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Dear Coverage Pointers Subscribers:

 

This week's issue of Coverage Pointers is attached.

 

Hope to see some of you in NYC for the DRI Insurance Coverage and Practice Seminar.

 

We surely hope you had a wonderful Thanksgiving repast with plenty of warmth, laughter and family joy.  It is your author's favorite holiday of the year, so much so that I celebrate it twice, once in Canada in mid-October and then in November.

 

It was Abraham Lincoln who first declared a national day of Thanksgiving, usurping the state declarations that had been made over several years previous.  Lincoln responded favorably to the efforts led by Sarah Josepha Hale, described in her obituary as an "authoress and editress."  Hale, stepmother of five children and editor of Lady's Magazine in Boston pressed hard for the recognition of a National Day of Thanksgiving.  Letters to Presidents Taylor, Fillmore, Pierce and Buchanan were unsuccessful but Lincoln finally agreed, declaring the national holiday in 1863.

 

Less known about the venerable Ms. Hale was her love of poetry and it was she who wrote the famous rhyme, "Mary's Lamb" now better known as "Mary Had a Little Lamb."  That might explain why it is turkey served on Thanksgiving and not lamb stew.

 

Highlights 

There's great reading in this week's issue of Coverage Pointers including two Court of  Appeals cases,  one dealing with the timing of disclaimers (this one for lack of cooperation) and the other with our favorite topic, late notice by insureds (and excuses for late notice). 

 

Appellate Division decisions are diverse and eclectic and range from the difficulty - perhaps impossibility - of rescinding auto policies for fraud, use and operation of cars including opening car doors, the consequences of lying to a liability carrier and several others.

 

One Hundred Years Ago Today

A century ago today, the Syracuse Herald, covered the story of the execution of William Sobert Brasch:

 

Brasch Pays the Penalty

Rochester Wife Murderer is Electrocuted

Only One Shock Needed

Pronounced Most Successful Execution at Auburn
Brasch's Crime was Killing of his Wife to Marry Ohio Woman 

 

AUBURN, Nov. 28.-William Sobert Brasch, the Rochester wife murderer, in whose case Governor Hughes refused to interfere, was electrocuted in Auburn prison this morning. It was one of the most successful executions in the prison, but one shock being necessary to kill. Brasch was pronounced dead at 6:19 o'clock. The crime for which Brasch was executed was the murder of his wife, Roxanna Miller Brasch, whom he pushed into the [Ere] canal on the night of the night of June 15th, 1906. He killed her that he might marry May Gilmore of Defiance, Ohio.

 

The current used was of greater power than usual, the high voltage being 1,880, ranging from 9 to 9% amperes. Brasch entered the execution chamber at 6:10 A. M. and two minutes later the contact was given. This was held on for a full minute and after six minutes spent in the examination of the man by the physicians who were present, Brasch was officially declared dead.

Editor's note:  The Elyria (OH) Daily Reporter carried a story in its January 5, 1907 edition indicating that Mr. Brasch's father, Charles Brasch, committed suicide by taking a dose of carbolic acid because of the "disgrace brought upon him by his son."  The younger Brasch was 22 when he committed the murder.

 

Lead Paint Series Starts in this Issue 

With apologies to Gene Chandler (who by the way, is 71 and living in Chicago and can be reached through his website, www.genechandler.com) . 

Duke, Duke, Duke,

Duke of Lead, Duke Duke .

 We are handling lots of lead paint exposure and ingestion cases here in Western New York and through the state, handling the defense of the personal injury claims and the interesting coverage cases that arise when lead paint claims are brought.

 

Scott Duquin, one of our really smart associates, coordinates our lead defense program and we thought it might be helpful to offer you some insight into the defense of lead cases and related coverage issues.  Accordingly, Scott "the Duke of Lead" Duquin starts the first of about a five or six part series on lead paint litigation in this week's issue.  You'll find the first article following Earl's Pearls in the attached issue.

 

Earl's Pearls: Sanctions for Computer Spoliation 

Thinking of hitting that delete button?  Earl Cantwell speaks of the consequences, in this week's Earl's Pearls column.  I really admire his creativity: new topic, each and every issue.

 

How Far We Have Come 

The Buffalo Bulls is the football team of the University at Buffalo.  Now anyone who follows college football knows that State University of New York teams haven't been the topic of discussion as football contenders in anyone's recent memory.  You've heard of Ohio State or Florida State but other than independent institutions, like Syracuse, New York teams are simply not on the radar screen.

 

This year, however, is an exception.  The Bulls, erasing a 20-point fourth quarter deficit claimed their first ever Mid-American Conference East Division Championship and secured a spot in the MAC Championship game in Detroit on Dec. 5. The Bulls will be invited to participate in a bowl game this year. That will be the second time in 102 years.  It's the back story that's interesting though and, with the election of Barach Obama, reflects on how far our nation has come in such a short period of time. 

 

The only other time they were invited to a Bowl game was 50 years ago this season, 1958.  The UB football team went 8-1 and was designated as the top small-school program in the eastern United States.  The team was invited to Orlando to play against Florida State in the 13th annual Tangerine Bowl.  However, the Orlando High School Athletic Association, the Tangerine Bowl's lessor, prohibited interracial sports and despite a request to change the policy, made it clear that African American ballplayers were not welcome.

 

There were two African-American players on the UB team, a starting halfback, Willie Evans and a reserve defensive end, Mike Wilson.  The University left it to the team to accept or reject the bid and to their credit, they unanimously rejected the offer.  Without Evans and Wilson, they would simply not be the same team.

 

Atta-team.  Good luck in Detroit, Buffalo. You've earned it.

 

From Audrey Seeley, the Queen of No-Fault: 

There is a paucity of decisions this edition but it is most likely attributed to the Thanksgiving holiday.  There is an interesting decision on whether a motor vehicle was principally used for hire permitting an insurer to recover first party benefits paid from another insurer under Insurance Law 5105.  The lesson learned from that decision is that further inquiry should be made on a vehicle's "principal" use even if it contains livery plates.

 

I wanted to thank everyone who attended the No-Fault seminar on November 19th in Buffalo.  We have a great turnout and a diverse group (plaintiff and defense counsel, as well as insurers).  I am hoping that there will be another seminar next year, with some presence from the bench and AAA.

 

I hope you have a safe and happy Thanksgiving.

 

Audrey 

[email protected]

 

In This Week's Issue: 

Court of Appeals

  • Court of Appeals Adds Light, but Not Substance, on Question of Time for Insurer to Disclaim for Lack of Cooperation.  When is "Not Enough," Cooperation, Enough to Justify a Disclaimer?
  • Insured that Failed to Update its Records with Secretary of State and thus was Unaware it was Sued, Cannot Use that Failure as an Excuse for Late Notice
  • Court of Appeals to Review SUM Arbitration Dispute  

Appellate Division

  • Must a Relative be "Blood?"  Perhaps Once, but Not Now
  • Good Faith Belief in Non-Liability May Excuse Notice Obligations; However the Court Missed the Boat on This One
  • Warranty Given By Insured, that Property Did Not Violate Building Codes, Did Not Apply to Abutting Sidewalk
  • The Vehicle and Traffic Law Supplants an Insurance Carrier's Common-law Right to Rescind or Cancel a Policy Retroactively on the Grounds of Fraud or Misrepresentation; Cancellations of Auto Policies May Only be Effected Prospectively
  • Opening a Car Door to Exit the Vehicle Constitutes Use and Operation Requiring a Defense in Action by Individual Struck by Door
  • Lying to One's Liability Company about an Accident Constitutes Breach of the Cooperation Clause
  • A Notice of Cancellation Properly Sent is Presumed Received
  • Purpose of Underinsured Trust Agreement is to Protect Subrogation Rights; Insurer has No Right to Compel its Insured to Name it as a Plaintiff 

MARGO'S MUSINGS ON SERIOUS INJURY UNDER NEW YORK NO FAULT

Margo M. Lagueras

[email protected]

 

  • Verdict That Defendant Was At Fault But That Plaintiff Did Not Sustain Serious Injury Was Not Against the Weight of the Evidence
  • Doctor's Conclusions Are "Clearly Speculative" Where Report Does Not Address Prior Significant Injuries
  • MRI Report Must Show More than "Mere Existence" of Herniation
  • Reversal Sends Issue of Liability Back to Trial Court
  • Would a Reasonable Person Think Your Scar is the Object of Pity and Scorn?
  • Sufficiency of Plaintiff's Papers Is Irrelevant Where Defendant Fails to Meet Prima Facie Burden
  • Failure to Address Prior Accidents Renders Treating Physician's Conclusions Speculative
  • Defendant Loses on Appeal for not Addressing Plaintiff's Allegations
  • Expert That Fails to Address Examining Radiologist's Conclusions Dooms Plaintiff's Case
  • Treating Physician's Affirmation Successfully Defeats Complete Dismissal 

AUDREY'S ANGLES ON NO-FAULT

Audrey Seeley

[email protected]

 

  • Livery License Plates on Vehicle Do Not Mean Vehicle Principally Used for Hire
  • Insurer Failed To Establish Policy Obtained Fraudulently Through Identity Theft 

PEIPER ON PROPERTY (and POTPOURRI)

Steven E. Peiper

[email protected]

 

Steve's out eating turkey today.

 

EARL'S PEARLS

Earl K. Cantwell, II
[email protected]

Sanctions for Computer Spoliation 


DUQUIN - THE DUKE OF LEAD

Scott M. Duquin
[email protected]   

LEAD: The Lingering Litigation

 

 

That's all from the home front.

 

Hope your holidays were all you wanted them to be.

 

Dan

New Page 2

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

Margo M. Lagueras

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-Richburg
Margo M. Lagueras

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

Index to Special Columns

 

Margo’s Musings on “Serious Injury”

 Audrey’s Angles on No Fault

Peiper on Property and Potpourri
Earl’s Pearls

Across Borders

Duquin -- The Duke of Lead

 

Court of Appeals

 

11/25/08          Continental Casualty Company v. Stradford

New York State Court of Appeals
Court of Appeals Adds Light, but Not Substance, on Question of Time for Insurer to Disclaim for Lack of Cooperation.  When is “Not Enough,” Cooperation, Enough to Justify a Disclaimer?

When the Second Department decided this appeal back in December, we described the ruling as follows:

12/11/07          Continental Casualty Company v. Stradford  
Appellate Division, Second Department
No Good Deed Goes Unpunished – Trying to Secure Cooperation is Not an Excuse for Failing to Deny on Lack of Cooperation
The dissent describes the carrier’s efforts to secure the insured’s cooperate as Herculean.  The majority agrees that the insured’s lack of cooperation was blatant, intelligent and designed to thwart the ability of the carrier to defend. Yet the carrier lost its right to disclaim on lack of cooperation?  Why, because it tried for too long and should have disclaimer earlier on lack of cooperation. 
Editor’s Note:  Sheesh.  There’s just no winning.

Well, on appeal to the Court of Appeals, the carrier won, sort of.  Well, at least it didn’t lose.

 

The Court of Appeals confronted – and ducked – the question of the proper method to measure the time to deny coverage when the insured fails to cooperate.  The high court appropriately defined the standard and the problem that arises when trying to determine whether or not a carrier should deny coverage based on lack of cooperation.  It then recognized the obvious – “fixing the time from which an insurer's obligation to disclaim runs is difficult. That period begins when an insurer first becomes aware of the ground for its disclaimer.”  It recognized that an insured's non-cooperative attitude is often not readily apparent and “such a position can be obscured by repeated pledges to cooperate and actual cooperation.”

That being said, the Court held that that a question of fact remained as to the amount of time required for Continental to complete its evaluation of the insured’s conduct in the two underlying actions. In this case, the reasonableness of an approximately two-month delay to analyze the pattern of obstructive conduct that permeated the insurer's relationship with its insured for almost six years presented a question of fact that precludes entry of summary judgment for either plaintiff or for defendants.  There is no instruction given to the lower court as to how to analyze that question of reasonableness.  So when do you know whether the sporadic cooperation justifies a denial of coverage?  We have no better idea now than before this decision.
Editor’s Note:  Well, it’s a better result than at the Appellate Division.  At least the Court vacated the ruling against the carrier and sent it back for a fact-finding determination.

11/20/08          Briggs Avenue LLC, v. Insurance Corporation of Hannover

New York State Court of Appeals
Insured that Failed to Update its Records with Secretary of State and thus was Unaware it was Sued, Cannot Use that Failure as an Excuse for Late Notice
In answering a certified question from the Second Circuit Court of Appeals, New York State’s highest state court ruled that an insured that fails to notify the Secretary of State of an address change and thus does not get notice of a lawsuit as quickly as it could, cannot use that failure to update its address and thus late notice, as an excuse.

Briggs Avenue LLC owned a building in the Bronx.  Incorporated in 1999, it designated the Secretary of State, as it was required to do, as its agent for the service of process.  The Articles of Incorporation listed Briggs’ address at the time, but thereafter Briggs moved, never notifying the Secretary of State of its address change. Four years later Briggs was sued, the Secretary of State was served and the process was sent by the Secretary to the old and outdated address. When an application for a default judgment was served on Briggs personally a year later, Briggs notified the carrier and the insurer immediately denied coverage based on late notice of the suit.

The Court of Appeals ruled that the excuse offered for late notice – “I didn’t get the notice because I didn’t know I had to keep my address updated” – was insufficient and notice was not given as soon as practicable as required by the policy.  Prejudice – at least now – is of no consequence and the insurer wins.

Held the court: “Briggs's argument is essentially that its mistake was understandable; that it caused no prejudice to the insurer; and that the loss of insurance coverage is a harsh result. All this may be true, but it is irrelevant.”

Editors Note:  As my friend – and fine coverage attorney – Elizabeth Fitzpatrick from Lewis, Johs noted upon review of this decision:  “One last bone before the prejudice legislation kicks in …” Amen.

11/25/08          In the Matter of Central Mutual Insurance Company v. Bemiss
New York State Court of Appeals
Court of Appeals to Review SUM Arbitration Dispute (Link above to Third Department Decision)
In Volume X, No. 4 of Coverage Pointers, we reported on a August 14, 2008 decision of the Third Department which included a friendly and respectable dispute between commentators on the correctness of that decision.  The Court of Appeals has now granted leave to appeal will review the Third Department’s determination.  Here was our earlier commentary:

Be Careful Not to Destroy Carrier’s Subrogation Rights -- Lessons for Settling with Multiple Defendants if Applying for Underinsured Motorists Benefits
Bemiss was involved in a multi-car accident and negotiated a settlement with one of the other drivers for the full of amount of the liability policy limits.  Before the settlement was finalized, she then gave her SUM (underinsured) carrier, Central, notice that she was intending to issue a release to that other driver and sought permission.  Central did not respond, and Bemiss accepted the settlement proceeds, issuing a release to both tortfeasors without protecting subrogation rights.

