Did Not Provide Coverage for Costs of Installing Equipment
Plaintiff insurance companies filed complaint for declaratory judgment against defendant power companies to determine extent of insurance obligations with respect to federal suit against power companies under Clean Air Act. Federal suit sought primarily to compel power companies to install equipment to reduce future emissions of pollutants and to prevent resulting future environmental harm. Power companies sought partial summary judgment to compel payment by one of plaintiffs of all past and future defense costs incurred in responding to federal suit. Trial court denied power companies' motion, but certified for interlocutory appeal. Court of Appeals accepted the appeal and affirmed. Supreme Court affirmed, finding that applicable insurance policies did not provide coverage for costs of installing equipment in question.
Submitted by: Gregory L. Cochran (McKenna Storer)

4/25/2007 Citizens Ins. Co. v. Pro-Seal Service Group, Inc.
Michigan Supreme Court
The Act of Shipping a Product in a Competitor's Packaging with One’s Own Name Affixed to it is Insufficient to Satisfy the CGL’s Policy’s Definition of an “Advertisement.”
Insurance company was not required to defend defendant under the terms of the commercial general liability policy because the violation did not involve advertising activity. According to the terms of the insurance contract, the insurance company "will pay those sums that the insured becomes legally obligated to pay as damages because of 'personal and advertising injury' to which the insurance applies." The Michigan Supreme Court held that the insurance company did not have a duty to defend because defendant's conduct did not fall within the scope of the term "advertisement" as written in the policy.

Submitted by: Ralph Zappala (Lewis Brisbois Bisgaard & Smith) - Posted: 04/27/2007

Reported Decisions

Bowker v. NVR, Inc.

Appeal from an order of the Supreme Court, Erie County (Christopher J. Burns, J.), entered July 5, 2006 in a personal injury action. The order, insofar as appealed from, denied the motion of defendant-third-party plaintiff for summary judgment against second third-party defendant New York State Insurance Fund.

It is hereby ORDERED that the order insofar as appealed from be and the same hereby is unanimously reversed on the law without costs, the motion is granted and judgment is granted in favor of defendant-third-party plaintiff as follows:

It is ADJUDGED AND DECLARED that second third-party defendant New York State Insurance Fund is obligated to indemnify third-party defendant in the third-party action.

Memorandum: Defendant-third-party plaintiff, NVR, Inc., individually and doing business as Ryan Homes of New York (NVR), appeals from an order denying its motion seeking summary judgment in its third-party action against New York State Insurance Fund (SIF). NVR contracted with Kevin Harmon, individually and doing business as K-Wall Dry Wall (Harmon), to provide dry wall services. Pursuant to their contract, Harmon agreed to "waive[] any provision of applicable . . . state . . . worker's compensation laws which might prevent [Harmon from] being joined as a defendant or enable it to avoid liability to NVR . . . for damages, contribution, or indemnity, where [an employee of Harmon] makes any claim for damages against NVR or commences any civil action related thereto." Harmon's employee, Joseph S. Bowker, a plaintiff in the main action against NVR, was allegedly injured in the course of his employment, and NVR commenced a third-party action against Harmon (first third-party action) alleging, inter alia, that Harmon's negligence was a proximate cause of Bowker's injuries. SIF, Harmon's insurer, disclaimed coverage with respect to the first third-party action against Harmon on the ground that the policy excluded coverage for "[l]iability assumed under a contract." NVR thereafter obtained an "order and interim judgment" upon Harmon's default in the first third-party action, pursuant to which the court ordered, inter alia, that NVR shall have common-law and contractual indemnification against Harmon "for any judgment rendered in the [main] action against NVR or settlement by NVR in the [main] action, together with all attorney fees, disbursements, and expenses, incurred in the defense of the [main] action . . . ." NVR then commenced a third-party action against SIF (second third-party action) pursuant to Insurance Law § 3420 seeking, inter alia, a declaration that SIF is obligated to indemnify Harmon in the first third-party action based on the "order and interim judgment" entered in that action. As relevant to this appeal, Supreme Court denied NVR's subsequent motion for summary judgment on the second third-party complaint. That was error.

Pursuant to his contract with NVR, Harmon waived the statutory defense that "[a]n employer shall not be liable for contribution or indemnity to any third person based upon liability for injuries sustained by an employee acting within the scope of his or her employment . . . unless such third person proves through competent medical evidence that such employee has sustained a grave injury' " (Workers' Compensation Law § 11). SIF contended in opposition to NVR's motion that there is no coverage under its policy issued to Harmon unless Harmon's employee sustained a grave injury and, in denying NVR's motion, the court agreed with SIF in determining that the " grave injury' question involves coverage and not the merits of the indemnity issue contained in the [first] third-party complaint . . . ." Because the third-party complaint against Harmon alleged, inter alia, that Harmon's negligence was a proximate cause of Bowker's injuries, we conclude that the applicability of Workers' Compensation Law § 11 is a defense to the first third-party action and therefore relates to the merits of that action and does not merely relate to the scope of the insurance coverage provided by SIF to Harmon (cf. Robbins v Michigan Millers Mut. Ins. Co., 236 AD2d 769, 771).

It is axiomatic that "an insurer will be called upon to provide a defense [for its insured] whenever the allegations of the complaint suggest . . . a reasonable possibility of coverage' " (Automobile Ins. Co. of Hartford v Cook, 7 NY3d 131, 137; see City of Niagara Falls v Merchants Ins. Group, 34 AD3d 1263, 1264). "If [an insurer] disclaims and declines to defend in the underlying lawsuit without [first seeking a declaratory judgment concerning its duty to defend or indemnify], it takes the risk that the injured party will obtain a judgment against the purported insured and then seek payment pursuant to Insurance Law § 3420" (Lang v Hanover Ins. Co., 3 NY3d 350, 356). SIF took that risk here, and SIF therefore "may litigate only the validity of its disclaimer and cannot challenge the liability or damages determination underlying the [order and interim judgment obtained upon Harmon's default]" (id.). SIF's policy does not exclude from coverage the waiver of a defense but, rather, the policy excludes only liability assumed under a contract. SIF therefore improperly disclaimed coverage based on Harmon's "liability assumed under a contract," and NVR is entitled to judgment declaring that SIF is obligated to indemnify Harmon in the first third-party action with respect to the order and interim judgment entered against him in that action.

Matter of AIG Claims Services, Inc. v. Bobak

Appeal from an order of the Supreme Court, Erie County (Joseph G. Makowski, J.), entered August 17, 2006 in a proceeding pursuant to CPLR article 75. The order granted the petition in part and stayed the supplementary uninsured motorist arbitration for 90 days to allow for appropriate discovery by petitioner concerning the uninsured motorist claim pending before the arbitrator.

It is hereby ORDERED that the order so appealed from be and the same hereby is unanimously modified on the law by providing that the arbitration is stayed pending determination of the issues of insurance coverage and as modified the order is affirmed without costs.

Memorandum: Petitioner commenced this action on behalf of the New Hampshire Insurance Company (NHIC) pursuant to CPLR article 75, seeking a permanent stay of arbitration of a claim by respondent against NHIC for supplementary uninsured motorist (SUM) coverage. In the alternative, petitioner sought a temporary stay of arbitration to permit it to join all parties necessary to determine the coverage issues and for a trial on those issues, or to enable it to conduct discovery with respect to the underlying claim. Respondent allegedly sustained serious injuries in an accident in Pennsylvania when the tractor-trailer he was operating for his employer was struck by objects that fell from a truck leased by B-Right Trucking Company, Inc. (B-Right) and owned by Ryder Leasing Company (Ryder). He commenced an action in Pennsylvania against, inter alia, B-Right and Ryder. After B-Right's insurer, Reliance National Indemnity Company (Reliance), became insolvent, respondent submitted a claim for SUM benefits under his employer's policy with NHIC, and then sought arbitration of that claim. Supreme Court granted the petition insofar as it sought a temporary stay, granting petitioner a 90-day stay of the SUM arbitration "in order to allow for appropriate discovery by the Petitioner concerning the uninsured motorist claim now pending before the [arbitrator]."

The parties agree that another insurer issued an excess policy covering B-Right's leased trucks, and there is no reliable evidence in the record whether that insurer has disclaimed coverage. Similarly, the record does not establish whether Ryder had insurance coverage that might benefit respondent, or whether the liquidation of Reliance's assets will provide any benefits to respondent. During the pendency of this appeal, a proceeding was commenced by NHIC in Pennsylvania seeking resolution of those issues. Thus, we conclude that "[a]rbitration should be stayed, not permanently, but pending the determination of the issue[s] of insurance coverage" (Matter of Hall [Royal Indem. Ins. Co.], 34 AD2d 1090, 1091; see also Matter of Government Empls. Ins. Co. v Basedow, 28 AD3d 766, 767-768). We therefore modify the order accordingly.

Pennsylvania Manufacturers’ Association Ins. Co. v. Liberty Mutual Ins. Co.

Appeal from an order of the Supreme Court, Erie County (Joseph R. Glownia, J.), entered August 28, 2006. The order denied defendant's motion to dismiss the complaint and for costs and disbursements.

JAFFE & ASHER LLP, NEW YORK CITY (MARSHALL T. POTASHNER OF COUNSEL), FOR DEFENDANT-APPELLANT.
CHELUS, HERDZIK, SPEYER, MONTE & PAJAK, P.C., BUFFALO (GREGORY V. PAJAK OF COUNSEL), FOR PLAINTIFF-RESPONDENT.

It is hereby ORDERED that the order so appealed from be and the same hereby is unanimously reversed on the law without costs, the motion is granted in part and the complaint is dismissed.

Memorandum: Plaintiff commenced this action seeking recovery of one half of the costs associated with the settlement of the underlying action. Plaintiff issued a policy to Textar Painting Corporation (Textar) that named the New York State Thruway Authority (Authority) as an insured. Defendant issued a policy to KTA-Tator, Inc. (KTA-Tator) that also named the Authority as an insured. The Authority contracted with Textar to clean and paint the structural steel on the South Grand Island Bridge, and it contracted with KTA-Tator to inspect the work performed by Textar. A Textar employee sustained fatal injuries while painting the bridge, and his wife, individually and as administratrix of his estate, commenced the underlying action against the Authority. Plaintiff paid a settlement on the Authority's behalf and commenced this action, alleging that its policy and defendant's policy covered the same risk and that plaintiff and defendant therefore were coinsurers.

