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Coverage Pointers - Volume X, No. 21

Dear Coverage Pointers Subscribers:

It's a wonderful thing, this publication, because I've made such great friends with its subscribers. Wherever I travel, I run into those who have shared a part of their Friday with me, reading our ramblings. It is interesting, of course, that most talk about some abject silliness that I've included in this cover letter rather than the nitty-gritty nuances of waiver, estoppel and quasi in rem jurisdiction. I'll keep offering both with the hope that you can be both educated and entertained.

Editor's Note: The last time I thought seriously about quasi in rem jurisdiction was in late 1976, when I completed my Civil Procedure exam at the conclusion of my first semester in law school. I vow never to discuss it again in Coverage Pointers.

A Coverage Pointers Pointer - Coverage Pointers Search Engine
I want to take this opportunity to provide a tidbit on searching back issues of CP

I had a delightful lunch on Wednesday with a loyal CP subscriber who mentioned that he printed and saved back issues of this publication in case he wanted to refer back to a case mentioned in a past issue. Like my file of federal and state tax returns dating back to the early '70's, I surely understand how people save things. As an aside, as I jammed the copies of 2008 returns into the fireproof box with the other yellowing returns, I was compelled to recall that my starting salary at H&F as a law clerk in 1977 was $3.00/hour and I was surely overpaid then.

However, you need not do that! I want to save you cabinet space and spare a few trees as well. The Hurwitz & Fine website has a search engine that allows you to search through past issues of this publication and every issue of CP produced over the past 10+ years is available and searchable.

How do you get there? Simple.

  • Go to our website: www.hurwitzfine.com and click on the NEWSLETTER tab at the top of the page;
  • You'll be taken to a page where our two newsletters are introduced. Under Coverage Pointers, click on Previous Issues;
  • The page that opens up is the linked list of all previous Coverage Pointers issues and if you scroll down to the bottom of the page, you'll find the search engine.
  • So, for example, if you are interested in cases interpreting the Court of Appeals decision in Pecker Iron Works, you can put the case those three words in the search box and click and you'll find the 12 summaries that mention the decision. You will also be taken to the Google search page for our website that allows more sophisticated Boolean searches.

This Issue.
This issue brings you a good late notice case from the First Department, an interesting "temporary employee" opinion from the Second, and a First Department case discussing the impact of the "settlement statute: (General Obligations Law §15-108) on the right of insurer contribution. We thank Patrick J. Feeley of the New York City law firm of Dorsey & Whitney LLP for this summary. He represented one of the successful parties in that litigation and was kind enough to contribute the decision summary.

Oh, Canada - Canadian Beer and Martinis on the Beach
It's spring in Western New York and Southern Ontario and we've opened up the cottage. We're fortunate enough to have a second home on the north shore of Lake Erie, in the Township of Fort Erie, with 70 feet of pristine beachfront. I grew up in Brooklyn, and when I went to high school, my commute to work, by bus and subway, was 45 minutes in each direction. Now, I travel to my cottage each day, crossing an international border which of course includes clearing customs and my commute to work is about 14 minutes.

If any of you are traveling to this part of the country this summer, let me know. While you'll soon need a passport or equivalent to cross back and forth, we'd love to have you over for a cold one. Of course, we can't fit all 1750 of you at the same time, but we'll do our best.

Coverage Mediation
I still find it surprising that carriers are not opting to mediate coverage disputes with more regularity. There are times when insurers wish to resolve complex insurance coverage disputes without the expense and costs of trial and without the risk of potentially adverse judicial precedent. We have encouraged the mediation and/or arbitration of complex insurance coverage claims and our office can assist insurers and insureds in bringing reasoned resolution to coverage disputes.

We offer mediation and arbitration services. Why spend the money and the time to litigate these questions when resolution by mediation or arbitration can bring closure to hotly contested matters in relatively short order for substantially reduced costs.

I have been counseling, litigating and resolving complex insurance coverage matters for over 25 years. For over 20 years, I've has served as an Adjunct Professor of Insurance Law at the Buffalo Law School and am retained as an expert witness in insurance coverage matters throughout the United States, Canada and in the London market. An experienced mediator, arbitrator and trial attorney can assist carriers in resolving disputes by agreement, avoiding unfortunate precedent and saving tens of thousands of dollars in litigation costs. Contact me for information: [email protected] or 716.849.8942.

One Hundred Years Ago Today:

MRS. STRONG'S WILL STANDS
Even If She Did Buy Her Hats on Third
Avenue, as Contestants Testified
New York Times, April 17, 1909, p 16, col.6

Surrogate Cohalan admitted the will of Mrs. Harriett Fleet Strong to probate yesterday; she was the widow of Edward Strong, who left a large fortune. She was wealthy also in her own right, leaving an estate estimated at about $300,000. Mr. Strong died on Jan. 14, 1904, at the age of. 80 and his widow died on Oct. 17, 1908. They had been married for fifty years when Mr. Strong died.

Mrs. Strong left her property to be divided between her husband's nephew and George R. Branson, whom she described as a "friend of my husband and myself." The will was contested by Mrs. Strong's relatives, who contended that she was of unsound mind when she made it.

Several witnesses examined on behalf of the contestants testified that the fact that Mrs. Strong purchased hats and millinery in a Third Avenue department store, which was evidence that she was insane.

Editor's Note: The beneficiary of Mrs. Strong's will, George R. Branson, worked for a public adjusting company and was the person in charge of representing the insurance companies who paid off the property damage claim in the famous Triangle Shirtwaist Fire of 1911. I knew you may have suspected that.

The Duke of Lead Returns
After a short hiatus, Scott Duquin returns, with the assistance of Steve Peiper, in presenting a short piece on insurance coverage triggers.

From Audrey Seeley, Queen of No Fault:
Here is this week's cover note from Audrey Seeley (and the Editor's response, which follows):

The DRI Insurance Coverage and Claims Institute was a success, and for those who are looking for another great seminar, DRI has a Bad Faith Seminar this June. If you would like more information feel free to send me an email at [email protected].

The discussion still remains open on LMK. The recent discussion was regarding attorney's fees and whether an attorney's fee is based upon the aggregate of the bills, per provider or EIP, per action (lawsuit or arbitration) or upon the aggregate of the bills, per provider or EIP, irrespective of the number of actions. If you have any thoughts on it again feel free to send me an email. Building on that issue is whether a court will grant a consolidation motion for multiple suits from the same provider or will merely join the actions for trial. In the event that the fee is based upon each action and the cases are consolidated then only one fee may be provided. Pursuant to CPLR 8104 costs awarded on consolidated actions is as if only one action existed, unless the court ordered otherwise. Yet, if the cases are merely joined then they are still separate actions and separate fees can be awarded. It will be interesting to see what the courts do with this issue and we will be sure to keep you updated.

Audrey

Editor's Note:
Audrey did a fabulous job at the Chicago DRI program, just thought I'd mention it.

On the issue of attorneys' fees in No Fault matters, here's my two cents, based on nothing but a feeling based on the Court of Appeals' reasoning

Your editor believes that reason will prevail. Fees (I predict, with all the scientific certainty at my fingertips) will be based on the aggregate of the bills, no matter how many providers and irrespective of the number of actions or causes of action, pending at the time of fee determination. So, if you have 10 providers and 24 bills and six lawsuits and 24 causes of action total, the fee would be based on the aggregate. [Audrey predicts that it will be on the number of suits but we both believe that the Superintendent of Insurance may yet step with additional guidance]. Of course, if new bills come later because of subsequent treatment, etc., another fee might be calculated.

 

From Steve "Property and Potpourri" Peiper:
Spring, it appears, has finally sprung. Not much else to say this week, as the courts have been quiet in the first-party arena. We do have an interesting decision out of the Third Department on workers' compensation coverage and the role of safety group administrators. Other than that, I would invite everyone to review Scott Duquin's latest offering. He, with a little help from friends, takes a look at some of the more interesting coverage issues in a lead paint case. Lastly, as we mentioned a few weeks ago, we are continuing our review of green energy issues. Coming next issue we will address what green energy law is, what it affects, and most importantly why you should care. Cheers!

Steve
[email protected]

A Century Ago
OLYMPIC, 1,000-FOOT LINER
White Star Line Selects Name for Its Leviathan - May Build Sister Ship
New York Times, April 17, 1909, Page 1

The new 1,000 foot steamship the construction of which is to be commenced later in the year for the White Star Line will be named the Olympic. The present intention is to give it a speed of 20 knots. Harland and Wolf of Belfast will build it, and it will be designed exclusively to suit the requirements of the Southampton - New York trade.
It is possible that the White Star Company will decide to order two boats of this class, instead of one.

Editor's Note: In fact, there were two other boats of that class built by White Star. Launched on 20th October 1910 Olympic was the first of the trio of White Star Liners. Under the command of Captain E.J. Smith (who was later to command one of two sister ship, The Titanic) she sailed on June 14, 1911 on her Maiden voyage to New York.

Earl's Pearls:
Are you considering or handling lawsuits against professionals? Earl Cantwell's column discusses the statute of limitations in such claims in his article: For Whom the Statute Tolls: Limits of "Continuous Representation"

In this Week's Issue, Attached:

KOHANE'S COVERAGE CORNER

Dan D. Kohane
[email protected]

  • As SUM Claimant did not Exercise Due Diligence in Identifying Insured Status of Other Vehicle, Notice Given 10 Months After Accident Deemed Untimely
  • Lateness (73 Days) is Fatal to Disclaimer with Proof of Necessary and Diligent Investigation
  • Without Special Relationship, Insurance Agency Not Liable to its Customer for Providing Coverage Requested, when Policy Did Not Cover Risk
  • Lack of "Garage Operations: Determined by Insured's Default
  • Under Doctrine of "Estoppel," Insurer that Assumes the Defense without Advising that it May Not Have Obligation, Loses Right to Change its Mind Two Years Later
  • Section 15-108 Does Not Bar Co-Insurer Contribution Claims
  • Ignorance of the Law is an Excuse for Not Submitting to Second SUM IME
  • Qualification Established for UM Benefits from MVAIC
  • When Property Owner Knows that Infant Claimant has Sustained Burns and Went to Hospital, No Excuse for Not Giving Prompt Notice to Liability Carrier
  • The Age-Old Battle Over the Definition of "Temporary Employee" in CGL Policy; In this One, Court Decides that Term "Furnished" is Ambiguous and Includes Person Recommended by Another Employee
  • Injured Party Not Charged with Insured's Failure to Timely Notify Insurer of Accident; Injured Party's Diligence Independently Determined

 

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

Margo M. Lagueras
[email protected]

  • Contemporaneous Examination Is Needed To Support Inference Of Causation
  • Failure to Establish Causation also Precludes Recovery Under the 90/180-Day Category Alleged in the Second Of Three Accidents
  • The Plaintiff's Physicians' Failure to Reconcile their Findings Results in Dismissal of Plaintiff's Complaint
  • The Plaintiff Fails to Offer any Contemporaneous or Recent Objective Medical Evidence; Trial Court is Reversed, on the Law
  • Minor Limitations in ROM Do Not Amount to Significant or Permanent Limitations
  • Doctor's Advise to "Restrict Activities" Is Too General To Support A 90/180-Day Claim
  • A "Tailored" Affidavit which Differs from Plaintiff's Deposition Testimony Will Not Defeat Summary Judgment
  • A Recent Affirmed Report has No Probative Value if Based on Contemporaneous Unaffirmed Reports
  • Portions of an Affirmed Report Based on Unaffirmed Findings is Not Considered
  • Once Again, Affirmations Relying On Unsworn Reports Are Out
  • Affirmation Must be by a Currently Licensed Doctor
  • Physician's Failure to Review Medical Records from a Prior Accident Makes Conclusion that Injuries are Caused Solely by Subject Accident Speculative

 

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

  • Master Arbitration Award Upheld - Lower Arbitrator Committed Err in Finding Fraud Defense Valid
  • Follow-Up Verification Request Premature Rendering Denial Untimely
  • Plaintiff's Summary Judgment Motion Denied as Insurer Established Lack of Medical Necessity
  • Failure to Submit Proper Affidavit on Mailing Deems Denial Late
  • Plaintiff Failed to Submit Proper Affidavit to Establish Prima Facie Case Insurer Could Not Establish Tolling of 30 Days to Pay or Deny to Survive Summary Judgment

 

PEIPER ON PROPERTY (and POTPOURRI)

Steven E. Peiper
[email protected]

  • Despite its Many Attempts, Insured Cannot Excuse its Failure to Read and Understand its Own Policy

 

That's all the news that fits this week. Rejoice in the warmth and rebirth of springtime, as we are, here in the colder part of the country. Call us if you need us, we're here to help. And if we can't help you, perhaps we can, at least, entertain you.

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]

4/14/09            In the Matter of Travelers Insurance Company v. Cohen
Appellate Division, Second Department
As SUM Claimant did not Exercise Due Diligence in Identifying Insured Status of Other Vehicle, Notice Given 10 Months After Accident Deemed Untimely
Cohen was injured on 12/23/05 she was caused to jump out of the way of a car driven by Wayne.  She was insured with Travelers, Wayne was insured with Progressive.  She contacted neither before she hired a lawyer the following September. On 10/3/06, Pearl gave notice to Travelers of a potential supplemental underinsured/uninsured motorist (hereinafter SUM) claim. Some 23 days later, Travelers denied coverage for the SUM claim based on her failure to give notice of the claim "as soon as practicable," as required by her policy.
Progressive denied in December on the ground of late notice.  On 1/2/07, Cohen sent a copy of Progressive's disclaimer letter to Travelers and again notified Travelers of her intention to pursue a SUM claim and then filed an arbitration demand. Travelers then moved to stay arbitration.
As the insured bears burden of demonstrating that she acted with due diligence in ascertaining the insurance status of the other vehicle, and there was no proof that Cohen did anything diligently, the notice was untimely and the arbitration should have been permanently stayed.  Travelers need not be prejudiced
4/14/09            New York City Housing Authority v. Underwriters at Lloyd's, London
Appellate Division, Second Department
Lateness (73 Days) is Fatal to Disclaimer with Proof of Necessary and Diligent Investigation
Lloyds did not disclaim coverage on the ground of late notice until more than three months after the plaintiff sent notice of the claim to it, and 73 days after the insured plaintiff turned over the file in the underlying case to it.  Therefore, under Insurance Law §3420[d] it did not disclaim as soon as practicable. The Underwriters asserted that the delay was necessitated by its investigation of the claim but the court found that the grounds for the disclaimer was apparent, at the latest, when the defendant received the case file. Moreover, the insurer did not prove that it conducted a diligent investigation.
4/14/09            Kay Bee Builders, Inc. v. Merchant's Mutual Insurance Company
Appellate Division, Second Department
Without Special Relationship, Insurance Agency Not Liable to its Customer for Providing Coverage Requested, when Policy Did Not Cover Risk
Kay Bee Builders, Inc., was hired to build a single-family home and subcontracted the roofing to Maggio. When Maggio denied responsibility for problems with the roof after its work was supposedly done, the plaintiff repaired the faulty portion of the roof for $140,000
Kay Bee then tried to pass off the costs to Merchants. When Merchants denied coverage, Kay Bee sued Merchants and its insurance agency.  The Errors and Omissions claim against the agency is dismissed because the agency established that it obtained a general liability insurance policy which provided the specific insurance coverage that the plaintiff requested.  Kay Bee did not establish that a special relationship existed with the agency which would give rise to a claim for negligent misrepresentation.
4/14/09            Lancer Insurance Company v. Omar Whitfield
Appellate Division, Second Department
Lack of “Garage Operations: Determined by Insured’s Default

Lancer issued a Garage Policy to Whitfield, an auto dealership.  An owned-auto was being driven by Charles Whitfield, Omar’s father and it was involved in an accident at 1:00 AM on some particular day. Johnson and Smalls, injured in the accident, sued the owner and driver (the Whitfields).  Lancer denied coverage and brought a declaratory judgment action alleging that the carrier was not liable to defend or indemnify because the use of the vehicle at the time of the accident did not fall within the coverage provisions of the subject policy as the driver's use was unrelated to "garage operations" as required by the policy.
The Whitfield defendants defaulted, thereby admitting the allegations in the instant complaint, that the driver had borrowed the subject vehicle "to visit friends” that at the time of the accident, he "was not operating the [subject vehicle] in furtherance of the garage business."
It was then the burden of the injured parties, the opponents of the motion, to provide evidence that the vehicle was being used in “garage operations.”  Since all the injured parties offered were an attorney’s affidavit, court declares coverage does not exist.
4/14/09            Liberty Insurance Underwriters, Inc. v. Arch Insurance Company
Appellate Division, First Department
Under Doctrine of “Estoppel,” Insurer that Assuming the Defense without Advising that it May Not Have Obligation, Loses Right to Change its Mind Two Years Later

This case involves a fight between two carriers over obligations to defend.  Here, one carrier undertook the defense of the insured and for two years controlled the defense before claiming it should have been in an excess position.  That carrier is estopped from changing its coverage position since the party it defended – and a carrier that may have had an obligation to defend – was prejudiced having ceded control.
4/9/09              Scotts Co. LLC v. Pacific Employers Ins. Co. and Employers Ins. of Wausau
Appellate Division, First Department
Section 15-108 Does Not Bar Co-Insurer Contribution Claims
Editor’s Note:
  From time to time, we ask one of the counsel involved in an appeal to provide a guest summary, particularly where the issues are unusual or unique or where the decision does not clearly articulate the reasons for a ruling.  A special thanks goes out to Patrick J. Feeley of the New York City law firm of Dorsey & Whitney LLP.  Pat and his firm represented Employers Insurance of Wausau, a successful party in this appeal, and Pat was kind enough to provide us this summary:
Employers Insurance of Wausau and Pacific Employers Ins. Co. both provided liability insurance coverage to Scotts Co. Wausau, which is defending asbestos claims against Scotts, asserted a claim that Pacific must contribute to the cost of defending the claims. Pacific, which entered into a prior settlement agreement with Scotts, sought to amend its third-party complaint to add a claim that Wausau's contribution claim was barred by Section 15-108 of the New York General Obligations Law. The trial court denied Pacific's motion to amend on the ground that Pacific's Section 15-108 claim was meritless.
The First Department affirmed the trial court's denial on two separate grounds. First, the court ruled that because Pacific's settlement agreement with Scotts expressly contemplated contribution claims by Scotts' other insurers, Pacific had waived any protection that Section 15-108 might offer. Second, the court held that Section 15-108 only bars contribution claims among joint tortfeasors; it does not bar contribution claims among co-insurers.
Editor’s Note:  Section 15-108 of the General Obligations Law provides that a settling tortfeasor is barred from pursuing contribution (but not indemnity) claims against non-settling tortfeasors.
4/9/09              New York Central Mut. Fire Ins. Co v. Bradfield
Appellate Division, Third Department
Ignorance of the Law is an Excuse for Not Submitting to Second SUM IME
Bradfield was hurt in a one car accident in January 2006. She was insured under a New York Central policy issued to her parents that included supplemental uninsured/underinsured motorist (hereinafter SUM) coverage. With consent, she settled her claim against the other tortfeasor.