 Later, Bemiss negotiated a settlement with a second tortfeasor for an amount less that the policy limits, did not seek permission or consent of the SUM carrier to settle and issued a release.  She then made a claim for SUM benefits and Central denied coverage based on Bemiss’ failure to protect the carrier’s subrogation rights.  Bemiss demanded arbitration and Central moved for a permanent stay.

The Appellate Division agreed that the settlement with the first tortfeasor was proper.  Under Condition 10, request for consent to settle was made, 30 days went by without a response, and the insured was permitted to issue a release.

However, the court concluded that the settlement with the second tortfeasor, even for an amount less than the policy limits, destroyed the insurer’s subrogation rights against that tortfeasor.  The court finds that the regulations require the preservation of subrogation rights when settlement is made for less than the policy limits. 

A strong – and well-reasoned dissent – suggests that the majority’s requirement of preservation of subrogation rights when less than the policy limits are being paid, will make it impossible for a victim to ever settle a case where there are multiple tortfeasors.

Editor’s Note:  While insurers might prefer the majority’s view here, we – as insurance purists – agree with the dissent.  However, my colleague Jonathan Dachs, who writes the Insurance Law column in the New York Law Journal, would side with the majority (and I have a lot of respect for his views in this area).  Our friendly disagreement was captured in a front page article in the New York Law Journal on August 15th.

Appellate Division

 

11/19/08          Smith v. State Farm Fire and Casualty Company
Appellate Division, Second Department
Must a Relative be “Blood?”  Perhaps Once, but Not Now
In construing a homeowners policy, the Second Department held that the named insured’s daughter-in-law was a relative of the named insured and thus an exclusion in the policy eliminated coverage to the name insured for her injuries.  In doing to, the court overruled a 1963 decision where it held that the term “relative” required a blood relationship and thus did not apply to one’s father-in-law.

 

11/19/08          R & L Richmond Avenue Corp., v. Public Service Mut. Ins.

Appellate Division, Second Department
Good Faith Belief in Non-Liability May Excuse Notice Obligations; However the Court Missed the Boat on This One
A good faith belief in non-liability provided a sufficient excuse for an eight months delay by the insured in giving it liability carrier notice of the accident – at least as a question of fact.  Nobody can argue with that.  This particular appellate decision had a paucity of facts so it was impossible to evaluate the “good faith belief.” We asked Public Service’s counsel, Mike Savett of Weber Gallagher Simpson Stapleton Fires & Newby and now we understand why the Second Department kept mum!

 

The underlying case involved a slip-and-fall on a common area in a shopping center in Richmond County. Store owner/tenant in shopping center claimed he did not learn of the accident involving his customer immediately - only when he received notice of a claim from an attorney about one month post-D/A. Thereafter, he checked his lease, believed that he was not responsible for maintaining the common area, and so advised claimant's attorney that he is not responsible. He also notified the landlord of the matter, believing that the landlord is responsible.

 

Importantly, the letter from the attorney expressly states that his client is pursuing a claim against the owner and advised the owner to place his insurer on notice and to provide insurance info. Owner did not provide carrier with notice until suit filed eight months post-D/A.

 

The carrier argued that receipt of the claim letter triggered obligation to notify, that post-notice investigation and belief that no claim would be filed was irrelevant. As Mr. Savett accurately indicated, this is distinguishable from cases where insured learns of accident and conducts investigation - i.e., was injured party taken to hospital, other circumstances, etc. Here, notice of accident/occurrence was at the same time as notice of claim.

Editor’s Note:  Wasn’t it the self-same Second Department that handed down the Donovan decision just a few short months ago.  As reported in our March 20, 2008 edition of Coverage Pointers, Vol .IX, No. 19:

 

3/11/08            Donovan v. Empire Insurance Group
Appellate Division, Second Department
Empire Strikes Back and Wins a Late Notice Disclaimer Where Insured Received Claim Letter and Did Nothing
Empire issued a CGL policy to Donovan for her property located at 7344 Amboy Road in Staten Island with standard notice provisions. On September 9, 2001, Barbara Kearney allegedly was injured when she tripped and fell on the sidewalk which she described as located at 7336-7346 Amboy Road. By letter dated October 10, 2001, Kearney's attorney, sent written notification of Kearney's claim to Donovan and then sued the City (but not Donovan) in February 2002. In March 2003, the City filed a third-party complaint against Donovan, seeking contribution and indemnity and about 10 weeks later, Donovan sent those pleadings to Empire seeking a defense.  A month later, Empire denied coverage based on late notice. Donovan sought a declaration that Empire’s disclaimer was invalid, alleging that her delay in notification was excusable because she had a reasonable belief in her non-liability. 

 

A win for the insurer here.  An insured's good-faith belief that the injured party would not seek to hold it liable, when reasonable under the circumstances, may excuse a delay in notifying an insurer of an occurrence or potential claim, but that believe must be reasonable under all the circumstances.  It may be relevant on the issue of reasonableness, whether and to what extent, the insured has inquired into the circumstances of the accident or occurrence

 

The Court held, in Donovan:

 

The plaintiff's belief in non-liability after receiving the claim letter, which clearly stated that Kearney had retained attorneys for the purpose of pursuing a claim against the plaintiff, was unreasonable.


Is the claim letter in Donovan different from the one in R&L Richmond?  Nah.

 

 11/19/08         Antoine v. City of New York

Appellate Division, Second Department
Warranty Given By Insured, that Property Did Not Violate Building Codes, Did Not Apply to Abutting Sidewalk
In 2005, Antoine and fell on a sidewalk in front a Brooklyn property.  Ocpard owned the building abutting the sidewalk.  Ocpard was insured under a policy procured by its broker Bilus and issued by American Safety Insurance Company (ASIC).On or about April 15, 2004, the plaintiff, Marie Jacqueline Antoine, was walking in front of 2561 Ocean Parkway in Brooklyn when she allegedly tripped and fell on a defect in the sidewalk abutting a building owned by Ocpard Realty Enterprises, LP (hereinafter Ocpard). Ocpard was insured under a policy procured by its insurance broker, Bilus and issued by its carrier, American Safety Indemnity Company (hereinafter ASIC).

When placed on notice of the Antoine lawsuit, Ocpard notified ASIC but ASIC denied coverage based on warranty in policy that the "insured premises, including but not limited to all buildings, structures and parking lots, are in compliance with all federal, national, state and local codes and/or requirements as respects fire, life safety (including, but not limited to: the National Fire Protection Association Life Safety Code Standard 101), building construction and building maintenance."  ASIC claimed that at the time the policy was issued (and a year later, at the time of the accident), there were code violations relating to the sidewalk.  Upon denial, Ocpard sued both ASIC and Bilus.

The question before the court was whether the warranty provisions applied to the City-owned sidewalk or only the building.

The term “premises” was undefined although the policy, which contained a provision entitled "Limitation of Coverage to Designated Premises or Operations," referenced structures but not sidewalks.  Since the term was undefined and ambiguous, the court interprets it in favor of the insured and rules that the warranty language did not apply to the sidewalks, thus there was no breach (and coverage is in place).

A judge, dissenting in party, argued that the NYC Code requirement imposing liability on property owners for abutting sidewalks together with the insured’s receipt of notice of code violations implicated the insured in ownership of the sidewalk and thus the warranty should have applied to the sidewalk as well as the building.
Editor’s Note:  There are very few cases reported involving policy warranties.  We have yet to see one in New York where an insured warrants that it will have indemnity agreements in place running it is favor from subcontractors and additional insured protection from other parties (a warranty growing in popularity).  Watch this space.

11/18/08          In re General Assurance Company v. Rahmanov
Appellate Division, First Department

The Vehicle and Traffic Law Supplants an Insurance Carrier's Common-law Right to Rescind or Cancel a Policy Retroactively on the Grounds of Fraud or Misrepresentation; Cancellations of Auto Policies May Only be Effected Prospectively
Rahmanov was involved in a car accident with a vehicle registered to McKain and operated by McDaniels. General Assurance (General) insured Rahmanov's vehicle while State Farm insured the McDaniels car.

State Farm had denied coverage to McDaniels on the grounds of non-cooperation and fraud (based on the claim that McKain was the subject of identity theft and had not procured the subject policy) and Rahmanov then filed a claim for uninsured motorist benefits with General

General moved to stay the UM arbitration claiming that the McDaniels care was insured.  The Appellate Division ruled that State Farm’s disclaimer was invalid.  The evidence established that State Farm did not cancel the subject policy before the date of the accident, and there was no indication that Rahmanov participated in the fraud in obtaining the State Farm policy in McKain's name. Under these circumstances, State Farm was precluded from denying coverage on the ground that the policy was fraudulently obtained. An auto insurer is precluded from rescinding coverage retroactively where mandatory coverage is permitted.  Its option is to cancel the policy prospectively.

11/14/08          Henderson v. New York Central Mutual Fire Ins. Co.

Appellate Division, Fourth Department
Opening a Car Door to Exit the Vehicle Constitutes Use and Operation Requiring a Defense in Action by Individual Struck by Door
Plaintiffs sought a declaration that defendant New York Central  Mutual (NYCM) had a duty to defend them in the underlying action commenced by defendant Prave.  Prave alleged that he was hurt when Henderson struck him while opening the driver’s door of his NYCM-insured car.

Here, the complaint in the underlying action alleges negligent conduct covered by the policy issued by NYCM, and thus NYCM has a duty to defend them in that action. The act of opening the car door in order to exit the vehicle constitutes use and operation of the vehicle, thus an obligation to defend exists. Whether there will be a duty to indemnify will abide the trial.

11/14/08          Nationwide Mutual Insurance Company v. Posa
Appellate Division, Fourth Department
Lying to One’s Liability Company about an Accident Constitutes Breach of the Cooperation Clause
Baughman sued Posa seeking damages for injuries that she allegedly sustained on April 24, 2005 when the vehicle driven by her collided with a pickup truck owned and driven by Posa. Posa left the scene of the accident without providing any identifying information to Baughman or the police, and that he submitted an insurance claim to Nationwide stating that he damaged his pickup truck by driving into it with his garden tractor. Posa's scorned girlfriend informed the police that Posa had been involved in the accident with Baughman's vehicle, whereupon Posa pleaded guilty to leaving the scene of an accident.

 

Posa’s fraudulent misrepresentations to Nationwide establish a lack of cooperation and a breach of the cooperation clause in the policy.

 

11/14/08          GEICO Indemnity v. Roth

Appellate Division, Fourth Department
A Notice of Cancellation Properly Sent is Presumed Received
GEICO commenced this action seeking a declaration that it has no duty to defend or indemnify defendant Scott C. Mayer, Jr. in an underlying lawsuit on the grounds that it canceled the policy prior to the accident.  GEICO submitted the Notice of Cancellation for nonpayment of premiums and proof that it was timely sent.  The insureds only response was that it did “not recall” receiving the notice. Once GEICO submitted evidence of its office mailing practice sufficient to establish that the notice of cancellation had been mailed” it is presumed that it as received.  The insured’s lack of recollection is insufficient to rebut the presumption of receipt.

 

11/12/08          Augello v. Koenig-Rivkin
Appellate Division, Second Department
Purpose of Underinsured Trust Agreement is to Protect Subrogation Rights; Insurer has No Right to Compel its Insured to Name it as a Plaintiff
In an underinsurance claim situation, the UIM carrier paid benefits and the insured signed a trust agreement agreeing to reimburse the carrier for any amounts received in settlement. The insurer cannot compel its insured to substitute it as a named party, however.

 

MARGO’S MUSINGS ON SERIOUS INJURY UNDER NEW YORK NO FAULT

Margo M. Lagueras

[email protected]

 

11/18/08          Ashby v. Mullin

Appellate Division, Second Department

Verdict That Defendant Was At Fault but That Plaintiff Did Not Sustain Serious Injury Was Not Against the Weight of the Evidence

The plaintiff was rear-ended and the defendant was determined to be at fault.  However, the plaintiff had a previously herniated disc which was shown to still exist one month before the accident.  The plaintiff’s expert testified that the accident aggravated the injury but the defendant’s expert testified that it had not worsened as a result of the accident.  The jury found that even though the defendant was at fault for the accident, the plaintiff had not sustained a serious injury.  On appeal, the jury verdict was affirmed as not against the weight of the evidence.

 

11/18/08          Besso v. DeMaggio

Appellate Division, Second Department

Doctor’s Conclusions Are “Clearly Speculative” Where Report Does Not Address Prior Significant Injuries

The plaintiff’s treating physician’s affirmation had no probative value.  His conclusions not only relied on the unsworn reports of others, but he also failed to address that fact that the plaintiff had significant injuries to her back and neck prior to the accident.  Therefore, his conclusions that her cervical and lumbar spine injuries were the result of the accident were “clearly speculative”.

 

11/18/08          Estrada v. Tejada

Appellate Division, Second Department

MRI Report Must Show More than “Mere Existence” of Herniation

The defendant wins a reversal, on the law, because the plaintiff’s opposition did not raise a triable issue of fact.  The treating chiropractor’s affidavit stated that the plaintiff sustained permanent injuries to his cervical and lumbar spine which were a significant limitation of use of the spine.  However, there was no competent evidence offered that showed range-of-motion limitations that were contemporaneous with the accident.  In addition, the MRI report only showed the existence of disc herniations but did not provide objective evidence of either the extent or duration of the limitations and, as is by now well known, the “mere existence of a herniated or bulging disc is not evidence of a serious injury” without such objective evidence.

 

11/18/08          Letts v. Bleichner

Appellate Division, Seconds Department

Reversal Sends Issue of Liability Back to Trial Court

Here the defendants, relying on a neurologist’s affirmed report, nonetheless failed to meet their prima facie burden and the complaint is reinstated.  The report noted range-of motion limitations in the plaintiff’s cervical spine but failed to state the extent.  Therefore, the court determined that the report did not serve to establish that the limitations were not the result of the accident or that they were insignificant.  Since the trial court had granted the defendants’ cross-motion on the issue of serious injury, it had denied the plaintiff’s motion on the issue of liability.  The Appellate Division remits for such a determination.

 

11/18/08          Lynch v. Iqbal

Appellate Division, Second Department

Would a Reasonable Person Think Your Scar is the Object of Pity and Scorn?

