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Dear Coverage Pointers Subscribers:

 

I'm on my way to Banff for the Federation of Defense & Corporate Counsel Annual Meeting. You can reach me on my cell at 716.445.2258 or by e-mail at [email protected]. The many of you who call me while I'm on the road know that I'm always reachable.  Your very acceptable alternative is to ask for my legal assistant Donna Boice and she'll direct you to the right attorney in the office who can assist you.  Surely, our coverage team - Audrey, Steve, Mike and Mark will be close at hand as well. 

 

Late Notice - Prejudice Bill Signed into Law

 

Well, without surprise - and with little fanfare - the Governor announced that he signed the prejudice-late notice bill earlier this week. A full summary of the legislation was provided in our Special Edition of Coverage Pointers, Volume IX,   No. 25a, published on Tuesday, June 24, 2008.  You can find that summary here.

 

We remind you of the effective date:

 

Effective Date
The bill would take effect 180 days after it is enacted into law and then apply to policies issued or delivered in this state on or after such date and to any action maintained under such a policy although the Insurance Department is permitted to develop appropriate regulation for the implementation of the new law.

 

That means that for any accident under a policy issued up to mid-January, 2009, there is no prejudice requirement for a late notice denial.  So, for example, if a policy is issued on January 2, 2009 without prejudice language and there is a February 2, 2011 accident with notice given to the insurer late, in December of 2011, there would NOT be a requirement that the insurer demonstrate prejudice before denying for late notice.

 

Over a year ago, in June 2007, we provided guidance on how prejudice can be established by including as an attachment to this publication an article written by Steve "Property and Potpourri" Peiper.  You can find that article here and some counseling points in Steve's column today.  In the coming issues, we will provide additional strategic advice and, of course would be happy to provide in-house claims training to assist your claims professionals in conducting effective coverage investigations.

 

Quiet Time in Appellate Courts

 

The New York appellate courts are very quiet this time of year.  The Court of Appeals is on summer recess until Labor Day.  The Fourth Department has traditionally issued very few decisions, other than in emergency and election matters, during the mid-summer hiatus.  We will see a few from the other Departments, but volume will be down a bit until Labor Day.

 

Today's Twister - Advice Sought - John Doe Sued!

I love Old-Time Radio and this puzzler comes right for the ranks of the 1950's who dunnits.
 One of our loyal readers offered up this true story.  I post it to the masses to see what kind of collective wisdom there may be to deal with this legal tongue-twister.  And who says fact isn't stranger than fiction?  The most creative answers to these questions will be posted next issue:

 

The named insured on an auto policy is found dead in the passenger seat of the vehicle he owns and the one listed on the declaration's page.  The police investigation concludes that the insured died from blunt trauma when the vehicle hit the concrete wall it was resting against.  The police also conclude that the decedent was not driving but actually was a passenger.  No driver is ever located.

 

This is a 1996 loss that was reported timely by a family member.  No coverage positions have been taken previously.

 

The insurer is now in receipt of a summons and complaint brought by the decedent's estate and heirs at law for wrongful death and conscious pain and suffering against the "John Doe" who is alleged to be a permissive user of the car, having obtained permission from the owner.  "John Doe" is the only named defendant.  Counsel convinced a court to allow substituted service on "John Doe" by serving the insurer.  The plaintiff's lawyer has now served "John Doe" according to the court's direction, by serving the summons the insurer.

 

Here are the questions:

 

·        Are there coverage issues that ought to be raised?

·        Should the insurer undertake Mr. Doe's defense, or allow a default to be taken?

·        Should coverage counsel be retained and what coverage strategy would be most effectively employed here?

 

For those "John Doe" fans, you will recall we provided a history of his origin in our May 30 edition.

 

Anniversary Dates:

 

Happy 100th anniversary to the FBI (assuming the Bureau knows how to be happy).  It was 100 years ago this week that the US Attorney General ordered staffing of the Office of the Chief Examiner, later renamed the Federal Bureau of Investigation.  During the same week, Fisher Body was founded. Now a part of General Motors, Fisher helped revolutionize the manufacture of carriages and cars.

It was also 100 years ago this week that Dorando Pietri won and then lost the Olympic Marathon in London (see our most recent issue for a discussion about the marathon distance established that year.  Pietri, from Italy, was leading the race.  kilometerskilometerskilometerskilometerskilometerskilometerskilometerskilometerskilometerskilometerskilometerskilometersWith two kilometres to go, Pietri, dehydrated, began to stumble.  When he entered the stadium, he went in the wrong direction and was redirected by the umpires.  He then collapsed not once, but four times while in his final steps to the finish line.  Each time, the umpires helped him to his feet.  It took him 10 minutes to cover the final 350 meters.  While he was first to cross the finish line, he was eventually disqualified because of the help he received from the umpires.  The official winner? American Johnny Hayes.

After the dramatic Olympic battle between Pietri and Hayes, public interest was such that a match race was organized by professional promoters in November, 1908 at Madison Square Garden. The race was won by Pietri by 75 yards. A second match race was held on March 15, 1909 and again Pietri won.

From Audrey Seeley, the Hard Working Queen of No Fault:

This may be the largest column for me this or any summer thus far.  I am still looking for bandages for my fingers with all that typing.  The courts have certainly been active for July, which is most unusual.

 

First thing first though and this is FABULOUS news I received from my friends, April and Phillip (last names intentionally omitted to protect privacy) on the Carothers trial.  Some 18 insurance companies were involved in this JURY (yes jury) trial and obtained a no cause.  Dr. Carothers, a 71 year old physician, stamped his name on Dr. Andrew Carothers, MDPC, Inc. bills as part of a MRI screening practice.  Dr. Carothers purportedly reviewed 38,000 MRI scans on more than 17,000 individuals involved in motor vehicle accidents in Staten Island and Brooklyn over a two year time period.  VERY BUSY MAN as he would be reading 52 MRIs EVERY day of the year.  Yet, it came out at trial that only 79 of those reports contained Dr. Carothers' signature stamp.  So maybe he took some time off....  A jury agreed with the 18 insurance companies that Dr. Carothers fronted a medical fraud scheme which resulted in a Russian landlord and his office manager making $11 MILLION.  The Russian landlord fled the country before the trial started and only after millions left the country.  The office manager, instead of using the money for legitimate operating expenses, spent it on an Infiniti, Lexus, swimming pools, and two homes.  It was noted in the information I was provided that Dr. Carothers' medical license will most likely not be affected as the jury did not find any intent on Dr. Carothers' part to commit fraud.  

 

One question presented was how this could affect a bodily injury claim involving this physician.  I do not see a devastating effect as the burden of proof is different in a bodily injury claim - you must establish a serious injury.  Not required in no-fault as the focus is on medical necessity or lack thereof.  If anything, the defense can call into question the weight that should be afforded to Dr. Carothers'  MRI report.

 

Alright, now that my fingers are bandaged and I am delirious with joy over this no cause, there are an abundance of decisions for you this edition.  Many of those decisions surround the sufficiency of the parties' proof on summary judgment.  I will leave you to peruse them and let my fingers heal...

 

Audrey

 

Audrey A. Seeley

In this Week's Issue

This week's issue contains a number of interesting offerings:

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

Mark Starosielec
[email protected]

 

  • Reversed: SJ Granted as Plaintiff's Chiropractor Failed to Address Plaintiff's Prior Injury
  • What Have You Done for Me Lately?
  • SJ Granted as Doctors' Reliance on Unaffirmed and Unsworn Reports Dooms Plaintiff
  • Court to Litigants: If You Need More Time, Ask! (But Do Not Presume You Will Get It) 

AUDREY'S ANGLES ON NO-FAULT

Audrey Seeley

[email protected]

 

 Arbitration
 

  • Applicant's Credible Testimony on Self-Employed Wage Claim, Although Profit Speculative,, it is Sufficient with Documentation to Prove Claim.