Defendant moved to dismiss the complaint and for costs and disbursements pursuant to, inter alia, CPLR 3211 (a) (1), on the ground that the two policies insured different risks. "[W]here insurance policies provide coverage for the same interest and against the same risk, concurrent coverage exists and two or more primary insurers will be held to be coinsurers" (Southgate Owners Corp. v Public Serv. Mut. Ins. Co., 241 AD2d 397, 398; see National Union Fire Ins. Co. of Pittsburgh, Pa. v Hartford Ins. Co. of Midwest, 248 AD2d 78, 85, affd 93 NY2d 983; B.K. Gen. Contrs. v Michigan Mut. Ins. Co., 204 AD2d 584, 585). In this case, plaintiff's policy provided coverage for the Authority in the event that bodily injury was caused by Textar's painting operations and for the Authority's acts or omissions in supervising Textar's painting operations. Defendant's policy, on the other hand, provided coverage for the Authority in the event that bodily injury was caused by KTA-Tator's inspecting operations and for the Authority's acts or omissions in supervising KTA-Tator's inspecting operations. Thus, while the two policies provided coverage for the same insured, the policies did not insure the same risk (see HRH Constr. Corp. v Commercial Underwriters Ins. Co., 11 AD3d 321, 323, lv denied 5 NY3d 705). We therefore reverse the order, grant the motion in part and dismiss the complaint.

Philadelphia Indemnity Insurance Company v. Genesee Valley Improvement Corp.

It is hereby ORDERED that the order insofar as appealed from be and the same hereby is unanimously reversed on the law without costs, the motion is granted and judgment is granted in favor of plaintiff as follows:

It is ADJUDGED AND DECLARED that plaintiff is not obligated to defend or indemnify defendant Genesee Valley Improvement Corp. in the underlying action.

Opinion by Lunn, J.: On September 24, 2001, defendant Richard Burke was injured when he fell approximately 20 feet to the ground from the roof of a two-story building owned by defendant Genesee Valley Improvement Corp. (GVIC). The building is located on Schuyler Street in Belmont, New York, and it housed the administrative offices of Allegany County Community Opportunities and Rural Development Corporation. At the time of his fall, Burke was employed by Don C. Parker, doing business as Construction Plus (Construction Plus), who was hired by GVIC to perform renovations and roof repair work on its building. An ambulance was immediately called to the scene of the accident, while GVIC personnel and employees of Construction Plus assisted Burke as he lay on the ground. As a result of the fall, Burke suffered serious injuries to his left arm, requiring immediate surgery. On the following day, the secretary/treasurer of GVIC was informed of Burke's accident by one of his staff members.

On June 4, 2002, Burke commenced an action against GVIC seeking damages for common-law negligence and the violation of Labor Law §§ 200, 240 (1) and § 241 (6). On June 21, 2002, plaintiff received notice of the underlying claim and lawsuit. On July 30, 2002, following its investigation into the matter, plaintiff disclaimed coverage based on, inter alia, GVIC's failure to comply with the policy provision requiring GVIC to provide timely notice of the accident.

Thereafter, plaintiff commenced this action seeking, inter alia, a declaration that it is not obligated to defend or indemnify GVIC in the underlying action. Following discovery, plaintiff moved for summary judgment seeking a declaration to that effect, and GVIC cross- moved for summary judgment declaring that plaintiff is obligated to defend and indemnify it in the underlying action. Supreme Court determined that plaintiff met its initial burden on the motion by establishing that GVIC unreasonably delayed in notifying it of the potential claim by Burke, but the court denied the motion and cross motion based on its further determination that GVIC raised triable issues of fact whether it had a good-faith belief that it had no liability with respect to Burke and whether that belief was reasonable.

We conclude that the court erred in denying plaintiff's motion. It is well established that "[t]he requirement that an insured notify its liability carrier of a potential claim as soon as practicable' operates as a condition precedent to coverage" (White v City of New York, 81 NY2d 955, 957). Further, "[a]bsent a valid excuse, a failure to satisfy the notice requirement vitiates the policy . . ., and the insurer need not show prejudice before it can assert the defense of noncompliance" (Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp., 31 NY2d 436, 440). "The burden of justifying the delay by establishing a reasonable excuse is upon the insured . . ., and where the insured offers no excuse or an excuse unsupported by credible facts, the issue of reasonableness may be determined by the court as a matter of law" (Can-Am Roofing v American States Ins. Co., 229 AD2d 973, 974; see Deso v London & Lancashire Indem. Co. of Am., 3 NY2d 127, 130; Hartford Fire Ins. Co. v Masternak, 55 AD2d 472, 474).

Although a good-faith belief in nonliability may excuse a failure to give timely notice (see Great Canal Realty Corp. v Seneca Ins. Co., Inc., 5 NY3d 742, 743; Security Mut. Ins. Co. of N.Y., 31 NY2d at 441; Duffin v Colonial Indem. Ins. Co., 270 AD2d 942), "[a]t issue under the policy provision [in this case] is not whether [GVIC had] a good-faith belief in nonliability, but whether [it] should have anticipated a claim" (Dryden Mut. Ins. Co. v Greaser, 269 AD2d 792, 793). "[T]he insured's belief must be reasonable under all the circumstances, and it may be relevant on the issue of reasonableness, whether and to what extent, the insured has inquired into the circumstances of the accident or occurrence" (Security Mut. Ins. Co. of N.Y., 31 NY2d at 441; see Great Canal Realty Corp., 5 NY3d at 743-744). In sum, "[a]t issue is not whether the insured believes he will ultimately be found liable for the injury, but whether he has a reasonable basis for a belief that no claim will be asserted against him" (SSBSS Realty Corp. v Public Serv. Mut. Ins. Co., 253 AD2d 583, 584).

In determining whether an insured's belief in nonliability is unreasonable as a matter of law, the court should consider, inter alia, whether the insured failed to make an adequate inquiry into the injured party's condition to determine its seriousness (see Felix v Pinewood Bldrs., Inc., 30 AD3d 459, 461), and whether the insured failed to make a "deliberate determination" in evaluating potential liability (Long Is. Light. Co. v Allianz Underwriters Ins. Co., 24 AD3d 172, 173, lv dismissed 6 NY3d 844; see Security Mut. Ins. Co. of N.Y., 31 NY2d at 442). Ultimately, the determination turns on whether an "ordinary prudent person could have reasonably believed himself to be immune from potential civil liability under the circumstances" (Zadrima v PSM Ins. Cos., 208 AD2d 529, 530, lv denied 85 NY2d 807).

Here, GVIC's senior staff admitted at their depositions that they did not conduct any investigation into Burke's accident. Rather, what they knew of the incident was derived from only a few casual conversations with other employees. GVIC's secretary/treasurer admitted that no investigation was undertaken and that no determination was made with respect to GVIC's potential liability because he assumed that the insurance of Burke's employer would cover Burke's claims. GVIC's assumption that other parties would bear the ultimate responsibility for Burke's injuries is insufficient and unreasonable as a matter of law to excuse GVIC's nine-month delay in providing notice (see Heydt Contr. Corp. v American Home Assur. Co., 146 AD2d 497, 499, lv dismissed 74 NY2d 651). Further, GVIC's reliance on the assurances of Burke that he was "okay" and his failure to mention that he would be commencing a lawsuit against GVIC also does not excuse the delay in providing notice (see Platsky v Government Empls. Ins. Co., 181 AD2d 764).

Under the circumstances of this case, "no ordinary prudent person could have reasonably believed himself to be immune from potential civil liability" (Zadrima, 208 AD2d at 530). Thus, GVIC has failed to raise a triable issue of fact whether its nine-month delay in providing notice to plaintiff was reasonably founded upon a good-faith belief that it should not have anticipated a claim (see Dryden Mut. Ins. Co., 269 AD2d at 793).

Accordingly, the order insofar as appealed from should be reversed, plaintiff's motion granted and judgment granted in favor of plaintiff declaring that it is not obligated to defend or indemnify GVIC in the underlying action.

Bi-Economy Mkt., Inc. v Harleysville Ins. Co. of N.Y.

Appeal from an order of the Supreme Court, Monroe County (David D. Egan, J.), entered February 21, 2006. The order, insofar as appealed from, granted defendants' motion for leave to amend the answer and for partial summary judgment dismissing the second cause of action and denied plaintiff's cross motion for partial summary judgment on the first cause of action.

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

Memorandum: Plaintiff commenced this action alleging, inter alia, that defendants breached the terms of the insurance policy issued to plaintiff. Supreme Court properly granted that part of defendants' motion seeking summary judgment dismissing the cause of action for breach of contract. That cause of action seeks consequential damages only, and " 'such unusual or extraordinary damages must have been brought within the contemplation of the parties as the probable result of a breach at the time of or prior to contracting' " (Kenford Co. v County of Erie, 73 NY2d 312, 319 [1989]; see Martin v Metropolitan Prop. & Cas. Ins. Co., 238 AD2d 389, 390 [1997]). Here, the insurance policy expressly excludes coverage for consequential losses, and thus it cannot be said that such damages were "contemplated by the parties when the contract was formed" (Crawford Furniture Mfg. Corp. v Pennsylvania Lumbermens Mut. Ins. Co., 244 AD2d 881, 881; see J.R. Adirondack Enters. v Hartford Cas. Ins. Co., 292 AD2d 771, 772 [2002]).

The further contention of plaintiff that the court erred in denying its cross motion for partial summary judgment on the first cause of action is raised for the first time in plaintiff's reply brief and thus is not properly before this Court (see Turner v Canale, 15 AD3d 960, 961 [2005], lv denied 5 NY3d 702 [2005]; Greene v Xerox Corp., 244 AD2d 877, 878 [1997], lv denied 91 NY2d 809 [1998]). Present—Gorski, J.P., Martoche, Smith, Green and Pine, JJ.

Cirone v. Tower Insurance Company of New York

Max W. Gershweir, New York, for appellant.
Pollack, Pollack, Isaac & DeCicco, New York (Brian J. Isaac
of counsel), for respondents.

Order, Supreme Court, New York County (Karen S. Smith, J.), entered December 27, 2006, which, in an action to recover insurance proceeds pursuant to Insurance Law § 3420(a)(2), denied defendant's motion for summary judgment dismissing the complaint and granted plaintiffs' cross motion to the extent of granting partial summary judgment as to liability, unanimously affirmed, with costs.

Plaintiffs were injured when, while walking on the street, they were struck by an underage bicyclist making a delivery for defendant's insured. Plaintiffs' counsel and an investigator made an unsuccessful attempt to identify the insurer of the bicyclist's alleged employer, and then brought a tort action against defendant's insured and its principal, who gave defendant insurer notice of the occurrence. Defendant admittedly assigned an employee to the matter and, in the course of working on the file, that employee admittedly contacted plaintiffs' counsel, who provided certain information. Defendant disclaimed on the ground that its insured had not fulfilled its contractual duty to give notice of the occurrence as soon as practicable, but, under a stipulation, did file an answer on the insured's behalf in the tort action. Under the particular circumstances of this case, where the efforts of the injured parties making a claim under Insurance Law § 3420 to facilitate proper notice "were sufficient in light of the opportunities to do so afforded [them] under the circumstances" (see Appel v Allstate Ins. Co., 20 AD3d 367, 369 [2005] [internal quotation marks and citations omitted]), the motion court properly found that plaintiffs' action is not barred by the circumstance that they did not give defendant insurer separate, formal, written notice of the occurrence in a communication initiated by them, in addition to the notice defendant received from its insured and the information it received from plaintiffs' counsel. For this reason, we need not and do not reach plaintiffs' argument that the disclaimer letter was ineffective as against them. In addition, in light of defendant's failure to argue specifically before the motion court that there was only one occurrence within the meaning of the policy, we do not reach that point.