The defendants win a reversal.  The plaintiff submitted color photographs of two scars on her chin, alleging they constituted a significant disfigurement.  The Appellate Court disagreed reasoning that “a reasonable person viewing the color photographs . . . would not regard the condition as unattractive, objectionable, or as the object of pity and scorn.

 

11/18/08          Yong Deok Lee v. Singh

Appellate Division, Second Department

Sufficiency of Plaintiff’s Papers Is Irrelevant Where Defendant Fails to Meet Prima Facie Burden

Once again the court reiterates that where the defendant has failed to meet his prima facie burden of showing that the plaintiff did not sustain a serious injury, the court will not even consider whether or not the plaintiff’s opposing papers raised a triable issue of fact.

 

11/12/08          Geliga v. Karibian, Inc.

Appellate Division, Second Department

Failure to Address Prior Accidents Renders Treating Physician’s Conclusions Speculative

Defendants appeal and get two out of three.  At their depositions, all three plaintiffs acknowledged that they missed little if any work or school, defeating their claims under the 90/180 category of serious injury.  In addition, two plaintiffs were involved in prior motor vehicle accidents but their treating physician failed to address what those accidents involved and instead merely concluded that the plaintiffs’ range-of-motion limitations and the injuries seen in their MRI reports were the result of the current accident.  That failure renders the conclusions speculative holds the Court.  However, the third plaintiff, who was not involved in a prior accident, raised a triable issue as to “significant limitation” through the use of an inclinometer, which measures the extent of restricted flexion and extension as compared to the norm.

 

11/12/08          Martinez v. Ehrenfeld

Appellate Division, Second Department

Defendant Loses on Appeal for not Addressing Plaintiff’s Allegations

This is serious, and it results in the reversal of defendant’s win at the trial level.  The plaintiff alleged that, as a result of the accident, he sustained an injury to his testicular region.  The defendant fails to address this allegation and thus loses, regardless of whether the plaintiff raises an issue of fact in his opposition.

 

11/12/08          Saint-Hilaire v. PV Holding Corp.

Appellate Division, Second Department

Expert That Fails to Address Examining Radiologist’s Conclusions Dooms Plaintiff’s Case

Here again the case is lost due to the failure to address the opponent’s allegations or proofs.  In this case, it is the plaintiff’s expert whose conclusions are deemed speculative for failing to address the defendants’ radiologist’s conclusions that the plaintiff’s spinal injuries were the result of long-standing degeneration and not related to the accident. 

 

11/12/08          Shtesl v. Kokoros

Appellate Division, Second Department

Treating Physician’s Affirmation Successfully Defeats Complete Dismissal

The plaintiff gets a reversal based on his treating physician’s affirmation.  This affirmation was based on both contemporaneous and recent range-of motion examinations of the plaintiff’s cervical spine, as well as on an affirmed MRI report revealing herniated discs.  The doctor’s opinion was that the injuries were a result of the accident and not the result of degeneration or the aging process, concluding that the injuries and limitation to the cervical spine were significant and permanent.  This was sufficient to raise an issue of fact as regards the cervical spine under the permanent consequential or significant limitation of use categories holds the Court.  The affirmation failed, however, with regards to the plaintiff’s alleged shoulder injury because no quantified range-of-motion findings and no qualitative assessment were presented.  A torn tendon, in of itself, is not a serious injury.

 

AUDREY’S ANGLES ON NO-FAULT

Audrey Seeley

[email protected]

 

11/26/08          Matter of Progressive Northeastern Ins. Co. v. New York State Ins. Fund

Appellate Division, Third Department

Livery License Plates on Vehicle Do Not Mean Vehicle Principally Used for Hire

An arbitration award arising out of a loss transfer arbitration under Insurance Law §5105 with Arbitration Forums, Inc. should have been vacated as a motor vehicle involved in the accident was not principally use for the transportation of person for hire.  On July 12, 2004, Mr. Chesebro was operating a motor vehicle when he was rear ended by another motor vehicle, a minivan, operated by Ms. Redden.  The minivan Ms. Redden was operating was owned by her employer, Affordable Wheelchair Transportation.  The minivan was registered as a passenger vehicle but had livery license plates belonging to another commercial vehicle Ms. Redden’s employer owned.  Ms. Redden and her employer admit that at the time of the accident, Ms. Redden was operating the minivan in the course of her employment and was using the minivan to transport passengers for her employer.

 

The New York State Insurance Fund (“the Fund”) paid no-fault benefits to Mr. Chesebro and then filed for mandatory arbitration under the loss transfer provision of Insurance Law §5105 against Progressive, who insured Ms. Redden’s employer.  Progressive argued at the arbitration that the minivan involved in the accident was a personal vehicle and not a vehicle primarily used for the transportation of persons for hire.  Accordingly, the Fund could not recover the benefits it paid as this was not a proper loss transfer arbitration under the requirements of Insurance Law §5105.  The arbitration was conducted through Arbitration Forums, Inc. and an award was rendered in the Fund’s favor.

 

Progressive commenced a proceeding to vacate the arbitration award which was denied and from which it now appealed.  On appeal, the Court held that the arbitration award should have been vacated.  The Court reasoned that under Insurance Law §5105 an insurer can attempt to recover first party benefits from another insurer only if at least one of the motor vehicles involved in the accident weighs over 6,500 pounds unloaded or is used principally for the transportation of persons or property for hire.  In this case, the evidence did not establish that the minivan was principally used for the transportation of persons for hire.  The fact that it contained a livery license plate on the date of the accident was not conclusive on the issue.  The Fund failed to submit any evidence that minivan was principally used for transporting persons for hire.  The fact that on the date of the accident was used for transporting persons for hire was insufficient.  The standard applied is whether the evidence demonstrates that the minivan is principally, not just occasionally, used to transport persons for hire.

 

11/7/08            D.A.V. Chiropractic, P.C. et. al. a/a/o Kareem Holland et. al. v. GEICO Indem. Co.

Appellate Term, Second Department

Insurer Failed To Establish Policy Obtained Fraudulently Through Identity Theft

The plaintiff was granted summary judgment as it submitted evidence, in admissible form, to establish its prima facie case.  The insurer failed to raise a triable issue of fact precluding summary judgment that the insurance policy was fraudulently procured due to identity theft.  The court held that despite the passage of five years from the date of the accident the insurer failed to present any evidence that plaintiff’s assignors participated in a fraudulent scheme.  Also, the doctrine of collateral estoppel was not applied based upon a prior determination in a different court that an issue of fact existed whether the insurance policy at issue in this case was fraudulently obtained.  The court held that the prior decision merely denied summary judgment to the plaintiff and did not present a final determination on the issue to apply the doctrine of collateral estoppel. 

 

 

PEIPER ON PROPERTY (and POTPOURRI)

Steven E. Peiper

[email protected]

 

Steve’s out eating turkey today.

 

EARL’S PEARLS

Earl K. Cantwell, II
[email protected]

 

Sanctions for Computer Spoliation

 

According to published reports, a United States Magistrate Judge has recommended entering a default judgment against defendants as a sanction for “extreme measures” they took to destroy and falsify computer generated electronic information (“ESI”).  If the proposed order is approved by a Judge in the Eastern District of New York, the case may be the first time within the Second Circuit where a default judgment was awarded on the basis of tampering with ESI.  Such cases are a chilling reminder that courts in several sanction cases to date have held counsel equally responsible with a client for loss or destruction of ESI. 

 

One key factor was that the Court had previously imposed lesser sanctions on the responsible party for other discovery misconduct.  Additional factors in the recommended decision by the Magistrate Judge where that the destruction of evidence was intentional, extensive and there was attempt (albeit unsuccessful) to conceal the tampering.  The case is Gutman v. Klein, Eastern District of New York, 03-CV-1570.  The Magistrate Judge recommended that the only appropriate non-monetary sanction was a default judgment in the plaintiff’s favor pursuant to Federal F.R.C.P. 37 and the Court’s inherent powers.  The claimant alleged that the defendant and offending party had obtained destruction programs, re-configured the laptop’s operating system, copied files into the computer from an external source, and altered the computer’s clock.  Although Gutman is an extreme case, such cases tend to “make law” or at least establish a precedent for an ESI – sanctions judgment or dismissal.

 

The case contains “Mission Impossible” type allegations that there was furtive replacement of a laptop computer containing documents, with the installation of a replacement operating system to make it look older which then uploaded thousands of files while the computer’s clock was set to an earlier date.  There were also allegations that “hundreds if not thousands” of files were deleted and then that the defendants took the time to run a search program to determine if the replacement and destruction could be detected. 

 

This case is further evidence of the importance of ESI in current litigation.  It emphasizes the importance of imposing “litigation holds” on ESI, computers, laptops, peripherals and other data bases to avoid claims of intentional or inadvertent spoliation.  It also emphasizes the importance of not deleting or destroying ESI in the face of imminent or actual litigation.  Fees for computer and forensic experts in some cases now, and more in the future, will equal or surpass counsel fees. 

 

Other Courts have also been embroiled in disputes and awarded sanctions in situations where an initial good faith litigation hold subsequently unraveled or was not enforced so that documents and items became lost or deleted once the initial onslaught of litigation and concern had passed.  Parties and counsel can also expect frequent and severe spoliation sanctions from federal and state judges for loss or contamination of ESI.  Monetary fines and costs may become common; issue determinations, preclusions and adverse inferences frequent; and outright dismissals or judgments not unusual.

 

The Gutman case also involved a laptop computer, so it emphasizes the importance of corporate and litigation counsel control over not only office equipment and operating systems but also portable laptops and other portable and peripheral devices that may contain documents, data, notes, calendars, etc. 

 

Counsel and the client must be wary and remain vigilant to make sure that a meritorious case or defense is not jeopardized or lost, or that separate judgments or awards for spoliation are not entered, because of destruction, tampering, or infection of ESI.  Although Gutman appears to be an intentional – tampering/deletion case, counsel and parties are again referred to recently enacted F.R.C.P. 37(e) which militates against sanctions if ESI is lost or obstructed by the routine good faith operation of a data system.  

 

DUQUIN – THE DUKE OF LEAD

Scott M. Duquin
[email protected] 

 

LEAD:  the Lingering Litigation

 

Notwithstanding federal, state and local regulations, educational awareness programs and an actual decrease in the infant lead poisoning rate, lead poisoning personal injury litigation continues to linger in New York. Current New York law favors shifting the cost of remediation of lead-based paint hazards and its negative externalities to New York real property owners and their insurers.  Full treatises have now been devoted to the defense of lead paint claims.  In order to make this dense subject a bit more palatable – the Romans used to add lead tincture to sweeten the wine – we are publishing a mini-series.    This article attempts to simplify the myriad of legal and factual complexities in a lead-based paint poisoning claim, and will be published in the next several issues of Hurwitz & Fine, P.C.’s coverage pointers.  This first installment discusses the ancient nature of most lead based-paint poisoning lawsuits.

 

Residential lead-based paint poisoning actions, although founded upon the same principles of premise liability as a simple slip-and-fall, are anything but simple and are cases of complex litigation.  The general theory of premise liability between a lead based paint poisoning claim and a slip-and-fall, is the same: an owner of the real property owed a non-delegable duty to the plaintiff to maintain the property in a reasonably safe condition, he was negligent in the maintenance of the property – exhibited a lack of ordinary care – in doing or not doing something, thus breaching his duty of care.  As a result of the owner’s breech of duty the plaintiff was injured and is entitled to damages.  Also, depending on the facts of the specific situation, federal law, New York law, and local ordinances all may present legal issues in the case.

 

Of concern for insurers is that there have been over 100,000 confirmed children with elevated blood lead levels since 1997 in New York State. In 1997, 6.31% of children, less than 6 years old who lived in New York State, but outside of New York City [3.33%  in NYC], tested for lead had confirmed elevated blood levels above Centers for Disease Control (CDC) guidelines.  In 2007, the rate of children less than six years old, who were tested for lead and had a reported elevated blood levels had fallen to 1.55% and was less than one percent in New York City[1].  Under New York law, a 2 year old exposed to lead in 1997 has a viable claim until 2016.   

 

New York lawsuits alleging lead poisoning as a result of deficient housing are often brought years after the child lived at the rental properties.  In New York a child has until they are 21 years of age to bring a lawsuit for personal injuries from exposure to lead, even if the child was only months old when the lead exposure occurred.  New York has a three year statute of limitations for personal injury claims; but, New York CPLR 208 extends the statute of limitations period to three years from the time the child turns 18.  Presently any plaintiff born after 1988 has a timely claim.  This long toll period is one of the reasons for lingering lead paint litigation despite a decreasing lead poisoning rate in children under six years of age.

 

In 1991, the CDC revised its acceptable threshold blood lead level down from 25ug/dl (micrograms per deciliter) to 10 ug/dl[2].  Thus, an elevated blood lead level is any blood lead level in excess of 10 ug/dl.   When a child has a blood test that shows an elevated blood lead level, the result is reported to the county health department, which then undertakes an investigation.  In New York State, county health departments generally perform environmental surveys for the presence of lead-based paint in the child’s residence when an elevated blood lead level is reported to them.  The environmental survey is then documented and becomes a record kept by the county health department.  Plaintiffs’ attorneys rely on these county health department records to show that the insured had deteriorating lead-based paint, and/or there were conditions conducive to lead poisoning present in the child’s residence when and while the child resided there.

 

These records, like lead, tend to linger.  Our office here has had county health department records dating back to the 1970’s, served in response to Freedom of Information requests.  In Erie County one plaintiff’s firm offered to pay the county’s storage costs in response to bill that would have mandated destruction of the records after seven years.  We recommend conducting an investigation when you receive notice of a potential lead-based paint poisoning bodily injury claim.  We also recommend making a Freedom of Information Request/Demand for county health department records of the alleged polluted property, with respect to any environmental surveys the health department may have performed at the property. You need not wait until you have an authorization to get the health department records.  Without an authorization certain portions may be redacted such as the child’s name.  But even in redacted form, the health department records will show, if an environmental survey for the presence of lead was done at the property, and/or if there were conditions conducive to lead poisoning at the property during the time period the plaintiff is alleging residency at the property.          

                       

Next issue we are going to focus on your insured’s duty under federal and New York law to abate lead-based paint hazards and what exactly is a hazardous paint chip.