At New York Central’s request, she submitted to an independent medical examination in January 2007 but refused to appear for two other examinations scheduled claiming that the SUM carrier was not entitled to multiple examinations. Bradfield then filed a demand for SUM arbitration and the carrier moved to stay, claiming that the refusal to attend the subsequent examinations violated the policy.

The SUM endorsement at issue here required respondent to "submit to physical examinations by physicians we select when and as often as we may reasonably require." 
Petitioner attempted to schedule a second examination in November 2007 but Bradfield’s counsel refused, taking the erroneous position that the carrier was only entitled to one exam. When, based on that position, Bradfield’s counsel continue to maintain that position and filed an arbitration demand, New York Central moved for this stay.  After receiving the motion papers, Bradfield’s counsel realize that the carrier did have the right to schedule more than one exam and indicated that Bradfield was willing to undergo the second exam.  New York Central refused.
The Third Department found that there was no evidence of avowed obstruction of the discovery rules but that Bradfield’s refusal was a result of a mistake in understanding the carrier’s right for an additional exam.
Editor’s Note:  The Court noted that the claimant and her attorney did not have a copy of the SUM endorsement.  Did the court forget that it’s a part of the Insurance Regulations, available to anyone?
4/9/09              Cardona v. Martinez and MVAIC
Appellate Division, Second Department
Qualification Established for UM Benefits from MVAIC

Lower court properly found that plaintiff was a "qualified person" entitled to proceed against MVAIC for uninsured motorists benefits. Plaintiff established that he cannot ascertain the identity of the owner or operator of the offending vehicle. There need not be a judicial determination that another motorist was not involved in the accident...
Editor’s Note:  We so rarely see MVAIC as a party in litigation anymore, as compared to “back in the day.” Is it because the Motor Vehicle Accident & Indemnification Corporate is paying claims or because everyone’s insured?

4/9/09              Ferreira v. Mereda Realty Corp.
Appellate Division, First Department
When Property Owner knows that Infant Claimant has Sustained Burns and Went to Hospital, No Excuse for Not Giving Prompt Notice to Liability Carrier
Notice was given by insured two months after it learned of accident and injuries.  Since the notice was late, it was the insured’s burden to establish that “a reasonably prudent person, upon learning of the accident, would have a good faith, objective basis for believing that litigation would not be commenced.”  No doubt, the insured’s property manager saw the burn scars on the infant plaintiff and knew he had been in the hospital.  Knowing that, the insureds could not have reasonably believed that there would be no litigation arising out of the accident and therefore have not shown any extenuating circumstances to justify their having delayed reporting the occurrence for another two months.
4/7/09              Nick's Brick Oven Pizza, Inc. v. Excelsior Insurance Company
Appellate Division, Second Department
The Age-Old Battle Over the Definition of “Temporary Employee” in CGL Policy; In this One, Court Decides that Term “Furnished” is Ambiguous and Includes Person Recommended by Another Employee

Guiliana Mendoa (Mendola) was injured when her car was rear ended by one driven by Travis.  She sued Travis and Nick’s Pizza, claiming that Travis negligently caused the accident while delivering pizza on behalf of Nick’s Pizza (and that Nick’s was liable as his employer).  Nick’s notified its CGL carrier, Excelsior but Excelsior disclaimed coverage on the basis of an exclusion for bodily injury arising out of an auto owned or operated by an “insured.”  The question was whether Travis was an “insured.”

“Employees” of Nick’s are within the definition of “insured” while “temporary workers” are not... A "temporary worker" is defined under the policy as "a person who is furnished to [Nick's Pizza] to substitute for a permanent employee' on leave or to meet seasonal or short-term workload conditions."  Since Travis was hire to meet seasonal or short-term workload conditions during business summer months, he was considered a “seasonal employee.”
Was he “furnished?”  Court finds that the term “furnished” is susceptible to two meanings (1) being provided by a recruiting or employment agency or (2) being referred to the named insured by anyone else. Hence, the term "furnished," is ambiguous. Moreover, the policy also does not clearly define whether an individual who is hired to meet seasonal or short-term workload conditions must also be "furnished" to the insured in order to qualify as a temporary worker, or whether only individuals hired to substitute for an employee on leave must be so "furnished." Since Travis was hired by recommendation from another employee and the term is ambiguous, the carrier is obligated to consider him a “temporary employee” and thus not an insured.  So coverage is afforded to Nick’s.
Editor’s Note:  Some courts have noted that the policy provisions for “leased workers” and “temporary workers are different.  “Leased workers” have to be referred by an agency while “temporary workers” have to be referred by any third party.
3/31/09            Malik v. Charter Oak Fire Insurance Company
Appellate Division, Second Department
Injured Party Not Charged with Insured’s Failure to Timely Notify Insurer of Accident; Injured Party’s Diligence Independently Determined
Juan was working in a Queens convenient store when Malik, a retired police officer, entered the premises.  While engaging in “horseplay” with Juan, Malik took out his gun, which accidentally discharged and the bullet struck Juan in the leg.  Juan subsequently died from the wound.
Malik was insured by Charter Oak, his homeowners carrier, and did not notify the carrier either at the time of the incident or soon thereafter.  Malik pleaded guilty to manslaughter for recklessly causing Juan’s death and was sentenced to a term of incarceration.  Malik testified that he was “consumed with guilt”.  Juan’s father, however, shortly after the shooting, retained counsel to commence a wrongful death action against Malik, and wrote to Malik asking for insurance information (by fax, phone and letter).  After the criminal plea, the Public Administrator on behalf of Juan’s estate brought the lawsuit against Malik, alleging, among other claims, negligence.  Another request was made for insurance information.  Finally, seven months after the occurrence, the summons and complaint were forwarded to Charter Oak, its first notice of the incident.  Two weeks later, Charter Oak denied coverage based on late notice.
The insured’s “consumed with guilt” excuse was unacceptable.  The insurer is entitled to notice when the information available to the insured could “glean a reasonable possibility of the policy’s involvement.”  However, the Public Administrator had a separate right to give notice, based on the injured party’s allowance under Section 3420(a)(3).   The Public Administrator created a paper trail establishing that she tried, with diligence, to identify Malik’s carrier, without success.  The injured person has an independent right to give notice and to recover thereafter, he is not to be charged insured's delay.  The injured person's rights must be judged by the prospects for giving notice that were afforded him, not by those available to the insured, so long as the injured party diligently pursued the rights.


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

Margo M. Lagueras
[email protected]

4/16/09            Kante v. Diarrassouba
Appellate Division, First Department
Contemporaneous Examination is Needed to Support Inference of Causation
In support of their motion, the defendants’ submitted affirmations from their experts demonstrating normal ranges-of motion, specifying the objective tests performed, and concluding that the plaintiff’s alleged injuries had resolved.  In opposition, the plaintiff’s experts reported range-of-motion limitations and the specific tests performed but those examinations were not contemporaneous with the accident.  The court determined their findings were too remote to infer causation.  The defendants also defeated the plaintiff’s claim under the 90/180-day category with the plaintiff’s own deposition testimony stating he returned to work within the first 90 days and, in response, the plaintiff failed to show, by competent medical evidence that he was unable to engage in his normal activities.

4/9/09              Falkner v. Hand
Appellate Division, Third Department
Failure to Establish Causation also Precludes Recovery under the 90/180-Day Category Alleged in the Second of Three Accidents
The plaintiff was involved in three accidents over a two-year period.  She commenced one action for the first and second accidents, and a second action for the third.  She claimed significant limitation of use of her spine as against all three defendants, and under the 90/180-day category as against Hand, the defendant from the second accident.  All three defendants moved for summary judgment and established that the condition of plaintiff’s spine was due to preexisting degenerative disease and not the accidents.  In fact, the plaintiff’s own medical records and deposition testimony all showed a long history of back problems predating the accidents.  The plaintiff did not offer any evidence to distinguish her previous condition from the claimed injuries, or even that she suffered an exacerbation. 

The trial court found this sufficient and dismissed the claims of significant limitation of use as against all three defendants, but allowed the 90/180-day claim to continue against Hand.  On appeal, the court reversed finding that the failure to prove causation in any of the accidents also precluded recovery under the 90/180-day category asserted only in the second accident.

4/7/09              Pamphile v. Bastien
Appellate Division, Second Department
The Plaintiff’s Physicians’ Failure to Reconcile their Findings Results in Dismissal of Plaintiff’s Complaint
The defendant met his burden by submitted the plaintiff’s own deposition testimony and affirmed medical reports from his examining neurologist, orthopedist and radiologist.  In opposition, the plaintiff’s examining physicians asserted he had range-of-motion limitations in the lumbar spine and left knee but those examinations were performed over 2 ½ years after the accident.  They failed to reconcile these findings with those of the plaintiff’s treating physician who, 2 ½ weeks after the accident found the plaintiff had full range-of-motion of the knee, and, upon subsequent examination 9 months later, found no limitations of either the spine or knee.  They also did not address the MRI which, according to the defendant’s radiologist, showed only degenerative conditions in the plaintiff’s lumbar spine and left knee.

4/7/09              Niles v. Lam Pakie Ho
Appellate Division, Second Department
The Plaintiff Fails to Offer any Contemporaneous or Recent Objective Medical Evidence;  Trial Court is Reversed, on the Law
Co-defendant Jacob Express Cab’s motion for summary judgment dismissing the complaint as against it is granted.  The plaintiff claimed injury to her left knee, cervical spine or lumbar spine under the “permanent consequential limitation of use” and the “significant limitation of use” categories but the reports and records from her chiropractor and a medical group were all unsworn or unaffirmed.  The affirmed report submitted by Dr. Bhatt was from an examination which he performed 1 ½ years after the accident and there were no contemporaneous finding of range-of motion limitations of the knee, nor had the knee been examined more recently.  An MRI revealed a tear of the medial and lateral menisci, but there was no objective evidence of the extent or duration of the alleged limitation as required being evidence of a serious injury.  The court found the same evidentiary deficiencies to exist with regard to the plaintiff’s submissions regarding her cervical and lumbar spine.

4/7/09              Tuberman v. Hall
Appellate Division, First Department
Minor Limitations in ROM Do Not Amount to Significant or Permanent Limitations
The defendants had reports from an expert orthopedist, neurologist and a radiologist showing not only that the plaintiff suffered only minor ROM limitations in the right knee, lumbar spine and shoulders, but also that the abnormalities seen in the MRIs of the plaintiff’s cervical spine, lumbar spine and right knee were all degenerative and not caused by the accident.  The dismissal of the complaint is unanimously affirmed.

4/7/09              Morris v. Ilya Cab Corp.
Appellate Division, First Department
Doctor’s Advise to “Restrict Activities” is too General to Support a 90/180-Day Claim
The plaintiffs raised issues of fact by submitting objective test results explaining why the claimed injuries were permanent, MRI reports revealing disc herniation, bulging and glenoid labrum tears, and a report explaining a preexisting condition.  However, the only support for the plaintiff’s 90/180-day claim was his own testimony that he had to quit his job as a result of the accident, and the statement of his physician that he advised the plaintiff to restrict his activities.  The court finds such a statement too general to support a 90/180-day claim.

4/7/09              Nguyen v. Abdel-Hamed
Appellate Division, First Department
A “Tailored” Affidavit which Differs From Plaintiff’s Deposition Testimony Will Not Defeat Summary Judgment
The defendants used the plaintiff’s own deposition testimony to demonstrate that she was only confined to her house for two weeks and only missed a couple of days of work following the accident.  In opposition, the plaintiff submitted an affidavit which the court found was “tailored to avoid the consequences” of her deposition testimony and was, therefore, insufficient to defeat summary judgment.  The court additionally searched the record, reversed the trial court, and granted summary judgment to all the remaining defendants, as well as to the appellants.
Note:  Not only did the tailored affidavit not defeat summary judgment, it appears to have ruffled the court’s feathers.

3/31/09            Ly v. Holloway
Appellate Division, Second Department
A Recent Affirmed Report has No Probative Value if Based on Contemporaneous Unaffirmed Reports
Based on a recent examination, the plaintiff’s examining physician concluded she had limited ROM in her cervical and lumbar spines but he also relied on the contemporaneous examination and records from plaintiff’s chiropractor in reaching his conclusions.  The chiropractor’s records, however, did not quantify the restrictions allegedly found nor were they in proper evidentiary form.  The court finds that sufficient to nullify the subsequent, and properly affirmed, report of the examining physician.
Note:  In addition to failing due to her physician’s reliance on unaffirmed or unsworn records, this is yet one more case where the plaintiff’s own deposition testimony undermines her claim under the 90/180 day category.

3/31/09            McNeil v. New York City Transit Auth.
Appellate Division, Second Department
Portions of an Affirmed Report Based on Unaffirmed Findings is Not Considered
The plaintiff relied on hospital records and EMG testing which had no probative value because they were unsworn.  Even those portions of the affirmed report of her treating physician, Dr. Murphy, which were based on the unsworn findings of other doctors, were disregarded.  However, Dr. Murphy found that the plaintiff had decreased ROM in her lumbar spine following the accident and for the following four years.  He also responded to the defendant’s experts, who opined that the plaintiff had problems prior to the accident, by stating that the plaintiff’s injuries were at least aggravated by the accident and constituted a permanent consequential limitation of use of her lumbar spine.  These portions of Dr. Murphy’s report were sufficient to raise a triable issue and defeat summary judgment.

3/31/09            Magid v. Lincoln Services Corp.
Appellate Division, Second Department
Once Again, Affirmations Relying on Unsworn Reports are Out
Yet again a plaintiff attempts to raise a triable issue of fact in opposition to summary judgment by submitting affirmations based upon the unsworn or unaffirmed records and reports of others, and fails.  Here, even though the affirmations revealed the existence of significant ROM limitations, they did not offer any admissible evidence of those limitations that were contemporaneous with the accident and that were in admissible form. 
Note:  The pattern which becomes evident is that a plaintiff must demonstrate restrictions with both contemporaneous and recent affirmed reports.  The repeating issue is that the contemporaneous records and reports often are not sworn or affirmed as often there was no litigation looming at the time.  When the recent affirmed report, now with views toward litigation, then compares  the recent with the contemporaneous findings, those comparisons are “without probative value” because they are based on the ‘unsworn findings of others’ contained in the contemporaneous reports.

3/31/09            Fung v. Uddin
Appellate Division, Second Department
Affirmation Must be by a Currently Licensed Doctor
Here, the defendants win a reversal.  The plaintiff’s former treating physician’s affirmation had no probative value because he was no longer licensed to practice medicine when he wrote the affirmation.  The plaintiff also failed to demonstrate the existence of any significant ROM limitations in his cervical or lumbar spine that were contemporaneous with the accident because the medical records submitted were neither affirmed nor sworn.

3/31/09            Cantave v. Gelle
Appellate Division, Second Department
Physician’s Failure to Review Medical Records From a Prior Accident Makes Conclusion that Injuries are Caused Solely by Subject Accident Speculative
The plaintiff had seriously injured his back two years earlier in another motor vehicle accident but his physicians did not review any of those prior medical records before concluding that the plaintiff’s  injuries and limitations were caused solely by the subject accident.  As a result, the court finds those conclusions speculative.  In addition, the plaintiff testified at his deposition that he went to work on the next business day after the accident and was not homebound, which demonstrated that his injuries did not qualify under the 90/180-day category. 
Note:  Another example of defendants’ use of plaintiff’s own deposition testimony to win dismissal of a claim under the 90/180-day category.

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

Litigation

4/9/09  Travelers Indemnity Co. v. Rapid Scan Radiology, P.C.
Appellate Division, First Department
Master Arbitration Award Upheld – Lower Arbitrator Committed Err in Finding Fraud Defense Valid
The Master Arbitrator’s award was not vacated as there was no showing that he exceeded his authority or rendered an arbitrary or capricious decision.  The award had a rational basis in finding that the lower arbitrator erred as a matter of law in finding that Rapid Scan committed fraud as the denial was not issued on that basis and the defense was subject to the 30 day rule.

4/7/09  Alur Med. Supply, Inc. a/a/o Teresa Rodriguez v. Progressive Ins. Co.
Appellate Term, Second Department
Follow-Up Verification Request Premature Rendering Denial Untimely

The insurer failed to timely deny a claim leading to the preclusion of most available defenses.  The insurer prematurely mailed follow up verification requests rendering it without effect and consequently issued an untimely denial.

4/3/09  Metropolitan Med. Supplies, LLC a/a/o Grizel Serrano v. Eveready Ins. Co.
Appellate Term, Second Department
Plaintiff’s Summary Judgment Motion Denied as Insurer Established Lack of Medical Necessity
Plaintiff established is prima facie case to recover payment for medical supplies through the submission of an affidavit from plaintiff’s billing manager.  The court noted that if there was any deficiency in the plaintiff’s papers on proof of mailing it was cured by the insurer’s denial claim form and the insurer’s supervisor’s affidavit attesting to receipt of the supplies in question.  The court further noted that the plaintiff is not required in its prima facie case to establish its costs.

