Coverage Pointers - Volume X, No. 1

Dear Coverage Pointers Subscribers,

 

Today's trivia question, as we prepare for the 2008 Beijing Olympics:

 

Why is the "marathon" distance set at 26 miles, 385 yards?

 

                               a.      The event is measures after the fabled run of the Greek soldier Pheidippides, a messenger from the Battle of Marathon to Athens

                              b.      The event is measured from distance from Paris where Prussian soldiers were stopped in 1870 by French Nationalists.

                               c.      The first modern marathon took place on the Italian roads between Sermoneta and Lido di Latina, which is exactly that distance.

                              d.      A British Queen refused to move to the finish line of a shorter race, so the race was extended to that distance to make her happy.

 

Answer later.

 

Happy 10^th Anniversary, Coverage Pointers subscribers.

 

This is a milestone for us.  We provide you with Volume X, No. 1 of our publication.

 

Just over a decade ago, our late senior partner and mentor, Shelly Hurwitz and I were completing one of those old-fashioned paper newsletters on some significant case that had come down from an appellate court.  We knew what we had to do next - give it to a secretary, have her make whatever number of copies for those on our standard mailing list, fold them, then print out mailing labels, tri-fold the newsletter, stuff them in envelopes, post them with 32 cents a piece on the Pitney-Bowes and send them on their way.

 

At the same time we could not help notice that our clients were beginning to converse electronically with us and with others with regularity.  Accordingly, we decided, right then and there, that we would no longer send out paper newsletters but would begin an electronic mailing list and thereafter only send out newsletters by e-mail.

 

So, we started collecting e-mail addresses and with a bulging list of 25, Coverage Pointers was born. Then, we were about the only electronic newsletter on the block.

 

The name was designed as a not-too-clever double entendre'.  We wanted to provide not just coverage summaries, but coverage advice, strategic consideration, wisdom and pointers for handling coverage issues.  Coverage Pointers, if you will.  We would do it but putting together a newsletter with all that good stuff and live web links to opinions in real-time, using hot links, then known as URL's (Uniform Resource Locators) now more commonly known as a website addresses.  At that time, the dictionary definition described a World Wide Web URL as a web pointer.  So, Coverage Pointers would use pointers to provide pointers.

 

Anyway, we now have over 1500 direct subscribers with the list growing daily.

 

As we said last year, on our ninth anniversary, we hope that we continue to provide you with what you need in insurance coverage commentary, sprinkled with a touch of humor and laced with common sense

 

The appellate judges are taking their early summer siestas and as we see every July and August, there is a down-tick in the number of reported decisions.  .

 

This Week at the Ranch

You'll find a couple of real interesting reads in this week's edition, including a case that confronts the very interesting (and common) question of whether notice by one insured under a policy satisfies notice by all.  The courts have been split on this issue and the Second Department in the Jackson case suggests a method to answer the question.  The First Department, in the Tishman case handles, fairly well, one of our favorite topics, the interrelationship between insurance procurement provisions in construction contracts and insurance policies.  It's complicated, erudite but quite important. 

 

The Fourth Department offers up another look at another of our favorite subjects, assaults and occurrence, in light of the Court of Appeals case in Cook.  The carrier wins the battle at the Fourth but a well-reasoned two-judge dissent, working on established precedent, gives this case a green light to go to the Court of Appeals.  You'll also find a scary Third Department case suggesting that additional insureds that do not have copies of policies may be excused from complying with policy conditions.  What a can of worms that decision could open.

 

Elacqua II Revisited

 

Steve Peiper has included a comprehensive review of the Elacqua II decision, that Third Department zinger requiring a carrier to notify an insured of the right to designate so-called independent counsel under certain circumstances. 

 

Earl's Pearl

 

This week Earl's reviews the qualification of experts to testify at trial; it's a good piece providing guidance on the process of securing or defeating the admission of expert testimony.

 

Oh Yes. The Marathon.

 

One hundred years ago this week, White City Stadium opened in Great Britain.  Italy had been awarded the 1908 Olympics, but the devastating eruption of Mount Vesuvius in 1906 knocked Italy out of the box for 1908.  So the Brits had two years to organize the games and they build the stadium at White City in those two years with room for 90,000 spectators. King Edward VII cut the ribbon on July 13, 1908 and the stadium remained operational until 1985.

 

The 1908 Olympics had its share of interesting moments. For the first time athletes had to enter as part of a national team, rather than as individuals and these were the first games to have gold, silver and bronze medals. Tug-of-war was an Olympic event as was speedboat racing.

 

In the 400m the winning US runner was judged to have impeded the British finalist, and the race was ordered to be re-run - the three US runners boycotted the re-run, leaving the Briton as the only one in the race. He won.

 

The marathon was run as it had been in previous Olympics but the races in the first few Olympic Games were not of a set length.  They were set at 40 km -- give or take -- roughly the distance from Marathon to Athens. 

 

The marathon at the 1908 Summer Olympics in London was set to measure about 25 miles (40 km) and to start on 'The Long Walk' - a magnificent avenue leading up to Windsor Castle.  However, the Princess of Wales wanted her children to watch the start of the race, so the start of the race was moved to the east lawn of Windsor Castle, increasing its length to 26 miles (42 km). The race was to finish at the Great White City Stadium in Shepherd's Bush in London; however, Queen Alexandra insisted on having the best view of the finish; so, in the words of the official Olympic report, "385 yards were run on the cinder track to the finish, below the Royal Box". The length then became 2.195 km (26 miles 385 yards or 26 ^7/₃₂ miles) and it has stayed that length ever since..

 

So, the answer to the trivia question is (d).

 

Continuing Education

 

Steve Peiper (on bad faith - Topic VI below) and the undersigned (on notice, late notice and disclaimer - Topic V) will be presenting as part of the Buffalo faculty on September 19^th in a co-sponsored program entitled Law School for Claims Professionals. It is a NYS Bar program cosponsored by CPCU chapters around the state along with Upstate NY RIMS.   You can register at www.nysba.org/TICL with discounted rates for CPCU and RIMS chapter members. Program dates:

 

Friday, September 5, 2008                   Syracuse

Friday, September 19, 2008                 Albany

Friday, September 19, 2008                 Buffalo

Friday, September 19, 2008                 Hauppauge

Thursday, September 25, 2008             Westchester

Friday, September 26, 2008                 New York City

 

 

Topics:

 

I.                    Premises Liability Issues and Trends

II.                 Automobile Liability Issues and Trends

III.               Indemnification and Defense Obligation Issues

IV.              Update on the Law of Liens and Subrogation

V.                 Notice, Late Notice and Disclaimers

VI.              Bad Faith Developments

 

This Week's Issue Includes:

 

• Notice by One Insured is Not Notice by Another, Unless Insureds are United in Interest; Additional Insured has Implied Duty to Give Notice
• Which Came First, the Primary Policies or the Excess Policies?  You Get Only One Guess
• Assault v. Occurrence: A Split Court Tees it Up for a Fresh Review by the Court of Appeals
• Question of Fact Exists as to Whether Contractor Falls within Subcontractor's Policy because of Lack of Clarity about Whether or Not Subcontractor's Acts Caused Accident
• Court Defies Logic and Holds that Non-Policyholder Is Not Bound by "Notice" Terms in SUM Policy because He Did Not Have Knowledge of its Terms 

STAROSIELEC'S SERIOUS (INJURY) SIDE OF NEW YORK NO FAULT

Mark Starosielec
[email protected]

 

• Motion to Set Aside the Verdict is Granted on Appeal as Plaintiff Did Not Suffer a SI
• Reverse Lay Up: Defendants' Failure to Meet Prima Facie Burden Dooms SJ Chances
• Complaint Survives as AD Knocks Out Some, But Not All SI Categories
• Plaintiff's Doctors' Opinions Enough to Raise a Triable Issue of Fact and Stave Off SJ
• Reversed: Findings of Significant ROM Limitations Keeps Plaintiff's Complaint Alive 

AUDREY'S ANGLES ON NO-FAULT

Audrey Seeley

[email protected]

 

Arbitration 

• Ignorance of the Law is No Excuse for Failing to Timely Submit a No-Fault Application.

Litigation

• Defendant State Farm's Motion for Leave to Appeal to the Court of Appeals Granted
• Issue of Fact Precluding Summary Judgment on Whether Verification Provided.

 

Thanks for a decade of your loyalty and see you in a couple of weeks.

 

Dan

 

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

Newsletter Editor

Dan D. Kohane
[email protected]

 

Insurance Coverage Team

Dan D. Kohane, Team Leader
[email protected]

Michael F. Perley
Audrey A. Seeley
Steven E. Peiper

Mark Starosielec

Fire, First-Party and Subrogation Team
Andrea Schillaci, Team Leader
[email protected]
Jody E. Briandi
Steven E. Peiper

NO-FAULT/UM/SUM TEAM
Audrey A. Seeley, Team Leader
[email protected]
Tasha Dandridge

APPELLATE TEAM
Jody E. Briandi, Team Leader
[email protected]
 Scott M. Duquin

Index to Special Columns

 

Starosielec’s Serious Side of “Serious Injury”

 Audrey’s Angles on No Fault

Peiper on Property
Earl’s Pearls

Across Borders

 

7/8/08              23-08-18 Jackson Realty Associates v. Nationwide Mutual Insurance Co.

Appellate Division, Second Department

Notice by One Insured is Not Notice by Another, Unless Insureds are United in Interest; Additional Insured has Implied Duty to Give Notice

The insured, 23-08-18 Jackson (Jackson) sought a defense in to third party claims in an action commenced by Sheehan and Crosby (underlying plaintiffs) against Integrity Construction (Integrity) where Integrity brought third party actions against Jackson.  Jackson owned property and hired Integrity to perform renovation work.  Integrity was required by contract to purchase liability insurance naming Jackson as additional insured.  Integrity did so by securing a policy issued by Nationwide.  The policy required prompt notice of accidents, claims and suits.

 

Of course, the underlying plaintiffs were hurt during the work and sued both Integrity and Jackson for personal injuries. Jackson sought coverage from Nationwide and Nationwide denied on late notice. This action by Jackson ensued. Jackson alleged that shortly after the accident an employee of the named insured, Integrity, assured Jackson’s principal that Integrity would notify Nationwide. In fact, Nationwide did get that notice from Integrity and was defending Integrity in the lawsuit by the underlying plaintiffs. Nationwide argued that it was entitled to separate notice from Jackson, and having not received it, it had a right to deny Jackson coverage.

The Appellate Division agreed with Nationwide. The plaintiffs, as additional insureds, had an implied duty, independent of Integrity, to provide Nationwide with the notices required under the policy, i.e., notice "as soon as practicable" of both the "occurrence" and of any "claim" or "suit" arising there from. The fact that an insurer may have received notice of the claim from the primary insured, or from another source, does not excuse an additional insured's failure to provide notice there are situations in which timely notice furnished by one insured may be deemed timely notice by another unless the two insureds are united in interest.