 

ACROSS BORDERS

 

11/13/08          National Union Fire Insurance Company v. West Lake Academy

First Circuit Court of Appeals
Jury Verdict For Carrier Upheld Against Sexual Molestation Victim's Claim for Coverage

United States Court of Appeals for the First Circuit
Jane Doe obtained a jury verdict and judgment against National Union's insureds for claims sexual molestation while she was involuntarily committed, then sued National Union for coverage under its CGL policy, for failure to settle, and for misrepresentation of its limits. National Union defended on the grounds that its limitations and endorsements limited coverage and that it handled the claim properly. The First Circuit affirmed, agreeing with the lower court that coverage for the claims at issue was limited by the Abuse or Molestation Exclusion and that the coverage provided by the Sexual Abuse Endorsement was wasting, and that there was no misrepresentation by National Union concerning the policy's wasting nature.

Submitted by: Matthew Warren (Clinton & Clinton)

 

11/07/08          State Farm Fla. Ins. Co. v. Campbell
Florida Court of Appeal, Fifth District

A Patient who Lost her Balance and Fell while being Positioned for an X-ray of her Heel Cannot Obtain Coverage Under Doctor’s Business Liability Policy
Plaintiff, Sarah Campbell, was in her podiatrist’s office being positioned for an x-ray of her heel. She lost her balance and fell backwards sustaining injuries. She filed suit against the doctor and his assistants, and the doctor submitted the claims to both his professional liability insurer and to State Farm under his business liability policy. The trial court found in favor of plaintiff that there was in fact coverage under the business liability policy. The Court of Appeal overturned the decision because the State Farm business policy excludes coverage for personal injuries “due to rendering” professional services. The Court found that the plaintiff’s injury was sustained while professional medical or x-ray services were being performed.

Submitted by: Bill Koska, (Waller, Lansden, Dortsch & Davis)

 

REPORTED DECISIONS

 

Augello v. Koenig-Rivkin


Baxter Smith Tassan & Shapiro, P.C., Hicksville, N.Y. (Anne
Marie Garcia of counsel), for nonparty-appellant.
Charles M. Hymowitz, P.C., Brooklyn, N.Y., for plaintiff-
respondent.

DECISION & ORDER

In an action to recover damages for personal injuries, nonparty New York Central Mutual Fire Insurance Company appeals, as limited by its brief, from so much of an order of the Supreme Court, Suffolk County (Whelan, J.), dated August 7, 2007, as denied its motion for leave to substitute itself, as subrogor of the plaintiff, for the plaintiff in the instant action, to substitute counsel, and to amend the caption accordingly.

ORDERED that the order is affirmed insofar as appealed from, with costs.

"CPLR 1004, the exception to the real party in interest rule, provides that an insured person who has executed a subrogation receipt or other similar agreement may sue without joining the person for whose interest the action is brought" (CNA Ins. Co. v Carl R. Cacioppo Elec. Contrs., 206 AD2d 399, 400). While an insurer also has the right to commence an action on behalf of its insured even where there is a subrogation agreement between the parties, "[n]either the case law nor the statute require that the insurance company be substituted as the plaintiff under such circumstances" (id. at 400; see generally Krieger v Insurance Co. of N. Am., 66 AD2d 1025; Point Tennis Co. v Urban Inds. Corp., 63 AD2d 967).

Here, pursuant to the release and trust agreement (hereinafter the release) executed by the plaintiff upon receipt of the underinsured motorist benefits paid to him by the nonparty-appellant (hereinafter the insurer), the plaintiff agreed, inter alia, to "hold any moneys received as a result of settlement or judgment in trust for the [insurer] to be paid to said [insurer] immediately upon recovery thereof provided that any sum received in excess of the amount paid by the [insurer] . . . shall be retained by the [plaintiff]." "The meaning and coverage of a general release necessarily depends upon the controversy being settled and upon the purpose for which the release was given. A release may not be read to cover matters which the parties did not intend to cover" (Gale v Citicorp, 278 AD2d 197; see generally Kaminsky v Gamache, 298 AD2d 361, 361-362).

The purpose of the release in this case was to protect the insurer's subrogation claim while also protecting the right of the plaintiff to retain any recovery in excess of the insurer's subrogation claim. Thus, where, as here, the plaintiff seeks damages in excess of the insurer's subrogation claim, the release cannot be interpreted to require the substitutions requested by the insurer (cf. Faraino v Centennial Ins. Co., 103 AD2d 790; Skinner v Klein, 24 AD2d 433, 434).

Accordingly, the Supreme Court properly denied the insurer's motion.

 

Geliga v. Karibian, Inc.


Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y.
(Stacy R. Seldin and Bruce Fassberg of counsel), for appellants.
The Yankowitz Law Firm, P.C., Great Neck, N.Y. (Robert P.
Baquet of counsel), for respondents.

DECISION & ORDER

In an action to recover damages for personal injuries, etc., the defendants appeal, as limited by their brief, from so much of an order of the Supreme Court, Kings County (Ambrosio, J.), dated November 26, 2007, as denied those branches of their motion which were for summary judgment dismissing the complaint insofar as asserted by the plaintiffs Christopher Geliga, Lionel Alicea, and Cecilia Cienfuegos on the ground that none of those plaintiffs sustained a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is modified, on the law, by deleting the provisions thereof denying those branches of the defendants' motion which were for summary judgment dismissing the complaint insofar as asserted by the plaintiffs Christopher Geliga and Lionel Alicea and substituting therefor provisions granting those branches of the motion; as so modified, the order is affirmed insofar as appealed from, with costs to the defendants.

The plaintiffs Lionel Alicea and Cecilia Cienfuegos, among others, were passengers in a motor vehicle operated by the plaintiff Christopher Geliga, when it was involved in an accident with the defendants' vehicle. After the instant action was commenced, the defendants moved for summary judgment, inter alia, dismissing the complaint insofar as asserted by Alicea, Cienfuegos, and Galiga (hereinafter collectively the plaintiffs) on the ground that none of the plaintiffs sustained a serious injury within the meaning of Insurance Law § 5102(d).

The defendants established, prima facie, that the plaintiffs' injuries were not serious through the submission, inter alia, of the affirmed medical reports of the defendants' retained expert orthopedist and expert neurologist, who examined the plaintiffs and concluded that the injuries did not fall within any of the statutory categories of serious injury (see Toure v Avis Rent A Car Sys., 98 NY2d 345, 352; Gaddy v Eyler, 79 NY2d 955, 956-957). In opposition to the defendants' showing, Geliga and Alicea failed to raise a triable issue of fact, but Cienfuegos did.

Each of the plaintiffs' alleged injuries concededly did not prevent them from performing "substantially all" of the material acts constituting their customary daily activities during at least 90 out of the first 180 days following the accident (see Sanchez v Williamsburg Volunteer of Hatzolah, Inc., 48 AD3d 664, 665). In particular, Geliga acknowledged at his deposition that he missed approximately one month of work as a result of the subject accident, while Alicea acknowledged at his deposition that he did not miss any work as a result of the accident. At her deposition, Cienfuegos acknowledged that she did not miss any school as a result of the accident.

Moreover, in his affidavit, Emil Stracar, the plaintiffs' treating physician, noted that both Geliga and Alicea had been involved in prior motor vehicle accidents. Rather than address those accidents, Stracar simply concluded that the significant range-of-motion limitations in these plaintiffs' cervical and lumbar spines, as well as the injuries noted in these plaintiffs' magnetic resonance imaging reports, were the result of the subject accident. "These conclusions were clearly rendered speculative in light of the fact that he failed to address what those prior accidents involved" (Pazmino v Universal Distribs., LLC, 45 AD3d 554, 555; see Tudisco v James, 28 AD3d 536; Allyn v Hanley, 2 AD3d 470, 471).

Cienfuegos, however, was not involved in a prior accident. Stracar's affidavit, which was submitted on behalf of Cienfuegos in opposition to the defendants' motion, raised a triable issue of fact as to whether she sustained a "significant limitation" of use of a body function or system as a result of the accident (see Insurance Law § 5102[d]). Stracar's opinion was based upon objective and quantified range-of-motion data obtained through the use of an inclinometer, reflecting the extent of restricted cervical and lumbar flexion and extension as compared to the norm (see Garner v Tong, 27 AD3d 401; Kraemer v Henning, 237 AD2d 492, 493).

The defendants' remaining contentions either are without merit or have been rendered academic in light of our determination.

 

Martinez v. Ehrenfeld


Fotopoulos, Rosenblatt & Green, New York, N.Y. (Alexander
D. Fotopoulos of counsel), for appellant.
James G. Bilello, Westbury, N.Y. (Patricia McDonagh of
counsel), for respondent.

DECISION & ORDER

In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Kings County (Ambrosio, J.), dated June 18, 2007, which granted the defendant's 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 defendant's motion for summary judgment dismissing the complaint is denied.

The defendant failed to meet his 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, 351; Gaddy v Eyler, 79 NY2d 955, 956-957). The defendant failed to address the plaintiff's allegation that he sustained an injury to his testicular region as a result of the subject accident (see Coleman v Shangri-La Taxi, Inc., 49 AD3d 587; Monkhouse v Maven Limo, Inc., 44 AD3d 630, 630-631; O'Neal v Bronopolsky, 41 AD3d 452). Since the defendant failed to establish his prima facie entitlement to judgment as a matter of law, it is unnecessary to consider whether the opposing papers were sufficient to raise a triable issue of fact (see Coleman v Shangri-La Taxi, Inc., 49 AD3d 567; Monkhouse v Maven Limo, Inc., 44 AD3d at 631; Coscia v 938 Trading Corp., 283 AD2d 538).

 

Saint-Hilaire v. PV Holding Corp.


Harmon, Linder & Rogowsky (Mitchell Dranow, Mineola, N.Y., of
counsel), for appellants.
Blaine Magee, Rockville Centre, N.Y., for respondents.

DECISION & ORDER

In an action to recover damages for personal injuries, etc., the plaintiffs appeal from an order of the Supreme Court, Kings County (Held, J.), dated June 26, 2007, which granted the defendants' motion for summary judgment dismissing the complaint on the ground that the plaintiff Lesly Saint-Hilaire did not sustain a serious injury within the meaning of Insurance Law § 5102(d), and denied the plaintiffs' cross motion for summary judgment on the issue of serious injury.

ORDERED that the order is affirmed, with costs.

The defendants established their prima facie entitlement to judgment as a matter of law by showing that the plaintiff Lesly Saint-Hilaire (hereinafter the injured plaintiff) did not sustain a serious injury to his lumbar spine 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; Byam v Waltuch, 50 AD3d 939; Giraldo v Mandanici, 24 AD3d 419). In opposition, the plaintiffs failed to raise a triable issue of fact. The plaintiffs' experts failed to address the conclusions of the defendants' examining radiologist that the injuries to the injured plaintiff's lumbar spine were the result of long-standing degeneration and were unrelated to the subject accident. Thus, the conclusions of the plaintiffs' experts that the injuries to the injured plaintiff's lumbar spine were caused by the subject accident were mere speculation (see Cornelius v Cintas Corp., 50 AD3d 1085; Marrache v Akron Taxi Corp., 50 AD3d 973; Giraldo v Mandanici, 24 AD3d 419; Lorthe v Adeyeye, 306 AD2d 252).

Accordingly, the Supreme Court properly granted the defendants' motion for summary judgment dismissing the complaint.

For the reasons set forth above, the plaintiffs' cross motion for summary judgment on the issue of serious injury was properly denied by the court.

 

Shtesl v. Kokoros


Eric H. Green, New York, N.Y. (Marc Gertler and Hiram Anthony
Raldiris of counsel), for appellant Moshe Shtesl.
Hawkins, Feretic & Daly, LLC, New York, N.Y. (Brian J. Daly of
counsel), for respondent George
Kokoros.
Wilson, Elser, Moskowitz, Edelman & Dicker LLP, White Plains,
N.Y. (Danielle Salese Tauber of
counsel), for respondent Elaine Finkel.
McMahon, Martine & Gallagher, LLP, Brooklyn, N.Y. (Patrick
W. Brophy of counsel), for respondents
Seung S. Shin and Young A. Pak.

DECISION & ORDER

In an action to recover damages for personal injuries, etc., the plaintiff Moshe Shtesl appeals, as limited by his brief, from so much of an amended order of the Supreme Court, Rockland County (Garvey, J.), dated June 14, 2007, as granted that branch of the motion of the defendant George Kokoros, in which the defendants Elaine Finkle, Seung S. Shin, and Young A. Pak joined, which was for summary judgment dismissing the complaint insofar as asserted by him on the ground that he did not sustain a serious injury within the meaning of Insurance Law § 5102(d), and the plaintiff Leah Shtesl appeals from the same order.

ORDERED that the appeal by the plaintiff Leah Shtesl is dismissed as abandoned, without costs or disbursements; and it is further,

ORDERED that the amended order is modified, on the law, by deleting the provision thereof granting that branch of the motion of the defendant George Kokoros, in which the defendants Elaine Finkel, Seung S. Shin, and Young A. Pak joined, which was for summary judgment dismissing so much of the complaint as alleged that the plaintiff Moshe Shtesl sustained a permanent consequential limitation of use of a body organ or member or a significant limitation of use of a body function or system within the meaning of Insurance Law § 5102(d) and substituting therefor a provision denying that branch of the motion; as so modified, the amended order is affirmed insofar as appealed from by the plaintiff Moshe Shtesl; and it is further,

ORDERED that one bill of costs is awarded to the plaintiff Moshe Shtesl payable by the defendants appearing separately and filing separate briefs.

The Supreme Court properly concluded that the submissions in support of the summary judgment motion of the defendant George Kokoros, in which the defendants Elaine Finkel, Seung S. Shin, and Young A. Pak joined, met the prima facie burden of showing that the plaintiff Moshe Shtesl (hereinafter Shtesl) 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, 350-351; Gaddy v Eyler, 79 NY2d 955, 956-957).