The insurer demonstrated lack of medical necessity for the medical supplies by submitting an affidavit from its supervisor and submitting the affirmed peer review.  Therefore, the plaintiff’s summary judgment motion should have been denied.

4/1/09  A.B. Med. Services, PLLC a/a/o Pierre Cameau v. Country-Wide Ins. Co.
Appellate Term, Second Department
Failure to Submit Proper Affidavit on Mailing Deems Denial Late
The insurer failed to submit proper affidavits to establish that the eligible injured person failed to appear for a scheduled independent medical examination.  The affidavit failed to properly establish that the scheduling letters were mailed.  Therefore, the denials were deemed late and the insurer was precluded from asserting a breach of the policy condition.

4/1/09  DJS Med. Supplies, Inc. a/a/o Frank Melendez v. Travelers Prop. Cas. Ins. Co.
Appellate Term, Second Department
Plaintiff Failed to Submit Proper Affidavit to Establish Prima Facie Case
Plaintiff failed to submit a sufficient affidavit from its officer to establish a foundation for the business record rule.

3/31/09  Westchester Med. Ctr. a/a/o Bartolo Reyes v. Lincoln Gen. Ins. Co.
Appellate Term, Second Department
Insurer Could Not Establish Tolling of 30 Days to Pay or Deny to Survive Summary Judgment
The insurer did not establish that its 30 days to pay or deny the plaintiff’s claim was tolled for verification based upon two letters sent to the plaintiff advising that the claim was being held pending an investigation into the loss.  The letters further indicated that there was an investigation regarding whether the eligible injured person was involved in a motor vehicle accident and that examinations under oath were being conducted.

The insurer’s argument that the 30 days to pay or deny was tolled pending receipt of a completed application for no-fault benefits (NF-2) when the insurer received a completed hospital facility form (NF-5).

Finally, the insurer did not raise a triable issue of fact that the motor vehicle accident was covered under Workers’ Compensation.  The basis for the argument was upon a hearsay statement from the insurer’s investigator.

PEIPER ON PROPERTY (and POTPOURRI)

Steven E. Peiper
[email protected]

4/02/09            Western Building Restoration Co., Inc. v Lovell Safety Mgt. Co., LLC
Appellate Division, Third Department
Despite its Many Attempts, Insured Cannot Excuse its Failure to Read and Understand its Own Policy
In this interesting case, plaintiff is a New York corporation that had begun conducting business operations in Massachusetts.  Prior to its decision to expand into the Massachusetts’s market, it had previously purchased a workers’ compensation policy through the New York State Insurance Fund.  Importantly, the policy issued by the Fund only covered injuries to workers within the State of New York. 

Four years after obtaining the policy with the Fund, plaintiff entered into a safety group which is permitted under the regulations governing workers’ compensation coverage.  Defendant served as the administrator of that group, and at some point, issued a certificate of insurance on behalf of the plaintiff.  In addition, plaintiff alleges that an employee of the group administrator also advised that plaintiff’s workers’ compensation coverage would apply to accidents which occurred outside the State of New York. 

As one may have guessed, an employee of plaintiff sustained injury while working at a jobsite in Massachusetts.  After the Fund denied on the basis that its policy was only exposed to injuries which occurred in New York, plaintiff commenced the instant action against the group administrator.  In its Complaint, plaintiff alleged causes of action for breach of contract, negligence, negligent misrepresentation, fraud, estoppel and General Business Law § 349. 

The Third Department quickly dismissed plaintiff’s causes of action based upon an alleged breach of contract where no contract could be produced which required the defendant to provide insurance advice and/or counseling.  Further, the Court noted that the policy – which was procured four years prior to plaintiff entering the safety group  and was renewed annually – did not create a contractual relationship between the parties.  Likewise, the Court also  noted that the certificate of insurance that was produced by defendant did not confer any contractual rights to any party.

In addition, the plaintiff’s claims based in negligence also failed where plaintiff could not establish that defendant owed a duty of care in this instance.  Contrary to the position advanced by plaintiff, the Court explicitly stated that defendant did not qualify as an insurance broker or insurance agent.  Indeed, its role was specifically defined under the regulations governing safety groups, and there is no indication that a group administrator will serve in the capacity as a broker/agent.  Moreover, the Court also flatly rejected the idea that the connection between plaintiff and defendant created a “special relationship” so as to create a duty of care.  Again, as no duty of care could be established, all of plaintiff’s claims sounding in negligence were dismissed. 

Finally, plaintiff’s claim under General Business Law §349 failed where it could not be established that defendant’s conduct had an impact on the general public as a whole.  As you will recall from other cases we have reviewed, a pre-requisite to any claim under GBL § 349 is that the conduct for which remedy is sought was directed toward the claimant as well as the general public

We also note that the Court indicated that even if plaintiff could establish the existence of a special relationship, or prove that defendant was an agent/broker, its claims would still fail.  This is because the policy unambiguously provided workers’ compensation coverage for  incidents which occurred within the State of New York only.  As an insured is deemed to know and understand the terms of its policy, it cannot blame another party for its failure to appreciate the plain limiting terms found within a policy that it had procured.  Further, where plaintiff attempted to create an ambiguity by comparing language found within the employers’ liability portion of the policy, the Court wisely noted that workers’ compensation coverage and employers’ liability coverage are separate and distinct grants of coverage.  Even if they were not separate and distinct, the Court noted that there was no ambiguity between the two clauses in any event. 


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


For Whom the Statute Tolls: Limits of “Continuous Representation”

In 2007, the New York Court of Appeals issued a major decision in Williamson v. PricewaterhouseCoopers LLP, 9 N.Y.3d 1, 840 N.Y.S.2d 730 (2007)  dealing with professional malpractice and negligence claims, the Statute of Limitations, and the tolling argument of “continuous representation”.  The decision was largely a victory for the accounting profession which circumscribed the use of the “continuous representation” argument to toll (extend) the statute of limitations for professional (in this case accounting) malpractice claims. 

The appeal came on by permission of the Appellate Division, First Department from an Order of the Appellate Division which reversed a prior Order of the Supreme Court which granted the accounting firm’s motion to dismiss negligence and malpractice claims concerning audits conducted from 1995 through 1999.  The decision of the Appellate Division was reversed, and, in essence, the Order of the trial court was reinstated. 

The Court of Appeals held that the continuous representation doctrine was not available to toll the limitations period in an accountant malpractice action commenced in July 2004 alleging improper audits of financial statements of investment funds for the years 1995 through 1999.  The malpractice claims accrued on the date plaintiff received the accountants’ audit opinions, and were barred by the three year statute of limitations and CPLR 214(6).  The Court of Appeals further ruled that the “continuous representation” doctrine by which the statute of limitations is sometimes tolled was not available as once the accounting firm performed services for a particular year no further work for that year was undertaken. 

Counsel for the accounting firm contended that consecutive or serial annual audits did not amount to continuous representation which would toll the statute of limitations.  Counsel for the plaintiffs argued that the applicability of the “continuous representation” doctrine was a question of fact that could not be determined prior to the development of discovery and a full factual record.  They argued that the First Department correctly held that the “continuous representation” doctrine created potential questions of fact. 

The case drew a number of amicus briefs including from the American Institute of Certified Public Accountants which argued that the relationship between the independent auditor and its client is not susceptible to application of the continuous representation doctrine, and that public policy was against subjecting auditors to basically an “indeterminate” statute of limitations.  On the other hand, attorneys for the National Association of Shareholder and Consumer Attorneys argued that companies and markets expect continuous long-term relationships between companies and their auditors, and continuous use of the same auditors can lead to errors which basically permit mistakes to be repeated year after year.  They argued that the contention that auditors would be subjected to “unlimited” liability if the continuous representation doctrine applied was simply false. 

The Court of Appeals posed the question as whether the continuous representation doctrine applied to toll the limitations period applicable to the auditing malpractice claims, and in the circumstances the Court concluded that it did not.

Beginning in or around 1990, the plaintiffs had annually engaged the accounting firm to perform a number of accounting services for the previous fiscal year including audit of and opinion of year-end financial statements.  The accounting firm was responsible for performing audits on the financial statements pursuant to generally accepted auditing standards.  After completing its inspection of the financial statements, the accounting firm issued opinions for the year audited stating that the financial statements fairly represented the financial position of the plaintiffs on December 31 of the subject year.  Critically and notably, once the annual audit services for a particular fiscal year were complete, the accounting firm did no further work for that year, at least not with respect to audit review. 

Ultimately, the plaintiff representing two investment funds discovered that, due to a former portfolio manager’s overstatements, the securities held in the funds had inflated assets, capital and profits in their respective financial statements for the years 1995 through 2000.  The result was a 40% decline in the funds’ equity value, and eventual dissolution and winding up of the funds in question.  On July 2, 2004, more than three years after the accounting firm completed its final audits of the financial statements, plaintiff commenced the action for malpractice based on the accounting firm’s alleged improper audits of financial statements for fiscal years 1995 through 2000.  Trying to invoke the “continuous representation” argument, the plaintiff alleged that the accounting firm’s services incorporated and built upon services rendered in prior years, were continuous, and performed in the same manner and for the same purposes until early 2002.  Plaintiff alleged that the audits were not conducted in accordance with generally accepted auditing standards and ignored errors in the portfolio management and valuation of the funds’ securities holdings. 

The accounting firm filed a pre-answer motion to dismiss arguing that the claims were barred by the three year statute of limitations.  Plaintiff countered that the statute of limitations was or should be tolled under the “continuous representation” doctrine because each audit was one part of continuous and inter-related services the accounting firm provided over a 12 year period from 1990 until it was discharged in February 2002. 

The trial court granted the motion to dismiss holding that the professional malpractice claims were time barred.  The court stated that the annual audits formed the only basis for the claims and that, taken together, the claims underscore that the audits constituted merely the continuation of a general professional relationship which was insufficient to toll the limitations under the “continuous representation” doctrine.  However, the Appellate Division, First Department reversed with two justices dissenting.  The majority reinstated the malpractice claims and held that the trial court should have given the plaintiff the opportunity to develop and establish the asserted fact that each audit was part of continuous and inter-related accounting services.  The dissenting judges countered that, inasmuch as these were discrete audits conducted on a year-to-year basis, the continuous representation doctrine did not apply to alter the accrual date of the causes of action.  In an unusual move, the Appellate Division itself granted defendant leave to appeal to the Court of Appeals. 

The Court of Appeals began its opinion by recognizing that an action for professional malpractice must be commenced within three years of the date of accrual, and that accrual occurs when the malpractice is committed not necessarily when the client discovers it.  In the context of an accounting malpractice claim, the claims accrued upon the client’s receipt of the accountant’s work product since that was the point that the client reasonably relies on the accountant’s skill and advice.  This is also the point when all the facts necessary to the cause of action have occurred and an injured party can allege and obtain relief in court.  Here the malpractice claims for 1995 through 1999 accrued on the date the funds received the audit opinions, and thus most were time barred unless the continuous representation doctrine applied. 

The Court of Appeals then proceeded to evaluate the “continuous treatment” doctrine, which was first recognized in medical malpractice cases.  Even in a medical context, the patient’s treatment for purposes of the doctrine did not necessarily terminate upon the patient’s last visit if further care or monitoring of the condition is explicitly anticipated by both physician and patient.  However, the rule of “continuous treatment” never applied to a continuing general relationship between a patient and a physician or to situations where the patient initiates routine, periodic examinations to check a condition. 

The Court of Appeals recognized that the rule of continuous treatment, or more appropriately continuous representation, has been applied to other types of professionals such as lawyers.  In such professional situations, the continuous representation doctrine may toll the statute of limitations if there is a “mutual understanding” of the need for further representation on the specific subject matter underlying the malpractice claim.  Thus, the argument is limited to where there is a specific mutual understanding between the parties of the need for further actions or representation on the specific subject matter underlying the malpractice claim, as opposed to merely some type of ongoing professional and work relationship. 

Getting to the case at hand, the Court of Appeals concluded that the plaintiff entered into annual engagements with the accounting firm for the provision of separate and discrete audit services for year-end financial statements.  Once the accounting firm performed services for a particular year, no further work as to that year was undertaken or contemplated.  These allegations may amount to failures within a continuing professional relationship, but not failures within a course of representation as to the particular audits that gave rise to the malpractice claims.  Even as a matter of pleading, the plaintiff could not allege that it and the defendant explicitly contemplated further work or actions regarding the annual audits and opinions.  Thus, the “mutual understanding” required for the continuous representation doctrine did not exist.  Although there may have been a continuing professional relationship, there was not a continuing representation as to the subject matter giving rise to the malpractice claims.  The main points of the Williamson case are:

  1. Continuous, ongoing relationship with a client does not necessarily mean “continuous representation” with respect to the subject matter of the malpractice claim; and
  2. For “continuous representation” to exist, the professional and the client must knowingly and mutually engage in further work and activity on the specific subject matter of the underlying malpractice claim, i.e., mere client belief or expectation is insufficient.  Another lesson for professionals is to try to limit and restrict retainers to specific times, tasks and matters to avoid “mission creep” which may muddy the waters of “continuous representation”.  Written retainer agreements setting forth the time, topic and deliverables of professional representation are of course advisable for this and many other reasons.

 

For purposes of analysis and application to other cases, the importance of Williamson is that a continuing professional relationship does not equate to continuing representation on the subject matter of the alleged malpractice.  Secondly, “continuous representation” can only arise where there is a clear mutual understanding that the professional firm will provide further or additional ongoing services in connection with that subject matter, and where there are no such facts or indications the complaint should be dismissed even as a point of pleading or on a summary judgment motion.  Defense counsel should carefully parse the complaint allegations and documents and try to segregate discrete issues and events, i.e., a particular audit report or financial statement, and move to dismiss if the statute of limitations has expired and be prepared to argue no tolling and no further “continuous representation”.  Note third that this understanding must be “mutual” – the plaintiff cannot allege only that the client thought the professional was going to “do more” with respect to the subject at hand.  There must be some admission, acknowledgement or recognition on the part of the professional that they were retained to and accepted and performed additional, ongoing or further work which might stop the statute of limitations from running. 

These thoughts and principles should be kept in mind upon any analysis of malpractice or negligence claims against attorneys, accountants, auditors, engineers, architects and other professionals as to whether all or parts of claims are time barred under the applicable statute of limitations.   



ACROSS BORDERS

               

4/9/09              Qualchoice, Inc. v. Nationwide Insurance Co.
Ohio Court of Appeals, Eighth Appellate District
Auto Policy’s Non-Assignment Clause Not Applicable to Non-Named Insured Seeking Medical Payment Coverage
Kimberly Gale-Page was involved in an automobile accident while allegedly operating a motor vehicle owned by Linda Borom for which Nationwide Insurance Company (“Nationwide”) provided coverage. Nationwide’s policy provided for payment of usual, customary and reasonable medical expenses/charges relating to an auto accident. Gale-Page had health insurance coverage with QualChoice, Inc. (“QualChoice”), which paid for Gale-Page’s medical care allegedly related to the accident in the amount of $823.39. QualChoice filed suit against Nationwide seeking recovery through subrogation from the auto no-fault medical payments coverage for its participant, Gale-Page. The trial court denied Nationwide’s motion for summary judgment, granted QualChoice’s motion for summary judgment and entered judgment in QualChoice’s favor in the amount of $823.69. On appeal, Nationwide contended that the trial court erred (1) in granting summary judgment in favor of QualChoice, (2) in rendering judgment in favor of QualChoice, (3) in denying Nationwide’s motion for summary judgment and (4) in considering QualChoice’s claims because they did not fall within the jurisdiction of a common pleas court. The Court of Appeals affirmed in part, reversed in part, and remanded the matter for further proceedings. The court sustained Nationwide’s first assignment of error finding there were genuine issues of material fact remaining. With respect to Nationwide’s third assignment of error, the court found the policy’s non-assignment clause which precluded an insured from transferring any interest or benefit under the policy without written consent, was not applicable to Gale-Page or her subrogees since she was not the named insured on the policy and because Ohio law prohibits application of policy provisions to be applied to a non-named insured who seek medical payment coverage. Finally, the court held that the trial court had jurisdiction and was not prohibited by law from hearing the matter. In so holding, the court stated that even assuming ERISA applied to the benefits offered by QualChoice, subrogation claims by ERISA benefit plans are governed by state law and are not preempted and the effect of state law to the matter was incidental in nature.
Submitted by: Bruce D. Celebrezze & Erin J. Volkmar (Sedgwick, Detert, Moran & Arnold LLP)


4/08/09            Everett Cash Mutual Ins. Co. v. Taylor
Indiana Court of Appeals
Policy Exclusion Precluding Coverage for Injuries Properly Addressed Through the Workers’ Compensation System Clear and Unambiguous
Christopher Collis, an employee of Sherlock Contract Painting (“Sherlock”), an independent contractor hired by Rick and Katrina Taylor, was injured while painting a grain bin on the Taylor’s farm. Although required to do so pursuant to Indiana Code Section 22-3-2-14(b), the Taylor’s did not verify whether Sherlock had worker’s compensation insurance before hiring them for the job. Indiana Code Section 22-3-2-14(b) states that if a third party contractors with an injured worker’s employer for the performance of work exceeding one thousand dollars, the third party is subject to liability for workers’ compensation benefits to the same extent as the employer if the third party failed to obtain a certificate of compliance with the Workers’ Compensation Act and the injury resulted from an accident arising out of and in the course of the performance of the work covered by the contract. Collis filed a workers’ compensation claim against Sherlock. Upon learning that Sherlock had no workers’ compensation insurance, Collis amended his claim to name the Taylors as a party for failing to verify whether Sherlock had such insurance, pursuant to Indiana Code Section 22-3-2-14(b). Everett Cash Mutual Insurance Company (“Everett”), which had issued a farm personal liability policy to the Taylors, denied coverage for Collis’ claim against the Taylors based on a policy exclusion which precluded from coverage “bodily injury to a person … if benefits are payable or are required to be provided by an insured under a workers’ compensation … law.” The Taylors filed suit against Everett seeking recovery for, among other things, breach of contract claiming they indicated to their insurance agent that they wanted “all risk” coverage. Everett moved for summary judgment based on the worker’s compensation policy exclusion which the trial court denied. The Court of Appeals reversed. In so holding, the court determined, among other things, the policy’s exclusion clearly and unambiguously precluded coverage for injuries that are or should be addressed through the worker’s compensation system. The court noted the Taylors may not have been able to purchase worker’s compensation coverage, they could have ensured that Sherlock did. The court further found that the insureds’ belief that they had purchased “all risk” coverage could not, without more, be sufficient to negate all exclusions in an insurance policy.
Submitted by: Bruce D. Celebrezze & Erin J. Volkmar (Sedgwick, Detert, Moran & Arnold LLP)

DUQUIN – THE DUKE OF LEAD
Scott M. Duquin
[email protected]

Part VI – Coverage Triggers
This week we look at two aspects of insurance coverage in lead-based paint litigation.  First, we review New York law surrounding Health Department letters advising your insured that there are conditions conducive to lead poisoning at your insureds’ property, and if such is a trigger for them to put you on notice of a potential claim.  Second we look at triggers of coverage and if such leads to “stacking” of the policy limits.  Special thanks to Steven Peiper, who lends his insurance coverage expertise as a co-author.