 Litigation

 

  • Defendant's Affidavit Insufficient to Demonstrate Timely Verification and Denials Mailed
  • Suit Premature as Verification Request Outstanding
  • Failure to Establish Claim Forms Sent to Improper Address and Extend 30 Days = Denial of Insurer's Summary Judgment Motion
  • Insurer's Admission of Receipt of Claim Form Cures Plaintiff's Defective Papers
  • Plaintiff Must Produce Treating Physician for Deposition
  • Court Addresses Whether Plaintiff's Notice to Admit was Proper
  • Motion to Dismiss for Failure to Comply with Court Order Denied - Defense Failed to Provide Proper Affidavit that Plaintiff Failed to Comply
  • Omission of Sections from Denial Form not Relevant to Claim does not Mean Denial Defective
  • Defendants' Affidavit Insufficient to Establish Forms Personally Mailed or Office Practice Followed
  • Default Judgment Vacated Due to Investigator's Affidavit
  • Failure to Dismiss First Action Without Prejudice did not Bar Second Identical Action
  • Default Judgment Vacated Due to Investigator's Affidavit
  • Electronic Stamped Signature on Peer Review Without Proper Evidence that Made by Reviewer or at His Direction Inadmissible Evidence
  • Summary Judgment Granted as Plaintiff Failed to Rebut Establishment of Lack of Medical Necessity
  • Judgment Affirmed as Plaintiff Failed to Rebut Establishment of Lack of Medical Necessity
  • Insurance Regulation Prohibiting Reimbursement to Corporations Not in Compliance with Law has Retroactive Effect
  • Summary Judgment Granted as Defendant Failed to Demonstrate Timely Request for EUO
  • Plaintiff Required to Produce Incorporation Documents and Its Owner for a Deposition But Not Personal Income Tax Returns
  • Failure to Timely Follow Up on Verification Request Fatal to Defense of Claim

 

That's all for now.  See you in a couple of weeks and keep writing!  Remember, if you have some suggestions on the twister above, drop me a note with your ideas.

 

Dan

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

Newsletter Editor

Dan D. Kohane
[email protected]

 

Insurance Coverage Team

Dan D. Kohane, Team Leader
[email protected]

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

Mark Starosielec

Fire, First-Party and Subrogation Team
Andrea Schillaci, Team Leader
[email protected]

Jody E. Briandi
Steven E. Peiper

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

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

Index to Special Columns

 

Starosielec’s Serious Side of “Serious Injury”

 Audrey’s Angles on No Fault

Peiper on Property
Earl’s Pearls

Across Borders

 

7/17/08            Pesta v. City of Johnstown

Appellate Division, Second Department
Anti-Subrogation Rule Does Not Bar Claims where Exclusions Lead to Determination that Parties are Not Insured Under Same Policies.
Pesta worked for Luizzi on a road paving project.  Luizzi was under contract with the City of Jamestown (City). Pesta sustained serious injuries, resulting in amputation of both his legs, when he was struck on the construction site by a dump truck owned by Luizzi and operated by another Luizzi employee. Luizzi was insured by Harleysville Insurance Company under a CGL, Business Auto and Umbrella Policy. In addition, as per the contract between Luizzi and the City, Luizzi had purchased from Harleysville an owners and contractors protective liability policy (hereinafter OCP policy) that naming the City as the insured.

When Pesta sued the City, the City sought common law indemnification from Luizzi.  Luizzi sought to dismiss that portion of the third party claim where it had provided coverage to the City under its policies, alleging that the anti-subrogation rule would bar such as action. The antisubrogation rule did not apply because coverage of the accident was excluded under the terms of the CGL, automobile, and umbrella policies.  

The anti-subrogation rules preclude an insurer from seeking to recover from its insured any amounts for which the carrier provides coverage. The antisubrogation rule does not apply, however, when an exclusion in a policy renders the policy inapplicable to the loss. Here, the CGL policy excluded auto claims and this was an auto claim.  The auto policy did not apply because of a co-employee claim exclusion.  Accordingly, with the auto and CGL policies inapplicable, the umbrella policy is similarly unavailable

The antisubrogation rule does not apply to the OCP policy either because only the City is insured under that policy.

7/15/08            In the Matter of Hertz Claim Management Corporation v. Kulakowich
Appellate Division, Second Department
When is Someone Underinsured?  Whose Coverage is Important to Consider?
This was an application to stay an underinsured motorist proceeding on the ground that the claimant did not exhaust the available liability limits of the offending motorist.  It was undisputed that the petitioner's insured exhausted, through settlement, the bodily injury policy limits under the policy of the owner of the offending vehicle, which was less than the liability coverage provided under the petitioner's policy. However, the court found, that the claimant was not required to exhaust the liability coverage limits under a separate insurance policy of the operator of the offending vehicle prior to pursuing a claim for underinsured motorist benefits from the petitioner.  Why not?  It covers the same car.

Editor’s Note:  Your editor believes this case is wrongly decided.  While the Doherty case upon which it relies in part provides support for the court’s decision, Doherty is wrongfully decided as well.  Note, we are looking at the total liability coverage available for the same carDoherty and this court relied on the Court of Appeals decision in S’Dao which held that if one car in a two care accident was underinsured, it made no difference that a second car was not.

As a condition precedent to payment of underinsurance, "the limits of liability of all bodily injury liability bonds or insurance policies applicable at the time of the accident shall be exhausted by payment of judgments or settlements" (Insurance Law § 3420 [f] [2]). Where plaintiff was a passenger injured in a two-vehicle accident, the question arises whether exhaustion of the limits of liability of all policies held by both tortfeasors is required before the underinsurance coverage in plaintiff's policy is available.

We conclude that the exhaustion requirement of section 3420 (f) (2) relates back to the statute's reference to "another motor vehicle" and indicates that the proper focus is on the underinsured status of each individual tortfeasor. Nothing in the statutory language or the policy providing underinsurance at issue here notifies the insured plaintiff that aggregation of the limits of liability held by multiple tortfeasors is a prerequisite to recovery of underinsurance.
S'Dao v. National Grange Mut. Ins. Co., 87 N.Y.2d 853, 855 (N.Y. 1995)

 

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

Mark Starosielec
[email protected]

 

7/22/08            Seck v. Minigreen Hacking Corp.

Appellate Division, Second Department

Reversed: SJ Granted as Plaintiff’s Chiropractor Failed to Address Plaintiff’s Prior Injury

Here, defendants successfully appealed a lower court order which had denied its motion for summary judgment dismissing the complaint. The Appellate Division held the defendants established their prima facie entitlement to judgment as a matter of law. In opposition, the plaintiff failed to raise a triable issue of fact. The majority of the plaintiff's submissions with the exception of the affidavit of his treating chiropractor and the affirmation of his treating radiologist, were either unaffirmed or unsworn, and thus without any probative value. Further, the affidavit of the plaintiff's treating chiropractor failed to raise a triable issue of fact. The chiropractor did not set forth any objective evidence to support the assertion that a pre-existing "injury" from a prior accident, which he failed to describe, was "exacerbated" by and causally related to the subject accident. The conclusions in the affidavit that the injuries and limitations noted in the plaintiff's lumbar spine were the result of the subject accident were rendered speculative in light of the fact that the chiropractor failed to adequately address that prior accident and injury.

 

7/15/08            Landicho v. Rincon

Appellate Division, Second Department

What Have You Done for Me Lately?

Here, an affirmation not based on a recent examination of plaintiff led the Appellate Division to reverse a lower court order which had denied summary judgment. The Appellate Division held that the defendants met their prima facie burden of showing that the plaintiff did not sustain a serious injury. In opposition, the plaintiff failed to raise a triable issue of fact. The plaintiff, inter alia, relied on the affirmation of Dr. Sunil Butani, her treating physician. While Dr. Butani concluded that the plaintiff sustained permanent injuries and significant limitations, the findings contained in his affirmation were not based on a recent examination. Further, other plaintiff doctors’ reports were unaffirmed and thus without probative value.

