Dear Coverage Pointers Subscribers:
I do hope to see many
of you at the DRI Annual Meeting in
We have an absolutely splendid issue of CP this week - kudos to Scott “Was I Over the Top?” Billman and Audrey “Another New No Fault Client” Seeley for their great work.
You want interesting
insurance cases? We have a barrel full for you in the attached issue, including
discussions of these very interesting topics:
· Not Quite an Orwellian Provision if You Can Delete the Evidence Without Consequences - Destroying Videotape Not “Material” Breach of Insurance Contract
· The Only Thing That Will Redeem Humankind (read “the Insured”) is Cooperation (Bertrand Russell)
· Insurer Changes Mind and Decides to Deny Coverage After Assigning Defense Counsel. What is it to do? Please Check the Right Approach:
Litigating the Disclaimer via Declaratory Judgment: ________
Withdrawing as Counsel: _________
· In a Well-Reasoned Decision, Court Sets forth Order of Coverage, Following Policy Terms - Avoids a Pecker Pickle
· Property Policy Reformed to Correct Name of Insured. Identity of Insured Doesn't Impact on Applicability of Property Policy
· Court Wrestles with Choice of Law issues Relating to Insurance Coverage for Claim in Multiple States Where Insurance Law Conflicts
· On the Art of Keeping Them Talking as the Statute Expires
· Who is a Resident of the “Household?”
· Hurwitz & Fine on an ATV, Please Don't Say Motor Vehicle!
The Serious (Injury) Side
of
· Oops -- Defendants Provided More than Enough Evidence of Serious Injury
· Herniated Disc Alone Insufficient without Evidence of Limitation
· Defense
IME Did
· Defendants Provided More than Enough Evidence of Serious Injury Part II
· Evidence of Loss of Flexion in Cervical Spine Sufficient to Resist Motion
· Defendant’s Doc Finds Limitations, Defendant’s Motion Fails
· Jury Finding of Serious Injury Not Supported by Dated Exam
· Defendants Fail to Address 90/180 Category
· Facsimile Signature on Affirmed Medical Report not in Admissible Form
· Plaintiff's Medical Report Rebuts Defendant's Motion by Reliance on Objective Tests
· Chiropractor Affidavit did not Constitute Objective Evidence of Limitations
A special “atta-court” to the Fourth Department for its analysis of “additional
insured” status in the
Keep those cards and letters - and the occasional file - coming in.
Dan
Dan D. Kohane
Hurwitz & Fine, P.C.
E-Mail:
[email protected]
10/3/06 Anjay v. Those Certain Underwriters at Lloyd's of London
Appellate Division, Fourth Judicial Department
Not Quite an Orwellian Provision if You Can Delete the Evidence Without Consequences – Destroying Videotape Not “Material” Breach of Insurance Contract
So, there’s a policy that contains a provision described as a "Video Tape Warranty” that requires that the insured maintain surveillance video tapes “for a minimum of seven days or, in the event of a loss occurring, shall keep such video tapes until they have been viewed by the Loss Adjuster appointed by Underwriters." Of course, a loss occurs (an employee in the Mexico facility inadvertently poured acetone into a pot of boiling water in a room and fire ensued). The insured claimed a loss of gold and diamonds of just over $1.2 million. The insurer denies the claim on the basis of the breach of the Video Tape Warranty. The insured claimed that the tapes were inadvertently taped over.
The Court holds that a breach of a policy warranty by an insured does not necessarily relieve the insurer of its obligations under the policy. Rather, a breach of warranty does not defeat recovery under an insurance contract unless such breach materially increases the risk of loss, damage or injury within the coverage of the contract. The question of the materiality of a breach of warranty is normally a question of fact for the jury and it only applies where the evidence concerning the materiality is clear and substantially uncontradicted that the question is a matter of law for the court to decide. The burden is on the insurer to show the materiality of the breach. Here, the insurer claimed that footage of events occurring prior to the power outage would have provided "valuable information" about the extent of the fire and the activities of persons in the building prior to the outage is pure speculation. However, the defendants offered no explanation of what that information might be or how plaintiffs' failure to preserve it materially increased the risk of loss. Therefore the Court finds the breach was not material.
10/3/06 Matter of Continental Insurance Company v. Lulanaj
Appellate Division, Second Judicial Department
The Only Thing That Will Redeem Humankind (read “the Insured”) is Cooperation (Bertrand Russell)
Utica Mutual Insurance Company demonstrated that it met the requirements set forth in Thrasher v United States Liab. Ins. Co. (19 NY2d 159, 168-169) to disclaim coverage on the ground of lack of cooperation of its insured. Therefore, the insured’s vehicle was uninsured and the Supreme Court properly denied the part of the petition to permanently stay arbitration of the claim for uninsured motorist benefits.
Editors Note: Ahh, WHAT IS the Thrasher Test? For those who may not remember, it’s the three-point standard set forth by the Court of Appeals for proving lack of cooperation by an insured under a liability policy. :
· The insurer must demonstrate that it acted diligently in seeking to bring about the insured's co-operation;
· The insurer must prove that the efforts employed by the insurer were reasonably calculated to obtain the insurer's co-operation;
· The insurer must convince the court that the attitude of the insured, after his co-operation was sought, was one of "willful and avowed obstruction."
10/3/06 Seye v. Sibbio
Appellate Division, Second Judicial Department
Insurer Changes Mind and Decides to Deny Coverage After Assigning Defense Counsel. What is it to do? Please Check the Right Approach:
· Litigating the Disclaimer via Declaratory Judgment:_______
· Withdrawing as Counsel: _________
In New York, it is well settled that a motion to withdraw as counsel is a poor vehicle to test an insurer's right to disclaim liability or deny coverage. The Court reminds us, that the appropriate vehicle for resolving a dispute over the coverage offered by a policy is a declaratory judgment action in which the insured would be able to adequately litigate the facts of the insurance carrier's disclaimer.
9/29/06 Cheektowaga Central School District v. The Burlington Insurance Company
Appellate Division, Fourth Judicial Department
In a Well-Reasoned Decision, Court Sets forth Order of
Coverage, Following Policy Terms – Avoids a Pecker Pickle
Burlington policy issued by subcontractor insured anyone who was promised coverage by contract. Accordingly, School District owner and General Contractor were to be defended by subcontractor’s liability insurer, Burlington. The GC had primary coverage with Zurich as well. However, that policy provided it would be primary unless there was other primary coverage provided for which the GC was added as an additional insured. Accordingly, since Burlington’s policy provided GC was additional insured, Zurich policy language applied and Zurich’s coverage followed Burlington’s. Diamond State issued an umbrella policy to the subcontractor which also insured the School and the GC. However, since it was truly a pure excess policy,” its coverage followed Zurich’s.
Editor’s Note: The Fourth Department’s approach was right on the money.
Instead of following tortured Pecker Iron Works analysis, court simply
gave meaning to apt terms of insurance clauses dealing with priority of
coverage.
9/29/06 Fahrenholz v. Security Mutual Insurance
Appellate Division, Fourth Judicial Department
Property Policy Reformed to Correct Name of Insured.
Identity of Insured Doesn't Impact on Applicability of Property Policy
The property policy covered a certain residential premises but incorrectly identified the named insured as Timothy Fahrenholz. In actuality, Thomas Fahrenholz, Timothy's brother, acquired the property after Timothy died (and paid the insurance premium). There was proof that the policy correctly identified the property that Security Mutual agreed to insure and that under the underwriting guidelines of Security Mutual, the identity of the insured was not a factor in evaluating the risk that Security Mutual agreed to cover. Having accepted plaintiff['s] premium payment, having intended to insure the very property it insured, and having asserted no reason for denying the assumption of risk in question, there is no justification for denying plaintiff the equitable remedy of reformation" (Crivella v Transit Cas. Co., 116 AD2d 1007, 1008).
9/28/06
Certain Underwriters at Lloyd's, London, v. Foster Wheeler Corporation
Appellate Division, First Judicial Department
Court Wrestles with Choice of Law Issues Relating to
Insurance Coverage for Claim in Multiple States Where Insurance Law Conflicts
This declaratory judgment action sought an apportionment of responsibility
for the defense and indemnity costs of hundreds of thousands of asbestos-related
personal injury claims (the asbestos claims) among defendant Foster Wheeler
Corporation and its liability insurers (the “insurers”). The asbestos claims,
which have been asserted in jurisdictions throughout the United States since the
1970s, are based on allegations that the claimants or their decedents were
exposed to asbestos contained in boilers and other steam-generating equipment
designed and built for industrial customers by FW Corp. (from the early
twentieth century until 1973.
From its founding in 1900 until 1962, Foster Wheeler's principal place of
business was located in New York City. From 1962 to the present, Foster
Wheeler's principal place of business has been in New Jersey. After the 1962
move to New Jersey, Foster Wheeler continued to maintain a small office in New
York City, where only one employee was assigned on a full-time basis. It is
undisputed that, at all relevant times, Foster Wheeler's operations relating to
the design and building of asbestos-containing products were conducted
throughout the United States, and that its customers purchasing such products
were similarly widespread.
From 1970 to 1981, while FW had its principal place of business in New Jersey,
insurers sold Foster Wheeler certain excess liability policies (the unsettled
policies) that covered various periods between February 1, 1970, and October 1,
1982. The nonsettling insurers (of which there are about 30) had their principal
places of business in various states at the times their policies were issued;
five were domiciled in New York, three in New Jersey. It is undisputed that
almost all of the insurers are licensed to do business in both New York and New
Jersey. NY and NJ have different methods of calculated “horizontal” coverage
calculations and thus there is a conflict in law. Which state’s law should
apply?
New York and New Jersey (the only states suggested as the source of applicable
law on the allocation issue) each uses a different mathematical method of
effecting a pro rata allocation of an insured loss over the period of its
occurrence. The " time-on-the-risk' method" that was approved by the New York
Court of Appeals in Consolidated Edison Co. of N.Y., Inc. v Allstate Ins. Co.
(98 NY2d 208, 225 [2002]) derives the portion of the total loss allocable to the
term of a given policy "by multiplying the [total loss] by a fraction that has
as its denominator the entire number of years of the claimant's injury, and as
its numerator the number of years within that period when the policy was in
effect." The New Jersey Supreme Court, on the other hand, has adopted the method
of "proration on the basis of policy limits, multiplied by years of coverage" (Owens-Illinois,
Inc. v United Ins. Co., 138 NJ 437, 475, 650 A2d 974, 993 [1994]). Under the
New Jersey method (which has been referred to as "time-plus-limits"), the
proportion of the total loss allocable to the term of a given policy is the
ratio of the total coverage purchased (or risk retained) during the term of that
policy to the total coverage purchased (or risk retained) during the entire
period of the injury's occurrence (excluding any time during which insurance for
the risk was unavailable). Under the NJ approach, tens of millions of dollars
more coverage would be available to Foster Wheeler than would the
time-on-the-risk method.
The Court then applied a “choice of law” analysis using New York’s “center of gravity” or “grouping of contacts” approach. The approach generally dictates that a contract of liability insurance be governed by the law of "the state which the parties understood to be the principal location of the insured risk . . . unless with respect to the particular issue, some other state has a more significant relationship . . . to the transaction and the parties" However, since there are multiple states involved, the state of the insured's domicile should be regarded as a proxy for the principal location of the insured risk. Where the insured risk is scattered throughout multiple states, courts still deem the risk to be located principally in one state. Where there is a divergence between the state of incorporation and the state where the insured has its principal place of business, the state of the principal place of business takes precedence over the state of incorporation. Here, the Court determined that NJ was FW’s principal place of business and applied NJ law.
9/26/06 Garcia v. Peterson
Appellate Division, Second Judicial Department
On the Art of Keeping Them Talking as the Statute Expires
Here, plaintiffs' decedent was a passenger in a vehicle involved in an automobile accident with a vehicle owned and operated by the defendant. Apparently, there were communications between the insurer and the plaintiffs' counsel before the expiration of the statute of limitations. The plaintiff alleged that the communications by the insurer somehow delayed the commencement of the action until the expiration of the applicable statute of limitations. The Court disagrees and hold that the doctrine of equitable estoppel is an "extraordinary remedy" which provides that a defendant may be estopped from pleading the statute of limitations when the "plaintiff was induced by fraud, misrepresentations, or deception to refrain from filing a timely action" The plaintiffs failed to adduce sufficient evidentiary facts to establish that they were induced to delay the commencement of this action as the result on any affirmative misconduct by the defendant. There was no evidence establishing that the defendant made an actual misrepresentation or committed some other affirmative wrongdoing. Here, the communications between the defendant's insurer and the plaintiffs' counsel were insufficient to establish grounds for estoppel.
9/22/06 Matter of Erie Insurance v. Williams
Appellate Division, Fourth Judicial Department
Who is a Resident of the
“Household?”
Petitioner sought a permanent stay of arbitration of the SUM claim. Erie
Insurance contended that its cancellation of the auto policy was effective with
respect to respondent so there was no insurance in effect at the time of the
underlying accident. The effectiveness of the notice of cancellation depends
upon whether respondent was a "member[] of the insured's household" at the time
of the cancellation (Vehicle and Traffic Law § 313 [3]). The Court concludes
that the Lower Court erred in holding as a matter of law that respondent was not
a member of the named insured's household within the meaning of Vehicle and
Traffic Law § 313 (3). On the date of cancellation, Williams "actually resided
in the insured household with some degree of permanence and with the intention
to remain for an indefinite period of time" . The record established that
although the respondent and Luterek were platonic roommates, they were living as
members of a single household and indeed were sharing the costs of maintaining
their vehicles and the insurance. Therefore, the Court concludes that the policy
was not in effect at the time of the accident and so Erie had no obligation to
disclaim liability or to deny coverage.
9/22/06 Liberty Mutual Fire Insurance Company v. Rondina
Appellate Division, Fourth Judicial Department
Hurwitz & Fine on an ATV, Please Don’t Say Motor Vehicle!
A victory for your favorite coverage lawyers, H&F handled this one from beginning to end. The insured’s son was injured on a four wheel ATV and submitted a claim under his parent’s policy. The Supreme Court granted Liberty Mutual’s petition for a permanent stay of arbitration on the ground that respondents' claim was not within the scope of the policy’s coverage. The insured appealed claiming that the ATV was a “motor vehicle” under the policy and injuries flowing from the ATV accident were covered under the UM endorsement. The Appellate Division affirms. First, Vehicle and Traffic Law defines a motor cycle as a motor vehicle- with no more than three wheels. So, the ATV in our case could not be a motor cycle. Second, ATVs were specifically excluded from the definition of motor vehicles set forth in Vehicle and Traffic Law § 125. Therefore, Appellate Division held that the insureds could not turn this four wheeled ATV into a motor vehicle for purposes of UM coverage.
The Serious (Injury) Side of New York No-Fault
9/29/06 Mancuso v. Collins
Appellate Division, Fourth Judicial Department
Defendants Provided More than Enough Evidence of Serious Injury
The defendants contended that plaintiff did not sustain a serious injury within the meaning of the three categories alleged by plaintiff in her bill of particulars, i.e., the permanent consequential limitation of use, significant limitation of use and the 90/180 categories. The Court concludes that the defendants submitted evidence tending to establish that plaintiff sustained a serious injury within the meaning of those categories, and thus the burden never shifted to plaintiff to raise an issue of fact. The defendants submitted the entire workers' compensation medical file that included numerous medical reports of plaintiff's treating physicians who stated that plaintiff's injuries were serious in nature and that plaintiff sustained a serious injury within the meaning of those two categories as a result of the motor vehicle accident at issue. Moreover, the submissions contained documented objective evidence of injury, i.e., muscle spasm, x-rays and an MRI showing loss of lordosis, and, in addition, various physicians' reports quantified plaintiff's loss of range of cervical and lumbar range of motion.