Editor’s Note:  This question comes up from time to time and this is one of the few recent cases where the court discussed the “united in interest” concept.  Two insureds with perhaps adverse interests are in the mix and only one gives timely notice.  Carrier gets notice from one but not from the other.  Coverage is denied if the two defendants have differing interests, even though the insurer knew of the accident.

 

There’s another interesting comment in this decision.  It appears that the additional insured may have argued that the policy did not require it to give notice.  However, the court held that there was, at least, an implied obligation on the part of an additional insured to do so.

 

All this may be subject to change once prejudice is required to be established.

7/8/08              Tishman Construction Corp. v. Great American Insurance Company Appellate Division, First Department
Which Came First, the Primary Policies or the Excess Policies?  You Get Only One Guess
Carnegie Hall Corporation retained plaintiff Tishman Construction Corporation to manage construction of a new music hall. Under the contract, Tishman procured a commercial general liability insurance policy from plaintiff National Union naming Carnegie as an additional insured. The policy limits were $1,000,000 per occurrence/$2,000,000 aggregate.

Tishman hires Schiavone Construction perform excavation and other work on the project. Under their contract, Schiavone agreed to defend and indemnify Tishman and Carnegie for claims arising out of its own negligence, and to procure insurance of at least $10,000,000 naming Tishman and Carnegie as additional insureds. Schiavone secured two separate policies. The first was a commercial general liability policy with limits of $1,000,000 per occurrence/$2,000,000 aggregate. This was issued by National Union, the same insurer that issued the policy to Tishman. The second policy acquired by Schiavone was a "Protector Commercial Umbrella Coverage" policy issued by defendant Great American with limits of $25,000,000.

So the coverage situation is as follows:

Carnegie and Tishman’s coverage through Tishman’s Nat. Union Policy $1 million
Carnegie and Tishman’s coverage through Schiavone Nat. Union Policy            $1 million
Carnegie and Tishman’s umbrella through Tishman’s Great Am. Policy  $25 million

Two Schiavone employees were hurt and sued Tishman and Carnegie. The Maikowski injury claim settled for $785,000. The Massie claim led to a verdict of $2,324,146.

National Union paid the entire Maikowski settlement from the insurance policy it issued to Schiavone.  Tishman, Carnegie and National Union then commenced this action against Great American and Schiavone for a declaration that after National Union paid out the remainder of the proceeds of the policy it issued to Schiavone, the remainder of the unsatisfied portion of the Massie judgment would be the responsibility of Schiavone pursuant to its agreement to indemnify Tishman and Carnegie. The complaint further sought a declaration that Great American was required to indemnify them to the extent the judgment exceeded the National Union policy issued to Schiavone, since the Great American excess policy named them as additional insureds.

The court found, based on the Bovis Lend Lease LMB, Inc. v Great American Ins. Co reported in three-part harmony in our April 18^th issue that because the Great American policy was an excess policy which provided the final tier of coverage, it should not have been invoked prior to the exhaustion of the National Union primary policy issued to Tishman.   

Bovis stood for the proposition that primary policies come before excess policies.  Here, the Great American Policy was the only pure excess policy.  Here, National Union argues that its policy should follow the Great American policy because its other insurance clause provided that:

"This insurance is excess over any other insurance, whether primary, umbrella, excess, contingent or on any other basis . . .

 

(4) If a "claim" arises out of the actions of a hired contractor or subcontractor who has agreed to either:

 

a. Contractually indemnify the "insureds" against whom "claims" may be made for any "claims" resulting from the actions of the hired contractor or subcontractor, or

 

b. name the "insureds" against whom "claims" may be made as Additional Insureds on the hired contractor's or subcontractor's commercial general liability insurance policy."

 The court found that this language did not change a primary policy into an excess policy.

7/3/08              State Farm Fire and Cas. Co. v. Whiting
Appellate Division, Fourth Department
Assault v. Occurrence: A Split Court Tees it Up for a Fresh Review by the Court of Appeals
Does State Farm have a duty to defend and indemnify Matthew Whiting?  In the underlying lawsuit, it is alleged that Whiting assaulted Lang while Lang was at a party at Whiting’s house. A 3-2 court determined that State Farm had no obligation to provide coverage for Whiting and this case is destined to give the Court of Appeals another opportunity to consider its holding in Automobile Ins. Co. of Hartford v. Cook.  For those who do not remember the Cook case, see our article entitled Ouch That Hurts: The Difference between Intentional Injury Exclusions and Assault Exclusions which appeared as a supplement to our April 4, 2008 issue.

Here the court held that the carrier had no duty to defend or indemnify Whiting because the incident was not an "occurrence" within the meaning of the policy. An occurrence is defined as "an accident" and an injury is accidental if, from the point of view of the insured, the incident resulting in injury was unexpected, unusual and unforeseen'.

Lang admitted at his deposition that he intended to hit Lang, who had shoved him and was again advancing toward him, and defendant knew when he hit Lang that Lang "could be hurt from the punch." In Cook, of course, the insured shot and killed an intruder in his home and after being acquitted of murder and manslaughter charges, and the victim's estate commenced a wrongful death action alleging that the insured in Cook negligently caused the victim's death..  The majority acknowledged that the insured in Cook, who fired the weapon at the lowest part of the victim's body that was visible behind a pool table, testified at his deposition that he knew that the victim would be injured but he did not anticipate that the victim would be killed. However, the court here distinguished the facts here from Cook by concluding that there was no view of the evidence to support a conclusion that the result of defendant's intentional act of punching Lang in the face "accidentally or negligently" caused Lang's alleged injuries.

The court rejected the insured’s contention that a late disclaimer vitiated coverage. On this issue, the court held, following well established precedent, that if incident was not an “occurrence” the provisions of Insurance Law 3420(d) were not applicable.

The two dissenting justices noted that the underlying complaint alleged that defendant was negligent in hosting a party and providing alcoholic beverages to persons under the age of 21, in failing to limit the amount of alcoholic beverages consumed, in failing to supervise those present so as to prevent an incident and in failing to foresee the likelihood that a physical altercation could occur as a result of serving alcoholic beverages to persons under the age of 21. With those allegations before it, the dissenters believed that there was at least a duty to defend.

Moreover, the dissenter did not subscribe to the majority’s conclusion that the incident was not an occurrence. The dissent noted that Court of Appeals in Cook, required a defense where the insured pointed a 12 gauge shot gun at the decedent and, when the decedent "menacingly started advancing toward" the insured, the insured shot and killed the decedent because the event may be considered an occurrence' within the meaning of the policy and coverage would apply." Here, the insured testified at his deposition that, after hours of consuming alcoholic beverages, Lang, was visibly intoxicated and unruly. Evan initially pushed defendant to the point of knocking him off balance, and he then charged at insured "fast" while speaking angrily, with his fists clenched.  testified that, in response, he hit Evan because he "thought [he] was going to get hit." Whiting further testified at his deposition that his blow to Evan was "quick, nothing that I had time to prepare for." In light of defendant's explanation of the events leading to Evan's alleged injuries, the dissent concluded that plaintiff failed to demonstrate that defendant's acts are subject to no other interpretation than that defendant " expected or intended' " the harm to Evan.

Editor’s Note:  Your editor has always believed, and still does, that the Cook case was wrongly decided.  An insured aims a gun and takes a shot and intends to injure, it just isn’t an occurrence in my book.  With Cook the law of the land, the dissent is probably correct and under Cook there is an obligation to defend.  However, this case, with two dissents, gives the Court of Appeals a chance to revisit the silliness of the Cook decision and bring common sense back to the definition of occurrence.

7/3/08              KMAPS Corp, v. Nova Casualty Company
Appellate Division, Fourth Department
Question of Fact Exists as to Whether Contractor Falls within Subcontractor’s Policy because of Lack of Clarity about Whether or Not Subcontractor’s Acts Caused Accident
KMAPS sought a declaration that Nova owed it defense and indemnity under a policy issued by Nova to a subcontractor, K&S for the installation of TV cable. KMAPS was able to demonstrate, prima facie, an entitlement to coverage but Nova raised an issue of fact as to whether the injuries to the underlying plaintiff arose because of conduct of a different subcontract not insured by Nova.

The court below had decided that Nova was required to provide KMAPS with a timely disclaimer of coverage.  However, the Appellate Division hold that it is still unclear whether or not KMAPS is an additional insured under the terms of the policy, and "requiring payment of a claim upon failure to . . . disclaim [in a timely manner] would create coverage where it [may] never [have] existed."

7/03/08            In the Matter of the Arbitration between Hartford Fire Ins. Co and Fell
Appellate Division, Third Department
Court Defies Logic and Holds that Non-Policyholder Is Not Bound by “Notice” Terms in SUM Policy because He Did Not Have Knowledge of its Terms
 In November 2005, Fell was hurt in a motor vehicle accident owned by his employer Sawhorse Lumber.  Hartford provided the insurance, including uninsured and underinsured coverage.  In August 2007, Fell served Hartford a request for arbitration regarding the SUM coverage.  Hartford sought a stay of arbitration, claiming that Fell failed to comply with certain provisions of the policy. Finding that Hartford never provided Fell, a non-policyholder, with a copy of the policy or the specific provisions upon which it relied, Hartford’s application for a stay was denied by the lower court.

Incredibly, the Third Department agrees with the lower court.

The record demonstrates that respondent was not a policyholder and it is devoid of any evidence that respondent was provided with a copy of the policy or was aware of its terms. Under these circumstances, petitioner cannot rely on respondent's failure to satisfy terms of an insurance contract that he did not possess and the terms of which he was not aware to obtain a stay of arbitration.

Editor’s Note:  Is the court saying that additional insureds that do not have access to policies are not bound by their terms?  Will carriers now have to send copies of policies to any potential additional insured?  Does this decision make sense, even in contact with a SUM claim, especially in the context of a policy whose terms are described in Insurance Department regulations?

 

 

 

STAROSIELEC’S SERIOUS (INJURY) SIDE OF NEW YORK NO FAULT

Mark Starosielec
[email protected]

 

 

7/8/08              Kilakos v Mascera

Appellate Division, Second Department

Motion to Set Aside The Verdict is Granted on Appeal as Plaintiff Did Not Suffer a SI
While conceding liability at the trial, defendant successfully appealed a lower court order which had denied his motion pursuant to CPLR 4401 for judgment as a matter of law. As a result, the complaint was dismissed. After trial, the jury had found that the plaintiff sustained a "significant limitation of use of a body function or system" from the accident to his back, and awarded damages. The Supreme Court, inter alia, denied the defendant's motion pursuant to CPLR 4401 for the plaintiff's failure to establish a prima facie case.

The Appellate Division held that a motion pursuant to CPLR 4401 for judgment as a matter of law may only be granted when, upon the evidence presented, there is no valid line of reasoning and permissible inferences which could possibly lead rational persons to the conclusion reached by the jury upon the evidence presented at trial, and no rational process by which the jury could find in favor of the nonmoving party. Here, no rational jury could have concluded that plaintiff sustained a "significant limitation of use of a body function or system". The mere existence of herniated or bulging discs, and even radiculopathy, is not evidence of a serious injury in the absence of objective evidence. Here, the plaintiff's expert witness admittedly never recorded any range-of-motion findings, nor compared his findings to normal ranges of motion.