 

7/15/08            Matra v. Raza

Appellate Division, Second Department

SJ Granted as Doctors’ Reliance on Unaffirmed and Unsworn Reports Dooms Plaintiff

Here, the defendants successfully appeal a lower court order which had denied their motion for summary judgment dismissing the complaint. The Appellate Division held the defendants met their initial prima facie burden. In opposition, the plaintiff failed to raise a triable issue of fact. The MRI reports authored by Dr. Tice concerning the plaintiff were not competent evidence since they were unaffirmed. The affirmed medical report of Dr. Hedrych was without any probative value since he relied on the unsworn reports of others in reaching his conclusions.

 

7/11/08            Covert v. Samuel

Appellate Division, Fourth Department

Court to Litigants: If You Need More Time, Ask! (But Do Not Presume You Will Get It)

Parties’ failure to abide by CPLR 3212(a) led the Appellate Division to reverse a lower court order which had granted plaintiff’s cross motion for partial summary judgment on liability. Appellate Division held the defendants were correct in stating that plaintiffs’ cross motion for partial summary judgment on liability, seeking partial summary judgment on the issues of negligence and serious injury was untimely. Absent an order to the contrary, a party seeking summary judgment must move for that relief "no later than one hundred twenty days after the filing of the note of issue, except with leave of court on good cause shown" (CPLR 3212 [a]; see Filannino v Triborough Bridge & Tunnel Auth., 34 AD3d 280, 281). Here, the note of issue was filed in October 2006 but an order was entered in March 2007, on consent of plaintiffs, extending defendants' "time to make any motions for summary judgment" to 120 days after plaintiff’s counsel received the IME report from defendants. Defendants moved for summary judgment dismissing the complaint in March 2007 contending that plaintiff did not sustain a serious injury and plaintiffs cross-moved for partial summary judgment on liability. Although plaintiffs cross-moved over 120 days after the note of issue was filed, they neither sought leave to file a late motion nor made any showing of good cause for their delay pursuant to CPLR 3212 (a). Thus, that part of plaintiffs' cross motion regarding negligence was time-barred.

 

The Appellate Division further agrees with defendants that the court erred in granting the other parts of the plaintiff’s cross motion too. The defendants raised an issue of fact sufficient to defeat that part of the cross motion by submitting the report of the physician who examined plaintiff on their behalf, wherein he concluded that plaintiff's "complaints" resulted from a preexisting condition.

 

AUDREY’S ANGLES ON NO-FAULT

Audrey Seeley

[email protected]

 

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

 

Arbitration

 

7/11/08            In the Matter of the Arbitration Between Applicant and Respondent

Arbitrator Thomas J. McCorry (Erie County)

Applicant’s Credible Testimony on Self-Employed Wage Claim, Although Profit Speculative, Sufficient with Documentation to Prove Claim.

The Applicant, eligible injured person, sought $58,898.49 in lost wages which were denied by the insurer solely on basis that the Applicant failed to prove lost earning based upon a Forensic Accounting review.

 

The Applicant testified that he bought, remodeled and sold real estate.  He purportedly purchased, a year before his motor vehicle accident, a number of properties at a mobile home community with the intention of remodeling and reselling them.

 

The insurer argued that the Forensic Accountant’s report indicated that the Applicant had not presented evidence that he could have effected the real estate transactions as planned.  The Accountant then indicated the Applicant could succeed in his plan if he paid substitute wages to get the improvements completed.

 

The parties agreed that Young v. Utica Mut. Ins. Co., 86 AD2d 764 applied and that the basis to establish a self-employed lost wage claim is upon past performance.  Yet, the insurer argued that the Applicant failed to present evidence that he was self-employed.

 

The assigned arbitrator found the Applicant’s testimony credible and that while his profit expectation was speculative, the Applicant sustained lost wages.  The assigned arbitrator recognized that the only evidence supporting his decision was the Applicant’s testimony and the documentation.

 

Litigation

 

7/18/08            Uptodate Med. Services, PC v. Lumbermens Mut. Cas. Co.

Appellate Term, Second Department

Defendant’s Affidavit Insufficient to Demonstrate Timely Verification and Denials Mailed.

The plaintiff’s cross-motion for summary judgment was properly granted as the defendant failed to establish through an affidavit of its no-fault examiner that the verification requested or the denials were timely mailed.  Specifically, the affidavit failed to establish the standard office practice and procedure used to ensure that a verification request and/or denial was properly addressed and mailed.

 

7/11/08            Beta Supply, Inc. a/a/o Calmey Jean v. Government Employees Ins. Co.,

Appellate Term, First Department

Suit Premature as Verification Request Outstanding

Defendant’s summary judgment motion granted dismissing the action as its documentary evidence demonstrated that the defendant’s verification request was timely mailed and received by the plaintiff yet outstanding.

 

7/11/08            Vinings Spinal Diagnostics v. Progressive Casualty Ins. Co.

Appellate Term, Second Department

Failure to Establish Claim Forms Sent to Improper Address and Extend 30 Days = Denial of Insurer’s Summary Judgment Motion

Plaintiff’s summary judgment motion was denied as it failed to submit a sufficient affidavit to admit the documents annexed to plaintiff’s owner’s affidavit as business records.  The defendant’s summary judgment motion was denied as an issue of fact existed as to whether the defendant’s denial was timely.  Specifically, the defendant’s affiant failed to set forth sufficient facts to prove that the address plaintiff used to mail the claim forms was improper.  Therefore, the defendant failed to demonstrate that the 30 day period to pay or deny was extended.

 

7/11/08            Med-Tech Product, Inc. a/a/o Yvette Rice v. Liberty Mut. Ins. Co.,

Appellate Term, Second Department

Insurer’s Admission of Receipt of Claim Form Cures Plaintiff’s Defective Papers

Plaintiff’s summary judgment motion was denied as there was an issue of fact as to whether the services purportedly rendered were medically necessary.  Interestingly, the plaintiff’s papers were deficient as it failed to have the proper affidavit to admit the claim forms as business records.  Yet, the insurer’s papers cured the plaintiff’s defect because the insurer acknowledged receipt of the claim.

 

7/11/08            City Wide Social, etc v.  New York Central Mut. Fire Ins. Co

Appellate Term, Second Department

Plaintiff Must Produce Treating Physician for Deposition

Defendant’s motion to compel the plaintiff’s, plaintiff’s assignor, and plaintiff’s assignor’s treating physician’s deposition was granted as to the plaintiff’s assignor’s treating physician and plaintiff’s cross-motion for protective order was denied.  The court held that CPLR §3101(a) provides that there must be full disclosure of all material and necessary matters to prosecute or defend an action.  The court has broad discretion in deciding what is material and necessary.  In this case, the court rejected the plaintiff’s conclusory assertion that the plaintiff’s assignor’s treating physician’s testimony would be useless in establishing the defendant’s defenses.

 

7/11/08            A.M. Med. Services, P.C. v.  Progressive Cas. Ins. Co.,

Appellate Term, Second Department

Court Addresses Whether Plaintiff’s Notice to Admit was Proper

This case involved a dispute between the parties regarding plaintiff’s notice to admit.  The defendant moved for a protective order striking the entire notice which was granted by the lower court.  On appeal, the court only struck three of the eight items.  The court initially reasoned that a notice to admit may be used by a party to request another party admit stated facts or the genuineness of a document if the party requesting the admission believes there is no substantial dispute at trial.  The plaintiff’s first three items in the notice to admit addressed the genuineness of the insurer’s NF-10s which the court determined without discussion were proper items for a notice to admit.  The fourth item of the notice to admit addressed the amount outstanding on the bills at issue in the litigation.  The court determined that this item was improper as it was imprecisely worded and could be read as a conclusion of an ultimate fact.  The seventh item sought an admission that the insurer received an attached claim form on or about a specified date.  The defendant had not previously acknowledged this fact in its denial forms.  The court determined that in the absence of a prior acknowledgment by the insurer in the denial forms, that the defendant received the claim form “is ‘an ultimate or conclusory fact which [is] an integral part of the plaintiff’s prima facie case’, and should not be determined on the basis of a notice to admit.  Citing, Scavuzzo v. City of New York, 47 AD3d 793 [2008].

