Coverage Pointers - Volume XI, No. 12

Dear Coverage Pointers Subscribers:

A special welcome to our 20+ new subscribers who come from a single carrier this week. We hope you have as much fun reading and learning as we do writing and teaching. Looking forward to my trip to Indianapolis on Monday, where we are doing combined training for three different insurers.

There are some fascinating decisions and summaries in this weeks issue, including a few late notice beauties, a perplexing first party case suggesting a shortcoming in mailing of Proofs of Loss only to an insureds attorney (in Steves column) and a lengthy summary by Audrey of the newly minted proposed No Fault regulations.

These are the days that try our souls. As I scribe this missive, I sit in the US Airways Club in LaGuardia hoping (perhaps beyond hope) that some flight will take me home tonight. Theres weather in Buffalo and while thats unusual and unique, it has the potential, on occasion, to be annoying. From past experience, I know the LaGuardia US Airways Club will not be open all night and those plastic chairs down in the main lobby are not very comfortable for sleeping. Anyway, if I cannot get a flight tonight, any one of you nearby may find me scratching at your door, looking for shelter.

From Audrey Seeley, the Queen of No Fault:
The Insurance Law Committee of DRI had a wonderful program last week in New York. The next program is the Insurance Coverage and Claims Institute April 14-16th in Chicago. I have the inside scoop on the Chicagoprogram, being on the steering and marketing committee for it this year. It is going to be a great program again with an entire track on Friday devoted to professional liability claims and a second track on Friday devoted to bad faith.

The BIG news in the no-fault world is the Insurance Department's release of the working draft amendments (MAJOR) to the no-fault regulations. I have a summary in this edition of the proposed amendments to the claims handling and mandatory endorsements. The amendments are truly a major overall of the no-fault regulations. Iknow that years have actually been put into this as I have personally workedwith onestakeholder to compile ideas on what amendments are required. In the next edition I will cover the proposed amendments to the arbitration and new section devoted to MVAIC. I invite you to send me your comments and thoughts on the proposed amendments at [email protected] or give me a call at (716) 849-8900.

Audrey

Sport Rock and Fieldston Other Insurance Cases Heading to High Court
With a tip of the hat to Jeff Gold and James Stewart of Stewart, Kravatz, Benes & Stone, LLP, Westbury, New York who represented the successful D&O carrier in the Fieldston case in the First Department (and who alerted me to this further appellate review), we advise that the Court of Appeals has accepted review of two related cases, each dealing with questions of other insurance.

These cases each deal with other insurance clauses and the obligation to defend non-covered claims. In the Sport Rock decision, the First Department held that where an other insurance clause placed one insurer primary over another for similar risks, the primary carrier had to defend all causes of action, including those that didnt fall within its coverage. In the Fieldston case, there were two completely different kinds of coverage, and both a CGL and D&O carrier had joint defense obligations. For more detailed summaries, we direct you to our earlier reports on Sport Rock and Fieldston

Happy One Hundredth Birthday Fred Seaton (with thanks to his son, Donald):
The year 2009 marks the 50th anniversary of the admission of Alaska and Hawaii into the Union. Fred Seaton played a pivotal role in making that happen.

On the centennial of Frederick Seatons birth, with additional insight and assistance from his son Donald, we recognize the late Senator Frederick Andrew Seaton, from Nebraska, born December 11, 1909. Seaton was raised in Manhattan, Kansas, where his father was in the newspaper publishing business. Working in the family business in broadcasting and in newspaper work for most of his young life Seaton Publications at the age of 28, he became publisher and general manager of the Hastings (Nebraska) Daily Tribune.

Fred Seaton became active in local and state affairs relating to agriculture, conservation, higher education, and politics, as well as various radio and press organizations and eventually cam to own several Nebraska radio stations and newspapers.

An active Republican, in 1936 he was secretary to Alfred Landon in his unsuccessful presidential campaign. Seaton was elected to the unicameral Nebraska State Legislature, was State Chair of Harold Stassen's unsuccessful 1948 presidential bid and later was an advisor for Dwight D. Eisenhower's presidential campaign in 1952.

Seaton was appointed to the U.S. Senate in December, 1951 by Governor Val Peterson and served one year. After working for the Eisenhower campaign, Seaton was appointed assistant secretary of defense by Eisenhower in 1953. The next year Eisenhower appointed Seaton Secretary of Interior, and he held this position through 1961, during which time Alaska and Hawaii were admitted as the 49th and 50th states.