However, the Supreme Court erred in concluding that the papers submitted by Shtesl in opposition were insufficient to raise a triable issue of fact on the issue of whether Shtesl sustained a serious injury to his cervical spine within the meaning of Insurance Law § 5102(d). In opposing the motion, Shtesl principally relied on the affirmation of his treating physician, Alexander Berenbilt. Berenbilt's affirmation raised a triable issue of fact as to whether Shtesl sustained a serious injury to his cervical spine under the permanent consequential or significant limitation of use categories of Insurance Law § 5102(d) as a result of the subject accident. Berenbilt's affirmation revealed significant range-of-motion limitations in Shtesl's cervical spine, based on both contemporaneous and recent examinations. Also, Berenbilt properly relied on the affirmed magnetic resonance imaging report of Shtesl's cervical spine, dated May 29, 2002, which revealed the existence of herniated discs at C4-5, C5-6, and C6-7. It was Berenbilt's opinion that such findings were not the result of degeneration or the aging process, but were the result of the subject accident. He concluded that the injuries and limitations noted in the cervical spine were permanent and significant. Therefore, his affirmation raised an issue of fact as to whether Shtesl sustained a serious injury to his cervical spine under the permanent consequential or significant limitation of use categories of the no-fault statute (see Altreche v Gilmar Masonry Corp., 49 AD3d 479; Lim v Tiburzi, 36 AD3d 671; Shpakovskaya v Etienne, 23 AD3d 368; Clervoix v Edwards, 10 AD3d 626; Acosta v Rubin, 2 AD3d 657; Rosado v Martinez, 289 AD2d 386; Vitale v Lev Express Cab Corp., 273 AD2d 225).

In his affirmation, Berenbilt failed to set forth any quantified range-of-motion findings concerning Shtesl's shoulders, nor did he provide a qualitative assessment of Shtesl's shoulders (see Toure v Avis Rent A Car Sys., 98 NY2d 345, 350). Therefore, Shtesl did not raise a triable issue of fact as to whether he sustained a serious injury to his shoulders as a result of the subject accident. The mere existence of a tear in a tendon is not evidence of a serious injury in the absence of objective evidence of the extent of the alleged physical limitations resulting from the injury and its duration (see Wong v Innocent, 54 AD3d 384; Cornelius v Cintas Corp., 50 AD3d 1085).

Moreover, Shtesl failed to raise a triable issue of fact as to the 90/180-day category of serious injury.

Contrary to the determination of the Supreme Court, Shtesl provided an adequate explanation for the lengthy gap in the treatment of his cervical spine between the time he stopped treating with Berenbilt in July 2002 and his most recent examination by Berenbilt in March 2007. Berenbilt stated in his affirmation that in late July 2002 he concluded that Shtesl had reached his maximum medical improvement and advised Shtesl that any further treatment at that time would have been merely palliative in nature (see Pommells v Perez, 4 NY3d 566, 577).

 


GEICO Indemnity v. Roth


Appeal from an order of the Supreme Court, Niagara County (Frank Caruso, J.), entered August 29, 2007 in a declaratory judgment action. The order denied plaintiff's motion for summary judgment seeking a declaration that plaintiff has no duty to defend or indemnify defendant Scott C. Mayer, Jr. in the underlying personal injury action.


CHELUS, HERDZIK, SPEYER & MONTE, P.C., BUFFALO (CHRISTOPHER R. POOLE OF COUNSEL), FOR PLAINTIFF-APPELLANT.
FEUERSTEIN & SMITH, LLP, BUFFALO (MARK E. GUGLIELMI OF COUNSEL), FOR DEFENDANTS-RESPONDENTS. It is hereby ORDERED that the order so appealed from is unanimously reversed on the law without costs, the motion is granted and judgment is granted in favor of plaintiff as follows:


It is ADJUDGED and DECLARED that plaintiff has no duty to defend or indemnify defendant Scott C. Mayer, Jr. in the underlying personal injury action.

Memorandum: Plaintiff commenced this action seeking a declaration that it has no duty to defend or indemnify defendant Scott C. Mayer, Jr. in the underlying personal injury action. Plaintiff initially moved for summary judgment seeking that declaration and, by the order in appeal No. 1, Supreme Court denied the motion without prejudice. Plaintiff thereafter made a second motion for the same relief, and we conclude that the court erred in denying plaintiff's second motion. We therefore dismiss the appeal from the order in appeal No. 1 as superseded by the order in appeal No. 2. "It is well established that a notice of cancellation is ineffective unless in strict compliance with the requirements of Vehicle and Traffic Law § 313 (1) (a)" (Barile v Kavanaugh, 67 NY2d 392, 399), and plaintiff met its initial burden by demonstrating its strict compliance with the statute, i.e., plaintiff demonstrated that it timely and validly cancelled the policy issued to Mayer based on his nonpayment of premiums (see generally § 313 [1] [a]; Badio v Liberty Mut. Fire Ins. Co., 12 AD3d 229; Matter of State Farm Mut. Auto. Ins. Co. v Morales, 207 AD2d 546; Matter of State Farm Mut. Auto. Ins. Co. v Cherian, 202 AD2d 434, 435). The burden then shifted to defendants-respondents (defendants) "to establish noncompliance with [Vehicle and Traffic Law § 313 (1) (a)] as to form and procedure' " (Cherian, 202 AD2d at 435, quoting Berrios v Lumbermens Mut. Cas. Co., 162 AD2d 365), and defendants failed to meet that burden. Plaintiff submitted "evidence of its office mailing practice sufficient to establish that the notice of cancellation had been mailed and presumably received" (Badio, 12 AD3d at 230). The deposition testimony of Mayer that he did not recall receiving the notice is insufficient to rebut the presumption of receipt (see id. at 231).

Henderson v. New York Central Mutual Fire Ins. Co.


Appeal from a judgment (denominated order) of the Supreme Court, Oneida County (John W. Grow, J.), entered March 28, 2007 in a declaratory judgment action. The judgment, inter alia, granted the cross motion of defendant New York Central Mutual Fire Insurance Company for summary judgment declaring that it has no duty to defend or indemnify plaintiffs.


KERNAN AND KERNAN, P.C., UTICA (JAMES P. GODEMANN OF COUNSEL), FOR PLAINTIFFS-APPELLANTS.
EISENBERG & KIRSCH, SARATOGA SPRINGS (JEFFREY D. WAIT OF COUNSEL), FOR DEFENDANT-RESPONDENT.

 

It is hereby ORDERED that the judgment so appealed from is unanimously reversed on the law without costs, the cross motion is denied, the declaration is vacated, the motion is granted in part, judgment is granted in favor of plaintiffs as follows: It is ADJUDGED and DECLARED that defendant New York Central Mutual Fire Insurance Company has a duty to defend plaintiffs in the underlying action,  and the matter is remitted to Supreme Court, Oneida County, for further proceedings in accordance with the following

 

Memorandum: Plaintiffs commenced this action seeking, inter alia, a declaration that defendant New York Central Mutual Fire Insurance Company (NYCM) has a duty to defend them in the underlying action commenced by defendant Anthony Prave, III. In the underlying action, Prave alleged, inter alia, that he sustained injuries when James Henderson, a plaintiff herein, negligently struck him while opening the driver's door of a vehicle covered under a liability policy issued by NYCM to Michelle Williams Henderson, also a plaintiff herein. Pursuant to the terms of that policy, NYCM is obligated to provide a defense for any claim for damages "for which any insured' becomes legally responsible because of an automobile accident." We agree with plaintiffs that Supreme Court erred in granting the cross motion of NYCM for summary judgment seeking a declaration that it has no duty to defend or indemnify plaintiffs in the underlying action and in denying that part of the motion of plaintiffs for partial summary judgment seeking a declaration that NYCM has a duty to defend them in the underlying action.

"It is well settled that an insurance company's duty to defend is broader than its duty to indemnify. Indeed, the duty to defend is exceedingly broad and an insurer will be called upon to provide a defense whenever the allegations of the complaint suggest . . . a reasonable possibility of coverage . . . If, liberally construed, the claim is within the embrace of the policy, the insurer must come forward to defend its insured no matter how groundless, false or baseless the suit may be" (Automobile Ins. Co. of Hartford v Cook, 7 NY3d 131, 137 [internal quotation marks omitted]; see Seaboard Sur. Co. v Gillette Co., 64 NY2d 304, 310). Here, the complaint in the underlying action alleges negligent conduct covered by the policy issued by NYCM, and thus we agree with plaintiffs that NYCM has a duty to defend them in that action. We reject NYCM's contention that the allegations in the underlying complaint do not fall within the meaning of the term "automobile accident" in the policy. Indeed, the policy does not define that term, and all insurance policies covering vehicles in New York must, at a minimum, cover "injuries to person or property resulting from negligence in the use or operation of such vehicle" (Vehicle and Traffic Law § 388 [1]; see § 388 [4]; see also 11 NYCRR 60-1.1 [a]). We note in any event that the "act of opening the [vehicle] door in order to exit the vehicle constitutes use and operation' of a vehicle pursuant to Vehicle and Traffic Law § 388" (Cohn v Nationwide Mut. Ins. Co., 286 AD2d 699, 700; see generally Argentina v Emery World Wide Delivery Corp., 93 NY2d 554, 558-561), and thus that act " suggests . . . a reasonable possibility of coverage' " that invokes NYCM's duty to defend plaintiffs in the underlying action (Automobile Ins. Co. of Hartford, 7 NY3d at 137).

The court further erred in declaring that NYCM has no duty to indemnify plaintiffs. As noted, the complaint in the underlying action alleges negligent conduct on the part of James Henderson and, if he accidentally or negligently caused Prave's injuries while opening the driver's door, that event may be considered an "automobile accident" within the meaning of the policy (see generally Argentina, 93 NY2d at 558-560; Cohn, 286 AD2d at 700-701). The remaining evidence submitted by NYCM in support of its cross motion is insufficient to meet its burden of establishing that it has no duty to indemnify plaintiffs (see generally Alvarez v Prospect Hosp., 68 NY2d 320, 324), and we thus conclude that the court erred in determining as a matter of law that NYCM had no such duty. Rather, "that determination will abide the trial" in the underlying action (Automobile Ins. Co. of Hartford, 7 NY3d at 138).

Finally, because the court did not reach that part of plaintiffs' motion seeking a declaration that NYCM is liable for plaintiffs' defense costs, including attorney's fees, incurred in the underlying action, we remit the matter to Supreme Court to determine that part of the motion.

Nationwide Mutual Insurance Company v. Posa

 

Appeal from an order of the Supreme Court, Niagara County (John L. Michalski, J.), entered August 22, 2007 in a declaratory judgment action. The order denied plaintiff's motion for summary judgment.


KENNEY SHELTON LIPTAK NOWAK LLP, BUFFALO (JESSE J. COOKE OF COUNSEL), FOR PLAINTIFF-APPELLANT.
BROWN CHIARI LLP, LANCASTER (DAVID W. OLSON OF COUNSEL), FOR DEFENDANT-RESPONDENT KATHLEEN A. BAUGHMAN. It is hereby ORDERED that the order so appealed from is unanimously reversed on the law without costs, the motion is granted in part, and judgment is granted in favor of plaintiff as follows:


It is ADJUDGED and DECLARED that plaintiff has no duty to defend or indemnify defendant Robert J. Posa in the underlying action.

Memorandum: Defendant Kathleen A. Baughman commenced the underlying action against defendant Robert J. Posa seeking damages for injuries that she allegedly sustained on April 24, 2005 when the vehicle driven by her collided with a pickup truck owned and driven by Posa. It is undisputed that Posa left the scene of the accident without providing any identifying information to Baughman or the police, and that he submitted an insurance claim to plaintiff stating that he damaged his pickup truck by driving into it with his garden tractor. Posa's former girlfriend thereafter informed the police that Posa had been involved in the accident with Baughman's vehicle, whereupon Posa pleaded guilty to leaving the scene of an accident. When informed of Posa's admission, plaintiff disclaimed coverage based, inter alia, on the failure of Posa to cooperate with plaintiff and his fraudulent misrepresentations to plaintiff concerning the accident. Plaintiff then commenced this action seeking, inter alia, a declaration that it has no duty to defend or indemnify Posa in the underlying action.

We agree with plaintiff that Supreme Court erred in denying that part of its motion for summary judgment seeking a declaration that it has no duty to defend or indemnify Posa in the underlying action. Plaintiff met its burden of establishing Posa's lack of cooperation and misrepresentations, and defendants failed to raise a triable issue of fact (see Nationwide Mut. Ins. Co. v Graham, 275 AD2d 1012, 1013; see generally Thrasher v United States Liab. Ins. Co., 19 NY2d 159, 168-169). Posa's "failure to make fair and truthful disclosures in reporting the [accident] constitutes a breach of the cooperation clause [and the fraud and misrepresentation clause] of the insurance policy as a matter of law" (Nationwide Mut. Ins. Co., 275 AD2d at 1013).

In re General Assurance Company v. Rahmanov


The Law Offices of David J. Tetlak, Huntington Station (Albert
J. Galatan of counsel), for appellant.
Rivkin Radler LLP, Uniondale (Stuart M. Bodoff of counsel),
for State Farm Mutual Automobile Insurance Company,
respondent.

Judgment, Supreme Court, New York County (Leland G. DeGrasse, J.), entered July 5, 2007, insofar as appealed from as limited by the briefs, which, upon granting the petition pursuant to CPLR article 75 to permanently stay arbitration of a claim for uninsured motorist benefits, declared that additional respondent State Farm Mutual Automobile Insurance Company's disclaimer of coverage was valid, unanimously reversed, on the law, without costs, and the disclaimer of coverage declared invalid.

Respondent Rahmanov was involved in a motor vehicle accident with a vehicle registered to additional respondent McKain and operated by additional respondent McDaniels. Rahmanov's vehicle was insured by petitoner, while the car registered to McKain was allegedly insured by State Farm. Rahmanov subsequently notified petitioner of a potential uninsured motorist claim, while McDaniels and the two passengers in his vehicle at the time of the accident filed claims with State Farm.

Petitioner advised Rahmanov that it was unable to honor his claim because the vehicle operated by McDaniels was insured by State Farm. However, State Farm disclaimed liability to McDaniels and the passengers on the grounds of failure to cooperate and fraud. State Farm had determined that McKain was the victim of identity theft and had not procured the applicable insurance policy.

Following its receipt of a demand for arbitration from Rahmanov to resolve his claim, petitioner sought to permanently stay the arbitration. A framed-issue hearing was held to determine whether the vehicle operated by McDaniels was insured at the time of the accident and whether State Farm's disclaimer of coverage was valid. At the conclusion of the hearing, the court granted the petition and determined that the vehicle operated by McDaniels was uninsured and that State Farm's disclaimer of coverage was valid.

Dismissal of the appeal on the grounds that petitioner is not an aggrieved party would not be appropriate. Although the application for a permanent stay was granted, petitioner also sought relief in the form of having State Farm's disclaimer of coverage deemed invalid. Accordingly, since petitioner did not obtain the full relief sought, it is an aggrieved party within the meaning of CPLR 5511 (see Parochial Bus Sys. v Board of Educ. of City of N.Y., 60 NY2d 539, 544-545 [1983]).