 

7/11/08            V.S. Med. Services, P.C. v.  New York Central Mut. Fire Ins. Co.

Appellate Term, Second Department

Motion to Dismiss for Failure to Comply with Court Order Denied – Defense Failed to Provide Proper Affidavit that Plaintiff Failed to Comply

The defendant’s motion to dismiss the plaintiff’s complaint for failure to comply with a court order to produce the plaintiff’s treating physician was properly denied.  The defendant moved to compel the deposition of the plaintiff’s treating physician among others.  The lower court granted the defendant’s motion and the plaintiff was to produce the witness by a date certain and the defendant could move to dismiss the complaint if plaintiff failed to comply with the order.  The defendant served a deposition notice upon the plaintiff and the deposition did not proceed as the defendant scheduled it.  The defendant moved to dismiss the plaintiff’s complaint for failure to comply with a court order, which was denied.  The court upheld the lower court’s decision on the ground that the defendant failed to submit an affidavit from a person with knowledge of the facts that plaintiff failed to produce its physician for the deposition.

 

7/11/08            All Borough Group Med. Supply, Inc.  v.  GEICO Ins. Co., and Mega Supplies Billing, Inc. a/a/o Tameka Robinson v. GEICO Ins. Co.

Appellate Term, Second Department

Omission of Sections from Denial Form not Relevant to Claim does not Mean Denial Defective

Plaintiff’s summary judgment motion was properly denied as it failed to contain an appropriate affidavit from plaintiff to admit records under the business record rule.  The defendant’s cross-motion for summary judgment was properly granted for lack of evidence to rebut the establishment of lack of medical necessity based upon a peer review.  Interestingly, the court held that the defendant’s denial was not defective for omitting certain section from the denial of claim form as those sections were not relevant to the claim. 

 

7/11/08            Health Plus Med. , P.C. v.  American Manu. Mut. Ins. Co.,

Appellate Term, Second Department

Defendants’ Affidavit Insufficient to Establish Forms Personally Mailed or Office Practice Followed

The defendants’ cross-motion for summary judgment was properly denied as the no-fault examiner’s affidavit was insufficient to establish that she either personally mailed the verification requests and denial forms or to give rise to a presumption that the defendants timely mailed them according to the defendants’ standard office practice and procedure.

 

7/11/08            Vista Surgical Supplies, Inc. a/a/o Benjamin Colon v. AutoOne Ins. Co.,

Appellate Term, Second Department

Court Addresses Whether Plaintiff’s Notice to Admit was Proper

The defendant’s cross-motion for summary judgment was properly denied.  The defendant cross-moved for summary judgment on the basis that the plaintiff’s assignor failed to appear for two scheduled independent medical examinations. The court held that the defendant failed to establish that the plaintiff’s assignor failed to appear through an affidavit from an individual with personal knowledge of the assignor’s failure to appear for the examinations.

 

7/10/08            Midwood Acupuncture, PC  v.  State Farm Mut. Auto. Ins. Co.

Appellate Term, Second Department

Default Judgment Vacated Due to Investigator’s Affidavit

Defendant’s motion to vacate a default judgment was granted as the defendant established a meritorious defense as the defendant’s special investigator’s affidavit demonstrated an issue as to who was operating and controlling the plaintiff.

 

7/10/08            Downtown Acupuncture, PC v. State Farm Mut. Auto. Ins. Co.

Appellate Term, Second Department

Failure to Dismiss First Action Without Prejudice did not Bar Second Identical Action

Defendant’s summary judgment motion on the doctrine of res judicata was properly denied.  The defendant argued that plaintiff previously commenced an identical action that was dismissed for plaintiff’s failure to comply with a so-ordered discovery stipulation.  The plaintiff argued that the prior action was not dismissed with prejudice and the current was proper.  The court held that plaintiff’s prior action was not dismissed with prejudice, or an order of preclusion or summary judgment which did not bar the plaintiff from commencing the second action.  

 

7/10/08            North New York Med. Care, PC v.  New York Cent. Mut. Fire Ins. Co.

Appellate Term, Second Department

Default Judgment Vacated Due to Investigator’s Affidavit

Plaintiff was entitled to summary judgment on the unpaid portion of the claim as the defendant conceded that it received requested verification on May 16, 2001, but did not issue a denial until June 14, 2001.  This denial was found untimely precluding the defendant from raising the defense of lack of medical necessity.

 

7/10/08            Orthotic Surgical & Med. Supply, Inc. a/a/o Alfred Reese v. GEICO Ins. Co.

Appellate Term, Second Department

Electronic Stamped Signature on Peer Review Without Proper Evidence that Made by Reviewer or at His Direction Inadmissible Evidence

Plaintiff was entitled to summary judgment as the defendant’s peer review report was not in admissible form.  The peer review contained an electronic stamped facsimile signature of the peer reviewer rendering it inadmissible under CPLR 2106.  The defendant conceded the fact that the signature was a facsimile and failed to provide any evidence that the facsimile signature on the report was placed there by the doctor who performed the peer review or at that doctor’s direction.

 

7/10/08            Eagle Surgical Supply, Inc. a/a/o Joey Edwards v. Progressive Cas. Ins. Co.

Appellate Term, Second Department

Summary Judgment Granted as Plaintiff Failed to Rebut Establishment of Lack of Medical Necessity

Defendant’s cross-motion for summary judgment was granted as the affirmed independent medical examination report was submitted without any evidence to the contrary from the plaintiff on medical necessity.

 

7/10/08            SJ Pahng, MD, PC v. Progressive Northeastern Ins. Co.

Appellate Term, Second Department

Judgment Affirmed as Plaintiff Failed to Rebut Establishment of Lack of Medical Necessity

The judgment entered by the court after a non-jury trial of $33.55 against the plaintiff was affirmed.  The sole issue was the medical necessity of nerve testing of the upper and lower extremities.  The court entered into evidence the claim forms, the denials, and the peer review physician’s deposition transcript.  The court awarded the plaintiff $33.55 and the plaintiff appealed contending that the judgment was inadequate.  The court affirmed the judgment reasoning that the plaintiff failed to submit any evidence to rebut the defendant’s showing that the services were not medically necessary.

 

7/10/08            Multiquest, PLLC a/a/o Hubert Jones v. Allstate Ins. Co.

Appellate Term, Second Department

Insurance Regulation Prohibiting Reimbursement to Corporations Not in Compliance with Law has Retroactive Effect

The defendant’s cross-motion for summary judgment was granted regarding the denial for psychological services rendered in August and September 1999.  The defendant argued that the plaintiff was not entitled to payment as it was fraudulently incorporated.  The court, citing to Allstate Ins. Co. v. Belt Parkway Imaging, PC, 33 AD3d 407 (1st Dept. 2006),determined that the insurance department regulation that the defendant relied upon, which was not promulgated and effective until 2002, is be given retroactive effect.

 

7/10/08            Quality Health Products, Inc. a/a/o Lindo Lincoln v. Auto One Ins. Co.

Appellate Term, Second Department

Summary Judgment Granted as Defendant Failed to Demonstrate Timely Request for EUO

The plaintiff’s motion for summary judgment was granted as the defendant failed to demonstrate it issued a timely denial.  The defendant failed to establish that its 30 days to pay or deny were tolled pending timely request of an examination under oath of the plaintiff’s assignor.  The record did not reveal that the defendant had requested additional verification within 15 days from defendant’s receipt of a letter of medical necessity.