Seaton was a member of the Board of Directors of the University of Nebraska Foundation, and was a Hastings College trustee for thirty-three years. He provided funds for the Dorothea Elizabeth Seaton Chapel at Hastings College, and gave scholarships at the University of Nebraska and at Kansas State University. Fred Seaton died on January 16, 1974.

As indicated, we were able to track down one of Senator Seatons sons, Donald Seaton, who serves as publisher of the Hastings Tribune and asked him to share some personal thoughts about his father. My father was a great man and father, he responded, but we Seatons do not toot our horns. He was kind enough to offer these recollections:

As a U.S. Senator from Nebraska, Dads first speech in the Senate was in favor of statehood for Alaska and Hawaii. Then later in his career, as Secretary of Interior under Ike, he told me that it was his idea to separate the two states so that Alaska could come in first.

When I asked him why he recommended that to Ike, he said after Alaska gets in the ice will be broken. Then those Congressmen who had opposed statehood for Hawaii would fade away.

Mr. Seaton continued:

As a US Senator from Nebraska, Dad was picked by the GOP to join a few Republicans to go to Europe to talk with General Dwight Eisenhower to see if they could persuade him to run for President as a Republican. The Democrats also sent a group to talk to Ike about running as a Democrat.

During Dads visit with Ike, they really liked each other and that formed the beginning of their personal friendship The friendship resulted in Dad being named Assistant Secretary of Defense, then Deputy Assistant to Ike and then to the Interior post.

While Dad was in Europe he went to an orphanage and arranged to adopt my younger brother and sister. They were German war orphans and spoke no English when they came to WashingtonDC to join my sister and me.

We salute Senator Seaton on his 100th birthday and thank Don for sharing some memories.

Peipers Preview on Property:

Welcome to December. We trust everyone has recovered from their respective post-Thanksgiving malaise. This weeks episode brings us some very interesting decisions that leave us scratching our heads to say the least.

In the first, the Third Department ruled that service of a demand for proof of loss upon an insureds legal counsel DOES NOT constitute proper service under the Insurance Law.

Following up on last week's feature case, we have yet another case where a partys pleading was struck for multiple violations of multiple discovery scheduling orders. Cant say we didnt warn you!

Finally, please take a look at the First Departments decision in Otero which, we think, forgets - or simply ignores - the General Obligations Law.

Best wishes until next time!

Steve
[email protected]

Defense Verdicts Made the Newspaper a Century Ago:

New York Times
December 11, 1909
Page 8
Injured on Midnight Auto Ride, Wanted the City to Pay

The jury in the suit of Miss Alvlna Weissman against the City of New York and the Union Railway Company for $10,000 damages for personal injuries sustained in an automobile accident while riding in Dr. Julian P. Thomas's car on July 9, 1907, returned a verdict yesterday afternoon after ten minutes' deliberation.

'The jury did not award damages. Justice McCall charged the jury briefly, to Miss Weissman. He said in part: "If you find that these young women were in this car for the purpose of speeding, and that they consented to the speeding; and you find that this speeding was the proximate cause or a contributing cause to the accident, then you must render your verdict for the defendants. But if you find that the city or the street railway company was negligent, and that their negligence was the cause of this accident and that the plaintiff by no act of her own contributed to the accident, then you may consider the question of damages. Miss Weissman laughed when the verdict was returned against her and said: "Well, we gave them a good fight anyhow."
Editors Note: Apparently her lawyer had nothing to say.

In this Weeks Coverage Pointers:

• Insured Must Make Reasonable Inquiry into Possibility of Claim when it Knows of Accident. One Call May Not be Enough. Notice/Prejudice Statute Not Applied Retroactively
• Non-Cooperation Established
• No Proof of Additional Insured Status Leads to Carriers Summary Judgment
• Where Cedant Is Not Raising Advice of Counsel As A Defense, It Should Not Refer to Confidential Communications At Trial Late Notice by Insured Established in SUM Context When Insured Fails to Explain Failure to Seek Information About Tortfeasors Liability Coverage
• Framed Issue Hearing on Existence of Underinsured Motorist Coverage
• Enough Evidence for a Framed Issue Hearing
• No Obligation to Indemnify (And Therefore, No Obligation to Defend) Driver Who Admits to Trying to Mow Down As Many People As He Can with His Car; Carrier Not Bound by Negligence Determination in Underlying Action Where Its Interests Were Not Represented

MARGOS MUSINGS ON SERIOUS INJURY UNDER NEW YORK NO FAULT
Margo M. Lagueras
[email protected]

