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Coverage Pointers - Volume X, No. 20

Untitled Document

Dear Coverage Pointers Subscribers:

 

Greetings from a hotel room high above the Magnificent Mile in the Windy City.  I'm attending the DRI Insurance Claims Institute, always an excellent program with top-notch speakers. 

 

LMK DECIDED BY COURT OF APPEALS
Before we tell you anything else, we announce that on Thursday, April 2, the Court of Appeals did the right thing in the LMK decision involving recovery of legal fees by claimant's counsel in No Fault proceedings.  Audrey mentions it in her letter below and analyzes it in her Audrey's Angles column in today's issue.

 

WELCOME TO NEW PLRB/LIRB SUBSCRIBERS

I was delighted to speak at the PLRB/LIRB Claims Conference in Seattle this past week and truly honored to have received the 2009 Outstanding Presentations Award.  My topic was "Complex Liability Insurance Coverage Issues" with a focus on an approach to unraveling mixed coverage, contract and tort issues to arrange them for analysis.  We are pleased to welcome over 30 new subscribers from conference attendees.   I hope that you enjoy our user-friendly publication.  Pass it on to others who might find it worthwhile and if they do, we'd be happy to include them as direct subscribers.  Close to 1800 subscribers receive Coverage Pointers directly and many hundreds more receive copies forwarded by others.  We have an interactive site on the World Wide Web - it's the New York Insurance Law group in LinkedIn www.linkedin.com/groups?gid=1777061.

 

FROM 30,000 FEET

For those who are just joining our readership ranks, let me introduce the treats you have in store.  For almost 11 years, we have been publishing this electronic newsletter and we dare say, it's one of the oldest in this medium.  It's a labor of unconditional love from our coverage team and you'll meet most of them in their columns or articles in the issue which is attached in Word format. We use Word, rather than .PDF format for a couple of reasons, the most important of which is that we want you to be able to easily cut and past case summaries or articles into your electronic claim files, when you see an summary or article that you may find useful or that you want to share with others.  Back issues are available on our website, www.hurwitzfine.com.  Just click on the Newsletter tab.

 

Each issue is welcomed by a cover letter, and if you're reading this, you've found it.  This missive contains highlight and overviews of the attached issues and other perspectives on the issue (and issues) of the day (not all having to do directly with insurance) with a little useless but entertaining (at least to me) ramblings tossed in for good measure.  Maintain your sense of humor (or, for our Canadian readers, humour) as you read this particular offering.

 

Our columns include:

 

  • Kohane's Coverage Corner which covers all liability and casualty policies cases, E&O, D&O, excess and umbrella, reinsurance, regulatory and virtually anything else not covered by the other authors;
  • Audrey's Angles is penned by Audrey Seeley, the Queen of No Fault in New York, who writes on judicial and arbitral decisions in the No Fault area dealing with everything from claim filing to peer reviews to attorney fees to appeals.
  • Margo's Musings comes to you from Margo Lagueras.  Margo focuses on the high volume of appellate cases discussing the "Serious Injury" threshold required to be met under the No Fault statute in New York in order for a NY auto accident victim to be permitted to maintain an action for pain and suffering against the owner or operator of a motor vehicle.
  • Peiper on Property (and Potpourri) is Steve Peiper's analysis of first party property cases, life, health and disability, surety, title insurance and whatever other interesting cases catch our eye that may be litigation but not insurance related.
  • Earl's Pearls is the work of our prolific contributor, Earl Cantwell who contributes several paragraphs each issue of in-depth analysis of a topic which is of interest to our readership.  He may discuss an evidentiary decision, new discovery rules, spoliation, or any other topic of consideration.  For example, in this week's issue, Earl discusses a recent case on the confidentiality of settlement agreements in New York.
  • Across Borders covers significant insurance cases from other jurisdictions that come to you from members of the Federation of Defense & Corporate Counsel (FDCC) and their submissions to Hot Cases (www.thefederation.org).  

You will also find occasional specialty columns and articles.  For example, we are completing Scott Duquin's (aka the Duke of Lead) series on lead poisoning litigation. This week's issue contains such a special column:

 

SCHOOL DISTRICT LIABILITY FOR INTERNET USE

As a special treat, attached to this issue is Paul Suozzi's article on School District Liability for Internet Use.  Thanks Paul.

 

HAPPY TWEED DAY

We all know that April 1st is April Fool's Day.  Fewer realize that April 3rd is listed as National Tweed Day.  Virtually every website that discusses this bizarre holiday suggests that it celebrates the warm, fashionable woolen clothing that originated in Scotland.  However, this Editor suggests otherwise.  Is it only coincidental April 3 celebrates the birthday of corrupt Tammany Hall leader, William "Boss" Tweed, who was born on that day in 1823?  Is National Blagojevich Day just around the corner?

 

FROM AUDREY SEELEY:

Greetings from the DRI Insurance Coverage and Claims Institute in Chicago.  There has been a tremendous turnout, despite the economic climate, and the program this year is top notch.

 

The headliner is the New York State Court of Appeals decision in LMK!  Yes, I said LMK.  I know you have been waiting anxiously for it.  The opinion was by Judge Pigott, a Buffalo native.  It was short and straight to the logical conclusion - attorney's fees are calculated on the aggregate of the bills per insured; a late denial does not preclude the tolling of interest.  This is a major decision in the no-fault area and will have a great impact in the future of the amount of claims.  If you would like a complete copy of the decision please email me at [email protected].  The obvious issue after the decision is what is the next argument we will see from the plaintiff's bar?  We are looking at that and in the event you are on the receiving end of such a post-LMK argument,  please share it with us and what your response was so that we can share it with all of our subscribers.  One tactic that may be tried, which most likely will not see success due to a consolidation motion, is the mass filing of suits with only one bill.  The second tactic, which I am still trying to see if it truly exists after this decision, is the $60/$80 as opposed to the 20% minimum argument.  This decision continually discusses the attorney's fee being based upon the 20% to a maximum of $850.00.  I will continue to review this issue and keep you updated if I hear anything.  The full decision is in the attached issue.

 

Audrey

 

TRAINING

 

This is a great time to speak of company training.  For those who found my presentation worthwhile and would like a reprise at a company location, contact me and we'd be happy to work out a convenient time for a visit.

 

We can craft training topics to meet your particular needs.  Here are just a few of the topics on which we can present:

 

  1. ADR and How to Get to "Yes"
  2. Auto Liability Policy Primer
  3. CGL Policy Primer
  4. Construction Cases - The Interplay between Indemnity Agreements and Insurance Policies
  5. EUO's Under First Party Policies
  6. Homeowners Liability Policy Primer
  7. How to Resolve Coverage Disputes:  DJ Actions, Insurance Law Section 3420 Direct Actions (Choice, Strategy and Timing)
  8. Insured Selected Counsel: When is it Necessary and How to Avoid it? 
  9. Mediation and the Role of the Mediator
  10. New Rules Regarding Notice, Developing Proof of Prejudice and a Strategic to Avoiding Direct Actions
  11. No Fault Regs - Knowledge is Power
  12. No- Fault Arbitrations and Appeals: Mock Arbitrations, Preserving the Record, Taking an Appeal
  13. NY Disclaimer Letter - Nuts & Bolts: How to Create and Write and Send a Disclaimer Letter, and How Not To. (The Reservation of Right Letter Myth)
  14. Other Insurance, Additional Insureds and Priority of Coverage
  15. Preventing Bad Faith Claims - First Party Cases
  16. Preventing Bad Faith Claims - Liability Cases
  17. Primary and Excess Insurance - Rights & Responsibilities
  18. SUM Claims Handling
  19. The Cooperation Clause - How to Handle
  20. The Internet as a Tool for the Claims Representative 

AREAS OF PRACTICE

At the PLRB/LIRB Claims Conference, we were asked where in New York State we represent clients.  The answer is simple:  anywhere our clients need us.  Our geographical reach is throughout New York and most of our coverage work is outside of Western New York.  As an expert witness, I've traveled throughout the US, Canada, and to London.  As a coverage mediator, our geographical reach is also without borders.

 

AUDREY WOWS THEM IN CHICAGO

Here in Chicago on Wednesday, our Audrey Seeley, a national leader in her own right in the Insurance Coverage Committee of DRI, was an opening speaker at the DRI Insurance Coverage and Claims Institute, Insurance 101program speaking on Inside Baseball - Understanding How Insurance Companies Work.  Atta lawyer.

 

NEW YORK HIGH COURT HOLD OCCASIONAL SELLERS OF USED PRODUCTS NOT STRICTLY LIABLE

In Jaramillo v. Weyerhaeuser Company and Technology Licensing Associates, Inc., decided by the New York Court of Appeals on Tuesday, March 31st, the high court decided that the occasional seller of products in not strictly liable for product defects.  New York courts have long held that both manufacturers and those regularly in the product distribution chain are strictly liable for defects in design, manufacturing and inadequate warning.  This case involved an "occasional" seller, one who sold a product it owned but not an entity regularly selling this particular product.   To review this decision, click here.

 

100 YEARS AGO TODAY

Regular readers often comment on our historical dalliances.  We don't want to disappoint.  A century ago today, it was a simpler time:

 

April 3, 1909

New York Times, p.16, col. 3

 

TAKE SCHOOLBOYS TO JAIL

Eleven Students of Horace Mann School Arrested for Ball Playing

 

While their school companions cheered, eleven baseball players of the Horace Mann School, at Broadway and 120th Street, were driven in a patrol wagon to the West 125th Street Police Station and charged with disorderly conduct yesterday. This was the result of letters complaining of baseball played in the street from W. H. White of 417 West 117th Street and William Watson of 44 Morningside Avenue West. These letters, containing stories of broken windows, came to Commissioner Bingham.

 

Detectives drove eleven boys into the doorway of the school yesterday and sent for a patrol wagon. While they waited for the wagon the 200 other pupils pushed and jostled them, giving cheers and singing school songs. The crowd ran with the wagon to the station house, and kept on cheering and singing till James E. Russell of the Teachers College at Columbia bailed the eleven boys out.


Editor's Note: 
The Good Samaritan, James E. Russell, went on to be the Dean of the Columbia University Teachers College.  Under his leadership, the enrollment of Teachers College grew from 169 students in 1897 to almost 5,000 in 1927. During this period the budget expanded tenfold and the physical plant grew from two buildings to 17.

 

Olean (NY) Evening Times - April 3, 1909

Page 1, Col 6

 

GREAT MARATHON RACE IS ON

 

The great international Marathon will take place at the Polo grounds this afternoon, with six of the greatest long-distance runners in the world as competitors. The race is for 26 miles, 385 yards, for a prize of $10,000. This is the richest purse ever hung up for a similar event in this or any other country . Johnny Hayes, winner of the Olympic Marathon in London, the thrilling race that has been responsible for the Marathon craze here, will represent the United States; Alfred Shrubb will wear the Union Jack; Thomas Longboat, the maple leaf of Canada; Doranda Pietri will represent Italy; Matthew Maloney, now of Yonkers, but only a few years out, will wear Ireland's emerald, while Henri Saint Yves wears the tri-color of France.

 

Editor's Note:  Press reports the following day reported that St. Yves, a novice marathon runner, crossed the finish line five minutes before any other competitor. He "killed off Longboat and Shrubb at 21 and 25 miles and raced the three other competitors into such a state that they were unable to cause him the slightest worry or anxiety for the first twenty miles."  In a 2006 book entitled 100 Greatest Days in Sports, the author declared that April 3, 1909 was ranked 99th because of that race. April 15, 1947 was ranked at the top of the list, the day Jackie Robinson broke baseball's color barrier at Ebbets Field in Brooklyn.

 

PUBLISHED IN THE TICL JOURNAL
For those who are NY Bar and TICL Section (Tort, Insurance & Compensation Law) members, you'll find two of my article in the Winter 2009 edition of the TICL Journal, that Section's quarterly publication:  Ouch that Hurts, The Difference Between Intentional Injury and Assault Exclusions (previously published as an addendum to the April 4, 2008 issue of Coverage Pointers) and Excuses, Excuses, Excuses, A Primer and Checklist on Late Notice Issues previously published as an addendum to the April 18, 2008 issue of Coverage Pointers.  The value of being a CP subscriber is that you received these articles almost a year earlier than the rest of the world.  Let me know if you need reprints, although they are readily available on our website. 

 

IN THIS WEEK'S ISSUE:

 

KOHANE'S COVERAGE CORNER

Dan D. Kohane

[email protected]

  • Carrier Proves Material Misrepresentation in Policy Application and Can Rescind Policy
  • Trust Exclusion Means What it Says
  • No Excuse for Late Notice
  • Issues Not Previously Decided; Carrier has Obligation to Defend
  • Claims Against Law Firm for Breach of Fiduciary Duty and Misappropriation of Confidential Information do Not Give Rise to Duty to Defend Firm under Law Firm Malpractice Policy
  • With Respect to Coverage, the Cart (Wagon) Does Not Come Before the Horse (Truck).  Fourth Department Rules that Non-Owned Auto Coverage Does Not Apply to Someone Borrowing a Hay Wagon from the Insured Farm 

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

Margo M. Lagueras

[email protected]

  • Conclusion that Pain is Related to Degenerative Disease and Was Not Exacerbated by the Accident Requires "Persuasive Evidence"
  • Objective Evidence that ROM Remains Restricted Even After Surgery Raises Triable Issue of Fact Under Permanent Limitation Category of Serious Injury
  • Affidavits Quantifying Limitations Found in Both Contemporaneous and Recent Examinations Raise Triable Issues of Fact to Defeat Summary Judgment
  • "Limitation" Unsupported by ROM Testing Will Not Pass Muster
  • Defendants' Examining Orthopedist Notes Significant Limitations in Plaintiff's Spine
  • No Good as Against One, No Good as Against Any
  • Contemporaneous Quantitative or Qualitative Assessment of Extent and Duration of ROM Limitations is Required Even Where There Has Been Surgery
  • Entirely New Injury Asserted for First Time in Supplemental Bill of Particulars Served in Opposition to Summary Judgment Must be Timely Objected to or Objection Will be Unpreserved for Review
  • Claim Under the Permanent Consequential Limitation of Use Category May be Supported where Treatment for Injury Would be Only Palliative and Prognosis is Guarded
  • Defendant Fails to Show Plaintiff's Failure was "Willful and Contumacious" 

AUDREY'S ANGLES ON NO-FAULT

Audrey Seeley

[email protected]

  • Attorney's Fees Calculated on Total of Bills in Dispute Per Insured; Interest Can Be Tolled if Untimely Denial Issued
  • Summary Judgment Denied as Denial Timely Issued After Additional Verification Received
  • Peer Reviewer's Reliance Upon Other Physicians' Reports in Rendering Opinion Does Not Render Report Insufficient to Establish Lack of Medical Necessity

PEIPER ON PROPERTY (and POTPOURRI)

Steven E. Peiper

[email protected]

  • The Term: "Use in Whole or in Part for Business Purposes" is Ambiguous.  Barn Storing Business Items, in Part, is Not Clearly Being Used for Business Purposes
  • Plaintiff's Claim on Breach of Contract Barred by the Statute of Frauds
  • Plaintiff's Malpractice Claim Dismissed Where She Cannot Establish the Existence of Coverage

 That's it for now.  See you in a couple of weeks.  Drop us a line and tell us how we're doing.  Enjoy the issue and Paul's article on Internet Liability for School Districts as well. 

Dan 

Untitled Document

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
Katherine A. Fijal
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

Kohane’s Coverage Corner
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
Reported Decisions

KOHANE’S COVERAGE CORNER

Dan D. Kohane
[email protected]

4/2/09              Kiss Construction NY, Inc., v. Rutgers Casualty Insurance Company
Appellate Division, First Department
Carrier Proves Material Misrepresentation in Policy Application, and Can Rescind Policy
Applicant for CGL coverage told insurer that it was a painting contractor and policy was issued.  In fact, applicant was a general contractor.  Insurer was able to establish, with underwriting guidelines and affidavits, that it would never have issued a policy to a general contractor.  Court accepted that proof and rescinded policy, ab initio (from inception) and directed insurer to return premiums paid.

4/2/09              American Guarantee and Liability Insurance Company v. Hoffmann
Appellate Division, Second Department
Trust Exclusion Means What it Says
The policy at issue excludes from coverage any claims based "in whole or in part" on acts "in connection with" a trust of which defendants are beneficiaries. This is an enforceable exclusion Here, each claim in the underlying proceeding centered on the transfer of stock held by a trust for the petitioners therein to a trust created by defendants of which they were the sole trustees and beneficiaries.