9/28/06 Navedo v. Jaime
Appellate Division, First Judicial Department
Herniated Disc Alone Insufficient without Evidence of Limitation
Doctor’s reports were deficient for their failure to offer any explanation for the cessation of plaintiffs' treatment. Plaintiffs received only a few months of physical therapy, acupuncture and chiropractic care, and neither plaintiffs nor their medical expert have provided any explanation for their failure to pursue treatment beyond the end of the year. Nor did plaintiffs provide proof to establish that the bulging or herniated discs noted in the MRI reports were caused by the accident. As stated in Pommells, "Proof of a herniated disc, without additional medical evidence establishing that the accident resulted in significant physical limitation, is not alone sufficient to establish a serious injury". In the absence of any objective medical basis for these conclusions, the reports fail to causally relate plaintiffs' orthopedic deficits to the accident, offering no explanation for how such serious abnormalities as bulging and herniated cervical and lumbar discs were produced by a minor collision.
9/26/06
Murdakhayeva v. Blackstone Limo, Inc
Appellate Division, Second Judicial Department
Defense IME Did Not State Objective Tests to Support Conclusions
The affirmed medical report of the examining neurologist relied upon by the defendants merely noted that the plaintiff had a full range of motion in her cervical spine without setting forth the objective tests to support his conclusion.
9/26/06 Cebularz v. Diorio
Appellate Division, Second Judicial Department
Defendants Provided More than Enough Evidence of Serious Injury Part II
The defendant's examining neurologist identified evidence of cervical radiculopathy, but his report was otherwise inconclusive. The defendant's examining radiologist noted that a MRI report showed herniations at C4-5, C5-6, and C6-7. Although those herniations were also reflected on a cervical spine MRI taken on June 9, 2000, prior to the subject accident, the defendant's radiologist noted that the herniations appeared "slightly more prominent in size" in the April 2003 MRI. The defendant's proof collectively tended to support rather than to negate the existence of a triable issue of fact as to whether the plaintiff's injuries from prior accidents or conditions predating the subject automobile accident were exacerbated by the subject accident, necessitating the spinal fusion and discectomy surgery the plaintiff underwent in April 2004.
9/26/06 DeLeon v. J & J Towing, Inc.
Appellate Division, Second Judicial Department
Evidence of Loss of Flexion in Cervical Spine Sufficient to Resist Motion
Plaintiff raised a triable issue of fact as to serious injury as the plaintiff proffered affirmed medical reports that measured the plaintiff's range of motion using an arthroidal protractor and found that he suffered a loss of 25% right lateral flexion and left lateral flexion in his cervical spine, as well as a 25% loss of forward flexion in his lumbar spine. This was sufficient to raise a triable issue of fact.
9/26/06 Grady v. Jacobs
Appellate Division, Second Judicial Department
Defendant’s Doc Finds Limitations, Defendant’s Motion Fails
The affirmed medical report of the defendant's neurologist indicated the existence of limitations in motion of the plaintiff's lumbar spine and left shoulder. Since the defendant failed to meet his initial burden of establishing a prima facie case, it was unnecessary for the Court to consider whether the plaintiff's papers submitted in opposition to the defendant's cross motion were sufficient to raise a triable issue of fact.
9/26/06 Laruffa v. Lau
Appellate Division, Second Judicial Department
Jury Finding of Serious Injury Not Supported by Dated Exam
In this case, the plaintiff's medical expert last examined him approximately 21 months before trial. Accordingly, the Supreme Court should have granted the defendant's motion pursuant to CPLR 4401 for judgment as a matter of law dismissing the complaint, since the opinions expressed by the plaintiff's medical expert at trial were not based on a recent medical examination.
9/26/06 Talabi v. Diallo
Appellate Division, Second Judical Department
Defendants Fail to Address 90/180 Category
The defendants never addressed the claim that the plaintiff sustained a medically determined injury or impairment of a nonpermanent nature which prevented her from performing substantially all of the material acts which constituted her usual and customary daily activities for not less than 90 days during the 180 days immediately following the accident. The defendants' neurologist and orthopedist each examined the plaintiff on April 22, 2005, some 18 months post-accident. Although both doctors stated that Talabi was not disabled when they examined her, neither doctor addressed the possibility that she had a medically determined injury or impairment immediately following the accident that affected her activities during the 180 days immediately following the accident.
9/22/06 Dowling v. Mosey
Appellate Division, Fourth Judicial Department
Facsimile Signature on Affirmed Medical Report not in Admissible Form
Plaintiff submitted a report of her treating orthopedist that was affirmed under penalty of perjury but contained only a stamped facsimile signature, as well as the notation that it had been "dictated . . . but not read." The Court holds that the report is not in admissible form. Nonetheless, the Court concludes that defendant waived any objection to the deficient affirmation by failing to raise the issue of its admissibility. Finally, that the orthopedist's report, together with plaintiff's deposition testimony, raised triable issues of fact whether plaintiff sustained a fracture as well as a medically determined injury that prevented her from performing substantially all of her usual and customary daily activities for at least 90 days during the 180 days immediately following the accident.
9/22/06 Evans v. Syracuse
Appellate Division, Fourth Judicial Department
Plaintiff’s Medical Report Rebuts Defendant’s Motion by Reliance on Objective Tests
Plaintiff submitted the affidavit of his treating physician, who relied upon an MRI report taken on September 30, 2002 showing "significant collapse and broad based contained central and right herniation at L3-L4." Plaintiff's treating physician determined that, "more likely than not, the motor vehicle accident was the direct cause of the rapid decline of the L3-4 disc, even though there is some very minor contribution from the work-related injury." Here, plaintiff's treating physician relied upon objective medical evidence in the form of MRI reports and those reports established the aggravation of the preexisting condition. In addition, he relied upon other medical records setting forth the necessity of surgical intervention to alleviate the aggravated condition, thereby establishing that the accident resulted in significant physical limitations.
9/22/06 Robinsion v. Polasky
Appellate Division, Fourth Judicial Department
Chiropractor Affidavit did not Constitute Objective Evidence of Limitations
In opposition to defendant’s serious injury motion, plaintiff failed to raise a triable issue of fact. The Court rejects the contention of plaintiff that the affidavit of a chiropractor, stating that plaintiff sustained "lineal annular tearing" of two discs, is sufficient to raise a triable issue of fact. That affidavit did not constitute objective evidence of the extent or degree of the alleged physical limitations resulting from that disc injury as it failed to provide a numeric percentage of plaintiff's loss of range of motion or a qualitative assessment of plaintiff's condition.
Audrey’s
Angle
on
No-Fault
In this feature to the newsletter, we highlight recent no-fault arbitration awards. The compilation and publication of these awards is not at the same level as traditional reported case law. There is no single source to conduct comprehensive research in the area. This feature seeks out notable current awards and judicial determinations and provides them to our subscribers.
We encourage the submission of no-fault awards, including Master Arbitration awards that address interesting issues. These can be submitted to Audrey Seeley at [email protected]. With all submissions, we ask that you forward a redacted version of the award omitting the parties’ names and that the document be in PDF format. For copies of these decisions, contact Audrey.
9/28/06 In the Matter of the Arbitration between the Applicant and Respondent
Arbitrator Veronica O’Connor, Esq. (Erie County)
IME Physician’s 10 Minute Evaluation Insufficient To Defeat Treating Physician’s Opinion and One Year Rule Does Not Apply To Hip MRI When Applicant Treated For Hip Pain Within One Year From Accident.
Here is the Angle: Here the one year rule was not applied to a hip MRI performed approximately 14 months after the accident as the documentation revealed the eligible injured person complained of and treated for hip pain within a year of the accident. More importantly, Arbitrator O’Connor reminds us that as she is the judge of credibility with regard to independent medical examination (“IME”) reports. Here, the fact that the IME physician only took 10 minutes to conduct an orthopedic IME did not lend great weight to his opinion. Insurers are reminded to closely review their IME reports for the length of time for the examination, the types of objective testing done, and the documentation of the eligible injured person’s subjective complaints to ascertain if the report is sufficient to withstand a challenge.
The Analysis: The issue in this arbitration was whether orthopedic treatment was medically necessary based upon an IME as well as whether a portion of the claim was barred as the treatment was not necessary beyond one years from the date of the loss.
The Applicant, eligible injured person (“EIP”), was involved in an October 9, 2004, motor vehicle accident whereafter she presented to the hospital with posterior neck pain. The EIP underwent neck x-rays which demonstrated no evidence of a fracture. She was prescribed Flexeril and Motrin for pain and advised to follow up with her primary care physician. However, the EIP returned to the hospital two days later with increased neck pain and limited range of motion of her neck. The attending physician prescribed Darvocet for pain and instructed her to follow up with her primary care physician.
Thereafter, the EIP presented to an orthopedist with complaints of neck and shoulder pain. On October 16, 2004, she underwent a cervical spine MRI which was normal. The EIP was referred for physical therapy.
On February 1, 2005, the EIP treated with the orthopedist complaining of right shoulder and left hip pain. She had normal left hip range of motion, positive Patrick’s test, and tenderness over the hip flexors and lumbosacral area. The EIP was referred for MRIs of the right shoulder and
lumbar spine. The lumbar spine MRI revealed a L4 – L5 right sided foraminal disc herniation.
On March 4, 2005, the EIP returned to the orthopedist continuing to complain of pain in her S1 joint into her left groin. She was referred for pain management and to continue physical therapy.
The EIP underwent an IME on May 18, 2005, with Dr. Barry Katzman, an orthopedist. Dr. Katzman opined that the EIP had resolved cervical strain, resolved lumbar strain with voluntary restricted flexion, and resolved right shoulder strain. Dr. Katzman concluded that the EIP did not require further orthopedic treatment, follow up, surgery, or diagnostic testing, as well as physical therapy and massage therapy.
On May 23, 2005, the insurer denied the EIP all orthopedic treatment based upon the IME.
On December 8, 2005, the EIP continued orthopedic treatment with Dr. Kevin McGuire. Dr. McGuire noted that the EIP complained of right shoulder, left hip, and low back pain. He diagnosed the EIP with discogenic low back pain, right shoulder instability, and left hip pain of an unclear etiology. Dr. McGuire recommended a left hip MRI which was performed at Albany Medical College. The MRI was normal except for small left hip joint effusion.
On January 5, 2006, Dr. Kaufman performed a follow-up evaluation and recommended continued conservative care of physical therapy.
The medical bills at issue in the arbitration were for orthopedic care and the left hip MRI conducted at Albany Medical College. The insurer denied all orthopedic care based upon Dr. Katzman’s IME report. The left hip MRI was denied on the same basis as well as “medical expenses will not be subject to a time limitation, provided that, within one year after the date of the accident, it is ascertainable that further medical expenses may be sustained as a result of the injury. Medical documentation does not support medical treatment would be necessary beyond one year from the date of loss.”
Arbitrator O’Connor did not uphold the denials for orthopedic treatment on the basis that Dr. Katzman’s IME report was not persuasive. More specifically, the fact that Dr. Katzman’s report indicates he only spent 10 minutes examining the EIP was indicative of only a cursory examination. Also, Arbitrator O’Connor noted that the EIP testified Dr. Katzman moved her legs causing low back pain. The EIP cried and immediately told him of the pain, Dr. Katzman’s report failed to note this incident.
Also, the left hip MRI denial on the basis of the treatment not being ascertainable within one year was not upheld. Arbitrator O’Connor stated that while the EIP had treatment gaps the documentation submitted demonstrated that the treatment rendered was causally related to the injuries sustained in the accident.
9/25/06 In the Matter of the Arbitration between the Applicant and Respondent
Arbitrator Mary Anne Theiss, Esq. (Onondaga County)
Physical Therapist Reimbursed For Conducting EMG/NCV Testing.
Here is the Angle: This was a disturbing arbitration award wherein a physical therapist conducted needle EMG/NCV testing and was reimbursed for it!! The therapist presented a letter from the State Education Department stating that a properly trained physical therapist can perform electromyography. We note that there is no indication that the Worker’s Compensation Board actually accepted this opinion. It is telling that there are no codes within the Workers’ Compensation Fee Schedule for reimbursement within that specialty. This is a case to watch as we predict it will be appealed to Master Arbitration.
The Analysis: The Applicant, physical therapy, sought reimbursement for needle EMG/NCV testing performed on an eligible injured person. The insurer denied the claim on the ground that the New York State Workers’ Compensation fee schedule does not contain codes for the physical therapy specialty in this area. In other words, the fee schedule never contemplated that a physical therapy could conduct this type of testing. Therefore self employed physical therapists cannot bill these codes, even if the physical therapist has a special certification.
The Applicant argued that the New York State Education Department stated that physical therapists can conduct needle electromyography and nerve conduction studies if properly trained. The Applicant produced an April 13, 2003, letter to Joseph Salamone, at the New York State Workers’ Compensation Board, from Barbara Zittel, PhD, the executive secretary of the State
Education Department, which states in pertinent part:
As early as June 15, 1973, counsel for the Department commented that electromyography comes within the scope of practice of a properly trained physical therapist. This opinion was reaffirmed in 1980 by former Assistant Commissioner Abbott; in 1981, by William Sippel, former executive secretary to the State Board for Physical Therapy; and, in 1977, by Thomas J. Monahan, executive secretary to the State Board for Medicine.
Arbitrator Theiss further notes that the eligible injured person’s treating physician made the referral to the therapist for the testing. Also, the ultimate diagnosis and treatment was left to the treating physician.
Arbitrator Theiss concluded, without further explanation that the physical therapy should be reimbursed for the testing interpretation.
9/22/06 In the Matter of the Arbitration between the Applicant and Respondent
Arbitrator Thomas J. McCorry, Esq. (Erie County)
Minimum Criteria Provided For Contents of Release of Assignment of Benefits.
Here is the Angle: In almost 90% of the arbitrations I appear an issue is whether the eligible injured person has standing to proceed as an appropriate Release of Assignment of Benefit has not been submitted. This seems to be an Upstate issue as the majority of arbitrations seem to be filed by the eligible injured person. Further almost every time I raise this argument Arbitrator McCorry, Applicant’s counsel, and I engage in a discussion over the necessity of an appropriate release. Many times I am presented with a frustrated opponent stating that I am making a “hypertechnical” argument and attempting to obstruct everyone from getting to the “real” issues. Yet, why is there a regulation on it??
The group discussion then turns to what is the appropriate language for a Release of Assignment of Benefits. All participants agree that it would be useful if a form Release of Assignment of Benefits were generated by the Insurance Department since it has generated a form Assignment of Benefits. Arbitrator McCorry is liberal in his interpretation of what is a release but he has his limits. This arbitration award is a common case in point of what Arbitrator McCorry will not accept. The purported release of assignment of benefits provided the attorney the authority to proceed with the arbitration on the provider’s behalf for the outstanding bills. Of course, the document was entitled Release of Assignment of Benefits. Arbitrator McCorry’s commentary on what the release should state is a good start.
The Analysis: The Applicant, eligible injured person (“EIP”), sought payment of an MRI study and digital motion x-ray. The EIP executed an Assignment of Benefits in favor of the providers rendering the services. The insurer raised the issue at the arbitration whether the EIP had standing to proceed with the arbitration as the purported Release of Assignment of Benefits was inappropriate and no more than an authorization for counsel to proceed with an arbitration on the providers’ behalf.