7/8/08              Gaccione v Krebs

Appellate Division, Second Department

Reverse Lay Up: Defendants’ Failure to Meet Prima Facie Burden Dooms SJ Chances

In another successful reversal this issue, the plaintiff successfully appeal a lower court order which granted the defendants' motion for summary judgment. The defendants failed to meet their prima facie burden. In support of their motion, the defendants relied upon, inter alia, the report of their examining neurologist. During testing of the plaintiff's lumbar spine, the plaintiff's leg elevation was to 60 degrees on the right side and to 30 degrees on the left side. Thus, a clear limitation was noted, the full extent of which is not known due to the examining neurologist's failure to compare these numerical findings to what is normal.

 

7/3/08              Chmiel v Figueroa

Appellate Division, Fourth Department

Complaint Survives as AD Knocks Out Some, But Not All SI Categories

While not an entire success, plaintiff was able to keep alive his complaint by appealing a lower court which granted defendants’ summary judgment motion in its entirety. On appeal, the Appellate Division modified the lower court order and reinstating the complaint, with respect to the permanent consequential limitation of use of a body organ or member, significant limitation of use of a body function or system, and significant disfigurement categories of serious injury within the meaning of Insurance Law § 5102 (d).

Although defendant met her initial burden with respect to the permanent consequential limitation of use and significant limitation of use categories of serious injury by establishing that plaintiff's alleged injuries were not causally related to the accident but resulted from a preexisting condition, plaintiff raised a triable issue of fact. Further, the defendant failed to meet her initial burden that plaintiff's surgical scars do not constitute a significant disfigurement. The lower court did properly granted that part of defendant's motion with respect to the 90/180 category of serious injury.

7/1/08              Giordano v Allstarz Limousine, Ltd.

Appellate Division, Second Department

Plaintiff’s Doctors’ Opinions Enough to Raise a Triable Issue of Fact and Stave Off SJ

The plaintiff successfully appealed a lower court order, which granted the defendants' motion for summary judgment. The defendants met their prima facie burden of showing that the plaintiff did not sustain a serious injury. In opposition, the plaintiff raised a triable issue of fact as to whether he sustained a serious injury under the permanent, consequential, and/or significant limitation of use categories of Insurance Law § 5102(d) to the cervical and/or lumbar regions of his spine as a result of the subject accident. The plaintiff's treating neurologists and chiropractor opined that the plaintiff's spinal injuries and range-of-motion limitations were significant and permanent, and were causally related to the subject accident, based on their contemporaneous and most recent examinations of the plaintiff.

 

7/1/08              Perry v Brusini

Appellate Division, Second Department
Reversed: Findings of Significant ROM Limitations Keeps Plaintiff’s Complaint Alive

Here, plaintiffs successfully appealed a lower court order which had granted defendants’ motion for summary judgment dismissing the complaint on the ground that neither of the plaintiffs sustained a serious injury. The Appellate Division held the defendants failed to meet their prima facie burden. In support of their motion, the defendants relied upon the affirmed medical reports of their examining orthopedic surgeon. In those reports, the surgeon noted significant range of motion limitations in the plaintiffs' respective left knees, as well as significant range of motion limitations in the lumbar spine of the plaintiff Idell M. Perry.

 

AUDREY’S ANGLES ON NO-FAULT

Audrey Seeley

[email protected]

 

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

 

Arbitration

 

6/30/08            In the Matter of the Arbitration Between Applicant and Respondent

Arbitrator Veronica K. O’Connor (Erie County)

Ignorance of the Law is No Excuse for Failing to Timely Submit a No-Fault Application.

The Applicant, eligible injured person (“EIP”), challenged the insurer’s denial of chiropractic bills based upon the EIP failing to timely submit notice of claim – his application for no-fault benefits. 

 

The EIP provided notice to the insurer the day after the accident and the insurer provided the EIP with the requisite cover sheet and application.  The insurer also called the EIP upon receipt of notice of the accident and advised the EIP that he must submit the completed application and the time frame in which the completed application must be submitted.  The EIP failed to do so and the insurer provided a second application to the EIP to complete and return.  The EIP failed to do. 

 

The insurer denied the EIP all no-fault benefits on the basis that he failed to submit timely notice of claim and provided the EIP, as required, with the ability to provide written reasonable justification.  The EIP’s counsel advised the insurer that the EIP failed to provide timely notice of claim as the EIP did not understand the no-fault law requirements.

 

The assigned arbitrator upheld the insurer’s denial, despite being sympathetic the EIP’s misunderstanding of the law, on the ground that ignorance of the law is not a reasonable justification for failing to provide timely notice of claim.

 

Litigation

 

7/1/08              LMK Psycho. Services, P.C. v. State Farm Mut. Auto. Ins. Co.,

Court of Appeals

Defendant State Farm’s Motion for Leave to Appeal to the Court of Appeals Granted.

This is a case that everyone is watching!  The New York State Court of Appeals granted State Farm’s motion for leave to appeal to the high court.  We note that New York Central was also granted leave to file amicus curiae brief and the brief as filed was accepted.  We will keep you posted on any developments regarding this case.

 

7/1/08              Westchester Med. Center v. Allstate Ins. Co.,

Appellate Division, Second Department

Issue of Fact Precluding Summary Judgment on Whether Verification Provided

Plaintiff was not entitled to summary judgment as the insurer raised a triable issue of fact regarding plaintiff’s compliance with the insurer’s verification request for a toxicology report.

 

PEIPER ON PROPERTY (and POTPOURRI)

Steven E. Peiper

[email protected]

 

SILENCE….from the courts this week.  Thus, no property cases to speak of, nor anything worthy of the potpourri column.  The only thing I could come up with is our ever expanding review of the recent Third Department decision in Elacqua v. Physician’s Reciprocal. 

 

As you will see, there are still quite a few unanswered questions.  However, we hope that this gives you an understanding of the background so you’ll be ready to move forward as we continue to unravel what has happened and where we might be headed.           

 

A Carrier’s Duties Regarding Independent Counsel:

A Review of Elacqua v. Physician’s Reciprocal &

General Business Law § 349

 

When the Insured’s Right to Independent Counsel Arises

 

The Court of Appeals has long been concerned with the tripod relationship that is so unique to our business.  Clearly, defense counsel is assigned to represent the interests of the insured.  However, it is of no surprise that counsel also seeks to serve the best interests of the carrier when a file is assigned.  When push comes to shove, however, counsel’s fidelity must fall with the party he or she has been retained to represent.  This, often times, may be at odds with the source of such representation; the assigning carrier. 

 

Ever fearful of the temptations to waiver from its ethical bond to the insured, the Court of Appeals has long established the “choice of independent counsel” rule to combat the pangs of undue influence (Pub. Serv. Mut. Ins. Co. v Goldfarb, 53 NY2d 392 [1981]; Prashker v U.S. Guarantee Co., 1 NY2d 584 [1956]).  Make no mistake, the Court of Appeals’ holding in Prashker establishes that there is an inherent conflict of interest where there are covered and uncovered claims (Prashker v U.S. Guarantee Co., 1 NY2d at 583).   Thus, the choice of counsel right arises where carrier identifies covered and uncovered claims asserted by plaintiff, and issues a partial disclaimer to that effect (Prashker v U.S. Guarantee Co., 1 NY2d at 584). 

 

When such a conflict exists, the insured is permitted to obtain his or her own representation (for the reasonable value of the services) so as to free the insured’s counsel from the exertion of undue influence over the defense by the carrier  (Pub. Serv. Mut. Ins. Co. v Goldfarb, 53 NY2d 392 [1981]; Prashker v U.S. Guarantee Co., 1 NY2d 584 [1956]; see also Purcigliotti v Risk Enterprises Mgt. Ltd., 240 AD2d 205 [1st Dept., 1997]; Baron v. Home Ins. Co., 112 AD2d 391 [2d Dept., 1985])..

 

Carrier’s Obligation to Notify the Insured of the Right to Independent Counsel

 

In Elacqua, plaintiffs and plaintiffs’ partnership, as well as a physician’s assistant employed by the partnership, were all named as defendants in a medical malpractice action (Elacqua v Physician’s Reciprocal Insurers, 21 AD3d 702 [3d Dept., 2005]).  Upon receipt of the claim, carrier took the position that the policy in question did not provide coverage for vicariously liability imposed upon the partnership by acts of others.  As the carrier had taken the position that covered claims (claims against the physicians) and uncovered claims (vicarious liability claims against the partnership) were asserted in the underlying wrongful death action, a conflict of interest regarding representation of the insureds was created.  Accordingly, at the request of the original defense counsel who had been representing all of the defendants, the carrier assigned individual counsel to each defendant. 

 

Carrier did not, however, notify the insureds of their independent right to select counsel as a consequence of the conflict of interest created by carrier’s partial disclaimer.  The Third Department, for the first time, held that a carrier must apprise its insureds of their individual right to select counsel when a conflict of interest situation arises.  To not require notification of independent counsel rights, reasoned the Court, would “seriously erode the protection afforded.”

Having indicated that the carrier failed to notify the insured’s of the conflict of interest, the Court remanded the matter to the trial court for a determination on whether carrier’s denial was enforceable. 

 

That was Elacqua I, now for Elacqua II…

 

Initially, it appears that the coverage dispute was settled at the trial court level.  However, upon remand, plaintiffs’ amended their Complaint to seek damages as a result of a violation of General Business Law § 349.  Specifically, plaintiffs sought to recover the attorney’s fees they had expended in challenging carrier’s coverage denial. 

 

Plaintiffs alleged that the carrier’s failure to inform them of their right to select independent counsel constitute a deceptive trade practice.  Counsel to carrier conceded that it was not the practice of carrier to inform insureds of their right to independent counsel despite knowledge of the Court of Appeals holdings in Prashker and Goldfarb.  Thus, the “consumer oriented” prong of Section 349 had been satisfied. 

 

Further damaging was the fact that the disclaimer letters in question recognized there were uncovered grounds, and suggested that the insureds retain independent counsel at their own expense.  The Third Department reasoned that this was likely to mislead “a reasonable consumer acting reasonably under the circumstances.”  In turn, the Court was satisfied that the deceptive portion of Section 349 had been triggered.

 

Finally, although not able to point to pecuniary harm, plaintiffs alleged injury as a result of the deprivation of independent counsel.  The Court agreed by noting that the “plaintiff’s showing that undivided and uncompromised conflict free representation was not provided to them [the insureds]”, and as such constituted harm.  The damage was caused when counsel to the physicians both moved to dismiss the claims against their respective clients.  When the motion was granted, the only cause of action surviving was the claim of vicarious liability against the partnership which carrier had already disclaimed.  Counsel to partnership joined in the motion to dismiss even though, if granted, it would result in his client being the only defendant left in the action. 