The court improperly determined that State Farm's disclaimer of coverage was valid. The evidence establishes that State Farm did not cancel the subject policy before the date of the accident, and there was no indication that Rahmanov participated in the fraud in obtaining the State Farm policy in McKain's name. Under these circumstances, State Farm was precluded from denying coverage on the ground that the policy was fraudulently obtained (see Matter of Metlife Auto & Home v Agudelo, 8 AD3d 571 [2004]; Taradena v Nationwide Mut. Ins. Co., 239 AD2d 876 [1997]). Furthermore, the disclaimer of coverage, issued approximately three months after State Farm had sufficient knowledge of the reasons why it was disclaiming coverage, was untimely as a matter of law (see e.g. Hartford Ins. Co. v County of Nassau, 46 NY2d 1028 [1979]; Bovis Lend Lease LMB, Inc. v Royal Surplus Lines Ins. Co., 27 AD3d 84, 88-89 [2005]; Campos v Sarro, 309 AD2d 888 [2003]).

THIS CONSTITUTES THE DECISION AND ORDER

Briggs Avenue LLC, v. Insurance Corporation of Hannover.


Robert A. Scher, for appellant.
Nancy Lyness, for respondent.
Complex Insurance Claims Litigation Association,
amicus curiae.

SMITH, J.:

We hold that a liability insurer is entitled to disclaim coverage when the insured, because of its own error in failing to update the address it had listed with the Secretary of State, did not comply with a policy condition requiring timely notice of a lawsuit.

Briggs Avenue L.L.C. is the owner of a building in the Bronx. The company was incorporated in 1999. Shaban Mehaj is its manager and only member. As required by Limited Liability Company Law § 301, Briggs's articles of organization designated the Secretary of State as its agent to receive service of process. The articles included Briggs's address, but Briggs later moved, and Mehaj did not notify the Secretary of State of the change. His explanation is that the lawyer who formed the company for him did not tell him of the need to keep the address updated.

In July 2003, a tenant of the building, Nelson Bonilla, began a personal injury action against Briggs, and served the summons and complaint on the Secretary of State. Because the Secretary of State did not have a current address for Briggs, Mehaj did not receive the summons and complaint and did not know that the lawsuit existed. He learned of it only in April 2004, when Bonilla served directly on Briggs a motion for a default judgment. Briggs then gave notice to its liability insurer, Insurance Corporation of Hannover (ICH), of the claim against it. ICH promptly disclaimed coverage, relying among other things on a policy provision saying: "If a claim is made or 'suit' is brought against any insured, you must . . . [n]otify us as soon as practicable."

Briggs brought a declaratory judgment action in Supreme Court against ICH, asking that the insurer be required to defend the Bonilla case. ICH removed the action to the United States District Court for the Southern District of New York, and the District Court dismissed Briggs's complaint, holding that ICH's disclaimer was valid. Briggs appealed to the United States Court of Appeals for the Second Circuit, which certified to us the following question:

"Upon all the facts of this case, given the terms of the insurance policy and the reason for the insured's failure to give more prompt notice of the lawsuit to the insurer, should the insurer's disclaimer of coverage be sustained?"

Our answer to the question is yes.

The validity of ICH's disclaimer turns on whether Briggs complied with the condition of the policy requiring it to give notice of a lawsuit to ICH "as soon as practicable." Clearly, it did not. It was unquestionably practicable for Briggs to keep its address current with the Secretary of State, and thus to assure that it would receive, and be able to give, timely notice of the lawsuit. Briggs's failure to do so was simply an oversight.

Briggs relies on Agoado Realty Corp. v United Intl. Ins. Co. (95 NY2d 141 [2000]), in which we held that there was an issue of fact as to whether notice of a lawsuit was given "as soon as practicable." But Agoado is distinguishable. In that case, the Secretary of State sent documents to the insureds' lawyer, but the lawyer had died, and the insureds claimed they did not know of his death. Thus, in Agoado it may really have been impracticable for the insureds to find out about the lawsuit and give timely notice to the insurer. In this case, however, it is clear that the insured could have prevented the mishap.

Briggs's argument is essentially that its mistake was understandable; that it caused no prejudice to the insurer; and that the loss of insurance coverage is a harsh result. All this may be true, but it is irrelevant. We have long held, and recently reaffirmed, that an insurer that does not receive timely notice in accordance with a policy provision may disclaim coverage, whether it is prejudiced by the delay or not (Argo Corp. v Greater N.Y. Mut. Ins. Co., 4 NY3d 332, 339 [2005]; Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp., 31 NY2d 436, 440 [1972]). While this rule produces harsh results in some cases, it also, by encouraging prompt notice, enables insurers to investigate claims promptly and thus to deter or detect claims that are ill-founded or fraudulent. The Legislature, weighing the competing interests at stake, has recently enacted legislation that strikes a different balance, more favorable to the insured (see L 2008, ch 388, §§ 2, 4 [amending Insurance Law § 3420, applicable to policies issued after January 17, 2009]), but that legislation has not yet become effective. The common law no-prejudice rule applies to this case.

Accordingly, the certified question should be answered in the affirmative.
* * * * * * * * * * * * * * * * *
Following certification of a question by the United States Court of Appeals for the Second Circuit and acceptance of the question by this Court pursuant to section 500.27 of the Rules of Practice of the New York State Court of Appeals, and after hearing argument by counsel for the parties and consideration of the briefs and the record submitted, certified question answered in the affirmative. Opinion by Judge Smith. Chief Judge Kaye and Judges Ciparick, Graffeo, Read, Pigott and Jones concur.
Decided November 20, 2008

Antoine v. City of New York

 

Gennet, Kallmann, Antin & Robinson, P.C., New York, N.Y. (Philip H.
Ziegler of counsel), for third-party defendant-appellant-respondent
American Safety Indemnity Company.
Edward J. Garfinkel (Fiedelman & McGaw, Jericho, N.Y. [James K.
O'Sullivan], of counsel), for third-party
defendant-appellant Bilus Brokerage, Inc.
Morris E. Barenbaum, Brooklyn, N.Y. (Vincent J. Licata and Louis
A. Badolato of counsel), for defendant
third-party plaintiff-respondent.


DECISION & ORDER

In an action to recover damages for personal injuries and a related third-party action, the third-party defendant American Safety Indemnity Company appeals from so much of an order of the Supreme Court, Kings County (Hinds-Radix, J.), dated April 11, 2007, as denied its motion for summary judgment dismissing the third-party complaint insofar as asserted against it, and the third-party defendant Bilus Brokerage, Inc., separately appeals from so much of the same order as denied its motion for summary judgment dismissing the third-party complaint and cross claims insofar as asserted against it.

ORDERED that the order is modified, on the law, (1) by adding a provision thereto searching the record and awarding summary judgment to the defendant third-party plaintiff, Ocpard Realty Enterprises, LP, against the third-party defendant American Safety Indemnity Company on the issue of liability, and (2) by deleting the provision thereof denying the motion of the defendant third-party defendant Bilus Brokerage, Inc., for summary judgment dismissing the third-party complaint and cross claims insofar as asserted against it and substituting therefor a provision granting that motion; as so modified, the order is affirmed, with one bill of costs to the third-party defendant Bilus Brokerage, Inc., and the defendant third-party plaintiff Ocpard Realty Enterprises, LP, payable by the third-party defendant American Safety Indemnity Company.

On or about April 15, 2004, the plaintiff, Marie Jacqueline Antoine, was walking in front of 2561 Ocean Parkway in Brooklyn when she allegedly tripped and fell on a defect in the sidewalk abutting a building owned by Ocpard Realty Enterprises, LP (hereinafter Ocpard). Ocpard was insured under a policy procured by its insurance broker, Bilus Brokerage, Inc. (hereinafter Bilus), and issued by its carrier, American Safety Indemnity Company (hereinafter ASIC).

Antoine commenced an action against both Ocpard and the City of New York to recover damages for her injuries. Ocpard notified ASIC, but ASIC disclaimed, asserting that Ocpard had breached a warranty in its policy that the "insured premises, including but not limited to all buildings, structures and parking lots, are in compliance with all federal, national, state and local codes and/or requirements as respects fire, life safety (including, but not limited to: the National Fire Protection Association Life Safety Code Standard 101), building construction and building maintenance."

Specifically, ASIC claimed that, at the time its policy was issued, there were code violations issued to Ocpard relating to the sidewalk where Antoine would later be injured, and that the violations still existed one year later when Antoine actually fell.

Ocpard thereupon commenced a third-party action against ASIC and Bilus, alleging that ASIC was in breach of its insurance contract and that Bilus had breached its brokerage contract by failing to obtain a policy without the warranty provision. ASIC moved for summary judgment dismissing the third-party complaint insofar as asserted against it and Bilus separately moved for summary judgment dismissing the third-party complaint and cross claims insofar as asserted against it. The Supreme Court denied both motions, and ASIC and Bilus separately appeal.

"As with any contract, unambiguous provisions of an insurance contract must be given their plain and ordinary meaning . . . [A] contract is unambiguous if the language it uses has a definite and precise meaning, unattended by danger of misconception in the purport of the [agreement] itself, and concerning which there is no reasonable basis for a difference of opinion . . . Thus, if the agreement on its face is reasonably susceptible of only one meaning, a court is not free to alter the contract . . . If the terms of a policy are ambiguous, however, any ambiguity must be construed in favor of the insured and against the insurer" (White v Continental Cas. Co., 9 NY3d 264, 267 [citations and internal quotation marks omitted]; see Vigilant Ins. Co. v Bear Stearns Cos., Inc., 10 NY3d 170, 177). Indeed, where a policy's terms are ambiguous, the insurer can prevail only if it can demonstrate " not only that its interpretation is reasonable but that it is the only fair interpretation'" (City of New York v Evanston Ins. Co., 39 AD3d 153, 156, quoting Primavera v Rose & Kiernan, 248 AD2d 842, 843). The dispositive issue here, therefore, is whether the warranty provision unambiguously applies to the City sidewalk outside Ocpard's building or, if not, whether the only fair interpretation of that provision is that, at the time of the issuance of the policy, Ocpard in fact warranted to ASIC that the City's sidewalk outside its premises was free of code violations.

The policy contains a provision entitled "Limitation of Coverage to Designated Premises or Operations" which, inter alia, lists the properties or "premises" for which coverage is afforded. The properties specified consist of certain apartment complexes with no mention of surrounding sidewalks. Moreover, the warranty provision at issue speaks of the "insured premises, including but not limited to all buildings, structures and parking lots." It does not mention surrounding sidewalks and the term "premises" is not otherwise defined anywhere in the policy. It can hardly be said, therefore, that the warranty provision unambiguously applies to the sidewalk in question.

In construing ambiguous language in a policy like this, the general rule is that insurance contracts are to be interpreted according to the reasonable expectations and purposes of ordinary businesspeople when making ordinary business contracts (see General Motors Acceptance Corp. v Nationwide Ins. Co., 4 NY3d 451, 457; Belt Painting Corp. v TIG Ins. Co., 100 NY2d 377, 383). Although, under New York law, the coverage afforded by a premises liability policy extends by implication to that portion of an outside sidewalk necessary for access to the covered premises (see ZKZ Assoc. v CNA Ins. Co., 89 NY2d 990; Ambrosio v Newburgh Enlarged City School Dist., 5 AD3d 410, 412; cf. New York Convention Center Operating Corp. v Cerrullo World Evangelism, 269 AD2d 275), we cannot say from that fact alone that a reasonable businessperson purchasing this policy would conclude that the only fair interpretation of its warranty provision would be that coverage is entirely eliminated if there are any violations relating to the sidewalk adjacent to the insured property which sidewalk is owned by the City and not mentioned in the policy.

Accordingly, because the language of the warranty does not unambiguously apply to the sidewalk outside the premises, because the ambiguous warranty provision must be interpreted in favor of the insured and against the insurer unless a contrary construction is the only fair interpretation, and because the inclusion of the City's sidewalk within the warranty provision is not the only fair interpretation of that provision, we conclude, as a matter of law, that Ocpard did not breach the warranty, that ASIC is therefore obligated to defend and indemnify, and that nothing Bilus did or failed to do caused Ocpard to sustain damages.
SPOLZINO, J.P., FISHER and DICKERSON, JJ., concur.

CARNI, J., concurs in part and dissents in part, and votes to reverse the Supreme Court's order and grant the motion of the third-party defendant American Safety Indemnity Company for summary judgment dismissing the third-party complaint insofar as asserted against it, and grant the motion of the third-party defendant Bilus Brokerage, Inc., for summary judgment dismissing the third-party complaint and cross claims insofar as asserted against it, with the following memorandum:

I agree with the majority's conclusion that the coverage afforded by the commercial general liability policy at issue includes the sidewalk section where the plaintiff tripped and fell. Thereafter, insofar as ASIC's motion for summary judgment is concerned, I respectfully dissent.

It is well settled that such policies extend to sidewalks incidental to and necessarily used for access to the premises (see ZKZ Assoc. v CNA Ins. Co., 89 NY2d 990). Indeed, it is this well-settled rule that provides the basis for the insurer to evaluate the risk associated with issuing such a policy covering a particular location (see ZKZ Assoc. v CNA Ins. Co., 89 NY2d at 991).

As part of that risk analysis, Ocpard made a warranty to ASIC concerning the condition of the insured premises "including but not limited to all buildings, structures and parking lots." This warranty allowed ASIC to accurately evaluate and rate, using the majority's language, the insured's "liability profile."

The policy was issued for the period of June 20, 2003, to June 20, 2004. There is no dispute that on June 3, 2003, the New York City Department of Transportation issued a notice of violation to Ocpard which recited that Ocpard's property was in violation of Section 2904 of the New York City Charter and Section 19-152 of the New York Administrative Code, which require property owners to maintain the sidewalks adjacent to their property. The notice of violation identified the existence of, inter alia, a "trip hazard" and other defects in the sidewalk section at issue. The plaintiff allegedly tripped and fell on this sidewalk section on April 15, 2004. There is no dispute that Ocpard was aware of the notice of code violations, the accuracy of which it does not dispute, for over 10 months prior to the plaintiff's fall.

At the inception of the policy, Ocpard made two categories of warranty concerning the condition of the property to the effect that the "insured premises" were in compliance with all (1) "federal, national, state and local codes," and (2) "requirements as respects fire, life safety (including, but not limited to: National Fire Protection Association Life Safety Code Standard 101), building construction and building maintenance." The policy also provided that if the insured failed to comply with any of the representations and warranties "at any time during the policy period,'" then the named insured shall be deemed in breach of the policy.