4/2/09              Silverite Construction Company, Inc. v. One Beacon Insurance Company
Appellate Division, First Department
No Excuse for Late Notice
Insured waited 2½ month-plus before giving notice of a workers injury.  Its excuse was that it did not believe worker had a claim or would bring one.  However, as worker was removed from the site by ambulance and missed a week of work and only returned on light duty and filed a claim against the City, excuse was unacceptable.  Insurer properly disclaimed and its slight delay, to determine insured status of Silverite, did not preclude denial.
3/24/09            Franklin Development Co., Inc., v. Atlantic Mutual Insurance Company
Appellate Division, Second Department
Issues Not Previously Decided; Carrier has Obligation to Defend
Editor’s Note:
Very often, we find that the participants in coverage appeals in New York are Coverage Pointer’s subscribers.  On occasion – if time permits before an issue is published – we will ask the attorney or claims professional involved in the appeal to provide the CP summary in order to give our readers the unique perspective of those in that particular litigation.  We thank Brian M. Hussey for this summary of the Franklin Development case.  He was the policyholder lawyer who successfully prosecuted this appeal:
This DJ was brought by the owner of commercial premises seeking defense and indemnity as an expressly named additional insured on his tenant's policy. The request for coverage was denied, as the carrier claimed that the place of the accident was not within the demised premises ( as required by its A/I endorsement).  The underlying injury action was brought by an employee of the sole second floor tenant claiming he tripped and fell down stairs while leaving work at the end of the day. The owner impleaded the second floor tenant seeking insurance and contractual indemnity per written lease. In the injury action, summary judgment was granted to a codefendant( ground floor tenant) and to the third-party defendant (second floor tenant). Owner appealed the denial of its motion to dismiss the plaintiff's action and its motion for conditional summary judgment for contractual indemnity against the second floor tenant.
 
On the first appeal, the Second Department granted the owner's motion dismissing the plaintiff's action for no notice of defect and declined to rule whether the place of the accident was appurtenant to the demised premises, an issue that was briefed by both owner and second floor tenant. The DJ was now limited to the duty to defend as the dismissal of the injury action mooted the claim for indemnity. It was urged to the trial court that the claim of appurtenance to the demised premises was adequate for a finding that the duty to defend was owed to the owner.  The carrier moved for summary judgment based on the scope of demise argument. The Court dismissed the DJ based on collateral estoppel, its own ruling on the maintenance duties during the summary judgment motions in the injury action and sua sponte imposed sanctions on owner's attorneys for maintaining a frivolous action.
 
The Second Department reversed, holding that: the owner was not collaterally estopped by express trial court findings in action # 1 that were unreviewed in Appeal #1, the requisite full and fair opportunity test was not met; the sanctions were vacated; and, that the carrier's motion papers in the DJ failed to establish that the underlying complaint did not suggest a reasonable possibility of coverage. The appellate issue is that unreviewed findings in action #1 are not collateral estoppel in the DJ ( it is my belief that if the findings in action #1 would have been collateral estoppel in the DJ if not appealed or if the argument was abandoned during appeal #1). The coverage issue is more familiar, that there are separate triggers for the duty to defend and the duty to indemnify; and, that the duty to defend may be triggered by a possibility of coverage. Because allegations may trigger the duty to defend, the Second Department did not have to rule on the appurtenance issue to rule on the duty to defend; however, the opinion cites to Jenel Mgmt. Corp. v. Pacific Ins. Co., 55 AD3d 313, wherein the First Department did hold stairs necessarily incidental to the demised premises and thus triggering A/I coverage.    

3/24/09            Burkhart, Wexler & Hirschberg, LLP, v. Liberty Ins. Underwriters, Inc.,  
Appellate Division, Second Department
Claims Against Law Firm for Breach of Fiduciary Duty and Misappropriation of Confidential Information do Not Give Rise to Duty to Defend Firm under Law Firm Malpractice Policy
The Burkhart law firm was insured under a policy of professional liability insurance issued by Liberty (LIU).  During the term of the policy, the Burkhart Firm was sued in an action entitled Financial Advisors Legal Association, Inc. v Wexler & Burkhart, P.C., (the underlying action). In that action, Financial claimed that Burkhart engaged in a "wanton, willful and malicious" breach of fiduciary duty for misappropriating Financial’s confidential information and trade secrets; tortious interference with contract for using this information to attempt to convert Financial’s members and prospective members to a newly- formed competing business entity; and for "wanton, willful and malicious" misappropriation of trade secrets.
LIU denied coverage claiming that the policy did not obligate it to defend the law firm for the claims. Here, Liberty established its prima facie entitlement to judgment as a matter of law because there were no claims in the underlying complaint claiming professional negligence in the performance of legal services.
3/20/09            Richmond Farms Dairy, LLC. v. National Grange Mut. Ins. Co.
Appellate Division, Fourth Department

With Respect to Coverage, the Cart (Wagon) Does not Come Before the Horse (Truck).  Fourth Department Rules that Non-Owned Auto Coverage Does Not Apply to Someone Borrowing a Hay Wagon from the Insured Farm
In this case, Mr. Rapson and Ms. Miller were severely injured when the motorcycle they were riding collided with a vehicle driving by Richardson.  At the time of the incident, Richardson was returning to Richmond Farms Dairy (“Farm”) after using a wagon owned by the Farm to transport a load of hay that she had just purchased.  Rapson and Miller sued both Richmond and the Farm for damages related to the accident.
Upon receipt of the suit, Richardson sought coverage under the Farm’s business auto policy and the Farm’s excess policy.  Richardson maintained that at the time of the incident, the vehicle she was operating was covered under either or both of these policies.  Specifically, Richardson argued that the truck was covered because it was being used in connection with the Farm’s business or because the truck was being used in the scope of a hired auto at the time of the collision. 
The Fourth Department disagreed by noting that the truck operated by Richardson was not being used in conjunction with Farm’s business.  Although it was used as a result of a hay sale engaged in by the Farm, the Court noted that Farm’s business was selling hay – not transporting it.  Likewise, the vehicle could not qualify as a hired auto because the Farm had never discussed using the vehicle at any time prior to the loss.
As a third argument, Richardson argued that the wagon itself was a covered auto under the business auto policy.  As such, when attached to the vehicle owned and operated by Richardson, coverage was conferred to Richardson’s vehicle.  However, the Court held that the wagon only became a covered auto when it was attached to a covered auto.  Here, because the vehicle operated by Richardson, was not a covered auto, coverage did not attach. 
As such, the Fourth Department ruled that the business auto carrier had no duty to indemnify or defend Richardson in this matter.  This was the case even though the Complaint alleged that Richardson was operating the vehicle at the direction of the Farm.  Because there was no evidence to support this conclusion, the Court held that the language of the Complaint was not dispositive. 
Tired yet?  Richardson was still not done!
Richardson also sought coverage under the Farm owner’s personal auto coverage.  This claim was premised upon the fact that a farm wagon qualified as a covered auto, independently, under the personal auto policy.  However, the claim failed where the wagon was owned by the Farm (as a corporation) and not by the Farm owner (as an individual). 
Finally, Richardson sought coverage independently under the Farm’s excess policy.  However, where the purported insured did not qualify under the underlying policies, no coverage was conferred under the excess policy.  As noted above, because Richardson did not qualify under the primary policies, she too was precluded under the excess policy. 

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

Margo M. Lagueras
[email protected]

3/27/09            Endres v. Shelba D. Johnson Trucking, Inc.
Appellate Division, Fourth Department
Conclusion That Pain Is Related To Degenerative Disease And Was Not Exacerbated By The Accident Requires “Persuasive Evidence”
The defendants’ examining physician concluded that plaintiff’s 50% reduction in lumbar extension and flexion was caused by degenerative disease and had not been exacerbated by the accident but he failed to offer any basis for that conclusion.  He also failed to address plaintiff’s statements to him that plaintiff had been relatively pain free prior to the accident.  Therefore, the court reinstated plaintiff’s complaint finding that defendants failed to present “persuasive evidence” that plaintiff’s pain and injuries were related to a pre-existing condition and not exacerbated by the accident.

3/26/09            Charlie v. Guerrero
Appellate Division, First Department
Objective Evidence That ROM Remains Restricted Even After Surgery Raises Triable Issue Of Fact Under Permanent Limitation Category Of Serious Injury
Another complaint that was reinstated.  Here plaintiff’s orthopedic surgeon’s affidavit contained objective evidence of range-of-motion limitations, even after corrective surgery, of plaintiff’s right shoulder and concluded that the limitation in use and range-of-motion would be permanent, thus supporting the claim under the “permanent consequential limitation of use” category.

3/24/09            Lee v. McQueens
Appellate Division, Second Department
Affidavits Quantifying Limitations Found In Both Contemporaneous And Recent Examinations Raise Triable Issues Of Fact To Defeat Summary Judgment
The injured plaintiffs were sitting in a parked van when defendant’s vehicle was struck by co-defendant Reyes’ taxi and propelled into plaintiffs’ van.  McQueen moved to dismiss as against him and Reyes cross-moved for summary judgment alleging no serious injury, but failed to meet his burden.  In addition, plaintiffs’ treating chiropractor’s affidavits of both contemporaneous and recent examinations using a goniometer, and which quantified the limitations found in plaintiffs’ cervical and lumbar spines, were sufficient to raise a triable issue of fact.

3/24/09            LaMarre v. Michelle Taxi, Inc.
Appellate Division, Second Department
“Limitation” Unsupported By ROM Testing Will Not Pass Muster
Plaintiff’s physician examined his lumbar spine and concluded the lumbar spine had “limitations.”  The physician failed, however, to perform any range-of-motion testing or set forth any other objective tests performed in arriving at that conclusion.  Plaintiff thus fails to raise a triable issued under the permanent consequential limitation of use or the significant limitation of use categories.  Plaintiff further fails with regard to his claim under the 90/180-day category where his own deposition testimony established he returned to work after 30 days and he did not offer any competent medical evidence to support a medically-determined injury.

3/24/09            Kasper v. N & J Taxi, Inc.
Appellate Division, Second Department
Defendants’ Examining Orthopedist Notes Significant Limitations In Plaintiff’s Spine
And, predictably, defendants fail to meet their burden and again lose on appeal where the affirmed report noted such limitations in the ranges-of-motion of plaintiff’s cervical spine and left shoulder.  No need to consider plaintiff’s evidence in opposition.

3/19/09            Rose v. Citywide Auto Leasing, Inc.
Appellate Division, First Department
No Good As Against One, No Good As Against Any
The complaint is dismissed as against all defendants where plaintiff fails to meet the serious injury threshold against one of them.  Here, defendants’ experts concluded that plaintiff’s limitations were either degenerative or attributable to a workplace accident which occurred after the accident, and plaintiff failed to offer any factually based medical opinions to rebut either of defendants’ arguments.

3/19/09            Alicea v. Troy Trans, Inc.
Appellate Division, First Department
Contemporaneous Quantitative or Qualitative Assessment Of Extent And Duration Of ROM Limitations Is Required Even Where There Has Been Surgery
Plaintiff’s opposition to summary judgment failed to present evidence of contemporaneous range-of-motion limitations as the report of the examination performed five days after the accident was not sworn or affirmed.  The court further notes that, even if all the reports, records, MRIs, and pre and post-operative examinations had been sworn or affirmed, while they showed continuing complaints of pain, a shoulder tear, surgery and bulging and herniated discs in the cervical and lumbar spine, none contained a “contemporaneous quantitative or qualitative assessment of the extent and duration of resulting range-of-motion limitations [which] assessment is required even where there has been surgery.”  Even plaintiff’s physician’s affidavit failed because it simply described the tests performed without specific, objective evidence of how the doctor arrived at his findings or causally relating those findings to the accident.

3/17/09            Kittner v. Allen
Appellate Division, Second Department
Entirely New Injury Asserted For First Time In Supplemental Bill of Particulars Served In Opposition To Summary Judgment Must Be Timely Objected To Or Objection Will Be Unpreserved For Review
Plaintiff’s deposition testimony and the affirmation of her neurologist referred to neck, back and right shoulder pain.  However, in opposition to defendants’ motion for summary judgment, plaintiff served a supplemental bill of particulars asserting a right rotator cuff tear and that she was a candidate for arthroscopic surgery, as well as an affirmed report from her treating physician quantifying range-of-motion loss of the right shoulder.  In reply, defendants claimed that the shoulder injury was pre-existing. 

On appeal, however, defendants attempted to argue that the shoulder injury was not properly before the court because the supplemental bill of particulars was actually an amended bill of particulars which could only be filed by leave of court.  Alas for defendants, the objection came too late and was unpreserved for appellate review.

3/17/09            Dieujuste v. Kiss Mgt. Corp.
Appellate Division, First Department
Claim Under The Permanent Consequential Limitation Of Use Category May Be Supported Where Treatment For Injury Would Be Only Palliative And Prognosis Is Guarded
On appeal, the court modified the denial of defendants’ motion by dismissing plaintiff’s claims of serious injury to the lumbar spine and under the 90/180-day category.  However, plaintiff’s claim of serious injury to his right wrist survived based on an affirmed report of an examination performed 11 days after the accident which determined that the pain, limited range-of-motion, grip strength, abnormal MRI showing several sprains, and the absence of a pre-existing injury showed plaintiff sustained a significant injury as a result of the accident.  Plaintiff’s physician further concluded, based on an examination 8 months after the accident, that although there was some improvement, further treatment would only be palliative and the prognosis for full recovery was guarded.  Plaintiff’s expert corroborated those findings and reported that after one year, plaintiff still had significant limitations and a 20% loss of the right arm, and that the right wrist injury was permanent and would have a “substantial qualitative effect on [plaintiff’s] life.”

3/17/09            Arimont v. Iwakawa
Appellate Division, Second Department
Defendant Fails To Show Plaintiff’s Failure Was “Willful And Contumacious”
That is the standard when seeking to have a complaint stricken for failure to comply with discovery demands.  Here, defendant’s motion was both the strike the complaint, and for summary judgment on the serious injury issue.  Both fail.  First, because defendant fails to clearly show that plaintiff’s failure to comply with discovery demands was willful and contumacious.  And second, because defendant fails to make a prima facie showing that plaintiff did not sustain a serious injury. 

AUDREY’S ANGLES ON NO-FAULT
Audrey Seeley
[email protected]

BREAKING NEWS ON A LONG AWAITED DECISION FOR NO-FAULT INSURERS –
THE COURT OF APPEALS HAS ISSUED A DECISION IN LMK!!!
4/2/09              LMK Psychological Services, PC v. State Farm Mut. Auto. Ins. Co.
Court of Appeals
Attorney’s Fees Calculated on Total of Bills in Dispute Per Insured; Interest Can Be Tolled if Untimely Denial Issued
No-fault insurers has been waiting and waiting for this decision and it is a major victory!!!  Well, it has finally arrived and provided some clear guidance on the issue of attorney’s fees and on the interest tolling issue.  We reported on the appellate division decision in December 2007 and it is reprinted herein to provide some background on this case:
12/27/07              LMK Psychological Services, P.C. v. State Farm Mut. Auto. Ins. Co.
Appellate Division, Third Department
Attorney’s Fees Awarded on Per Claim Basis – What’s a Claim?
I apologize for this one as I missed it for our last issue.  Many of you have probably reviewed this decision and cringe when you hear the case name.  However, it really only reiterates case law produced by the lower courts regarding whether an attorney fee is recoverable on a per claim basis or per assignor basis.  The question it creates is how is a claim defined?  The insurance regulations contain no definition.  This decision provides no guidance on the issue either.  Further, this issue of interest accrual was not preserved for the Court’s decision and any discussion on this issue is purely dicta and not controlling authority.
For those who have not read this decision, the defendant appealed the lower court’s decision granting plaintiff summary judgment with interest and attorney’s fees.  The Appellate Division held that the issue of when interest accrues on a claim was not preserved for its review.  Yet, the Court provides its own opinion on the matter finding that the argument is meritless.  The Court opined that interest on an untimely paid no-fault claim accrues 30 days after the claim was properly presented for payment.  However, if the claim had been timely denied then interest would be tolled 30 days after plaintiff received the denial until plaintiff commenced the litigation. 
Then the Court addressed the issue of calculating attorneys’ fees.  The Court held that attorneys’ fees are awarded on a per claim basis and not a per assignor basis.  The Court went so far as to state that the Superintendent of Insurance’s opinion letter on this issue dated October 3, 2003:
undermines the goal of the no-fault law to fully compensate the claimant for economic loss resulting from the wrongful denial of a claim and wastes judicial assets by encouraging the commencement of multiple actions in order to recover the maximum available counsel fees.
Yet, the Court never defines a claim.  I think this issue is still open for interpretation.
The Court of Appeals’ decision, written by Buffalo’s own, Judge Pigott, addresses the attorney’s fees issue first.  The Court reasoned that under Insurance Law §5106(a), if a valid claim or a portion of that claim is overdue then the applicant is entitled to recover reasonable attorney’s fees in securing payment of the overdue claim.  The Superintendent of Insurance was authorized to promulgate a regulation, 11 NYCRR 65-4.6, which established a minimum attorney’s fees.  That regulation provided that the attorney’s fee must be limited to 20% of the amount of first-party benefits, plus interest, subject to a maximum of $850.00.