Trigger of Insured to give notice:

Is the relatively standard requirement that the insured must give notice of a potential claim triggered when your insured receives a letter from the local county health department advising that there are conditions conducive to lead poisoning?  New York common law says no, and New York courts have held that receipt of a notice of condition conducive to lead poisoning from a county health department, standing alone, is insufficient to establish that the insured was put on notice of a potential claim under the policy. (Pub. Mut. Ins. Co. v AYFAS Realty Corp., 234 AD2d 226, 651 NYS2d 513 [1st Dept 1996]; Seals v Powell, 236 AD2d 700, 653 NYS2d 452 [3d Dept 1997]; Generali B U.S. Branch v Rothschild, 295 AD2d 236, 744 NYS2d 159 [1st Dept 2002]).

In 2004, the Second Department followed the precedent established by its colleagues in the First and Third Departments, respectively, when it again found that a question of fact regarding whether the insured was on notice upon receipt of the health department’s Notice of Lead Paint & Order of Abatement (Huertero v Blue Ridge Ins. Co., 13 AD3d 486, 787 NYS2d 89 [2d Dept 2004]).  In support of this conclusion, the Second Department noted that the Notice in question did not establish that the injuries were caused by the lead paint found at the subject premises.  Likewise, the court also pointed to the fact that the notice did not explicitly state that the lead-based paint found at the premises caused injury to the affected party. 

Frankly, we find this an odd standard.  It would seem to us that receipt of the Lead Abatement Notice, as you all know, comes with the understanding that someone that spends a significant amount of time has been found with an elevated lead level in his or her blood stream.  Thus, the insured knows (a) lead paint has been found at the premises (under most circumstances it is pin-pointed in the abatement notice) and (b) that someone who spends a significant amount of time there has been found with an elevated lead level.  These two items, taken together, should be enough to require the insured to place his or her carrier on notice.  Remember that most policies require notice where there is notice of an incident which may give rise to a claim.  Notice of the claim is not required to trigger initial notice.

Alas, however, New York Appellate Court’s have not been sympathetic to our position.  If you decide to invoke a late notice defense, one would be well advised to be certain that the insured not only knew of the existence of lead, but also knew of the existence of injury to a specific child at the insured location.  Without both please be forewarned that a late notice disclaimer will be a difficult road to travel.

Triggers of Coverage:

Traditionally, and as most people understand it, New York is an injury-in-fact jurisdiction.  This means that coverage is not triggered unless it can be established that the insured was injured during the policy period.  In a 2008 declaratory judgment action, the insurance company was relieved of any obligation to defend and indemnify (Fire & Casualty Ins. Co. v. Kelly, 50 AD3d 340 [1st Dept 2008]).  The insurance company issued its policy effective December 10.  The health department issued a letter on December 12 stating that the lead hazards at the property were corrected based upon an inspection it conducted in July.  Further, the testimony of infant plaintiff’s mother (in the main action) was that since the abatement the paint in the apartment was good.  Notwithstanding a blood test of January the next year that revealed a slightly elevated blood lead level in the infant plaintiff (in the main action), the court held there was no evidence of lead exposure during the effective policy dates, and as such the insurer was under no duty to defend or indemnify.

Further, the New York Court of Appeals' holding in Hilrado v. Allstate Ins. Co. (5 NY3d 508 [2005]) established that a carrier would not be held liable for multiple policy periods where it intended its exposure to be capped a sole policy limit.  In that decision, the Court of Appeals noted that a carrier should not have to worry that it would be potentially exposed to three times its policy limit (over three policy terms) because the injury was continuous over three policy periods.  In other words, where the carrier contracted to pay a limit of $300,000 per injury on a homeowner's policy, it should not be worried about exposure of $900,000 because the injury took place over three years. 

We note that the Court appeared to struggle with the reality that if the insured had three different policies, written by three different carriers, the insured would be entitled to the limits of all three policies.  However, fortunately following precedent and strong policy language, the Court of Appeals was not persuaded to extend a carrier’s risk exposure beyond that what was bargained for.  To date, the decision has gone unchallenged. 

However, although of little value as precedent because it is a summary order, the Second Circuit has ruled that “New York courts would read Allstate’s non-cummulation clause strongly and find that plainly limits [plaintiff’s] recovery to one policy limit” [Bahar v. Allstate Ins. Co., 159 Fed. Appx. 311, 2005 US App Lexis 27964 (2d Cir 2005)].  For sake of completeness, we note that Maryland’s high court found the triggering of multiple policy periods appropriate (Untied Services Automobile Assn. v. Riley, 393 Md. 55, 899 A2d 819 (2006)]. In Riley, the Maryland court discussed the Hiraldo decision at length.  However, the Riley Court noted that the policy’s non-cumulation clause was ambiguous, and as such refused to limit the carrier’s exposure (who had issued consecutive policies) to one policy term.  Significantly, the Riley decision follows a long line of Maryland cases which have permitted multiple policies to be triggered, and likewise involved the interpretation of policy language that differed from the language employed by Allstate in the Hilrado decision.  Moreover, the carrier in Riley was unable to support its intent with respect to the interpretation of the non-cumulation clause.

Just the same, if this issue should come up, the attentive claims professional would be well served to work closely with coverage counsel and underwriting to ensure that the carrier’s intent with regard to risk exposure is preserved.   


REPORTED DECISIONS


Malik v. Charter Oak Fire Insurance Company

Pena & Kahn, PLLC (Shayne, Dachs, Corker, Sauer & Dachs,
LLP, Mineola, N.Y. [Jonathan A. Dachs], of counsel), for appellant.
Feeney & Associates, PLLC, Hauppauge, N.Y. (Rosa M.
Feeney of counsel), for respondent.

DECISION & ORDER
In an action for a declaration that the defendant Charter Oak Fire Insurance Company and Travelers Insurance Company is obligated to defend and indemnify the plaintiff in an action entitled Rosenblatt v Malik, pending in the Supreme Court, Queens County under Index No. 9742/05, the defendant Lois M. Rosenblatt, Public Administrator of the goods, chattels and credits of Juan Manuel Chametla, deceased, appeals from an order of the Supreme Court, Nassau County (Parga, J.), dated March 13, 2008, which granted the motion of the defendant Charter Oak Fire Insurance Company and Travelers Insurance Company for summary judgment, in effect, declaring that it was not obligated to defend and indemnify the plaintiff in the underlying action.
ORDERED that the order is reversed, on the law, without costs or disbursements, and the motion of the defendant Charter Oak Fire Insurance Company and Travelers Insurance Company for summary judgment, in effect, declaring that it was not obligated to defend and indemnify the plaintiff in the underlying action is denied.
In this declaratory judgment action, the plaintiff, John R. Malik, Sr., sought defense and indemnification from the Charter Oak Fire Insurance Company, incorrectly sued herein as Charter Oak Fire Insurance Company and Travelers Insurance Company (hereinafter Charter Oak) in the wrongful death action brought against him by Lois M. Rosenblatt, Public Administrator of the goods, chattels, and credits of Juan Manuel Chametla (hereinafter the Public Administrator). 
The underlying action arose from the tragic, accidental shooting on October 18, 2004, of Juan Chametla, a young man working in a convenience store in Astoria, Queens, by Malik, a retired police detective. Malik was legally carrying a gun, as he was on his way to work as a security supervisor. He entered the store in which Chametla was working and while engaged in "horseplay" with Chametla, Malik took out his gun, which accidentally discharged, hitting Chametla in the leg. Chametla died from the wound.
It is uncontroverted that Malik did not notify Charter Oak, his home insurance carrier, when the incident occurred or soon thereafter. Malik contended that he was consumed with guilt and the criminal proceedings brought against him. He pleaded guilty on April 18, 2005, to manslaughter in the second degree for recklessly causing Chametla's death and was sentenced to one to three years in prison.
Soon after the shooting, Chametla's father retained counsel to initiate a civil action against Malik. Counsel wrote to Malik by letter dated November 2004 to advise him that a wrongful death claim existed and asked him to notify his carrier and advise counsel of the carrier's name, address, and policy number. It was then discovered that Chametla had fathered a son, then six years old, who resided in Mexico. Counsel for Chametla's estate continued to attempt to obtain Malik's insurance information by contacting Malik's attorney in the criminal action by letter, phone calls, and fax, all to no avail.
On April 29, 2005, 11 days after Malik's plea of guilty, the Public Administrator, on behalf of Chametla's estate, filed a summons and complaint alleging that Malik negligently, grossly negligently, recklessly, and carelessly caused Chametla's death. A courtesy copy of the complaint was sent to Malik's attorney in the criminal action on May 3, 2005, with a letter reiterating the demand for insurance information. No one notified the Public Administrator of the name and address of Malik's insurer; however, the summons and complaint in the Public Administrator's action were forwarded to Charter Oak on May 20, 2005, seven months after the occurrence.
Charter Oak contacted the Public Administrator's counsel for information about the claim on May 23, 2005, and counsel provided the Charter Oak representative with all the information at his disposal.
By letter dated June 3, 2005, Charter Oak notified its insured and the Public Administrator that it was disclaiming coverage due to the lateness of the notice to it.
Thereafter, Malik brought this action for a judgment declaring that Charter Oak is obligated to defend and indemnify him in the Public Administrator's wrongful death action. The complaint was amended to add the Public Administrator as a necessary party by stipulation of all the parties.
Charter Oak moved for summary judgment dismissing the amended complaint and both Malik and the Public Administrator submitted separate responses seeking denial of Charter Oak's motion. Malik argued that he was consumed with guilt and sorrow over the tragedy he caused and the trauma of the criminal proceedings that were being pursued such that the possible liability in a civil suit on the necessity of contacting his home insurance carrier never crossed his mind. Thus, he contended that the notice that he gave, after pleading guilty and being served with the summons and complaint, was reasonable under the circumstances.
A duty to give an insurer notice arises "when from the information available relative to the accident, an insured could glean a reasonable possibility of the policy's involvement" (Figueroa v Utica National, 16 AD3d 616, 616-617; see Paramount Ins. Co. v RosedaleGardens, 293 AD2d 235, 239-240). The Supreme Court, without reaching the Public Administrator's contention that it had a separate right to give notice, granted summary judgment to Charter Oak, finding that the plaintiff had not provided timely notice.
The Public Administrator contended that she had an independent right to give notice to Malik's carrier pursuant to Insurance Law § 3420(a)(3). Since the Public Administrator made diligent efforts to ascertain Malik's insurance information and was unable to ascertain the carrier's identity until after the action was instituted, the notice on behalf of Chametla's estate was provided as soon as was practicable and the motion should be denied.
The Public Administrator established that she contacted Malik within a short time after the incident, and demanded that he notify his insurance carrier of the claim, and requested his insurance information, which would have enabled the Public Administrator to notify the defendant itself pursuant to Insurance Law § 3420(a)(3). It was not until after Malik pleaded guilty to the criminal indictment and the wrongful death suit against him was commenced that Malik or someone on his behalf or on behalf of the Public Administrator sent the summons and complaint to Charter Oak, constituting the first notice of the claim provided to it by the insured or the claimant.
Under the particular circumstances of this case there are issues of fact as to the timeliness of the notice given to Charter Oaks so as to require the denial of Charter Oak's motion for summary judgment.
As this Court stated in Becker v Colonial Cooperative Insurance Company (24 AD3d 702):
"Insurance Law § 3420(a)(3), in effect, requires insurance companies to accept notice of claims from injured parties. As was made clear more than 40 years ago, [t]he statute having granted the injured person an independent right to give notice and to recover thereafter, he is not to be charged vicariously with the insured's delay' [Lauritano v American Fid.Fire Ins.Co., 3 AD2d 564, 568, affd 4 NY2d 1028]. The injured person's rights must be judged by the prospects for giving notice that were afforded him, not by those available to the insured. What is reasonably possible for the insured may not be reasonably possible for the person he has injured. The passage of time does not of itself make delay unreasonable' (id). When the injured party has pursued his rights with as much diligence as was reasonably possible' the statute shifts the risk of the insured's delay to the compensated risk-taker' (id). Thus, the pertinent inquiry is whether the plaintiff pursued his rights with as much diligence as was reasonably possible' (id).'
"In determining the reasonableness of an injured party's notice, the notice required is measured less rigidly than that required of the insureds (see GA Ins. Co. of N.Y. v Simmes, 270 AD2d 664). The sufficiency of notice by an injured party is governed not by mere passage of time but by means available for such notice' (Appel v Allstate Ins. Co., 20 AD3d 367, 369)" (24 AD3d at 704-705; see also Ringel v Blue Ridge Ins. Co., 293 AD2d 460).
Accordingly, the Supreme Court erred in granting the motion of Charter Oaks for summary judgment.
Morris v. Ilya Cab Corp.


Baker, McEvoy, Morrissey & Moskovits, P.C., New York
(Steven N. Feinman of counsel), for appellants.
Weiser & Associates, LLP, New York (Edward Spark of
counsel), for respondents.
Order, Supreme Court, New York County (Paul Wooten, J.), entered October 17, 2008, which denied defendants' motion for summary judgment dismissing the complaint, unanimously modified, on the law, to dismiss plaintiff Keith Morris's 90/180 day claim of serious injury, and otherwise affirmed, without costs.
Defendants established a prima facie case that plaintiffs did not suffer serious injuries within the meaning of Insurance Law § 5102(d). However, plaintiffs raised issues of fact (except as to the 90/180 day category) by submitting (a) the reports of their treating physicians providing objective test results to substantiate their subjective complaints of pain and explaining why plaintiffs' injuries were permanent and (b) MRI reports indicating disc herniation (Keith Morris) and bulging (Goddess Morris) and tears of the glenoid labrum (both plaintiffs) (see Newcomb v Leslie, 300 AD2d 92 [2002]; DaSilva v Storz, 290 AD2d 288 [2002]). One of the doctors' reports for Keith also explained his pre-existing condition.
The only evidence in the record that Keith had to quit his job as a result of the accident is his own testimony. This is insufficient (see e.g. Uddin v Cooper, 32 AD3d 270, 272 [2006], lv denied 8 NY3d 808 [2007]; Arrowood v Lowinger, 294 AD2d 315, 316-317 [2002]). The statement in the September 2006 report of Keith's treating physician that "[h]e is totally disabled and I have advised him to restrict his activities" is too general to support a 90/180 day claim (see Gorden v Tibulcio, 50 AD3d 460, 463 [2008]).
We note that Supreme Court has precluded Goddess from relying on the 90/180 day category of serious injury and that plaintiffs have not cross-appealed.
Nguyen v. Abdel-Hamed


Baker, McEvoy, Morrissey & Moskovits, P.C., New York
(Stacy R. Seldin of counsel), for appellants.
Greenberg & Stein, P.C., New York (Ian Asch of counsel), for
respondent.
Order, Supreme Court, New York County (Deborah A. Kaplan, J.), entered June 25, 2008, which, to the extent appealed from, denied defendants-appellants' motion 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), unanimously reversed, on the law, without costs, and the motion granted, and, upon a search of the record, the remaining defendants' motion for summary judgment granted as well. The Clerk is directed to enter judgment in favor of defendants dismissing the complaint in its entirety.
Defendants made a prima facie showing that plaintiff suffered no permanent or significant limitation of use of her cervical, thoracic and lumbar spine, by submitting the affirmed medical report of a neurologist describing the tests he performed and setting forth the results supporting his finding that plaintiff had full range of motion in the spine and his conclusion that plaintiff was not disabled at the time of the examination and that there was no permanency or residual effect (see Toure v Avis Rent A Car Sys., 98 NY2d 345 [2002]; see Taylor v Terrigno, 27 AD3d 316 [2006]). Plaintiff's chiropractor, while concluding, to the contrary, that plaintiff's injuries were permanent and significant, failed to set forth any objective basis for his findings, such as the tests he performed to measure plaintiff's range of motion (see Toure, supra; Harris v Ariel Transp. Corp., 55 AD3d 323 [2008]; Cartha v Quinn, 50 AD3d 530 [2008], lv to denied 11 NY3d 704 [2008]; Rodriguez v Abdallah, 51 AD3d 590, 591 [2008]).
Defendants also demonstrated that plaintiff suffered no "medically determined injury or impairment of a non-permanent nature" (Insurance Law § 5102[d]), by submitting plaintiff's deposition testimony that she was confined to home for two weeks and missed only two or three days of work following the accident (see Prestol v McKissock, 50 AD3d 600 [2008]). To the extent plaintiff's opposition affidavit differs with her testimony regarding her alleged impairment during the 90/180-day period, the affidavit appears to have been tailored to avoid the consequences of her earlier testimony and is insufficient to defeat summary judgment (see Amaya v Denihan Ownership Co., LLC, 30 AD3d 327 [2006]).
Upon a search of the record, the nonappealing defendants' motion is also granted (see Lopez v Simpson, 39 AD3d 420 [2007]).
McNeil v. New York City Transit Authority