Arbitrator McCorry agreed with the insurer’s position and at the arbitration informed the EIP’s counsel of his opinion. Moreover, he permitted counsel to submit the appropriate releases but none were submitted.
Arbitrator McCorry provides some guidance on what the release should contain:
Although there is no great magic to the wording of the release, I think at a minimum it should indicate that for the assignment that was given for the treatment of injuries arising out of an accident of a certain date, the health provider is releasing back to the injured party the right to make claim for payment. The document should be signed by both parties or their authorized representatives.
Arbitrator McCorry further notes that under 11 NYCRR §65-3.11 when a health provider accepts an assignment it no longer has a claim against the injured party for payment of the treatment rendered. The exception to the rule is that the assignment can be revoked by the health provider if benefits are not payable based upon the injured person’s lack of coverage and/or violation of a policy condition due to the injured person’s actions or conduct (i.e., failure to appear for IME or EUO).
Accordingly, the claim was denied for lack of standing.
Across Borders
Visit the Hot Cases section of the Federation of Defense & Corporate Counsel website, www.thefederation.org ranked among the top five legal research websites in an article published in Litigation News, a publication of the Litigation Section of the American Bar Association. Dan Kohane serves as the FDCC’s Website Editor Emeritus.
10/2/06
Roberts v. American Family Mutual Insurance Co.
Supreme Court of Colorado
Stacking Of Underinsured
Motorist Benefits Not Precluded By Coverage Limitations Of Policies Issued By
Different Insurers From Same Insurance Group
In this case, the Plaintiffs suffered substantial injuries as a
result of a motorcycle/pickup truck accident. Plaintiffs (who were riding the
motorcycle) filed claims against the pickup truck driver, which were settled for
the liability limits of the pickup truck driver's automobile policy. Plaintiffs
were insured under seven (7) separate insurance policies; one (1) motorcycle
insurance policy issued by American Standard Insurance Company of Wisconsin
("American Standard") and six (6) automobile insurance policies issued by
American Family Mutual Insurance Company ("American Family). American Standard
and American Family are members of the American Family Insurance Group.
Plaintiffs sought underinsured motorists benefits from all seven policies, and
when the insurers declined to tender benefits, Plaintiffs sought declaratory
relief. On cross-motions for summary judgment, the insurers conceded that
underinsured motorist benefits were available under any of the seven policies,
but asserted that the anti-stacking provisions of each policy limited their
liability to the underinsured motorist benefits available under any single
policy. The district court agreed with the insurers and a majority of the Court
of Appeals affirmed. The Colorado Supreme Court reversed, holding that the
anti-stacking limitations did not apply as their application was limited, by
their own terms, to policies issued by "the same company", and the motorcycle
policy was not issued by the same company as the automobile policies. The case
was remanded to the district court for further proceedings consistent with the
Supreme Court's ruling.
Submitted by: Anthony J. Zarillo, Jr. and Charles A. Castle [Courter, Kobert & Cohen, P.C.]
9/29/06
Crocker v. National Union Fire Insurance
Fifth Circuit Court of Appeals
Issues Related to Impact of
Additional Insured’s Failure to Provide Notice Under Notice-Prejudice Rule
Certified to Texas Supreme Court
National Union insured the company as the named insured and the company
employee as an additional insured. National Union received notice from and
provided the insured-company with a defense, but not the employee, because the
employee failed to forward the suit papers or to otherwise provide notice or
authorize a defense. By statute, Texas requires that an insurer show prejudice
despite lack of notice. However, in the present case, there was a question of
the additional insured’s failure to provide notice. The circuit court stated
that before it were “important and determinative questions of Texas law,” to
which there was no controlling Texas precedent. The circuit court therefore
certified two questions to the Supreme Court of Texas; first, “[w]here an
additional insured does not and cannot be presumed to know of coverage under an
insurer’s liability policy, does an insurer that has knowledge that a suit
implicating policy coverage has been filed against its additional insured have a
duty to inform the additional insured of the available coverage?” Second, if
yes, “what is the extent or proper measure of the insurer’s duty to inform the
additional insured, and what is the extent or measure of any duty on the part of
the additional insured to cooperate with the insurer up to the point he is
informed of the policy provisions?”
Submitted by: Bruce Celebrezze & Supriya Sundarrajan (Sedgwick Detert Moran & Arnold)
9/29/06
Young v. Midwest Family Mutual Insurance
Nebraska Supreme Court
Plaintiffs’ motion for
attorneys’ fees permissible, because written settlement offer not equivalent to
an offer to allow judgment
Neb. Rev. Stat. § 25-901 permits a defendant to make an offer in
writing to allow judgment to be taken against it at any time prior to trial, for
a specified sum. Neb. Rev. Stat. § 44-359 provides that if a plaintiff fails to
obtain a judgment greater than that offered by the defendant pursuant to §
25-901, then the plaintiff cannot recover prevailing party attorneys’ fees
against the defendant insurer. The court considered whether an offer to settle
is equivalent to an offer to allow judgment pursuant to Neb. Rev. Stat. §
25-901. The Nebraska Supreme Court determined that the district court erred in
applying § 25-901 to deny plaintiffs’ motion for attorneys fees, because
although the defendant made settlement offers, it did not make specifically make
an offer to allow judgment to be taken against it. Looking to decisions in other
jurisdictions on the issue, the court held that a written settlement offer was
not the same as an offer to allow judgment to be taken against the insurer.
Submitted by: Bruce Celebrezze & Supriya Sundarrajan (Sedgwick Detert Moran & Arnold)
9/22/06
Founders Insurance Company v. White
Illinois Appellate Court, First District
No Liability For Insurer Where
Great Northern Acted As Insured’s, and not Insurer’s, Agent In Obtaining
Non-Owners Vehicle Insurance Policy
In September 2002, Tamietha White (White) obtained a non-owners
vehicle insurance policy issued by plaintiff Founders Insurance Company
(Founders). White obtained the policy with the assistance of Great Northern
Insurance Agency (Great Northern). In December 2002, while driving a vehicle she
owned, White was in an accident involving a pedestrian. A personal injury action
ensued. Founders denied coverage for the claim under the non-owners policy,
because White was driving a vehicle that she owned. The issue on appeal was
whether Great Northern acted as Founders' agent when it assisted White in
obtaining her non-owners policy. Under Illinois law four factors are considered
in determining whether an individual acted as an insured’s broker or an
insurer’s agent: (1) who first set the individual in motion ; (2) who controlled
the individual’s action; (3) who paid the individual; and (4) whose interest the
individual was protecting. Based on the facts before it, the appellate court
held that the lower court properly concluded that Great Northern was not an
agent of Founders, but rather served as White’s agent. Significant here were
that White set Great Northern in motion when she sought its assistance in
procuring insurance, Great Northern worked with 15-20 different insurance
companies, Great Northern financed a portion of the premium owed by White to
Founders, and Great Northern could not bind insurance coverage on behalf of
Founders, except in certain limited circumstances.
Submitted by: Bruce Celebrezze & Supriya Sundarrajan (Sedgwick Detert Moran & Arnold)
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Cheektowaga Central School District v. Burlington Insurance
Appeals from a judgment (denominated order and judgment) of the Supreme Court,
Erie County (Joseph R. Glownia, J.), entered January 28, 2005. The judgment
denied plaintiffs' motion for summary judgment, granted the cross motion of
defendants Diamond State Insurance Company and United National Group, Ltd. for
summary judgment, declared that the insurance policy issued by them was excess
to the coverage provided by the insurance policy issued by Zurich American
Insurance Company and dismissed the amended complaint.
RUPP, BAASE, PFALZGRAF, CUNNINGHAM & COPPOLA LLC, BUFFALO (JOHANNA M. DASH OF
COUNSEL), FOR PLAINTIFF-APPELLANT CHEEKTOWAGA CENTRAL SCHOOL DISTRICT.
HODGSON RUSS LLP, BUFFALO (MICHAEL V. MC LAUGHLIN OF COUNSEL), FOR
PLAINTIFF-APPELLANT CIMINELLI-COWPER CO., INC.
SMITH, MAZURE, DIRECTOR, WILKINS, YOUNG & YAGERMAN, P.C., NEW YORK (JOEL M.
SIMON OF COUNSEL), FOR DEFENDANTS-RESPONDENTS. It is hereby ORDERED that the
judgment so appealed from be and the same hereby is modified on the law by
vacating the provision dismissing the amended complaint, granting the motion in
part and granting judgment in favor of plaintiffs as follows: It is ADJUDGED AND
DECLARED that plaintiffs are additional insureds under the insurance policies
issued by defendants The Burlington Insurance Company and Diamond State
Insurance Company and United National Group, Ltd. to defendant Sahlem's Roofing
& Siding, Inc. and that defendant The Burlington Insurance Company is obligated
to defend and indemnify plaintiffs in the underlying action
and as modified the judgment is affirmed without costs.
Memorandum: Plaintiffs, Cheektowaga Central School District (School) and Ciminelli-[*2]Cowper Co., Inc. (Ciminelli), commenced this action seeking a declaration that they are additional insureds on insurance policies issued by defendants The Burlington Insurance Company (Burlington) and Diamond State Insurance Company and United National Group, Ltd. (collectively, Diamond State) to defendant Sahlem's Roofing & Siding, Inc. (Sahlem). Plaintiffs also sought a declaration that Burlington and Diamond State are obligated to defend and indemnify plaintiffs in the underlying action commenced by defendant Donald E. Bishop. Bishop was injured while working on a construction site on property owned by the School, where Ciminelli was the construction manager for the project, and thereafter commenced the underlying action against, inter alia, the School and Ciminelli. The School had contracted with Sahlem for roofing work on the project, and Sahlem subcontracted the work to Bishop's employer. Sahlem was the named insured on a general liability policy issued by Burlington providing coverage up to $1,000,000 and on an umbrella policy issued by Diamond State providing coverage up to $10,000,000.
The School moved for summary judgment seeking the declarations set forth in the amended complaint, and Ciminelli joined in the motion. Diamond State cross-moved for judgment declaring, inter alia, that the coverage provided by the Diamond State policy was excess to the coverage provided by the policy of insurance issued to Ciminelli by Zurich American Insurance Company (Zurich). Supreme Court denied the motion in its entirety and granted the cross motion by declaring that the Diamond State policy was excess to the coverage provided by the policy of insurance issued by Zurich, and the court sua sponte dismissed the amended complaint.
We agree with plaintiffs that they are additional insureds on the policies issued by Burlington and Diamond State and that Burlington is obligated to defend and indemnify plaintiffs in the underlying action. The Burlington policy defined an insured as, inter alia, any organization with whom Sahlem agreed to provide insurance pursuant to the terms of a written contract. Here, the written contract between the School and Sahlem required Sahlem to obtain insurance to provide coverage for claims for bodily injury arising from Sahlem's operations under the contract, including the operations of any subcontractor of Sahlem, and to name plaintiffs as additional insureds on the policies. Indeed, Burlington did not oppose plaintiffs' motion and conceded that its policy provided primary coverage to plaintiffs. The Diamond State policy defined an insured as, inter alia, any organization qualifying as an insured under any policy of underlying insurance, which in turn was defined as coverage afforded under the insurance policies designated in item five of the declarations, and the Burlington policy was designated in item five. Because plaintiffs are additional insureds under the Burlington policy, they are also additional insureds under the Diamond State policy. We therefore modify the judgment by granting plaintiffs' motion in part and granting judgment in favor of plaintiffs declaring that plaintiffs are additional insureds under the policies issued by Burlington and Diamond State and that Burlington is obligated to defend and indemnify plaintiffs in the underlying action.
The court, however, properly granted the cross motion insofar as it declared that the coverage provided by the Diamond State policy is excess to that provided by the Zurich policy. Ciminelli is the named insured on the Zurich policy, which provided coverage of $1,000,000, and, according to Ciminelli, the School is an additional insured on that policy. The Zurich policy provided primary coverage to plaintiffs, inter alia, unless there was other primary insurance available for which plaintiffs were added as additional insureds by the attachment of an endorsement or there was other insurance, whether primary or excess, in which a named insured of the Zurich policy was added as an additional insured. In either of those two events, the Zurich policy provided excess insurance coverage. The Diamond State policy provided only excess insurance coverage. Plaintiffs contend that the Diamond State policy provides excess coverage that is primary to the Zurich policy. We reject that contention. "The general rule is . . . that [*3]where there are multiple policies covering the same risk, and each generally purports to be excess to the other, the excess coverage clauses are held to cancel out each other and each insurer contributes in proportion to its [policy] limit" (Lumbermens Mut. Cas. Co. v Allstate Ins. Co., 51 NY2d 651, 655; see Great N. Ins. Co. v Mount Vernon Fire Ins. Co., 92 NY2d 682, 687). That rule, however, does not apply "when its use would distort the meaning of the terms of the policies involved" (State Farm Fire & Cas. Co. v LiMauro, 65 NY2d 369, 374; see Lumbermens Mut. Cas. Co., 51 NY2d at 655; Castricone v Riggi, 259 AD2d 815, 816). "Whether there will be such distortion turns on consideration of the purpose each policy was intended to serve as evidenced by both its stated coverage and the premium paid for it . . ., as well as upon the wording of its provision concerning excess insurance" (State Farm Fire & Cas. Co., 65 NY2d at 374; see United States Fire Ins. Co. v CNA, 300 AD2d 1054, 1055; Castricone, 259 AD2d at 816).
Here, the requisite analysis leads to the conclusion that coverage under the Zurich policy must be exhausted before Diamond State is required to contribute under its policy. Sahlem paid $43,750 for $10,000,000 in umbrella coverage under the Diamond State policy, whereas Ciminelli paid $414,277 for $1,000,000 in general liability coverage under the Zurich policy (see United States Fire Ins. Co., 300 AD2d at 1055-1056). In addition, as noted, the Diamond State policy is an umbrella policy and its coverage is excess to other insurance, providing coverage only after the exhaustion of other excess policies, while the Zurich policy affords primary coverage (see id.; Castricone, 259 AD2d at 817). Because the Zurich policy was purchased for primary coverage, despite its "other insurance" clause whereby it would provide only excess coverage under certain conditions, and the Diamond State policy was purchased only for excess coverage, the Diamond State policy is " last on the risk' " (Jefferson Ins. Co. of N.Y. v Travelers Indem. Co., 92 NY2d 363, 372).
Although the court properly issued the declaration sought by Diamond State, it erred in sua sponte dismissing the amended complaint in this declaratory judgment action (see Tumminello v Tumminello, 204 AD2d 1067). We therefore further modify the judgment by vacating the provision dismissing the amended complaint.
All concur, Hayes, J., not participating.
Certain Underwriters at Lloyd's v. Foster Wheeler Corporation
Defendant Foster Wheeler
Corporation appeals from an order of the Supreme Court, New York County (Barbara
R. Kapnick, J.), entered January 10, 2005, which denied its motion for partial
summary judgment declaring that New Jersey substantive law governs all disputed
issues in this action, and granted the motions by defendants-respondents for
partial summary judgment declaring that New York substantive law governs all
disputed issues in this action.
FRIEDMAN, J.P.
The question presented is whether New York law or New Jersey law governs a large number of excess liability insurance policies, under which the insured seeks coverage for a portion of the costs of defending and paying asbestos-related personal injury claims that have been asserted against it since the 1970s. For the reasons discussed below, we conclude that New Jersey law applies.