The Superintendent of Insurance issued an opinion letter dated October 8, 2003, providing an interpretation of that regulation.  The opinion was that the minimum attorney’s fees that could be awarded to an assignee health care provider is based upon “the aggregate amount of payment required to be reimbursed based upon the amount awarded for each bill which has been submitted and denied.  The minimum attorney fee…is not due and owing for each bill submitted as part of the total amount of the disputed claim sought in the court action.” (emphasis added).  The opinion further states that 11 NYCRR 65-6.4(e) clearly provides that the amount of attorney’s fees is based upon 20% of the total amount of the individual bills disputed in either a law suit or in arbitration.  This is irrespective of whether one bill or multiple bills are presented as part of a total claim for benefits based upon the health services rendered by the provider to the same eligible injured person.

The Court held that the Superintendent’s interpretation of the Insurance Law will be upheld in deference as long as that interpretation is not irrational, unreasonable, or is contrary to the statute’s clear wording. 

Here, the Court upheld the Superintendent’s interpretation of a claim, for purposes of calculating attorney’s fees, that it is “the total medical expenses claimed in a cause of action pertaining to a single insured, and not – as the courts below held – each separate medical bill submitted by the provider.  Accordingly, the attorney’s fees were to be calculated based on the aggregate of all bills for each insured.

Next, the Court turned to the issue of whether interest can be tolled on a claim that is untimely denied.  The Court held that interest can be tolled pursuant to Insurance Law §5106(a).  Pursuant to Insurance Law §5106(a), interest on an overdue claim accrues at 2% per month and the claim is overdue if not paid within 30 days after a proper demand for payment.  Yet, the Superintendent’s regulation, 11 NYCRR 65-3.9(c), provides that interest will be tolled if the applicant does not request arbitration or commence a lawsuit within 30 days after receipt of the denial of the claim or payment of benefits calculated pursuant to the regulations.

The Superintendent of Insurance interpreted 11 NYCRR 65-3.9(c) as mandating a tolling of interest regardless of whether the claim was timely denied.  Again, that interpretation is provided with deference as long as it is not irrational, unreasonable, or contrary to the statute’s clear wording.  The Court held that this interpretation also was consistent with Insurance Law §5106, Fair Claim Settlement, which encourages applicants to quickly seek to resolve a disputed claim.

This decision provides some clear guidance on both issues and has been a long, but worthwhile wait, for insurers.  With respect to the attorney’s fee issue, it appears that this decision has cleared up the debate on whether the provision on $60 or $80 minimum v. the 20% to max of $850.00 is applied.  Now the question becomes what are the loopholes….  One obvious tactic would be to file a mass a individual law suits.  Yet, it is unclear how a plaintiff would successfully oppose the insurer’s motion to consolidate.  Further, I can predict that some plaintiffs will not give up the fight on the $60/$80 argument.  Yet, how do they get past not only this decision but the clear wording of the insurance regulation as to when the maximum, and not minimum fees, on the total amount of first party benefits apply.  I will continue to monitor the situation and keep you apprised of any new developments.

3/17/09            Westchester Med. Ctr. v. American Transit Ins. Co.
Appellate Division, Second Department
Summary Judgment Denied as Denial Timely Issued After Additional Verification Received
The plaintiff’s summary judgment motion should have been denied as the insurer established that it timely requested additional verification on the issue of whether the assignor was entitled to Workers’ Compensation benefits for the underlying accident.  The insurer’s 30 days to pay or deny the claim did not begin to run until the insurer received the additional verification and not the date that the bill was sent to the insurer.

3/17/09            PLP Acupuncture PC v. Progressive Cas. Ins. Co.
Appellate Term, Second Department
Peer Reviewer’s Reliance Upon Other Physicians’ Reports In Rendering Opinion Does Not Render Report Insufficient to Establish Lack of Medical Necessity
An issue was raised in this case as to the sufficiency of the peer reviewer’s opinion in establishing lack of medical necessity because the peer reviewer cited and relied upon other medical providers’ report to formulate the opinion.  The court held that the peer reviewer’s opinion can be admitted into evidence if it is based upon out of court documents as long as there is proof on reliability of those documents.  In this particular case, the peer reviewer’s opinion was based upon the plaintiff’s records.  The court held that the plaintiff could not challenge the reliability of its own medical records and reports.

PEIPER ON PROPERTY (and POTPOURRI)

Steven E. Peiper
[email protected]

3/27/09            R.B. Woodcraft, Inc. v. Acadia Insurance Company, State Farm, et al.
Appellate Division, Fourth Department
The Term: “Use in Whole or in Part for Business Purposes” is Ambiguous.  Barn Storing Business Items, in Part, is Not Clearly Being Used for Business Purposes

State Farm issued a homeowner's insurance policy to Brooks  A residence and detached pole barn were located on the Woodcraft policy.  When a fire destroyed the barn, a claim was submitted to State Farm for the loss of the barn and the personal property within it.  State Farm paid the claim for the personal property but denied the claim for the barn, under an exclusion that eliminated coverage for “other structures . . . used in whole or in part for business purposes . . . ."
The Fourth Department concluded that State Farm is required to pay the barn claim. The storage of business items in the barn does not mean the pole barn was used in part for business purposes.  The phrase used in whole or in part for business purposes' is ambiguous in the absence of any qualifying language . . . and therefore must be construed in favor of the insureds".
3/27/09            Binkowski v Hartford Acc. & Indemn. Co.
Appellate Division, Fourth Department
Plaintiff’s Claim on Breach of Contract Barred by the Statute of Frauds

Plaintiff commenced the current action seeking to enforce an oral contract she allegedly entered into with the workers’ compensation carrier paying her benefits.  As part of the settlement of an underlying action, plaintiff allegedly agreed to pay a portion of the lien that Hartford had asserted on the recovery.  In return, plaintiff alleges that Hartford agreed to resume benefits in approximately nine years rather than the nearly thirteen years that was ordered by the Workers’ Compensation Board.

Hartford moved to dismiss based upon the premises that the alleged oral agreement violated that Statute of Frauds, and was, as such, unenforceable.  Because the contract could not be performed within one-year, the Fourth Department agreed and upheld the trial court’s dismissal.  In so holding, the Court noted plaintiff’s opposition based upon the theory of promissory estoppel was unavailing where plaintiff could not establish the existence of an actual promise.  Likewise, the Court also noted that plaintiff’s opposition based upon the doctrine of part performance also failed because plaintiff could not establish that payment of the lien was “unequivocally referable to the oral agreement.”

3/26/09            Schorsch v Moses & Singer, LLP
Appellate Division, First Department
Plaintiff’s Malpractice Claim Dismissed Where She Cannot Establish the Existence of Coverage
Plaintiff’s malpractice claim was dismissed where she was unable to establish a viable claim against the carrier providing business property insurance.  Principally, plaintiff’s case rested upon a challenge to a disclaimer that the carrier issued which denied coverage for a loss of inventory.  The carrier’s denial was allegedly based upon an “employee dishonesty” exclusion found within the plaintiff’s policy.

The First Department noted that plaintiff’s alleged reason for the loss fell within the employee dishonesty exclusion.  Further, the Court noted the fact that the carrier’s counsel failed to recite the proper policy language – which was similar, but not the same as the language found within plaintiff’s policy – did not render the disclaimer letter insufficient (note this is a property damage claim, and as such not subject to Insurance Law §3420[d]).  Having failed to establish coverage, plaintiff’s attempts to assert a legal malpractice claim likewise failed. 

EARL’S PEARLS
Earl K. Cantwell, II
[email protected]


WHEN IS A SECRET NOT A SECRET?

The devious minds of attorneys can concoct any number of slippery slopes and secret deals which was the issue addressed in Mahoney v. Turner Construction Co., 2009 N.Y. App. Div. LEXIS 126, 872 N.Y.S.2d 433 (1st Dept. 2009).  The scenario in Mahoney was common enough.  Plaintiff sustained injuries in a construction site accident and commenced an action against Turner (the general contractor) and the owner of the site.  The plaintiff was granted summary judgment under Labor Law 240(1).  Multiple defendants and parties in the meantime asserted numerous claims for contribution, indemnification, breach of contract and related claims.  The trial court severed the main action from the impleader actions.  Ultimately, plaintiff, Turner and the owner entered into a stipulation of discontinuance which was filed in Bronx County and, while the stipulation stated that those parties had “settled” the matter as between them, the terms of the settlement were not disclosed.  A full copy of the Mahoney decision can be found in the January 23, 2009 issue of Coverage Pointers, Volume X, No. 15.

A few months after this “stipulation” was filed,  other defendants served a request for admissions regarding the settlement and whether the settling defendants had been released, and also a document demand for a copy of the settlement agreement.  The settling defendants refused to provide details of the settlement other than that the plaintiff had agreed to release them.  The non-settling defendants moved to compel a copy of the settlement agreement or a sworn statement setting out its terms.  The moving defendants voiced “concern” that the plaintiff and the settling defendants were “improperly colluding” and stated as a further basis that the content of the settlement agreement was relevant under General Obligations Law 15-108.  Of course, there was also the suspicion, if not the reality, that the plaintiff, general contractor and owner were conspiring to benefit from the various cross claims, indemnity claims, and other impleaded claims.  The settling defendants opposed the motion arguing, inter alia, that the settlement agreement contained a confidentiality provision.  The trial court granted the motion to the extent of directing disclosure of the amount of the settlement, which was apparently disclosed, but not any other details.  The non-settling defendants appealed the order which denied so much of their motion for disclosure of the terms of the settlement agreement other than the amount.  On appeal, the non-settling defendants prevailed, and the trial court order was reversed.  The decision of the First Department is interesting because, as noted by the Court, the law on disclosure of settlement agreements to non-settling parties is unclear and presents a “thorny issue” which the trial courts are often required to address. 

The appellate court initially noted that CPLR 2104 states that, with respect to stipulations of settlement, the terms of such stipulation shall be filed by the defendant with the County Clerk.  The parties in Mahoney apparently did not argue that the stipulation of discontinuance filed with the Bronx County Clerk failed to comply with CPLR 2104.  What that statute may require with respect to disclosure of the terms of a stipulation of settlement “is not clear”. 

The Court then proceeded to analyze the issue in terms of traditional discovery standards, such as whether the terms of the settlement agreement were “material and necessary” to some aspect of the non-settling party’s case.  The parties seeking disclosure of the settlement agreement apparently had (at least) four primary concerns:

  • The terms of the settlement agreement might be relevant to computing damages under GOL 15-108, although the trial court did allow disclosure of the amount of the settlement which should have resolved that difficulty. 
  • The non-settling parties were also concerned that there may have been a “non-aggression” peace pact or some type of “Mary Carter” agreement between the plaintiffs and the settling defendants which would affect the course of trial. 
  • The non-settling defendants may also have been concerned that there was a trial high-low agreement in place under the settlement agreement, which also might have affected the parties’ proof, aggressiveness and diligence at trial. 
  • The non-settling parties were probably also just nosy in terms of wanting to know what the deal was between the plaintiff and the general contractor and the owner, since the amount of any verdict, damages, etc. might have implications for the parties’ various cross claims and third party claims. 

The First Department indicated that any doubt as to the relevance of the terms of the settlement could be resolved by an in camera inspection of the settlement agreement, and any concerns with respect to confidentiality could be protected by a court order limiting disclosure of the settlement agreement to certain uses, parties, proceedings, or otherwise.  However, despite an apparent offer, the trial court in Mahoney was not provided with the settlement agreement for an in camera inspection, nor was the agreement provided to the appellate court, so the appellate court took the position that they were unable to gauge whether it contained information “material and necessary” to the non-settling parties’ defense, preparation or conduct of the trial. 

The non-settling defendants contended that the settling defendants intended to participate in the trial of the underlying action, and it was not clear why they would do so if there was in fact a settlement resolving the case against them.  The court viewed the uncertainty about whether the settling defendants planned on participating in the trial and the reason for their continued participation as “causes for concern”. 

Therefore, the First Department reversed the order appealed from and remanded the matter back to the trial court for in camera inspection of the settlement agreement and a new determination of the motion for disclosure.  In the view of the appellate court, the trial court could allow disclosure of the settlement agreement while protecting and limiting the confidential nature of the agreement by way of a protective order under CPLR 3103.  Practitioners should also note that the Court declined to offer much guidance or commentary on CPLR 2104 as to what extent that statute requires disclosure of actual settlement terms other than to admit that “is not clear”. 

The lessons to be learned from Mahoney are that if you are a settling defendant, settle the case, get out and don’t stick around.  Also, make sure to include a tight confidentiality provision in the settlement agreement.  If getting out of the case entirely is not possible, present the settlement agreement to the court for an in camera inspection and assert confidentiality to deny or severely limit disclosure of settlement terms and conditions. 

ACROSS BORDERS

3/24/09            Cincinnati Insurance Company v. Bluewood, Inc.
Eighth Circuit Court of Appeals
Pyrrhic Trial Victory Upheld on Appeal
In a dispute over the ‘cash value’ of water damage to an apartment complex, insurer Cincinnati and insured property management company Bluewood differed on estimates for repair, with Cincinnati paying its estimated amount, $93,283, to Bluewood on its claim. Ultimately, Cincinnati sued for declaratory relief, Bluewood counterclaimed for breach, and a trial ensued, with a verdict for Bluewood, but an award identical to the amount initially paid by Cincinnati. On appeal, Bluewood argued that trial court erred in instructing the jury and by improperly ruling on the admissibility of experts’ testimony. The appellate court held the policy language to be unambiguous regarding damages, rejecting Bluewood’s contention that Missouri Statute § 379.150 trumped policy language. Further the court analyzed the statutory language, holding that § 379.150 only applies to damage caused by fire. The court held Bluewood’s jury instruction arguments had not been preserved prior to the jury’s deliberation, and likewise, the appellate court affirmed the lower court’s evidentiary rulings.
Submitted by: David E. Hall, Esq., Abbey Adams, LLC, St. Petersburg, FL

3/24/09            Walburn v. Dunlap
Ohio Supreme Court
Order That Declares an Insured’s Right to Coverage, but is Silent with Respect to Damages, is Not a Final Order Under Ohio Law
 This matter arises out of a motor vehicle collision whereby a negligent driver collided with a vehicle containing a driver and one passenger who was in the scope of his employment. The passenger filed suit against the negligent driver and, because the defendant was uninsured, the passenger filed claims against his own liability policy as well as a policy issued by National Union Fire Insurance Company of Pittsburgh, Pa. (“National Union”) to his employer. The passenger/employee requested an order determining the rights and responsibilities of the parties, and demanded an award of damages. The trial court issued an order determining that the passenger/employee was entitled to UM coverage under the National Union policy/ies. the judgment entry stated that the order was “a Final and Appealable order. The Court finds there is no just cause for delay.” National Union sought to appeal, but an issue arose as to whether the trial court’s ruling was final. In determining whether the trial court’s ruling in the declaratory judgment action could be appealed under Ohio law, the Ohio Supreme Court ruled that it could not, because the trial court failed to rule on the issue of damages. The Ohio Supreme Court stated, “in a case involving multiple claims, a judgment in a declaratory judgment action is not a final, appealable order when the trial court finds that an insured is entitled to coverage but has not addressed the issue of damages, even though the order [states to the contrary].”
Submitted by: Bruce D. Celebrezze and Courtney O. Schreiber (Sedgwick, Detert, Moran & Arnold LLP)

REPORTED DECISIONS


Richmond Farms Dairy, LLC. v. National Grange Mut. Ins. Co.

Appeals and cross appeals from a judgment (denominated order) of the Supreme Court, Erie County (John A. Michalek, J.), entered January 25, 2008 in a declaratory judgment action. The judgment, among other things, granted in part the motion of defendant National Grange Mutual Insurance Company for summary judgment and granted in part the cross motions of defendant Susan Miller and defendant-third-party plaintiff for summary judgment.