• Experts Failure to Acknowledge A Prior Accident Which Resulted in Injury to The Same Area Renders His Opinion Regarding Causation Speculative
• Opinion That Findings Are Normal Based on the Existence of Pre-Existing Degenerative Changes Must Nevertheless Have Some Foundation
• Upon Re-Examination, Cervical Spine Limitations That Are Not Significant Do Not Amount to Serious Injury
• Opinion That Limitations Are Subjective, Without Further Explanation, Is Insufficient
• Primer on How to Raise a Triable Issue of Fact
• Again: Failure to Acknowledge Prior Injury to Same Body Part Renders Causation Speculative
• Radiologists Unequivocal Report Noting Pre-Existing Disc Desiccation At Allegedly Injured Levels Defeats Claim

AUDREYS ANGLES ON NO-FAULT
Audrey Seeley
[email protected]

• Important Update on Proposed Amendments to No-Fault Regulations!

Litigation

• Insurer Prevails On Argument of Lack of Medical Necessity Because Plaintiff Fails to Rebut
• Insurer Again Prevails On Lack of Medical Necessity Because Plaintiff Fails to Properly Rebut
• I Did Not Hit Her!

PEIPER ON PROPERTY (and POTPOURRI)

Steven E. Peiper
[email protected]
Of Property

• Two Year Statute of Limitations Found Within Policy Precludes Plaintiffs Lawsuit
• Sending Sworn Proof of Loss to Insureds Attorney, Not Good Enough
• The Term Disability Period is Clear and Unambiguous on its Face

and Potpourri

• Conditional Order of Indemnity Ok Where the Contract Complies with General Obligations Law 5-322.1

EARLS PEARLS

Earl K. Cantwell
[email protected]
Update on the Economic Loss Doctrine

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
Fijal's Federal Focus
Earl's Pearls
Across Borders

KOHANE'S COVERAGE CORNER

Dan D. Kohane
[email protected]

12/10/09 The Board of Managers of the 1235 Park Condo. v. Clermont Specialty
Appellate Division, First Department
Insured Must Make Reasonable Inquiry into Possibility of Claim when it Knows of Accident. One Call May Not be Enough. Notice/Prejudice Statute Not Applied Retroactively
The worker was taken to the hospital by ambulance after falling off a ladder while installing a water tank on the roof of the insured's building; the insured immediately learned of the accident; and the insured's notice of claim was admittedly untimely. The insured argued that the untimeliness should be excused because it had a reasonable, good-faith belief that no claim would be asserted against it, based on a phone call it made to the worker's employer on the day of the accident in which it was informed that the worker was not admitted to the hospital, did not sustain any serious injuries, and was expected to return to work the next day.

Single phone call was not an adequate inquiry into circumstances of accident. Argument that the statute requiring a carrier to establish prejudice before it can prove late notice should be applied retroactively fails, as it has every time an appellate court has considered it. Statute only applies to policies issued or renewed after January 1, 2009.

12/8/09 In the Matter of State-Wide Ins. Co. v. Luna
Appellate Division, Second Department
Non-Cooperation Established
An application for uninsured motorist benefits was made to State-Wide based on a disclaimer by State Farm on ground of non-cooperation. State Farm established that it properly disclaimed coverage under its insured's insurance policy on the ground of non-cooperation by demonstrating that it (1) acted diligently in seeking to bring about its insured's cooperation, (2) that its efforts were reasonably calculated to obtain its insured's cooperation, and that the (3) attitude of its insured, after the cooperation of its insured was sought, was one of "willful and avowed obstruction" (Thrasher v United States Liab. Ins. Co., 19 NY2d 159).
Editors Note: For any carrier considering a lack of cooperation disclaimer, note that Thrasher test and the three elements the court will consider.

12/8/09 American Cleaners, Inc. v. American Interl Specialty Lines Ins.
Appellate Division, Second Department
No Proof of Additional Insured Status Leads to Carriers Summary Judgment
American International Insurance Company moved for summary judgment. American Cleaners was unable to establish that it was insured under the policy, as only named insured, Konover, appeared in the policy. Under the four corners rule, coverage could not be established. Apparently, American Cleaners tried to establish that its contract with Konover required Konover to name it as an additional insured under the American International policy because the court also dismissed the claim it made that Konover breached the lease by not having American Cleaners named.

12/8/09 United States Fid. & Guar. Co. v. Excess Ca. Reinsurance Assoc.
Appellate Division, First Department
Where Cedant Is Not Raising Advice of Counsel As A Defense, It Should Not Refer to Confidential Communications At Trial
In view of cedant's concession that it will not raise the "advice of counsel" defense and make any reference to attorney-client communications by cedant at the trial, the court below should not permit cedant to raise this defense to reinsurers' claims, or refer to any such communications.