American Transit Insurance Company v. B.O. Astra Management Corp.

Order, Supreme Court, New York County (Rolando T. Acosta, J.), entered May 2, 2006, which, inter alia, granted defendant Kuok Hang Leong's motion for summary judgment dismissing the complaint, unanimously modified, on the law, to declare that plaintiff insurer is obligated to indemnify its insured in the underlying action, and otherwise affirmed, with costs in favor of defendants.

Having received timely notice of claim, plaintiff insurer was not entitled to disclaim coverage based on untimely notice of the claimant's commencement of litigation unless it was prejudiced by the late notice (see Rekemeyer v State Farm Mut. Auto. Ins. Co., 4 NY3d 468, 476 [2005]; Matter of Brandon [Nationwide Mut. Ins. Co.], 97 NY2d 491, 498 [2002]), and such prejudice was not shown. The relief afforded defendant claimant Kuok Hang Leong was proper notwithstanding the default of plaintiff's insured. Indeed, in enacting Insurance Law § 3420, the Legislature has made it clear that the right of a claimant to seek recovery of insurance proceeds is not defeated by the insured's failure to perform its claim-related obligations.

We modify only to declare in defendant's favor (see Lanza v Wagner, 11 NY2d 317, 334 [1962], appeal dismissed 371 US 74 [1962], cert denied 371 US 901 [1962]).

We have considered plaintiff's remaining arguments and find them unavailing.

In the Matter of the Arbitration between New South Ins. Co. and Krum

Ryan & Smallacombe, P.L.L.C., Albany (John F.
Moore of counsel), for appellant.
Hanson & Fishbein, Albany (Paul G. Hanson of
counsel), for Progressive Insurance Company.

MEMORANDUM AND ORDER

Carpinello, J.

Appeal from an order of the Supreme Court (Doyle, J.), entered April 25, 2006 in Albany County, which denied petitioner's application pursuant to CPLR 7503 to stay arbitration between the parties.

In May 2005, respondents, Michael D. Krum and Raymond Reynolds, were injured when the vehicle in which they were traveling collided with a vehicle which was being operated by Resolve Williams. At the time of the accident, Krum maintained an insurance policy with petitioner which provided uninsured motorist coverage and Williams was insured by Progressive Insurance Company. Progressive subsequently disclaimed coverage on the grounds that Williams neither provided notice of the accident nor cooperated with its investigation. Consequently, respondents filed a demand for arbitration for uninsured motorist coverage with petitioner. In response, petitioner commenced this CPLR article 75 proceeding seeking to permanently stay the arbitration contending, among other things, that Progressive's disclaimer was invalid. Supreme Court denied petitioner's application, finding that Williams' failure to notify Progressive of the accident served as a proper basis for its disclaimer. Given that determination, Supreme Court concluded that it need not address the merits of the issue concerning Williams' alleged noncooperation with the investigation. Petitioner now appeals.

Initially, with respect to the issue of notice, it is clear that Williams never informed Progressive of the accident as he was required to do under the conditions of his insurance policy. However, such a failure to give notice did not prevent respondents from directly giving notice of the accident to Progressive (see Insurance Law § 3420 [a] [3]; see also National Grange Mutual Ins. Co. v Diaz, 111 AD2d 700 [1985]), which they did in a June 3, 2005 letter. Supreme Court, therefore, erred in concluding that Williams' dereliction in this regard required denial of petitioner's application for a stay of arbitration.

Mindful of the foregoing, we must nevertheless affirm. Although Supreme Court did not entertain the issue of noncooperation with the investigation, we note that the record demonstrates that Progressive, in an effort to discuss the matter with and obtain assistance from Williams, placed unsuccessful telephone calls to him at the home and work numbers which he had provided. Also to no avail, Progressive sent three letters via certified and regular mail to Williams' last known address, which was confirmed through, among other things, Progressive's database and directory assistance. In addition, on two separate occasions, Progressive personnel visited Williams' home address. In the first instance, nobody appeared to be in the house and, in the second instance, a woman who identified herself as Williams' mother answered the door and explained that Williams was aware of the accident and had received Progressive's letters. The mother then advised that she would stress to Williams that his cooperation with the matter was necessary. Despite these efforts by Progressive, Williams never responded or assisted in the investigation. We find that the aforementioned sufficiently establishes that Progressive acted diligently in attempting to secure Williams' cooperation (see Thrasher v United States Liability Ins. Co., 19 NY2d 159, 168 [1967]) and, in turn, Williams willfully and without any reasonable excuse obstructed the investigation (see Turkow v Erie Ins. Co., 20 AD3d 649, 651 [2005]). Accordingly, Progressive's disclaimer of coverage for noncooperation was valid and, for that reason, petitioner's application for a permanent stay of the arbitration must be denied.

Cardona, P.J., Mercure, Mugglin and Kane, JJ., concur

Maldonado v. C.L.-M.I. Properties, Inc.

DECISION & ORDER

In an action to recover damages for personal injuries, and a third-party action for a judgment declaring that the third-party defendant, Sirius American Insurance Company, is obligated to defend and indemnify the third-party plaintiffs in the main action, the defendants third-party plaintiffs appeal from an order of the Supreme Court, Suffolk County (Doyle, J.), dated February 9, 2006, which denied their motion for summary judgment declaring that Sirius American Insurance Company is obligated to defend and indemnify them in the main action.

ORDERED that the order is affirmed, with costs.

On their motion for summary judgment, the defendants third-party plaintiffs (hereinafter the third-party plaintiffs) failed to establish that the disclaimer letter of their insurer, the defendant third-party defendant (hereinafter the insurer), was ineffective. The letter apprised the third-party plaintiffs that coverage was being disclaimed on the ground of untimely notice of the occurrence by the insured, Home Magician, Inc. (hereinafter the insured), in violation of the policy terms and conditions. The third-party plaintiffs' assertion that the letter incorrectly identified a witness to the accident as an employee of the insured does not change the basis for the disclaimer, which was clearly stated as late notice by the insured (see Abreu v Huang, 300 AD2d 420).

Moreover, the third-party plaintiffs failed to establish that the insurer improperly disclaimed as against the plaintiff in the main action. An injured person has an independent right to give notice to an insurer, and is not to be charged vicariously with an insured's delay (see Becker v Colonial Coop. Ins. Co., 24 AD3d 702; Lauritano v American Fid. Fire Ins. Co., 3 AD2d 564, affd 4 NY2d 1028). However, where an injured party fails to exercise the independent right to notify an insurer of the occurrence, a disclaimer issued to an insured for failure to satisfy the notice requirement of the policy will be effective as against the injured party as well (see Viggiano v Encompass Ins. Co., 6 AD3d 695). In this case, there is no evidence that the plaintiff ever gave notice to the insurer, and the insurer's disclaimer also specified the plaintiff's failure to provide timely notice as a separate ground for disclaiming coverage in the main action.

Thus, the third-party plaintiffs failed to establish their entitlement to judgment as a matter of law, and the Supreme Court properly denied their motion.

In the Matter of Merchants Insurance Group v. Geralis

Martin, Fallon & MullÉ;, Huntington, N.Y. (Richard C. MullÉ;
and Stephen Burke of counsel), for appellant.
Goldberg Segalla LLP, Buffalo, N.Y. (Sarah J. Delaney and
Robert Varga of counsel), for
petitioners-respondents.
Shayne, Dachs, Stanisci, Corker & Sauer, Mineola, N.Y.
(Jonathan A. Dachs of counsel), for
respondent-respondent.

DECISION & ORDER

In a proceeding pursuant to CPLR article 75 to stay arbitration of a supplementary underinsured motorist claim, State Farm Mutual Automobile Insurance Company appeals (1) from an order of the Supreme Court, Suffolk County (Molia, J.), dated May 10, 2005, which granted the petition and granted that branch of the cross motion of Progressive Insurance Company which was for summary judgment declaring that State Farm Mutual Automobile Insurance Company is obligated to reimburse Progressive Insurance Company for all sums it had paid and would pay as a result of the underlying automobile accident, and (2) from a judgment of the same court entered December 8, 2005, which, upon the order, granted the petition, stayed arbitration of the supplementary underinsured motorist claim, and is in favor of Progressive Insurance Company and against State Farm Mutual Automobile Insurance Company in the total sum of $82,617.63.

ORDERED that the appeal from the order is dismissed; and it is further,

ORDERED that the judgment is affirmed; and it is further,

ORDERED that one bill of costs is awarded to the respondents appearing separately and filing separate briefs.

The appeal from the intermediate order must be dismissed because the right of direct appeal therefrom terminated with the entry of the judgment (see Matter of Aho, 39 NY2d 241, 248). The issues raised on appeal from the order are brought up for review and have been considered on the appeal from the judgment (see CPLR 5501[a][1]).

The Plymouth Voyager in which the deceased was a passenger was insured by the appellant State Farm Mutual Automobile Insurance Company (hereinafter State Farm) on the date of the accident. The record contains a police accident report with the Plymouth Voyager's insurance code. The registration record from the New York State Department of Motor Vehicles also showed State Farm as the insurer of the Plymouth Voyager. Thus, Progressive Insurance Company (hereinafter Progressive) established, prima facie, its entitlement to judgment as a matter of law (see Matter of State Farm Mut. Auto. Ins. Co. v Youngblood, 270 AD2d 493; Matter of Nationwide Ins. Co. v Sillman, 266 AD2d 551; Matter of Lumbermens Mut. Cas. Co. v Beliard, 256 AD2d 579; Matter of Eagle Ins. Co. v Sadiq, 237 AD2d 605). In opposition, State Farm failed to offer sufficient probative evidence to raise an issue of fact as to whether the Plymouth Voyager was not owned by State Farm's insured at the time of the accident, or alternatively, was not insured by State Farm. Moreover, State Farm failed to submit probative evidence demonstrating facts upon which one could reasonably infer that possession of the Plymouth Voyager by the petitioners' insured was consistent with an intent of an actual transfer of ownership from State Farm's insured to the petitioners' insured (see Dorizas v Island Insulation Corp., 254 AD2d 246). Therefore, the Supreme Court properly granted that branch of Progressive's cross motion which was for summary judgment declaring that State Farm is obligated to reimburse Progressive for all sums it had paid and would pay as a result of the underlying automobile accident (see Matter of Eagle Ins. Co. v Pierre-Louis, 306 AD2d 344).

State Farm's remaining contention is without merit.

In the Matter of the Arbitration between Progressive Ins. Co. and Nemitz

MEMORANDUM AND ORDER

Cardona, P.J.