It is hereby ORDERED that the judgment so appealed from is unanimously modified on the law by vacating in its entirety the declaration in the second decretal paragraph and granting judgment in favor of defendant National Grange Mutual Insurance Company as follows:

It is ADJUDGED and DECLARED that defendant National Grange Mutual Insurance Company is not obligated to defend or indemnify defendant-third-party plaintiff in the underlying actions under the business automobile insurance policy issued to plaintiff Richmond Farms Dairy, LLC, and by vacating the declaration in the fourth decretal paragraph and granting judgment in favor of third-party defendant as follows: It is ADJUDGED and DECLARED that third-party defendant is not obligated to provide excess coverage for defendant-third-party plaintiff in the underlying actions under the farm umbrella policy issued to plaintiff Richmond Farms Dairy, LLC,  and as modified the judgment is affirmed without costs.
Memorandum: As we set forth in our prior decision in Miller v Richardson (48 AD3d 1298, lv denied 11 NY3d 710), Susan Miller and George W. Rapson, Jr., who are defendants in the action and third-party action now before us, were injured when a vehicle driven by Lorraine Richardson, presently a defendant and the third-party plaintiff, made a sudden left turn in front of the motorcycle driven by Rapson on which Miller was a passenger. The vehicle driven by Richardson was towing a hay wagon owned by plaintiff, Richmond Farms Dairy, LLC (Richmond Farms). Richardson had purchased hay from Richmond Farms and was returning the empty hay wagon to Richmond Farms when the accident occurred. Miller and Rapson each commenced underlying actions.
Richmond Farms had a business automobile insurance policy (business policy) with National Grange Mutual Insurance Company (National Grange), a defendant herein, and a farm umbrella policy with Cherry Valley Cooperative Insurance Company (Cherry Valley), the third-party defendant herein. John Richmond ("Richmond") had a personal automobile insurance policy with National Grange.
National Grange disclaimed coverage under its business policy with Richmond Farms but subsequently agreed to defend Richmond Farms in the underlying actions commenced by Miller and Rapson. National Grange also disclaimed coverage under its personal automobile insurance policy with Richmond. In addition, National Grange and Cherry Valley disclaimed coverage for Richardson under all policies.
Richmond Farms and Richmond (collectively "the Richmonds") commenced this declaratory judgment action seeking a declaration that National Grange was obligated to defend and indemnify the Richmonds in the underlying actions pursuant to the business policy. Miller asserted a cross claim in which she joined in that request for declaratory relief, and Richardson asserted a cross claim seeking a declaration that National Grange was obligated to defend and indemnify her under both the business and automobile policies. Richardson also commenced a third-party action seeking a declaration that Cherry Valley must provide coverage for her under the umbrella policy.
Supreme Court thereafter granted in part the motion of National Grange and denied in part the cross motions of Richardson and Miller, declaring that National Grange is not obligated to defend or indemnify Richardson or her husband under the personal automobile insurance policy issued to Richmond. The court further denied in part the motion of National Grange and granted in part the cross motions of Richardson and Miller, declaring that National Grange is obligated to defend and indemnify Richardson under the business policy issued to Richmond Farms. In addition, the court granted the cross motion of the Richmonds, declaring that National Grange is obligated to defend and indemnify them under the business policy issued to Richmond Farms, and the court granted in part the cross motion of Richardson, declaring that Cherry Valley "must provide excess coverage" for her.
We note at the outset that the issue whether National Grange is obligated to indemnify the Richmonds is moot, based on our prior decision in Miller in which we determined as a matter of law that the Richmonds "are not liable for injuries sustained by Miller and Rapson by virtue of [their] ownership of the hay wagon being towed by Lorraine Richardson at the time of the collision" (id. at 1300).
We further conclude that the court erred in declaring that National Grange was obligated to defend and indemnify Richardson under the business policy, and we therefore modify the judgment accordingly. Addressing first the duty to indemnify, we note that such a duty may be imposed only in the event that the insured is liable for a loss that is covered by the policy (see Servidone Constr. Corp. v Security Ins. Co. of Hartford, 64 NY2d 419). Here, we conclude that the truck driven by Richardson at the time of the accident was not a covered vehicle within the meaning of the business policy. Contrary to the contentions of Miller and Richardson, the truck was not a covered "auto" within the meaning of "nonowned autos" in the business policy. Such "nonowned autos" are defined as vehicles that "you [i.e., Richmond Farms,] do not own, lease, hire, rent or borrow that are used in connection with [Richmond Farms'] business." The definition of covered "autos" also includes "[m]obile equipment while being carried or towed by a covered auto.' " Under that definition, the hay wagon being towed by Richardson is covered only in the event that it was being towed by a covered "auto." We conclude that the vehicle driven by Richardson that was used to tow the hay wagon at the time of the collision is not a covered auto. The phrase "used in connection with your business" is not ambiguous under the facts of this case. Although that phrase is not defined in the policy, it is to " be understood in [its] plain, ordinary, and popularly understood sense, rather than in a forced or technical sense' " (Burriesci v Paul Revere Life Ins. Co., 255 AD2d 993, 994). In addition, a court " may not disregard clear provisions which the insurers inserted in the policies and that the insured accepted' " (Baughman v Merchants Mut. Ins. Co., 87 NY2d 589, 592). Here, it is clear from the language of the business policy that the business policy covered vehicles that are not owned, leased, hired, rented or borrowed by Richmond Farms but are nevertheless associated with risks involving the business of Richmond Farms. The policy language "used in connection with your business" is not so broad as to encompass a customer using his or her own vehicle to transport purchased items home. Further, the record establishes that, although Richmonds were in the business of selling hay, they were not in the business of delivering hay. Indeed, Richardson asked to use the hay wagon in order to transport the hay, and she was not charged a fee for the use of the hay wagon. Thus, it is clear from the record before us that the hay wagon was used by Richardson for her own purposes.
Contrary to the further contentions of Richardson, Rapson and Miller, the vehicle driven by Richardson was not a covered auto within the meaning of hired autos, which are defined in the business policy as those vehicles that are leased, hired, rented or borrowed by Richmond Farms. Richardson and her husband submitted affidavits in which they contended that the husband loaned the vehicle driven by Richardson to Richmond Farms, which in turn loaned the vehicle to Richardson for towing the hay wagon. Those affidavits, however, are insufficient to raise an issue of fact concerning whether the vehicle was a hired auto, inasmuch as they are self-serving and contradicted by prior sworn testimony of Richardson and her husband (see generally Martindale v Town of Brownville, 55 AD3d 1387, lv denied 11 NY3d 715; Liberty Mut. Ins. Co. v General Acc. Ins. Co., 277 AD2d 981). Moreover, the record contains an affidavit of Richmond in which he states that no one from Richmond Farms spoke with Richardson's husband about borrowing the vehicle, and that no one from Richmond Farms loaned the vehicle to Richardson.
We further conclude that National Grange did not have a duty to defend Richardson. "While the duty of the insurer to defend is broader than its duty to indemnify . . . and the policy must be construed liberally in favor of the insured and strictly against the insurer . . ., where it can be concluded as a matter of law that there is no possible factual or legal basis under which the insurer might eventually be found obligated to indemnify the insured, the insurer may properly decline to provide a defense" (Propis v Fireman's Fund Ins. Co., 112 AD2d 734, 736, affd 66 NY2d 828). The complaints in the underlying actions allege that Richardson was towing the hay wagon at the direction of Richmond and in furtherance of the business of Richmond Farms. Although under this language, Richardson could be construed as driving a covered vehicle due to its alleged use in connection with Richmond Farms' business, there is nothing in the complaint that supports a finding that Richardson was an insured under the business auto policy. The definition of "insured" includes Richmond Farms and anyone who is using a "covered auto" owned, hired or borrowed by Richmond Farms. The relevant vehicle herein is the vehicle driven by Richardson, and the complaints in the underlying actions do not allege that Richmond Farms owned, hired or borrowed the vehicle.
We further conclude that the court properly declared that National Grange is not obligated to defend and indemnify Richardson under the personal automobile insurance policy issued to Richmond. Pursuant to that policy, the term insured includes any person using a covered auto owned by Richmond, including any trailer owned by him. The term trailer is defined in relevant part as "a farm wagon or farm implement" that is towed by a private passenger auto, "pickup" or van. It is undisputed that the hay wagon constitutes a trailer within the meaning of the personal automobile insurance policy. We conclude however that the record establishes that the hay wagon was owned by Richmond Farms, not by Richmond. Richmond submitted an affidavit expressly stating that Richmond Farms owned the hay wagon, and explained that any indication in his deposition testimony to the contrary resulted only from the fact that he was not asked to differentiate between himself and Richmond Farms.
Finally, we conclude that the court erred in declaring that Cherry Valley must provide excess coverage for Richardson under the umbrella policy, and we therefore further modify the judgment accordingly. The umbrella policy provided extra liability insurance for any person who was, inter alia, covered under one of the basic policies of the Richmonds, including the business and personal automobile insurance policies. Based on our conclusion that Richardson is not covered under either of those policies, she likewise is not covered under the umbrella policy. Thus, under the circumstances of this case, we search the record pursuant to CPLR 3212 (b) and grant summary judgment in favor of Cherry Valley, a nonmoving party, and we grant judgment declaring that it is not obligated to provide excess coverage for Richardson under the umbrella policy. In light of our determination, we need not address Richardson's remaining contentions.
Kittner v. Allen


Wilson Elser Moskowitz Edelman & Dicker, LLP, White Plains,
N.Y. (John M. Flannery and Janine A. Mastellone of counsel), for
respondents.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff Leocadia Kittner appeals, as limited by her brief, from so much of an order of the Supreme Court, Dutchess County (Dolan, J.), dated January 4, 2008, as granted the defendants' motion for summary judgment dismissing the complaint insofar as asserted by her on the ground that she did not sustain a serious injury within the meaning of Insurance Law § 5102(d), and denied her cross motion for summary judgment on the issue of serious injury.
ORDERED that the order is modified, on the law, by deleting the provision thereof granting the defendants' motion for summary judgment dismissing the complaint insofar as asserted by the plaintiff Leocadia Kittner and substituting therefor a provision denying the defendants' motion; as so modified, the order is affirmed insofar as appealed from, without costs or disbursements.
The plaintiff Leocadia Kittner (hereinafter the plaintiff) allegedly was injured in an automobile accident on August 11, 2004. The plaintiff testified at her deposition that since the accident, she suffered tingling in the right arm and her right arm would get "stuck" when she uses it to do her hair.
After service of a note of issue in October 2006, the defendants moved for summary judgment based upon the plaintiff's deposition and an affirmation of a neurologist who noted that the plaintiff reported neck, back, and right shoulder pain as a result of the accident. In opposition, the plaintiff served a supplemental bill of particulars stating that she had sustained a right rotator cuff tear and was a candidate for arthroscopy, and an affirmed medical report of her treating physician quantifying loss of range of motion of the right shoulder. The defendants, in reply, claimed that the right shoulder injury was a preexisting condition, based on a reference in the plaintiff's medical records that she suffered a right shoulder strain in January 2003.
The Supreme Court erred in determining that the defendants established their prima facie entitlement to judgment as a matter of law dismissing the complaint insofar as asserted by the plaintiff on the ground that she did not sustain a serious injury within the meaning of Insurance Law § 5102(d). On appeal, the defendants assert that the plaintiff's injury to her right shoulder was not properly before the court because the supplemental bill of particulars asserted entirely new injuries and, therefore, was, in fact, an amended bill of particulars which could not be filed without leave of the court. This issue is unpreserved for appellate review.
Further, it is clear from the record that there are triable issues of fact with respect to whether the injury to the plaintiff's right shoulder constituted a serious injury attributable to the accident (see Engles v Claude, 39 AD2d 357).
Dieujuste v. Kiss Mgt. Corp.


Baker, McEvoy, Morrissey & Moskovits, P.C., New York
(Stacy R. Seldin of counsel), for appellants.
Louis A. Badolato, Roslyn Harbor, for respondent.
Order, Supreme Court, Bronx County (Sallie Manzanet-Daniels, J.), entered September 8, 2008, which, insofar as appealed from, denied defendants-appellants' motion for summary judgment dismissing the complaint for lack of a serious injury under Insurance Law § 5102(d), unanimously modified, on the law, to dismiss the claims alleging injury to the lumbar spine and a 90/180-day curtailment of plaintiff's activities, and otherwise affirmed, without costs.
An issue of fact as to whether plaintiff sustained a serious injury to his right wrist is raised by the affirmed reports of plaintiff's treating physician, who initially examined plaintiff 11 days after the accident and determined that the pain, tenderness, and limited range of motion and grip strength in plaintiff's right wrist, coupled with plaintiff's abnormal MRI showing several sprains and the absence of any preexisting injury, indicated that plaintiff had sustained significant injury to his right wrist as a result of the accident. Plaintiff's treating physician further concluded that, even though plaintiff showed some improvement in wrist extension and grip strength approximately eight months after the accident, further treatment would be only palliative in nature, the prognosis for a full recovery was guarded, and plaintiff's wrist injury was therefore permanent. Plaintiff's expert physician corroborated these findings, reporting that, nearly one year after the accident, plaintiff still exhibited significant limitations on all range of motion tests performed on his right wrist, and concluding that plaintiff demonstrated a 20% loss of use of his right arm, and that plaintiff's right wrist injuries are permanent in nature and will have a substantial qualitative effect on his life (see Toure v Avis Rent A Car Sys., 98 NY2d 345, 350 [2002]).
Plaintiff, however, fails to raise an issue of fact as to whether he sustained a serious injury to his lumbar spine. While plaintiff's treating physician found that plaintiff exhibited pain and tenderness in his lumbar spine upon palpation and his range of motion in that area was slightly limited immediately after the accident, he also found that plaintiff's lumbar spine MRI was within normal limits and that, within six months after the accident, plaintiff's range of motion was almost completely normal. Clearly, any injury to plaintiff's lower back was minor or insignificant (see Licari v Elliott, 57 NY2d 230, 236 [1982]).
Nor is an issue of fact raised as to whether plaintiff sustained a 90/180-day injury by the conclusory statements in his expert's affirmation that his right wrist injury rendered him unable to perform substantially all of his usual daily activities during the seven-month period immediately following the accident and that plaintiff's treating physician maintained plaintiff on light duty status from the time of the accident until at least five months later. It appears from plaintiff's deposition that he missed no time from work as a construction worker, and there is no evidence that plaintiff was unable to perform all significant aspects of his job (see Ronda v Friendly Baptist Church , 52 AD3d 440, 441 [2008]; Lopez v Simpson, 39 AD3d 420, 421 [2007]; cf. Nigro v Penree, 238 AD2d 908, 909 [1997]), or that his leisure activities were substantially curtailed (see Nelson v Distant, 308 AD2d 338, 340 [2003]).
We have considered the parties' remaining contentions for affirmative relief and find them unavailing.
Alicea v. Troy Trans, Inc.


Stephen D. Chakwin, Jr., New York, for appellant.
Filip L. Tiffenberg, P.C., New York (Filip L. Tiffenberg of
counsel), for respondents.
Order, Supreme Court, New York County (Deborah A. Kaplan, J.), entered December 24, 2007, which granted defendants' motion for summary judgment dismissing the complaint for lack of a serious injury as required by Insurance Law § 5102(d), unanimously affirmed, without costs.
The affirmed medical report of defendants' physician stating, inter alia, that he examined plaintiff on August 24, 2006 and found no objective clinical evidence of the injuries alleged in plaintiff's bill of particulars, nor any evidence of limited range of motion or other residual injury as a result of the accident of October 26, 2005, sufficed to show, prima facie, that plaintiff did not sustain a permanent or significant limitation as a result of the October 26, 2005 accident (see Nagbe v Minigreen Hacking Group, 22 AD3d 326, 326 [2005]). We decline to consider, because improperly raised for the first time on appeal, plaintiff's argument that the physician's affirmation was rendered deficient by his acknowledgment that he did not receive or review medical records and diagnostic films (see Vasquez v Reluzco, 28 AD3d 365, 366 [2006]). Summary judgment was properly granted because plaintiff's opposition failed to adduce evidence of a limitation of range of motion based on objective medical findings made within a reasonable time after the accident (see Thompson v Abbasi, 15 AD3d 95, 99 [2005]; Toulson v Young Han Pae, 13 AD3d 317, 319 [2004]). The report of the physician who examined plaintiff five days after the accident, on October 31, 2005, may not considered for this purpose because it was not sworn or affirmed (see Toulson, id.; Petinrin v Levering, 17 AD3d 173, 174 [2005]).
In any event, we would reach the same conclusion even if we were to consider this physician's report, the records of the hospital to which plaintiff was taken after the accident, the unsworn MRI reports taken within two weeks of the accident, the unsworn report of the surgeon who operated on plaintiff's shoulder on January 24, 2006, the unsworn "follow-up examination" dated February 23, 2006, and the affidavit of the physician who examined plaintiff on January 29, 2007. While these materials show continuing complaints of pain, a shoulder tear, shoulder surgery, and bulging and herniated discs in the cervical and lumbar spine, they do not contain a contemporaneous quantitative or qualitative assessment of the extent and duration of resulting range-of-motion limitations (see Nagbe, 22 AD3d at 326; Thompson, 15 AD3d at 97-98; Arjona v Calcano, 7 AD3d 279 [2004]). Such assessment is required even where there has been surgery (see Danvers v New York City Tr. Auth., 57 AD3d 252, [2008]). The physician's affidavit fails in this respect because it merely describes tests that were performed in the past, and provides no specific, objective evidence of how the doctor arrived at his findings of limited range of motion at the time of his examination, or why he attributed the limitations to the accident (see Bent v Jackson, 15 AD3d 46, 49 [2005]).
Plaintiff's bill of particulars alleging that he stayed home from work for only two weeks after the accident establishes defendants' entitlement to summary judgment on plaintiff's 90/180-day claim (see Onishi v N & B Taxi, Inc., 51 AD3d 594, 595 [2008]).
Rose v. Citywide Auto Leasing, Inc.