12/1/09 In the Matter of Liberty Mutual Insurance Co. v. Gallagher
Appellate Division, First Department
Late Notice by Insured Established in SUM Context When Insured Fails to Explain Failure to Seek Information About Tortfeasors Liability Coverage
When insured is required to provide notice of a claim as soon as practicable, such notice must be given within a reasonable time under all of the circumstances. In the context of supplementary uninsured/underinsured motorist (SUM) claims, it is the claimant's burden to prove timeliness of notice, which is measured by the date the claimant knew or should have known that the tortfeasor was underinsured. The claimant must establish a reasonable excuse for any delay, such as latency of his/her injuries, and evidence of the claimant's due diligence in attempting to establish the insurance status of the other vehicles involved in the accident. Here, the claimant failed to demonstrate that there was a reasonable excuse for determining the tortfeasors liability coverage.

12/3/09 In re Progressive Insurance Company v. Dillon
Appellate Division, First Department
Framed Issue Hearing on Existence of Underinsured Motorist Coverage
While its rare to see a framed issue hearing on the existence or non-existence of coverage that is what was ordered in this case. Insurer took the position that its policy did not include optional underinsurance coverage. In NY, uninsured motorist coverage must be provided with every auto policy issued while underinsurance coverage is optional. Here, there appeared to a genuine dispute about whether the optional coverage was or was not issued. The court correctly noted that if it did not exist, the fact that the insurer did not disclaim with respect to the coverage in a timely fashion cannot be used to establish coverage for coverage that does not exist will not be created by waiver. Instead, the court ordered a framed issue hear to resolve the questions relating to the existence of the coverage.

12/3/09 In re Liberty Mutual Insurance Company v. Mohabir
Appellate Division, First Department
Enough Evidence for A Framed Issue Hearing
Liberty presented enough evidence to raise an issue of fact as to whether a particular vehicle was involved in the accident with the uninsured motorist applicants car. Accordingly, a temporary stay is granted and a framed-issue hearing will proceed to make that determination.

12/1/09 Commercial Insurance Company of Newark, New Jersey v. Popadich
Appellate Division, First Department
No Obligation to Indemnify (And Therefore, No Obligation to Defend) Driver Who Admits to Trying to Mow Down As Many People As He Can with His Car; Carrier Not Bound by Negligence Determination in Underlying Action Where Its Interests Were Not Represented
Insurer sought a declaration that it had no obligation to defend or indemnify its insured, Popadich in a number of personal injury action. By his own admission, Popadich, on two dates in February 2002, ran down 27 pedestrians with his automobile on the streets of Manhattan. Nice fellow.

The insurer had appointed counsel to represent Popadich in a Kings County action that ended with an award of summary judgment determining thatthe underlying plaintiff'sinjuries were caused by Popadich's negligence. That determination was not binding on the carrier because the insurer was not a party to the lawsuit, only the insured and the plaintiff (neither of whom would want to prove intentional conduct). Surely the defense counsel selected by the insurer could not take a position adverse to its client, the insured.

The carriers lawyer, in the DJ action, offered (a) statements made by Popadich after his arrest and (b) the transcript of his confession, which he signed and the accuracy of which was sworn to by a detective. Those documents demonstrate that Popadich admitted that he had driven his vehicle into Manhattan on two occasions with the purpose of running over as many people as possible.

The policy issued provided no coverage for bodily injury that "[m]ay reasonably be expected to result from the intentional or criminal acts of any covered person" or "[i]s in fact intended by any covered person." "Thus, there is no insurance coverage under the terms of the policy if the resulting injury could reasonably be expected from the conduct.

Based on the evidence, the underlying plaintiff'sinjuries were to be reasonably expected by Popadich when he drove his vehicle through the streets of Manhattan with the purpose of causing as much harm to as many people as possible. Accordingly, the insurer was not obligated to defend or indemnify him.
Editors Note: An Attalawyer goes outto our good friend, and great coverage attorney, Elizabeth Fitzpatrick from the Long Island law firm of Lewis, Johs, for getting the right result for the right reason.