Appeal from an order of the Supreme Court (Dowd, J.), entered April 19, 2006 in Otsego County, which granted petitioner's application pursuant to CPLR 7503 to permanently stay arbitration between the parties.

On October 10, 2004, Nicolas Feil, the owner and operator of an all-terrain vehicle (hereinafter ATV), failed to negotiate a turn while riding on a public road in the Town of Rosebloom, Otsego County. Feil drove into a ditch and the ATV overturned, causing his passenger, respondent, to sustain injuries. Feil did not carry insurance on the ATV and, consequently, respondent submitted a claim for supplementary uninsured/underinsured motorist (hereinafter SUM) benefits pursuant to her automobile insurance policy, which had been issued by petitioner. Petitioner denied coverage, asserting that an ATV is not an uninsured motor vehicle as defined in respondent's insurance policy. Respondent thereafter filed a request for arbitration and petitioner commenced this proceeding seeking a permanent stay. Supreme Court granted the petition, prompting this appeal.

Respondent contends that an ATV is included as a covered vehicle under her policy and, therefore, she is entitled to arbitration with respect to her request for SUM benefits. When addressing an insurance coverage dispute, "'courts must determine the rights and obligations of parties under an insurance contract based on the policy's specific language'" (Pepper v Allstate Ins. Co., 20 AD3d 633, 634 [2005], quoting State Farm Mut. Auto. Ins. Co. v Glinbizzi, 9 AD3d 756, 757 [2004]). While "'[u]nambiguous provisions of a policy are given their plain and ordinary meaning'" (Travelers Indem. Co. v Commerce & Indus. Ins. Co. of Can., 36 AD3d 1121, 1122 [2007], quoting Lavanant v General Acc. Ins. Co. of Am., 79 NY2d 623, 629 [1992]), where policy language is unclear or subject to multiple reasonable interpretations, such ambiguities are resolved against the insurer (see Travelers Indem. Co. v Commerce & Indus. Ins. Co. of Can., supra at 1123; Fulmont Mut. Ins. Co. v New York Cent. Mut. Fire Ins. Co., 4 AD3d 724, 725 [2004]).

Here, respondent does not dispute Supreme Court's conclusion that ATVs are not included in the definition of a "motor vehicle"^[FN1] provided in the "General Definitions" section of the subject policy. However, respondent points out that the phrase "[e]xcept as otherwise defined in this policy" at the beginning of the "General Definitions" section contemplates that other definitions in the policy could apply. Consequently, she argues that coverage for an ATV accident nevertheless exists therein because of a separate definition for an uninsured motor vehicle in the SUM endorsement section of the policy which reads, in pertinent part:

"(c) Uninsured Motor Vehicle. The term 'uninsured motor vehicle' means a [*3]motor vehicle that, through its ownership, maintenance or use, results in bodily injury to the insured."

However, while it cannot be disputed that utilizing an ATV can certainly result "in bodily injured to the insured," that fact does not end the analysis. Significantly, the definition of an "uninsured motor vehicle" in the SUM section of the policy nonetheless references the phrase "motor vehicle," which, as we previously noted, is already unambiguously defined in the policy in a manner that excludes ATVs. Accordingly, Supreme Court properly granted the petition to stay arbitration.

We have examined respondent's remaining arguments and find them to be unpersuasive.

Peters, Spain, Carpinello and Kane, JJ., concur.

ORDERED that the order is affirmed, without costs.

Footnotes

Footnote 1: As relevant herein, the General Definitions section of the policy states that: "Except as otherwise defined in this policy . . .: . . . 12. 'Vehicle' and 'vehicles' mean a land motor vehicle: a. of the private passenger, pickup body, or cargo van type; b. designed for operation principally upon public roads; c. with at least four wheels; and d. with a gross vehicle weight rating of 12,000 pounds or less, according to the manufacturer's specifications. However, 'vehicle' and 'vehicles' do not include step-vans, parcel delivery vans, or cargo cutaway vans or other vans with cabs separate from the cargo area" (emphasis added).

Staten Island Molesi Social Club, Inc., v. Nautilus Insurance Company, appellant.

Wade Clark Mulcahy, New York, N.Y. (David F. Tavella of
counsel), for appellant.
Thomas A. Tormey, Jr., New York, N.Y. (Kevin Claffey of
counsel), for respondent.

DECISION & ORDER

In an action for a judgment declaring that the defendant is obligated to defend and indemnify the plaintiff in an action entitled Rabinovich v DCFS Trust, pending in the Supreme Court, Richmond County, under Index No. 12222/04, the defendant appeals from an order of the Supreme Court, Richmond County (Giacobbe, J.), dated March 24, 2006, which denied its motion to dismiss the complaint and granted the plaintiff's cross motion for summary judgment declaring that it was obligated to defend and indemnify the plaintiff in the underlying action.

ORDERED that the order is modified, on the law, by deleting the provision thereof granting that branch of the plaintiff's cross motion which was for summary judgment declaring that the defendant is obligated to indemnify the plaintiff in the underlying action, and substituting therefor a provision denying that branch of the motion; as so modified, the order is affirmed, with costs to the plaintiff.

The defendant, Nautilus Insurance Company (hereinafter Nautilus), issued a commercial general liability policy to the plaintiff, Staten Island Molesi Social Club, Inc. (hereinafter the Molesi Club), which provided coverage for bodily injury liability. The policy contained a liquor liability exclusion which Nautilus relied upon to disclaim coverage when the Molesi Club was sued in an action arising from the alleged distribution of alcoholic beverages at the insured premises. The Molesi Club commenced this declaratory judgment action and Nautilus moved to dismiss the complaint on the ground that the allegations within the four corners of the underlying personal injury complaint cast the pleadings wholly within the exclusion. The Molesi Club cross-moved for summary judgment based upon the affidavit of the club president which contained factual allegations describing circumstances which would give rise to a duty to defend and indemnify under a reasonable interpretation of the policy.

The Supreme Court held that the language used in the liquor liability exclusion clause regarding the noncoverage of premises used for the distribution of alcoholic beverages was susceptible to differing interpretations and thereby accorded controlling weight to the interpretation most favorable to the Molesi Club. The Supreme Court also held that the construction urged by the Molesi Club, i.e., that the exclusion, as amended, was not intended to apply to casual, nonrecurring situations involving the incidental consumption of alcohol, did not represent a strained or unnatural interpretation of the language employed, and the resultant ambiguity was resolved by the Supreme Court in favor of the Molesi Club.

Nautilus contends that, in the absence of a reference in the policy to the operation of a "business" on the premises, a simple reading of the exclusion reveals that any injury arising out of the use of the premises for the purpose of distributing alcohol is excluded. Nautilus further contends that, since the underlying personal injury complaint alleges that the injuries arose out of the use of the premises for distributing alcohol, coverage is excluded. However, in support of its motion for summary judgment, the Molesi Club demonstrated that it did not distribute or permit the premises to be used for the distribution of alcoholic beverages within the meaning of the policy.

Since the "duty of an insurer to defend its insured arises whenever the allegations within the four corners of the underlying complaint potentially give rise to a covered claim, or where the insurer has actual knowledge of facts establishing a reasonable possibility of coverage' " (Frontier Insulation Contrs. v Merchants Mut. Ins. Co., 91 NY2d 169, 175; quoting Fitzpatrick v American Honda Motor Co., 78 NY2d 61, 65-67; see Almar v Utica Mutual Ins. Co., 280 AD2d 624), Nautilus could not ignore the information supplied by the Molesi Club in assessing its duty to defend (see Fitzpatrick v American Honda Motor Co., supra at 70). Nautilus offered no admissible evidence sufficient to raise a triable issue of fact to defeat the Molesi Club's prima facie showing of entitlement to judgment as a matter of law on the issue of its duty to defend (see CPLR 3212[b]; Zuckerman v City of New York, 49 NY2d 557, 562; Firemen's Ins. Co. of Washington, D.C. v 860 W. Tower, 246 AD2d 401). Accordingly, the Supreme Court properly granted that branch of the Molesi Club's cross motion which was for summary judgment declaring that Nautilus is obligated to defend it in the underlying personal injury action.

However, in light of the conflicting versions of the circumstances giving rise to the alleged intoxication of the driver in the underlying personal injury action, it was premature to conclude that the Molesi Club is entitled to indemnification. Accordingly, the Supreme Court should not have granted that branch of the Molesi Club's cross motion which was for summary judgment declaring that Nautilus is obligated to indemnify it in the underlying personal injury action (see Sandy Creek Cent. School Dist. v United Nat. Ins. Co., 37 AD3d 812).

Kiladze v. Country-Wide Insurance Company

Thomas Torto, New York (Jason Levine of counsel), for
appellant-respondent.
Robert Dembia, New York, for respondents-appellants.

Order, Supreme Court, New York County (Faviola A. Soto, J.), entered June 23, 2006, which, to the extent appealed from as limited by the briefs, denied plaintiffs' motion for summary judgment or alternatively to compel the deposition of nonparty Progressive Insurance Company, and denied defendant Country-Wide's cross motion for summary judgment dismissing the complaint as against it, unanimously modified, on the law, the cross motion granted to the extent of limiting Country-Wide's liability, if any, to compensatory damages, the demand for punitive damages stricken, and otherwise affirmed, without costs.

Questions of fact preclude summary judgment on the issue of whether Country-Wide is liable for the underlying judgment against its insured. The record reveals material issues as to when Country-Wide received notice of the claim, and as to whether plaintiffs exercised diligent efforts in locating the insured and notifying Country-Wide of the accident. An issue of fact is raised as to whether plaintiffs' efforts to notify Country-Wide of the claim was reasonable, especially in light of plaintiffs' difficulty in obtaining relevant information from the insured (see Appel v Allstate Ins. Co., 20 AD3d 367, 368-369 [2005]; Denneny v Lizzie's Buggies, 306 AD2d 89 [2003]; National Grange Mut. Ins. Co. v Diaz, 111 AD2d 700, 701 [1985]; Jenkins v Burgos, 99 AD2d 217, 221 [1984]). Since there is a factual issue regarding when Country-Wide received notice of the claim, the effectiveness of its disclaimer cannot be determined at this juncture. The complaint fails to state a claim for punitive damages (see e.g. Rice v St. Luke's-Roosevelt Hosp. Ctr., 293 AD2d 258 [2002]; Resnick Textile Co. v Daisy Group, 284 AD2d 101 [2001]).

We have considered the parties' remaining claims for affirmative relief and find them unavailing.

Lopez v. Simpson

Cullen and Dykman LLP, Brooklyn (Timothy J. Flanagan of counsel), for appellant.
Block & O'Toole, New York (David L. Scher of counsel), for respondent.

Order, Supreme Court, Bronx County (Barry Salman, J.), entered December 30, 2005, which, in an action for personal injuries sustained in a car accident, insofar as appealed from, denied defendant-appellant's motion for summary judgment dismissing the complaint, unanimously reversed, on the law, without costs, the motion granted, the complaint dismissed as against defendant-appellant, and, upon a search of the record, as against the codefendant as well. The Clerk is directed to enter judgment in favor of defendants dismissing the complaint.