Baker, McEvoy, Morrissey & Moskovits, P.C., New York
(Stacy R. Seldin of counsel), for appellants.
The Edelsteins, Faegenburg & Brown, LLP, New York (Evan
M. Landa of counsel), for respondent.
Order, Supreme Court, Bronx County (Kenneth L. Thompson, Jr., J.), entered July 11, 2008, which denied the motion of defendants Sow and Jejote for summary judgment dismissing the complaint as against them, unanimously reversed, on the law, without costs, and the motion granted. The Clerk is directed to enter judgment dismissing the complaint as against all defendants.
Defendants satisfied their prima facie burden of showing that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d). Based on their physical examinations of plaintiff and review of her MRI reports, as well as plaintiff's own statements, defendants' experts concluded that any limitations were either degenerative in nature or attributable to a workplace accident subsequent to the instant occurrence (see Valentin v Pomilla, __ AD3d __, 2009 NY Slip Op 981 [1st Dept 2009]). Plaintiff failed to raise a triable issue by offering factually based medical opinions ruling out the subsequent accident and degenerative conditions as the cause of her limitations, and therefore summary judgment should have been granted to the moving defendants (see Lunkins v Toure, 50 AD3d 399 [2008]). We dismiss the complaint as against all defendants, since "if plaintiff cannot meet the threshold for serious injury against one defendant, she cannot meet it against the other[s]" (Lopez v Simpson, 39 AD3d 420, 421 [2007]).
Charlie v. Guerrero


Arnold E. DiJoseph, III, New York, for appellant.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York
(Stacy R. Seldin of counsel), for respondents.
Order, Supreme Court, Bronx County (Betty Owen Stinson, J.), entered August 27, 2007, which granted the motion by defendants Contreras and Jimenez for summary judgment dismissing the complaint, unanimously reversed, on the law, without costs, the motion denied and the complaint reinstated as against these defendants.
In opposition to the motion, plaintiff raised a triable issue of fact as to serious injury of a nondegenerative nature by reason of a permanent limitation of the use of a body member as a consequence of this accident (Insurance Law § 5102[d]). Objective evidence of this limitation was presented in the form of an affidavit by plaintiff's orthopaedic surgeon that plaintiff's right shoulder range of motion remained "limited and/or restricted" even after corrective surgery. Specifically, significant restrictions were noted in both the forward flexion and abduction of the shoulder, as well as the internal and external rotation of the arm. Plaintiff's surgeon concluded that this significant limitation of the use and range of motion in the right shoulder would be permanent. Therefore, despite plaintiff's failure to meet the 90/180-day test of curtailment of activities, his claim of serious injury did raise a triable issue under the statute's test of a "permanent consequential limitation of use of a body . . . member" (see generally Prestol v McKissock, 50 AD3d 600 [2008]; Rienzo v La Greco, 11 AD3d 1038 [2004]).
Arimont v. Iwakawa


Neil L. Kanzer, Garden City, N.Y. (Steven T. Farmer of counsel),
for appellant.
Andrew Hirschhorn, Rosedale, N.Y., for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendant appeals from an order of the Supreme Court, Westchester County (Donovan, J.), dated April 15, 2008, which, in effect, denied that branch of his motion which was to strike the plaintiff's complaint for failure to comply with discovery demands and denied that branch of his motion which was for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is affirmed, with costs.
Contrary to the defendant's contention, the Supreme Court did not improvidently exercise its discretion by, in effect, denying that branch of his motion which was to strike the plaintiff's complaint for failure to comply with discovery demands, as a sanction under CPLR 3126 (see Pacheco v New York City Hous. Auth., 48 AD3d 534). The defendant failed to make a clear showing that the failure to comply with discovery demands was willful and contumacious (see Goldstein v Kingsbrook Jewish Med. Ctr., 39 AD3d 816).
In addition, the defendant failed to make a prima facie showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) in the subject motor vehicle accident of March 8, 2005 (see Tchjevskaia v Chase, 15 AD3d 389). In light of the foregoing, that branch of the defendant's motion which was for summary judgment dismissing the complaint was properly denied, regardless of the sufficiency of the opposing papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853).
Burkhart, Wexler & Hirschberg, LLP, v. Liberty Insurance Underwriters, Inc., 


Burkhart, Wexler & Hirschberg, LLP, Garden City, N.Y. (Norman
B. Arnoff pro se and Carney & McKay [Robert McKay], of
counsel), appellant pro se and for appellants Stephen B. Wexler, Errol A.
Burkhart, and David Hirschberg.
Steinberg & Cavaliere, LLP, White Plains, N.Y. (Kevin F.
Cavaliere, Neil W. Silberblatt, and
Robert P. Pagano 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 plaintiffs in an underlying action entitled Financial Advisors Legal Association, Inc. v Wexler & Burkhart, P.C., commenced in the United States District Court for the Eastern District of New York under Case No. 07 Civ. 2248, the plaintiffs appeal, as limited by their brief, from so much of an order of the Supreme Court, Nassau County (Murphy, J.), dated March 14, 2008, as granted that branch of the defendant's motion which was, in effect, for summary judgment declaring that it was not obligated to defend and indemnify the plaintiffs in the underlying action, and denied that branch of their cross motion which was for summary judgment declaring that the defendant was so obligated.
ORDERED that the order is affirmed insofar as appealed from, with costs, and the matter is remitted to the Supreme Court, Nassau County, for the entry of a judgment declaring that the defendant is not obligated to defend and indemnify the plaintiffs in the underlying action.
The plaintiffs, Burkhart, Wexler & Hirschberg, LLP, Stephen B. Wexler, Errol A. Burkhart, David Hirschberg, and Norman B. Arnoff (hereinafter collectively the Burkhart Firm), were insured under a professional liability insurance policy for lawyers (hereinafter the policy) issued by the defendant, Liberty Insurance Underwriters, Inc. (hereinafter Liberty). During the term of the policy, the Burkhart Firm was sued in an action entitled Financial Advisors Legal Association, Inc. v Wexler & Burkhart, P.C., (hereinafter the underlying action). In the underlying complaint, Financial Advisors Legal Association, Inc. (hereinafter FA Legal), asserted claims for relief against the Burkhart Firm for "wanton, willful and malicious" breach of fiduciary duty for misappropriating FA Legal's confidential information and trade secrets; tortious interference with contract for using this information to attempt to convert FA Legal's members and prospective members to a newly- formed competing business entity; and for "wanton, willful and malicious" misappropriation of trade secrets.
Liberty disclaimed any duty to defend or indemnify the Burkhart Firm in the underlying action on the ground that the allegations did not fall within the scope of the policy. The Burkhart Firm then commenced this action against Liberty seeking, inter alia, a declaration that Liberty was obligated to defend and indemnify it in the underlying action.
In determining whether an insurance carrier has a duty to defend under a professional liability policy, the point of departure is a comparison between the complaint against the insured and the language of the policy (see Cohen v Employers Reinsurance Corp., 117 AD2d 435, 438). If the underlying action falls within the scope of risk covered by the policy, the insurer is obligated to defend (see American Home Assur. Co. v Port of Auth. of N.Y. & N.J., 66 AD2d 269, 277). On the other hand, if the allegations, on their face, do not bring the case within the coverage of the policy, there is no duty to defend or indemnify (see Lionel Freedman, Inc. v Glens Falls Ins. Co., 27 NY2d 364, 368).
Here, Liberty established its prima facie entitlement to judgment as a matter of law declaring that it was not obligated to defend and indemnify the Burkhart Firm in the underlying action, and the Burkhart Firm failed to raise a triable issue of fact in opposition. The basic coverage provision of the Liberty policy clearly limits coverage to claims which are caused by "any actual or alleged act, error, omission or personal injury which arises out of the rendering or failure to render professional legal services." Inasmuch as there is no allegation of negligence or malpractice arising out of the Burkhart Firm's performance, or failure to perform, legal services, the claim in the underlying action does not fall within the ambit of the policy (see Tartaglia v Home Ins. Co., 240 AD2d 396; Cohen v Employers Reinsurance Corp., 117 AD2d 435; George Muhlstock & Co. v American Home Assur. Co., 117 AD2d 117). For the same reason, the Supreme Court properly denied that branch of the Burkhart Firm's cross motion which was for summary judgment.
The Burkhart Firm's remaining contentions are without merit.
Since this is a declaratory judgment action, the matter must be remitted to the Supreme Court, Nassau County, for the entry of a judgment declaring that Liberty is not obligated to defend and indemnify the Burkhart Firm in the underlying action entitled Financial Advisors Legal Association, Inc. v Wexler & Burkhart, P.C., commenced in the United States District Court for the Eastern District of New York under Case No. 07 Civ. 2248 (see Lanza v Wagner, 11 NY2d 317, 334, appeal dismissed 371 US 74, cert denied 372 US 901).
Franklin Development Co., Inc., v. Atlantic Mutual Insurance Company


Daniel J. Sweeney & Associates, PLLC, Pleasantville, N.Y. (Brian
M. Hussey of counsel), for appellants.
Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, White
Plains, N.Y. (Joanna M. Topping of
counsel), for respondent.

DECISION & ORDER
In an action, inter alia, for a judgment declaring that the defendant is required to defend and indemnify the plaintiffs in a related action entitled Rodriguez v Franklin Dev. Co., Inc., pending in the Supreme Court, Westchester County, under Index No. 12229/01, the plaintiffs Franklin Development Co., Inc., and William Weinstein Realty Corp. appeal from (1) an order of the Supreme Court, Westchester County (Nastasi, J.), entered September 24, 2007, which denied, as academic, their motion, among other things, to vacate the defendant's 90-day demand pursuant to CPLR 3216, granted the defendant's cross motion to declare that the defendant did not have a duty to defend or indemnify the plaintiffs and, upon finding that this action was frivolous within the meaning of 22 NYCRR 130-1.1, sua sponte, determined that an award of an attorney's fee to the defendant and the imposition of a sanction upon the plaintiffs were warranted, and set the matters down for a hearing to fix the amounts, and (2) an order of the same court entered January 25, 2008, which denied their motion for leave to renew and reargue.
ORDERED that the appeal from so much of the order entered January 25, 2008, as denied that branch of the motion of the plaintiffs Franklin Development Co., Inc., and William Weinstein Realty Corp. which was for leave to reargue is dismissed, as no appeal lies from an order denying reargument; and it is further,
ORDERED that on the Court's own motion, the notice of appeal is deemed an application for leave to appeal from so much of the order entered September 24, 2007, as, sua sponte, determined that an award of an attorney's fee to the defendant and the imposition a sanction upon the plaintiffs were warranted, and leave to appeal is granted (see CPLR 5701[c]); and it is further,
ORDERED that the order entered September 24, 2007, is reversed, on the law, the defendant's cross motion is denied, and the matter is remitted to the Supreme Court, Westchester County, for a determination on the merits of the plaintiffs' motion; and it is further,
ORDERED that the appeal from so much of the order entered January 25, 2008, as denied that branch of the motion which was for leave to renew is dismissed as academic in light of our determination on the appeal from the order entered September 24, 2007; and it is further,
ORDERED that one bill of costs is awarded to the appellants.
The plaintiff Franklin Development Co., Inc. (hereinafter Franklin), leased space in a building it owned at 545 Franklin Avenue in Mount Vernon to nonparty Hertlein Special Tool Co., Inc. (hereinafter Hertlein). Pursuant to the terms of the lease, Hertlein obtained a comprehensive general public liability insurance policy for the leased premises, naming Franklin as an additional insured. The defendant was Hertlein's insurer. Nonparty Thomas Rodriguez, an employee of Hertlein, allegedly fell in a stairwell in the building, sustaining injuries. Rodriguez commenced an action to recover damages for personal injuries (hereinafter the underlying action). The plaintiffs herein were defendants in that action.
Under the doctrine of collateral estoppel, or issue preclusion, "a party is precluded from relitigating an issue which has been previously decided against him in a prior proceeding where he had a full and fair opportunity to litigate such issue" (Luscher v Arrua, 21 AD3d 1005, 1007; see D'Arata v New York Cent. Mut. Fire Ins. Co., 76 NY2d 659, 664). The doctrine of collateral estoppel is "intended to reduce litigation and conserve the resources of the court and litigants and it is based upon the general notion that it is not fair to permit a party to relitigate an issue that has already been decided against it" (Kaufman v Eli Lilly & Co., 65 NY2d 449, 455). "The two elements that must be satisfied to invoke the doctrine of collateral estoppel are that (1) the identical issue was decided in the prior action and is decisive in the present action, and (2) the party to be precluded from relitigating the issue had a full and fair opportunity to contest the prior issue" (Luscher v Arrua, 21 AD3d at 1007; see Kaufman v Eli Lilly & Co., 65 NY2d 449, 455). "The rule in New York is that the pendency of an appeal does not prevent the use of the challenged judgment as the basis of' collateral estoppel" (Anonymous v Dobbs Ferry Union Free School Dist., 19 AD3d 522, 522-523, quoting Matter of Amica Mut. Ins. Co. [Jones], 85 AD2d 727, 728). However, "collateral estoppel does not prevent relitigation of a ruling that was an alternative basis for a trial-level decision, where an appellate court affirmed the decision without addressing that ruling" (Tydings v Greenfield, Stein & Senior, LLP, 11 NY3d 195, 197). Here, contrary to the Supreme Court's determination, the plaintiffs were not barred from relitigating the issue of whether the stairwell in the building where the plaintiff in the underlying action fell was an area covered by the additional insured clause in the insurance policy. This issue was relevant to the third-party action in the underlying case. Franklin appealed from the Supreme Court's denial of its motion for summary judgment on its third-party complaint, and Franklin addressed the issue on its appeal before this Court. This Court modified the Supreme Court's order by granting Franklin's motion for summary judgment dismissing the complaint and all cross claims insofar as asserted against it in the main action, affirmed the Supreme Court's order as so modified, and expressly did not reach any of Franklin's remaining contentions (see Rodriguez v Franklin Dev. Co., Inc., 43 AD3d 1134). Thus, this case does not present the typical situation where an "alternative basis" for the Supreme Court's ruling is not entitled to preclusive effect, as the Supreme Court's ruling at issue pertained to the third-party action, which this Court had no reason to address once we dismissed the complaint insofar as asserted against Franklin in the main action. Nevertheless, the same rationale as bars the application of collateral estoppel to an "alternative basis" for a ruling applies here. Since Franklin appealed from the Supreme Court's denial of its motion for summary judgment on the third-party complaint, which was based on the issue presented here, Franklin addressed the issue before this Court, but, for the reasons discussed, this Court did not reach the issue. Thus, the issue was not necessarily decided and Franklin did not have "a full and fair chance to overturn the earlier decision" (Tydings v Greenfield, Stein & Senior, LLP, 11 NY3d 195, 200). Accordingly, the Supreme Court's determination thereof is not entitled to preclusive effect (see generally Tydings v Greenfield, Stein & Senior, LLP, 11 NY3d 195).
As to whether the defendant established its entitlement to dismissal of this action by demonstrating that it had no duty to defend the plaintiffs in the underlying action, "[a]n insurer's duty to defend is broader than its duty to indemnify, such that an insurer may be obligated to defend its insured even if, at the conclusion of an underlying action, it is found to have no obligation to indemnify its insured" (Global Constr. Co., LLC v Essex Ins. Co., 52 AD3d 655, 655-656; see Automobile Ins. Co. of Hartford v Cook, 7 NY3d 131, 137; City of New York v Evanston Ins. Co., 39 AD3d 153, 157). "An insurer must defend its insured whenever the allegations of a complaint in an underlying action suggest . . . a reasonable possibility of coverage'" (Global Constr. Co., LLC v Essex Ins. Co., 52 AD3d at 656, quoting BP A.C. Corp. v One Beacon Ins. Group, 8 NY3d 708, 714; see Automobile Ins. Co. of Hartford v Cook, 7 NY3d at 137; Bruckner Realty, LLC v County Oil Co., Inc., 40 AD3d 898, 900; Shapiro v OneBeacon Ins. Co., 34 AD3d 259). "The duty to defend is not triggered, however, when, as a matter of law . . . there is no possible factual or legal basis upon which the insurer might eventually be held to be obligated to indemnify the claimant under any provision of the insurance policy' (Bruckner Realty, LLC v County Oil Co., Inc., 40 AD3d at 900; City of New York v Evanston Ins. Co., 39 AD3d at 157-158) or when the only interpretation of the allegations against the insured is that the factual predicate for the claim falls wholly within a policy exclusion" (Global Constr. Co., LLC v Essex Ins. Co., 52 AD3d at 656; see Automobile Ins. Co. of Hartford v Cook, 7 NY3d at 137; Bruckner Realty, LLC v County Oil Co., Inc., 40 AD3d at 900). The Supreme Court erred in granting the defendant's cross motion, as the defendant failed to establish, as a matter of law, that the allegations of the complaint in the underlying action did not suggest a reasonable possibility of coverage, that there was no possible factual or legal basis upon which the defendant might eventually be held to be obligated to indemnify Franklin, or that the only interpretation of the allegations against the insured was that the factual predicate for the claim fell wholly within a policy exclusion (cf. ZKZ Assoc. v CNA Ins. Co., 89 NY2d 990; Jenel Mgmt. Corp. v Pacific Ins. Co., 55 AD3d 313; Ambrosio v Newburgh Enlarged City School Dist., 5 AD3d 410; see generally BP A.C. Corp. v One Beacon Ins. Group, 8 NY3d at 714; Automobile Ins. Co. of Hartford v Cook, 7 NY3d at 137; Global Constr. Co., LLC v Essex Ins. Co., 52 AD3d at 656; Bruckner Realty, LLC v County Oil Co., Inc., 40 AD3d at 900; City of New York v Evanston Ins. Co., 39 AD3d at 157-158; Shapiro v OneBeacon Ins. Co., 34 AD3d 259).
The Supreme Court improperly determined that an award of an attorney's fee to the defendant and the imposition of a sanction upon the plaintiffs were warranted, as the action was not frivolous (see Mancini v Mancini, 269 AD2d 366).
The Supreme Court denied the plaintiffs' motion as academic. In light of our determination, we remit the matter to the Supreme Court, Westchester County, for a determination on the merits of the plaintiffs' motion.
R.B. Woodcraft, Inc. v. Acadia Insurance Company, State Farm, et al.