MARGOS MUSINGS ON SERIOUS INJURY UNDER NEW YORK NO FAULT

Margo M. Lagueras
[email protected]

12/8/09 Wallace v. Adam Rental Transp., Inc.
Appellate Division, Second Department
Experts Failure to Acknowledge A Prior Accident Which Resulted in Injury to The Same Area Renders His Opinion Regarding Causation Speculative
Plaintiff Bailey appealed in this branch of the consolidated action, and lost because the affirmation of her treating physician, while noting range-of-motion limitations of her right shoulder that were contemporaneous with the accident, failed to compare those limitations with the norm. He also failed to provide any recent range-of-motion findings. In addition, and with regard to her claimed injury to the right knee, he did not provide any range-of-motion findings whatsoever. Finally, although he did note significant limitations, based both on contemporaneous and recent examinations, of her lumbar spine, he did not address the fact that she was involved in a prior accident in which she injured her lower back, which failure rendered his opinion regarding causation speculative.

12/8/09 Wallace v. Adam Rental Transp., Inc.
Appellate Division, Second Department
Opinion That Findings Are Normal Based on The Existence of Pre-Existing Degenerative Changes Must Nevertheless Have Some Foundation
In this branch of the consolidated action, defendants appealed and lost with respect to plaintiff Wallace because their orthopedist surgeon failed to offer any support for his conclusion that Wallaces significant range-of-motion limitations in her left shoulder were normal merely because she suffered from pre-existing degenerative changes. His failure to set forth any foundation for his opinion resulted in the denial of the defendants motion.

12/8/09 Annan v. Abdelaziz
Appellate Division, Second Department
Upon Re-Examination, Cervical Spine Limitations That Are Not Significant Do Not Amount to Serious Injury
On appeal, the trial court is reversed and the defendants motion is granted and the complaint is dismissed. While plaintiffs chiropractor noted significant range-of-motion limitations of the cervical and lumbar regions during his initial examination, during a recent re-examination it was noted that plaintiff had full range-of-motion of the lumbar spine and only some cervical limitations which were not significant and therefore do not amount to s serious injury. In addition, plaintiffs medical records from his chiropractor were uncertified and unauthenticated, and the narrative reports of other providers were unsworn. As such, all were inadmissible. Finally, his own doctor had cleared him to return to work after one month which defeated his claim under the 90/180-day category.

12/1/09 Ortiz v. S&A Taxi Corp.
Appellate Division, Second Department
Opinion That Limitations Are Subjective, Without Further Explanation, Is Insufficient
On appeal, the trial court decision was affirmed but based on the determination by the appellate court that defendants failed to meet their prima facie burden because they relied in part on the affirmed medical report of their examining orthopedic surgeon who, while noting significant range-of-motion limitations, opined that they were subjective. He did not, however, explain or substantiate his opinion. The result is that defendants fail to meet their burden and plaintiffs opposing papers need not be considered.

11/24/09 Reyes v. Dagostino
Appellate Division, Second Department
Primer on How To Raise A Triable Issue of Fact
This plaintiff did it right the first time and thus wins a reversal. He claimed injuries to the cervical and lumbar spinal regions under the permanent consequential limitation and/or significant limitation of use categories. He submitted the affirmation of one of his treating physicians which, based on contemporaneous examination, noted significant limitations in the lumbar and cervical regions. Plaintiff also submitted the affirmed report of another of his treating physicians which, based on recent examination, also noted significant range-of motion restrictions of the lumbar and cervical spine. Both physicians also recited in their affirmed reports the affirmed findings in MRI reports which revealed herniated discs in the lumbar and cervical regions. Both physicians concluded that the injuries were causally related to the accident. Finally, both stated that the injuries were permanent.
Note: Done by the book.

11/24/09 Chanda v. Varughese
Appellate Division, Second Department
Again: Failure to Acknowledge Prior Injury to Same Body Part Renders Causation Speculative
The plaintiff appealed and lost again for a multitude of reasons, but this one alone would have been sufficient and so the court addressed it first. Although plaintiffs treating chiropractor noted significant limitations in her cervical and lumbar regions based on both contemporaneous and recent examinations as required, he failed to acknowledge that plaintiff had suffered previous injuries precisely to those regions in a prior 2004 accident. His conclusions that the injuries were caused by this accident were, therefore, rendered speculative and causation could not be established. In addition, plaintiff submitted unaffirmed hospital reports and MRI reports which, although affirmed, only noted the existence of herniated and bulging discs, but without setting forth objective evidence of the resulting extent or duration, all of which is insufficient to defeat summary judgment.