Plaintiff fails to raise an issue of fact as to whether she sustained a serious injury in response to defendant's showing that, 19 months after the accident, cervical and lumbar strains had resolved with "above normal" and "excellent" range of motion. While plaintiff submitted evidence of pain and herniated and bulging discs, she failed to submit the requisite contemporaneous quantitative assessment of range-of-motion limitations based on objective testing (see Atkinson v Oliver, 36 AD3d 552 [2007], citing, inter alia, Toulson v Young Han Pae, 13 AD3d 317 [2004]). Rather, the objectively tested range-of-motion limitations submitted by plaintiff were not assessed until two years after the accident, too remote to raise an issue of fact as to whether the limitations were caused by the accident (see Atkinson, id., citing, inter alia, Vaughan v Baez, 305 AD2d 101 [2003]; see also Thompson v Abbasi, 15 AD3d 95, 98-99 [2005]). Nor does plaintiff raise an issue of fact as to whether she experienced any substantial curtailment of her daily activities for 90 out of the 180 days following the accident (see Hewan v Callozzo, 223 AD2d 425 [1996]). Aside from the lack of contemporaneous medical evidence showing the severity of plaintiff's injuries, it is undisputed that plaintiff, a police officer, went to work the day after the accident, and, although put on limited duty for several months, never missed any work (see Licari v Elliott, 57 NY2d 230, 238-239 [1982]; Thompson, 15 AD3d at 101; Atkinson, 36 AD3d at 553; see also Grimes-Carrion v Carroll, 17 AD3d 296, 297 [2005]). Although the codefendant did not file a notice of appeal from the denial of her own motion for summary judgment, we also grant her summary judgment because, obviously, if plaintiff cannot meet the threshold for serious injury against one defendant, she cannot meet it against the other (see Merritt Hill Vineyards v Windy Hgts. Vineyard, 61 NY2d 106, 110-112 [1984]).

M-1745 - Lopez v Simpson

Motion seeking stay of trial dismissed

as academic.

Cordero v. Ford Credit Titling Trust Ins. Ctr.

James P. Nunemaker, Jr., Uniondale, N.Y. (Linda Meisler of counsel), for appellants.
Silverstein & Stern, LLP (Pollack, Pollack, Isaac & De Cicco, New York, N.Y.

[Keith D. Silverstein and Brian J. Isaac] of counsel), for respondent.

DECISION & ORDER

In an action to recover damages for personal injuries, the defendants Patricia Sammon and Brian Sammon appeal from an order of the Supreme Court, Kings County (Schneier, J.), dated July 14, 2006, which denied their motion for summary judgment dismissing the complaint insofar as asserted against them on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is affirmed, with costs.

The defendants Patricia Sammon and Brian Sammon made a prima facie 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). However, in opposition to the motion, the plaintiff raised a triable issue of fact by submitting, inter alia, the affirmed report of a neurologist quantifying the decreased range of motion in his cervical and lumbar spines based upon a recent examination, and affirmed magnetic resonance imaging test reports finding multiple disc herniations and bulges (see Santiago v Rodriguez, AD3d [2d Dept, Mar. 13, 2007]; Lim v Tiburzi, 36 AD3d 671; Gonzalez v Baik, 36 AD3d 854; Holley v Salsa, Inc., 35 AD3d 814).
SCHMIDT, J.P., KRAUSMAN, GOLDSTEIN, COVELLO and ANGIOLILLO, JJ., concur.

Montas v. Tuelia

Kim I. McHale & Associates, P.C., New York, N.Y. (Huy M. Le of counsel), for appellant.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y.

(Stacy R. Seldin of counsel), for respondents.

DECISION & ORDER

In an action to recover damages for personal injuries, the plaintiff appeals, as limited by her brief, from so much of an order of the Supreme Court, Queens County (Weiss, J.), entered February 10, 2006, as granted the defendants' motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

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

The defendants established their prima facie entitlement to judgment as a matter of law by demonstrating that the plaintiff did not suffer a serious injury within the meaning of Insurance Law § 5102(d) (see Toure v Avis Rent A Car Sys., 98 NY2d 345, 350-351). However, in opposition, the plaintiff raised a triable issue of fact as to whether she sustained a serious injury by submitting competent medical evidence in admissible form (see Fisher v Williams, 289 AD2d 288, 289). Accordingly, the Supreme Court should have denied the defendants' motion for summary judgment dismissing the complaint.
MILLER, J.P., RITTER, COVELLO and McCARTHY, JJ., concur.

Downs v. Kehoe

Appeal from an order of the Supreme Court, Niagara County (Richard C. Kloch, Sr., A.J.), entered May 11, 2006 in a personal injury action. The order granted defendant's motion for summary judgment dismissing the complaint.

DE MARIE & SCHOENBORN, P.C., BUFFALO (JOSEPH DE MARIE OF COUNSEL), FOR PLAINTIFF-APPELLANT.
RUPP, BAASE, PFALZGRAF, CUNNINGHAM & COPPOLA LLC, BUFFALO (MATTHEW A. LENHARD OF COUNSEL), FOR DEFENDANT-RESPONDENT.

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 90/180 category of serious injury within the meaning of Insurance Law § 5102 (d) and as modified the order is affirmed without costs.

Memorandum: Plaintiff commenced this action seeking damages for, inter alia, injuries she sustained in a motor vehicle accident, and defendant 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 properly granted defendant's motion with respect to the significant limitation of use category of serious injury. Defendant met his initial burden with respect to that category, and the affidavits in opposition of plaintiff and her treating physician, both of which were based on plaintiff's subjective complaints of pain, failed to raise an issue of fact with respect to that category (see Scheer v Koubek, 70 NY2d 678, 679; Cullen v Treen, 30 AD3d 1086, 1087; Constantine v Serafin, 16 AD3d 1145, 1146; Hicklin v LaDuca [appeal No. 1], 277 AD2d 966).

We further conclude, however, that defendant failed to meet his initial burden with respect to the 90/180 category of serious injury and thus that the court erred in granting defendant's motion with respect to that category. We therefore modify the order accordingly. Indeed, "defendant['s] own submissions raise a triable issue of fact whether plaintiff suffered a qualifying injury under the 90/180 category" (Zeigler v Ramadhan, 5 AD3d 1080, 1081). "To qualify as a serious injury under [that] category, there must be objective evidence of a medically determined injury or impairment of a non-permanent nature . . . as well as evidence that plaintiff's activities were curtailed to a great extent" (id.; see Licari v Elliott, 57 NY2d 230, 236). Here, defendant submitted evidence establishing that, within the requisite time period, plaintiff suffered mild to moderate restriction in various ranges of motion in her cervical and lumbar spine, which was verified through objective diagnostic testing and was manifested in spasms that were "objectively ascertained" (Nitti v Clerrico, 98 NY2d 345, 357; see Zeigler, 5 AD3d at 1081). Defendant also submitted evidence establishing that two of plaintiff's treating physicians determined that plaintiff was "temporarily totally disabled" within the first 180 days after the accident, and thus defendant's submissions raise a triable issue of fact whether plaintiff was prevented from performing her usual and customary activities during the requisite time period (see Zeigler, 5 AD3d at 1081; see also McCabe v Boyce, 2 AD3d 1375, 1377; Temple v Doherty, 301 AD2d 979, 983; cf. Parkhill v Cleary, 305 AD2d 1088, 1089-1090).

Faso v. Fallato

Appeal from an order of the Supreme Court, Erie County (Joseph R. Glownia, J.), entered July 24, 2006 in a personal injury action. The order denied the motion of defendant Peter C. Fleck, Jr. for summary judgment dismissing the amended complaint against him.

LAW OFFICE OF EPSTEIN & HARTFORD, WILLIAMSVILLE

(JENNIFER V. SCHIFFMACHER OF COUNSEL), FOR DEFENDANT-APPELLANT.
MISERENDINO, CELNIKER, SEEGERT & ESTOFF, P.C., BUFFALO

(PHILIP CELNIKER OF COUNSEL), FOR PLAINTIFF-RESPONDENT.

It is hereby ORDERED that the order so appealed from be and the same hereby is unanimously reversed on the law without costs, the motion is granted and the amended complaint against defendant Peter C. Fleck, Jr. is dismissed.

Memorandum: Plaintiff commenced this action seeking damages for injuries sustained in two motor vehicle accidents. Peter C. Fleck, Jr. (defendant), who was involved in the second accident, moved for summary judgment dismissing the amended complaint against him on the ground that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102 (d). Supreme Court erred in denying defendant's motion. Defendant met his initial burden on the motion with respect to each of the four categories of serious injury alleged by plaintiff by submitting, inter alia, the deposition testimony of plaintiff in which she stated that her "complaints after the first accident stayed the same" after the second accident and the affirmation of an orthopedic surgeon who found no injury as the result of the second accident and no aggravation of any preexisting injury as the result of that accident. Defendant thus established that plaintiff did not sustain a serious injury that was causally related to the second accident (see McNamara v Wood, 19 AD3d 921, 922-923). In response, plaintiff failed to submit "competent medical evidence based upon objective medical findings and tests to support [the] claim of serious injury and to connect the condition to the [second] accident" and thus failed to raise a triable issue of fact to defeat the motion (Blanchard v Wilcox, 283 AD2d 821, 822).

Jaromin v. Northrup

Appeal from an order of the Supreme Court, Chautauqua County (Paula L. Feroleto, J.), entered March 3, 2006 in a personal injury action. The order granted defendant's motion for summary judgment dismissing the complaint.

SPANN & SPANN, P.C., DUNKIRK (LAURIE M. BECKERINK OF COUNSEL), FOR PLAINTIFF-APPELLANT.
BOUVIER PARTNERSHIP, LLP, BUFFALO (JOSHUA P. RUBIN OF COUNSEL), FOR DEFENDANT-RESPONDENT.

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

Memorandum: Plaintiff commenced this action seeking damages for injuries he sustained when the motor vehicle in which he was a passenger was rear-ended by a vehicle operated by defendant. We conclude that Supreme Court properly granted defendant's motion 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). We note that plaintiff conceded that he has abandoned his claim with respect to the 90/180 category of serious injury.