Appeal from an order of the Supreme Court, Onondaga County (Donald A. Greenwood, J.), entered February 28, 2008. The order, insofar as appealed from, denied the cross motion of defendants State Farm Fire and Casualty Company, incorrectly sued as State Farm Insurance Company, and Jon Brittain, incorrectly sued as John Britton, for summary judgment dismissing the second amended complaint against them.

HISCOCK & BARCLAY, LLP, ROCHESTER (JOSEPH A. WILSON OF COUNSEL), FOR DEFENDANTS-APPELLANTS.
GUSTAVE J. DETRAGLIA, JR., UTICA, FOR PLAINTIFFS-RESPONDENTS.

It is hereby ORDERED that the order so appealed from is unanimously modified on the law by granting in part the motion of plaintiffs and granting judgment in favor of plaintiffs and against defendant State Farm Fire and Casualty Company, incorrectly sued as State Farm Insurance Company, on the second cause of action and by granting in part the cross motion of defendants State Farm Fire and Casualty Company and Jon Brittain, incorrectly sued as John Britton, and dismissing the second amended complaint against defendant Jon Brittain and as modified the order is affirmed without costs, and the matter is remitted to Supreme Court, Onondaga County, for further proceedings in accordance with the following Memorandum:

Defendant State Farm Fire and Casualty Company, incorrectly sued as State Farm Insurance Company (State Farm), issued a homeowner's insurance policy to Raymond A. Brooks and Kelly E. Brooks (plaintiffs). Both a residenceand a detached pole barn were located on plaintiffs' property. When a fire destroyed the pole barn, plaintiffs submitted a claim to State Farm for the loss of the pole barn and their personal property located in it. State Farm paid the claim with respect to the personal property but refused to pay the claim with respect to the pole barn, relying on a policy exclusion for "other structures . . . used in whole or in part for business purposes . .. "
We conclude that Supreme Court properly denied that part of the cross motion ofState Farm and insurance agent Jon Brittain, incorrectly sued as John Britton (defendants), for summary judgment dismissing the second amended complaint against State Farm. Despite the absence of a cross appeal by plaintiffs (see Hillman v Eick, 8 AD3d 989, 991; see generally Merritt Hill Vineyards v Windy Hgts. Vineyard, 61 NY2d 106, 110), however, we further conclude that the court erred in denying plaintiffs' motion for summary judgment in its entirety. Rather, we conclude with respect to the second cause of action that plaintiffs are entitled to summary judgment determining that State Farm is obligated to pay their claim with respect to the pole barn and to a money judgment for that claim. We therefore modify the order accordingly, and we remit the matter to Supreme Court to determine the amount owed by State Farm to plaintiffs for the loss of the pole barn and to direct the entry of judgment in favor of plaintiffs for that amount together with interest, costs, and disbursements. We reject defendants' contention that the storage of business items in the pole barn established as a matter of law that the pole barn was being used in part for business purposes. Rather, we conclude that State Farm "may not deny coverage based upon the use of the barn for the storage of business items. The phrase used in whole or in part for business purposes' is ambiguous in the absence of any qualifying language . . . and therefore must be construed in favor of the insureds" (Roland v Nationwide Mut. Fire Ins. Co., 286 AD2d 872, 872). In light of our determination, we further modify the order by granting that part of defendants' cross motion for summary judgment dismissing the second amended complaint against Brittain.
Endres v. Shelba D. Johnson Trucking, Inc.

Appeal from an order of the Supreme Court, Erie County (Joseph D. Mintz, J.), entered August 7, 2008 in a personal injury action. The order granted defendants' motion for summary judgment dismissing the complaint.

CELLINO & BARNES, P.C., BUFFALO (ROSS CELLINO OF COUNSEL), FOR PLAINTIFF-APPELLANT.
LAW OFFICES OF LAURIE G. OGDEN, BUFFALO (JERRY MARTI OF COUNSEL), FOR DEFENDANTS-RESPONDENTS.

It is hereby ORDERED that the order so appealed from is unanimously modified on the law by denying the motion in part and reinstating the complaint, as amplified by the bill of particulars, with respect to the permanent consequential limitation of use of a body organ or member and significant limitation of use of a body function or system categories of serious injury within the meaning of Insurance Law § 5102 (d) and as modified the order is affirmed without costs.
Memorandum: Plaintiff commenced this action seeking damages for injuries he allegedly sustained when a tractor-trailer driven by defendant Jerry William White and owned by defendant Shelba D. Johnson Trucking, Inc. collided with the vehicle driven by plaintiff. Defendants moved for summary judgment dismissing the complaint on the ground that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102 (d). We note at the outset that, in opposition to the motion, plaintiff abandoned his claims with respect to three of the six categories of serious injury alleged in the complaint, as amplified by the bill of particulars, i.e., significant disfigurement, fracture, and permanent loss of use (see Oberly v Bangs Ambulance, 96 NY2d 295, 297; Feggins v Fagard, 52 AD3d 1221, 1222). We thus conclude that Supreme Court properly granted the motion with respect to those categories. We further conclude that the court properly granted the motion with respect to the 90/180 category of serious injury inasmuch as defendants established their entitlement to summary judgment with respect thereto, and plaintiff failed to submit any evidence that his activities were subject to a "medically imposed restriction[]" during the relevant time period (Tuna v Babendererde, 32 AD3d 574, 576; see generally Zuckerman v City of New York, 49 NY2d 557, 562).
We agree with plaintiff, however, that the court erred in granting the motion with respect to the permanent consequential limitation of use and significant limitation of use categories of serious injury, and we therefore modify the order accordingly. Contrary to the contention of defendants, the report of a physician who examined plaintiff at their request failed to offer any basis upon which to conclude that plaintiff's 50% reduction in lumbar flexion and extension was caused by plaintiff's alleged degenerative disease and was not exacerbated by the accident (see McKenzie v Redl, 47 AD3d 775, 776; see also Umar v Ohrnberger, 46 AD3d 543). That report also "failed to address the significance of the absence of any prior complaints of similar pain," despite indicating that plaintiff had informed the physician that he had been relatively free from pain immediately prior to the accident (Ashquabe v McConnell, 46 AD3d 1419). Thus, defendants failed to present "persuasive evidence that plaintiff's alleged pain and injuries [with respect to the permanent consequential limitation of use and significant limitation of use categories] were related to a preexisting condition" and were not exacerbated by the accident (Carrasco v Mendez, 4 NY3d 566, 580; see Ashquabe, 46 AD3d 1419). Contrary to defendants' further contention that there was an unexplained gap in plaintiff's treatment, we conclude that the record fails to establish that plaintiff in fact ceased all therapeutic treatment (see generally Pommells v Perez, 4 NY3d 566, 574; Brown v Dunlap, 4 NY3d 566, 577).
Lee v. McQueens


Sim & Park, LLP, New York, N.Y. (Sang J. Sim of counsel), for
appellants.
Finder & Cuomo, LLP, New York, N.Y. (Sherri A. Jayson of
counsel), for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiffs appeal, as limited by their brief, from so much of an order of the Supreme Court, Kings County (Vaughan, J.), dated October 24, 2007, as granted the cross motion of the defendant Pedro Molasco Reyes for summary judgment dismissing the complaint insofar as asserted against him on the ground that neither of them sustained a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and the cross motion of the defendant Pedro Molasco Reyes for summary judgment dismissing the complaint insofar as against him is denied.
The plaintiffs allegedly were injured when a motor vehicle operated by the defendant Gabriel McQueens was struck by a taxi operated by the defendant Pedro Molasco Reyes, and thereby was propelled into the plaintiffs' parked van. After McQueens moved for summary judgment dismissing the complaint insofar as asserted against him, inter alia, on the ground that he was not liable for the plaintiffs' injuries, Reyes cross-moved for summary judgment dismissing the complaint insofar as asserted against him, on the ground that the plaintiffs' injuries were not serious within the meaning of Insurance Law § 5102(d).
The admissible medical evidence which was submitted by Reyes failed to establish, prima facie, that the plaintiffs did not sustain a serious injury within the meaning of Insurance Law § 5102(d) (see Tchjevskaia v Chase, 15 AD3d 389). In any event, the affidavits prepared by the plaintiffs' treating chiropractors were sufficient to raise a triable issue of fact. The chiropractor averred that, through the use of a goniometer, he found limitations in the plaintiffs' cervical and lumbar spines, both on his contemporaneous and most recent examination of the plaintiffs, which he quantified in his affidavits (see Williams v Clark, 54 AD3d 942; Kerzhner v N.Y. Ubu Taxi Corp., 17 AD3d 410).
LaMarre v. Michelle Taxi, Inc.


Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y.
(Stacy R. Seldin of counsel), for appellants-respondents.
Sacco & Fillas, LLP, Whitestone, N.Y. (Lamont K. Rodgers of
counsel), for respondent-appellant.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendants appeal from so much of an order of the Supreme Court, Kings County (Jacobson, J.), dated June 3, 2008, as, in effect, denied that branch of their motion which was for summary judgment dismissing so much of the complaint as alleged that the plaintiff sustained a serious injury under the medically-determined injury or impairment of a nonpermanent nature category of Insurance Law § 5102(d) as a result of the subject accident, and the plaintiff cross-appeals from so much of the same order as, in effect, granted those branches of the defendants' motion which were for summary judgment dismissing so much of the complaint as alleged that he sustained a serious injury under the permanent consequential limitation of use and/or significant limitation of use categories under Insurance Law § 5102(d) as a result of the subject accident.
ORDERED that the order is reversed insofar as appealed from, on the law, and that branch of the defendants' motion which was for summary judgment dismissing so much of the complaint as alleged that the plaintiff sustained a serious injury under the medically-determined injury or impairment of a nonpermanent nature category of Insurance Law § 5102(d) as a result of the subject accident is granted; and it is further,
ORDERED that the order is affirmed insofar as cross-appealed from; and it is further,
ORDERED that one bill of costs is awarded to the defendants.
On their motion for summary judgment, 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; see also Meyers v Bobower Yeshiva Bnei Zion, 20 AD3d 456). In opposition, the plaintiff failed to raise a triable issue of fact as to whether he sustained a serious injury under the permanent consequential limitation of use and/or significant limitation of use categories under Insurance Law § 5102(d) as a result of the subject accident. The plaintiff relied upon an affirmed report from his treating physician, based on a recent physical examination. However, the physician indicated that he only examined the plaintiff's lumbar spine, concluded, without making any range of motion findings, that the lumbar spine had a "limitation," and failed to set forth the objective tests he performed to arrive at his conclusion (see Sapienzea v Ruggiero, 57 AD3d 643; Gastaldi v Chen, 56 AD3d 420, 421; Budhram v Ogunmoyin, 53 AD3d 640, 641).
Furthermore, contrary to the Supreme Court's determination, the plaintiff also failed to raise a triable issue of fact as to whether he sustained a serious injury under the medically-determined injury or impairment of a nonpermanent nature category of Insurance Law § 5102(d) as a result of the subject accident. In this regard, the plaintiff, whose deposition testimony established that he returned to work approximately 30 days after the accident and missed approximately 60 days of work, failed to proffer any competent medical evidence to establish that he sustained a medically-determined injury or impairment of a nonpermanent nature which prevented him from performing substantially all of the material acts constituting his usual and customary activities for not less than 90 of the 180 days immediately following the accident (see Itkin v Devlin, 286 AD2d 477, 478).
Kasper v. N & J Taxi, Inc.


Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y.
(Timothy M. Sullivan of counsel), for appellants.
Law Offices of Michael M. Goldberg, P.C., New York, N.Y.
(Frank H. GuzmÁn 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 (Agate, J.), entered June 11, 2008, 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 affirmed, with costs.
The Supreme Court properly determined that the defendants did not meet their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In support of their motion, the defendants relied upon, inter alia, the affirmed medical report of Dr. S. Farkas, their examining orthopedist, who noted significant limitations in the plaintiff's cervical spine and left shoulder ranges of motion based upon his examination of her on May 21, 2007 (see Hurtte v Budget Roadside Care, 54 AD3d 362; Perry v Brusini, 53 AD3d 478; Moorer v Amboy Bus Co., Inc., 52 AD3d 587).
Since the defendants failed to meet their prima facie burden, it is unnecessary to consider the sufficiency of the evidence submitted in opposition to the motion (see Hurtte v Budget Roadside Care, 54 AD3d 362; Coscia v 938 Trading Corp., 283 AD2d 538).
American Guarantee and Liability Insurance Company v. Hoffmann


Hancock & Estabrook, LLP, Syracuse (Timothy P. Crisafulli of
counsel), for appellants.
Steinberg & Cavaliere, LLP, White Plains (Ronald W. Weiner
of counsel), for respondent.
Order, Supreme Court, New York County (Louis B. York, J.), entered February 27, 2008, which, to the extent appealed from as limited by the briefs, granted plaintiff's cross motion for summary judgment declaring no duty to defend or indemnify defendants, unanimously affirmed, with costs.
The policy at issue excludes from coverage any claims based "in whole or in part" on acts "in connection with" a trust of which defendants are beneficiaries. This is an enforceable exclusion (see American Guar. & Liab. Ins. Co. v Lerner, 58 AD3d 523 [2009]). Here, each claim in the underlying proceeding centered on the transfer of stock held by a trust for the petitioners therein to a trust created by defendants of which they were the sole trustees and beneficiaries. Because no claim fell outside the exclusion, there was no duty to defend or indemnify (Atlantic Mut. Ins. Co. v Terk Tech. Corp., 309 AD2d 22 [2003]).
Kiss Construction NY, Inc., v. Rutgers Casualty Insurance Company