 

Holding that the “carrier’s interests were advanced and the insured doctors’ interests were…not enhanced,” the Third Department concluded that the insured’s had sustained injury and the claim under General Business Law § 349 had been sufficiently supported. 

 

Penalties for Failing to Notify the Insured of the Right

 

As it currently stands, under Elacqua v. Physician’s Reciprocal, a carrier who fails to notify its insured of the insured’s right to select independent counsel may face extra-contractual damages by implication of General Business Law §349.  Initially, it is noted that General Business Law § 349(h) provides an individual party with standing to proceed in a direct action against a carrier for deceptive business practices. Although not intended to govern disputes among carrier and insured with regard to the insuring agreement, the Court of Appeal’s has permitted the General Business Law to apply to insurance disputes in limited circumstances (New York Univ. v Continental Ins. Co., 87 NY2d at 321). 

 

To assert a valid claim under General Business Law § 349, a claimant must establish that the allegedly deceptive acts were “consumer oriented” (Gaidon v Guardian Life Ins. Co. of America, 94 NY2d 330 [1999]).  To that end, claims involving a simple dispute over the extent of coverage provided under a singular policy cannot satisfy the requirements of a Section 349 cause of action (New York Univ. v Continental Ins. Co., 87 NY2d at 321).  However, in limited circumstances, courts have recognized claims under the General Business Law where the practice permeated the company’s philosophy. 

 

Examples of General Business Law claims which have survived an initial challenge include an allegedly deceptive marketing scheme (Gaidon v Guardian Life Ins. Co. of  America, 94 NY2d at 211-12).  Likewise, courts have held that a carrier’s intentional delay of adjusting losses falls within the General Business Law (Riordan v Nationwide Mut. Fire Ins. Co., 977 F2d 47 [2d Cir. 1992]; Infostar, Inc. v Worchester Insurance Company, 924 F. Supp.2d 25 [SDNY, 1996]).  Finally, a General Business Law § 349 violation has been found to lie where the plaintiff established that the carrier was exerting pressure on claimants to steer all repairs to a carrier approved contractor (Scavo v Allstate Ins. Co., 238 AD2d 571 [2d Dept., 1997]).

 

A second prong to a claim under Section 349 of the General Business Law requires the party prosecuting the claim to further establish that the acts of the carrier actually caused damage to the party seeking coverage (New York Univ. v Continental Ins. Co., 87 NY2d at 321).  Importantly, a party may establish that it has been damaged by a deceptive consumer act without proving economic damages as a result (New York Univ. v Continental Ins. Co., 87 NY2d at 321; Elacqua v Physician’s Reciprocal, 2008 NY Slip. Op. 04968  [3d Dept., 2008]).  Rather, any demonstration of any loss will suffice (Id.).

The good news, if there is any, is under Section 349(h), the Legislature provides that the injured party is entitled to “his actual damages or fifty dollars” whichever is greater.  In addition, the statute provides authority for injunctive relief to stop the deceptive act.  There is also a provision in the statute which provides that damages can be tripled if the deception was done willfully or knowingly.  However, under no circumstances will the award exceed $1,000.  Finally, the statute provides that the injured party may be awarded attorney’s fees if a violation of the GBL is proven. 

Does the duty to of the carrier to notify an insured of the right to choose independent counsel?  At least for now, the only appellate authority indicates that there may not be such an obligation.

 

Unlike the pronouncement by the Third Department in Elacqua v Physician’s Reciprocal, at least one appellate court has ruled that there shall be no penalty where defense counsel does not notify his or her client of their independent right to select representation (Sumo Container Station, Inc. v Evans, Orr, Pacelli, Norton & Laffan, P.C., 278 AD2d 169 [2d Dept., 2000]).  In Sumo Container, carrier was presented with a claim involving a truck that plaintiff has allegedly leased from Hertz Penske Truck Leasing (“Hertz”).  Upon receipt of the claim, Hertz’s carrier issued a reservation of rights/partial disclaimer indicating that there would be no coverage if it were determined that the subject vehicle was owned by Sumo Container and not Hertz.  In any event, carrier assigned defendant to represent both Sumo Container and Hertz in the underlying tort action. 

 

The underlying matter concluded via settlement when Hertz offered $295,000 to the injured party.  However, Hertz also specified that if it were proven that Sumo Container owned the truck such obligation for payment of the $295,000 would fall upon Sumo Container.  Not surprisingly,   Sumo Container was found to be the owner of the truck at a subsequent trial, and as a result was not entitled to coverage for the loss from Hertz’s insurance carrier. 

 

As defense counsel had represented both the interests of Hertz and Sumo Container when it was obvious both parties were not in alignment, Sumo Container subsequently challenged these events under the theory that it was not provided with independent counsel.  More importantly, retained defense counsel also had an interest in protecting the assigning carrier from exposure. 

Although noting that Sumo Container was entitled to independent counsel in this matter, the Second Department explicitly rejected the idea that the firm retained by carrier has an “affirmative obligation” to apprise its client of its independent right to select counsel.  The Court further noted that even if counsel’s failure to inform his or her client about the right to select counsel was considered a Breach of the Code of Professional Responsibility, Sumo Container had still not sufficiently plead a case for legal malpractice (see also, Schafrann v NV Famka, Inc., 14 Ad3d 363 [1st Dept., 2005]). 

 

In so holding, the Court noted the fact that a representative of Sumo Container admitted that he was aware of Sumo’s right to select independent counsel, and chose to move forward with assigned counsel. Moreover, Sumo Container further acknowledged that the settlement negotiated by defense was a reasonable resolution to the underlying action.  Finally, the Second Department noted that counsel’s failure to appreciate the coverage available, and Sumo Container’s possible exposure to personal liability, was not fatal to due to Sumo’s own “indifference to…identifying its own vehicles.”

 

Thus, although defense counsel never acknowledged the potential conflict of interest, and ultimately executed a defense strategy which resulted in one of his client’s facing personal exposure of nearly $300,000, the Second Department found no culpability.  Although Sumo Container’s own actions did not avail itself to the sympathies of the Court, it appears that the appellate division’s ruling goes much farther than the particular facts of this case.  Because the settlement of the underling action was deemed reasonable, the fact that counsel had never specifically advised the insured that its fidelity was subject to the pressures of competing interests (Hertz and carrier) was of no moment.

 

Clearly, as set forth above, the reasoning of the Second Department is hard to reconcile with the Third Department’s ruling in Elacqua.  However, for the time being, defense counsel is not required to notify the insured of his or her right to select independent counsel.

Unresolved Questions

Is there actual damage without a showing that the insured did not receive the benefit of effective counsel? Clearly, if counsel takes a position on behalf of his client which is not complementary of the carrier, it cannot be reasonably argued that the carrier’s right to counsel was impacted . . . can it?

 In Elacqua, the matter was sent back to trial for a determination on damages.  But what are the damages for counsel failing to assert the best interests of his or her client (Third Department’s assessment --- not mine)?  If it is loss of coverage, are the damages the $2,000,000 award rendered against the partnership in the underlying action?  If so, a maximum of a $1,000 penalty seems like a good trade off for Physician’s Reciprocal.  Can the trial court increase damages beyond that which is permitted under the GBL?  How expansive is the injunctive remedy, and more importantly, can it be applied to preclude a carrier from relying upon the policy provision which created the conflict in the first place?  

If nothing else, the decision in Elacqua highlights the need for defense counsel to understand the coverage issues in a case.  Moreover, it requires that defense counsel appreciate the “big picture” to litigation, and how legal strategy can impact his or her client’s rights several steps down the road.  At times, like in the current matter, aggressively moving against the plaintiff may not be in the best interests of his or her client’s long term risk plan.

EARL’S PEARLS

Earl K. Cantwell, II

[email protected]

 

Experts Must Be Expert

 

            Expert testimony in trials and hearings has become commonplace, but that does not mean it is necessarily commonly understood, or has a place in every trial or proceeding.  Under Federal Rule of Evidence 702, expert witness testimony with respect to scientific, technical or other specialized knowledge is admissible to “assist” the trier of fact to understand evidence or determine a fact at issue.  Therefore, the first threshold matter is that there is some issue or evidence in the case requiring “scientific, technical or other specialized knowledge.”  The second threshold issue is whether the expert testimony will assist the trier of fact, whether a judge, jury or arbitrators, understand the evidence or determine any facts in issue.

 

            An expert witness must be an expert and qualified by knowledge, skill, experience, training, or education.  Whether an expert is properly qualified in the relevant field of knowledge, and whether that expert is able to testify and apply that knowledge to the particular facts in the case, is a preliminary question of admissibility for the trial court to determine. 

 

            There are three other underlying predicates for admissibility of expert testimony.  The first is that the testimony must be based on sufficient facts or data in the underlying case record.  Courts may reject or limit expert testimony if it is based more on theory than on the particular facts of the case. 

 

            Secondly, the testimony must be the “…product of reliable principles and methods.”  This is a shorthand rendition of the case of Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), and the many cases applying Daubert, including Kumho Tire Company v. Carmichael, 119 S. Ct. 1167 (1999).  Under this portion of the rule and the Daubert case, trial judges have an initial responsibility of acting as “gatekeepers” to exclude or restrict unreliable or unproven expert testimony.  Some factors a trial court may apply to assess the “reliability” of scientific expert testimony include:

 

1.                  Whether the expert’s technique or theory can be or has been tested;

2.                  Whether the technique or theory has been subject to peer review and publication;

3.                  What is the known or potential rate of error(s) in the technique or theory when applied;

4.                  The existence and maintenance of any accepted standards or controls;

5.                  Whether the technique or theory is “generally accepted” in the scientific community;

6.                  Whether the expert is proposing to testify about matters growing naturally and directly out of research they have conducted independent of the litigation, or whether the testimony and opinions are developed expressly for purposes of litigation or testifying;

7.                  Whether the expert testimony unjustifiably extrapolates from an accepted scientific theory or premise to an unfounded or new conclusion;

8.                  Whether the expert has adequately accounted for and discounted obvious alternative explanations; and

9.                  Whether the field of expertise claimed by the expert is known to produce reliable results for the type of opinion being offered.

            Lastly, the expert witness must apply the principles and methods reliably to the facts of the case.  In other words, the expert must have taken enough time, study, and analysis of the particular facts in issue so as to testify reliably not only with respect to the underlying science, but application of that science to the facts of a particular case.  Cases are legion where otherwise valid expert testimony was rejected or restricted because the expert did not have the opportunity or take the time to understand an underlying product or medical condition, review all of the medical records, etc. 

 

            While rejection of expert testimony is the exception rather than the rule, the proponent of the testimony has the burden of establishing the pertinent admissibility requirements.

 

            In short, the ground rules for expert testimony are that the case must warrant or deserve expert testimony; the expert must be a bona fide expert; the theories and principles applied by the expert must be reliable; and they must be validly and directly applied to the particular facts at issue in the case.          