With respect to the remaining categories, permanent loss of use, permanent consequential limitation of use and significant limitation of use, we conclude that defendant met her initial burden by establishing that plaintiff did not sustain a qualifying serious injury that was causally related to the accident, and plaintiff failed to raise any issues of fact with respect to those categories (see generally Zuckerman v City of New York, 49 NY2d 557, 562). In opposition to the motion, plaintiff submitted the affidavit of a physician who first examined him more than 3½; years after the accident. Plaintiff's physician failed to address the gap in plaintiff's treatment, and he failed to address the finding of defendant's expert that the abnormality at L4-5 was caused by an osteophyte, a characteristic of plaintiff's preexisting chronic and long-term degenerative condition at that level (see Pommells v Perez, 4 NY3d 566, 572-575). Plaintiff correctly argues that, as a general principle, "conflicting expert opinions may not be resolved on a motion for summary judgment" (Cooper v City of Rochester, 16 AD3d 1117, 1118 [internal quotation marks omitted]; see Pittman v Rickard, 295 AD2d 1003, 1004; Williams v Lucianatelli, 259 AD2d 1003). Nevertheless, plaintiff's physician failed to "provide either a numeric percentage of . . . plaintiff's loss of range of motion' or a qualitative assessment of . . . plaintiff's condition . . .' " (Parkhill v Cleary, 305 AD2d 1088, 1089, quoting Toure v Avis Rent A
Car Sys., 98 NY2d 345, 350), nor did plaintiff's physician " compare[]
the plaintiff's limitations to the normal function, purpose and use of the affected body organ, member, function or system' " (id., quoting Toure, 98 NY2d at 350). Further, the opinion of plaintiff's physician is based only upon plaintiff's subjective complaints of pain and thus is insufficient to overcome defendant's entitlement to summary judgment (see Kinchler v Cruz, 22 AD3d 808).

McCarthy v Bellamy

Appeal from an order of the Supreme Court, Niagara County (Ralph A. Boniello, III, J.), entered March 13, 2006 in a personal injury action. The order, insofar as appealed from, denied in part defendants' motion for summary judgment dismissing the complaint.

CHELUS, HERDZIK, SPEYER, MONTE & PAJAK, P.C., BUFFALO

(BRIAN R. BIGGIE OF COUNSEL), FOR DEFENDANTS-APPELLANTS.
VIOLA, CUMMINGS & LINDSAY, LLP, NIAGARA FALLS

(MICHAEL J. SKONEY OF COUNSEL), FOR PLAINTIFFS-RESPONDENTS.

It is hereby ORDERED that the order insofar as appealed from be and the same hereby is unanimously reversed on the law without costs, the motion is granted in its entirety and the complaint is dismissed.

Memorandum: Plaintiffs commenced this action seeking damages for injuries allegedly sustained by Georgenia McCarthy (plaintiff) in a motor vehicle accident on July 29, 2000 when her vehicle collided with a vehicle owned by one defendant and operated by the other. Plaintiffs allege that, as a result of the motor vehicle accident, plaintiff sustained, inter alia, injuries to her cervical spine.

Defendants moved for summary judgment seeking dismissal of the complaint on the ground that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102 (d), and Supreme Court granted the motion only in part. We conclude that the court should have granted defendants' motion in its entirety. "[E]ven where there is objective medical proof [of a serious injury], when additional contributory factors interrupt the chain of causation between the accident and claimed injury——such as a gap in treatment, an intervening medical problem or a preexisting condition——summary dismissal of the complaint may be appropriate" (Pommells v Perez, 4 NY3d 566, 572). Here, the record establishes that in 1999 plaintiff complained of left-sided neck pain that had persisted for three months, resulting in an x-ray showing "minimal spondylosis" and "possible minor cervical degenerative disease." Plaintiffs' failure to acknowledge or address that preexisting condition in opposition to the motion renders the opinion of plaintiffs' expert "speculative" (Moore v Sarwar, 29 AD3d 752, 753; see Style v Joseph, 32 AD3d 212, 214-215; Jimenez v Rojas, 26 AD3d 256, 257; Clark v Perry, 21 AD3d 1373; Montgomery v Pena, 19 AD3d 288, 289-290).

We likewise agree with defendants that plaintiffs' failure to explain a 15-month gap in plaintiff's treatment renders summary judgment dismissing the complaint appropriate (see Black v Regalado, 36 AD3d 437; Park v Champagne, 34 AD3d 274, 276; Caracci v Miller, 34 AD3d 515; see generally Pommells, 4 NY3d at 574).

Yoonessi v. Givens

Appeal from an order of the Supreme Court, Erie County (Frank A. Sedita, Jr., J.), entered June 2, 2006 in a personal injury action. The order denied defendant's motion for summary judgment dismissing the complaint.

LAW OFFICE OF EPSTEIN & HARTFORD, WILLIAMSVILLE (JENNIFER V. SCHIFFMACHER OF COUNSEL), FOR DEFENDANT-APPELLANT.
ZDARSKY, SAWICKI & AGOSTINELLI, BUFFALO (PATRICK A. DUDLEY 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 the motion in part and dismissing the complaint, as amplified by the bill of particulars, with respect to the fracture, permanent loss of use of a body organ, member, function or system, and 90/180 categories of serious injury within the meaning of Insurance Law § 5102 (d) and as modified the order is affirmed without costs.

Memorandum: In this action commenced by plaintiffs to recover damages for injuries allegedly sustained by Mahmood Yoonessi (plaintiff) in an automobile accident, defendant appeals from an order denying her motion for summary judgment seeking dismissal of the complaint on the ground that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102 (d). We note at the outset that plaintiffs have abandoned the fracture and permanent loss of use categories of serious injury set forth in their bill of particulars (see Parkhill v Cleary, 305 AD2d 1088, 1090; Ciesinski v Town of Aurora, 202 AD2d 984), and we therefore modify the order accordingly (see Robinson v White, 6 AD3d 1059).

Supreme Court properly denied defendant's motion insofar as the complaint, as amplified by the bill of particulars, alleges that plaintiff sustained a serious injury to his cervical spine under the permanent consequential limitation of use and significant limitation of use categories of serious injury. Although defendant met her burden by submitting competent medical evidence establishing that plaintiff did not sustain a serious injury under those categories (see Chunn v Carman, 8 AD3d 745, 746; Dongelewic v Marcus, 6 AD3d 943, 943-944; Zeigler v Ramadhan, 5 AD3d 1080, 1082), plaintiffs raised triable issues of fact with respect to those categories by presenting the requisite "competent medical evidence based upon objective medical findings and diagnostic tests" (Barbagallo v Quackenbush, 271 AD2d 724, 725; see Toure v Avis Rent A Car Sys., 98 NY2d 345, 350-351). Moreover, although defendant established that plaintiff's condition was preexisting and was not exacerbated by the accident (see Franchini v Palmieri, 1 NY3d 536, 537; Shaw v Looking Glass Assoc., LP, 8 AD3d 100, 102-103), plaintiffs raised a triable issue of fact with respect to causation (see Chunn, 8 AD3d at 746-747; Millick v Whatman, 253 AD2d 996).

We conclude, however, that the court erred in denying defendant's motion insofar as the complaint, as amplified by the bill of particulars, alleges that plaintiff sustained a serious injury under the 90/180 category, and we therefore further modify the order accordingly. Defendant met her burden by establishing that plaintiff was not limited or impaired in carrying out substantially all of his customary daily activities, but rather was able to continue functioning in a full and unrestricted manner following the accident (see Thompson v Abbasi, 15 AD3d 95, 96-97; Chunn, 8 AD3d at 746; Byrnes v Hertz Corp., 278 AD2d 867), and plaintiffs failed to raise a triable issue of fact (see Stevens v Homiak Transp., Inc., 21 AD3d 300, 301, lv denied 6 NY3d 701; Oribamie v Santiago, 12 AD3d 250, lv denied 4 NY3d 711; Byrnes, 278 AD2d 867).

Stone v. Rullo Agency, Inc.

Before: Mercure, J.P., Peters, Spain, Rose and Lahtinen, JJ.

Lustig & Brown, L.L.P., Stamford, Connecticut
(Christopher B. Weldon of counsel), for appellant.
Edward Fassett Jr., Schenectady, for respondent.

MEMORANDUM AND ORDER

Rose, J.

Appeal from an order of the Supreme Court (Teresi, J.), entered October 16, 2006 in Albany County, which denied defendant's motion for summary judgment dismissing the complaint.

Plaintiff asserts causes of action for breach of contract and negligence against defendant, an insurance agency, based upon defendant's alleged failure to procure full coverage for his collection of artwork and other similarly unique items of personal property in obtaining a homeowner's insurance policy for him. While plaintiff alleges that defendant was aware that the contents of his home were expensive and included such items, he concedes that he did not specifically schedule them on his application for insurance. The policy purchased through defendant provided replacement value coverage for most personal property, but expressly excluded "articles of art or rarity that cannot be duplicated." These items were apparently covered only under the more restrictive actual cash value provisions of the policy. As a result of the exclusion, plaintiff did not receive payment of replacement value for his works of art after his home and its contents were destroyed by fire. Following plaintiff's examination before trial, at which he admitted that he had not read the policy obtained, defendant moved for summary judgment dismissing the complaint. Supreme Court denied defendant's motion and defendant now appeals.

Under the circumstances here, plaintiff's failure to read the policy and specifically request additional coverage for his artwork is fatal to his causes of action. This is so even if, as Supreme Court found, defendant may have had reason to know that plaintiff's possessions included such items (see Laconte v Bashwinger Ins. Agency, 305 AD2d 845, 846 [2003]). Once plaintiff received the policy, he was presumed to have known its contents including its exclusion of certain types of personal property from replacement value coverage and to have assented to them (see M & E Mfg. Co. v Frank H. Reis, Inc., 258 AD2d 9, 12 [1999]; Brownstein v Travelers Cos., 235 AD2d 811, 813 [1997]). This "'conclusive presumptive knowledge of the terms and limits of [the policy],'" defeats his causes of action for negligence and breach of contract as a matter of law (Catalanotto v Commercial Mut. Ins. Co., 285 AD2d 788, 790-791 [2001], lv denied 97 NY2d 604 [2001], quoting Rogers v Urbanke, 194 AD2d 1024, 1024-1025 [1993]; see Laconte v Bashwinger Ins. Agency, supra at 846; Brownstein v Travelers Cos., supra at 813). Thus, we are constrained to reverse Supreme Court's denial of defendant's motion. As a result of our conclusion, it is not necessary to consider defendant's remaining contentions.

Mercure, J.P., Peters, Spain and Lahtinen, JJ., concur.

Town of Massena v. Healthcare Underwriters Mutual Ins. Co..

MEMORANDUM AND ORDER

Lahtinen, J.

Appeal from an order of the Supreme Court (Demarest, J.), entered November 2, 2005 in St. Lawrence County, which, upon renewal, granted defendant and third-party plaintiff's motion for summary judgment.

The facts in this declaratory judgment action involving insurance coverage are set forth more fully in earlier appeals (281 AD2d 107 [2001], mod 98 NY2d 435 [2002] [hereinafter referred to as Massena I and Massena II, respectively]). The underlying action, which is pending in federal court, is explained in decisions from that court (Franzon v Massena Mem. Hosp., 977 F Supp 160 [ND NY 1997]; see Franzon v Massena Mem. Hosp., 89 F Supp 2d 270, 273 [ND NY 2000] [providing citations to reported decisions in the underlying action]). Briefly, in 1997, Olof Franzon, a physician, and his professional corporation (hereinafter the Franzon plaintiffs) commenced the underlying federal court action alleging several causes of action against Massena Memorial Hospital, its governing committees and members of the committees (hereinafter the Franzon defendants). The Franzon plaintiffs contended that, in retaliation for Franzon having advocated an enhanced role for nurse-midwives at the hospital, the Franzon defendants engaged in tortious conduct including defamation, violation of civil rights, interference with business relations and interference with contract.