 

7/10/08            Great Wall Acupuncture v. State Farm Mut. Auto. Ins. Co.

Appellate Term, Second Department

Plaintiff Required to Produce Incorporation Documents and Its Owner for a Deposition But Not Personal Income Tax Returns

Defendant’s motion to compel against plaintiff was granted to extent that the plaintiff must produce its certificate of incorporation for discovery and inspection and serve answers to certain interrogatories.  Further, the plaintiff was ordered to produce its owner for a deposition in the courthouse.

 

The plaintiff rejected the defendant’s notice for discovery and inspection and interrogatories in there entirety which led to a motion to compel.  The plaintiff cross-moved for a protective order.  The court held that the plaintiff failed to timely challenge the propriety of the defendant’s discovery demands which obligated the plaintiff to produce the information sought except those that were palpably improper or privileged.  The court determined that the demands regarding matters related to defenses that the defendant was precluded from raising were palpably improper.  Yet, the defense of fraudulent incorporation was properly alleged and the defendant was not precluded from relying upon that defense.  Therefore, the discovery of documents such as the certificate of incorporation, management agreements, and the plaintiff’s shareholders’ names was proper.  The plaintiff was also required to disclose the corporate income tax returns.

 

The court rejected plaintiff’s argument that its owner was already produced for a deposition in other actions.  The court denied at that time the defendant’s demand for disclosure of plaintiff’s owner’s personal income tax returns on the basis that the defendant’s failed to establish a strong showing that the information was indispensable to the claim and could not be obtained through other sources.  It is noted that the dissent felt the personal income tax returns should have been disclosed given the fact that the owner is the sole shareholder of not less than 20 professional service corporations and has been in involved in numerous other actions which were determined to contain pervasive fraud.  Further, the owner was indicted for insurance fraud and had a burglary at a facility under investigation where only business files were stolen.

 

7/10/08            Infinity Health Products, Ltd. a/a/o Jermaine Thomson v. Eveready Ins. Co.

Appellate Term, Second Department

Failure to Timely Follow Up on Verification Request Fatal to Defense of Claim

Defendant’s cross-motion was denied and plaintiff’s motion for summary judgment granted.  The defendant failed to establish that it was not required to issue payment or denial due to an outstanding verification request.  The defendant failed to establish that it adhered to the no-fault regulations regarding initial and follow-up verification requests as it mailed a follow-up verification request 27 days after it mailed its initial demand.  Therefore, the defendant was precluded from raising most defenses, including excessive fees.

 

 

PEIPER ON PROPERTY (and POTPOURRI)

Steven E. Peiper

[email protected]

 

As Abraham Lincoln once said “"[b]etter to remain silent and be thought a fool than to speak out and remove all doubt."  Alas, safe for another couple of weeks because for the second issue in a row appellate courts remain silent on first party issues. 

However, rather than saying nothing as President Lincoln might have suggested, it seemed like a good time to bring up the issue of prejudice again.  As you are all well aware, the Governor recently approved significant changes to New York’s Insurance Law.  It took more than thirty years, but the rules enunciated in Sec. Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp (31 NY2d 436 [1972]) will cease for policies issued in a mere 180 days from now.  From then on, carrier’s will need to establish prejudice (in most cases) to successfully disclaim on late notice. 

Prejudice, my friends, is the way of the future, but what, again, is it?   As we noted in our earlier column on this issue (see Coverage Pointers from June 29, 2007), you will know it when you see it.  With this in mind, we remind you that some things to look for include:

 · Loss of documents concerning a possible culpable party;

· Inability to locate witnesses;

· Loss of opportunity to “effect an early settlement”;

· Loss of opportunity to investigate the claim when still fresh;

· Loss of a viable defense to the action;

· Physical changes in evidence;

· Loss of affirmative defenses;

· Loss of viable claims against other parties; and,

· Insured either consents to judgment or has default judgment entered against it.

 

EARL’S PEARLS

Earl K. Cantwell, II

[email protected]

 

Tort or Contract? Fraud Claim Survives TKO in Boxing Case

 

            Given liberal rules of pleading and the creative pens of lawyers, courts have often struggled to decide whether to entertain tort claims that arise in the context of a contractual relationship.  Some cases ask whether the tort claim “relates to” the breach of contract claim, and if so, the tort claim may be subject to dismissal.  Other courts have held that tort claims should not be dismissed merely because they have some “relation” to a contractual relationship if the tort claim adds different allegations not part of the contract claim.

           

This issue was recently studied by the Manhattan Commercial Division in the case of Gotham Boxing, Inc. v. Finkel, 856 N.Y.S.2d 498 (Sup. Ct. N.Y. Co. 2008).  The case involved a dispute concerning a failed effort to arrange a heavyweight championship boxing match. Plaintiffs alleged that the parties reached an oral agreement that two boxers would stage a fight on a day certain. Plaintiffs further alleged that defendants subsequently reiterated such promises and assured them that the fight would happen.  The expected fight failed to occur.  Indeed, one of the boxers fought a match against a different boxer that same evening.  Plaintiffs alleged six causes of action, including breach of contract and a fraudulent misrepresentation claim.  Defendants moved to dismiss all of them, and only the “fraud” claim survived the knockout punch.

           

The court ruled that to survive a motion to dismiss as an independent cause of action, a fraud claim arising out of a contractual relationship must be based on some additional representation, omission, or conduct other than the contract itself.  It did not matter that the alleged fraudulent misrepresentation was the same or similar to the promises alleged as the contract, as long as it was made at a different place and time.  The court denied the motion to dismiss the fraudulent misrepresentation claim, reasoning that the alleged fraudulent misrepresentations were not the same as the alleged contract.  Rather, the fraud claim was based on a series of assurances and conduct by the defendants which were not part of the contractual agreement allegedly reached.

Justice Fried of the Manhattan Commercial Division upheld the fraud claim on the basis that:

 

So the rule, as I understand it, is that a cause of action for fraud will not arise if the alleged fraud restates the facts of the breach of contract claim; a fraud claim must be based on some additional representation, omission, or conduct, other than the contract itself, which was fraudulent when performed.

 

            By requiring some “additional representation, omission, or conduct,” Gotham Boxing holds that a tort claim arising out of a breach of contract is available as an independent cause of action only if the allegations contain elements or allegations different and apart from the breach of contract claim.  New York courts in the past have identified certain aspects of a “tort claim” that could distinguish it from a breach of contract claim so as to allow its independent survival:

 

  • Breach of a legal duty independent from the contract.  The legal duty must arise from circumstances extraneous to and not constituting elements of the contract, although it may be connected with or dependent upon the contract. For example, professionals, common carriers, and bailees may be subject to tort liability for failure to exercise reasonable care apart from any specific contractual duties.
  • Nature of the injury.  A tort claim may not be “merely duplicative” of a contract claim if the manner in which the injury arose and resulting damages are typical of tort claims, particularly of a catastrophic nature such as fires, explosions, crashes, or building collapses.

           

However, the Gotham Boxing case is simply one of a series of cases where the courts, particularly the New York Commercial Divisions, have had to review the validity of tort or extra-contractual claims in the context of a contractual or pre-contractual relationship. 

 

In Gotham Boxing, in fact, all of the other claims, including the breach of contract claim, were dismissed, so the fraud claim was the only one left standing after an eight-count.

 

The case seems to follow a steady line of New York cases that only a tort or extra-contractual claim that adds a different element or “something extra” beyond and apart from the contract claim may survive a pre-Answer motion to dismiss, i.e., get TKO’d in Round One.

 

 

ACROSS BORDERS

 

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

7/22/08            Cook v. Medial Savings Insurance Company
Tenth Circuit Court of Appeals
Health Insurance Carrier Subject to Punitive Damages where Counsel Failed to Objecti to Charge
In this fraud case from the W.D. Okla., the jury awarded plaintiff $550,000 in compensatory damages and $550,000 in punitive damages.  The 10th Circuit affirmed.  The case involves misrepresentation of the coverage afforded by a health insurance policy.  The company had agreed to pay what was owed before plaintiff filed suit, but the court allowed damages for mental and emotional distress. 