 

ACROSS BORDERS

 

Visit the Hot Cases section of the Federation of Defense & Corporate Counsel website, www.thefederation.org. Dan Kohane serves as the FDCC’s Immediate Past President and Board Chair and past Website Editor

 

6/27/08            Associated Industries of Kentucky, Inc. v. USLIG

Sixth Circuit Court of Appeals
Group Self-Insurance Fund That Included Joint and Several Liability of Participants for Deficits in Fund Was “Insurance,” and Policy Exclusion for Claims Based Upon Administration of Insurance Plan Applied
 Plaintiff Associated Industries of Kentucky, Inc. (“AIK”) is a trade association that sponsored a group self-insurance fund (“AIK Comp.”) wherein participants could pool their liabilities for workers’ compensation benefits. AIK Comp. collected premiums in exchange for assuming any workers’ compensation liability. If, however, AIK Comp. could not meet its obligations, each participant remained jointly and severally liable for AIK Comp.’s outstanding liabilities. Such an outstanding liability was incurred by AIK Comp., and in order to cover the $90 million deficit, it charged additional assessments to the participants, some of whom refused to pay. The participants sued AIK alleging that it controlled and administered AIK Comp. in a fraudulent and negligent manner. AIK tendered the defense to defendant U.S. Liability Insurance Group (“U.S. Liability”). U.S. Liability refused to defend AIK, however, based upon a policy exclusion which provided that U.S. Liability would not defend or indemnify any loss of defense costs in connection with a claim made against an insured “based upon, arising out of, directly or indirectly resulting from, in consequence of, the offering or administration of any insurance plan or program.” AIK sought a declaratory judgment from the District Court, but summary judgment was granted in U.S. Liability’s favor. AIK appealed, and the Sixth Circuit Court of Appeals affirmed. AIK argued that AIK Comp. was not insurance because the participants did not transfer all of their risks to the fund, as they remained jointly and severally liable for any deficit AIK Comp. might suffer. The Court of Appeals reasoned, however, that AIK Comp. was “insurance” as defined under Kentucky law. In so holding, the Court of Appeals stated that a group self-insurance with a joint and several liability provision involved the shifting of risks to the fund and, if insolvent, to the participants. Thus, while the participants might not shift their collective risk to an outside third party, they did shift their risks to the fund, and if the fund became insolvent, the risk from an individual participant was shifted to other participants. Accordingly, the exclusion applied, and U.S. Liability did not have a duty to defend AIK in the lawsuit.

Submitted by: Bruce D. Celebrezze and Erin A. Cornell (Sedgwick Detert, Moran & Arnold LLP)

 

REPORTED DECISIONS

 

In the Matter of the Arbitration between Hartford Fire Ins. Co and Fell

Calendar Date: June 2, 2008
Before: Peters, J.P., Spain, Carpinello, Lahtinen and Malone Jr., JJ.

Law Office of Joseph W. Buttridge, Albany (Joseph
W. Buttridge of counsel), for appellant.
Richard J. Katz, L.L.P., New York City (Jonathan A.
Rapport of counsel), for respondent.

MEMORANDUM AND ORDER

Carpinello, J.

Appeal from an order of the Supreme Court (Egan Jr., J.), entered November 30, 2007 in Albany County, which, among other things, denied petitioner's application pursuant to CPLR 7503 to stay arbitration between the parties.

In November 2005, while operating a motor vehicle, respondent was injured in an accident. The vehicle was owned and insured by respondent's employer, Sawhorse Lumber & More, Inc., and petitioner provided the insurance, including the supplementary uninsured/underinsured motorist coverage. In August 2007, respondent served petitioner with a request for arbitration regarding the supplementary uninsured/underinsured motorist coverage. Petitioner commenced this proceeding seeking to permanently stay the arbitration based upon the failure of respondent to abide by certain provisions of Sawhorse Lumber's insurance policy. Finding that petitioner never provided respondent a nonpolicyholder claimant with a copy of the policy or the particular provisions upon which its application was based, Supreme Court, among other things, denied petitioner's application for a permanent stay of arbitration. Petitioner now appeals.

While petitioner is correct that Supreme Court apparently erred in relying on the affirmation of respondent's attorney for assertions regarding issues of which he had no firsthand knowledge (see Zuckerman v City of New York, 49 NY2d 557, 563 [1980]; Daus v Cassavaugh, 17 AD3d 837, 839 [2005]), we nevertheless affirm. The record demonstrates that respondent was not a policyholder and it is devoid of any evidence that respondent was provided with a copy of the policy or was aware of its terms ^[FN1]. Under these circumstances, petitioner cannot rely on respondent's failure to satisfy terms of an insurance contract that he did not possess and the terms of which he was not aware to obtain a stay of arbitration (see Matter of Eveready Ins. Co. [Schwartzberg], 203 AD2d 101, 101-102 [1994]; Matter of Eagle Ins. Co. [Chowdhury], 149 Misc 2d 227, 230 [1990]).

Finally, petitioner's assertion that respondent's opposition was untimely and should not have been considered is without merit. Petitioner served the notice of petition by mail on September 12, 2007 with a return date of October 1, 2007 (see CPLR 7503 [c])^[FN2]. However, in order to make effective its demand for seven days notice of answering papers, petitioner was required to have mailed the notice of petition at least 21 days prior to the return date (see CPLR 2103 [b] [2]; 2214 [b]; see generally Siegel, Supp Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C2215:1, 2008 Pocket Part, at 84). Accordingly, petitioner's untimeliness claim is unavailing.

Peters, J.P., Spain, Lahtinen and Malone Jr., JJ., concur.

KMAPS Corp. v. Nova Casualty Company

Appeal from a judgment (denominated order) of the Supreme Court, Erie County (Frank A. Sedita, Jr., J.), entered December 11, 2006 in a declaratory judgment action. The judgment, among other things, granted plaintiffs' motion for summary judgment.


MURA & STORM, PLLC, BUFFALO (ROY A. MURA OF COUNSEL), FOR DEFENDANT-APPELLANT.
SLIWA & LANE, BUFFALO (PAUL J. CALLAHAN OF COUNSEL), FOR PLAINTIFFS-RESPONDENTS.


It is hereby ORDERED that the judgment so appealed from is unanimously reversed on the law without costs, the motion is denied and the declaration is vacated.

Memorandum: Plaintiffs commenced this action seeking, inter alia, a declaration that defendant is obligated to defend and indemnify plaintiff KMAPS Corp. (KMAPS) in the underlying personal injury action. On a prior appeal, we affirmed the amended order denying plaintiffs' cross motion for summary judgment on the complaint (KMAPS Corp. v Santana, 28 AD3d 1241). Following discovery, plaintiffs by order to show cause sought summary judgment on the amended complaint. We conclude that Supreme Court erred in granting the motion. The court properly determined that plaintiffs established their entitlement to judgment as a matter of law on the issue whether KMAPS is an additional insured under the policy issued by defendant to Nestor Santana, doing business as K & S, one of the subcontractors of KMAPS for the installation of television cable (see generally Zuckerman v City of New York, 49 NY2d 557, 562). We conclude, however, that defendant raised an issue of fact whether KMAPS is entitled to a defense and indemnification with respect to injuries sustained by the plaintiff in the underlying action, a different subcontractor who was not insured by defendant (see generally id.).

We further conclude that the court erred in determining that defendant was obligated to provide KMAPS with a timely disclaimer of coverage. As noted, there is an issue of fact whether KMAPS is an additional insured under the terms of the policy, and "requiring payment of a claim upon failure to . . . disclaim [in a timely manner] would create coverage where it [may] never [have] existed" (Matter of Worcester Ins. Co. v Bettenhauser, 95 NY2d 185, 188). Because it is plaintiffs' "burden to establish the existence of coverage" (Borg-Warner Corp. v Insurance Co. of N. Am., 174 AD2d 24, 31, lv denied 80 NY2d 753), we further conclude that the court erred in determining that defendant was required to assert lack of coverage as an affirmative defense (see generally CPLR 3018 [b]).

Perry v Brusini

 

The Law Offices of Henry W. Davoli, Jr., PLLC, Rockville Centre,
N.Y. (Susan R. Nudelman of counsel), for appellants.
McCabe, Collins, McGeough & Fowler, LLP, Carle Place, N.Y.
(Patrick M. Murphy of counsel), for respondents.

DECISION & ORDER

In an action to recover damages for personal injuries, the plaintiffs appeal from an order of the Supreme Court, Nassau County (Phelan, J.), dated June 12, 2007, which granted the motion of the defendants Robert Brusini and Brian Brusini for summary judgment dismissing the complaint insofar as asserted against them on the ground that neither of the plaintiffs sustained a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is reversed, on the law, with costs, and the motion of the defendants Robert Brusini and Brian Brusini for summary judgment dismissing the complaint insofar as asserted against them is denied.

The defendants Robert Brusini and Brian Brusini (hereinafter the respondents) failed to meet their prima facie burden of showing that neither of the plaintiffs sustained a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In support of their motion, the respondents relied upon, inter alia, the affirmed medical reports of their examining orthopedic surgeon. In those reports, the surgeon noted significant range of motion limitations in the plaintiffs' respective left knees, as well as significant range of motion limitations in the lumbar spine of the plaintiff Idell M. Perry (see Jenkins v Miled Hacking Corp., 43 AD3d 393; Bentivegna v Stein, 42 AD3d 555; Zamaniyan v Vrabeck, 41 AD3d 472; Brown v Motor Veh. Acc. Indem. Corp., 33 AD3d 832; Smith v Delcore, 29 AD3d 890; 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 respondents failed to meet their prima facie burden, it is unnecessary to consider whether the papers submitted by the plaintiffs were sufficient to raise a triable issue of fact (see Jenkins v Miled Hacking Corp., 43 AD3d 393; Coscia v 938 Trading Corp., 283 AD2d 538).
FISHER, J.P., FLORIO, ANGIOLILLO, DICKERSON and BELEN, JJ., concur.

 

 

State Farm Fire and Cas. Co. v. Whiting

Appeal from a judgment (denominated order) of the Supreme Court, Orleans County (James P. Punch, A.J.), entered August 15, 2007 in a declaratory judgment action. The judgment granted plaintiff's cross motion for summary judgment seeking a declaration that plaintiff has no duty to defend or indemnify defendant Matthew Whiting in the underlying action.


LAW OFFICES OF MICHAEL PILARZ, BUFFALO (MICHAEL PILARZ OF COUNSEL), FOR DEFENDANT-APPELLANT.
GOLDBERG SEGALLA LLP, BUFFALO (DANIEL W. GERBER OF COUNSEL), FOR PLAINTIFF-RESPONDENT.


It is hereby ORDERED that the judgment so appealed from is affirmed without costs.