In my view, New York City Administrative Code § 19-152, entitled "Duties and obligations of property owner with respect to sidewalks and lots," expressly applies to Ocpard as the abutting property owner. That provision defines a substantial defect in a sidewalk as including, inter alia, trip hazard, loose sidewalk flag, cracked sidewalk flag and improper slope—all defects which the insured does not dispute existed in the sidewalk at the time of the plaintiff's trip and fall. Under the code, the owner of the property fronting or abutting the sidewalk—here Ocpard—is required to repair the defect within 45 days of notice thereof (see New York City Administrative Code § 19-152 [c]).

There is no dispute that Ocpard did not repair the defect and the sidewalk remained in continuous violation of the code up to and including the date of the plaintiff's trip and fall. I do not find anything ambiguous about the policy's language concerning Ocpard's continuous obligation to comply with this local code provision insofar as Ocpard simultaneously seeks liability coverage for bodily injury arising from the very same sidewalk.

Lastly, and perhaps most fundamentally, accepting as we must that the policy includes the sidewalk within the "premises" for the purpose of requiring coverage, I cannot find at the same time that the warranty's more expansive and inclusively descriptive language that the "insured premises, including but not limited to all buildings, structures, and parking lots," were in compliance with local codes did not include the very same sidewalk. While the term "premises" for purposes of coverage is undefined, the warranty language is more expansive and inclusive of the sidewalk at issue because it contains the language "including but not limited to, all buildings and structures." In other words, if we are to include the sidewalk within the singular word "premises," surely the same sidewalk must be included in the all-encompassing phrase "insured premises including but not limited to all buildings, structures and parking lots." I submit that we should read and apply the policy in a uniform and consistent manner and I cannot reconcile the conclusion that the "premises" includes the sidewalk for coverage purposes but does not include the same sidewalk within Ocpard's warranty concerning the condition of the very same "insured premises." The majority's inconsistent reading of the policy is, in my mind, not a fair interpretation. I find it unreasonable for a business person, in reliance upon the word "premises," to expect and believe that he has liability coverage for bodily injury occurring on a defective abutting City sidewalk and at the same time believe that his warranty that the "insured premises, including but not limited to all buildings, structures and parking lots" are code compliant does not include the very same sidewalk.

R & L Richmond Avenue Corp., v. Public Service Mutual Insurance Company


Weber Gallagher Simpson Stapleton Fires & Newby, LLP, New York,
N.Y. (Michael S. Savett of counsel), for appellant.
Allyn J. Crawford, Staten Island, N.Y. (Kerri Bringslid of counsel),
for respondent.


DECISION & ORDER

In an action, inter alia, for a judgment declaring that the defendant is obligated to defend and indemnify the plaintiff in an underlying personal injury action entitled Velasquez v Holiday Plaza, LLC, pending in the Supreme Court, Richmond County, under Index No. 102441/06, the defendant appeals from an order of the same court (Maltese, J.), dated February 25, 2008, which denied its motion for summary judgment.

ORDERED that the order is affirmed, with costs.

In opposition to the defendant insurer's prima facie showing of entitlement to judgment as a matter of law based upon the plaintiff's eight-month delay in reporting the underlying occurrence to it, the plaintiff raised a triable issue of fact as to whether the delay was reasonable, based upon a good faith belief in its nonliability. Under these circumstances, the Supreme Court properly denied the defendant's motion for summary judgment (see St. James Mech., Inc. v Royal & Sunalliance, 44 AD3d 1030, 1031-1032; Genova v Regal Mar. Indus., 309 AD2d 733).

Smith v. State Farm Fire and Casualty Company


Saretsky Katz Dranoff & Glass, LLP, New York, N.Y. (Howard J.
Newman, Nancy Ahn, and Patrick Dellay of counsel), for
respondents.


DECISION & ORDER

In an action, inter alia, pursuant to Insurance Law § 3420(a)(2) to recover an unsatisfied judgment against the insured of the defendants State Farm Fire and Casualty Company and State Farm Insurance Companies, in an underlying action entitled Smith v Public Administrator of Suffolk County on Behalf of the Estate of Leonard Smith, commenced in the Supreme Court, Suffolk County, under Index No. 25071/03, the plaintiff appeals from an order of the Supreme Court, Suffolk County (Tanenbaum, J.), entered September 7, 2007, which, among other things, granted that branch of the motion of the defendants State Farm Fire and Casualty Company and State Farm Insurance Companies which was for summary judgment dismissing the complaint insofar as asserted against them, and denied that branch of her cross motion which was for summary judgment on the complaint insofar as asserted against those defendants.

ORDERED that the order is affirmed, with costs.

On their motion, inter alia, for summary judgment, the defendants State Farm Fire and Casualty Company and State Farm Insurance Companies (hereinafter together the State Farm defendants), made a prima facie showing of entitlement to judgment as a matter of law. The State Farm defendants demonstrated that the plaintiff, the named insureds' daughter-in-law, who resided in the home of the named insureds at the time of the incident giving rise to her underlying personal injury action against the named insureds, was a resident "relative" of the named insureds. Thus, she was within an exclusion from coverage contained in the homeowner's insurance policy State Farm issued to the named insureds (see Korson v Preferred Mut. Ins. Co., 39 AD3d 483, 484; Randolph v Nationwide Mut. Fire Ins. Co., 242 AD2d 889, 889-890; Smith v Pennsylvania Gen. Ins. Co., 32 AD2d 854, affd 27 NY2d 830; Eisner v Aetna Cas. & Sur. Co., 141 Misc 2d 744, 745). In opposition to the State Farm defendants' motion, the plaintiff failed to raise a triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d 320). To the extent that McGuiness v Motor Veh. Acc. Indem. Corp. (18 AD2d 1100), may be inconsistent with this determination, it should not be followed.

Accordingly, the Supreme Court properly granted that branch of the State Farm defendants' motion which was for summary judgment dismissing the complaint insofar as asserted against them, and properly denied that branch of the plaintiff's cross motion which was for summary judgment on the complaint insofar as asserted against the State Farm defendants.

The plaintiff's remaining contention is without merit.

Ashby v. Mullin

 

Barbara J. Strauss, Goshen, N.Y., for appellant.

Grogan & Souto, P.C., Goshen, N.Y.

(Edward P. Souto of counsel), for respondent.


DECISION & ORDER

In an action to recover damages for personal injuries, the plaintiff appeals from an amended judgment of the Supreme Court, Orange County (Owen, J.), entered June 8, 2007, which, upon a jury verdict, is in favor of the defendant and against him, dismissing the complaint.

ORDERED that the amended judgment is affirmed, with costs.

This action arises out of a two-car collision that occurred on November 21, 2003. A motor vehicle operated by the plaintiff was struck in the rear by a motor vehicle operated by the defendant. Evidence at trial established that the plaintiff had a herniated disc as early as 2001, and that it still existed one month before the accident. The plaintiff's medical expert testified that the accident aggravated the condition, but the defense presented expert testimony that the herniated disc had not worsened as a result of the accident. Additionally, the plaintiff was impeached with inconsistent statements about whether he had suffered or sought treatment for neck pain before the accident. The jury found that the defendant was at fault for the accident, but that the plaintiff had not sustained a serious injury as a result thereof (see Insurance Law § 5102[d]). The plaintiff appeals, asserting, inter alia, that the verdict was against the weight of the evidence. We affirm.

The standard for determining whether a jury verdict is against the weight of the evidence is whether the evidence so preponderated in favor of the unsuccessful party that the verdict could not have been reached on any fair interpretation of the evidence (see Lolik v Big V Supermarkets, 86 NY2d 744, 746; Pearson v Walker, 44 AD3d 1019; Tapia v Dattco, Inc., 32 AD3d 842, 844). If the verdict can be reconciled with a reasonable view of the evidence, the successful party is entitled to the presumption that the jury adopted that view (see Pearson v Walker, 44 AD3d at 1019; Tapia v Dattco, Inc. 32 AD3d at 844). Here, there is a fair interpretation of the evidence presented at trial that supports the jury's conclusion that the accident did not cause the plaintiff to sustain a serious injury within the meaning of Insurance Law § 5102(d) (see Marino v Cunningham, 44 AD3d 912, 913; cf. Scudera v Mahbubur, 39 AD3d 620, 620-621).

The plaintiff's remaining contentions are without merit.

Besso v. DeMaggio


Maffei & Condon, LLP, Sayville, N.Y. (Bassett & Bassett, P.C.
[Kerry S. Bassett], of counsel), for appellant.
Richard T. Lau, Jericho, N.Y. (Joseph G. Gallo of counsel), for
respondent.

DECISION & ORDER

In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Suffolk County (Doyle, J.), dated July 17, 2007, which granted the defendant's motion for summary judgment dismissing the complaint on the ground that she did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is affirmed, with costs.

The defendant established his prima facie entitlement to judgment as a matter of law by 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 opposition, the plaintiff failed to raise a triable issue of fact. The affirmed medical report of the plaintiff's treating physician is without probative value as his conclusions rely upon the unsworn reports of others (see Matra v Raza, 53 AD3d 570; Malave v Basikov, 45 AD3d 539, 540; Verette v Zia, 44 AD3d 747; Furrs v Griffith, 43 AD3d 389, 390; see also Friedman v U-Haul Truck Rental, 216 AD2d 266, 267). Moreover, the physician's conclusions contained within his report that the injuries noted by him in the plaintiff's cervical and lumbar spine were the result of the subject accident were clearly speculative. In this regard, he failed to adequately address in his report the fact that the plaintiff had significant injuries to her neck and back prior to the subject accident (see Seck v Minigreen Hacking Corp., 53 AD3d 608, 609; McNeil v Dixon, 9 AD3d 481). Furthermore, neither the plaintiff nor her treating physician explained the gap between when she stopped treatment in May 2005 and her most recent examination in March 2007 (see Pommells v Perez, 4 NY3d 566; Sealy v Riteway-1, Inc., 54 AD3d 1018; Cornelius v Cintas Corp., 50 AD3d 1085).

Estrada v. Tejada


Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y.
(Michael I. Josephs of counsel), for appellant.
Mallilo & Grossman, Flushing, N.Y. (Francesco Pomara, Jr., of
counsel), for respondent.

DECISION & ORDER

In an action to recover damages for personal injuries, the defendant appeals from an order of the Supreme Court, Queens County (Satterfield, J.), entered December 26, 2007, which denied his motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

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

The Supreme Court properly determined that the defendant met his prima facie burden by 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). The Supreme Court erred, however, in concluding that the plaintiff's opposition raised a triable issue of fact. Dr. Deborah Turner, the plaintiff's treating chiropractor, concluded in her affidavit that the plaintiff sustained permanent injuries to his cervical and lumbar spine, and that those injuries amounted to a significant limitation of use of those regions of his spine. Neither Turner nor the plaintiff, however, proffered competent medical evidence that showed cervical and/or lumbar spine range-of-motion limitations that were contemporaneous with the subject accident (see Leeber v Ward,AD3d, 2008 NY Slip Op 07629 [2d Dept 2008]; Ferraro v Ridge Car Serv., 49 AD3d 498; D'Onofrio v Floton, Inc., 45 AD3d 525).

The magnetic resonance imaging reports of Dr. Richard Rizzuti, the plaintiff's radiologist, showed only that, as of November 2004, the plaintiff exhibited evidence of disc herniations at C3-4, L4-5, and L5-S1. The mere existence of a herniated or bulging disc 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 Sealy v Riteway-1, Inc., 54 AD3d 1018; Kilakos v Mascera, 53 AD3d 527, lv deniedNY3d, 2008 NY Slip Op 86661 [2008]; Cerisier v Thibiu, 29 AD3d 507; Bravo v Rehman, 28 AD3d 694; Kearse v New York City Tr. Auth., 16 AD3d 45). The plaintiff's affidavit was insufficient to meet that requirement (see Rabolt v Park, 50 AD3d 995; Young Soo Lee v Troia, 41 AD3d 469; Nannarone v Ott, 41 AD3d 441).

Further, the plaintiff failed to submit competent medical evidence that the injuries he allegedly sustained in the subject accident rendered him unable to perform substantially all of his daily activities for not less than 90 days of the first 180 days subsequent to the accident (see Rabolt v Park, 50 AD3d 995; Roman v Fast Lane Car Serv., Inc., 46 AD3d 535; Sainte-Aime v Ho, 274 AD2d 569).

Letts v. Bleichner


DupÉe & Monroe, P.C., Goshen, N.Y. (Peter W. Green of
counsel), for appellants.
James R. McCarl, Montgomery, N.Y. (Betsy N. Abraham of
counsel), for respondents.

DECISION & ORDER

In related actions to recover damages for personal injuries, etc., the plaintiffs appeal, as limited by their brief, from (1) so much of an order the Supreme Court, Orange County (McGuirk, J.), dated September 8, 2006, as granted the cross motion of the defendants Michael J. Maguire and Michael Maguire in Action No. 2 for summary judgment dismissing the complaint on the ground that the plaintiff Richard Letts did not sustain a serious injury within the meaning of Insurance Law § 5102(d), and denied, as academic, that branch of their motion which was for summary judgment on the issue of liability against those defendants in that Action, and (2) so much of a judgment of the same court entered January 18, 2007, as, upon the order, dismissed the complaint in Action No. 2.

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

ORDERED that the judgment is reversed insofar as appealed from, on the law, so much of the order as granted the cross motion of the defendants Michael J. Maguire and Michael Maguire in Action No. 2 for summary judgment dismissing the complaint on the ground that the plaintiff Richard Letts did not sustain a serious injury within the meaning of Insurance Law § 5102(d) and denied, as academic, that branch of the motion of the plaintiffs in Action No. 2 which was for summary judgment on the issue of liability against those defendants in that action is vacated, the cross motion is denied, and the complaint in Action No. 2 is reinstated; and it is further,

ORDERED that the matter is remitted to the Supreme Court, Orange County, for a determination on the merits of that branch of the plaintiffs' motion which was for summary judgment on the issue of liability against the defendants Michael J. Maguire and Michael Maguire in Action No. 2; and it is further,

ORDERED that one bill of costs is awarded to the appellants.