Bivona & Cohen, P.C., New York (Elio M. Di Berardino of
counsel), for appellant.
Apuzzo & Chase, New York (William Apuzzo of counsel), for
respondent.
Order, Supreme Court, New York County (Herman Cahn, J.), entered April 16, 2008, which, to the extent appealed from, denied defendant Rutgers' motion for summary judgment and granted plaintiff's motion for partial summary judgment declaring that Rutgers is obligated to defend and/or pay plaintiff's defense costs in an underlying action until the question of rescission of the policy is decided, unanimously reversed, on the law, with costs, Rutgers' motion granted, plaintiff's motion denied, the policy declared void ab initio, and defendant Rutgers is directed to refund the premiums to plaintiff.
In its application for commercial general liability insurance with Rutgers, plaintiff listed the nature of its business as "PAINTING-100%-100% INTERIOR." The Declaration page of the policy described plaintiff's business as a painting contractor, and the Extension of Declarations included the further description "PAINTING INTERIOR BUILDINGS-NO TANKS." Plaintiff further acknowledged that by accepting the policy, it agreed that the statements in the Declarations were accurate, complete and based on representations it had made in its application, and that Rutgers was issuing the policy in reliance on those representations.
In 2004, plaintiff lodged a claim under the policy for injuries that allegedly occurred during the construction of a three-family building, where plaintiff was the general contractor in work involving excavation and paving. Rutgers disclaimed coverage based on an alleged material misrepresentation in the application for insurance. Plaintiff brought the instant action, seeking a declaration that Rutgers was obligated under the policy to defend and indemnify plaintiff in that underlying claim. In its fifth affirmative defense, Rutgers sought to void the policy ab initio, based on the alleged material misrepresentation in the application.
For an insurer to be entitled to rescind a policy ab initio, it must show that the applicant made a material misrepresentation with an intent to defraud (see Dwyer v First Unum Life Ins. Co., 41 AD3d 115 [2007]). "No misrepresentation shall be deemed material unless knowledge by the insurer of the facts misrepresented would have led to a refusal by the insurer to make such a contract" (Insurance Law § 3105[b]). While the materiality of a misrepresentation is ordinarily  jury question, it becomes a matter of law for the court's determination when the evidence concerning materiality is clear and substantially uncontradicted (Process Plants Corp. v Beneficial Natl. Life Ins. Co., 53 AD2d 214, 216-217 [1976], affd 42 NY2d 928 [1977]).
Here, although defendants have not established that the policy itself limited coverage to painting and neither the guidelines nor the classification of the nature of plaintiff's business would alter the coverage provided, the court should have granted Rutgers' motion for summary judgment declaring the policy void ab initio. Rutgers offered the affidavits of two of its vice presidents (one of whom was the Vice President of Commercial Underwriting) who each averred that the company does not write policies for such construction work, or for general contractors. This argument was also supported by the company's underwriting guidelines, by copies of e-mails declining coverage to similarly situated applicants, and by copies of disclaimer letters sent to similarly situated insureds making similar claims (see Insurance Law § 3105[c]; cf. Di Pippo v Prudential Ins. Co. of Am., 88 AD2d 631 [1982]). This satisfied Rutgers' burden of demonstrating the materiality of the misrepresentation (see Bleecker St. Health & Beauty Aids, Inc. v Granite State Ins. Co., 38 AD3d 231 [2007]; Mehta v New York Life Ins. Co, 203 AD2d 8 [1994]), and plaintiff does not argue to the contrary on appeal.
One of plaintiff's managers, who was the father of plaintiff's principal, testified at deposition that based on his own knowledge, plaintiff had been performing such construction work throughout and since 2002. The subsequent affidavits of plaintiff's principal and this manager, to the effect that the father was never employed by plaintiff and that he had no knowledge of any such construction work during 2002, were insufficient to defeat Rutgers' motion for summary judgment, as those self-serving affidavits created no more than a feigned issued of fact tailored to avoid the consequences of the earlier contrary testimony (see Phillips v Bronx Lebanon Hosp., 268 AD2d 318, 320 [2000]). The later affidavits asserting that the father was not employed by plaintiff are also belied by a prior affidavit submitted by him in this action, on plaintiff's behalf, in which he averred that he was indeed one of plaintiff's managers. Again, plaintiff does not argue otherwise on appeal.
In Federal Ins. Co. v Kozlowski (18 AD3d 33 [2005]), we held that once a policy goes into effect and a claim has been made, the status quo is changed and a defense of rescission must await a judicial determination. This does not mean, as plaintiff argues, that once a claim is made under such a policy, the rescission would only be effective as to new claims. We clearly held that once a claim is lodged under the policy, a rescission by notice (i.e., without a judicial determination) can only be prospective, but "[n]eedless to say, if [the insurer] prevails in its claim of right to rescind on the basis of fraud in the inducement, its obligation to defend [the insured] is vitiated and the policy will be rendered void from its inception irrespective of the point in the life of the policy that a liability claim may have arisen" (id. at 40).
None of plaintiff's other arguments alters Rutgers' right to summary judgment on its affirmative defense for a declaration that the policy was void ab initio based on the material misrepresentations in the insurance application. Since we now declare the policy void ab initio, Rutgers is obligated to refund plaintiff's premium payments (LaRocca v John Hancock Mut. Life Ins. Co., 286 NY 233, 238 [1941], cited in Curiale v AIG Multi-Line Syndicate, 204 AD2d 237, 238 [1994], lv dismissed 84 NY2d 1026 [1995]).

 LMK Psychological Services, P.C. v. , State Farm Mutual Automobile Ins. Co.


Evan H. Krinick, for appellant.
Craig Meyerson, for respondents.
Peter Karanjia, for amicus curiae Eric R. Dinallo.
Government Employees Insurance Company et al.;
New York Central Mutual Fire Insurance Company, et al., amici
curiae.

PIGOTT, J.:
Plaintiffs, two medical providers that treated various automobile accident victims insured by defendant State Farm Automobile Insurance Company, commenced this action against State Farm after it denied no-fault insurance benefit claims assigned to plaintiffs by the insureds. Plaintiffs asserted one cause of action for each insured treated, alleging that State Farm failed to pay or deny multiple bills within the requisite 30 days.
Plaintiffs were granted summary judgment awarding them, among other things, attorneys' fees and interest. As relevant to this appeal, attorneys' fees were awarded "on each claim within each cause of action"; in other words, attorneys' fees were calculated on each bill submitted for each insured. This amount differed substantially from that proposed by State Farm, which sought a calculation of attorneys' fees on a per insured basis.
In addition, Supreme Court awarded plaintiffs interest at the statutory rate of 2% per month, without applying the tolling provision set forth in the Insurance Law regulations, which provide for the suspension of interest 30 days after denial of payment until plaintiffs commence an action seeking payment.
On appeal, the Appellate Division rejected State Farm's contention that Supreme Court failed to properly apply the tolling provision in awarding interest to plaintiffs. The court held that because State Farm did not issue a proper and timely denial to plaintiffs' no-fault claims, it was not entitled to the benefit of the tolling provision.
As it pertained to attorneys' fees, the court held that Supreme Court properly awarded fees on a per bill basis rather than a per insured basis. The court expressly rejected an opinion letter of the Superintendent of Insurance, finding it in conflict with the express language of Insurance Law § 5106, as well as case law. This Court granted defendant leave to appeal and we now reverse.
"New York's no-fault automobile insurance system is designed 'to ensure prompt compensation for losses incurred by accident victims without regard to fault or negligence, to reduce the burden on the courts and to provide substantial premium savings to New York motorists'" (Hosp. for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312 [2007] [citations omitted]). We recently reiterated that the no-fault scheme's core objective is "to provide a tightly timed process of claim, disputation and payment" (id. at 319 citing Presbyterian Hosp. in City of N.Y. v Md. Cas. Co., 90 NY2d 274 [2007]). In furtherance of this objective, an insurer's failure to pay or deny a claim within the requisite time period carries significant consequences, including the payment of attorneys' fees and interest.
Insurance Law § 5106 (a) provides that "[if] a valid claim or portion was overdue, the claimant shall . . . be entitled to recover his attorney's reasonable fee, for services necessarily performed in connection with securing payment of the overdue claim . . ." Pursuant to the authority delegated to him by § 5106 (a), the Superintendent of Insurance promulgated regulation 11 NYCRR 65-4.6 establishing a minimum attorneys' fee and further providing that the "attorney's fee shall be limited as follows: 20 percent of the amount of first-party benefits, plus interest thereon, awarded by the . . . court, subject to a maximum of $850" (11 NYCRR 65-4.6 [e]).
On October 8, 2003, the Superintendent issued an opinion letter interpreting that regulation and stating that the minimum amount of attorneys' fees awarded to an assignee health care provider pursuant to Insurance Law § 5106 is "based upon the aggregate amount of payment required to be reimbursed based upon the amount awarded for each bill which had been submitted and denied. The minimum attorney fee . . . is not due and owing for each bill submitted as part of the total amount of the disputed claim sought in the court action" (Ops Gen Counsel NY Ins Dept No. 03-10-04 [Oct. 2003]). In referring to the regulations, specifically 11 NYCRR 65-6.4 (e), the Superintendent stated
"[that provision] makes it clear that the amount of attorneys' fees awarded will be based upon 20% of the total amount of first party benefits awarded. That total amount is derived from the total amount of individual bills disputed in either a court action or arbitration, regardless of whether one bill or multiple bills are presented as part of a total claim for benefits, based upon the health services rendered by a provider to the same eligible insured."
We have long held that the Superintendent's "interpretation, if not irrational or unreasonable, will be upheld in deference to his special competence and expertise with respect to the insurance industry, unless it runs counter to the clear wording of a statutory provision" (Matter of New York Pub. Interest Research Group v. New YorkState Dept. of Ins., 66 NY2d 444, 448 [1985]). The responsibility for administering the Insurance Law and, in particular, fair claims settlement under the No-Fault law rests with the Superintendent(see Insurance Law §§ 301; 5106 [e]). For purposes of calculating attorneys' fees, the Superintendent has interpreted a claim to be the total medical expenses claimed in a cause of action pertaining to a single insured, and not — as the courts below held — each separate medical bill submitted by the provider. Because this interpretation is neither irrational, unreasonable, nor runs counter to the clear wording of the statute, it is entitled to deference. Thus, this Court accepts the Insurance Department's interpretation of its own regulation and, upon remittitur, directs Supreme Court to calculate attorneys' fees based on the aggregate of all bills for each insured.
State Farm next contends that the Appellate Division erred in finding that an insurance company that fails to issue a proper and timely denial is not entitled to the benefit of the tolling provision. We agree.
Pursuant to Insurance Law § 5106 (a), interest accrues on overdue no-fault insurance claims at a rate of 2% per month. A claim is overdue when it is not paid within 30 days after a proper demand is made for its payment (Insurance Law § 5106 [a]; 11 NYCRR 65.15 [g]). The Superintendent's regulation tolls the accumulation of interest if the claimant "does not request arbitration or institute a lawsuit within 30 days after receipt of a denial of claim form or payment of benefits calculated pursuant to Insurance Department regulations" (11 NYCRR 65-3.9 [c]).
The Superintendent has interpreted this provision to mandate that the accrual of interest is tolled, regardless of whether the particular denial at issue was timely. That interpretation is similarly entitled to deference given that it is "not irrational or unreasonable" (Matter of Council of City of NY v Public Service Comm, 99 NY2d 64, 74 [2002]). Indeed, it is consistent with § 5106 entitled "Fair claims settlement", the purpose of which is to encourage claimants to swiftly seek to resolve any dispute concerning their entitlement to no-fault benefits. Once a denial is issued, even if an untimely one, a claimant should still be encouraged to act to resolve the dispute quickly. Supreme Court is therefore directed to calculate appropriate interest on each claim, taking into consideration the tolling provision of § 5106 (a) as interpreted by the Superintendent of Insurance.
Accordingly, the order of the Appellate Division, insofar as appealed from, should be reversed, with costs, and the matter remitted to Supreme Court for further proceedings in accordance with this opinion.
* * * * * * * * * * * * * * * * *
Order, insofar as appealed from, reversed, with costs, and case remitted to Supreme Court, Greene County, for further proceedings in accordance with the opinion herein. Opinion by Judge Pigott. Judges Ciparick, Graffeo, Read, Smith and Jones concur. Chief Judge Lippman took no part.
Silverite Construction Company, Inc. v. One Beacon Insurance Company

Melito & Adolfsen P.C., New York (S. Dwight Stephens of
counsel), for appellants.
Goldberg Segalla LLP, Mineola (Joanna M. Roberto of
counsel), for respondent.
Order, Supreme Court, New York County (Judith J. Gische, J.), entered March 31, 2008, which denied plaintiffs Silverite Construction Company, Inc. ("Silverite") and the New York City Department of Environmental Protection's ("the DEP") motion for summary judgment and granted defendant One Beacon Insurance Company's ("One Beacon") motion for summary judgment unanimously affirmed, with costs.
Plaintiffs excuse for their 2½ month-plus late notice of a worker's injury at a city construction site was that they did not believe the worker either had a claim, or would bring one, was properly rejected given evidence that the worker was removed from the worksite by ambulance, an accident report was prepared the same date but not followed up, the worker missed a week of work, he returned on limited duties and filed a notice of claim against the City the same day (see generally Great Canal Realty Corp. v Seneca Ins. Co., 5 NY3d 742 [2005]). One Beacon's disclaimer was timely following a brief investigation into whether the plaintiffs qualified as additional insureds under the One Beacon policy.
BINKOWSKI v HARTFORD ACCIDENT AND INDEMNITY CO.

Appeal from an order of the Supreme Court, Erie County (Kevin M. Dillon, J.), entered April 11, 2008. The order granted defendant's motion to dismiss the complaint.

LIPSITZ GREEN SCIME CAMBRIA LLP, BUFFALO (JOHN A. COLLINS OF COUNSEL), FOR PLAINTIFF-APPELLANT.
KEVIN A. RICOTTA, ATTORNEYS & COUNSELORS AT LAW, BUFFALO (K. JOHN BLAND OF COUNSEL), FOR DEFENDANT-RESPONDENT.

It is hereby ORDERED that the order so appealed from is unanimously affirmed without costs.
Memorandum: Plaintiff commenced this action against defendant, her employer's workers' compensation carrier, seeking damages resulting from the breach of an alleged oral agreement between plaintiff and defendant concerning the offset of future benefit payments following plaintiff's settlement with a third party. In her complaint, plaintiff alleged that she paid $18,916 to satisfy defendant's lien on the settlement and that defendant's representative orally promised plaintiff that her workers' compensation benefits would resume after 9.36 years rather than the 13.6-year period set forth in the Notice of Decision of the Workers' Compensation Board. We conclude that Supreme Court properly granted defendant's motion to dismiss the complaint pursuant to CPLR 3211 (a) (5) on the ground that the action is barred by the statute of frauds. Defendant established that its alleged oral agreement with plaintiff by its terms could not be performed within one year and thus is barred by the statute of frauds (see General Obligations Law § 5-701 [a] [1]; Sheehy v Clifford Chance Rogers & Wells LLP, 3 NY3d 554, 561-562, rearg denied 4 NY3d 795).
Contrary to plaintiff's contentions, no exception applies to defeat the affirmative defense of the statute of frauds. Plaintiff alleged in opposition to the motion that defendant's amended answer, in which it denied the existence of the oral agreement, was unverified. Plaintiff thus contended that there is a triable issue of fact whether defendant admitted the existence of the oral agreement. "[D]efendant's admission of the existence and essential terms of the oral agreement [would be] sufficient to take the agreement outside the scope' " of the statute of frauds (Concordia Gen. Contr. v Peltz, 11 AD3d 502, 503). Contrary to plaintiff's contention, we conclude that the court properly considered the verified copy of the amended answer submitted by defendant in its reply papers. The reply papers merely responded to plaintiff's opposition to the motion and raised no new theories or contained new information. "Given that the object of [a motion to dismiss] is to expedite matters by eliminating claims from the trial calendar when appropriate to do so . . ., we see no procedural infirmity in allowing defendant to resubmit [a verified] cop[y] of the same [amended answer,] especially since it cannot be argued that in these circumstances a substantial right of plaintiff has been prejudiced" (Arbour v Commercial Life Ins. Co., 240 AD2d 1001, 1002; cf. Seefeldt v Johnson, 13 AD3d 1203, 1203-1204).
Plaintiff further contends that the agreement may be enforced under the doctrines of promissory estoppel or part performance. Neither contention is availing. "Promissory estoppel is made out by a clear and unambiguous promise; a reasonable and foreseeable reliance by the party to whom the promise is made; and an injury sustained by the party asserting the estoppel by reason of his [or her] reliance' " (Chemical Bank v City of Jamestown, 122 AD2d 530, 530, lv denied 68 NY2d 608). In light of defendant's denial of the alleged promise, plaintiff has failed to establish the existence of a clear and unambiguous promise and thus the doctrine of promissory estoppel does not apply (see Rogowsky v McGarry, 55 AD3d 815; Chemical Bank, 122 AD2d at 530). With respect to the doctrine of part performance, that doctrine removes oral agreements from the scope of the statute of frauds "only if plaintiff's actions can be characterized as unequivocally referable' to the agreement alleged . . . [T]he actions alone must be unintelligible or at least extraordinary,' explainable only with reference to the oral agreement" (Anostario v Vicinanzo, 59 NY2d 662, 664; see James v Western N.Y. Computing Sys., 273 AD2d 853, 854-855). Inasmuch as defendant had a lien on plaintiff's settlement with the third party (see Workers' Compensation Law § 29 [1]), it cannot be said that plaintiff's agreement to pay the lien is unequivocally referable to the alleged oral agreement, nor is the payment "explainable only with reference to" that alleged agreement (Anostario, 59 NY2d at 664; see James, 273 AD2d at 855).
Entered: March 27, 2009
Schorsch v Moses & Singer LLP

Bennett, Giuliano, McDonnell & Perrone LLP, New York
(Nicholas P. Giuliano of counsel), for appellants.
Landman Corsi Ballaine & Ford P.C., New York (Louis G.
Corsi of counsel), for respondent.
Judgment, Supreme Court, New York County (Walter B. Tolub, J.), entered July 10, 2008, dismissing the complaint, and bringing up for review an order, same court and Justice, entered June 20, 2008, which granted defendant's motion to dismiss, unanimously affirmed, with costs. Appeal from the aforesaid order unanimously dismissed, without costs, as superseded by appeal from the judgment.
To prevail in a legal malpractice suit, the client must prove negligence on the part of her attorneys, and that she would have prevailed on the merits but for that negligence (see e.g. Davis v Klein, 88 NY2d 1008 [1996]). Defendant made a prima facie showing of entitlement to summary judgment through sworn statements and documentary evidence that the underlying defendant insurer had properly denied plaintiffs' claim pursuant to the dishonest acts exclusion, thus rendering any subsequent claim against the insurer futile. In response, plaintiffs failed to present any admissible evidence to raise a disputed issue of material fact as to the futility of the underlying insurance claim.
The court properly found that Margaret Schorsch's affidavit failed to create an issue of material fact as to whether her brother David was responsible for the 1995 inventory loss, or whether he was an "authorized representative" of M.R.S. Antiques so as to defeat coverage under the "dishonest acts" exclusion in the policy. Her affidavit contradicts detailed statements she previously made under oath in a 1995 case she brought against David wherein she alleged that he, as an integral member of the family business, had stolen company inventory and was thus responsible for the loss. This contradiction negated the authority of her affidavit as a basis for defeating defendant's motion for summary judgment (see Sugarman v Malone, 48 AD3d 281 [2008]).
Plaintiffs' assertion that the insurance policy did not contain an exclusion for dishonest acts is contrary to the record evidence. It is true that the insurer's counsel, in the February 14, 1997 letter denying coverage, mistakenly cited to a different policy it had issued to M.R.S. Antiques. However, the slight differences between the language of the Fine Arts Coverage dishonest acts exclusion and the one incorrectly cited by counsel in the letter do not affect the material terms of the applicable exclusion. The basic scope is the same: coverage is excluded for dishonest acts by "you" or the insured's "employees" or "authorized representatives" or "anyone entrusted with the property." Since the inventory loss was caused by the dishonest acts of David, who qualified as an authorized representative of M.R.S. Antiques or a person otherwise entrusted with the missing property, coverage was properly denied.
THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT
WESTERN BUILDING RESTORATION CO., INC. v LOVELL SAFETY MANAGEMENT CO. LLC

Calendar Date: February 9, 2009
Before: Cardona, P.J., Mercure, Malone Jr., Kavanagh and McCarthy, JJ.