This declaratory judgment action seeks an apportionment of responsibility for the defense and indemnity costs of hundreds of thousands of asbestos-related personal injury claims (the asbestos claims) among defendant Foster Wheeler Corporation (FW Corp.), its subsidiary, Foster [*3]Wheeler Energy Corp. (FW Energy), and their liability insurers. The asbestos claims, which have been asserted in jurisdictions throughout the United States since the 1970s, are based on allegations that the claimants or their decedents were exposed to asbestos contained in boilers and other steam-generating equipment designed and built for industrial customers by FW Corp. (from the early twentieth century until 1973) or by FW Energy (since 1973, when FW Energy took over FW Corp.'s commercial operations). FW Corp. was incorporated under New York law from 1900 until 2001, when it was merged into another entity in a corporate restructuring. FW Energy, which is now a subsidiary of FW Corp.'s successor-by-merger, has been incorporated under Delaware law at all times since its formation in 1973. We use the term "Foster Wheeler" to refer to FW Corp. and FW Energy collectively.
From its founding in 1900 until 1962, Foster Wheeler's principal place of business was located in New York City. From 1962 to the present, Foster Wheeler's principal place of business has been in New Jersey. After the 1962 move to New Jersey, Foster Wheeler continued to maintain a small office in New York City, where only one employee was assigned on a full-time basis. It is undisputed that, at all relevant times, Foster Wheeler's operations relating to the design and building of asbestos-containing products were conducted throughout the United States, and that its customers purchasing such products were similarly widespread.
Before the order appealed from was rendered, Foster Wheeler reached settlements with all of its insurers except for defendants-respondents (the nonsettling insurers). From 1970 to 1981, the nonsettling insurers sold Foster Wheeler certain excess liability policies (the unsettled policies) that covered various periods between February 1, 1970, and October 1, 1982. Thus, all of the unsettled policies were issued while Foster Wheeler's principal place of business was in New Jersey. The nonsettling insurers (of which there are about 30) had their principal places of business in various states at the times their policies were issued; five were domiciled in New York, three in New Jersey. It is undisputed that almost all of the nonsettling insurers are licensed to do business in both New York and New Jersey.
The parties agree that the underlying asbestos claims are based on injuries that are deemed, for purposes of insurance coverage, to have been suffered continuously over extended periods of time. This makes it necessary to allocate each injury "horizontally" over the period of its occurrence in order to determine the coverage obligation of each nonsettling insurer. The conflict-of-laws issue in this case arises from the circumstance (on which the parties agree, as more fully discussed below) that New York and New Jersey prescribe different mathematical methods of performing such an allocation. The matter is further complicated by the need, once an allocation is made to each year (whichever method is used), to allocate the loss for that particular year "vertically" among the various layers of insurance purchased for that year, with primary policies paying first within each year. Thus, as the nonsettling insurers point out, "the way in which liabilities are allocated to policies in the primary layers will determine when those primary policies are exhausted, and thus when excess layer policies [such as the unsettled policies] are reached, if at all."
Since there is no suggestion that methods of allocating a loss "horizontally" over time can be derived from the terms of the relevant policies, such an allocation method must be supplied by [*4]the applicable state law. As the relevant policies do not contain choice-of-law provisions, we are required to make that determination in accordance with our state's established choice-of-law principles.
As previously indicated, the parties agree (and we accept for purposes of this appeal) that New York and New Jersey (the only states suggested as the source of applicable law on the allocation issue) each uses a different mathematical method of effecting a pro rata allocation of an insured loss over the period of its occurrence. The " time-on-the-risk' method" that was approved by the New York Court of Appeals in Consolidated Edison Co. of N.Y., Inc. v Allstate Ins. Co. (98 NY2d 208, 225 [2002]) derives the portion of the total loss allocable to the term of a given policy "by multiplying the [total loss] by a fraction that has as its denominator the entire number of years of the claimant's injury, and as its numerator the number of years within that period when the policy was in effect" (Stonewall Ins. Co. v Asbestos Claims Mgt. Corp., 73 F3d 1178, 1202 [2d Cir 1995])[FN1]. The New Jersey Supreme Court, on the other hand, has adopted the method of "proration on the basis of policy limits, multiplied by years of coverage" (Owens-Illinois, Inc. v United Ins. Co., 138 NJ 437, 475, 650 A2d 974, 993 [1994]). Under the New Jersey method (which has been referred to as "time-plus-limits"), the proportion of the total loss allocable to the term of a given policy is the ratio of the total coverage purchased (or risk retained) during the term of that policy to the total coverage purchased (or risk retained) during the entire period of the injury's occurrence (excluding any time during which insurance for the risk was unavailable) (see Carter-Wallace, Inc. v Admiral Ins. Co., 154 NJ 312, 322-323, 712 A2d 1116, 1122 [1998] [illustrating how the method operates]). It is undisputed that the time-plus-risk method, by "intentionally assign[ing] a greater portion of indemnity costs to years in which greater amounts of insurance were purchased" (id., 154 NJ at 326, 712 A2d at 1123 [internal quotation marks and citation omitted]), would make tens of millions of dollars more coverage available to Foster Wheeler than would the time-on-the-risk method.
In the proceedings before the motion court, Foster Wheeler moved for partial summary judgment declaring all disputed issues to be governed by New Jersey law, while the nonsettling insurers moved for partial summary judgment declaring New York law to govern. In the order appealed from, the motion court ruled that New York law applies. We now reverse and hold that New Jersey law applies.
Under New York's "center of gravity" or "grouping of contacts" approach to choice-of-law questions in contract cases, we are required to apply the law of the state with the "most significant relationship to the transaction and the parties" (Zurich Ins. Co. v Shearson Lehman Hutton, Inc., 84 NY2d 309, 317 [1994], quoting Restatement [Second] of Conflict of Laws [hereinafter, Restatement] § 188[1]). This approach generally dictates that a contract of liability [*5]insurance be governed by the law of "the state which the parties understood to be the principal location of the insured risk . . . unless with respect to the particular issue, some other state has a more significant relationship . . . to the transaction and the parties" (id. at 318, quoting Restatement § 193). However, the location-of-the-risk rule obviously cannot be applied without modification in the event the insurance policies in question cover risks that are spread though multiple states. Such is the case here, where the risks covered by the unsettled policies are nationwide or global in scope, and, given Foster Wheeler's widely dispersed operations and customers, there is no contention that, at the time the unsettled policies were issued, the parties would have understood any one state to have constituted, in a literal sense, "the principal location of the insured risk." Accordingly, we turn to broader choice-of-law principles for guidance.
In adopting the "grouping of
contacts" theory to resolve choice-of-law issues in contract cases, the Court of
Appeals noted that the merit of this approach "is that it gives to the place
having the most interest in the problem paramount control over the legal issues
arising out of a particular factual context, thus allowing the forum to apply
the policy of the jurisdiction most intimately concerned with the outcome of the
particular litigation" (Auten v Auten, 308 NY 155, 161 [1954] [internal
quotation marks, brackets and citation omitted]). Thus, although contract cases
do not call for use of the pure "interest analysis" employed in tort cases (see
Zurich, 84 NY2d at 319), the respective "governmental interests" of the
competing
jurisdictions nonetheless "should be considered" (Zurich, 84 NY2d at 319,
quoting Matter of Allstate Ins. Co. [Stolarz], 81 NY2d 219, 226 [1993]).
The governmental interests implicated by an insured's claim against an insurer of risks located in multiple states are those in: (1) regulating conduct with respect to insured risks within the state's borders; (2) assuring that the state's domiciliaries are fairly treated by their insurers; (3) assuring that insurance is available to the state's domiciliaries from companies located both within and without the state; and (4) regulating the conduct of insurance companies doing business within the state's borders (see Fireman's Fund Ins. Co., Inc. v Schuster Films, Inc., 811 F Supp 978, 984 [SD NY 1993] [applying New York choice-of-law principles]). In the case of a corporate insured seeking coverage under a policy covering risks in multiple states, the foregoing interests, in aggregate, weigh in favor of applying the law of the insured's domicile, notwithstanding that certain other states (e.g., the states of the insurer's domicile, and where negotiation and contracting occurred) may share, to a lesser extent, in the fourth interest enumerated above (see id. at 984-985).[FN2] [*6]
Additional goals of choice-of-law analysis are "certainty, predictability and uniformity of result" and "ease in the determination and application of the law to be applied" (Restatement § 6[2][f], [g]; see Zurich, 84 NY2d at 318 n 5 ["Section 6 of (the) Restatement . . . embodies the general choice of law principles"]). These goals, too, will be furthered by applying the law of the insured's domicile to liability insurance policies covering multistate risks. The state of the insured's domicile is a fact known to the parties at the time of contracting, and (in the absence of a contractual choice-of-law provision) application of the law of that state is most likely to conform to their expectations. As a Rhode Island federal court addressing a similar choice-of-law issue has observed, "common sense suggests that, knowing of the potential for claims in any number of states and even in foreign countries, the parties would consider the insured's principal headquarters as the one jurisdiction which ties all potential parties together" (CPC Intl., Inc. v Northbrook Excess & Surplus Ins. Co., 739 F Supp 710, 715 [D RI 1990], reconsideration granted on other grounds 839 F Supp 124 [D RI 1993], affd 46 F3d 1211 [1st Cir 1995]; accord Liggett Group Inc. v Affiliated FM Ins. Co. 788 A2d 134, 138 [Del Super 2001]). Moreover, the state of the insured's domicile can be ascertained in any subsequent litigation without fact-intensive inquiry or unguided weighing of different contacts, and making the insured's domicile the primary factor in selecting applicable law minimizes the likelihood that contemporaneous policies will be deemed governed by the laws of different states. Thus, in addition to rendering the resolution of choice-of-law issues less difficult, adoption of a rule to apply the law of the insured's domicile makes it more likely that consistent and uniform results will be reached in different cases.
What emerges from the foregoing
is that, where it is necessary to determine the law governing a liability
insurance policy covering risks in multiple states, the state of the insured's
domicile should be regarded as a proxy for the principal location of the insured
risk. As such, the state of domicile is the source of applicable law. This
conclusion accords with prior decisions of this Court and of the Third
Department. Most recently, in Steadfast Ins. Co. v Sentinel Real Estate Corp.
(283 AD2d 44 [2001]), this Court held that, where the policy in question covered
the risks arising from "the nationwide scope of [the insured's] operations, the
principal location of the insured risk should be deemed to be the state where
[the insured] is incorporated and has its principal place of business" (id.
at 50), i.e, the insured's domicile
[FN3]. Similarly, in Munzer v St.
[*7]Paul Fire & Mar. Ins. Co. (203 AD2d 770
[1994]), the Third Department held that the "primary factor" in ascertaining the
law governing a liability policy covering risks in multiple states was that the
insured was "a Vermont based business" (id. at 772), notwithstanding
that, among other things, the policy had been procured by a New York broker from
the insurer's New York office (id. at 771)[FN4].
Finally, in
Regional Import & Export Trucking Co. v North Riv. Ins. Co. (149 AD2d 361
[1989]), this Court held that "a policy delivered to a New Jersey corporation to
insure against a loss occurring anywhere' should be subject to the law of that
State" (id. at 362).
The foregoing establishes that, "where the insured risk is scattered throughout multiple states, courts still deem the risk to be located principally in one state" (Maryland Cas. Co. v Continental Cas. Co., 332 F3d 145, 153 [2d Cir 2003] [following Steadfast]), namely, in the state of the insured's domicile at the time the policy was issued. It remains for us to discuss whether a corporate insured's domicile is the state of its principal place of business or the state of its incorporation, where, as here, these are not the same state [FN5]. In the case of such a divergence, the state of the principal place of business takes precedence over the state of incorporation, a point that the nonsettling insurers apparently do not dispute (see Munzer, 203 AD2d at 771, 772 [applying the law of Vermont, the state of the insured's principal place of business, rather than the law of New York, the state of incorporation]). Treating the state of the principal place of business as the corporate domicile for these purposes, rather than the state of incorporation, is consistent with the view expressed in the Restatement that, "[a]t least with respect to most issues, a corporation's principal place of business is a more important contact than the place of incorporation" (Restatement § 188, Comment e, at 581). We look to the state of incorporation for the law governing the corporation's internal corporate governance and its relations with shareholders, not for the law governing the corporation's contractual relationships in general.
Significantly, our conclusion that New Jersey law applies to the unsettled policies finds [*8]further support in the fact that Foster Wheeler, as an insured with a New Jersey principal place of business, will look to the New Jersey insurance guaranty fund for payment of its claims against insolvent insurers (see NJ Stat Ann § 17:30A-5; see also American Employers' Ins. Co. v Elf Atochem N. Am., Inc., 157 NJ 580, 591, 725 A2d 1093, 1099 [1999]; Eastern Seaboard Pile Driving Corp. v New Jersey Prop.-Liab. Ins. Guar. Assn., 175 NJ Super 589, 594, 421 A2d 597, 600 [App Div 1980]). New Jersey's provision of such protection to Foster Wheeler, based on Foster Wheeler's maintenance of its principal place of business in that state, confirms that New Jersey now has, and had at the time the unsettled policies were issued, the greatest interest in the determination of the amount of coverage available to Foster Wheeler.
We recognize that, in contract cases generally, the resolution of a choice-of-law issue involves consideration of five factors enumerated in section 188 of the Restatement (the Restatement factors), viz., the place of contracting, the place of negotiation, the place of performance, the location of the subject matter, and the contracting parties' domiciles (see Zurich, 84 NY2d at 317, citing Restatement § 188[2]). In arguing for the application of New York law, the nonsettling insurers rely heavily on the first three of these factors, emphasizing the role New York City insurance brokerage firms (specifically, Marsh & McLennan and Johnson & Higgins) played in procuring the unsettled policies. In this regard, the nonsettling insurers point to evidence that, among other things: (1) the unsettled policies were generally negotiated and "bound" by these brokers in New York City; (2) many of the unsettled policies were countersigned by the insurers' agents in New York; (3) the insurers generally delivered the policies to the brokers' New York offices; (4) premium invoices were sent by the insurers to, and premium checks remitted to the insurers from, the brokers' offices; and (5) most of Foster Wheeler's premium checks were drawn on a bank account it maintained in New York City. Based on this evidence, the nonsettling insurers argue that New York was the place where the unsettled policies were contracted, negotiated and performed.[FN6]
Foster Wheeler, for its part, argues that New Jersey was the place of contracting, negotiation and performance for each of the unsettled policies. To this end, Foster Wheeler highlights evidence that, among other things: (1) each of the unsettled policies was either mailed or hand-delivered to Foster Wheeler in New Jersey; (2) Foster Wheeler's internal activities related to obtaining the policies (e.g., setting specifications, preparing applications, giving brokers authority to act, writing premium checks) were performed in New Jersey; (3) the brokers frequently met with Foster Wheeler in New Jersey; and (4) Foster Wheeler received premium [*9]invoices in New Jersey.[FN7]
As previously discussed, we regard the state of the insured's domicile to be a proxy for the principal location of the insured risk, which, under New York law and Restatement § 193, is the controlling factor in determining the law applicable to a liability insurance policy, thereby obviating the need to consider all five Restatement factors. Even if consideration of all five Restatement factors were required, however, we still would conclude that New Jersey law should be applied. Further, we would reach the same conclusion even if, as the nonsettling insurers argue, New York constituted the place of contracting, negotiation, and the insured's performance. This is because the Restatement factors "are to be evaluated according to their relative importance with respect to the particular issue" (Restatement § 188[2]). Stated otherwise, the choice-of-law analysis is not "a mindless scavenger hunt to see which state can be found to have more contacts, but rather . . . an effort to detect and analyze what interest the competing states have in enforcing their respective rules" (Fireman's Fund, 811 F Supp at 984). In the case of a liability insurance policy covering risks in multiple states, the state of the insured's principal place of business has a greater concern with issues of policy construction and application bearing on the amount of available coverage than do the states where contracting, negotiation, or payment of the premium happened to occur.