Zaklukiewicz Puzo & Morrissey, LLP, Islip Terrace, N.Y.
(Stephen F. Zaklukiewicz of counsel), for appellants.
Lurie & Flatow, P.C., New York, N.Y. (Jay Flatow of
counsel), for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendants appeal, as limited by their brief, from so much of an order of the Supreme Court, Kings County (Schmidt, J.), dated February 5, 2008, as 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 insofar as appealed from, with costs.
The defendants satisfied their burden of establishing, prima facie, that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In opposition, the plaintiff relied upon various medical records, as well as the affirmed medical report of Dr. John Murphy, who treated the plaintiff after her accident. The plaintiff's hospital records and EMG testing report from December 22, 2003, were unsworn and therefore without any probative value (see Sapienza v Ruggiero, 57 AD3d 643; Choi Ping Wong v Innocent, 54 AD3d 384), and portions of Dr. Murphy's affirmed medical report dated November 19, 2007, must similarly be disregarded because they recite unsworn findings of other doctors (see Sorto v Morales, 55 AD3d 718; Malave v Basikov, 45 AD3d 539; Furrs v Griffith, 43 AD3d 389; see also Friedman v U-Haul Truck Rental, 216 AD2d 266, 267). Nevertheless, Dr. Murphy found, on the basis of his physical examination of the plaintiff, that she had a decreased range of motion in her lumbar spine following the date of the accident and for four years thereafter. In response to the conclusory statement by the defendant's orthopedic expert that the plaintiff "[had] significant problems preceding the alleged incident," and the defendant's radiologist's determination that the plaintiff suffers from a chronic degenerative condition of the lumbar spine, Dr. Murphy opined, on the basis of his review of pre-accident and post-accident imaging, that the plaintiff's injuries were caused or, at least, aggravated by the accident. Thus, Dr. Murphy's conclusion that the plaintiff's injuries constitute a permanent consequential limitation of use of her lumbar spine was sufficient to raise a triable issue of fact as to whether the plaintiff sustained a serious injury under the significant limitation of use or the permanent consequential limitation of use category of Insurance Law § 5102(d) as a result of the subject accident (see Altreche v Gilmar Masonry Corp., 49 AD3d 479; Nigro v Kovac, 45 AD3d 547-548).
Magid v. Lincoln Services Corp.


Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y.
(Feinman & Grossbard, P.C. [Steven N. Feinman], of counsel),
for appellants.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendants appeal from an order of the Supreme Court, Kings County (Schmidt, J.), dated July 1, 2008, which denied their motion for summary judgment dismissing the complaint on the ground that neither of the plaintiffs sustained a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed, on the law, with costs, and the defendants' motion for summary judgment dismissing the complaint is granted.
The defendants met their prima facie burden of showing that the plaintiffs did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In opposition, the plaintiffs failed to raise a triable issue of fact.
Initially, the records and reports of Hamilton Medical Diagnostics were without any probative value since they were not properly sworn or affirmed (see Grasso v Angerami, 79 NY2d 813; Luna v Mann, 58 AD3d 699; Uribe-Zapata v Capallan, 54 AD3d 936; Patterson v NY Alarm Response Corp., 45 AD3d 656; Verette v Zia, 44 AD3d 747; Nociforo v Penna, 42 AD3d 514; Pagano v Kingsbury, 182 AD2d 268).
The respective affirmations of Laxmidhar Diwan and Emmanuel Hostin failed to raise a triable issue of fact since they clearly relied on the unsworn reports of others in coming to their conclusions (see Sorto v Morales, 55 AD3d 718; Malave v Basikov, 45 AD3d 539; Verette v Zia, 44 AD3d 747; Furrs v Griffith, 43 AD3d 389; see also Friedman v U-Haul Truck Rental, 216 AD2d 266, 267). While both Diwan and Hostin set forth findings that revealed the existence of significant limitations in each of the respective plaintiffs' range of motion, neither they nor the plaintiffs proffered competent admissible medical evidence that revealed the existence of significant limitations in the plaintiffs' ranges of motion that were contemporaneous with the subject accident (see Leeber v Ward, 55 AD3d 563; Ferraro v Ridge Car Serv., 49 AD3d 498; D'Onofrio v Floton, Inc., 45 AD3d 525).
The magnetic resonance imaging reports of Stephen Veigh failed to raise a triable issue of fact. The mere existence of a herniated or bulging disc, or even a tear in a tendon, is not evidence of a serious injury in the absence of objective evidence of the extent of the alleged physical limitations resulting from the injury and its duration (see Washington v Mendoza, 57 AD3d 972; Cornelius v Cintas Corp., 50 AD3d 1085, 1087; Shvartsman v Vildman, 47 AD3d 700; Tobias v Chupenko, 41 AD3d 583; Mejia v De Rose, 35 AD3d 407; Yakubov v CG Trans. Corp., 30 AD3d 509; Cerisier v Thibiu, 29 AD3d 507; Bravo v Rehman, 28 AD3d 694; Kearse v New York City Tr. Auth., 16 AD3d 45; Diaz v Turner, 306 AD2d 241).
The plaintiffs failed to submit competent medical evidence that the injuries they allegedly sustained in the subject accident rendered them unable to perform substantially all of their usual and customary daily activities for not less than 90 days of the first 180 days subsequent to the subject accident (see Rabolt v Park, 50 AD3d 995; Roman v Fast Lane Car Serv., Inc., 46 AD3d 535; Sainte-Aime v Ho, 274 AD2d 569).
Ly v. Holloway


Robert P. Tusa (Sweetbaum & Sweetbaum, Lake Success, N.Y.
[Marshall D. Sweetbaum], of counsel), for appellant Angela Holloway.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York,
N.Y. (Holly E. Peck amd Stacy R. Seldin of counsel), for appellants
Osman A. Mohamedtamim and Tangiz  Hacking Corp.
Park & Nguyen, Bronx, N.Y. (John S. Park of counsel), for  respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendants Osman A. Mohamedtamim and Tangiz Hacking Corp. appeal, as limited by their brief, from so much of an order of the Supreme Court, Kings County (Schneier, J.), dated March 28, 2008, as 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) insofar as asserted against them, and the defendant Angela Holloway separately appeals, as limited by her brief, from so much of the same order as denied her separate motion, in effect, for the same relief.
ORDERED that the order is reversed, on the law, with costs, and the motion of the defendants Osman A. Mohamedtamim and Tangiz Hacking Corp. for summary judgment dismissing the complaint insofar as asserted against them, and the separate motion of the defendant Angela Holloway, in effect, for the same relief, are granted.
The defendants established their prima facie entitlement to judgment as a matter of law dismissing the complaint by demonstrating, on the basis of the same submissions, 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). In opposition, the plaintiff failed to raise a triable issue of fact.
The plaintiff relied on, inter alia, an affirmed report of an examining physician, who, based on a recent examination of the plaintiff, indicated that she had limited ranges of motion in her cervical and lumbar spines. It is evident that in arriving at his conclusions, the plaintiff's examining physician relied on records of the plaintiff's treating chiropractor, who performed contemporaneous examinations of the plaintiff, and indicated that he found limited ranges of motion in her cervical and lumbar spines. However, those records were not in proper evidentiary form (see Casas v Montero, 48 AD3d 728, 728-729). Moreover, the plaintiff's treating chiropractor failed to adequately quantify the restrictions he claimed to have found (see Sirma v Beach, 59 AD3d 611; Friscia v Mak Auto, Inc., 59 AD3d 492; Gochnour v Quaremba, 58 AD3d 680; Duke v Saurelis, 41 AD3d 770, 771).
The plaintiff also failed to set forth any competent medical evidence to establish that she sustained a medically-determined injury or impairment of a nonpermanent nature which prevented her from performing substantially all of the material acts which constituted her ususal and customary daily activities for 90 of the 180 days following the subject accident (see Leeber v Ward, 55 AD3d 563, 564; Furrs v Griffith, 43 AD3d 389, 390). The plaintiff's own deposition testimony established that she missed, at most, several hours of work as a result of the subject accident.
Fung v. Uddin


Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y.
(Stacy R. Seldin of counsel), for appellants.
Kenneth M. Mollins, Melville, N.Y. (Peter Citrin of counsel), for
respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendants Mohammed Nasir Uddin and Ainos Taxi, Inc., appeal, as limited by their brief, from so much of an order of the Supreme Court, Kings County (Schmidt, J.), dated June 30, 2008, as granted the plaintiff's motion for leave to reargue his opposition to their motion for summary judgment dismissing the complaint insofar as asserted against them on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d), which had been determined in an order dated December 11, 2007, and upon reargument, denied their motion for summary judgment dismissing the complaint insofar as asserted against them.
ORDERED that the order dated June 30, 2008, is modified, on the law, by deleting the provision thereof which, upon reargument, denied the motion of the defendants Mohammed Nasir Uddin and Ainos Taxi, Inc., for summary judgment dismissing the complaint insofar as asserted against them, and substituting therefor a provision, upon reargument, adhering to the original determination in the order dated December 11, 2007, granting their motion for summary judgment dismissing the complaint insofar as asserted against them; as so modified, the order is affirmed insofar as appealed from, with costs to the appellants.
Contrary to the contention of the defendants Mohammed Nasir Uddin and Ainos Taxi, Inc. (hereinafter the appellants), the Supreme Court providently exercised its discretion in granting reargument (see Luna v Mann, 58 AD3d 699; E.W. Howell Co. Inc. v S.A.F. LaSala Corp., 36 AD3d 653, 654; Pimentel v Mesa, 28 AD3d 629). However, upon granting reargument, the Supreme Court erred in failing to adhere to its original determination granting the appellants' motion for summary judgment dismissing the complaint insofar as asserted against them.
The appellants 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). In opposition to the appellants' showing in this regard, the plaintiff failed to raise a triable issue of fact as to whether he sustained a serious injury to his cervical or lumbar spine under the categories of Insurance Law § 5102(d) requiring a plaintiff to establish a "permanent consequential limitation of use of a body organ or member" or a "significant limitation of use of a body function or system." The plaintiff offered no competent medical evidence to demonstrate the existence of a significant range-of-motion limitation in his cervical or lumbar spine contemporaneous with the subject accident (see Garcia v Lopez, 59 AD3d 593; Luizzi-Schwenk v Singh, 58 AD3d 811; Leeber v Ward, 55 AD3d 563). The plaintiff's medical records from St. Vincent's Hospital and Apple Chiropractic, P.C., were not competent proof of a contemporaneous injury because they were neither affirmed nor sworn (see Pompey v Carney, 59 AD3d 416; Sapienza v Ruggiero, 57 AD3d 643; Choi Ping Wong v Innocent, 54 AD3d 384, 385). Furthermore, the affirmation of the plaintiff's former treating physician, Jeffrey Schwartz, was without probative value because he was no longer licensed to practice medicine at the time the affirmation was written (see CPLR 2106; Worthy v Good Samaritan Hosp. Med. Ctr., 50 AD3d 1023, 1024; McDermott v New York Hosp.-Cornell Med. Ctr., 42 AD3d 346).
The plaintiff also failed to submit competent medical evidence that the injuries he allegedly sustained in the subject accident rendered him unable to perform substantially all of his usual and customary daily activities for not less than 90 days of the first 180 days subsequent to the accident (see Garcia v Lopez, 59 AD3d 593; Roman v Fast Lane Car Serv., Inc., 46 AD3d 535, 536; Sainte-Aime v Ho, 274 AD2d 569).
Cantave v. Gelle


Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y.
(Colin F. Morrissey of counsel), for appellants.
Harmon, Linder & Rogowsky, New York, N.Y. (Mitchell
Dranow of counsel), for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendants Mustaffa Abu-Baker and Milan Cab Corp. appeal, as limited by their brief, from so much of an order of the Supreme Court, Kings County (Dorsa, J.), dated June 11, 2008, as denied their motion for summary judgment dismissing the complaint insofar as asserted against them on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and the motion of the defendants Mustaffa Abu-Baker and Milan Cab Corp. for summary judgment dismissing the complaint insofar as asserted against them is granted.
The moving defendants submitted an affirmation of their examining physician stating that, based upon his examination of the plaintiff, it was his opinion that the plaintiff did not have any permanent injury, limitation, or restriction. The physician tested the ranges of motion of the plaintiff's cervical and lumbar spines, as well as his shoulders, and found that they were normal. In addition, the physician set forth the details of his measurements as well as the norms that he measured them against. This was sufficient to establish, prima facie, the moving defendants' entitlement to judgment as a matter of law (see Gaddy v Eyler, 79 NY2d 955; Luckey v Bauch, 17 AD3d 411; Sims v Megaris, 15 AD3d 468; Check v Gacevk, 14 AD3d 586).
In opposition, the plaintiff failed to raise a triable issue of fact. Although the plaintiff had seriously injured his back in a motor vehicle accident just two years prior to the instant accident, and he was out of work for two months following that prior accident, neither of the plaintiff's physicians indicated that they reviewed the medical records arising from that prior accident. Accordingly, their conclusions that the plaintiff's injuries and limitations were caused solely by the subject accident were highly speculative (see Moore v Sarwar, 29 AD3d 752; Tudisco v James, 28 AD3d 536; Bennett v Genas, 27 AD3d 601; Allyn v Hanley, 2 AD3d 470). In addition, the plaintiff testified at his deposition that he went back to work as a Field Technician for Verizon on the next business day after the accident, which had occurred on a weekend, and that he was not homebound or bedridden as a result of the accident, which demonstrated that his injuries did not prevent him from performing substantially all of the material acts constituting his usual and customary daily activities during at least 90 out of the first 180 days following the accident (see Geliga v Karibian, Inc., 56 AD3d 518; Sanchez v Williamsburg Volunteer of Hatzollah, Inc., 48 AD3d 664). The plaintiff's current complaints, as set forth in his affidavit, while suggestive of discomfort, do not suggest the inability to perform substantially all of his usual and customary daily activities (see Ingram v Doe, 296 AD2d 530; Berk v Lopez, 278 AD2d 156; Barbarulo v Allery, 271 AD2d 897; Taber v Skulicz, 265 AD2d 902).
Accordingly, the moving defendants' motion for summary judgment dismissing the complaint insofar as asserted against them should have been granted.
Tuberman v. Hall


Taubman Kimelman & Soroka, LLP, New York (Antonette M.
Milcetic of counsel), for appellant.
Armienti, DeBellis, Guglielmo & Rhoden, LLP, New York
(Vanessa Corchia of counsel), for Andrea A. and Trevor A.
Hall, respondents.
Fiedelman & McGaw, Jericho (James K. O'Sullivan of
counsel), for Gregory Blackwell, respondent.
Order, Supreme Court, Bronx County (Betty Owen Stinson, J.), entered December 10, 2007, which, to the extent appealed from, dismissed plaintiff-appellant Steven Tuberman's complaint, alleging "serious injury" under Insurance Law § 5102(d), unanimously affirmed, without costs.
The motion court properly dismissed plaintiff's complaint as against the Hall defendants. The Hall defendants satisfied their prima facie burden of establishing that plaintiff did not sustain a statutorily-defined serious injury under Insurance Law
§ 5102(d) (see Shinn v Catanzaro, 1 AD3d 195, 197 [2003]). The reports of the Hall defendants' expert orthopedist, Dr. Freeman, and expert neurologist, Dr. Schwartz, which showed that plaintiff had only minor limitations in the range of motion of his right knee, lumbar spine, and shoulders, established that plaintiff's injuries did not amount to a "significant" or "permanent" limitation of use of those body parts as a matter of law (see Licari v Elliott, 57 NY2d 230, 236 [1982]; see e.g. Santos v Taveras, 55 AD3d 405, 405 [2008]). Moreover, the reports of the Hall defendants' expert radiologist, Dr. Tantleff, stated that any abnormalities revealed by the MRIs of plaintiff's cervical spine, lumbar spine, and right knee were degenerative in nature and not caused by the subject accident.
In opposition to the motion, plaintiff failed to proffer quantitative or qualitative evidence in admissible form raising an issue of fact that he did sustain a "serious" injury (see Toure v Avis Rent A Car Sys., Inc., 98 NY2d 345, 350 [2002]). We have considered plaintiff's remaining contentions and find them unavailing.
New York Central Mut. Fire Ins. Co v. Bradfield

Calendar Date: February 10, 2009
Before: Peters, J.P., Rose, Lahtinen, Kane and Stein, JJ.