Memorandum: Supreme Court properly granted the cross motion of plaintiff seeking summary judgment declaring that it has no duty to defend or indemnify Matthew Whiting (defendant) in the underlying action. According to the complaint in the underlying action, defendant assaulted Evan Lang while Lang was attending a party at defendant's home. We agree with the court that plaintiff has no duty to defend or indemnify defendant with respect to the cause of action alleging an intentional tort. We conclude that the incident herein was not an "occurrence" within the meaning of the policy and, in our view, the dissent's reliance upon Automobile Ins. Co. of Hartford v Cook (7 NY3d 131) in reaching a contrary conclusion is misplaced. Under the terms of the policy, an occurrence is defined as "an accident." We note at the outset that an incident is an occurrence, i.e., an accident, if, " from the point of view of the insured, . . . [the incident resulting in injury] was unexpected, unusual and unforeseen' " (Miller v Continental Ins. Co., 40 NY2d 675, 677; see Cook, 7 NY3d at 137-138; Essex Ins. Co. v Zwick, 27 AD2d 1092). Defendant herein testified at his deposition that he intended to hit Lang, who had shoved him and was again advancing toward him, and defendant knew when he hit Lang that Lang "could be hurt from the punch." In Cook, the insured shot and killed an intruder in his home. He was acquitted of murder and manslaughter charges, and the victim's estate commenced a wrongful death action alleging that the insured in Cook negligently caused the victim's death (see id. at 135). The insured in Cook, who fired the weapon at the lowest part of the victim's body that was visible behind a pool table, testified at his deposition that he knew that the victim would be injured but he did not anticipate that the victim would be killed (see id. at 135-136). Although the insured acted intentionally insofar as he fired a weapon at the victim who was advancing toward him, the Court explained that, "if [the insured] accidently or negligently caused [the victim's] death, such event may be considered an occurrence' within the meaning of the policy and coverage would apply" (id. at 138). We conclude herein that there is no view of the evidence to support a conclusion that the result of defendant's intentional act of punching Lang in the face "accidently or negligently" caused Lang's alleged injuries (id.).

We reject the further contention of defendant that he is entitled to coverage based upon plaintiff's failure to disclaim coverage in a timely manner. Because we have concluded that the claim falls outside the scope of the policy's coverage on the ground that the incident is not an occurrence, disclaimer pursuant to Insurance Law 3420 (d) is not necessary. Where, as here, "the insurance policy does not contemplate coverage in the first instance, . . . requiring payment of a claim upon failure to timely disclaim would [impermissibly] create coverage where it never existed" (Matter of Worcester Ins. Co. v Bettenhauser, 96 NY2d 185, 188).

All concur except Green and Gorski, JJ., who dissent and vote to reverse in accordance with the following Memorandum: We respectfully dissent because, in our view, plaintiff has a duty to defend Matthew Whiting (defendant) in the underlying action. An insurer's duty to defend is " exceedingly broad' " and requires an insurer to provide a defense whenever the allegations of the complaint " suggest . . . a reasonable possibility of coverage' " (Automobile Ins. Co. of Hartford v Cook, 7 NY3d 131, 137, quotingContinental Cas. Co. v Rapid-American Corp., 80 NY2d 640, 648). Here, the complaint in the underlying action alleges, inter alia, that defendant was negligent in hosting a party and providing alcoholic beverages to persons under the age of 21, in failing to limit the amount of alcoholic beverages consumed, in failing to supervise those present so as to prevent an incident and in failing to foresee the likelihood that a physical altercation could occur as a result of serving alcoholic beverages to persons under the age of 21. The Court of Appeals has written that " [i]f, liberally construed, the claim is within the embrace of the policy, the insurer must come forward to defend its insured no matter how groundless, false or baseless the suit may be' " (id., quoting Ruder & Finn v Seaboard Sur. Co., 52 NY2d 663, 670, rearg denied 54 NY2d 753). "The duty remains even though facts outside the four corners of [the] pleadings indicate that the claim may be meritless or not covered' " (id., quoting Fitzpatrick v American Honda Motor Co., 78 NY2d 61, 63). Here, the complaint plainly sets forth negligent acts attributable to defendant.

We cannot agree with the majority that the incident was not an "occurrence" within the meaning of the policy or that it falls within an exclusion to the policy. The policy defines an "occurrence" as an "accident," and the Court of Appeals has also written that an accident is "deemed to pertain . . . to an intentional or expected event which unintentionally or unexpectedly" results in injury or death (Miller v Continental Ins. Co., 40 NY2d 675, 678). The policy also contains an exclusion for an act that is "either expected or intended by the insured" or "which is the result of willful and malicious acts of the insured." Notably, the Court of Appeals recently held that there was a duty to defend in Cook, where the insured pointed a 12 gauge shot gun at the decedent and, when the decedent "menacingly started advancing toward" the insured, the insured shot and killed the decedent (id. at 135). The Court concluded that, "if [the insured] accidentally or negligently caused [the victim's] death, such event may be considered an occurrence' within the meaning of the policy and coverage would apply" (id. at 138). The Court reasoned that, although the factfinder in the underlying action may "ultimately reject the notion that [the insured] negligently caused [the decedent's] death given the evidence of intentional behavior, . . . that uncertain outcome is immaterial to the issue" whether the insurer had a duty to defend its insured (id.).

In our view, Cook is controlling under the facts of this case. Here, defendant testified at his deposition that, after hours of consuming alcoholic beverages, Evan Lang, one of the plaintiffs in the underlying action, was visibly intoxicated and unruly. Evan initially pushed defendant to the point of knocking him off balance, and he then charged at defendant "fast" while speaking angrily, with his fists clenched. Defendant testified that, in response, he hit Evan because he "thought [he] was going to get hit." Defendant further testified at his deposition that his blow to Evan was "quick, nothing that I had time to prepare for." In light of defendant's explanation of the events leading to Evan's alleged injuries, we conclude that plaintiff failed to demonstrate that defendant's acts are subject to no other interpretation than that defendant " expected or intended' " the harm to Evan (Cook, 7 NY3d at 138; cf. Allstate Ins. Co. v Mugavero, 79 NY2d 153). Thus, we conclude that, because the complaint in the underlying action alleges negligent conduct by defendant, and defendant's description of the events and actions leading to Evan's injury support the conclusion that the punch or its results were unexpected or unintended by defendant, plaintiff has a duty to defend defendant in the underlying action. We therefore would reverse the judgment, deny plaintiff's cross motion, vacate the declaration and grant judgment in favor of defendant declaring that plaintiff has a duty to defend him in the underlying action.

Tishman Construction Corp. v. Great American Insurance Company

Hardin, Kundla, McKeon & Poletto, P.A., New York (Stephen
J. Donahue of counsel), for appellant.
Miller & Associates, P.C., New York (Richard Imbrogno of
counsel), for respondents.

Judgment, Supreme Court, New York County (Jane S. Solomon, J.), entered March 23, 2007, granting plaintiffs' cross motion for summary judgment declaring, inter alia, the defendant Great American Ins. Co. is obligated to indemnify plaintiffs Tishman Const. Corp. of New York and Carnegie Hall Corp. in connection with the underlying action entitled Robert J. Massie v Carnegie Hall Corp., New York County Clerk's Index No. 124269/00, and denying Great American leave to amend its answer to assert affirmative defenses and counterclaims based on the anti-subrogation rule, unanimously modified, on the law, to vacate that part of the judgment requiring defendant Great American Insurance Company to indemnify plaintiffs Tishman Construction Corp. of New York and Carnegie Hall Corporation in connection with the underlying action entitled Robert J. Massie v Carnegie Hall Corp., et. al., and otherwise affirmed, without costs. Judgment, same court (Nicholas Doyle, Special Referee), entered October 1, 2007, fixing the amount which Great American and Schiavone Construction Company were required to pay plaintiffs consistent with the prior judgment, unanimously modified, on the law, to vacate that part of the judgment requiring Great American to make payment pursuant to its policy, and otherwise affirmed, without costs.

Plaintiff Carnegie Hall Corporation retained plaintiff Tishman Construction Corporation to manage construction of a new music hall. Pursuant to its contract with Carnegie, Tishman procured a commercial general liability insurance policy from plaintiff National Union Fire Insurance Company naming Carnegie as an additional insured. The policy limits were $1,000,000 per occurrence/$2,000,000 aggregate.

Tishman retained defendant Schiavone Construction Company to perform the excavation, foundation, structural demolition, structural steel and concrete work on the project. Under their contract, Schiavone agreed to defend and indemnify Tishman and Carnegie for claims arising out of its own negligence, and to procure insurance of at least $10,000,000 naming Tishman and Carnegie as additional insureds. In order to satisfy the latter requirement, Schiavone secured two separate policies. The first was a commercial general liability policy with limits of $1,000,000 per occurrence/$2,000,000 aggregate. This was issued by National Union, the same insurer that issued the policy to Tishman. The second policy acquired by Schiavone was a "Protector Commercial Umbrella Coverage" policy issued by defendant Great American with limits of $25,000,000.

Two Schiavone employees were injured on the construction site when a hoist failed. Both of the employees commenced actions against Tishman and Carnegie. One of the actions, brought by Richard Maikowski, settled before trial for $785,000. The other, brought by Robert J. Massie, resulted in a jury verdict reduced by the trial court to $2,324,146. National Union paid the entire Maikowski settlement from the insurance policy it issued to Schiavone.

Tishman, Carnegie and National Union commenced this action against Great American and Schiavone for a declaration that after National Union paid out the remainder of the proceeds of the policy it issued to Schiavone, the unsatisfied portion of the Massie judgment would be the responsibility of Schiavone pursuant to its agreement to indemnify Tishman and Carnegie. The complaint further sought a declaration that Great American was required to indemnify them to the extent the judgment exceeded the National Union policy issued to Schiavone, since the Great American excess policy named them as additional insureds.

Great American moved to amend its answer to assert additional affirmative defenses and counterclaims premised on the anti-subrogation rule, which bars an insurer from proceeding against its own insured because of the conflict of interest that it presents. It argued that National Union's sole intention in commencing the action was to protect the separate policy it had issued to Tishman. Plaintiffs cross-moved for summary judgment on the claims in their complaint.

The motion court denied Great American's motion and granted plaintiffs' cross motion. It held that the Great American policy was primary coverage for Tishman and Carnegie after the exhaustion of the National Union primary policy covering Schiavone, and entered judgment requiring Great American to satisfy the Massie judgment. It further ordered Schiavone to pay any sums not paid by Great American. The court referred the matter to a Special Referee to hear and determine the amounts which Great American or Schiavone were required to pay. The Special Referee fixed damages in favor of National Union and Travelers Indemnity Company, Carnegie's insurer.

We find, based on our recent decision in Bovis Lend Lease LMB, Inc. v Great American Ins. Co. (__ AD3d __ , 855 NYS2d 459 [1st Dept. 2008]), that the court erred in declaring that plaintiffs were entitled to indemnification from Great American. Because Great American's policy was an excess policy which provided the final tier of coverage, it should not have been invoked prior to the exhaustion of the National Union primary policy issued to Tishman.