In 1998, plaintiff commenced the current action against, among others, Healthcare Underwriters Mutual Insurance Company (hereinafter HUM), Federal Insurance Company and Physicians Reciprocal Insurers seeking to require them to defend and indemnify the Franzon defendants. HUM then brought a third-party action against the Franzon defendants. As is relevant here, several of these insurers eventually moved for summary judgment asserting no coverage because the underlying action was premised upon intentional conduct by the Franzon defendants. Although Supreme Court determined that these three insurers were not entitled to summary judgment, we held in Massena I that they were. The Court of Appeals, however, granted leave and modified, holding that HUM had a duty to defend. In its decision, the Court of Appeals noted that HUM's contract with the hospital involved three policies: the personal injury liability (hereinafter PIL) policy, the hospital professional liability (hereinafter HPL) policy, and the comprehensive general liability (hereinafter CGL) policy. Since it found that HUM had a duty to defend under the PIL policy, it was "unnecessary for [the Court] to discuss the HPL and the CGL policies" (98 NY2d 435, 446 [2002]).

Thereafter, the Franzon plaintiffs stipulated to discontinue all of their causes of action in the underlying federal suit except the one premised on the lst Amendment and 42 USC § 1983, which asserted Franzon's civil rights had been violated through a concerted campaign of retaliation and harassment to punish him for his comments. This discontinuance prompted HUM to renew its motion for summary judgment arguing that the discontinued causes of action extinguished the basis for the Court of Appeals' holding and revived this Court's dismissal in Massena I as to HUM. In opposition, the Franzon defendants submitted, among other things, affidavits from their peer review committee members denying any intent to injure Franzon. Supreme Court, concluding that the portions of our decision in Massena I not modified by the Court of Appeals remained the law of the case, granted HUM's motion. The Franzon defendants appeal.

Initially, we are unpersuaded that the law of the case doctrine applies on appeal and that our decision in Massena I mandates that we now affirm. The law of the case doctrine generally precludes relitigating an issue decided in an ongoing action where there previously was a full and fair opportunity to address the issue (see People v Evans, 94 NY2d 499, 502-504 [2000]; Bennett v Nardone, 298 AD2d 790, 791 [2002], lv dismissed 99 NY2d 579 [2003]). The doctrine is "'amorphous' in that it 'directs a court's discretion,' but does not restrict its authority" (see People v Evans, supra at 503, quoting Arizona v California, 460 US 605, 618 [1983]). As such, a court may revisit its prior ruling under certain narrow circumstances, such as a change in controlling authority (see State of New York v Speonk Fuel, 307 AD2d 59, 62-63 [2003], affd 3 NY3d 720 [2004]).

Here, our prior ruling as to HUM was reversed by the Court of Appeals in Massena II and that Court reinstated Supreme Court's order declaring a duty to defend by HUM (98 NY2d 435, 437 [2002], supra). We agree with HUM that the Court of Appeals' analysis in Massena II was directed at one of the three HUM policies (i.e., the PIL policy) and only as to how that policy related to the defamation cause of action. However, having found a basis for the duty to defend, it was unnecessary for the Court of Appeals to address the two other HUM policies or the then-hypothetical situation that the Franzon plaintiffs might discontinue some of their causes of action, including the one for defamation. The fact that the Franzon plaintiffs have now limited their causes of action does not, in our view, serve as a predicate under the law of the case doctrine for this Court to conclude that it must reinstate a result previously reversed by the Court of Appeals. Moreover, even if we ascribed to such a view, we would exercise our discretion and revisit the coverage issue in this case since a logical implication of the Court of Appeals' Massena II decision, as well as another decision subsequent thereto (Automobile Ins. Co. of Hartford v Cook, 7 NY3d 131 [2006], revg 21 AD3d 1155 [2005]), is that our interpretation and application of the duty to defend was not as broad as it should have been.

Next, we turn to the issue of coverage. "[T]he 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'" (id. at 137, quoting Continental Cas. Co. v Rapid-American Corp., 80 NY2d 640, 648 [1993]). Policies providing for a defense are, in essence, "litigation insurance" and, accordingly, the "insurer may be required to defend under the contract even though it may not be required to pay once the litigation has run its course" (Automobile Ins. Co. of Hartford v Cook, supra at 137; see 98 NY2d 435, 444 [2002], supra). "'If, liberally construed, the claim is within the embrace of the policy, the insurer must come forward to defend its insured no matter how groundless, false or baseless the suit may be'" (Automobile Ins. Co. of Hartford v Cook, supra at 137, quoting Ruder & Finn v Seaboard Sur. Co., 52 NY2d 663, 670 [1981]). We have previously explained that "[a] party's characterization of the causes of action alleged in a complaint are not controlling" as "we seek to determine the nature of the claims based upon the facts alleged 'and not the conclusions which the pleader draws therefrom'" (Curtis v Nutmeg Ins. Co., 204 AD2d 833, 834-835 [1994], lv dismissed 84 NY2d 1027 [1995], quoting County of Columbia v Continental Ins. Co., 189 AD2d 391, 394 [1993], affd 83 NY2d 618 [1994]).

Before looking at the specific HUM policies, it merits considering the nature of the risk being insured since a policy should be interpreted in light of the reasonable expectations and purposes implicated (see Atlantic Cement Co. v Fidelity & Cas. Co. of N.Y., 91 AD2d 412, 418-419 [1983], affd 63 NY2d 798 [1984]; see also Automobile Ins. Co. of Hartford v Cook, supra at 138 ["a reasonable insured under these circumstances would have expected coverage under the policy"]). As is relevant here, coverage included the work of peer review committees. Such committees consider complaints about medical care and determine whether to limit hospital privileges of doctors (see Public Health Law § 2805-j [1] [a]; 10 NYCRR 405.6). Because of the readily apparent sensitive nature of such review and the need for candor that is not inhibited by a fear of litigation, the Legislature has afforded qualified statutory immunity to members of such committees (see e.g. Public Health Law § 2805-m [3]). Committee members are protected by this statutory immunity unless they provide "information which is untrue and communicated with malicious intent" (Public Health Law § 2805-m [3]). It follows that an insurer covering committee members could anticipate allegations in litigation attempting to avoid immunity-based dismissal, and members of those committees would reasonably expect litigation coverage for their narrow exposure.

Under the HPL policy, HUM contracted to cover "injury to any person arising out of the rendering of . . . professional services," including "service by any person as a member of a formal accreditation or similar professional board or committee of the named insured," and HUM had the "duty to defend any suit against the insured . . ., even if any of the allegations of the suit are groundless, false or fraudulent." Many of the allegations remaining in the federal lawsuit pertain to actions taken by the Franzon defendants when exercising their statutory obligation to review complaints regarding Franzon. This falls within the language of the HPL policy with respect to a duty to defend. The fact that some of the complained-of decisions were made corporately, as part of the committee process, supplying a basis to allege a conspiracy to violate civil rights does not as urged by HUM extinguish the duty to defend (see generally Curtis v Nutmeg Ins. Co., supra). We further note that the HPL policy (unlike the CGL policy) did not require an "occurrence." Nor was there a specific provision excluding from coverage claims alleging civil rights violations (cf. 98 NY2d 435, 446-447 [2002], supra; Syvertsen v Great Am. Ins. Co., 267 AD2d 854, 857 [1999]). While a trial in the underlying federal action could result in a determination revealing no indemnification obligation, we nevertheless find HUM has a duty to defend under the HPL policy. Having found a duty to defend in the HPL policy, it is not necessary to discuss the other HUM policies.

Rodless Properties, L.P., v. Westchester Fire Insurance Company

Shay & Maguire LLP, East Meadow (Kenneth R. Maguire of
counsel), for appellants-respondents.
Lustig & Brown, LLP, New York (Howard S. Kronberg of
counsel), for respondent-appellant.

Order, Supreme Court, New York County (Helen E. Freedman, J.), entered July 14, 2006, which, insofar as appealed from as limited by the briefs, denied plaintiffs' motion for partial summary judgment declaring that defendant Westchester Fire Insurance Company (Westchester) had a duty to defend and indemnify them as additional insured in an underlying personal injury action, unanimously reversed, on the law, without costs, and upon a search of the record, summary judgment granted to Westchester declaring that it has no obligation to defend or indemnify plaintiffs in the underlying action, and the complaint otherwise dismissed as against it.

The plaintiff in the underlying action was injured when he fell from a scaffold or ladder while working at a site owned by the noninsurer plaintiffs herein (collectively Rodless). This action ensued after Westchester, the general liability insurer of defendant general contractor American Pipe and Tank Lining Co. (American Pipe), refused to defend Rodless in the underlying action on the ground that its policy did not include Rodless as an additional insured. The Westchester policy provided, with respect to "Additional Insured - Owners, Lessees or Contractors":

This endorsement modifies insurance provided under the following:

COMMERCIAL GENERAL LIABILITY COVERAGE PART.

SCHEDULE

Name of Person or Organization:

AS REQUIRED BY CONTRACT, PROVIDED THE CONTRACT IS EXECUTED PRIOR TO LOSS.

(If no entry appears above, information required to complete this endorsement will be shown in the Declarations as applicable to this endorsement.)

The motion court erred in concluding that the term "executed," as employed in the Westchester policy, is ambiguous. As noted by the motion court, an "executed contract," as defined by Black's Law Dictionary, 8th ed [2004], is either a contract that has been signed or a contract that has been fully performed by both parties. However, that the term "executed" can be interpreted in two ways does not render the contract uncertain or ambiguous. Indeed, whether the Westchester policy is interpreted as anticipating written contracts only or both oral and written contracts, it is clear that under either interpretation, Rodless was not an additional insured under that policy. The contract was admittedly never reduced to a writing and the accident, which occurred five days before the conclusion of the job, prevented full performance by both Rodless and American Pipe. In any event, even if we were to find the term "executed" ambiguous, which we do not, the canon of construction that ambiguities in an insurance policy are to be construed against the insurer in favor of the insured, an argument raised by Rodless, does not apply here, where the real party in interest is an insurance company, plaintiff Seneca, Rodless's general liability insurer, and not the insured (see Standard Marine Ins. Co. v Federal Ins. Co., 39 AD2d 444, 446 [1972]).

We agree with the motion court that since the certificate of insurance was issued as a matter of information only and tendered after the loss, it is neither proof of insurance nor proof of an oral contract. Given the absence of any material issues of fact to be resolved, we search the record and grant summary judgment to Westchester (CPLR 3212[b]; Levin v 117 Ltd. Partnership, 291 AD2d 304 [2002]).