McNamee, Lochner, Titus & Williams, Albany (Scott
C. Paton of counsel), for appellant-respondent.
Couch White, L.L.P., Albany (Jeremy M. Smith of
counsel), for respondent-appellant.
MEMORANDUM AND ORDER

McCarthy, J.
Cross appeals from an order of the Supreme Court (Lynch, J.), entered September 2, 2008 in Albany County, which, among other things, partially denied defendant's motion for summary judgment.
Plaintiff, a wholly owned subsidiary of a Massachusetts corporation, is a construction company with an office in New York. In December 1989, it purchased a workers' compensation and employers' liability policy through the State Insurance Fund (hereinafter Fund) and four years later became a member of a safety group consisting of like construction companies (see 12 NYCRR 451.1, 451.2, 451.7). Defendant was that safety group's manager (see 12 NYCRR 451.5).
In early 2002, plaintiff began work on a project in Massachusetts. During the course of this project, plaintiff obtained, through defendant, a certificate of workers' compensation insurance. Plaintiff was named as the policyholder on the certificate and another New York company, the general contractor on the project, was named as the "certificate holder."[FN1] When defendant issued the certificate, it was not made aware that the project was located in Massachusetts.
According to plaintiff's office manager, during the fall of 2002, she contacted one of defendant's underwriters and inquired if employees hired from a Massachusetts trade union for the Massachusetts project were covered under the workers' compensation policy. According to the office manager, during their brief conversation, which she did not document in any substantive fashion, she was told that such employees were covered [FN2] . In December 2002, a renewal certificate of insurance was issued for the project. Like the first, this certificate also clearly states that plaintiff had workers' compensation insurance through the Fund with respect to all operations in New York.
In April 2003, a Massachusetts resident hired to work on the project was injured. Defendant refused to process his claim for workers' compensation coverage on the ground that plaintiff's workers' compensation policy did not cover out-of-state employees. Plaintiff then commenced this action against defendant alleging eight claims, including breach of contract, negligence, estoppel, negligent misrepresentation, fraud and a violation of General Business Law § 349. Defendant's motion for summary judgment dismissing all eight causes of action was partially denied by Supreme Court, prompting this appeal by defendant. Plaintiff cross-appeals, arguing that the court improperly dismissed its General Business Law § 349 claim. We agree with defendant's contention that the complaint should have been dismissed in its entirety.
First, plaintiff has not provided prima facie evidence of a contract between these parties sufficient to sustain the first cause of action (alleging breach of contract) or the second cause of action (alleging breach of implied covenant of good faith and fair dealing). With respect to the breach of contract claim, plaintiff alleges in the complaint that, "[i]n exchange for valuable consideration from [it]," defendant agreed to provide a certificate of insurance and/or insurance policy that would provide workers' compensation coverage for employees on the Massachusetts project (no other contract is alleged in the complaint and no contract is identified in plaintiff's response to defendant's interrogatories). To the extent that plaintiff is relying on either the certificate of insurance and/or insurance policy to support the first two causes of action, we find that neither of these documents gave rise to a contractual relationship between plaintiff and defendant. Fundamentally, the insurance policy, procured long before plaintiff became a member of defendant and renewed annually without defendant's input, is clearly a contract between plaintiff and the Fund only (see generally Matter of Covert, 97 NY2d 68, 76 [2001]; see also 1 Couch on Insurance 3d § 1:6; 68A NY Jur 2d, Insurance §§ 516, 582). A certificate of insurance is merely evidence of insurance here, for the sake of the "certificate holder" and is not itself a contract (see Bucon, Inc. v Pennsylvania Mfg. Assn. Ins. Co., 151 AD2d 207, 210 [1989]; Blue Cross of Northeastern N.Y. v Ayotte, 35 AD2d 258, 260 [1970]; see also 3 Couch on Insurance 3d § 40:30; 68A NY Jur 2d, Insurance § 683). In the absence of a contract between these parties, the first two causes of action should have been dismissed.
Turning to the negligence causes of action, the issue of duty is dispositive. To this end, we note that existence and scope of an alleged tortfeasor's duty is a decision for the court (see Palka v Servicemaster Mgt. Servs. Corp., 83 NY2d 579, 585 [1994]). Here, plaintiff alleges in the complaint that defendant had a duty to provide it with a certificate of insurance and/or a policy providing workers' compensation coverage for its employees on the subject project (third cause of action) and a duty to inform that it never actually provided same (fourth cause of action). These duties are premised on the notion that defendant served in the capacity as plaintiff's insurance agent and/or broker.
We note, however, that the duties of defendant, as a safety group manager, are defined by regulation and nothing within the regulatory scheme assigns safety group managers with the responsibility of procuring workers' compensation coverage or providing advice or counsel with respect to the adequacy or limits of coverage (see 12 NYCRR 451.5 [c]). In short, the regulatory scheme does not remotely establish that safety group managers assume the role or are somehow akin to an insurance broker or agent.
In addition to the well-defined and circumscribed role of safety group managers outlined under the regulations, plaintiff failed to submit any proof establishing that defendant, in any event, went beyond these regulatory duties by assuming a role akin to that of insurance broker or agent. While plaintiff's corporate safety director opined that he considered defendant to be the equivalent of an "insurance broker," he pointed to no duty or task performed by defendant over the years to adequately establish that it actually served in this capacity. To the contrary, he testified that defendant provided guidance on claims management and safety issues (duties entirely consistent with those outlined under the regulation). Moreover, none of defendant's essential duties as described by plaintiff's office manager suggested an agent or broker relationship. In fact, according to the office manager, the alleged telephone conversation with defendant's underwriter concerning the scope of coverage on the subject policy was an anomaly, that is, it was the only such call that she ever placed in her over two decades of service with plaintiff.
In addition, the corporate safety director candidly acknowledged that defendant played no role in plaintiff's decision to secure the subject policy or to renew it annually. Rather, these decisions were made by plaintiff's parent company. Notably, annual renewal decisions were made by the parent company with the assistance of a Massachusetts insurance broker [FN3] . Because defendant did not serve in the capacity of plaintiff's insurance agent or broker (cf. Keyes v Northbrook Prop. & Cas. Ins. Co., 278 AD2d 736, 737 [2000]), it had no legally cognizable duty to provide plaintiff with workers' compensation coverage or to inform plaintiff about the adequacy or limits of such coverage. Moreover, the alleged misrepresentation in the sole telephone call about coverage does not create a duty where none otherwise existed and is thus insufficient to impose liability under these circumstances. Accordingly, the third and fourth causes of action sounding in negligence should have been dismissed.
Next, we find that the absence of an insurance agent/broker relationship between these parties completely negates a legally cognizable claim of reasonable and foreseeable reliance on the alleged misrepresentation that there was coverage such that defendants' fifth, sixth and seventh causes of action the negligent misrepresentation, estoppel and fraud claims should have been dismissed (see e.g. Hoffend & Sons, Inc. v Rose & Kiernan, Inc., 19 AD3d 1056, 1058 [2005], affd 7 NY3d 152 [2006]; H & R Project Assoc. v City of Syracuse, 289 AD2d 967, 969 [2001]; Ambrosino v Exchange Ins. Co., 265 AD2d 627, 628 [1999]). In any event, the relationship between these parties safety group member and safety group manager also falls well short of the threshold required to be deemed a "special relationship" (Kimmell v Schaefer, 89 NY2d 257, 260 [1996]) for the purpose of establishing the negligence and negligent misrepresentation claims (see Hoffend & Sons, Inc. v Rose & Kiernan, Inc., 7 NY3d 152, 158 [2006]; Murphy v Kuhn, 90 NY2d 266, 270-271 [1997]; Ambrosino v Exchange Ins. Co., 265 AD2d at 628; M & E Mfg. Co. v Frank H. Reis, Inc., 258 AD2d 9, 11 [1999]).
Furthermore, even assuming defendant acted as plaintiff's insurance agent and that defendant's underwriter misrepresented the scope of coverage, plaintiff's claims are defeated by the clear and unequivocal limits of the workers' compensation provisions of the policy to "workplaces in the State of New York" a limit of which, we note, plaintiff is conclusively presumed to have knowledge and to have assented (see Catskill Mtn. Mech., LLC v Marshall & Sterling Upstate, Inc., 51 AD3d 1182, 1184-1185 [2008]; Laconte v Bashwinger Ins. Agency, 305 AD2d 845, 846 [2003]; Catalanotto v Commerical Mut. Ins. Co., 285 AD2d 788, 790-791 [2001], lv denied 97 NY2d 604 [2001]; Ambrosino v Exchange Ins. Co., 265 AD2d at 628-629; M & E Mfg. Co. v Frank H. Reis, Inc., 258 AD2d at 12; Madhvani v Sheehan, 234 AD2d 652, 654-655 [1996])[FN4] . The four-page document states on page one, "THIS IS YOUR POLICY. PLEASE READ IT." Under the first section entitled "General Section," there is a paragraph denominated "Locations" which clearly states in its entirety that "[t]his policy covers all of your workplaces in the state of New York, except as excluded by endorsement" (emphasis added). Part One of the policy governs workers' compensation insurance and contains no exclusions. Part Two of the policy governs employers' liability insurance and does contain exclusions.[FN5]  
Plaintiff argues that issues of fact regarding the interpretation of the policy have been raised because the phrase "regular New York employees" (see n 5, supra) is ambiguous and open to interpretation. To this end, plaintiff claims that it "reasonably interpreted the [p]olicy as covering workers . . . working on out of state projects." For a variety of reasons, these claims do not withstand close scrutiny and are thus insufficient to avoid dismissal of the action.
First and foremost, the subject policy is a workers' compensation and employers' liability contract (see generally Preserver Ins. Co. v Ryba, 10 NY3d 635 [2008]; Continental Ins. Co. v State of N.Y., 99 NY2d 196 [2002])[FN6] . The phrase "regular New York employees" is contained only within Part Two, governing employers' liability coverage (see Preserver Ins. Co. v Ryba, 10 NY3d at 643; compare Continental Ins. Co. v State of N.Y., 99 NY2d at 200-201). Significantly, this dispute centers on plaintiff's workers' compensation coverage, which was limited to "workplaces" in New York and provided coverage under the New York State Workers' Compensation Law only. Notably, plaintiff makes no claim that any aspect of Part One of the policy is unclear or ambiguous. Moreover, the project "workplace" here was clearly located outside of New York.[FN7]
Putting aside the legal nuance between these two sections of the policy, we next point out that plaintiff submitted no evidence in opposition to defendant's summary judgment motion that anyone within its employ, or the employ of its parent company, actually read the policy at any time before the subject incident and thus interpreted the phrase "regular New York employees" in the manner now espoused. To the contrary, plaintiff's corporate safety director since 1991 candidly acknowledged that he never saw or read the policy until after the subject accident. While he indeed believed that the subject policy covered out-of-state operations, his basis for this belief did not come from the policy language itself but rather from plaintiff's "history" of conducting out-of-state operations, obtaining certificates of insurance and paying payroll premiums without ever being advised that it did not have coverage in such instances. Thus, while plaintiff now claims that the phrase "regular New York employees" is ambiguous and open to interpretation,[FN8] the asserted ambiguity and now-espoused interpretation clearly did not guide its actions, or inactions, over the years.
Next, and again assuming that the employers' liability provision of the policy has some relevance here and further putting aside the fact that no one within plaintiff's employ could have been confused by language in a policy that was never read, we find the disputed phrase, when read in complete context, is not ambiguous here. The complete sentence provides that the "exclusion does not apply to bodily injury sustained by your regular New York employees while temporarily outside the state of New York" (emphasis added). Thus, this language unambiguously extends employers' liability coverage if two conditions exist, namely, that an injured worker is a "regular New York employee[]" and further that such employee is "temporarily" outside of New York. Plaintiff seemingly ignores this latter phrase in pursuing its argument that the policy language is ambiguous. Here, the record firmly establishes that the injured worker was a Massachusetts resident hired for this job "only" (i.e., no future employment with plaintiff was contemplated) and he had never previously worked for plaintiff. Thus, any alleged ambiguity in the excised phrase "regular New York employees" is sophistry here because it cannot reasonably be claimed that the subject worker here was injured while temporarily outside of New York.
Finally, as to plaintiff's cross appeal, we find that Supreme Court properly dismissed the General Business Law § 349 cause of action as plaintiff wholly failed to demonstrate that defendant's alleged deceptive business practices had a broad impact on consumers at large (see Oswego Laborers' Local 214 Pension Fund v Marine Midland Bank, 85 NY2d 20, 24-25 [1995]).
Cardona, P.J., Mercure, Malone Jr. and Kavanagh, JJ., concur.
ORDERED that the order is modified, on the law, with costs to defendant, by reversing so much thereof as partially denied defendant's motion; motion granted in its entirety, summary judgment awarded to defendant and complaint dismissed; and, as so modified, affirmed.
Footnotes

Footnote 1: The certificate of insurance clearly states that plaintiff is insured with the Fund "COVERING THE ENTIRE OBLIGATION OF [PLAINTIFF] FOR WORKERS' COMPENSATION UNDER THE NEW YORK WORKERS' COMPENSATION LAW WITH RESPECT TO ALL OPERATIONS IN THE STATE OF NEWYORK, EXCEPT AS INDICATED BELOW" (emphasis added). No relevant exclusion was thereafter indicated.

Footnote 2: Defendant's underwriter denied ever having a conversation with plaintiff's office manager, or anyone else employed by plaintiff, in which he stated, in sum or substance, that the subject policy would provide coverage to non-New York employees who suffer injury outside of New York.

Footnote 3: Of note, this broker was aware that plaintiff conducted operations outside of New York.

Footnote 4: Significantly, it is undisputed that plaintiff neither contacted defendant's underwriter for clarification of coverage after reviewing its policy (cf. Keyes v Northbrook Prop. & Cas. Ins. Co., 278 AD2d at 736) nor made a specific request for coverage, factors found particularly relevant by this Court in granting summary judgment to agents in like scenarios (see Catskill Mtn. Mech., LLC v Marshall & Sterling Upstate, Inc., 51 AD3d at 1184-1185; M & E Mfg. Co. v Frank H. Reis, Inc., 258 AD2d at 11-12; Madhvani v Sheehan, 234 AD2d at 654).

Footnote 5: As relevant here, the employers' liability insurance portion of the policy has the following exclusion: "This insurance does not cover . . . bodily injury occurring outside the state of New York. This exclusion does not apply to bodily injury sustained by your regular New York employees while temporarily outside the state of New York."

Footnote 6: Employers' liability in the context of policies issued by the Fund has been defined by this Court as "liability for damages imposed on an employer by law, but excluding damages under the Workers' Compensation Law" (Oneida, Ltd. v Utica Mutual Ins. Co., 263 AD2d 825, 826 [1999]).

Footnote 7: Additionally, the injured employee never pursued a claim for workers' compensation coverage in New York or sought benefits under New York law; rather, he received coverage under the Massachusetts workers' compensation law. Nothing within the subject workers' compensation policy obligates the Fund itself to cover damages to plaintiff stemming from the award of these out-of-state benefits (see Safespan Platform Sys., Inc. v State Ins. Fund, 21 AD3d 1373 [2005], affg 20 Misc 3d 1117[A], 2004 NY Slip Op 51927[U] [2004]).

Footnote 8: According to plaintiff, because the injured Massachusetts worker faxed employment application documents to its New York office and was paid directly by plaintiff from its checking account, this worker "was probably a 'regular New York employee' within the meaning of the policy" (emphasis added).

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