Eisenberg & Kirsch, Liberty (Jeffrey L. Kirsch of
counsel), for appellant.
Foulke Law Offices, Goshen (Evan M. Foulke of
counsel), for respondent.
MEMORANDUM AND ORDER

Stein, J.
Appeal from an order of the Supreme Court (Connolly, J.), entered June 30, 2008 in Ulster County, which denied petitioner's application pursuant to CPLR 7503 to stay arbitration between the parties.
In January 2006, respondent sustained injuries when the automobile in which she was a passenger was involved in a one-car accident. Respondent was covered under an insurance policy issued by petitioner to respondent's parents that included applicable supplemental uninsured/underinsured motorist (hereinafter SUM) coverage. Respondent settled her claim against the tortfeasor with petitioner's consent. At petitioner's request, respondent submitted to an independent medical examination in January 2007. However, respondent refused to appear for a second examination in both November 2007 and April 2008, claiming that petitioner was not entitled to multiple examinations. Respondent subsequently served a demand for arbitration, prompting petitioner to commence this proceeding seeking a stay of arbitration on the basis that respondent had violated a condition precedent to coverage. Supreme Court denied the application and this appeal ensued.
To obtain a permanent stay of arbitration, petitioner bore the heavy burden of showing "that it acted diligently in seeking to bring about [respondent's] co-operation; that the efforts employed by [petitioner] were reasonably calculated to obtain [respondent's] co-operation; and that the attitude of [respondent], after [her] co-operation was sought, was one of 'willful and avowed obstruction'" (Thrasher v United States Liab. Ins. Co., 19 NY2d 159, 168-169 [1967], quoting Coleman v New Amsterdam Cas. Co., 247 NY 271, 276 [1928] [citations omitted]; see Matter of St. Paul Travelers Ins. Co. [Kreibich D'Angelo], 48 AD3d 1009, 1010 [2008]). Because we agree with Supreme Court's determination that petitioner failed to meet this burden, we affirm.
The SUM endorsement at issue here required respondent to "submit to physical examinations by physicians we select when and as often as we may reasonably require." When petitioner scheduled respondent's first medical examination in January 2007, respondent's attorney, Evan M. Foulke, advised petitioner's attorney that respondent's treatment was ongoing and suggested that the examination await the completion of treatment. Foulke further indicated that, if petitioner insisted upon an examination at that time, respondent would not participate in a second examination. According to Foulke, this refusal was, at all times, based on the incorrect belief that petitioner was not entitled to more than one examination.
Petitioner attempted to schedule a second examination in November 2007 and Foulke again refused consistent with his earlier position. Having heard nothing further, Foulke served a demand for arbitration by letter dated April 2, 2008. By letter faxed to Foulke on April 8, 2008, petitioner attempted to schedule another examination the following day at 9:00 A.M. Foulke replied by fax later that same day, objecting to the examination on the grounds that petitioner was not entitled to it and that notice of the examination (less than 24 hours) was unreasonable. Although petitioner attempted to fax another letter to Foulke offering to reschedule the examination to April 21, 2007, Foulke did not receive that letter due to an error in its transmission. Petitioner then moved by order to show cause for a stay of arbitration. Upon receipt of the order to show cause and supporting papers [FN1] on April 15, 2008, Foulke contacted petitioner's attorney and advised him that now being aware that the policy entitled petitioner to a second examination respondent was willing to submit to the examination, which had been rescheduled to April 21, 2008. However, petitioner's attorney declined the offer.
In our view, even assuming that petitioner acted diligently and employed reasonable efforts to secure respondent's cooperation, Supreme Court properly determined that petitioner failed to demonstrate that respondent's lack of cooperation rose to the level of willful and avowed obstruction (see Baust v Travelers Indem. Co., 13 AD3d 788, 790 [2004]; Ingarra v General Acc./PG Ins. Co. of N.Y., 273 AD2d 766, 767 [2000]). Although respondent's earlier refusals to submit to a second examination were unequivocal, there is no evidence that either she or her attorney was in possession of the policy and, therefore, aware of the provision permitting multiple examinations [FN2] . Furthermore, respondent did submit to one physical examination, answered questions under oath for three hours and provided petitioner with copies of medical records, as well as numerous authorizations for healthcare providers, employers and insurance companies. Once she was aware of her obligation to submit to a second physical examination, she immediately indicated her willingness to do so. Overall, there is ample evidence that respondent's attitude was one of cooperation and that her conduct was not an unreasonable attempt to obstruct discovery (see Baust v Travelers Indem. Co., 13 AD3d at 790). Therefore, Supreme Court properly denied petitioner's application to stay arbitration.
Peters, J.P., Rose, Lahtinen and Kane, JJ., concur.
ORDERED that the order is affirmed, with costs.
Footnotes

Footnote 1: Attached to the order to show cause were a copy of the policy which respondent's attorney asserts was provided to him for the first time and a copy of the April 8, 2008 letter attempting to reschedule respondent's examination to April 21, 2008.

Footnote 2: In our view, Foulke's assumption that petitioner was not entitled to such examinations and his failure to request a copy of the policy were no more unreasonable than petitioner's failure to offer a copy of the policy in the face of Foulke's obvious misunderstanding.

Nick's Brick Oven Pizza, Inc. v. Excelsior Insurance Company


Goldberg Segalla LLP, Buffalo, N.Y. (Kimberly E. Whistler and
Joanna M. Roberto of counsel), for appellants.
Peter C. Alexanderson, Brewster, N.Y., for plaintiff-respondent.
Spiegel, Brown, Fichera & CotÉ, LLP, Poughkeepsie, N.Y.
(Donald D. Brown, Jr., and Timothy
W. Kramer of counsel), for
intervenor-respondent.

DECISION & ORDER
In an action for a judgment declaring that the defendants are obligated to defend and indemnify Nick's Brick Oven Pizza, Inc., in an underlying action entitled Mendola v Schmidt, commenced in the Supreme Court, Dutchess County, under Index No. 2004/330, the defendants appeal, as limited by their brief, from so much of an order of the Supreme Court, Dutchess County (Sproat, J.), dated March 20, 2008, as, upon renewal and reargument, adhered to its determinations in an order dated May 31, 2007, denying their motion for summary judgment declaring that they are not obligated to defend Nick's Brick Oven Pizza, Inc., in the underlying action and granting those branches of the separate cross motions of the plaintiff and the intervenor, Giuliana Mendola, which were for summary judgment declaring that they are so obligated, and granted those branches of the separate cross motions of the plaintiff and the intervenor, Giuliana Mendola, which were for summary judgment declaring that they are obligated to indemnify Nick's Brick Oven Pizza, Inc., in the underlying action.
ORDERED that the order dated March 20, 2008, is affirmed insofar as appealed from, with one bill of costs, and the matter is remitted to the Supreme Court, Dutchess County, for the entry of a judgment declaring that the defendants are obligated to defend and indemnify the plaintiff, Nick's Brick Oven Pizzza, Inc., in the underlying action. .
Giuliana Mendola allegedly sustained personal injuries when her vehicle was struck in the rear by a vehicle operated by Travis Schmidt. Mendola commenced an action (hereinafter the underlying action) against Schmidt and Nick's Brick Oven Pizza, Inc. (hereinafter Nick's Pizza), alleging that Schmidt negligently caused the collision in the course of delivering pizza on behalf of Nick's Pizza, and that Nick's Pizza was vicariously liable for Schmidt's negligence. Nick's Pizza timely notified its general liability insurance carriers (hereinafter the defendants) of the underlying action, but the defendants disclaimed coverage based on a policy clause that excluded coverage for bodily injury arising out of the use of any automobile owned or operated by an "insured." Nick's Pizza commenced this action for a judgment declaring that the defendants are obligated to defend and indemnify it in the underlying action. Mendola was granted leave to intervene in the instant action.
Under the relevant policy, "employees" of Nick's Pizza are "insureds," who consequently fall within the policy exclusion, while "temporary workers," who are not included under the definition of "employees" and, hence, not "insureds," are an exception to the exclusion. Thus, the tortious conduct of "temporary workers" is covered by the policy. A "temporary worker" is defined under the policy as "a person who is furnished to [Nick's Pizza] to substitute for a permanent employee' on leave or to meet seasonal or short-term workload conditions."
The Supreme Court properly determined that Nick's Pizza made a prima facie showing that Schmidt was a temporary worker as defined in the policy since he was hired to meet seasonal or short-term workload conditions during the busy summer months prior to his return to college or enlistment in the military in September. Thus, Nick's Pizza made a prima facie showing of entitlement to judgment as a matter of law. In response, the defendants failed to raise a triable issue of fact to rebut this showing (see Alvarez v Prospect Hosp., 68 NY2d 320).
The Supreme Court also correctly determined that the term "furnished," as set forth in the policy's definition of "temporary worker," was ambiguous, inasmuch as it was an open question as to whether Schmidt fell within the exclusion for "employees" or the exception to that exclusion for "temporary workers." Whether a provision in an insurance policy is ambiguous is a question of law for the court to determine (see NIACC, LLC v Greenwich Ins. Co., 51 AD3d 883). "The test for ambiguity is whether the language in the insurance contract is susceptible to two reasonable interpretations'" (id. at 884, quoting MDW Enters. v CNA Ins. Co., 4 AD3d 338, 340-341). "An exclusion from coverage must be specific and clear in order to be enforced,' and an ambiguity in an exclusionary clause must be construed most strongly against the insurer" (Catucci v Greenwich Ins. Co., 37 AD3d 513, 514 [internal citations omitted]; see Cali v Merrimack Mut. Fire Ins. Co., 43 AD3d 415, 417 [internal citations omitted]).
Here, the requirement that a temporary worker be "furnished" to the insured is susceptible to two reasonable interpretations: (1) any third party, including another employee, can refer a person to the insured to qualify that person as a temporary worker; or (2) only a recruitment and placement consultant, employment referral agency, or similar service can refer a person to the insured to qualify that person as a temporary worker. Hence, the term "furnished," as used in the policy, is ambiguous since the policy does not clearly define whether any third party, including another employee, can furnish a person to the insured in order for that person to qualify as a temporary worker or whether the third-party must be a recruitment and placement consultant, employment referral agency, or similar service in order for the referred individual to qualify as a temporary worker. The policy also does not clearly define whether an individual who is hired to meet seasonal or short-term workload conditions must also be "furnished" to the insured in order to qualify as a temporary worker, or whether only individuals hired to substitute for an employee on leave must be so "furnished." Here, Schmidt was hired pursuant to a referral from another employee of Nick's Pizza. The ambiguities in the policy must be construed in favor of Nick's Pizza (see Lee v State Farm Fire & Cas. Co., 32 AD3d 902).
Accordingly, since the defendants failed to satisfy their burden of establishing that the policy exclusion applies to Schmidt, the policy must be construed as to afford coverage, thereby requiring the defendants to both defend and indemnify Nick's Pizza in the underlying personal injury action.
Since this is a declaratory judgment action, the matter must be remitted to the Supreme Court, Dutchess County, for the entry of a judgment declaring that the defendants are obligated to defend and indemnify Nick's Brick Oven Pizza, Inc., in the underlying action (see Lanza v Wagner, 11 NY2d 317, 334, appeal dismissed 371 US 74, cert denied 371 US 901).
Cardona v. Martinez and MVAIC


Kornfeld, Rew, Newman & Simeone, Suffern (William S.
Badura of counsel), for appellant.
William Pager, Brooklyn, for Ricardo Cardona, respondent.
Picciano & Scahill, P.C., Westbury (Thomas R. Craven, Jr. of
counsel), for Olga M. Martinez, respondent.
Order, Supreme Court, New York County (Deborah A. Kaplan, J.), entered December 17, 2007, which, in an action for personal injuries sustained when plaintiff pedestrian was struck by a motor vehicle that left the scene, denied the motion of defendant Motor Vehicle Accident Indemnification Corporation (MVAIC) to dismiss the complaint as against it, unanimously affirmed, without costs.
Despite the procedural irregularities cited by MVAIC, the court properly found that plaintiff was a "qualified person" under the Insurance Law. Insurance Law § 5218(b) provides that the court may permit an action against MVAIC upon satisfaction of certain enumerated conditions. Here, those conditions have effectively been demonstrated and there was no need for a hearing (see e.g. Milstein v Clark, 32 AD2d 935 [1969]). Plaintiff established that he cannot ascertain the identity of the owner or operator of the offending vehicle. MVAIC's argument that there has been no judicial determination that defendant Martinez was not involved in the accident does not warrant a different finding (see Steele v Motor Veh. Acc. Indem. Corp., 39 AD3d 78, 83 [2007], appeal dismissed 9 NY3d 989 [2007]).
Ferreira v. Mereda Realty Corp.


L'Abbate, Balkan, Colavita & Contini, L.L.P., Garden City
(Monte E. Sokol of counsel), for appellants.
Quirk and Bakalor, P.C., New York (Richard H. Bakalor of
counsel), for respondent.
Order, Supreme Court, Bronx County (Howard H. Sherman, J.), entered June 9, 2008, which denied appellants' motion for summary judgment declaring that respondent had an obligation to defend and indemnify them in the personal injury action and granted respondent's cross motion for summary judgment dismissing the third-party complaint and directed entry of judgment, unanimously affirmed, without costs.
Appellant insureds were required by the policy to notify the insurer "as soon as practicable of an occurrence' or offense which may result in a claim." Here, where they did not give notice for more than two months after first learning of the infant plaintiff's accident, it was their burden (see Great Canal Realty Corp. v Seneca Ins. Co., 5 NY3d 742, 743-44 [2005]) to establish that a reasonably prudent person, upon learning of the accident, would have a good faith, objective basis for believing that litigation would not be commenced (see Kambousi Rest. v Burlington Ins. Co., 58 AD3d 513 [2009]; Paramount Ins. Co. v Rosedale Gardens, 293 AD2d 235, 239 [2002]). It is not disputed that, on meeting with plaintiff mother no later than April 11, 2005, the insureds' property manager had seen burn scars on the infant plaintiff and been told that the infant had been in the hospital. At that point, the insureds could not have reasonably believed that there would be no litigation arising out of the accident (see e.g. Tower Ins. Co. of New York v Dyker Contr., 47 AD3d 522 [2008]; Rondale Bldg. Corp. v Nationwide Prop. and Cas. Ins. Co., 1 AD3d 584, 585-86 [2003]), and therefore have not shown any extenuating circumstances to justify their having delayed reporting the occurrence until late June 2005 (see Paramount Ins. Co., 293 AD2d at 242). We reject appellants' alternate argument that the policy was ambiguous, since appellants fail to show how the term "claim," as used in this policy, could be parsed in two different, equally  logical ways (see Schechter Assoc. v Major League Baseball Players Assn., 256 AD2d 97 [1998]; cf. Matter of Ancillary Receivership of Reliance Ins. Co., 55 AD3d 43 [2008], affd __ NY3d __ , 2009 NY Slip Op 1019).
Falkner v. Hand


Calendar Date: February 10, 2009
Before: Peters, J.P., Rose, Lahtinen, Kane and Stein, JJ.

John P. Kingsley, P.C., Catskill (John P. Kingsley of
counsel), for appellants-respondents in action No. 1 and
appellants in action No. 2.
Thuillez, Ford, Gold, Butler & Young, L.L.P., Albany
(William C. Firth of counsel), for respondent-appellant.
Flink & Smith, L.L.C., Latham (Jay A. Smith of
counsel), for April Tiano, respondent.
Burke, Scolamiero, Mortati & Hurd, L.L.P., Albany
(Jeffrey E. Hurd of counsel), for Rachel E. Falkner, respondent.
MEMORANDUM AND ORDER

Rose, J.
Cross appeals from an order of the Supreme Court (Lalor, J.), entered April 9, 2008 in Greene County, which granted motions by defendants Rachel E. Falkner and April Tiano for summary judgment dismissing the complaint against them and partially granted defendant Donald G. Hand's motion for summary judgment dismissing the complaint against him.
Plaintiff Betty Falkner (hereinafter plaintiff) and her husband, derivatively, commenced two separate actions to recover for the serious injuries she allegedly sustained in three motor vehicle accidents over a two-year period. The other drivers of the motor vehicles involved in the accidents defendants April Tiano (first accident), Donald G. Hand (second accident) and Rachel E. Falkner (third accident) separately moved for summary judgment on the grounds that plaintiff did not sustain a qualifying serious injury (see Insurance Law § 5102 [d]; § 5104 [a]). In response, plaintiff asserted that, as a result of each of these accidents, she suffered injuries to her spine which qualified as serious injuries in the significant limitation of use and 90/180-day categories. Supreme Court granted Tiano's and Falkner's motions in full, but only partially granted Hand's motion, finding a question of fact as to the 90/180-day category. Plaintiffs and Hand now appeal.
Defendants met their initial burden of establishing entitlement to judgment as a matter of law by presenting evidence that the condition of plaintiff's spine was the result of a preexisting degenerative disease rather than the motor vehicle accidents. Plaintiff's medical records and her own deposition testimony establish that she had a history of significant neck and lower back problems before the accidents. Also, after conducting an independent medical examination of plaintiff and reviewing her medical records, a neurologist concluded that she had degenerative changes in her cervical and lumbar spine that created "a long history of axial musculoskeletal pain that clearly predates the accidents." He opined that her current complaints are not attributable to any of the accidents.
"[W]ith [this] persuasive evidence that plaintiff's alleged pain and injuries were related to a preexisting condition, plaintiff[s] had the burden to come forward with evidence addressing defendant[s'] claimed lack of causation" (Pommells v Perez, 4 NY3d 566, 580 [2005]). They were required to offer objective medical evidence distinguishing plaintiff's preexisting condition from the injuries claimed to have been caused by each accident (see Wolff v Schweitzer, 56 AD3d 859, 862 [2008]; Coston v McGray, 49 AD3d 934, 935 [2008]; Dabiere v Yager, 297 AD2d 831, 832 [2002], lv denied 99 NY2d 503 [2002]).
Due to the failure of plaintiffs' experts to fully consider and distinguish plaintiff's condition prior to each accident from her condition after that accident, as well as plaintiffs' failure to submit objective medical evidence of an exacerbation caused by any of the accidents, Supreme Court properly granted summary judgment to Tiano and Falkner (see Pommells v Perez, 4 NY3d at 574-575, 580; Wolff v Schweitzer, 56 AD3d at 862; McNamara v Wood, 19 AD3d 921, 922-923 [2005]; Franchini v Palmieri, 307 AD2d 1056, 1057-1058 [2003], affd 1 NY3d 536 [2003]). Since this deficiency of evidence as to causation also precludes recovery under the 90/180-day category for injuries allegedly sustained in the second accident (see Daisernia v Thomas, 12 AD3d 998, 999 [2004]; Dabiere v Yager, 297 AD2d at 832-833; Monk v Dupuis, 287 AD2d 187, 191 [2001]; Blanchard v Wilcox, 283 AD2d 821, 824 [2001]), Hand's motion should have been granted in its entirety.
The Scotts Company, LLC v.  Pacific Employers Insurance Company