11/24/09 Lopez v. Abdul-Wahab
Appellate Division, First Department
Radiologists Unequivocal Report Noting Pre-Existing Disc Desiccation At Allegedly Injured Levels Defeats Claim
The 28-year old plaintiff alleged injuries to his cervical and lumbar spine and left shoulder but the defendants submitted medical affirmations stating that there was no evidence of recent trauma on plaintiffs diagnostic films and that plaintiffs had full range-of-motion. The tests performed and all the measurements were detailed and the conclusion was that any injuries were resolved. Included among the affirmations was that of defendants radiologist who reviewed plaintiffs MRIs and found pre-existing disc desiccation at all the same cervical and lumbar levels where injury was claimed. These observations were unequivocal and, because desiccation occurs over time, it was not possible that it was the result of the accident. In opposition, plaintiff only submitted unaffirmed reports. The court noted that, even if the unaffirmed report of plaintiffs radiologist were considered, it did not address the findings of disc desiccation by defendants radiologist.
Note: The court makes a brief comment on a point we have often noted. Injuries enumerated in a plaintiffs bill of particulars are all important and will be fatal to a defendants case if not specifically addressed by defendants experts. In this case, however, it was the plaintiff who attempted to include a claim for an annular lumbar tear which he had not included in his bill of particulars and the court therefore refused to consider.

AUDREYS ANGLES ON NO-FAULT
Audrey Seeley
[email protected]

IMPORTANT UPDATE ON PROPOSED AMENDMENT TO NO-FAULT REGULATION!!!

On November 11, 2009, the Insurance Department released a working draft of proposed changes to Reg. 68. The proposed changes are a MAJOR overhaul of the no-fault regulations. If you would like to review the proposed changes please go to the following link: http://www.ins.state.ny.us/r68_link.htm . The Insurance Department is also seeking public comment on the proposed changes. If you would like to submit a comment you can do so electronically by going to the following link: http://www.ins.state.ny.us/r68/r68_draft_form.htm .

I have reviewed the tracked changes document and will be providing a summary of them over the course of two editions. The following is a summary of the proposed amendments as to claims handling and the mandatory endorsements. In next edition, I will cover the amendments to arbitration and the new section dedicated to MVAIC.

The draft indicates that the amendments would be required to be included in all policies issued to new insureds and for all renewals on or after January 1, 2010. The following is a summary of the major changes to the Regulation.

Mandatory PIP Endorsement

Scope of coverage:

• All-terrain vehicles (ATV) are included within the scope of this endorsement and tracks the scope of coverage afforded if the accident arises out of the use of a motorcycle.

• Eligible injured person is deleted throughout and replaced with applicant.

• Medical expense is deleted and replaced with health service expense.

A health service expense now includes physical therapy but only if the treatment is rendered pursuant to a referral.

• Additional definitions were added for ATV, assignee, assignor, calendar day, and no-show.

With regard to the additional definitions, assignee is defined as a health service provider that receives an assignment of benefits from an applicant. An assignor is defined as an applicant who assigns all rights, privileges, and remedies under Insurance Law Article 51 to an assignee.

Calendar day was defined as all days of the week. Yet, if the performance of a condition falls on a Saturday, Sunday, or New York State holiday then the performance must be made on the next succeeding business day.

A no-show is defined as an applicants or assignees failure to appear for a scheduled health service examination or examination under oath.

• The definition of insured motor vehicle also includes a leased vehicle.

Conditions to Coverage:

• Everyone is aware of the provision requiring compliance with the conditions of the policy before an action can be taken against the insurer. A new sentence is added though that the assignees failure to comply fully with the conditions does not vitiate the coverage to the applicant.

• The applicant or the applicants assignee must now provide authorization to the insurer to obtain not only health medical records but also wage loss verification.

• The requirement to submit to a medical examination is broadened to health service examination by a health service professional and is not limited to a physician.

Endorsements for Motorcycle and ATV

• These endorsements have the same changes to them as the Mandatory PIP endorsement.

OBEL

• The exceptions set forth in 65-1.7, Deviations is omitted, and it is noted the 65-1.7 is deleted from the regulation.

• The definition of Basic Economic Loss (BEL) within the mandatory endorsement for ATVs is added.

• The changes within Mandatory PIP endorsement as all incorporated to this endorsement.

APIP

• The term eligible injured person is replaced with applicant and ATV is included within the scope of the APIP endorsement.

Reg. 68-C Claims for PIP Benefits

This is where the MAJOR amendments have been proposed. This regulation will apply not only to the settlement but also the processing of the claim.

65-3.2 Claims Practice GOALS

• 65-3.2 is now claims practice goals and not principals that insurer must follow.

• The insurer must not only assist the applicant but also the assignee and not treat the assignee as its adversary.

• Email and fax can be used in processing the claim in addition to telephone. This type of contact must be noted in the claim file.

• The insurer must also respond promptly to assignees.

• Copies of this regulation must be provided to employees with the insurer charged with the responsibility to ENSURE, not just satisfy itself, with the employees ability to be thoroughly conversant with the regulation.