In Bovis, we analyzed a situation involving similar insurance policies. There, the owner and construction manager were insured by Illinois National Insurance Company. The general contractor was insured by Liberty Insurance Underwriters, Inc. under a commercial general liability policy. It was further insured by Westchester Fire Insurance Company with a commercial umbrella liability policy which afforded $10,000,000 in coverage. J & A Concrete Corp., the injured worker's employer, was insured by QBE Insurance Corporation under a commercial general liability policy. J & A was further insured by United National Insurance Corp. pursuant to a commercial general umbrella liability policy which afforded $10,000,000 in coverage. The owner, construction manager and Illinois sought a judgment declaring the order of priority of the foregoing insurance policies. They argued that since both the general contractor and the subcontractor had agreed to defend and indemnify the owner and construction manager, the policies which were procured to carry out those promises should be exhausted before they had to look to their own carrier.

We held that the priority of coverage in Bovis was, after the exhaustion of the QBE primary policy, first the Liberty primary policy, then the Illinois policy and then the two umbrella policies, on a pro rata basis (855 NYS2d at 474). In considering the primacy of the insurance policies in Bovis, we reiterated that in the context of construction projects, the terms of the individual policies take precedence over the terms of the various trade contracts for purposes of determining priority (855 NYS2d at 464). We further stated that in analyzing each policy to determine the priority of coverage, a court is required to consider the intended purpose of each policy " 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'" (id. at 466, quoting State Farm Fire & Cas. Co. v LiMauro, 65 NY2d 369, 374 [1985]).

Accordingly, we noted that the insuring provisions of the United and Westchester policies established that they were "true" excess policies which trump other policies written to provide primary coverage (855 NYS2d at 466-467, 471). We further observed that the premiums for the United and Westchester policies were significantly smaller than the premiums for the primary policies at issue (id. at 466). This confirmed that those policies were "true" excess policies, since the low premiums reflected the underwriters' assessments that the policies were unlikely to ever be invoked.

Here, it is similarly apparent that the Great American policy was intended only to provide excess insurance. First, the policy language establishing it as a pure excess policy is substantially similar to the language in the United policy in Bovis on which we relied to declare that policy purely excess. In addition, the premium for the policy was $60,000, for coverage of $25,000,000. In contrast, the premium for the National Union policy issued to Tishman was significantly higher, although the coverage was for only $2,000,000 in the aggregate.

Plaintiffs argue that National Union's position as the final tier of coverage is the "Other Insurance" provision in the National Union policy, which provides as follows:

"This insurance is excess over any other insurance, whether primary, umbrella, excess, contingent or on any other basis . . .

(4) If a "claim" arises out of the actions of a hired contractor or subcontractor who has agreed to either:

a. Contractually indemnify the "insureds" against whom "claims" may be made for any "claims" resulting from the actions of the hired contractor or subcontractor, or

b. name the "insureds" against whom "claims" may be made as Additional Insureds on the hired contractor's or subcontractor's commercial general liability insurance policy."

However, in Bovis we held that the existence of such a clause did not transform a policy which was clearly intended to be excess into a lower-tier policy, as indicated by the comparatively small premium (2008 NY Slip Op 3150 at *10-11, citing Cheektowaga Cent. School Dist. v Burlington Ins. Co., 32 AD3d 1265 [2006]).

Nor does the "Other Insurance" clause in the Great American policy, which plaintiffs also rely on, change this analysis. That clause provides:

"If other insurance applies to a loss that is also covered by this policy, this policy will apply excess of the other insurance. Nothing herein will be construed to make this policy subject to the terms, conditions and limitations of such other insurance. However, this provision will not apply if the other insurance is specifically written to be excess of this policy."

Plaintiffs claim that because the National Union policy's "Other Insurance" clause states that it is excess over any other policies, the last sentence of the Great American "Other Insurance" clause must be construed as an acknowledgment that Great American's policy is first in line. However, in Bovis, we also rejected this argument, relying on cases from other jurisdictions which hold that "a reference in an insurance policy to insurance specifically purchased to apply in excess' of the subject policy (or similar phraseology) means a higher-level policy that specifically designates the subject policy as underlying insurance" (2008 NY Slip Op 3150 at *11). Here, the National Union policy is not a "higher-level" policy, and it does not refer to the Great American policy. Accordingly, the clause is unavailing to plaintiffs' argument.

Because we vacate those parts of the judgments appealed which require Great American to indemnify plaintiffs based on the foregoing analysis, we need not reach the issue of whether National Union violated the anti-subrogation rule by commencing this action.

23-08-18 Jackson Realty Associates v. Nationwide Mutual Insurance Company

Pike & Pike, P.C., North Bellmore, N.Y. (Kenneth R. Tuch of
counsel), for appellants.
Epstein & Grammatico, Hauppauge, N.Y. (Claude N.
Grammatico of counsel), for respondent.


DECISION & ORDER

In an action for a judgment declaring that the defendant is obligated to defend and indemnify the plaintiffs in two underlying actions entitled Sheehan v Integrity Constr. and Consulting Servs. and Crosby v 23-08-18 Jackson Realty Assoc., pending in the Supreme Court, Queens County, under Index No. 15366/02 and Index No. 20615/02, respectively, the plaintiffs appeal from an order of the Supreme Court, Nassau County (Murphy, J.), entered June 11, 2007, which denied that branch of their motion which was for summary judgment declaring that the defendant is obligated to defend and indemnify them in the underlying action entitled Sheehan v Integrity Constr. and Consulting Servs. pending in the Supreme Court, Queens County, under Index No. 15366/02.

ORDERED that the order is affirmed, with costs.

The plaintiffs are the owners of certain premises in Queens. They hired nonparty Integrity Construction and Consulting Services (hereinafter Integrity) to perform renovation work on the premises. The agreement between the parties obligated Integrity to purchase liability insurance for the project and name the plaintiffs as additional insureds. Integrity obtained such coverage from the defendant Nationwide Mutual Insurance Company (hereinafter Nationwide). As relevant here, the policy entitled Nationwide to notice "as soon as practicable" of both (1) an "occurrence" (i.e., an accident) which might result in a "claim," and (2) of a "claim" or "suit" brought against any insured.

During the renovation project, two workers, Richard Sheehan and David Crosby, allegedly were injured. Thereafter, each commenced an action against both Integrity and the plaintiffs to recover damages for personal injuries. The plaintiffs, as additional insureds under the policy issued to Integrity, made a demand that Nationwide defend and indemnify them in the actions. Nationwide disclaimed coverage, citing the notice provisions described above.

The plaintiffs then commenced this action for a declaration that Nationwide was obligated to defend and indemnify them in the two underlying personal injury actions. In their moving papers, among other things, the plaintiffs claimed that immediately after the occurrence, Mark Graue, a principal of Integrity, assured the plaintiff Yuri Kandov that he (Graue) would notify Nationwide. The plaintiffs also asserted that Nationwide agreed to defend and indemnify Integrity in the underlying actions. Nationwide did not deny that it received the required notices from Integrity, or that it agreed to defend and indemnify Integrity. Instead, Nationwide contended that the plaintiffs were obligated under the policy to furnish the carrier with timely notices, and that they had failed to do so.

Addressing only that branch of the plaintiffs' motion as pertains to Sheehan's lawsuit, the Supreme Court determined that the plaintiffs had a duty under the policy to notify Nationwide of the occurrence and of the lawsuit. The court further held that the plaintiffs failed to make a prima facie showing that they furnished the relevant notices "as soon as practicable," and thus denied that branch of the motion. We affirm, although, as noted below, we cannot conclude on the current record that the plaintiffs had a duty, as a matter of law, to furnish Nationwide with the requisite notices.

Here, contrary to the plaintiffs' contention, Nationwide's disclaimer of coverage was not limited to the plaintiffs' alleged failure to furnish timely notice of the claim or suit (see Abreu v Chiung Huang, 300 AD2d 420, 420). Rather, it also encompassed the plaintiffs' alleged failure to furnish timely notice of the occurrence, i.e., the accident.

The plaintiffs, as additional insureds, had an implied duty, independent of Integrity, to provide Nationwide with the notices required under the policy, i.e., notice "as soon as practicable" of both the "occurrence" and of any "claim" or "suit" arising therefrom (see City of New York v St. Paul Fire & Mar. Ins. Co., 21 AD3d 978, 981; Ambrosio v Newburgh Enlarged City School Dist., 5 AD3d 410, 412; Sayed v Macari, 296 AD2d 396, 397; City of New York v Certain Underwriters at Lloyd's of London, 294 AD2d 391, 391; Structure Tone v Burgess Steel Prods. Corp., 249 AD2d 144, 145; see also Ell Dee Clothing Co. v Marsh, 247 NY 392, 396). "The fact that an insurer may have received notice of the claim from the primary insured, or from another source, does not excuse an additional insured's failure to provide notice" (City of New York v St. Paul Fire & Mar. Ins. Co., 21 AD3d 978, 981).

However, there are situations in which timely notice furnished by one insured may be deemed timely notice by another. Where two or more insureds are defendants in the same action, notice of the occurrence or of the lawsuit provided by one insured will be deemed notice on behalf of both insureds only where the two parties are united in interest or where there is no adversity between them (see Ambrosio v Newburgh Enlarged City School Dist., 5 AD3d 410, 412 [occurrence]; Sayed v Macari, 296 AD2d 396, 397 [occurrence]; City of New York v Certain Underwriters at Lloyd's of London, 294 AD2d 391, 391 [lawsuit]; National Union Fire Ins. Co. of Pittsburgh, Pa. v State Ins. Fund, 266 AD2d 518, 519-520 [occurrence]; Structure Tone v Burgess Steel Prods. Corp., 249 AD2d 144, 145 [lawsuit]; Delco Steel Fabricators v American Home Assur. Co., 40 AD2d 647, 648, affd 31 NY2d 1014 [occurrence and lawsuit]).

In this case, the plaintiffs failed to make a prima facie showing that, in Sheehan's personal injury lawsuit, they are united in interest with Integrity (see generally Alvarez v Prospect Hosp., 68 NY2d 320). Accordingly, the subject branch of the motion which was for summary judgment should have been denied for this reason alone, without regard to the sufficiency of the opposition papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853). On the current record, there remain questions of fact on this issue; accordingly, the Supreme Court should not have made a determination that the plaintiffs had a duty, as a matter of law, to furnish Nationwide with the required notices.

We note that even assuming that it may be said at this stage of the action that the plaintiffs had a responsibility to furnish the required notices, independent of Integrity, the Supreme Court correctly concluded that the plaintiffs failed to make a prima facie showing that they did so "as soon as practicable," in accordance with the policy (see generally Alvarez v Prospect Hosp., 68 NY2d 320).

To the extent that the plaintiffs raise any issues with respect to that branch of their motion which was for summary judgment declaring that Nationwide is obligated to defend and indemnify them in the underlying action entitled Crosby v 23-08-18 Jackson Realty Assoc., pending in the Supreme Court, Queens County, under Index No. 20615/02, we note that such issues are not properly before us, as that branch of the plaintiffs' motion remains pending and undecided (see Katz v Katz, 68 AD2d 536, 542-543).

The plaintiffs' remaining contentions are without merit.

Kilakos v Mascera

Rivkin Radler, LLP, Uniondale, N.Y. (Evan H. Krinick, Cheryl F.
Korman, and Melissa M. Murphy of counsel), for appellant.
Lawrence Perry Biondi, Garden City, N.Y. (Lisa M. Comeau of
counsel), for respondent.