Towers v. Hoag

Michael A. Cardozo, Corporation Counsel, New York (Ronald
E. Sternberg of counsel), for appellants-respondents.
The Breakstone Law Firm, P.C., Bellmore (Jay L.T. Breakstone
of counsel), for respondents-appellants.

Judgment, Supreme Court, Bronx County (Patricia Anne Williams, J.), entered September 30, 2004, upon a jury verdict, inter alia, awarding damages to plaintiff Alex Tillie and imposing joint and several liability therefor upon the municipal defendants, modified, on the law, to limit the municipal defendants' liability to 20% of the damages awarded, in accordance with the jury's apportionment of fault, and otherwise affirmed, without costs.

Marlow and Nardelli, JJ. concur in a memorandum by Nardelli, J. as follows:

NARDELLI, J. (concurring)

This is a personal injury action in which plaintiffs were passengers in a livery cab which was struck, at an intersection, by a New York City Fire Department ladder truck operated by defendant firefighter William Hoag. The jury, after trial, awarded plaintiff Alex Tillie the principal sum of $1,900,000, found that the remaining plaintiffs did not suffer serious injuries and, therefore, denied recovery as to those plaintiffs, and as to Alex Tillie apportioned fault 80% to the cab driver and 20% to the City. Since the City's liability did not exceed 50%, it should have been liable for only its equitable share of the damages (CPLR 1601), but the trial court, without explanation, adjudged the City jointly and severally liable.

The two exceptions at issue under which plaintiffs allege the City should be held jointly and severally liable are delineated in CPLR 1602(6) and (7). CPLR 1602 provides that the limitations set forth in [Article 16] shall:

"6. not apply to any person held liable by reason of his use, operation, or ownership of a motor vehicle or motorcycle, as those terms are defined respectively in sections three hundred eleven and one hundred twenty-five of the vehicle and traffic law.

"7. not apply to any person held liable for causing claimant's injury by having acted with reckless disregard for the safety of others."

CPLR 1603 states, in pertinent part, that a party asserting the applicability of one or more of the exceptions set forth in CPLR 1602 must prove such by a preponderance of the evidence.

The exception codified in CPLR 1602(6) is inapplicable herein as Fire Department vehicles are not considered "motor vehicles" within that exception (see Rafaelova v City of New York, 25 AD3d 442 [2006]; Vehicle and Traffic Law § 311[2]). Indeed, plaintiffs conceded that point at the trial court level.

In order for the exception set forth in CPLR 1602(7) to apply, the driver of the fire truck must be shown to have "acted with reckless disregard for the safety of others." The trial court, despite plaintiffs' request, refused to charge the jury as to recklessness, stating, as noted by the dissent, that:

"The fact of the matter is the word reckless doesn't appear in the complaint. I suspect it doesn't appear in the bill of particulars anywhere. I know it doesn't appear in the notice of claim."

We agree with the dissent that the trial court's conclusion was erroneous in that regard. What the dissent fails to note, however, is the trial court's further observation which immediately followed the foregoing statement:

"You proceeded on the theory of negligence at all times and so we will we are going to leave it as it had been tried this theory of negligence."

Clearly, the trial court also found that a recklessness charge was not warranted as the result of the theory advanced and the proof elicited by plaintiffs at trial.

In any event, in order to trigger the reckless disregard exception set forth in CPLR 1602(7), plaintiff must prove, by a preponderance of the evidence, the intentional commission "of an act of an unreasonable character in disregard of a known or obvious risk so great as to make it highly probable that harm would follow, and done with conscious indifference to the outcome" (Szczerbiak v Pilat, 90 NY2d 553, 557 [1997], see also Saarinen v Kerr, 84 NY2d 494, 501 [1994]; Badalamenti v City of New York, 30 AD3d 452, 453 [2006]).

We conclude there is no reasonable view of the evidence which warrants a finding that the theory of reckless disregard should have been submitted to the jury, for the following reasons: (1) defendant's ladder truck had the right-of-way; (2) there was no expert testimony, or any other evidence, to corroborate plaintiffs' rendition of the accident; (3) pictorial evidence was adduced which refutes the majority of plaintiffs' most serious allegations; and (4) the jury found in favor of defendant against two of the three plaintiffs, awarding no damages because those plaintiffs did not prove they had sustained serious injuries and, as to the remaining plaintiff, the jury found the City only 20% liable under an ordinary negligence standard.

Further, the trial court properly determined that it was given an insufficient evidentiary predicate to submit the issue of intoxication to the jury (see Sanchez v Manhattan & Bronx Surface Tr. Operating Auth., 203 AD2d 128 [1994]).

We perceive no basis to disturb the jury's finding that the plaintiffs Richard Towers and Charles Tillie did not sustain serious injury (see Insurance Law 5102[d]) in this accident. The trial court properly excluded from admission into evidence portions of Charles Tillie's warehoused medical records relating to his treatment in 1995 at Greater Metropolitan Medical Services, since he failed to produce the requisite certification from the warehouseman (see CPLR 4518[c]). Although Charles Tillie's MRI film from that time should have been admitted pursuant to CPLR 4532-a as self-authenticated, its exclusion was harmless. The medical testimony concerning examinations of, and tests administered to, Charles Tillie from 1999 onward afforded the jury an ample evidentiary basis to determine whether he had sustained a serious injury. With respect to plaintiff Towers, the evidence at trial was inconclusive as to whether his alleged injuries, i.e., two tooth fractures, were causally related to the accident. Moreover, plaintiff presented no evidence of the treatment he required or underwent for his alleged dental injuries (see Sanchez v Romano, 292 AD2d 202 [2002]).

We have considered the parties' remaining arguments for affirmative relief and find them unavailing.

McGuire, J. concurs in a separate memorandum as follows:

McGUIRE, J. (concurring)

I agree with the dissent that Supreme Court erred in failing to submit to the jury the question of whether the firefighter who drove the fire truck acted with reckless disregard for the safety of others (see CPLR 1602[7]). Plaintiffs' evidence, if credited, supported a charge and interrogatory on the verdict sheet regarding the "reckless disregard" exception to CPLR 1601. I cannot agree, however, that this failure warrants a new trial. Rather, in my view, the verdict demonstrates that the jury did not credit the testimony upon which plaintiffs rely. Accordingly, the court's failure to submit this issue to the jury was harmless (see CPLR 2002 ["an error in a ruling of the court shall be disregarded if a substantial right of a party is not prejudiced"]).

The only rational explanation for the jury's determination to apportion only 20% of the liability to the City is that the jury rejected the testimony that the fire truck was traveling at a high rate of speed in the wrong lane, and did not have its lights on at the time of the collision. Nor is it at all surprising that the jury rejected that testimony. Notably, plaintiffs' evidence — consisting of the testimony of two of the plaintiffs — that the headlights on the fire truck were not on at the time the accident occurred is belied by evidence that the headlights were automatically activated when the engine was running and could not be shut off manually. Moreover, the physical evidence of the scene is not consistent with the plaintiffs' claim that the fire truck had been traveling at a high rate of speed. In all, the evidence overwhelmingly supports the jury's verdict (see Nestorowich v Ricotta, 97 NY2d 393, 400-401 [2002] [holding that improper " error in judgment' charge was harmless"; "the evidence so clearly supports a verdict in favor of the defendant . . . Supreme Court's error did not prejudice a substantial right of the plaintiff"]).

Saxe, J.P. and Catterson, J. dissent in a memorandum by Catterson, J. as follows:

CATTERSON, J. (dissenting)

Because I believe there was sufficient evidence presented at trial requiring a "recklessness" charge to the jury, I respectfully dissent.

The testimony of one of the plaintiffs placed the fire truck on the wrong side of the road, being driven at approximately 40 miles an hour with all its lights off including its headlights. A second plaintiff also testified that the fire truck did not have its headlights on. A nonparty witness could not recall if the headlights were off or on but testified as to the fire truck bearing down on the intersection at about 40 miles an hour. The eyewitness also testified that the cab in which plaintiffs were riding had come to a complete stop at the intersection just prior to the collision. All the conflicting testimony about the failure of the cab to stop at the intersection came from the driver of the fire truck and the firefighters accompanying him, two of them were sitting in the rear of the truck, one in a seat facing rearward.

More significant is the trial court's reasoning for omitting the "recklessness" charge. Plaintiffs in their brief assert that the trial judge initially added the charge after counsel argued: "If the jury believes the plaintiffs . . . if they believed [sic] the lights were out. If they believed [sic] it was driving in the middle of the road on the wrong side of the road sometime after midnight, I suggest the requirements of recklessness."

However, the court then changed its mind stating: "Perhaps we shouldn't put it in. The fact of the matter is the word reckless doesn't appear in the complaint. I suspect it doesn't appear in the bill of particulars anywhere." In fact, the court's reasoning was premised on entirely incorrect information since the plaintiffs raised the recklessness claim in their complaint, bill of particulars, and notice of claim.

For all the foregoing reasons, I believe that "recklessness" should have been charged to the jury, and that the failure to do so was reversible error, warranting a new trial.

Davis v. Giria

Jay S. Hausman & Associates, P.C., Hartsdale (Jay S. Hausman of counsel), for appellant.
Cheven, Keely & Hatzis, Esqs., New York (Mayu Miyashita of counsel), for Manuel Giria and Kenneth D. Weiler, respondents.
Fiedelman & McGaw, Jericho (Dawn C. DeSimone of
counsel), for Allen Brewer, respondent.

Order, Supreme Court, Bronx County (Nelson S. Roman, J.), entered on or about March 9, 2006, which granted defendant Giria's motion for summary judgment dismissing the complaint as against all defendants, unanimously affirmed, without costs.

Even if an issue of fact were raised as to whether plaintiff's alleged injuries are "serious" as that term is defined in Insurance Law § 5102(d), the grant of summary judgment dismissing the complaint was correct in light of the persuasive and essentially uncontradicted evidence adduced by defendants showing that the injuries at issue are attributable, not to the alleged automobile accident, but to a preexisting degenerative condition (see Pommells v Perez, 4 NY3d 566, 580 [2005]; Diaz v Aanasco, __ AD3d __, 2007 NY Slip Op 01975 [2007]).

Coverage Pointers - Volume VIII, No. 23

NO-FAULT/UM/SUM TEAM
Audrey A. Seeley, Team Leader
[email protected]
Vivian Perry Roché
Mark Starosielec

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Coverage Pointers - Volume VIII, No. 23

NO-FAULT/UM/SUM TEAM Audrey A. Seeley, Team Leader [email protected] Vivian Perry Roché Mark Starosielec

APPELLATE TEAM Dan D. Kohane Scott M. Duquin

Across Borders

Newsletter Sign Up

Headquarters

Long Island Office

Albany

Additional Offices

NO-FAULT/UM/SUM TEAM
Audrey A. Seeley, Team Leader
[email protected]
Vivian Perry Roché
Mark Starosielec

APPELLATE TEAM
Dan D. Kohane
Scott M. Duquin