Siegal & Park, Mt. Laurel, NJ (Brian G. Fox of counsel), for
appellant.
Dorsey & Whitney, LLP, New York (Patrick J. Feeley of
counsel), for Employers Insurance of Wausau, respondent.
Kantor, Davidoff, Wolfe, Mandelker, Twomey & Gallanty,
P.C., New York (Michael E. Twomey of counsel), for Liberty
Mutual Insurance Company, respondent.
Howrey LLP, Los Angeles, CA (Keith A. Meyer of the
California Bar, admitted pro hac vice, of counsel), for The Scotts
Company, LLC, respondent.
Order, Supreme Court, New York County (Bernard J. Fried, J.), entered February 27, 2008, which, to the extent appealed from as limited by the briefs, denied third-party plaintiff's motion to amend its third-party complaint to seek relief enjoining its co-insurers from seeking contribution in this matter as to any claims in any proceeding in any jurisdiction, unanimously affirmed, with costs.
The court properly denied appellant's motion to amend the third-party complaint since the proposed amendment did not state a viable claim for relief. The amendment sought to enjoin appellant's co-insurers from proceeding against appellant for contribution based upon appellant's settlement agreement with the insured and upon General Obligations Law § 15-108. The court correctly found that the settlement agreement's express contemplation of contribution claims by the co-insurers was a waiver of § 15-108's protections (see Mitchell v New York Hosp., 61 NY2d 208, 213 [1984]). Moreover, § 15-108 applies only to joint tortfeasors, not to co-insurers (HRH Constr. Corp. v Commerical Underwriters Ins. Co., 11 AD3d 321, 323 [2004]).
Liberty Insurance Underwriters, Inc. v. Arch Insurance Company


Jaffe & Asher LLP, New York (Marshall T. Potashner of
counsel), for appellant.
Gallo Vitucci Klar LLP, New York (Yolanda L. Ayala of
counsel), for respondents.
Order and judgment (one paper), Supreme Court, New York County (Walter B. Tolub, J.), entered December 30, 2008, which, in a declaratory judgment action between insurers involving their respective obligations to defend and indemnify in an underlying action for personal injuries, upon the parties' respective motions for summary judgment, declared that plaintiff is obligated to defend and indemnify in the underlying action and is also obligated to reimburse defendants for the costs they incurred in defending the underlying action, unanimously modified, on the law, to declare that plaintiff is obligated to reimburse defendants for the costs defendants incurred in defending the underlying action after tendering the defense of the underlying action to plaintiff, and otherwise affirmed, without costs.
"The doctrine of estoppel precludes an insurance company from denying or disclaiming coverage where the proper defending party relied to its detriment on that coverage and was prejudiced by the delay of the insurance company in denying or disclaiming coverage based on the loss of the right to control its own defense" (Merchants Mut. Ins. Group v Travelers Ins. Co., 24 AD3d 1179, 1182 [2005] [internal quotation marks and brackets omitted]). We reject plaintiff's argument that this doctrine should be limited to coverage disputes between insurers and insureds, and not applied to coverage allocation disputes between insurers (see e.g. Fireman's Fund Ins. Co. v Zurich Am. Ins. Co., 37 AD3d 521 [2d Dept 2007]; Donato v City of New York, 156 AD2d 505, 507-508 [2d Dept 1989]). Lumbermens Mut. Ins. Co. v Lumber Mut. Ins. Co. (148 AD2d 328 [1st Dept 1989]), cited by plaintiff, is not to the contrary. Lumbermens merely held that failure by an insurer to reserve its rights under the circumstances of that case did not constitute an intentional relinquishment, or waiver, of the right to seek contribution from another insurer (id. at 330). It did not address the issue of whether an insurer may be estopped, by its unqualified assumption of the defense of an action, from seeking contribution from another insurer. No issues of fact exist as to whether defendants, in tendering the defense to plaintiff, lacked knowledge that plaintiff would ultimately claim to be only an excess insurer, or whether defendants lost control of the underlying defense and were otherwise prejudiced by plaintiff's assumption thereof for two years without reserving a right to disclaim coverage (see Federated Dept. Stores v Twin City Fire Ins. Co., 28 AD3d 32, 39 [2006]). Defendants, however, are not entitled to reimbursement of defense costs incurred before tendering the defense to plaintiff (see Bovis Lend Lease LMB, Inc. v Royal Surplus Lines Ins. Co., 27 AD2d 84, 94 [2005]), and we modify the declaration accordingly. We have considered plaintiffs' other arguments and find them unavailing.
Niles v. Lam Pakie Ho


Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y.
(Timothy M. Sullivan of counsel), for appellant.
Harmon, Linder & Rogowsky, New York, N.Y. (Mitchell
Dranow of counsel), for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendant Jacob Express Cab appeals from an order of the Supreme Court, Kings County (Schack, J.), dated June 6, 2008, which denied its motion for summary judgment dismissing the complaint insofar as asserted against it on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed, on the law, with costs, and the motion of the defendant Jacob Express Cab for summary judgment dismissing the complaint insofar as asserted against it is granted.
The appellant met its prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a consequence of the subject motor vehicle accident (see Toure v Avis Rent A Car Sys., 98 NY22d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In opposition, the plaintiff failed to raise a triable issue of fact as to whether she sustained a serious injury to her left knee, cervical spine, or lumbar spine, under the "permanent consequential limitation of use" and/or the "significant limitation of use" categories of Insurance Law § 5102(d). The reports and records submitted by the plaintiff from AR Medical and Apex Chiropractic were without any probative value since they were unsworn or unaffirmed (see Grasso v Angerami, 79 NY2d 813; Luna v Mann, 58 AD3d 699; Uribe-Zapata v Capallan, 54 AD3d 936; Patterson v N.Y. Alarm Response Corp., 45 AD3d 656; Verette v Zia, 44 AD3d 747; Nociforo v Penna, 42 AD3d 514; Pagano v Kingsbury, 182 AD2d 268).
The affirmed medical report of Dr. Harshad Bhatt did not raise a triable issue of fact as to whether the plaintiff sustained a serious injury to her left knee as a result of the subject accident. Dr. Bhatt examined the plaintiff on September 1, 2006, 1½ years after the subject accident. The plaintiff failed to proffer any admissible objective medical evidence revealing the existence of significant range-of-motion limitations in her left knee that were contemporaneous with the subject accident (see Washington v Mendoza, 57 AD3d 972; Leeber v Ward, 55 AD3d 563; Ferraro v Ridge Car Serv., 49 AD3d 498; D'Onofrio v Floton, Inc., 45 AD3d 525). Moreover, the plaintiff failed to proffer any objective medical evidence that showed that her left knee was the subject of a recent examination (see Diaz v Lopresti, 57 AD3d 832; Landicho v Rincon, 53 AD3d 568, 569; Cornelius v Cintas Corp., 50 AD3d 1085; YoungHwanPark v Orellana, 49 AD3d 721; Amato v Fast Repair Inc., 42 AD3d 477). While the magnetic resonance imaging (hereinafter MRI) report referable to the plaintiff's left knee dated May 16, 2005, revealed, inter alia, a tear of the medial and lateral menisci, the mere existence of a tear in a tendon is not evidence of a serious injury in the absence of objective evidence of the extent of the alleged physical limitations resulting from the injury and its duration (see Washington v Mendoza, 57 AD3d 972; Cornelius v Cintas Corp., 50 AD3d at 1087; Shvartsman v Vildman, 47 AD3d 700; Tobias v Chupenko, 41 AD3d 583).
Likewise, the submissions of Dr. Aric Hausknecht were insufficient to raise a triable issue of fact. These submissions noted, among other things, range-of-motion findings with respect to the plaintiff's cervical and lumbar spine as of February 19, 2008. While Dr. Hausknecht noted the existence of recent significant limitations in the plaintiff's lumbar and cervical ranges of motion, neither he nor the plaintiff proffered admissible objective medical evidence revealing the existence of significant limitations in the plaintiff's cervical and lumbar spine that were contemporaneous with the subject accident (see Washington v Mendoza, 57 AD3d 972; Leeber v Ward, 55 AD3d 563; Ferraro v Ridge Car Serv., 49 AD3d 498; D'Onofrio v Floton, Inc., 45 AD3d 525).
The MRI reports of the plaintiff's cervical and lumbar spine merely revealed evidence that as of May 16, 2005, the plaintiff had disc herniations at C4-5 and C5-6, as well as disc bulges at C3-4 and L4-5. The mere existence of a herniated or bulging disc is not evidence of a serious injury in the absence of objective evidence of the extent of the alleged physical limitations resulting from the disc injury and its duration (see Luna v Mann, 58 AD3d 699; Sealy v Riteway-1, Inc., 54 AD3d 1018; Kilakos v Mascera, 53 AD3d 527; Cerisier v Thibiu, 29 AD3d 507; Bravo v Rehman, 28 AD3d 694; Kearse v New York City Tr. Auth., 16 AD3d 45, 49). The affidavit of the plaintiff was insufficient to meet this requirement (see Luna v Mann, 58 AD3d 699).
Pamphile v. Bastien


Baker, McEvoy, Morrissey & Moskovits, P.C. (Feinman &
Grossbard, P.C., White Plains, N.Y. [Steven N. Feinman], of counsel), for
appellant.
Harmon, Linder, & Rogowsky (Mitchell Dranow, Mineola,
N.Y., of counsel), for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendant appeals, as limited by his brief, from so much of an order of the Supreme Court, Kings County (Solomon, J.), dated July 17, 2008, as denied his cross motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and the defendant's cross motion for summary judgment dismissing the complaint is granted.
The defendant made a prima facie showing of his entitlement to judgment as a matter of law dismissing the complaint through the submission of the plaintiff's deposition testimony and the affirmed medical reports of his examining neurologist, orthopedist, and radiologist, which established 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; Johnson v Berger, 56 AD3d 725). In opposition, the plaintiff failed to raise a triable issue of fact. Although the plaintiff's two examining physicians asserted that they had found limitations in the ranges of motion of the plaintiff's lumbar spine and left knee upon their examinations over 2½ years after the accident, neither doctor reconciled these findings with those of the plaintiff's treating physician who reported finding a full range of motion in the left knee 2½ weeks after the accident, and did not note any limitations in the lumbar spine or left knee upon a follow-up examination 9 months after the accident (see Carrillo v DiPaola, 56 AD3d 712; Felix v Wildred, 54 AD3d 891; Magarin v Kropf, 24 AD3d 733). Moreover, none of the plaintiff's physicians addressed the finding of the defendant's radiologist that the magnetic resonance imaging studies of the plaintiff's lumbar spine and left knee revealed only degenerative conditions which were not causally related to the accident (see Levine v Deposits Only, Inc., 58 AD3d 697; Johnson v Berger, 56 AD3d 725; Ciordia v Luchian, 54 AD3d 708). Finally, there was no competent medical evidence to establish that the plaintiff had sustained a medically-determined injury of a nonpermanent nature which prevented him from his usual and customary activities for 90 days of the 180 days following the subject accident (see Sainte-Aime v Ho, 274 AD2d 569; Arshad v Gomer, 268 AD2d 450; DiNunzio v County of Suffolk, 256 AD2d 498, 499).
Kante v. Diarrassouba


Grover & Fensterstock, P.C., New York (Simon B. Landsberg
of counsel), for appellant-respondent.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York
(Stacy R. Seldin of counsel), for respondents-appellants.
Order, Supreme Court, New York County (Deborah A. Kaplan, J.), entered September 14, 2007, which denied defendants' motion for summary judgment dismissing the complaint on the ground that plaintiff did not sustain a "serious injury" within the meaning of Insurance Law § 5102(d) and denied plaintiff's cross motion for partial summary judgment on the issues of liability and "serious injury" and to strike defendants' affirmative defenses, unanimously modified, on the law, defendants' motion granted, and otherwise affirmed, without costs. The Clerk is directed to enter judgment dismissing the complaint.
Defendants established prima facie that plaintiff did not sustain a serious injury by submitting their experts' affirmations reporting normal ranges of motion in all tested areas, specifying the objective tests they performed to arrive at the measurements, and concluding that plaintiff's alleged injuries had resolved (see e.g. Ayala v Douglas, 57 AD3d 266 [2008]). Plaintiff's submissions in opposition to defendants' motion and in support of his cross motion for summary judgment were insufficient to raise an inference that he sustained a serious injury. While his experts reported range-of-motion limitations, specifying the objective tests they performed, their examinations were not contemporaneous with the accident and their findings are "too remote to raise an inference that the limitation was caused by the accident" (Santos v Taveras, 55 AD3d 405 [2008]).
Defendants also established prima facie that plaintiff did not sustain a 90/180-day injury by submitting plaintiff's testimony that he returned to work within the first 90 days following his accident (see e.g. Onishi v N & B Taxi, Inc., 51 AD3d 594 [2008]); plaintiff failed to submit competent medical evidence to show that he was prevented from performing his usual activities for not less than 90 of the first 180 days following the accident (see e.g. Szabo v XYZ, Two Way Radio Taxi Assn., 267 AD2d 134, 135-136 [1999]).
In light of this disposition, we do not reach the parties' remaining contentions.
M-1049 - Kante v Diarrassouba, et al.,
Motion seeking leave for costs and expenses and striking the cross appeal denied.

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]). 
Structural Processing Corp. v The Hartford Steam Boiler Inspection and Ins. Co.

Appeal from an order of the District Court of Nassau County, First District (Anthony W. Paradiso, J.), entered March 18, 2008. The order, insofar as appealed from, granted defendant's motion for summary judgment dismissing the complaint and denied plaintiff's cross motion for summary judgment.

Order, insofar as appealed from, modified by vacating the provision granting defendant's motion for summary judgment dismissing the complaint and by providing that defendant's motion is denied; as so modified, affirmed without costs.
Plaintiff brought the present action seeking insurance coverage for losses totaling $49,414.18 that it incurred as a result of the breakdown of a natural-gas-fired co-generator system it owned and operated. Defendant, which had issued an equipment breakdown insurance policy to plaintiff, denied coverage and moved for summary judgment dismissing the complaint, on the ground that the breakdown, which was allegedly caused by a backfire in the generator's combustion system, was not a covered loss under the insurance policy for two reasons: first, because the breakdown did not constitute an "accident" within the policy's coverage; and second, because the policy specifically excluded coverage for loss, damage and expense "caused directly or indirectly" by "combustion explosion." In an affidavit submitted in support of defendant's motion for summary judgment dismissing the complaint, defendant's expert, engineer John Charles Vronay, stated, "A backfire' is the common term used to describe a combustion explosion that occurs outside the combustion chamber." Defendant claimed that the "backfire" that caused plaintiff's loss was thus a "combustion explosion" which fell within the policy's exclusions.
Plaintiff cross-moved for summary judgment. While conceding that the policy terms excluded loss from combustion explosion, plaintiff argued that the policy defendant had issued to it was, by its terms, designed for steam boiler systems, and that literal application of the policy exclusion would render the policy coverage "illusory" for plaintiff's natural-gas-fired co-generator system. In support of this argument, plaintiff referred in part to the deposition testimony of defendant's employee, Zakkiyah Shah, for the proposition that steam boilers operate by using one energy source within a firebox to heat water, and then obtain energy from the expansion of water as it forms steam. Thus, the only potential trigger for the policy exclusion for combustion explosion in a steam boiler would occur if something blew up inside the boiler's firebox. Plaintiff offered unrefuted evidence that, unlike the situation with a steam boiler, its natural-gas-fired co-generator involved herein consisted of a large 12-cylinder internal combustion engine, which employed combustion explosions in its ordinary operation. The affidavit of Howard E. Goodman, the owner and chief engineer of Rudox Engine and Equipment Company, which had built, maintained and repaired plaintiff's co-generator, was offered, in which he stated that "a backfire of the engine is not a regular combustion explosion, but rather a misfire caused by a prior failure within the engine, which may result in a failure of the engine or some of its parts. Many times a backfire occurs and there is no noticeable damage to the engine." It was plaintiff's contention that the prior failure within the engine was the cause of the accident, and that the policy did not exclude coverage for such a failure.
The District Court found that there had been a mechanical breakdown," which constituted a covered accident" under the policy, but concluded that the policy exclusion for loss, damage or expense resulting from a combustion explosion" was so specific and unambiguous as to preclude recovery by plaintiff. Summary judgment was accordingly awarded to defendant dismissing the complaint. Since neither party disputes the District Court's finding that the loss constituted mechanical breakdown" within the meaning of the general coverage of the policy, the only question before this court is whether the District Court erred in concluding that the loss was nevertheless barred under the policy's exclusions. We conclude that a question of fact exists as to the parties' intentions respecting the policy exclusions, which precludes summary judgment.
[T]he proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact" (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]). Where an exclusion to insurance coverage is claimed, the insurer bears the burden of establishing that the exclusion applies and that the exclusionary clause is not subject to any other reasonable interpretation. The burden is a heavy one, and if the language is doubtful or uncertain in its meaning, any ambiguity will be construed in favor of the insured and against the insurer" (Lee v State Farm Fire & Cas. Co., 32 AD3d 902, 903 [2006]; see also Junius Dev., Inc. v New York Mar. & Gen. Ins. Co., 48 AD3d 426, 427 [2008]). Exclusionary provisions are to be strictly and narrowly construed (see e.g. Lee, 32 AD3d at 903; see also 10A Couch on Insurance 3d § 150:14). Exclusions must be construed within the reasonable understanding of business persons (e.g. Belt Painting Corp. v TIG Ins. Co., 100 NY2d 377, 383 [2003]; Pepsico, Inc. v Winterthur Intl. Am. Ins. Co., 13 AD3d 599, 600 [2004], lv dismissed 4 NY3d 882 [2005]). Moreover, exclusions must be construed in favor of the insured if doing otherwise would render the coverage illusory (Thomas J. Lipton, Inc. v Liberty Mut. Ins. Co., 34 NY2d 356, 361 [1974]). 
We conclude that the District Court erred in finding that defendant met its burden on its motion for summary judgment. The Exclusions" portion of the insurance policy upon which defendant relied states:
1.We will not pay for any excluded loss, damage or expense, caused directly or indirectly by any of the following, whether or not caused by or resulting from an accident.'
a.  Fire and Explosion
(1)Fire, including smoke from a fire.
(2)Combustion explosion. This includes, but is not limited to, a combustion explosion of any steam boiler or other fired vessel.
(3)Any other explosion, except as specifically provided in A.1.a.(3)."
Section A (1) (a) (3) of the coverage portion of the policy provides that covered accidents include, "Explosion, other than combustion explosion, of steam boilers, steam piping, steam engines or steam turbines."
The cause of the loss at issue has not been established with certainty. The "Definitions" section of the policy does not define explosion," combustion explosion," backfire," or misfire." The rule is clear that terms contained in an insurance policy are to be accorded their everyday, commonsense meanings (see Pepsico, Inc.,13 AD3d at 600). Where the evidence is disputed as to the meaning or applicability of terms of an insurance policy, the issue should be settled by reference to the intentions of the parties, which is a question of fact (see e.g. Pan Am. World Airways, 505 F2d at 1006; 10A Couch on Insurance 3d §§ 150:7, 150:21; see also Thomas J. Lipton, Inc., 34 NY2d at 361).Although the policy here excluded both direct and indirect damage from "combustion explosion" and any other explosions," except as otherwise provided, we conclude that it is unclear whether the parties intended by this language to exclude coverage for damages from the backfire" that is believed to have caused plaintiff's losses. In view of the foregoing, the District Court's order is modified by vacating the provision granting defendant's motion for summary judgment dismissing the complaint and by providing that defendant's motion is denied.
WESTERN BLDG RESTORATION CO., INC. v LOVELL SAFETY MGT. 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 [*6]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).