• All correspondence must contain insurers name, address, and telephone number of the claim representative on the file. If a TPA is used then the underlying insurers name must be identified.

• In scheduling IMEs the goal is the convenience of the applicant. It should be avoided scheduling multiple IMEs on the same day more than five miles apart. Insurer must work to ensure that the applicant is examined within 60 minutes of the scheduled exam time.

• FAILURE TO FOLLOW THE GOALS DOES NOT GIVE RISE TO A PRIVATE CAUSE OF ACTION.

65-3.3 Notice of Claim

• Requirement to advise applicant of excuse of late submission of proof of claim deleted. Requirement still applies to late notice of claim.

• Section also applies to self-insurers.

• The telephone notice requirement from 65-3.4(a) moved to this section. If notice is received by telephone then the insurers representative taking the call must advise the caller of their name and title. The insurer is required during the call to request:

• applicants name, address, and telephone number;
• the policyholders name OR the policy number OR both; and
• reasonably obtainable information regarding time, place, and circumstances of the accident to begin claims processing.

65-3.4 Acknowledgment of Claim

• The insurer has seven calendar days to send the NF-1 and NF-2 once to the proper claims office.

• If notice not sent to proper claims office then seven days extended to 14 calendar days.

65-3.5 Claims Procedure

• Insurer must forward within 14 calendar day (10 business day was old rule) from receiving the NF-2 the verification forms required to process the initial claim. The insurer may send them prior to receipt of the NF-2.

• If after receiving one of the requested prescribed verification forms or other forms in subsection i (NF-5, UBF-1 or NF-4) other verification is needed to establish proof of claim then the insurer must request it within 21 calendar days of receipt of the prescribed verification form. Other verification now may include requests for completed forms and required information set forth on those forms.

• If the claim is received at the improper office the insurer now has 21 calendar days to request other verification. The receipt of the claim date at the proper office shall not exceed 14 calendar days after being sent to the improper claims office.

• The insurer upon request must provide one copy of all prescribed forms submitted by or on behalf of the applicant to the applicant.

• With the exception of the prescribed verification forms, a person who is requested to provide verification must supply it within 90 calendar days from the date of the request unless he or she can submit written proof of clear and reasonable justification for failure to comply with the time limitation.

• If verification is not an IME or EUO is requested of the applicant or a third party, not the assignee, then notice of the request must be sent to the assignee advising who verification is requested from and the nature of the request. The notice must be sent either at the same time the request is sent (insurer may send copy of the verification request) or within 14 calendar days after receipt of the claim. THE 30 DAY RULE IS PENDED UNTIL RECEIPT OF THE VERIFICATION FROM THE PERSON IT IS REQUESTED.

• NEW SECTION REGARDING IME.
• Insurer must schedule exam to be held within 10 to 30 days after first verification request sent scheduling the exam.
• The exam must be at a time and place reasonably convenient to the applicant. A reasonable place is where the applicant resides or in the county where the health service provider rendered services to the applicant.
• The applicant must be reimbursed for documented wages and travel expenses within 30 days after the exam is completed and only after the insurer is provided with the appropriate documentation of the expenses.
• The IME notification must contain the health service area that is subject of the exam (i.e., chiro., acupuncture, ortho, etc.).
• The insurer must accommodate one reasonable request for an adjournment and re-schedule the IME in each of the health service areas SO LONG AS THE REQUEST IS PROVIDED TO THE INSURER 48 HOURS PRIOR THE TO SCHEDULED EXAM.
• If an adjournment is provided it cannot be counted as a no-show.
• All adjournments must be documented on the re-schedule notices forwarded to the applicant.
• The IME request still does not pend the claim.
• The IME is complete on the date the exam is conducted.
• The insurer does not need to establish that a no-show is a willful and deliberate act by the applicant.