The court rejected a challenge to the constitutionality of the punitive damages award.  An issue arose because the jury was not instructed that it could not punish the insurer for injury to persons other than plaintiff, in accordance with Philip Morris USA v. Williams, 127 S. Ct. 1057 (2007).  The insurer did not, however, object to the jury instructions on this basis in the trial court, or request an instruction of its own.  Because of State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408 (2003), the insurer was on notice that instructions permitting direct punishment for harm to non-parties unrelated to the plaintiff may be objectionable.  The court therefore refused to consider the issue on appeal.

The bottom line is that you may want to consider whether it would be appropriate to request an instruction that the insurer cannot be punished for injury to persons other than the plaintiff.  Secondarily, the discussion at pp. 15-18 could be useful in discovery disputes where the plaintiff seeks a broad range of information about the insurer's other lawsuits and disputes with persons other than the plaintiff.
Editor’s Note:  Special thanks to our good friend, Tulsa lawyer John R. Woodard, III of Feldman, Franden, Woodard & Farris for this submission

7/18/08            Adams v. Rice

DC Circuit Court of Appeals
Breast Cancer Deemed Disability Under the Rehabilitation Act of 1973
The United State Court of Appeals, DC Circuit, reversed the district court’s grant of summary judgment to the State Department finding that the Plaintiff, Kathy Adams, provided sufficient evidence demonstrating that she had a record of an impairment – her breast cancer - that substantially limited her in certain major life activities, and that the government failed to contest any of the evidence plaintiff offered to support her disability status. Plaintiff Adams was diagnosed with stage I breast cancer after she had passed the required medical entrance exams and received medical clearance for the US Foreign Service. The State Department ultimately revoked Plaintiff Adams’ medical clearance, disqualifying her from the Foreign Service. Plaintiff Adams brought her lawsuit under the Rehabilitation Act of 1973, section 501, which prohibits federal agencies from discriminating in employment against disabled individuals – including those with a “record of” disability. In determining that the plaintiff indeed had a “record of” disability, the Court set out on a three-step inquiry. First, the court determined whether plaintiff had a history of mental or physical impairment. The Court then asked, whether the impairment limited an activity qualifying as a major life activity under the Act. Finally, since both the impairment and activity meet the statute’s requirements, the Court then looked at whether the alleged limitation was substantial.
Submitted by Michael A. Tanenbaum and Shari Keiser (Sedgwick, Detert, Moran & Arnold, LLP)

 

7/17/08                        Guaranty Bank v. Chubb Corp.
Seventh Circuit Court of Appeals
Liability Insurance: No “Advertising Injury” Coverage for Violation of an “Unregistered” Trademark

Midwest Guaranty Bank (“Midwest”) filed an action alleging that Guaranty Bank’s (“Guaranty”) public announcement to enter the same geographic market as Midwest created confusion for Midwest’s customers, in violation of federal and Michigan unfair competition law, including Michigan’s common law of trademark infringement. Great Northern Insurance Company (“Great Northern”) had issued a liability policy to Guaranty that covered advertising injury. In a diversity suit based on Wisconsin law, the Seventh Circuit affirmed summary judgment in favor of Great Northern, finding that the insurer had no duty to defend Guaranty since the policy excluded advertising injury to any intellectual property law or right other than for registered trademarks. In the underlying action, Midwest had not claimed statutory infringement of a registered trademark, but rather, only common law infringement of an unregistered trademark, so the exclusion applied. The Seventh Circuit also analyzed Wisconsin law on delay in timely furnishing notice of a claim contrary to policy requirement.

Submitted by: Bruce D. Celebrezze, Esq. & Jamison R. Narbaitz, Esq. of Sedgwick, Detert, Moran & Arnold LLP

 

REPORTED DECISIONS

 

Landicho v. Rincon


Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y.
(Michael I. Josephs of counsel), for appellants.
Kagan & Gertel, Brooklyn, N.Y. (Irving Gertel of counsel), for respondent.


DECISION & ORDER

In an action to recover damages for personal injuries, the defendants appeal from an order of the Supreme Court, Queens County (Kitzes, J.), dated November 15, 2007, which denied their 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 defendants' motion for summary judgment is granted.

The defendants met their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In opposition, the plaintiff failed to raise a triable issue of fact. The plaintiff principally relied on the affirmation of Dr. Sunil Butani, her treating physician. While Dr. Butani concluded that the plaintiff sustained permanent injuries and significant limitations, the findings contained in his affirmation were not based on a recent examination (see Cornelius v Cintas Corp., 50 AD3d 1085; Amato v Fast Repair, Inc., 42 AD3d 477; Ali v Mirshah, 41 AD3d 748; Elgendy v Nieradko, 307 AD2d 251). The magnetic resonance imaging reports of Dr. Eliezer Offenbacher and Dr. Charles DeMarco, as well as the physical therapy reports concerning the plaintiff, were without any probative value since they were unaffirmed (see Patterson v NY Alarm Response Corp., 45 AD3d 656; Verette v Zia, 44 AD3d 747; Nociforo v Pena, 42 AD3d 514; see also Grasso v Angerami, 79 NY2d 813; Pagano v Kingsbury, 182 AD2d 268). The medical reports of Dr. Butani also were without any probative value since they were unaffirmed, and were not incorporated into his affirmation by reference.
SKELOS, J.P., SANTUCCI, COVELLO, McCARTHY and CHAMBERS, JJ., concur.

Matra v Raza


Baker, McEvoy, Morrissey & Moskovits, P.C. (Thomas Torto, New
York, N.Y. [Jason Levine], of counsel), for appellants.
Neveloff Law Firm, P.C., New York, N.Y. (Daniel I. Neveloff of counsel), for respondent.

DECISION & ORDER

In an action to recover damages for personal injuries, the defendants appeal from an order of the Supreme Court, Kings County (Jacobson, J.), dated October 23, 2007, which denied their 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 defendants' motion for summary judgment dismissing the complaint is granted.

The defendants met their initial prima facie burden of demonstrating, through admissible evidence, 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; see also Meyers v Bobower Yeshiva Bnei Zion, 20 AD3d 456).

In opposition, the plaintiff failed to raise a triable issue of fact. The magnetic resonance imaging reports authored by Dr. Harold Tice concerning the plaintiff were not competent evidence since they were unaffirmed (see Grasso v Angerami, 79 NY2d 813, 814-815; Patterson v NY Alarm Response Corp., 45 AD3d 656; Verette v Zia, 44 AD3d 747; Nociforo v Penna, 42 AD3d 514, 515; Pagano v Kingsbury, 182 AD2d 268, 270). The affirmed medical report of Dr. Gideon Hedrych was without any probative value since he relied on the unsworn reports of others in reaching his conclusions (see Malave v Basikov, 45 AD3d 539, 540; Verette v Zia, 44 AD3d at 748; Furrs v Griffith, 43 AD3d 389, 390; see also Friedman v U-Haul Truck Rental, 216 AD2d 266, 267). Similarly, although Dr. Donald Rose was able to objectively observe the plaintiff's menisci during arthroscopic surgeries he performed on the plaintiff's knees in May and June 2006, the portion of the opinion in his report regarding proximate causation is based upon unsworn evidence and is therefore without probative value (see Navedo v Jaime, 32 AD3d 788, 789), particularly as Dr. Rose had earlier found full range of motion in both knees during his initial evaluation of the plaintiff in April of 2006. The plaintiff's remaining contentions have been rendered academic by our determination.
SPOLZINO, J.P., RITTER, DILLON, BALKIN and LEVENTHAL, JJ., concur.