In this case, the nonsettling insurers' argument that the first three Restatement factors point to New York (which the motion court essentially adopted) is based largely on the fact that the unsettled policies were procured by New York-based insurance brokers. As a result of the brokers' involvement, certain of the relevant activities (negotiations, policy delivery, premium collection) occurred in New York. We agree with Foster Wheeler that the nonsettling insurers' approach places too much weight on the location of the broker, who, after all, is not a party to the insurance contract (see Munzer, 203 AD2d at 771 [applying the law of Vermont, the state of the policyholder's principal place of business, although the "policies were procured through a New York insurance broker from (the insurer's) New York office"]; Regional Import & Export, 149 AD2d at 362 ["(t)he mere fact that the policy was placed through a New York insurance broker which negotiated its terms is not a sufficient contact" to warrant application of New York law, given the insured's New Jersey domicile]; see also CPC Intl., 739 F Supp at 712 ["the locations [*10]of the brokers present mere distractions because the brokers acted only as intermediaries"]; Liggett Group, 788 A2d at 141 [in choice-of-law analysis, roles of brokers "pale in comparison and significance to the role of the insured"] [internal quotation marks, brackets, ellipsis and citation omitted])[FN8]. Thus, when the Restatement factors are "evaluated according to their relative importance with respect to the particular issue [presented in this case]" (Restatement § 188[2]), the conclusion is that the insured's principal place of business should be considered the "primary factor" (Munzer, 203 AD2d at 772) in the choice-of-law analysis.
In the alternative, the
nonsettling insurers argue that, even assuming that the insured's primary place
of business is the primary factor in resolving the choice-of-law issue presented
here (as we now hold), the law governing the unsettled policies cannot be chosen
without also considering the settled policies, as well as still earlier lost
policies that the nonsettling insurers also consider relevant
[FN9]. Many of the settled policies, and all of the lost
policies, were issued before 1962, when Foster Wheeler's principal place of
business was still in New York. Since these pre-1962 settled and lost policies
presumably would have been deemed governed by New York law, the nonsettling
insurers contend, considering each policy separately for choice-of-law purposes
would result in "applying differing allocation approaches to the same sequence
of policies." This, they maintain, "would add insurmountable complexity if not
impossibility to the process, undermining the basic principles underlying
allocation," which they describe as "divid[ing] responsibility for a continuing
liability in a consistent and coordinated way." Accordingly, the nonsettling
insurers reason, there should be a blanket choice-of-law determination for all
policies covering the asbestos claims, whether issued before or after Foster
Wheeler's 1962 move to New Jersey, and whether settled, unsettled, or lost. In
their view, the law chosen to govern all implicated policies should be that of
New York, on the ground that, even if the insured's principal place of business
is the primary factor in choosing the governing law, Foster Wheeler had its
principal place of business in New York for the majority of the years the
nonsettling insurers regard as relevant (1940 to 1982).[FN10]
[*11]
The crux of the nonsettling insurers' concern is that, in determining when their
excess layers of coverage are reached, the losses will be allocated to the
now-settled primary policies (and lower-level excess policies) in force during
the same years (1970 to 1982) in accordance with a state law different from that
applicable to the unsettled policies themselves. Specifically, the nonsettling
insurers are concerned that the losses will be allocated in accordance with New
York law to the policies issued by settled defendant Liberty Mutual Insurance
Company (Liberty), which provided underlying primary coverage for all but three
years (1972-1975) of the decades of the injuries' occurrence, at the same time
that New Jersey law is applied to the unsettled policies
[FN11]. As previously noted, the nonsettling insurers
contend that Foster Wheeler was based in New York for most of what they view as
the relevant period, and contend, on that basis, that New York law is applicable
to the Liberty policies, whenever issued. As also previously discussed, New York
law spreads the loss evenly over the entire period of loss occurrence, while New
Jersey law shifts more of the loss to periods when more coverage was purchased,
i.e., the later years, when the unsettled policies were in force. Therefore,
applying New York law to the settled policies underlying the unsettled policies,
while applying New Jersey law to the unsettled policies, will result in
simultaneously reaching the unsettled policies earlier (through smaller
allocations to the lower-level policies) and allocating more of the loss to the
unsettled policies.
We are not persuaded by the nonsettling insurers' contention that all of the settled policies (and the lost policies, assuming their relevance) must be considered in determining which state's law governs the unsettled policies. Under our choice-of-law analysis, the settled primary and lower-level excess policies underlying the unsettled policies in force from 1970 to 1982 will also be deemed governed by New Jersey law, for the simple reason that all such underlying policies were, like the unsettled policies, issued while Foster Wheeler was based in New Jersey. The pre-1962 settled policies do not underlie the unsettled policies that cover the years 1970 to 1982, and are therefore irrelevant to determining when the layer of coverage afforded by each unsettled policy is reached in the vertical allocation for the year that policy was [*12]in force [FN12]. Thus, the problem posited by the nonsettling insurers, while it might actually be presented in some future case, is illusory here.[FN13]
The nonsettling insurers further argue that, even if the foregoing analysis is correct as applied to settled and lost policies in general, certain settled policies - many of which were [*13]issued prior to 1962 — continue to be at issue insofar as Foster Wheeler, as assignee of the carriers that issued those policies, asserts those carriers' contribution claims (if any) against the nonsettling insurers in this action [FN14]. The theory of the contribution claims is that the original holders of the claims (Liberty and the London Insurers) each paid "more than its allocable share" of Foster Wheeler's loss. Therefore, the pleadings in support of the contributions claims assert, the nonsettling insurers are liable to Foster Wheeler, as the assignee of Liberty and the London Insurers, for the amounts "properly allocable" to the nonsettling insurers that have been paid by Liberty and the London Insurers.
In our view, the contribution claims only theoretically place the coverage obligations of Liberty and the London Insurers at issue, and therefore do not affect our conclusion that the settled policies are irrelevant to the choice-of-law determination. Obviously, the nonsettling insurers' liability cannot exceed their own actual coverage obligations. Thus, as a practical matter, Foster Wheeler's assertion of the assigned contribution claims merely forecloses the nonsettling insurers from arguing that their liability should be reduced because Liberty and the London Insurers, in their respective settlements, paid Foster Wheeler more than they actually owed [FN15]. Moreover, it is undisputed that Liberty and the London Insurers are the only carriers that sold Foster Wheeler relevant coverage prior to the 1962 move to New Jersey. Accordingly, it is also irrelevant to the choice-of-law determination that the nonsettling insurers might ultimately argue for reducing their liability on the ground that other settling carriers, which did not assign their potential contribution claims, paid Foster Wheeler more than they actually owed under their respective policies.
In closing, we note that the nonsettling insurers fail to articulate any justification under choice-of-law principles for their argument that we should render a blanket choice-of-law determination for hundreds of different insurance policies issued by dozens of different insurers [*14]over several decades. Each policy constitutes a separate contractual transaction, and to treat insurance policies issued at various widely separated points in time, over a span of decades, as one undifferentiated aggregate for the purpose of choosing one state's law to govern them all, would do considerable violence to the principle (relied on by the nonsettling insurers themselves at certain points in their argument) that the contacts on which the choice-of-law determination depends should have been known to the parties at the time of contracting (see Restatement § 188, Comment e, at 580 [a contact "can bear little weight in the choice of the applicable law when . . . at the time of contracting it is either uncertain or unknown"])[FN16]. While there may nonetheless be sound practical reasons to adopt the practice suggested by the nonsettling insurers where the issue cannot be avoided, we find that the settlement of all pre-1962 policies in the case before us obviates any need for us to consider doing so here.
Accordingly, the order of the Supreme Court, New York County (Barbara R. Kapnick, J.), entered January 10, 2005, which denied defendant-appellant Foster Wheeler Corporation's motion for partial summary judgment declaring that New Jersey substantive law governs all disputed issues in this action, and granted the motions by defendants-respondents for partial summary judgment declaring that New York substantive law governs all disputed issues in this action, should be reversed, on the law, without costs, the motion by Foster Wheeler Corporation granted to the extent of declaring that the liability insurance policies issued by defendants-respondents, and the underlying settled policies providing primary and lower-level excess coverage for the same years, are governed by New Jersey substantive law, and the motions by defendants-respondents denied.
All concur.
THIS CONSTITUTES THE DECISION
AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: SEPTEMBER 28, 2006
CLERK
Footnotes
Footnote 1:Although the Court of Appeals stated that its approval of
the time-on-the-risk method in Consolidated Edison was "not the last word
on proration" (98 NY2d at 225), for purposes of this appeal, we accept the
parties' shared premise that Consolidated Edison adopted time-on-the-risk
as New York's allocation method.
Footnote 2:The nonsettling insurers, citing Stolarz (81 NY2d
at 226), argue that New York, as the center of the worldwide insurance industry,
has an interest in the issues in dispute, given that the insurance brokers that
procured the unsettled policies were located in New York, as more fully
discussed below. We acknowledge, of course, that the Court of Appeals has
recognized New York's interest in "maintain[ing] its position as a financial
capital of the world" (id.). While this interest might well warrant
applying New York law to determine the authority of the New York-based brokers
that procured the policies, we are not persuaded that the involvement of New
York brokers gives New York a greater interest than the state of the insured's
domicile in the construction of the policies themselves.
Footnote 3:We also noted in our discussion of the choice-of-law issue
in Steadfast that the insured's domicile in that case was also the place
"from which it negotiated the special terms of the Policy, and where the Policy
presumably was delivered to it (thus constituting the state where the contract
was made)" (283 AD2d at 50). While these factors provided additional support for
the choice-of-law ruling in Steadfast, for the reasons discussed below,
they were not essential to that ruling.
Footnote 4:As more fully discussed below, Munzer's holding
that the law of the state of the insured's principal place of business should be
applied if that state is different from the insured's state of the incorporation
(203 AD2d at 771, 772) is also of significance to this appeal.
Footnote 5:As previously noted, throughout the period in which the
unsettled policies were issued (1970-1981), the principal place of business of
Foster Wheeler (meaning both FW Corp. and FW Energy) was in New Jersey, while FW
Corp. and FW Energy were incorporated, respectively, in New York and Delaware.
Footnote 6:The nonsettling insurers apparently use the term
"performance" to refer only to the insured's payment of the premium. This
ignores the fact that the insurer's payment of a claim (which has not yet
occurred with regard to any of the unsettled policies) also constitutes the
performance of a policy obligation.
Footnote 7:Foster Wheeler apparently concedes that it generally
remitted premium checks to, and received policies and premium invoices from, the
brokers' New York offices. Foster Wheeler argues that this should not affect the
choice-of-law analysis because (according to Foster Wheeler) the brokers, in
transmitting such material between the parties, were acting as agents of the
insurers. Not surprisingly, the nonsettling insurers argue that the brokers were
acting as agents of Foster Wheeler. For the reasons discussed below, we find it
unnecessary to determine which party the brokers were representing in performing
these functions.
Footnote 8:To the extent the nonsettling insurers rely on the fact
that most premium checks were drawn on Foster Wheeler's New York bank account,
we fail to see how the bank's location would give New York an interest in the
construction of the insurance policies for which the checks constituted payment.
Footnote 9:Foster Wheeler denies the relevance of the lost policies.
We do not find it necessary to determine whether the lost policies are relevant
in order to decide this appeal.
Footnote 10:The parties disagree on how far back in time the relevant
policies extend. Foster Wheeler contends that the relevant policies extend back
to around 1952, while the nonsettling insurers contend that the relevant
policies extend back at least to 1940. This dispute cannot be resolved on the
present record; in any event, the instant appeal does not require us to resolve
it. Assuming, however, that the nonsettling insurers are correct that the
relevant years are from 1940 to 1982, Foster Wheeler points out that, during
this 42-year period, it purchased 82.7% of its liability insurance policies, and
95% of its total liability coverage, while based in New Jersey, i.e., after
1962.
Footnote 11:Contrary to the nonsettling insurers' claim that Foster
Wheeler has attempted to manipulate the choice-of-law determination by
selectively settling with certain insurers rather than others, the record
establishes that Liberty, as well as Hartford Accident & Indemnity Company, the
primary insurer during Liberty's three-year hiatus, both argued for application
of New Jersey law before they settled with Foster Wheeler.
Footnote 12:This point is demonstrated by a hypothetical the New
Jersey Supreme Court posed to illustrate how vertical allocation within a policy
year operates: "Assume that primary coverage for one year was $100,000,
first-level excess insurance totaled $200,000, and second-level excess coverage
was $450,000. If the loss allocated to that specific year was $325,000, the
primary insurer would pay $100,000, the first-level excess policy would be
responsible for $200,000, and the second-level excess policy would pay $25,000"
(Carter-Wallace, 154 NJ at 326-327, 712 A2d at 1124). Given that the
primary and lower-level excess insurers have settled with Foster Wheeler, New
Jersey apparently requires (subject to the particular terms of each unsettled
policy) that, in determining when the nonsettling insurers' layers of coverage
are reached, each nonsettling insurer receive a credit for the full amount of
the loss allocable to the underlying settled policies (see Chemical Leaman
Tank Lines, Inc. v Aetna Cas. & Sur. Co., 177 F3d 210, 227-228 [3d Cir 1999]
[applying New Jersey law]; UMC/Stamford, Inc. v Allianz Underwriters Ins. Co.,
276 NJ Super 52, 68-69, 647 A2d 182, 190-191 [Law Div 1994]; see also
Carpenter Tech. Corp. v Admiral Ins. Co., 172 NJ 504, 517-518, 522, 800 A2d
54, 61-62, 64 [2002] [discussing with apparent approval the Chemical Leaman
and UMC/Stamford holdings on this issue]).
Footnote 13:It is also irrelevant to the determination of the
nonsettling insurers' coverage obligations that the putative allocation of the
loss to years prior to 1962 that will result from using New Jersey's
time-plus-limits method will be different from the allocation that would have
resulted under New York's time-on-the-risk method, which presumably would have
applied to the settled and lost policies that were in force during those years.
To reiterate, since all pre-1962 policies have been settled, this appeal simply
does not require us to consider how a loss should be allocated when there must
be a determination of the respective coverage obligations of various implicated
policies that are governed by the laws of different states mandating the use of
conflicting allocation methods. That difficult problem will have to be addressed
in a case that actually presents it.
Footnote 14:The carriers that assigned their contribution claims to
Foster Wheeler as part of their respective settlements are Liberty and
plaintiffs Certain Underwriters at Lloyd's, London, and Certain London Market
Insurance Companies (collectively, the London Insurers). Liberty assigned Foster
Wheeler any contribution claims Liberty had based on payments made pursuant to
the primary policies Liberty sold Foster Wheeler from 1951 to 1971 and from 1975
to 1981. The London Insurers assigned Foster Wheeler any contribution claims
they had based on payments made pursuant to the excess policies the London
Insurers sold Foster Wheeler from 1951 to 1981.
Footnote 15:Of course, Liberty and the London Insurers presumably did
not intend to pay Foster Wheeler more than they owed, but it is possible that
they did so, given that many issues (including the choice-of-law issue) were
unresolved at the time the settlements were made.
Footnote 16:In this case, at the various times the unsettled policies
were issued between 1970 and 1981, the parties presumably could not have known
with any degree of certainty that the unsettled policies would be implicated by
claims originating as far back as 1940, or that, by virtue of such claims, the
policies issued in those remote times would be relevant to determining the law
governing the unsettled policies.