Lancer Insurance Company v. Whitfield

Law Offices of Curtis, Vasile, P.C., Merrick, N.Y. (Patricia M.
D'Antone of counsel), for appellant.
Shaevitz & Shaevitz, Jamaica, N.Y. (Jonathan R. Vitarelli of
counsel), for respondents.


DECISION & ORDER
In an action for a judgment declaring that the plaintiff is not obligated to defend and indemnify the defendants Omar Whitfield, d/b/a Whitfield Auto Center, and Charles Whitfield in an underlying action entitled Johnson v Whitfield Auto, pending in the Supreme Court, Queens County, under Index No. 11628/06, the plaintiff appeals from an order of the Supreme Court, Nassau County (Feinman, J.), dated June 26, 2008, which denied its motion for summary judgment on the complaint.
ORDERED that the order is reversed, on the law, with costs, the motion is granted, and the matter is remitted to the Supreme Court, Nassau County, for the entry of a judgment declaring that the plaintiff is not obligated to defend or indemnify the defendants Omar Whitfield, d/b/a Whitfield Auto Center, and Charles Whitfield in the underlying action entitled Johnson v Whitfield Auto, pending in the Supreme Court, Queens County, under Index No. 11628/06.
The plaintiff insurer issued a garage dealer's policy of insurance (hereinafter the subject policy) to the defendant Omar Whitfield, d/b/a Whitfield Auto Center, an auto dealership. On May 31, 2004, at approximately 1:00 A.M., an automobile owned by the auto dealership was involved in an accident. At the time of the accident, the subject vehicle was being driven by the defendant Charles Whitfield (hereinafter the driver), Omar Whitfield's father. The defendants Kevin Johnson and Reginald Smalls (hereinafter the respondents) commenced an underlying personal injury action against, among others, the auto dealership and the driver (hereinafter collectively the Whitfield defendants) for personal injuries they allegedly sustained in the accident. The plaintiff commenced this action seeking a judgment declaring that it was not obligated to defend or indemnify the Whitfield defendants in the underlying personal injury action because the accident did not fall within the coverage provisions of the subject policy as the driver's use of the subject vehicle at the time of the accident was unrelated to "garage operations" as required by the policy.
The Whitfield defendants did not interpose an answer in the instant action, and by order of the Supreme Court, Nassau County (Feinman, J.), dated November 5, 2007, the court granted that branch of a prior motion of the plaintiff which was pursuant to CPLR 3215 for a default judgment against them. By defaulting, the Whitfield defendants admitted the allegations in the instant complaint and all reasonable inferences therefrom, to wit, that the driver had borrowed the subject vehicle "to visit friends in North Babylon, and was on his way home when the accident occurred" and that at the time of the accident, he "was not operating the [subject vehicle] in furtherance of the garage business" (see Woodson v Mendon Leasing Corp., 100 NY2d 62, 71; Matter of Gupta, 38 AD3d 445, 446; Lamm v Stevenson, 276 AD2d 531; Fleet Bank v Powerhouse Trading Corp., 267 AD2d 276, 277; see also Hermitage Ins. Co. v Trance Nite Club, Inc., 40 AD3d 1032; Silberstein v Presbyterian Hosp. in City of N.Y., 96 AD2d 1096). Based on the foregoing, the plaintiff established, prima facie, that the accident was not covered by the subject policy which requires it to pay damages for bodily injury caused by an accident and resulting from "garage operations" involving the ownership, maintenance or use of a covered auto (see Singh v Allcity Ins. Co., 1 AD3d 501; Empire Group Allcity Ins. Co. v Cicciaro, 240 AD2d 362, 363; Dumblewski v ITT Hartford Ins. Group, 213 AD2d 823).
Since the plaintiff, as movant, demonstrated its prima facie entitlement to summary judgment, the burden shifted to the respondents, as opponents of the motion, to provide evidence, in proper admissible form, sufficient to raise a triable issue of fact (see generally Alvarez v Prospect Hosp., 68 NY2d 320, 324; Zuckerman v City of New York, 49 NY2d 557, 562). The respondents failed to meet their burden since their opposing papers consisted solely of the affirmation of counsel in which hearsay statements of the Whitfield defendants were proffered to defeat the motion (see Zuckerman v City of New York, 49 NY2d 557, 562; Collins v Laro Serv. Sys. of N.Y., Inc., 36 AD3d 746, 746-747; Salzano v Korba, 296 AD2d 393, 395; Heifets v Lefkowitz, 271 AD2d 490, 491; cf. Municipal Testing Lab., Inc. v Brom, 38 AD3d 862; Mazzola v City of New York, 32 AD3d 906; Orelli v Showbiz Pizza Time, 302 AD2d 440, 441; Ritts v Teslenko, 276 AD2d 768, 769; Dan's Supreme Supermarkets v Redmont Realty Co., 261 AD2d 353, 354; Lukin v Bruce, 256 AD2d 388, 389; Gomes v Courtesy Bus Co., 251 AD2d 625, 626).
Accordingly, the Supreme Court should have granted the plaintiff's motion.
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 the appellant is not obligated to defend and indemnify the Whitfield defendants in the underlying action entitled Johnson v Whitfield Auto, pending in the Supreme Court, Queens County, under Index No. 11628/06 (see Lanza v Wagner, 11 NY2d 317, 334, appeal dismissed 371 US 74, cert denied 371 US 901).
Kay Bee Builders, Inc. v. Merchant's Mutual Insurance Company


David K. Lieb, P.C., Center Moriches, N.Y. (Andrew M. Lieb of
counsel), for appellant.
Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, White
Plains, N.Y. (Nancy Quinn Koba of
counsel), for respondents.

DECISION & ORDER
In an action, inter alia, to recover damages for negligence in the procurement of insurance coverage, the plaintiff appeals from (1) an order of the Supreme Court, Suffolk County (Doyle, J.), dated December 18, 2007, which granted the motion of the defendants Thomas M. Kerr and the William Hentschel Agency, Inc., for summary judgment dismissing the complaint insofar as asserted against them, and (2) a judgment of the same court entered April 9, 2008, which, upon the order, dismissed the complaint insofar as asserted against those defendants.
ORDERED that the appeal from the order is dismissed; and it is further,
ORDERED that the judgment is affirmed, with one bill of costs.
The appeal from the intermediate order must be dismissed because the right of direct appeal therefrom terminated with the entry of judgment in the action (see Matter of Aho, 39 NY2d 241, 248). The issues raised on the appeal from the order are brought up for review and have been considered on the appeal from the judgment (see CPLR 5501[a][1]). 
The plaintiff Kay Bee Builders, Inc., was hired to build a single-family home in Remsenberg, and subcontracted the roofing to the third-party defendant Maggio Construction, Inc. (hereinafter Maggio). When Maggio denied responsibility for problems with the roof after purportedly completing its work, the plaintiff repaired the faulty portion of the roof at an approximate cost of $140,000.
The plaintiff submitted a claim for the foregoing expense to the defendant insurers Merchant's Mutual Insurance Company and the Blue Ridge Insurance Company, and the defendant insurers denied the claim. The plaintiff commenced this action asserting a cause of action against each of the defendant insurers to recover damages for breach of contract, and causes of action against its insurance agency and agent, the respective defendants William G. Hentschel Agency, Inc., and Thomas M. Kerr (hereinafter together the Agents), to recover damages for negligence.
The Agents demonstrated their prima facie entitlement to summary judgment by presenting evidence that they obtained a general liability insurance policy which provided the specific insurance coverage that the plaintiff requested (see JKT Constr., Inc. v United States Liab. Ins. Group, 39 AD3d 594, 594-595; Fremont Realty, Inc. v P & N Iron Works, Inc., 39 AD3d 586, 587; Empire Indus. Corp. v Insurance Cos. of N. Am., 226 AD2d 580, 581). In opposition to the Agents' prima facie showing, the plaintiff failed to raise an issue of fact that required the denial of summary judgment (cf. Mid-Hudson Castle v P.J. Exteriors, 292 AD2d 355; Village of Newark v Pepco Contrs., 99 AD2d 661, affd 62 NY2d 772). The plaintiff also failed to establish that a special relationship existed with the Agents which would give rise to a claim for negligent misrepresentation (see Murphy v Kuhn, 90 NY2d 266, 270-271; Fremont Realty, Inc. v P & N Iron Works, Inc., 39 AD3d 586
New York City Housing Authority v. Underwriters at Lloyd's, London

Lester Schwab Katz & Dwyer, LLP, New York, N.Y. (Steven B.
Prystowsky and Joshua C. Zimring of counsel), for appellant.
Abrams, Gorelick, Friedman & Jacobson, P.C., New York,
N.Y. (Jessica F. Napoli of counsel), for
respondent.


DECISION & ORDER
In an action for a judgment declaring that the defendant is obligated to defend and indemnify the plaintiff and to reimburse the plaintiff for all reasonable attorney's fees and disbursements incurred in the defense of an underlying action entitled Piliotis v City of New York, pending in the Supreme Court, Kings County, under Index No. 20226/03, the plaintiff appeals from an order of the Supreme Court, Kings County (Ruditzky, J.), dated May 1, 2007, which denied its motion for summary judgment on the complaint with leave to renew following the filing of a note of issue and statement of readiness.
ORDERED that the order is reversed, on the law, with costs, the motion is granted, and the matter is remitted to the Supreme Court, Kings County, for the entry of a judgment declaring that the defendant is obligated to defend and indemnify the plaintiff and to reimburse the plaintiff for all reasonable attorney's fees and disbursements incurred in the defense of the underlying action entitled Piliotis v City of New York, pending in the Supreme Court, Kings County, under Index No. 20226/03.
Contrary to the defendant's contention, the Supreme Court erred in denying the plaintiff's motion for summary judgment awarding it declaratory relief. The plaintiff made a prima facie showing of its entitlement to judgment as a matter of law by demonstrating that the defendant did not disclaim coverage on the ground of late notice until more than three months after the plaintiff sent notice of the claim to it, and 73 days after the plaintiff turned over the file in the underlying case to it, thereby failing to provide notice of its disclaimer "as soon as is reasonably possible" (Insurance Law § 3420[d]; see Hartford Ins. Co. v County of Nassau, 46 NY2d 1028, 1029). In opposition, the defendant failed to raise a triable issue of fact by asserting that the delay was necessitated by its investigation of the claim, since the ground for the disclaimer was apparent, at the latest, when the defendant received the case file (see e.g. First Fin. Ins. Co. v Jetco Contr. Corp., 1 NY3d 64, 69; Delphi Restoration Corp. v Sunshine Restoration Corp., 43 AD3d 851; Matter of Allstate Ins. Co. v Cruz, 30 AD3d 511; Gregorio v J.M. Dennis Constr. Co. Corp., 21 AD3d 1056; Pennsylvania Lumbermans Mut. Ins. Co. v D & Sons Constr. Corp., 18 AD3d 843; West 16th St. Tenants Corp. v Public Serv. Mut. Ins. Co., 290 AD2d 278). Moreover, the defendant did not establish the need for the investigation, nor did it provide detailed information demonstrating that the investigation was conducted diligently (see Quest Bldrs. Group, Inc. v Deco Interior Constr., Inc., 56 AD3d 744; Quincy Mut. Fire Ins. Co. v Uribe, 45 AD3d 661, 662; Matter of Temple Constr. Corp. v Sirius Am. Ins. Co., 40 AD3d 1109). Since any purported failure on the part of the plaintiff to provide the defendant with timely notice of the underlying claim did not excuse the defendant's unreasonable delay in disclaiming (see Schulman v Indian Harbor Ins. Co., 40 AD3d 957, 958; Matter of Blue Ridge Ins. Co. v Cook, 301 AD2d 598, 600; Wasserheit v New York Cent. Mut. Fire Ins. Co., 271 AD2d 439), the plaintiff is entitled to a declaration that the defendant is obligated to defend and indemnify it and to reimburse it for all reasonable attorney's fees and disbursements incurred in the defense of the underlying action.
Since this is a declaratory judgment action, the matter must be remitted to the Supreme Court, Kings County, for the entry of an appropriate judgment in accordance herewith (see Lanza v Wagner, 11 NY2d 317, 334, appeal dismissed 371 US 74, cert denied 371 US 901).
In the Matter of Travelers Insurance Company v. Cohen

Rivkin Radler, LLP, Uniondale, N.Y. (Alan C. Eagle and Joanne
M. Engeldrum of counsel), for appellant.
Jacobowitz & Gubits, LLP, Walden, N.Y. (Peter R. Eriksen,
Kara J. Cavallo, and Michael Mahon
of counsel) and The Law Offices of
James J. Cupero, PLLC, Goshen, N.Y.,
for respondent-respondent (one brief
filed).
Buratti, Kaplan, McCarthy & McCarthy, Yonkers, N.Y.
(Michael A. Zarkower of counsel), for
proposed additional respondent-respondent.

DECISION & ORDER
In a proceeding pursuant to CPLR article 75, inter alia, to permanently stay arbitration of a claim for uninsured motorist benefits, the petitioner appeals from a judgment of the Supreme Court, Orange County (Giacomo, J.), dated November 7, 2007, which denied the petition and dismissed the proceeding.
ORDERED that the judgment is reversed, on the law, with costs to the petitioner payable by the respondent Pearl Cohen and the proposed additional respondent Progressive Northeastern Insurance Company, the petition is granted, and the arbitration is permanently stayed.
Pearl Cohen allegedly was injured on December 23, 2005, when she was forced to jump out of the way of a car driven by Wayne Salvaty. Cohen made no attempt to contact either her insurance carrier, the appellant Travelers Insurance Company (hereinafter Travelers), or Salvaty's insurance carrier, the proposed additional respondent Progressive Northeastern Insurance Company (hereinafter Progressive), prior to contacting an attorney in September 2006. On October 3, 2006, Cohen gave notice to Travelers of a potential supplemental underinsured/uninsured motorist (hereinafter SUM) claim. On October 30, 2006, Travelers issued a letter to Cohen disclaiming coverage for her SUM claim on the basis that she had failed to give Travelers notice of the claim "as soon as practicable," as required by her policy.
On December 6, 2006, Progressive issued a letter to Salvaty disclaiming coverage for the accident on the basis of late notice of the claim. On January 2, 2007, Cohen forwarded a copy of Progressive's disclaimer letter to Travelers and notified Travelers of her intention to pursue a SUM claim. Cohen subsequently served Travelers with a request for arbitration, and Travelers instituted this proceeding, inter alia, to permanently stay the arbitration. The Supreme Court denied the petition. We reverse.
The Court of Appeals has held that the phrase "as soon as practicable," as used in the SUM context, means that the "insured must give notice with reasonable promptness after the insured knew or reasonably should have known that the tortfeasor was underinsured" (Matter of Metropolitan Prop. & Cas. Ins. Co. v Mancuso, 93 NY2d 487, 495; see Matter of Assurance Co. of Am. v Delgrosso, 38 AD3d 649, 650). The insured bears "[the] burden of demonstrating that [he or she] acted with due diligence in ascertaining the insurance status of the other vehicle" (Matter of Nationwide Mut. Ins. Co. v Wexler, 276 AD2d 490, 491; see Matter of Nationwide Ins. Co. v Montopoli, 262 AD2d 647, 647; Matter of State Farm Mut. Auto. Ins. Co. v Adams, 259 AD2d 551, 552). Here, Cohen failed to establish that she exercised any diligence whatsoever in attempting to ascertain the insurance status of Salvaty's vehicle from the date of the accident on December 23, 2005, until she contacted an attorney in September 2006. Under the circumstances presented, the notice was untimely and the arbitration should have been permanently stayed (see Matter of Nationwide Ins. Co. v Montopoli, 262 AD2d at 647; Matter of State Farm Mut. Auto. Ins. Co. v Adams, 259 AD2d at 552; cf. Matter of State Farm Mut. Auto. Ins. Co. v Linero, 13 AD3d 546, 548).
Contrary to Cohen's contention, under the circumstances presented here, Travelers was not required to demonstrate prejudice (see Matter of Assurance Co. of Am. v Delgrosso, 38 AD3d at 650; see also Rekemeyer v State Farm Mut. Auto. Ins. Co., 4 NY3d 468).
In light of our determination, the parties' remaining contentions have been rendered academic.

 

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