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

Contrary to the Supreme Court's determination, the defendants Michael J. Maguire and Michael Maguire (hereinafter the Maguires) in Action No. 2 failed to meet their prima facie burden of showing, on their cross motion, that the plaintiff Richard Letts (hereinafter the injured plaintiff) did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of a car accident that occurred on July 19, 2003. In support of their cross motion, the Maguires relied on the affirmed medical report of Dr. Michael Weintraub, a neurologist. Dr. Weintraub, in his report, noted limitations in the injured plaintiff's range of motion of the cervical spine, the extent of which were not set forth therein. While Dr. Weintraub concluded that these limitations were "voluntary" he also alluded to the fact that the limitations may be associated with spasms observed in the injured plaintiff's neck upon examination. As Dr. Weintraub was unable to establish that the limitations noted in the cervical spine were not the result of the subject accident, and were not insignificant, the Maguires failed to meet their prima facie burden (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957; see also Kaminsky v Waldner, 19 AD3d 370).

Since the Maguires failed to meet their prima facie burden, it is unnecessary to consider whether the papers submitted by the injured plaintiff were sufficient to raise a triable issue of fact (see Kaminsky v Waldner, 19 AD3d 370; Coscia v 938 Trading Corp., 283 AD2d 538).

The Supreme Court, having granted the Maguires' cross motion, denied, as academic, that branch of the plaintiffs' motion which was for summary judgment on the issue of the Maguires' liability for the happening of the accident on July 19, 2003. Accordingly, we remit the matter to the Supreme Court, Orange County, to determine that branch of the plaintiffs' motion on the merits (see Phillips v Stephan Hacking Corp., 38 AD3d 868; Buchanan v Celis, 38 AD3d 819, 820; Torres v Performance Auto. Group, Inc., 36 AD3d 894; Campbell v Vakili, 30 AD3d 457; Korpalski v Lau, 17 AD3d 536, 538).

Lynch v. Iqbal


Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y.
(Holly E. Peck of counsel), for appellants.
Friedman, Levy, Goldfarb & Weiner, P.C., New York, N.Y. (Ira
H. Goldfarb and David J. Kresman of
counsel), for plaintiff-respondent.

DECISION & ORDER

In an action to recover damages for personal injuries, the defendants Rashid Iqbal and Yakov Kaplan appeal from an order of the Supreme Court, Kings County (Ambrosio, J.), dated December 17, 2007, which denied their motion for summary judgment dismissing the complaint and all cross claims insofar as asserted against them on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is reversed, on the law, with costs, and the motion of the appellants Rashid Iqbal and Yakov Kaplan for summary judgment dismissing the complaint and all cross claims insofar as asserted against them is granted.

In opposition to the appellants' prima facie establishment of entitlement to summary judgment, the plaintiff alleged that the two scars she sustained to her chin as a result of the subject accident constituted a significant disfigurement and, therefore, constituted a serious injury within the meaning of Insurance Law § 5102(d). However, contrary to the plaintiff's contentions, a reasonable person viewing the color photographs of her chin in its altered state, which she submitted in opposition to the motion, would not regard the condition as unattractive, objectionable, or as the object of pity and scorn (see Sirmans v Mannah, 300 AD2d 465; Loiseau v Maxwell, 256 AD2d 450; Edwards v DeHaven, 155 AD2d 757). Thus, the appellants' motion should have been granted and the complaint and all cross claims dismissed insofar as asserted against them.

Yong Deok Lee v. Singh


Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y.
(Stacy R. Seldin of counsel), for appellants.

DECISION & ORDER

In an action to recover damages for personal injuries, the defendants appeal, as limited by their brief, from so much of an order of the Supreme Court, Queens County (Dorsa, J.), dated January 7, 2008, as denied their motion for summary judgment dismissing the complaint on the ground that the plaintiffs did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is affirmed insofar as appealed from, without costs or disbursements.

The defendants did not meet their prima facie burden of showing that the plaintiffs 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). Since the defendants failed to establish their prima facie entitlement to judgment as a matter of law in the first instance, it is unnecessary to consider whether the opposing papers were sufficient to raise a triable issue of fact (see Coleman v Shangri-La Taxi, Inc., 49 AD3d 587; Monkhouse v Maven Limo, Inc., 44 AD3d 630, 631; Coscia v 938 Trading Corp., 283 AD2d 538).

Continental Casualty Company v. Stradford


Benjamin A. Fleischner, for appellant.
James L. Lutfy, for respondents.

CIPARICK, J.:

Over the course of nearly six years, defendant Terrance Stradford cooperated only sporadically with his professional liability insurer, plaintiff Continental Casualty Company, in the defense of two dental malpractice actions. We are asked to determine whether plaintiff timely disclaimed coverage in those actions on the basis of Stradford's non-cooperation. Because [*2]issues of fact remain with respect to the timeliness of plaintiff's disclaimer, we modify the order of the Appellate Division by denying summary judgment to defendants.[FN1]

I.

In October 1998, defendants Hector Gunaratne and his wife, Rose, and Sumanadasa Perera, as parent and natural guardian of Prashan Perera, separately commenced dental malpractice actions against Stradford. A professional liability policy that Continental issued to Stradford was in effect at that time. The policy required Stradford to notify his insurer of the Gunaratne and Perera actions, gave Continental the right to defend him in those actions, and obligated the insured to "fully cooperate" in the company's litigation and settlement efforts. This cooperation clause explicitly required Stradford's attendance at hearings and trials, as well as his assistance in the securing and giving of evidence and obtaining the attendance of witnesses.

About a month after the underlying malpractice actions were initiated, Stradford notified Continental. Thereafter, Continental's employees and counsel whom the company retained to defend Stradford sought to obtain defendants' treatment records and other materials from him, solicit his views on potential expert witnesses, schedule depositions and meetings, and to discuss potential settlements. These many requests took the form of largely unanswered correspondence and telephone calls to Stradford's home and office, and failed visits by defense counsel to Stradford's office pursuant to prearranged meetings. Stradford ignored the vast majority of Continental's requests or otherwise refused to cooperate with the company. In response, Continental repeatedly warned Stradford that his non-cooperative conduct could jeopardize his coverage. These warnings, however, went unheeded.

Nevertheless, at various times, Stradford indicated an awareness of his duty to cooperate and expressed his willingness to do so. For example, Stradford made multiple promises to provide the requested documents, which he claimed were located on his boat or at his residence. Further, although Stradford's deposition in Gunaratne was rescheduled multiple times due to his unexplained absences, he eventually appeared and was deposed [FN2]. Then, after more than four years had passed without his production of a single relevant document, Stradford [*3]participated in a July 2, 2003 conference call — which he had requested — to discuss a possible settlement of Gunaratne.

During that call, Stradford asked for new counsel in both underlying actions, claiming that he had lost confidence in his present attorney's ability to zealously defend him due to the attorney's actions in another malpractice action brought against him. Continental agreed to the request, Stradford's attorney moved to be relieved, and Supreme Court marked all cases pending against Stradford off-calendar, pending the substitution of new counsel. Despite calls and a letter from his new counsel, Stradford never executed the necessary form to effect the requested substitution.

On July 8, 2004, Continental mailed Stradford two detailed letters — one each for Gunaratne and Perera. In the main, the letters set forth his history of noncompliance, evasion and broken commitments. They also demanded that Stradford schedule a meeting with his newly-retained counsel for a date on or before August 13, warned that further non-cooperation "may imperil" his coverage, and, given adverse expert findings regarding Stradford's care of defendants, recommended that he consent to settlement of both actions. On August 11, both letters were returned to Continental as "unclaimed." Approximately two months later, on October 13, 2004, Continental's outside counsel sent a disclaimer letter to Stradford. Two days after its disclaimer was issued, Continental commenced the present action, seeking a declaratory judgment that it had no duty to defend or indemnify Stradford in the Gunaratne and Perera actions.

The decision-making process that Continental employed prior to disclaiming and bringing this action was described in the deposition testimony of Thomas Morelli, who by July 8, 2004 was the Continental employee responsible for Gunaratne and Perera. According to him, the "normal protocol" involved a recommendation by him to his director, who would then make a recommendation to Continental's in-house coverage counsel. In addition, in connection with the Gunaratne and Perera disclaimers, Morelli testified that Continental "sought an opinion from outside counsel regarding [its] coverage position."

Continental's decision to disclaim was bolstered by a declaratory judgment issued on June 1, 2004 in two other malpractice actions then pending against Stradford, O'Halloran and Shields. There, the court held that Stradford's failure to respond to multiple letters seeking his cooperation and his absence on trial dates constituted sufficient grounds for a disclaimer of coverage.

In the present action, Continental moved for summary judgment on its declaratory judgment claim that Stradford's non-cooperation had terminated the company's contractual [*4]obligation to him [FN3]. Defendants cross-moved for summary judgment, arguing that the company's disclaimer was untimely and, in the alternative, that it had not carried its burden of proving Stradford's non-cooperation. Supreme Court granted Continental's motion in all respects and similarly denied the cross-motion. The court concluded that Stradford was not entitled to a defense or indemnification because of his multiple breaches of the cooperation clause.

In a 3-2 decision, the Appellate Division reversed. All members of the panel concluded that Continental had carried its burden of establishing Stradford's non-cooperation. The majority held, however, that Continental's approximately two-month delay in disclaiming — measured from August 11, 2004 (the date its final letters were returned unclaimed) — was unreasonable as a matter of law. The dissent disagreed, reasoning that Continental's need to carefully analyze Stradford's conduct and to consult with counsel to ensure that the company had discharged its "heavy burden" of attempting to bring about his cooperation prior to disclaiming, supported the conclusion that Continental's delay was "explained and . . . reasonable under the circumstances" (46 AD3d 604, 605 [2007] [Goldstein & Schmidt, JJ., dissenting] [internal quotation omitted]).

Plaintiff appeals from the order of reversal based on a dual dissent on a question of law. We now modify by denying defendants' cross-motion for summary judgment.

II.

On this appeal, defendants do not dispute the lower courts' conclusions that Continental was entitled to disclaim due to Stradford's non-cooperation. According to them, the timeliness of that disclaimer is the sole issue before us. We now turn to that single issue.

Even if an insurer possesses a valid basis to disclaim for non-cooperation, it must still issue its disclaimer within a reasonable time (see 14 Couch on Insurance 3d § 199:69). When construing Insurance Law § 3420 (d), which requires an insurer to issue a written disclaimer of coverage for death or bodily injuries arising out of accidents "as soon as is reasonably possible," we have made clear that timeliness almost always presents a factual question, requiring an assessment of all relevant circumstances surrounding a particular disclaimer (First Fin. Ins. Co. v Jetco Constr. Corp., 1 NY3d 64, 69 [2003]; Hartford Ins. Co. v County of Nassau, 46 NY2d 1028, 1030 [1979]; Allstate Ins. Co. v Gross, 27 NY2d 263, 270 [1970])[FN4]. One of those circumstances is the time necessary for an insurer to conduct a prompt [*5]investigation into those grounds supporting a potential disclaimer (see Gross, 27 NY2d at 270; First Fin. Ins. Co., 1 NY3d at 69). Although we have declined to provide a "fixed yardstick" against which to measure reasonableness of a delay in disclaiming coverage (see id. at 70), we have said that cases in which the reasonableness of an insurer's delay may be decided as a matter of law are exceptional and present extreme circumstances (see Hartford, 46 NY2d at 1030; Gross, 27 NY2d at 270). This is not such a case.

Fixing the time from which an insurer's obligation to disclaim runs is difficult. That period begins when an insurer first becomes aware of the ground for its disclaimer (see First Fin. Ins. Co., 1 NY3d at 68-69, quoting Matter of Allcity Ins. Co. [Jimenez], 78 NY2d 1054, 1056 [1991]). But unlike cases involving late notice of claims (see id. at 66-67; Hartford, 46 NY2d at 1029; Gross, 27 NY2d at 268) or other clearly applicable coverage exclusions, an insured's non-cooperative attitude is often not readily apparent. Indeed, as here, such a position can be obscured by repeated pledges to cooperate and actual cooperation.

The challenge of setting an appropriate date is only heightened by the heavy burden that an insurer seeking to establish a non-cooperation defense must carry (see Thrasher v U.S. Liab. Ins. Co., 19 NY2d 159, 168-169 [1967]; accord Matter of Empire Mut. Ins. Co. [Stroud], 36 NY2d 719, 721 [1975]). To further this State's policy in favor of providing full compensation to injured victims, who are unable to control the actions of an uncooperative insured, insurers must be encouraged to disclaim for non-cooperation only after it is clear that further reasonable attempts to elicit their insured's cooperation will be futile (see Thrasher, 19 NY2d at 168; see also Matter of Liberty Mut. Ins. Co. v Roland-Staine, 21 AD3d 771, 772 [1st Dept 2005] ["strict[] scrutin[y]" of facts supporting non-cooperation defense required to protect "innocent injured parties from suffering the consequences of a lack of coverage"]). In some cases, such as where an insured openly disavows its duty to cooperate (see e.g. Allcity Ins. Co. v 601 Crown Street Realty Corp., 264 AD2d 315, 316-317 [1st Dept 1999]) little time is needed to evaluate the relevant non-cooperative conduct before disclaiming. But here, where an insured has punctuated periods of non-compliance with sporadic cooperation or promises to cooperate, some reasonably longer period for analysis may be warranted.

The Appellate Division majority acknowledged that even after June 1, 2004, when Continental received a declaratory judgment that it was entitled to disclaim coverage in the O'Halloran and Shields actions, the carrier "was continuing to pursue its heavy burden" of attempting to bring about Stradford's compliance in the two actions relevant here (see 46 AD3d at 601). The court also found that the time for disclaimer ran from August 11, 2004, the date [*6]when what became Continental's final letters to Stradford were returned unclaimed. Following that date, there is no indication that the company engaged in further communication with Stradford. Thus, on these facts, we agree with both of the Appellate Division's conclusions.

Contrary to the Appellate Division, however, we conclude that a question of fact remains regarding the amount of time required for Continental to complete its evaluation of Stradford's conduct in the two underlying actions. In this case, the reasonableness of an approximately two-month delay to analyze the pattern of obstructive conduct that permeated the insurer's relationship with its insured for almost six years presents a question of fact that precludes entry of summary judgment for either plaintiff or for defendants (see First Fin. Ins. Co., 1 NY3d at 69 ["[I]nvestigation into issues affecting an insurer's decision whether to disclaim coverage obviously may excuse delay in notifying the policyholder of a disclaimer"]; Hartford, 46 NY2d at 1030 ["[A] two-month delay may often be easily justified, if in fact there be justification"]).

Accordingly, the order of the Appellate Division should be modified, without costs, by denying the cross-motion of defendants Gunaratne and Perera for summary judgment and, as so modified, affirmed.


[2]  CDC October 1991 Preventing Lead Poisoning in young children.