Cebularz v. Diorio
DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff Henry Cebularz appeals, as limited by his brief, from so much of an order of the Supreme Court, Kings County (Ruchelsman, J.), dated January 24, 2005, as granted that branch of the defendant's motion which was to dismiss the complaint insofar as asserted by him on the ground that he did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed insofar as appealed from, on the law, with costs, the motion is denied, and the complaint is reinstated insofar as asserted by the plaintiff Henry Cebularz.
The defendant's proof in support of that branch of her motion which was for summary judgment dismissing the claim of the plaintiff Henry Cebularz (hereinafter the plaintiff) failed to establish the defendant's entitlement to judgment as a matter of law on the theory that the plaintiff did not sustain a serious injury as defined by Insurance Law § 5102(d) (see Miller v Afshin, 28 AD3d 437; Ribaudo v Amir, 27 AD3d 544; Dockery v Budget Rent-A-Car, 27 AD3d 413; Rich-Wing v Baboolal, 18 AD3d 726; Tchjevskaia v Chase, 15 AD3d 389; Naydis v LA Transp. Corp., 14 AD3d 673). The defendant's examining orthopedist's affirmation was inconclusive. The defendant's examining neurologist identified, inter alia, evidence of cervical radiculopathy (see Smith v Delcore, 29 AD3d 890), but his report was otherwise inconclusive. The defendant's examining radiologist [*2]noted that the April 14, 2003, magnetic resonance imaging (hereinafter MRI) report of the plaintiff's cervical spine showed herniations at C4-5, C5-6, and C6-7. Although those herniations were also reflected on a cervical spine MRI taken on June 9, 2000, prior to the subject accident, the defendant's radiologist noted that the herniations appeared "slightly more prominent in size" in the April 2003 MRI. The defendant's proof collectively tended to support rather than to negate the existence of a triable issue of fact as to whether the plaintiff's injuries from prior accidents or conditions predating the subject automobile accident were exacerbated by the subject accident, necessitating the spinal fusion and discectomy surgery the plaintiff underwent in April 2004.
Under the circumstances, the
defendant failed to make a prima facie showing that the plaintiff did not
sustain a serious injury as a result of the subject accident (see Gentile v
Snook, 20 AD3d 389). Accordingly, the Supreme Court should have denied that
branch of the defendant's motion which was for summary judgment dismissing the
complaint insofar as asserted by the plaintiff (see Trunk v Spross, 306
AD2d 463; Phillips v Tissotvanpatot, 280 AD2d 735, citing Walsh v
Kings Plaza Replacement Serv., 239 AD2d 408; cf. Correa v City of New
York, 18 AD3d 418).
LUCIANO, J.P., RIVERA, LIFSON and COVELLO, JJ., concur.
DECISION & ORDER
In an action to recover damages for personal injuries, the defendants appeal from an order of the Supreme Court, Kings County (Ruchelsman, J.), dated September 8, 2005, which, upon reargument, in effect, vacated its prior order dated March 9, 2005, granting their motion for summary judgment dismissing the complaint on the ground that the plaintiff Ramon DeLeon did not sustain a serious injury within the meaning of Insurance Law § 5102(d) and denied the motion for summary judgment.
ORDERED that the order is affirmed, with costs.
The Supreme Court properly treated the motion of the plaintiff Ramon DeLeon (hereinafter the plaintiff) as one for leave to reargue rather than as one for leave to renew. The new affirmed report submitted by the plaintiff's physician did not offer new facts which were unavailable at the time of the original motion. Rather, it demonstrated that the Supreme Court had overlooked or misapprehended certain facts contained in the original affirmed reports. Upon reargument, the Supreme Court properly, in effect, vacated its prior order and denied the defendants' motion for summary judgment (see McNeil v Dixon, 9 AD3d 481).
The defendants established
their prima facie entitlement to summary judgment by way of the affirmed report
of Dr. Olson. In opposition, the plaintiff proffered the affirmed reports of Dr.
[*2]Hausknecht, who alleged, inter alia, that he
had measured the plaintiff's range of motion using an arthroidal protractor and
found that he suffered a loss of 25% right lateral flexion and left lateral
flexion in his cervical spine, as well as a 25% loss of forward flexion in his
lumbar spine. This was sufficient to raise a triable issue of fact as to whether
the plaintiff sustained a serious injury (see DeFilippo v Jones, 22 AD3d
788; Desulme v Stanya, 12 AD3d 557; see also Lee v Glicksman, 14
AD3d 669; cf. Vishnevsky v Glassberg, 29 AD3d 680; Pimentel v Mesa,
AD3d [2d Dept, Apr. 18, 2006]).
FLORIO, J.P., SKELOS, FISHER and DILLON, JJ., concur.
ENTER:
James Edward Pelzer
Clerk of the Court
Appeal from an order of the Supreme Court, Erie County (Kevin M. Dillon, J.),
entered May 24, 2005 in a personal injury action. The order granted defendant's
motion for summary judgment dismissing the complaint.
FRANCIS M. LETRO, ESQ., BUFFALO (ROBERT L. VOLTZ OF COUNSEL), FOR
PLAINTIFF-APPELLANT.
BURGIO, KITA & CURVIN, BUFFALO (JAMES P. BURGIO OF COUNSEL), FOR
DEFENDANT-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 denied, and the
complaint is reinstated.
Memorandum: Plaintiff appeals from an order granting defendant's motion for
summary judgment on the ground that plaintiff did not sustain a serious injury
as defined in Insurance Law § 5102 (d). We reverse. In opposition to the motion,
plaintiff submitted, inter alia, a December 28, 1999 report of her treating
orthopedist that was affirmed under penalty of perjury but contained only a
stamped facsimile signature, as well as the notation that it had been "dictated
. . . but not read." Contrary to plaintiff's contention on appeal, that report
is not in admissible form (see CPLR 2106; Park Health Ctr. v
Countrywide Ins. Co., 1 Misc 3d 906[A], 2003 NY Slip Op 51529[U], *3;
Sandymark Realty Corp. v Creswell, 67 Misc 2d 630, 631; Macri v St. Agnes
Cemetery, 44 Misc 2d 702, 703-704). We nevertheless conclude that defendant
waived any objection to the deficient affirmation by failing to raise the issue
of its admissibility (see Akamnonu v Rodriguez, 12 AD3d 187; Shinn v
Catanzaro, 1 AD3d 195, 198; Scudera v Mahbubur, 299 AD2d 535; Sam
v Town of Rotterdam, 248 AD2d 850, 851, lv denied 92 NY2d 804; see
also Bax v Allstate Health Care, Inc., 26 AD3d 861, 863). We further
conclude that the orthopedist's report, together with plaintiff's deposition
testimony, raises triable issues of fact whether plaintiff sustained a fracture
as well as a medically determined injury that prevented her from performing
substantially all of her usual and customary daily activities for at least 90
days during the 180 days immediately following the accident (see
Insurance Law § 5102 [d]).
Entered: September 22, 2006
JoAnn M. Wahl
Clerk of the Court
Evans v. Syracuse
Appeal from an order of the Supreme Court, Erie County (John P. Lane, J.),
entered July 8, 2005 in a personal injury action. The order granted defendant's
motion for summary judgment dismissing the amended complaint.
CANTOR, LUKASIK, DOLCE & PANEPINTO, P.C., BUFFALO (STEPHEN C. HALPERN OF
COUNSEL), FOR PLAINTIFF-APPELLANT.
BAXTER & SMITH, P.C., WEST SENECA (PAUL T. BUERGER, JR., 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 amended complaint, as amplified by the bill of particulars, with respect to
the significant limitation of use of a body function or system and permanent
consequential limitation of use of a body organ or member categories of serious
injury within the meaning of Insurance Law § 5102 (d) and as modified the order
is affirmed without costs.
Memorandum: Plaintiff commenced this action seeking damages for alleged injuries he sustained in a motor vehicle accident on December 8, 2000 when he swerved to avoid the vehicle driven by defendant's decedent. The record establishes that, as a result of a work-related injury on March 3, 1999, plaintiff had undergone a discectomy and fusion at L5-S1 on October 10, 1999, and the MRI of the lumbar spine at that time showed "mild disc degeneration" at L3-4. Plaintiff alleges that, as a result of the motor vehicle accident, he sustained injury to the cervical and thoracic spine and the preexisting condition of the lumbar spine was aggravated, requiring intradiscal electrothermal therapy at L3-4.
We agree with Supreme Court that defendant met her initial burden of establishing that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102 (d) under the significant limitation of use and permanent consequential limitation of use categories, but we conclude that the court erred in determining that plaintiff failed to raise an issue of fact sufficient to defeat the motion with respect to those two categories of serious injury. We note that, inasmuch as plaintiff does not contend on appeal that the court erred in dismissing his claim of serious injury under the 90/180 category, he is deemed to have abandoned that claim (see Ciesinski v Town of Aurora, 202 AD2d 984). [*2]
Plaintiff submitted the affidavit of his treating physician, who relied upon the report of the MRI taken on September 30, 2002 showing "significant collapse and broad based contained central and right herniation at L3-L4." Plaintiff's treating physician determined that, "more likely than not, the motor vehicle accident was the direct cause of the rapid decline of the L3-4 disc, even though there is some very minor contribution from [the work-related injury]." "Proof of a herniated disc, without additional objective medical evidence establishing that the accident resulted in significant limitations, is not alone sufficient to establish a serious injury" (Pommells v Perez, 4 NY3d 566, 574). Here, however, plaintiff's treating physician relied upon objective medical evidence in the form of MRI reports (see Brown v Dunlap, 4 NY3d 566, 577 n 5), and those reports established the aggravation of the preexisting condition (cf. Franchini v Palmieri, 307 AD2d 1056, 1057-1058, affd 1 NY3d 536; Clark v Perry, 21 AD3d 1373, 1374). In addition, he relied upon other medical records setting forth the necessity of surgical intervention to alleviate the aggravated condition, thereby "establishing that the accident resulted in significant physical limitations" (Pommells, 4 NY3d at 574). Thus, viewing the evidence in the light most favorable to plaintiff (see Toure v Avis Rent A Car Sys., 98 NY2d 345, 353), we conclude that plaintiff raised an issue of fact whether he sustained a significant limitation of use or permanent consequential limitation of use. We therefore modify the order accordingly.
Fahrenholz v. Security Mutual Insurance
Appeal from a judgment of the Supreme Court, Erie County (Frederick J. Marshall,
J.), entered September 6, 2005. The judgment, entered upon a jury verdict,
awarded plaintiff the sum of $47,837.64 against defendant Security Mutual
Insurance Company.
LAW OFFICE OF ROY A. MURA, BUFFALO (JAMES M. DE VOY OF COUNSEL), FOR
DEFENDANT-APPELLANT.
DUKE, HOLZMAN, YAEGER & PHOTIADIS LLP, BUFFALO (MATTHEW J. BECK OF COUNSEL), FOR
PLAINTIFF-RESPONDENT.
LUSTIG & BROWN, LLP, BUFFALO (CHERYL A. GREEN OF COUNSEL), FOR
DEFENDANT-RESPONDENT.
It is hereby ORDERED that the judgment so appealed from be and the same hereby
is unanimously affirmed without costs.
Memorandum: Plaintiff commenced this action seeking, inter alia, reformation of a policy of insurance issued by defendant Security Mutual Insurance Company (Security Mutual) through its agent, defendant The Kreiner Company, Inc. (Kreiner). The policy covered residential property in the City of Buffalo that was damaged by fire. Supreme Court properly granted those parts of plaintiff's motion seeking summary judgment on the cause of action seeking reformation and partial summary judgment on liability on the cause of action for breach of contract. It is undisputed that the policy incorrectly identified the named insured as "Timothy R. Fahrenholz [the former owner of the property and plaintiff's deceased brother] % Thomas Fahrenholz[,i.e., plaintiff]." It also is undisputed that, following his brother's death, plaintiff acquired title to the property and paid the insurance premium. Plaintiff submitted evidence establishing that the policy correctly identified the property that Security Mutual agreed to insure (see DeSantis v Dryden Mut. Ins. Co., 241 AD2d 916). In addition, plaintiff submitted evidence establishing that, under the underwriting guidelines of Security Mutual, the identity of the insured was not a factor in evaluating the risk that Security Mutual agreed to cover (see Zielinski v Associated Mut. Ins. Co., 217 AD2d 938). "Having accepted plaintiff['s] premium payment, having intended to insure the very property it insured, and having asserted no reason for denying the assumption of risk in question, there is no justification for denying plaintiff[] the equitable [*2]remedy of reformation" (Crivella v Transit Cas. Co., 116 AD2d 1007, 1008). Because it is undisputed that Security Mutual failed to pay plaintiff for the fire loss, the court properly granted that part of plaintiff's motion seeking partial summary judgment on liability on the cause of action for breach of contract. In view of the award of summary judgment to plaintiff, moreover, the court properly granted that part of the cross motion of Kreiner seeking summary judgment dismissing Security Mutual's cross claims against it.
We reject the contention of Security Mutual that the court erred in
entertaining the motion and cross motion on the merits inasmuch as plaintiff and
Kreiner failed to comply with CPLR 3212 (a) (see generally Miceli v State
Farm Mut. Auto. Ins. Co., 3 NY3d 725). Pursuant to that section, a party
seeking summary judgment must do so within 120 days after the filing of the note
of issue, "except with leave of court on good cause shown" (CPLR 3212 [a]). The
court has broad discretion in determining whether the party seeking summary
judgment has shown "good cause" for an untimely motion (id.; see
Burnell v Huneau, 1 AD3d 758, 760; Luciano v Apple Maintenance & Servs.,
289 AD2d 90). Here, plaintiff's attorney provided an adequate explanation for
the delay in an affirmation in support of the motion (see Stimson v E.M.
Cahill Co., Inc., 8 AD3d 1004, 1005; Luciano, 289 AD2d at 91). The
court also properly considered the merits of the cross motion inasmuch as it
seeks relief nearly identical to the relief sought by plaintiff in his motion (see
generally Bressingham v Jamaica Hosp. Med. Ctr., 17 AD3d 496, 497;
Miranda v Devlin, 260 AD2d 451, 452). Finally, the court properly exercised
its discretion in awarding plaintiff interest on the verdict at the statutory
rate, calculated from the date of the commencement of the action (see
CPLR 5001 [a]; cf. Zielinski, 217 AD2d at 939).
Entered: September 29, 2006
JoAnn M. Wahl
DECISION & ORDER
In an action to recover damages for personal injuries, the defendant appeals, as limited by his brief, from so much of an order of the Supreme Court, Kings County (Douglass, J.), entered December 19, 2005, as denied his cross motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is affirmed insofar as appealed from, with costs.
Contrary to the defendant's contention, the Supreme Court correctly denied
his cross 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) as a result of the subject accident. The defendant
failed to make a prima facie showing that the plaintiff did not sustain a
serious injury within the meaning of the statute (see Toure v Avis Rent a Car
Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955). The affirmed medical
report of the defendant's neurologist indicated the existence of limitations in
motion of the plaintiff's lumbar spine and left shoulder (see Sano v
Gorelik, 24 AD3d 747; Spuhler v Khan, 14 AD3d 693; Omar v Bello,
13 AD3d 430; Scotti v Boutureira, 8 AD3d 652). Since the defendant failed
to meet his initial burden of establishing a prima facie case, it is unnecessary
to consider whether the plaintiff's papers submitted in opposition to the
defendant's cross motion were sufficient to raise a triable issue of fact (see
Coscia v 938 [*2]Trading Corp., 283 AD2d
538).
ADAMS, J.P., GOLDSTEIN, FISHER and LIFSON, JJ., concur.