DECISION & ORDER

In an action to recover damages for personal injuries, the defendant appeals from a judgment of the Supreme Court, Queens County (Kelly, J.), entered March 28, 2007, which, upon a jury verdict, and upon the denial of his motion pursuant to CPLR 4401 for judgment as a matter of law for the plaintiff's failure to establish a prima facie case, is in favor of the plaintiff and against him in the principal sum of $250,000.

ORDERED that the judgment is reversed, on the law, with costs, the defendant's motion pursuant to CPLR 4401 for judgment as a matter of law is granted, and the complaint is dismissed.

The plaintiff commenced this action to recover damages allegedly arising from a motor vehicle accident which occured in August 2003. The defendant conceded liability and the matter proceeded to trial on the issue of whether the plaintiff sustained a "serious injury" within the meaning of Insurance Law § 5102(d) and, if so, for an award of any damages that were warranted. The jury found that the plaintiff sustained a "significant limitation of use of a body function or system" (Insurance Law § 5102[d]) from the accident to his back, and awarded damages. The Supreme Court, inter alia, denied the defendant's motion pursuant to CPLR 4401 for judgment as a matter of law for the plaintiff's failure to establish a prima facie case. We reverse.

A motion pursuant to CPLR 4401 for judgment as a matter of law may only be granted when, upon the evidence presented, there is no valid line of reasoning and permissible inferences which could possibly lead rational persons to the conclusion reached by the jury upon the evidence presented at trial, and no rational process by which the jury could find in favor of the nonmoving party (see Hamilton v Rouse, 46 AD3d 514). The court must consider the facts in a light most favorable to the nonmoving party, and afford that party the benefit of every favorable inference that may be properly drawn therefrom (see Hamilton v Rouse, 46 AD3d 514). Here, viewing the evidence in the light most favorable to the plaintiff, and affording him every favorable inference, no rational jury could have concluded that he sustained a "significant limitation of use of a body function or system" within the meaning of Insurance Law § 5102(d). The mere existence of herniated or bulging discs, and even radiculopathy, is not evidence of a serious injury in the absence of objective evidence of the extent of the alleged physical limitations resulting from the disc injury and its duration (see Sharma v Diaz, 48 AD3d 442). Here, the plaintiff's expert witness admittedly never recorded any range-of-motion findings, nor compared his findings to normal ranges of motion (see Morris v Edmond, 48 AD3d 432). Rather, he merely made the conclusory assertion that the plaintiff suffered an approximately 30% limitation in various ranges of motion. Finally, neither the plaintiff nor his expert established that the damages at issue arose from the subject accident rather than from a prior motor vehicle accident in December 2000, during which the plaintiff sustained, inter alia, a fractured hip and herniated discs in his lumbar spine.

In light of our determination, the defendant's remaining contentions need not be reached.
RIVERA, J.P., RITTER, MILLER and DILLON, JJ., concur.

 

Gaccione v Krebs

Schwartzapfel Truhowsky Marcus & Sachs, P.C. (Alexander J.
Wulwick, New York, N.Y., of counsel), for appellant.
Picciano & Scahill, P.C., Westbury, N.Y. (Gilbert J. Hardy and
Francis J. Scahill of counsel), for respondents.


DECISION & ORDER

In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Nassau County (Galasso, J.), dated August 20, 2007, which granted the defendants' motion for summary judgment dismissing the complaint on the ground that he did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

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

The defendants failed to meet their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In support of their motion, the defendants relied upon, inter alia, the report of their examining neurologist, who examined the plaintiff on November 2, 2006. During testing of the plaintiff's lumbar spine, the plaintiff's leg elevation was to 60 degrees on the right side and to 30 degrees on the left side. Thus, a clear limitation was noted, the full extent of which is not known due to the examining neurologist's failure to compare these numerical findings to what is normal (see Giammanco v Valerio, 47 AD3d 674; Coburn v Samuel, 44 AD3d 698; Iles v Jonat, 35 AD3d 537; McCrary v Street, 34 AD3d 768; Whittaker v Webster Trucking Corp., 33 AD3d 613; Yashayev v Rodriguez, 28 AD3d 651). Moreover, while the affirmed medical reports of the defendants' radiologist attributed certain abnormalities in the plaintiff's cervical and lumbar spines to the degenerative process, they failed to address the cause of the disc bulge noted at L2-3 of the lumbar spine.

Since the defendants failed to meet their prima facie burden, it is unnecessary to determine whether the plaintiff's papers submitted in opposition were sufficient to raise a triable issue of fact (see McCrary v Street, 34 AD3d 768; Yashayev v Rodriguez, 28 AD3d 651).
RIVERA, J.P., LIFSON, MILLER, CARNI and ENG, JJ., concur.

Chmiel v Figueroa

 

Appeal from an order of the Supreme Court, Erie County (Frederick J. Marshall, J.), entered February 1, 2007 in a personal injury action. The order granted the motion of defendant for summary judgment and dismissed the complaint.

PAUL WILLIAM BELTZ, P.C., BUFFALO (DEBRA A. NORTON OF COUNSEL), FOR PLAINTIFF-APPELLANT.
HAGELIN KENT LLC, BUFFALO (MICHAEL T. HAGELIN OF COUNSEL), FOR DEFENDANT-RESPONDENT.

It is hereby ORDERED that the order so appealed from is unanimously modified on the law by denying the motion in part and reinstating the complaint, as amplified by the bill of particulars, with respect to the permanent consequential limitation of use of a body organ or member, significant limitation of use of a body function or system, and significant disfigurement 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 to recover damages for injuries he allegedly sustained when he was struck by a motor vehicle driven by defendant. Defendant moved for summary judgment dismissing the complaint on the ground that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102 (d), and we conclude that Supreme Court erred in granting the motion in its entirety. Although defendant met her initial burden with respect to the permanent consequential limitation of use and significant limitation of use categories of serious injury by establishing that plaintiff's alleged injuries were not causally related to the accident but resulted from a preexisting condition (see generally Pommells v Perez, 4 NY3d 566, 580), plaintiff raised a triable issue of fact on causation with respect to those categories by submitting objective evidence of his herniated disc as well as his loss of movement resulting from the spinal fusion surgery he underwent following the accident (see Yoonessi v Givens, 39 AD3d 1164, 1165; Coleman v Wilson, 28 AD3d 1198; Vitez v Shelton, 6 AD3d 1180, 1181-1182). We further conclude with respect to the significant disfigurement category of serious injury that defendant failed to meet her initial burden of establishing as a matter of law that plaintiff's surgical scars do not constitute a significant disfigurement (see Judd v Walton, 259 AD2d 1016). We therefore modify the order accordingly.

We conclude, however, that the court properly granted that part of defendant's motion with respect to the 90/180 category of serious injury. Defendant met her initial burden by establishing that plaintiff was not prevented from performing substantially all of his customary activities during 90 of the first 180 days following the accident (see Yoonessi, 39 AD3d at 1165-1166; Thompson v Abbasi, 15 AD3d 95, 96-97), and plaintiff failed to raise a triable issue of fact (see Robinson v Polasky, 32 AD3d 1215; Oribamie v Santiago, 12 AD3d 250, lv denied 4 NY3d 711).

Giordano v Allstarz Limousine, Ltd.

Harold Solomon, Rockville Centre, N.Y. (Bernard G. Chambers of
counsel), for appellant.
Barry and Associates, LLC, Plainview, N.Y. (Rhonda H. Barry
of counsel), for respondents.

DECISION & ORDER

In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Queens County (Rosengarten, J.), entered July 8, 2007, which granted the defendants' motion for summary judgment dismissing the complaint on the ground that he did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

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

The defendants met their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957; Kearse v New York City Tr. Auth., 16 AD3d 45, 49-50). Contrary to the Supreme Court's determination, in opposition, the plaintiff raised a triable issue of fact as to whether he sustained a serious injury under the permanent, consequential, and/or significant limitation of use categories of Insurance Law § 5102(d) to the cervical and/or lumbar regions of his spine as a result of the subject accident. The plaintiff's treating neurologists and chiropractor opined that the plaintiff's spinal injuries and range-of-motion limitations were significant and permanent, and were causally related to the subject accident, based on their contemporaneous and most recent examinations of the plaintiff, as well as their review of the affirmed cervical spine magnetic resonance imaging report prepared by the plaintiff's treating radiologist, which showed bulging discs at C4-5 and C5-6 and a disc herniation at C3-4 (see Casey v Mas Transp., Inc., 48 AD3d 610; Gibson v Tordoya, 44 AD3d 1000; Green v Nara Car & Limo, Inc., 42 AD3d 430; Francovig v Senekis Cab Corp., 41 AD3d 643, 644-645; Hyun Jun Kim v Collazo, 38 AD3d 842; Lim v Tiburzi, 36 AD3d 671; Clervoix v Edwards, 10 AD3d 626).
SKELOS, J.P., SANTUCCI, COVELLO, McCARTHY and CHAMBERS, JJ., concur.

 

Perry v Brusini

 

The Law Offices of Henry W. Davoli, Jr., PLLC, Rockville Centre,
N.Y. (Susan R. Nudelman of counsel), for appellants.
McCabe, Collins, McGeough & Fowler, LLP, Carle Place, N.Y.
(Patrick M. Murphy of counsel), for respondents.

DECISION & ORDER

In an action to recover damages for personal injuries, the plaintiffs appeal from an order of the Supreme Court, Nassau County (Phelan, J.), dated June 12, 2007, which granted the motion of the defendants Robert Brusini and Brian Brusini for summary judgment dismissing the complaint insofar as asserted against them on the ground that neither of the plaintiffs sustained a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is reversed, on the law, with costs, and the motion of the defendants Robert Brusini and Brian Brusini for summary judgment dismissing the complaint insofar as asserted against them is denied.

The defendants Robert Brusini and Brian Brusini (hereinafter the respondents) failed to meet their prima facie burden of showing that neither of the plaintiffs sustained a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In support of their motion, the respondents relied upon, inter alia, the affirmed medical reports of their examining orthopedic surgeon. In those reports, the surgeon noted significant range of motion limitations in the plaintiffs' respective left knees, as well as significant range of motion limitations in the lumbar spine of the plaintiff Idell M. Perry (see Jenkins v Miled Hacking Corp., 43 AD3d 393; Bentivegna v Stein, 42 AD3d 555; Zamaniyan v Vrabeck, 41 AD3d 472; Brown v Motor Veh. Acc. Indem. Corp., 33 AD3d 832; Smith v Delcore, 29 AD3d 890; 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 respondents failed to meet their prima facie burden, it is unnecessary to consider whether the papers submitted by the plaintiffs weresufficient to raise a triable issue of fact (see Jenkins v Miled Hacking Corp., 43 AD3d 393; Coscia v 938 Trading Corp., 283 AD2d 538).
FISHER, J.P., FLORIO, ANGIOLILLO, DICKERSON and BELEN, JJ., concur.