 

 

Covert v. Samuel
 

Appeal from an order of the Supreme Court, Erie County (Diane Y. Devlin, J.), entered July 9, 2007 in a personal injury action. The order, insofar as appealed from, granted plaintiffs' cross motion for partial summary judgment on liability.


Hagelin Kent LLC, Buffalo (Victor M. Wright Of Counsel), For Defendants-Appellants.
Lipsitz Green Scime Cambria LLP, Buffalo (John A. Collins Of Counsel), For Plaintiffs-Respondents.


It is hereby ORDERED that the order insofar as appealed from is unanimously reversed on the law without costs and the cross motion is denied.

Memorandum: Plaintiffs commenced this action to recover damages for injuries allegedly sustained by Meg H. Covert (plaintiff) when the vehicle she was driving was rear-ended by a vehicle driven by defendant Rana Samuel and registered to defendant Sam J. Samuel. We note at the outset that defendants are correct that plaintiffs' cross motion for partial summary judgment on liability, seeking partial summary judgment on the issues of negligence and serious injury (see Ruzycki v Baker, 301 AD2d 48, 51-52), was untimely. Absent an order to the contrary, a party seeking summary judgment must move for that relief "no later than one hundred twenty days after the filing of the note of issue, except with leave of court on good cause shown" (CPLR 3212 [a]; see Filannino v Triborough Bridge & Tunnel Auth., 34 AD3d 280, 281). Here, the note of issue was filed in October 2006 but an order was entered in March 2007, on consent of plaintiffs, extending defendants' "time to make any motions for summary judgment" to 120 days after the date on which the report of the physician who examined plaintiff on defendants' behalf was provided to plaintiffs' counsel. Defendants moved for summary judgment dismissing the complaint in March 2007 on the ground that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102 (d) and, as noted, plaintiffs cross-moved for partial summary judgment on liability. Although plaintiffs cross-moved over 120 days after the note of issue was filed, they neither sought leave to file a late motion nor made any showing of good cause for their delay pursuant to CPLR 3212 (a). Thus, that part of plaintiffs' cross motion with respect to negligence was time-barred, and Supreme Court erred in granting that part of the cross motion.

Although that part of the cross motion with respect to the issue of serious injury was properly before the court because it "was made on nearly identical grounds" as defendants' timely motion (Grande v Peteroy, 39 AD3d 590, 591-592; see Fahrenholz v Security Mut. Ins. Co. [appeal No. 2], 32 AD3d 1326, 1328), we further agree with defendants that the court erred in granting that part of the cross motion on that issue. In support of the cross motion, plaintiffs submitted the affirmations of plaintiff's treating neurosurgeon and orthopedic surgeon. The neurosurgeon found that plaintiff suffered from a degenerative condition of her cervical spine, and he did not "adequately address how plaintiff's current medical problems, in light of her past medical history, are causally related to the subject accident" (Style v Joseph, 32 AD3d 212, 214; see also Montgomery v Pena, 19 AD3d 288, 289-290). Plaintiffs met their burden, however, by submitting the affirmation of the orthopedic surgeon who concluded, based on objective evidence, that the accident aggravated a preexisting problem in plaintiff's right shoulder, resulting in tendinopathy and intrasubstance tearing of the supraspinatus tendon, as revealed by an MR arthrogram (see Ellis v Emerson, 34 AD3d 1334, 1335). Nevertheless, we conclude that defendants raised an issue of fact sufficient to defeat that part of the cross motion by submitting the report of the physician who examined plaintiff on their behalf, wherein he concluded that plaintiff's "complaints" resulted from a preexisting condition and were not causally related to the accident(see Agard v Bryant, 24 AD3d 182; Clark v Perry, 21 AD3d 1373, 1374).

Seck v. Minigreen Hacking Corp.


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 Minigreen Hacking Corp. and Altaf Raja appeal from an order of the Supreme Court, Kings County (Saitta, J.), entered December 28, 2007, which denied their motion for summary judgment dismissing the complaint insofar as asserted against them on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is reversed, on the law, with costs, and the motion of the defendants Minigreen Hacking Corp. and Altaf Raja for summary judgment dismissing the complaint insofar as asserted against them is granted.

The defendants Minigreen Hacking Corp. and Altaf Raja (hereinafter the appellants) established their 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, 350-351; Gaddy v Eyler, 79 NY2d 955, 956-957). In opposition, the plaintiff failed to raise a triable issue of fact. The majority of the plaintiff's submissions made in opposition to the appellants' motion, with the exception of the affidavit of his treating chiropractor and the affirmation of his treating radiologist, were either unaffirmed or unsworn, and thus without any probative value (see Grasso v Angerami, 79 NY2d 813, 814-815; Patterson v NY Alarm Response Corp., 45 AD3d 656; Verette v Zia, 44 AD3d 747, 748; Nociforo v Penna, 42 AD3d 514, 515). The affidavit of the plaintiff's treating chiropractor failed to raise a triable issue of fact. The chiropractor did not set forth any objective evidence to support the assertion that a pre-existing "injury" from a prior accident, which he failed to describe, was "exacerbated" by and causally related to the subject accident (see McNeil v Dixon, 9 AD3d 481, 482; Ingram v Doe, 296 AD2d 530, 532). The conclusions in the affidavit that the injuries and limitations noted in the plaintiff's lumbar spine were the result of the subject accident were rendered speculative in light of the fact that the chiropractor failed to adequately address that prior accident and injury (see Gorden v Tibulcio, 50 AD3d 460; McNeil v Dixon, 9 AD3d 481; see also Penaloza v Chavez, 48 AD3d 654, 655). The CT scan of the plaintiff's lumbar spine, which was affirmed by the plaintiff's treating radiologist, was performed a little more than two years after the subject accident occurred, and was the only one performed on the plaintiff. Therefore, that scan could not prove that the injuries alleged by the plaintiff in this action were caused by the subject accident rather than the previous accident. By the plaintiff's own deposition testimony, the previous accident occurred in the same year as the subject accident (see McNeil v Dixon, 9 AD3d 481).

Neither the plaintiff nor the plaintiff's treating chiropractor adequately explained the lengthy gap between the plaintiff's treatment in January 2006 and his last examination by his treating chiropractor in May 2007 (see Pommells v Perez, 4 NY3d 566, 574; Cornelius v Cintas Corp., 50 AD3d 1085; Berktas v McMillian, 40 AD3d 563, 564; Waring v Guirguis, 39 AD3d 741, 742; Phillips v Zilinsky, 39 AD3d 728, 729).

The plaintiff also failed to set forth any competent medical evidence to establish that he sustained a medically-determined injury of a nonpermanent nature which prevented him from performing his usual and customary activities for 90 of the 180 days following the subject accident (see Roman v Fast Lane Car Serv., Inc., 46 AD3d 535, 536; Sainte-Aime v Ho, 274 AD2d 569).

Accordingly, the Supreme Court should have granted the appellants' motion for summary judgment dismissing the complaint insofar as asserted against them.
SPOLZINO, J.P., RITTER, DILLON, BALKIN and LEVENTHAL, JJ., concur.

In the Matter of Hertz Claim Management Corporation v. Kulakowich


Law Offices of James J. Killerlane, P.C. (Jeffrey Samel & Partners,
New York, N.Y. [David Samel] of counsel), for appellant.
George F. Sacco, Staten Island, N.Y., for petitioner-respondent.
Boeggeman, George & Corde, P.C., White Plains, N.Y. (Eugene
N. Neporanny and Cynthia Dolan of
counsel), for proposed additional
respondent.


DECISION & ORDER

In a proceeding pursuant to CPLR article 75, inter alia, to permanently stay arbitration, Andrew P. Kulakowich appeals, as limited by his brief, from so much of an order of the Supreme Court, Westchester County (Bellantoni, J.) entered June 14, 2007, as granted that branch of the petition which was to permanently stay arbitration.

ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and that branch of the petition which was to permanently stay arbitration is denied.

The Supreme Court erred in granting the petitioner a permanent stay of arbitration on the ground that its insured failed to exhaust the policy limits of the operator of the offending vehicle (see S'Dao v National Grange Mut. Ins. Co., 87 NY2d 853). It is undisputed that the petitioner's insured exhausted, through settlement, the bodily injury policy limits under the policy of the owner of the offending vehicle, which was less than the liability coverage provided under the petitioner's policy. The petitioner's insured was not required to exhaust the liability coverage limits under a separate insurance policy of the operator of the offending vehicle prior to pursuing a claim for underinsured motorist benefits from the petitioner (see Matter of Liberty Mut. Ins. Co. v Doherty, 13 AD3d 629).

Moreover, the petitioner's failure to respond to a letter notifying it of an offer to settle for the policy limits of the owner of the offending vehicle and affording it the opportunity to consent to or reject such offer may be deemed an acquiescence to the offer to settle (see Matter of State Farm Mut. Ins. Co. v Del Pizzo, 185 AD2d 352). Thus, it was error to permanently stay arbitration based on the failure of the petitioner's insured to obtain the petitioner's consent to that offer to settle, as the petitioner, in effect, acquiesced to it (see Matter of State Farm Mut. Ins. Co. v Del Pizzo, 185 AD2d 352).

Based on the foregoing, it is unnecessary to reach the petitioner's remaining contentions.

Pesta v. City of Johnstown


Calendar Date: June 3, 2008
Before: Mercure, J.P., Rose, Lahtinen, Kavanagh and Stein, JJ.


Davidson & O'Mara, P.C., Elmira (Donald S.
Thomson of counsel), for third-party defendant-appellant.
Friedman, Hirschen & Miller, L.L.P., Albany (Jeanne
M.G. Lloyd of counsel), for defendant and third-party plaintiff-
respondent.

MEMORANDUM AND ORDER

Lahtinen, J.

Appeal from an order of the Supreme Court (Giardino, J.), entered January 18, 2007 in Fulton County, which, upon reargument, among other things, granted defendant's motion for summary judgment on its common-law indemnification claim against third-party defendant.

This appeal involves a dispute over the applicability of the antisubrogation rule. Plaintiff, an employee of third-party defendant, Peter Luizzi & Brothers Contracting (hereinafter Luizzi), was working on a road paving project that Luizzi had contracted to complete for defendant. Plaintiff sustained serious injuries, resulting in amputation of both his legs, when he was struck on the construction site by a dump truck owned by Luizzi and operated by another Luizzi employee. At the time of the accident, Luizzi was insured by Harleysville Insurance Company under three policies: a commercial general liability policy (hereinafter CGL policy), a commercial automobile policy (hereinafter automobile policy), and a commercial liability umbrella policy (hereinafter umbrella policy). In addition, as per the contract between Luizzi and defendant, Luizzi had purchased from Harleysville an owners and contractors protective liability policy (hereinafter OCP policy) that named defendant as the insured.

After plaintiff commenced an action against defendant, defendant brought a third-party action seeking common-law indemnification from Luizzi. Defendant moved for summary judgment on its indemnification claim and Luizzi cross-moved to partially dismiss the third-party action to the extent of the coverage of the policies. In December 2006, Supreme Court, among other things, held that defendant would be entitled to indemnification for damages that exceeded the amount of coverage in the CGL policy, the automobile policy and the umbrella policy. Shortly thereafter, Supreme Court granted reargument (but reserved its decision) and also commenced a jury trial, during which plaintiff's action settled; but the stipulation permitted the third-party action to proceed. In January 2007, Supreme Court rendered its decision following reargument and granted defendant's motion in its entirety. The court determined that the antisubrogation rule did not apply because coverage of the accident was excluded under the terms of the CGL, automobile, and umbrella policies. The court further found that, as to OCP policy, which named only defendant as an insured, the antisubrogation rule was inapplicable. Luizzi appeals.

It is well settled that "[a]n insurer has no right of subrogation against its own insured for a claim arising from the very risk for which the insured was covered" (Pennsylvania Gen. Ins. Co. v Austin Powder Co., 68 NY2d 465, 468 [1986]; see Jefferson Ins. Co. of N.Y. v Travelers Indem. Co., 92 NY2d 363, 373-374 [1998]; North Star Reins. Corp. v Continental Ins. Co., 82 NY2d 281, 294 [1993]). The antisubrogation rule does not apply, however, when an exclusion in a policy renders the policy inapplicable to the loss (see North Star Reins. Corp. v Continental Ins. Co., 82 NY2d at 296; State of New York v U.W. Marx, Inc., 209 AD2d 784, 785 [1994]).

The CGL policy had an exclusion entitled "Aircraft, Auto Or Watercraft" applicable to "'Bodily injury' or 'property damage' arising out of the ownership, maintenance, use or entrustment to others of any aircraft, 'auto' or watercraft owned or operated by or rented or loaned to any insured." Luizzi contends that the exclusion does not apply because the use of the dump truck fell within the definition of "mobile equipment" rather than "auto" under the terms of the policy. The definition of "auto" includes a "land motor vehicle . . . designed for travel on public roads, including any attached machinery or equipment." "Mobile equipment" pertains to items such as bulldozers, farm machinery, and vehicles on crawler treads, as well as "[v]ehicles, whether self-propelled or not, maintained primarily to provide mobility to permanently mounted . . . [r]oad construction or resurfacing equipment such as graders, scrapers or rollers." Under these definitions, the subject dump truck, which is designed to travel on public roads and not limited primarily to providing mobility to permanently mounted equipment, must be considered an "auto" and, accordingly, falls within the exclusion in the CGL policy.

With regard to the automobile policy, Supreme Court found applicable the exclusion for injuries resulting from acts of a coemployee occurring within the course of employment for which workers' compensation benefits were available. Luizzi argues for the first time on appeal that this exclusion is void as it violates public policy. Initially, we note that, contrary to defendant's contention, an argument that a provision is void as against public policy may be raised for the first time on appeal (see Matter of Niagara Wheatfield Adm'rs Assn. [Niagara Wheatfield Cent. School Dist.], 44 NY2d 68, 72 [1978]). Nevertheless, we find the argument unavailing since the provision is consistent with recognized law in this state (see Workers' Compensation Law § 29 [6]; Kawecki v McAllister, 221 AD2d 597, 598 [1995]; Kinsman v McGill, 210 AD2d 659, 659-660 [1994]; see generally 8 Couch on Insurance 3d § 115:13; Benton, Annotation, Validity, Construction, and Application of Provision In Automobile Liability Policy Excluding From Coverage Injury to, or Death of, Employee of Insured, 43 ALR 5th 149; cf. City of Albany v Standard Acc. Ins. Co., 7 NY2d 422, 431-433 [1960]).

Luizzi concedes that, if coverage is excluded under the CGL and automobile policies, then the umbrella policy is not implicated. Accordingly, since we have found applicable exclusions in the CGL and automobile policies, the coverage of the umbrella policy does not apply.

Finally, Luizzi asserts that the antisubrogation rule applies to the OCP policy. We cannot agree. The OCP policy named only defendant as an insured (cf. Cox v International Paper Co., 234 AD2d 757, 759-760 [1996] [antisubrogation applied where the third-party plaintiff named as an additional insured on policy naming the third-party defendant as insured]). And, as previously discussed, Luizzi is excluded from coverage under the other policies purchased from Harleysville. Similarly, in North Star Reins. Corp. v Continental Ins. Co. (supra), the third-party defendant purchased an OCP policy naming only the third-party plaintiff as an insured (id. at 290) and purchased from the same insurer a separate general commercial liability policy, which was determined to be inapplicable because of a policy exclusion (id. at 296). Under such circumstances, the Court of Appeals held that the antisubrogation rule did not apply in North Star, and the same result necessarily follows on the facts before us.