DECISION & ORDER
In an action to recover damages for personal injuries, the defendant appeals from a judgment of the Supreme Court, Kings County (Martin, J.), entered April 11, 2005, which, upon a jury verdict, and upon the denial, inter alia, of the defendant's motion pursuant to CPLR 4401 for judgment as a matter of law dismissing the complaint on the ground of legal insufficiency, is in favor of the plaintiff and against the defendant in the principal sum of $150,000.
ORDERED that the judgment is reversed, on the law, with costs, and the motion pursuant to CPLR 4401 for judgment as a matter of law dismissing the complaint on the ground of legal insufficiency is granted.
A motion for judgment as a matter of law pursuant to CPLR 4401 may only be granted when, upon the evidence presented, there is no rational process by which the jury could find in favor of the nonmoving party (see Szczerbiak v Pilat, 90 NY2d 553, 556). In considering such a motion, "the trial court must afford the party opposing the motion every inference which may properly be drawn from the facts presented, and the facts must be considered in a light most favorable to the nonmovant" (id. at 556; see Hand v Field, 15 AD3d 542, 543).
Contrary to the plaintiff's contention, viewing the facts in the light most
favorable to him, the evidence adduced at trial was insufficient to establish,
prima facie, that he sustained a [*2]"significant
limitation of use of a body function or system" and accordingly, that he
sustained a "[s]erious injury" within the meaning of Insurance Law § 5102(d). In
order to establish that he suffered a "significant limitation of use of a body
function or system," the plaintiff was required to provide objective evidence of
the extent or degree of the limitation and its duration (see Beckett v Conte,
176 AD2d 774), based on a recent examination of the plaintiff (see Young v
Russell, 19 AD3d 688, 689; Silkowski v Alvarez, 19 AD3d 476;
Kooblall v Morris, 276 AD2d 595, 596). In this case, the plaintiff's medical
expert last examined him approximately 21 months before trial. Accordingly, the
Supreme Court should have granted the defendant's motion pursuant to CPLR 4401
for judgment as a matter of law dismissing the complaint, since the opinions
expressed by the plaintiff's medical expert at trial were not based on a recent
medical examination. In view of our determination, it is not necessary to
address the other claims raised by the defendant on appeal.
MILLER, J.P., RITTER, GOLDSTEIN and LUNN, JJ., concur.
Appeal from an order of the Supreme Court, Monroe County (Thomas A. Stander,
J.), entered June 29, 2005 in a personal injury action. The order, insofar as
appealed from, granted that part of the motion of defendant John A. Camille for
summary judgment dismissing the second amended complaint against him, that part
of the motion of fourth-party defendant for summary judgment dismissing the
second amended complaint, and the cross motion of defendants Todd M. Collins and
Sharon R. Collins for summary judgment dismissing the second amended complaint
against them.
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 motions are denied
in their entirety, the cross motion is denied, and the second amended complaint
is reinstated.
Memorandum: Plaintiff commenced this action seeking damages for injuries she sustained when the vehicle she was driving was rear-ended in the course of a multi-vehicle accident. We agree with plaintiff that Supreme Court erred in granting that part of the motion of defendant John A. Camille for summary judgment dismissing the second amended complaint against him, that part of the motion of fourth-party defendant for summary judgment dismissing the second amended complaint, and the cross motion of defendants Todd M. Collins and Sharon R. Collins for summary judgment dismissing the second amended complaint against them.
In support of their respective motions and cross motion, defendants and fourth-party defendant (movants) contended that plaintiff did not sustain a serious injury within the meaning of the three categories alleged by plaintiff in her bill of particulars, i.e., the permanent consequential limitation of use, significant limitation of use and the 90/180 categories (see Insurance Law § 5102 [d]). We conclude with respect to the first two categories that the movants submitted evidence tending to establish that plaintiff sustained a serious injury within the meaning of those categories, and thus the burden never shifted to plaintiff to raise an issue of fact (see generally Zuckerman v City of New York, 49 NY2d 557, 562). Here, the movants submitted the entire workers' compensation medical file that included, inter alia, numerous medical reports of plaintiff's treating physicians who stated therein that plaintiff's injuries were serious in nature and that plaintiff sustained a serious injury within the meaning of those two categories as a result of the motor vehicle accident at issue. Moreover, those submissions contained documented objective evidence of injury, i.e., muscle spasm, x-rays and an MRI showing loss of lordosis, and, in addition, various physicians' reports quantified plaintiff's loss of range of cervical and lumbar range of motion (see generally Toure v Avis Rent A Car Sys., 98 NY2d 345, 350-351).
We conclude with respect to the 90/180 category that, although the movants
met their initial burden, plaintiff raised an issue of fact by her own affidavit
and the affirmation of her treating physician (see Pagels v P.V.S.
Chems., 266 AD2d 819, 820).
Entered: September 29, 2006
JoAnn M. Wahl
Liberty Mutual Fire Insurance Company v. Rondina
Appeal from an order of the Supreme Court, Erie County (Frederick J. Marshall,
J.), entered May 5, 2005. The order granted the application for a permanent stay
of arbitration.
BOUVIER PARTNERSHIP, LLP, BUFFALO (NORMAN E.S. GREENE OF COUNSEL), FOR
RESPONDENTS-APPELLANTS.
HURWITZ & FINE, P.C., BUFFALO (SCOTT C. BILLMAN OF COUNSEL), FOR
PETITIONER-RESPONDENT.
It is hereby ORDERED that the order so appealed from be and the same hereby is
unanimously affirmed without costs.
Memorandum: Respondents served their automobile insurer, petitioner, with a
demand for arbitration after petitioner refused to provide uninsured motorist
coverage for injuries sustained by respondents' son while he was a passenger on
an uninsured all-terrain vehicle (ATV). Contrary to respondents' contention,
Supreme Court properly granted petitioner's application pursuant to CPLR 7503
(c) for a permanent stay of arbitration on the ground that respondents' claim is
not within the scope of petitioner's uninsured motorist coverage. "As a matter
of law, [uninsured motorist] coverage extends to all motor vehicles as defined
by Vehicle and Traffic Law § 125" (Harper v Lumbermen's Mut. Cas. Co.,
174 AD2d 1031, 1031, lv dismissed 78 NY2d 1110; see Insurance Law
§ 5202 [a]; Matter of Askey [General Acc. Fire & Life Assur. Corp.], 30
AD2d 632, affd 24 NY2d 937). Because ATVs are specifically excluded from
the definition of motor vehicles set forth in Vehicle and Traffic Law § 125, the
court properly concluded that the uninsured motorist endorsement in the policy
issued by petitioner to respondents does not encompass the claim for the
injuries sustained by respondents' son (see Harper, 174 AD2d 1031; cf.
Matter of Nationwide Mut. Ins. Co. v Riccadulli, 183
AD2d 111).
Murdakhayeva v. Blackstone Limo, Inc
DECISION & ORDER
In an action to recover damages for personal injuries, (1) the defendants Blackstone Limo, Inc., and Arteaga Franklyn appeal, as limited by their brief, from so much of an order of the Supreme Court, Kings County (Partnow, J.), dated June 17, 2005, as 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), and (2) the defendants City of New York and New York City Department of Sanitation separately appeal, as limited by their brief, from so much of the same order as denied that branch of their motion which was 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 insofar as appealed from, with one bill of costs to the plaintiff.
The appellants failed to make their respective prima facie showings that the plaintiff [*2]did not sustain a serious injury within the meaning of Insurance Law § 5102(d) (see Toure v Avis Rent A Car Sys., 98 NY2d 345, 350; Gaddy v Eyler, 79 NY2d 955). The affirmed medical report of the examining neurologist relied upon by the appellants merely noted that the plaintiff had a full range of motion in her cervical spine without setting forth the objective test or tests performed supporting his conclusion (see Nembhard v Delatorre, 16 AD3d 390; Black v Robinson, 305 AD2d 438, 439). Since the appellants failed to satisfy their prima facie burdens, it is unnecessary to consider whether the plaintiff's papers in opposition were sufficient to raise a triable issue of fact (see Coscia v 938 Trading Corp., 283 AD2d 538).
Order, Supreme Court, Bronx County (Janice L. Bowman, J.), entered April 4, 2005, which granted the summary judgment motion of defendants Rajinder Singh and Emmanuel O. Mills and dismissed the complaint as against them, unanimously affirmed, without costs.
On September 2, 2002, plaintiffs were passengers in a taxicab owned by defendant Singh and operated by defendant Mills, when it was involved in a collision with an automobile owned and operated by defendant Jaime, who has not appeared in answer to the complaint. Following the collision, plaintiffs proceeded to their apartment building in the same taxi. Plaintiff Raul Rodriguez was able to immediately resume employment as a maintenance worker at Columbia University. Plaintiff Doreen Navedo, who was unemployed at the time of the accident, alleges that she was confined to her home for two to three weeks.
The day after the accident, plaintiffs sought treatment at Zerega Chiropractic P.C. and were referred to Bridge Medical P.C., where they were seen several days later. Navedo was diagnosed with cervical, lumbar and bilateral shoulder sprains and strains. Rodriguez was found to have cervical, thoracic, lumbar, left shoulder, bilateral knee and bilateral leg sprains and strains. MRI studies revealed that each plaintiff had bulging or herniated cervical and lumbar discs, abnormalities in lordosis and radiculopathy. Both plaintiffs received physical therapy, acupuncture and chiropractic treatment. Rodriguez was last treated on November 21, 2002 and Navedo on January 3, 2003.
This action was commenced in November 2002, and defendants Singh and Mills moved for summary judgment dismissing the complaint in mid-September 2004. In support of their motion, defendants submitted the affirmed report of Marianna Golden, M.D., who found that plaintiffs had a full range of motion, exhibited no sensory or motor deficits and proved negative on Romberg, Patrick and Kernig tests. It was the doctor's opinion that neurological examination was objectively normal and that plaintiffs' various sprains and strains had resolved. In conclusion, Dr. Golden stated that plaintiffs were capable of performing all activities of daily [*2]living, finding no objective evidence of any disability or permanency and no need for further diagnostic testing.
In opposition, plaintiffs submitted affirmed medical reports from Hal Gutstein, M.D., a board certified neurologist who examined them on October 1, 2004. The doctor also reviewed their treatment and diagnostic histories, including an affirmed medical report from Gabriel L. Dassa, D.O., an orthopedic surgeon who had evaluated plaintiffs on October 24, 2002, and unsworn cervical and lumbosacral MRI reports. Dr. Gutstein found that Navedo suffered from lumbar radiculopathy secondary to an L4-L5 bulging disc and cervical spine radiculopathy secondary to a C5-C6 disc herniation. He found that Rodriguez had lumbar radiculopathy secondary to an L5-S1 herniation and cervical spine radiculopathy secondary to a C5-C6 herniation. In each instance, the report gives the cause of the respective impairments as the accident of September 2, 2002.
Supreme Court found that the report from Dr. Golden established that neither plaintiff had sustained a serious injury within the meaning of Insurance Law § 5102(d) and demonstrated defendants' prima facie entitlement to summary judgment. The court held that plaintiffs had failed to submit admissible opposing evidence sufficient to raise a question of fact with respect to serious injury. Relying on this Court's decision in Henkin v Fast Times Taxi (307 AD2d 814 [2003]), the court reasoned that unsworn MRI reports by a physician, unaccompanied by the physician's affirmation, lack probative value.
We agree that defendants established their prima facie entitlement to summary dismissal by submitting the report from Dr. Golden and that plaintiffs' opposing submissions were insufficient to withstand defendants' dismissal motion (see Giuffrida v Citibank Corp., 100 NY2d 72, 81 [2003]). However, we reach our conclusion by way of a different analysis.
In Henkin (307 AD2d at 814-815), the plaintiff submitted only "an attorney's affirmation accompanied by unaffirmed, unsworn and sometimes unsigned reports which are insufficient to raise and issue of fact." Contrary to Supreme Court's interpretation, Henkin does not go so far as to state that the affirmed report of a physician may not be based on other, unsworn reports (cf. Rosario v Universal Truck & Trailer Serv., 7 AD3d 306, 309 [2004]). Because reference was made to the results of the unsworn reports in the affirmations of Dr. Gutstein, submitted in opposition to the motion, they were properly before the court (see Pommells v Perez, 4 NY3d 566, 577, n 5 [2005]; Ayzen v Melendez, 299 AD2d 381 [2002]).
However, Dr. Gutstein's reports are deficient for their failure to offer any explanation for the cessation of plaintiffs' treatment. They received only a few months of physical therapy, acupuncture and chiropractic care, and neither plaintiffs nor their medical expert have provided any explanation for their failure to pursue treatment beyond the end of the year (see Pommells, 4 NY3d at 574). Nor have plaintiffs provided proof to establish that the bulging or herniated discs noted in the MRI reports were caused by the accident. As stated in Pommells, "Proof of a herniated disc, without additional medical evidence establishing that the accident resulted in significant physical limitations, is not alone sufficient to establish a serious injury" (id.). We note that Dr. Gutstein's examination was conducted only after defendants moved to dismiss the complaint, and his reports state only that "the proximate cause of the patient's symptoms, signs, and physical impairments would be the accident of 9 24 2002." In the absence of any objective medical basis for these conclusions, the reports fail to causally relate plaintiffs' orthopedic deficits to the accident (Franchini v Palmieri, 1 NY3d 536, 537 [2003]), offering no explanation for how such serious abnormalities as bulging and herniated cervical and lumbar discs were [*3]produced by a minor collision (see Mullings v Huntwork, 26 AD3d 214, 216 [2006]). As this Court has observed, "conclusory assertions tailored to meet statutory requirements . . . are insufficient to rebut defendants' prima facie showing" (Shaw v Looking Glass Assoc., LP, 8 AD3d 100, 103 [2004]).
Appeal from an order of the Supreme Court, Niagara County (Amy J. Fricano, J.),
entered August 11, 2005 in a personal injury action. The order granted
defendants' motion for summary judgment dismissing the complaint.
It is hereby ORDERED that the order so appealed from be and the same hereby is
unanimously affirmed without costs.
Memorandum: In an action to recover damages for personal injuries arising from an automobile accident, plaintiff appeals from an order granting defendants' motion for summary judgment dismissing the complaint. The complaint, as amplified by the bill of particulars, sought recovery under three categories of serious injury as set forth in Insurance Law § 5102 (d), i.e., the permanent consequential limitation of use, the significant limitation of use and the 90/180 categories. With respect to the 90/180 category, defendants met their initial burden on the motion by submitting excerpts of plaintiff's deposition testimony wherein plaintiff admitted that he did not miss any full days of work after the accident. In response, plaintiff failed to raise an issue of fact whether he was unable to perform substantially all of the material acts that constituted his usual and customary daily activities (see Burns v McCabe, 17 AD3d 1111; Parkhill v Cleary, 305 AD2d 1088, 1090; see also Simpson v Feyrer, 27 AD3d 881).
Contrary to the contention of plaintiff, defendants met their initial burden
on the motion with respect to the permanent consequential limitation of use and
significant limitation of use threshold categories by submitting competent
medical evidence establishing as a matter of law that plaintiff did not sustain
a serious injury under either of those categories (see Sarkis v Gandy, 15
AD3d 942; Hoffmann v Stechenfinger, 4 AD3d 778, 779). In opposition,
plaintiff failed to raise a triable issue of fact (see Winslow v
Callaghan, 306 AD2d 853, 854). We reject the contention of plaintiff that
the affidavit of a chiropractor, stating that plaintiff sustained "lineal
annular tearing" of two discs, is sufficient to raise a triable issue of fact.
That affidavit did not constitute
" objective evidence of the extent or degree of the alleged physical limitations
resulting from th[at] disc injury' " (Owen v Rapid Disposal Serv., 291
AD2d 782, 782-783), inasmuch as it [*2]failed to
provide a numeric percentage of plaintiff's loss of range of motion or a
qualitative assessment of plaintiff's condition (see Toure v Avis Rent A Car
Sys., 98 NY2d 345, 350).
We have considered plaintiff's remaining contentions and conclude that they
are without merit.
Entered: September 22, 2006
JoAnn M. Wahl
Clerk of the Court
DECISION & ORDER
In an action, inter alia, to recover damages for personal injuries, etc., the defendants appeal from an order of the Supreme Court, Kings County (Johnson, J.), dated September 15, 2005, which denied their motion for summary judgment dismissing the complaint on the ground that the plaintiff Fatimat Talabi did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is affirmed, with costs.
In support of their motion for summary judgment dismissing the complaint, the
defendants failed to make a prima facie showing that the plaintiff Fatimat
Talabi did not sustain a serious injury within the meaning of Insurance Law §
5102(d) as a result of the subject accident. The defendants never addressed the
claim, clearly set forth in the bill of particulars, that Talabi sustained a
medically determined injury or impairment of a nonpermanent nature which
prevented her from performing substantially all of the material acts which
constituted her usual and customary daily activities for not less than 90 days
during the 180 days immediately following the accident. The defendants'
neurologist and orthopedist each examined the plaintiff on April 22, 2005, some
18 months post-accident. Although both doctors stated that Talabi was not
disabled when they [*2]examined her, neither
doctor addressed the possibility that she had a medically determined injury or
impairment immediately following the accident that affected her activities
during the 180 days immediately following the accident (see Sayers v Hot,
23 AD3d 453). Since the defendants failed to satisfy their prima facie burden,
it is unnecessary to consider whether the plaintiffs' papers in opposition were
sufficient to raise a triable issue of fact (see Coscia v 938 Trading Corp.,
283 AD2d 538).
SCHMIDT, J.P., CRANE, KRAUSMAN, SKELOS and LUNN, JJ., concur.
Anjay v. Those Certain Underwriters at Lloyd's of London subscribing to Certificate Number HN01AAF4393
Weg and Myers, P.C., New York (Joshua L. Mallin of counsel),
for appellants.
Vedder, Price, Kaufman & Kamholz, P.C., New York (John H.
Eickemeyer of counsel), for respondents.
Order, Supreme Court, New York County (Carol Edmead, J.),
entered December 23, 2004, which granted defendants' motion for summary judgment
dismissing the complaint, unanimously reversed, on the law, with costs, the
motion denied and the complaint reinstated.
Plaintiffs, entities engaged in the business of manufacturing jewelry, own and operate a facility in Mexico where they manufacture jewelry from gold and diamonds. Defendants insurers issued to plaintiffs a Jewelers' Block policy of insurance that insured against loss or damage to plaintiffs' jewelry stock. The policy was not an all-risk policy, but rather provided that "coverage under this Insurance shall be restricted to loss and/or damage arising from the perils of Fire, lightning, Explosion, Aircraft, Storm, Tempest, Flood, Burst Pipes, Impact, Hold-Up (as defined herein), Robbery (as defined herein), or Safe Burglary (as defined herein). Any other loss or damage not specified above shall be excluded." The policy also contained certain warranties, one of which, denominated the "Video Tape Warranty," reads in full as follows: "It is a warranty of this insurance that the Assured shall maintain all video tapes for a minimum of seven days or, in the event of a loss occurring, shall keep such video tapes until they have been viewed by the Loss Adjuster appointed by Underwriters."
On March 7, 2002, an employee in the Mexico facility inadvertently poured acetone into a pot of boiling water in a room, the "washout room," where assembled items of jewelry are cleaned. An explosion and fire ensued, and plaintiffs claimed a resulting loss of gold and diamonds of just over $1.2 million. Following an investigation by a loss adjusting firm, defendants denied the claim. On this appeal, the principal issue relates to one of the grounds defendants asserted for denial of the claim, plaintiffs' breach of the Video Tape Warranty. On the basis of this breach, Supreme Court granted defendants' motion for summary judgment.
Apparently, the facility's video surveillance system included cameras at various locations, monitors and a videocassette recorder. The breach defendants rely upon is plaintiffs' failure to preserve the videotapes until viewed by the loss adjuster. According to the affidavit of the [*2]facility's general manager, he located the tape depicting the washout room prior to the explosion and set it aside. However, that tape was reused in accordance with normal procedures at some point after defendants allegedly lulled plaintiffs into believing that defendants regarded as irrelevant any videotapes recorded on the day of the fire. The general manager also asserted that none of the cameras were working after the explosion due to a loss of electric power, the cameras were damaged by the fire and the surveillance system did not again become operational until March 25, 2002.
As Supreme Court recognized, a breach of a policy warranty by an insured does not necessarily relieve the insurer of its obligations under the policy. Rather, "a breach of warranty does not defeat recovery under an insurance contract unless such breach materially increases the risk of loss, damage or injury within the coverage of the contract'" (Continental Ins. Co. v RLI Ins. Co., 161 AD2d 385, 387 [1990], quoting Insurance Law § 3106 [b]). The question of the materiality of a breach of warranty is "[o]rdinarily . . . a question of fact for the jury" and "[i]t is only where the evidence concerning the materiality is clear and substantially uncontradicted that the question is a matter of law for the court to decide" (id. [citation omitted]). The burden is on the insurer to show the materiality of the breach (cf. Carpinone v Mutual of Omaha Ins. Co., 265 AD2d 752, 754 [1999]).
Defendants' various contentions on the ostensible materiality of plaintiffs' breach are unavailing. That a video surveillance system decreases the risk of loss generally — principally by reducing the incidence of various forms of larceny, including "Hold-Up" and "Robbery" — is irrelevant when the loss is caused by an event the occurrence of which cannot possibly be affected by such a system. Defendants do not dispute that the explosion and fire were caused by a worker's inadvertence. Also irrelevant are defendants' assertions that the Video Tape Warranty was particularly important to the underwriters in light of the prior loss history of the policyholders. Presumably, all insurers regard as important the warranties for which they negotiate. The importance of a warranty, however, does not establish anything about the materiality of a particular breach. Defendants' assertion that footage of events occurring prior to the power outage would have provided "valuable information" about the extent of the fire and the activities of persons in the building prior to the outage is pure speculation. Nor do defendants offer any explanation of what that information might be or how plaintiffs' failure to preserve it materially increased the risk of loss.
To be sure, it is possible that some portion of the gold and jewelry losses could have been the result of acts of theft occurring in the aftermath of the explosion. To the extent defendants rely on that possibility, it is unavailing as well. Obviously, plaintiffs would not be in breach of the Video Tape Warranty if the occurrence of one of the risks for which it obtained insurance made it impossible for it to comply with the warranty. As noted, the facility manager asserted in opposition to defendants' motion that the cameras stopped working simultaneously with the power outage and did not again become operational for more than two weeks.
Nor could summary judgment properly be granted to defendants on the basis of either of the two alternative grounds raised in their motion which Supreme Court did not reach. We assume without deciding that the record-keeping provisions of the policy required plaintiffs to keep and maintain records sufficient to determine the amount of any loss without "any need to resort to evidence outside the records to explain the records other than might be necessary to disclose the bookkeeping methods employed" (Globe Jewelry, Inc. v Pennsylvania Ins. Co., 72 Misc. 2d 563, 564 [1973] [citations omitted]). Although the factual averments submitted by [*3]defendants may have established that there were curiosities in the records reviewed and that the accounting firm retained by defendants had difficulties determining the extent of the loss, neither the sworn nor the unsworn averments established either that all of plaintiffs' records had been reviewed or that it was not possible to determine the amount of loss with sufficient precision from plaintiffs' records (see Diamond Den, Ltd. v Jefferson Ins. Co., 127 AD2d 998 [1987]).
Finally, defendants argue that the extent of the claimed losses is explicable only on the basis of the occurrence, after the explosion and fire, of varieties of theft not covered by the insurance policy. This argument, however, rests on speculation. Given our disposition of this appeal, we need not reach plaintiffs' contention that defendants are estopped from relying on the breach of the Video Tape Warranty.
THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: OCTOBER 3, 2006
CLERK
Garcia v. Peterson
In an action, inter alia, to recover damages for wrongful death, the defendant appeals, as limited by his brief, from so much of an order of the Supreme Court, Orange County (Peter C. Patsalos, J.), dated December 2, 2005, as, in effect, upon renewal, adhered to its original determination in an order dated June 22, 2005, denying his motion to dismiss the complaint pursuant to CPLR 3211(a)(5) as time barred and granting the plaintiffs' cross motion to compel the settlement of the action.
ORDERED that the order is reversed insofar as appealed from, on the law, with costs, upon renewal, the motion is granted, the cross motion is denied, the complaint is dismissed, and the order dated June 22, 2005, is vacated.
On September 25, 2001, the plaintiffs' decedent was a passenger in a vehicle involved in an automobile accident with a vehicle owned and operated by the defendant. On or about November 29, 2004, the plaintiffs commenced the instant action against the defendant. It is undisputed that the three-year limitations period for personal injury actions (see CPLR 214[5]) and the two-year limitations period for wrongful death (see EPTL 5-4.1) had expired when the action was commenced. The defendant, who had the initial burden of establishing that the applicable statute of limitations has expired (see Assad v City of New York, 238 AD2d 456), met his burden of establishing that the action was time barred (id.). [*2]
Contrary to the plaintiffs' contention, they may not invoke the doctrine of equitable estoppel to preclude the defendant from asserting the statute of limitations as a defense (see Zumpano v Quinn, 6 NY3d 666). The doctrine of equitable estoppel is an "extraordinary remedy" (East Midtown Plaza Hous. Co. v City of New York, 218 AD2d 628), which provides that a defendant may be estopped from pleading the statute of limitations when the "plaintiff was induced by fraud, misrepresentations, or deception to refrain from filing a timely action" (Simcuski v Saeli, 44 NY2d 442, 448-449; see Kiernan v Long Is. R.R., 209 AD2d 588, 588-589). The plaintiffs failed to adduce sufficient evidentiary facts to establish that they were induced to delay the commencement of this action as the result on any affirmative misconduct by the defendant (see Dioguardi v Glassey, 5 AD3d 430; Zoe G. v Frederick F.G., 208 AD2d 675, 675-676). There was no evidence establishing that the defendant made an actual misrepresentation or committed some other affirmative wrongdoing (see Powers Mercantile Corp. v Feinberg, 109 AD2d 117, 122). Here, the communications between the defendant's insurer and the plaintiffs' counsel before the expiration of the statute of limitations were insufficient to establish grounds for estoppel (see Blitman Constr. Corp. v Insurance Co. Ins. Co. of N. Am., 66 NY2d 820, 823; Grumman Corp. v Travelers Indem. Co., 288 AD2d 344, 345).
Accordingly, the Supreme Court, upon renewal, should have granted the
defendant's motion to dismiss the complaint pursuant to CPLR 3211(a)(5) as time
barred and denied the plaintiffs' cross motion to compel the settlement of the
claim.
MILLER, J.P., ADAMS, SKELOS and COVELLO, JJ., concur.
ENTER:
James Edward Pelzer
Clerk of the Court
Matter of Continental Insurance Company v. Lulanaj
DECISION & ORDER
In a proceeding pursuant to CPLR article 75 to stay an uninsured motorist arbitration, the appeal is from an order of the Supreme Court, Kings County (Spodek, J.), dated July 27, 2005, which, in effect, denied that branch of the petition which was to permanently stay the arbitration.
ORDERED that the order is affirmed, with costs.
The additional respondent Utica Mutual Insurance Company demonstrated that it
met the requirements set forth in Thrasher v United States Liab. Ins. Co.
(19 NY2d 159, 168-169) to disclaim coverage on the ground of lack of cooperation
of its insured, Paldo Express (see Allstate Ins. Co. v United Intl. Ins. Co.,
16 AD3d 605). Accordingly, the Paldo Express vehicle was uninsured and, as
such, the Supreme Court properly, in effect, denied that branch of the petition
which was to permanently stay arbitration of the claim for uninsured motorist
benefits.
SCHMIDT, J.P., ADAMS, LUCIANO and LIFSON, JJ., concur.
ENTER:
James Edward Pelzer
Clerk of the Court
Matter of Erie Insurance v. Williams
Appeal from an order of the Supreme Court, Erie County (Rose H. Sconiers, J.),
entered January 9, 2006 in a proceeding pursuant to CPLR article 75. The order
denied the petition for an order permanently staying arbitration of the
supplementary uninsured motorist claim of respondent.
It is hereby ORDERED that the order so appealed from be and the same hereby is
unanimously reversed on the law without costs and the petition is granted.
Memorandum: Petitioner commenced this proceeding seeking a permanent stay of
arbitration of the supplementary uninsured motorist claim of respondent. On
appeal from an order denying the petition, petitioner contends that its
cancellation of a policy of automobile insurance issued to Tiffany A. Luterek
was effective with respect to respondent and thus that there was no insurance in
effect at the time of the underlying accident. The effectiveness of the notice
of cancellation depends upon whether respondent was a "member[] of the insured's
household" at the time of the cancellation (Vehicle and Traffic Law § 313 [3]).
We conclude that Supreme Court erred in holding as a matter of law that
respondent was not a member of the named insured's household within the meaning
of Vehicle and Traffic Law § 313 (3). We conclude, instead, that respondent on
the date of cancellation "actually resided in the insured['s] household with
some degree of permanence and with the intention to remain for an indefinite
period of time" (Matter of Biundo v New York Cent. Mut., 14 AD3d 559,
560). The record establishes that, although respondent and Luterek were platonic
roommates, they were living as members of a single household and indeed were
sharing the costs of maintaining their vehicles and the insurance thereon. We
thus conclude that the policy was not in effect at the time of the accident.
Under the circumstances, petitioner had no obligation to disclaim liability or
to deny coverage (see generally Insurance Law § 3420 [d]; Matter of
Worcester Ins. Co. v Bettenhauser, 95 NY2d 185, 188-190; Zappone v Home
Ins. Co., 55 NY2d 131, 137-138).
Entered: September 22, 2006
JoAnn M. Wahl
DECISION & ORDER
In an action to recover damages for personal injuries, etc., McGivney & Kluger, P.C., the attorney of record for the defendant Ralph Sibbio, appeals from an order of the Supreme Court, Kings County (Hinds-Radix, J.), dated January 9, 2006, which denied its motion for leave to withdraw as his counsel.
ORDERED that the order is affirmed, with costs.
"It is settled law in this State that a motion to withdraw as counsel is a
poor vehicle to test an insurer's right to disclaim liability or deny coverage"
(Monaghan v Meade, 91 AD2d 1014, 1015; see Brothers v Burt, 27
NY2d 905, 906; Rusolo v Skate Odyssey, 109 AD2d 875; cf. Dillon v Otis
Elevator Co., 22 AD3d 1). Rather "[t]he appropriate vehicle for resolving a
dispute over the coverage offered by a policy is a declaratory judgment action
in which the [insured] would be able to adequately litigate the facts of the
insurance carrier's disclaimer" (Pryer v DeMatteis Orgs., 259 AD2d 476,
477; see Sojka v 43 Wooster LLC, 19 AD3d 266, 267; Garcia v Zito,
242 AD2d 258, 259; Laura Accessories v A.P.A. Warehouses, 140 AD2d 182).
ADAMS, J.P., KRAUSMAN, FISHER and DILLON, JJ., concur.
ENTER:
James Edward Pelzer
Clerk of the Court