• EUO SECTION IS ELABORATED
• If an EUO is required to establish proof of claim it must be based upon objective standards so that there is a specific objective justification supporting the use of the EUO. The insurers standards must be made available for review by the Insurance Department examiners.
• All EUO must be held at a time and place reasonably convenient for the applicant. Reasonably convenient place is the county where the applicant resides or the county where the applicants counsels office is located.
• The applicant must be reimbursed for documented wages and travel expenses within 30 days after the exam is completed and only after the insurer is provided with the appropriate documentation of the expenses.
• The EUO noticed must advise the general subject matter to be addressed at the exam and that the individual may have legal representation.
• The questions at the EUO are not limited to the disclosed general subject matter but must be limited to what is necessary to establish proof of claim.
• The person or their counsel may state objections during the exam to the scope or relevance of the question but it does not excuse the failure of the person to respond to questions relevant to establish proof of claim.
• The insurer must accommodate one reasonable request for an adjournment and re-schedule the exam SO LONG AS THE REQUEST IS PROVIDED TO THE INSURER 48 HOURS PRIOR THE TO SCHEDULED EXAM.
• If an adjournment is provided it cannot be counted as a no-show.
• All adjournments must be documented on the re-schedule notices forwarded to the person being examined.
• The 30 day rule is pended upon request of the EUO as to all applicants and assignees for all pending and subsequent claims for benefits until the EUO process is complete.
• The insurer must send a notice of pending claim to the assignee for each claim submitted that cannot be paid or denied because the EUO is pending. This can be accomplished by sending a copy of the EUO notice. The notice must be sent either simultaneously with the request for the exam or within 14 calendar days after receipt of the claim.
• An EUO request as to an assignee pends payment or denial of all pending and subsequent claims from that assignee for a specific assignor until the EUO is complete. The aforementioned notice requirements apply for the assignee with the 14 calendar day rule for each claim.
• If the EUO pertains to the assignees ability to meet any state licensing requirements then all pending and subsequent claims by that assignee for all applicants, based upon services billed by the assignee are pended until the EUO is complete. Again the same notice requirements apply for the assignee with the 14 calendar day rule for each claim.
• The insurer must provide an original and copy of the EUO transcript to the party being examined within 10 days [calendar and/or business not specified] from receipt of the transcript.
• Verification in the form of an EUO is complete on the date of the second scheduled exam if the party failed to appear for the first scheduled exam OR the date the insurer receives the signed original transcript together with responses to any documents demanded made at the same time the EUO was conducted.
• If the EUO is of an assignee then the insurer is limited to only one exam to address licensing requirements and corporate structure unless the insurer can provide a well founded and articulable belief that there was a change since the first EUO.

• The insurer must obtain a written and signed IME or peer review report. The reports must be based upon the examination of the applicant and/or review of health records.

• No one, except the health service professional who prepared the report, may alter it.

• The insurer and anyone acting at the direction on or behalf of the insurer can change or seek to change or alter the health service professionals conclusion. Rather, an addendum may be requested.

65-3.6 Follow Up Requirements

• If the NF-2 has not been received between 25 to 30 calendar days after original mailing the insurer must forward (not mail) a second application within 10 calendar days.

• If a verification request, excluding an IME or EUO, has not been received between 25 to 30 calendar days after the initial request then the insurer must forward within 10 calendar days a follow up via a follow up notice.

• If verification is not supplied between 25 and 30 calendar days of the first request then the insurer must forward a second notice pending to the claim to the assignee for each claim submitted within 25 to 30 days of the first notice being sent to the party from which verification is sought, unless the verification is provided and payment made by the insurer.

• If verification is an IME and the applicant is a no-show for the IME then the insurer within 10 calendar days of the no-show must forward the follow up notice scheduling the next exam. The second IME exam must be performed within 10 to 30 calendar days from the follow up notice.

• If verification is an EUO and the party is a no-show then the insurer within 10 calendar days of the no-show forward the follow up notice scheduling the next exam. The second IME exam must be performed within 10 to 30 calendar days from the follow up notice. A second notice pending the claim must also be sent to the assignee for each claim submitted within 25 to 30 days of the first notice being sent to the party from which verification is sought.

65-3.8 Payment or Denial of Claim (30 Day Rule)

• An insurer may only issue a denial based upon a health service examination that is specified in the verification request. A copy of the denial must now be sent to all known assignees of the applicant whose claims may be denied based upon the examination. Also, this does not relieve the insurer from issuing pending or subsequent denials on submitted claims.

• If the denial is based in whole or in part upon an EUO then the denial must identify those areas of the EUO that form the basis of the denial. A copy of the denial must now be sent to all known assignees of the applicant whose claims may be denied based upon the examination. Also, this does not relieve the insurer from issuing pending or subsequent denials on submitted claims.

• An insurer cannot issue a denial before receiving verification UNLESS more than 90 days from forwarding the initial verification has passed. The insurer may only then issue a denial if the verification was requested from the applicant or assignee. Thereafter, the party can submit reasonable justification for not providing the verification which the insurer must reconsider. If the insurer will not reconsider the denial then a note must be in the claims file and the parties affected be provided with written notification.

• The insurer must provide the assignee with a copy of the IME or peer review report if a request is sent in writing.

• Any denials must also be issued to the assignee on any element of basic economic loss.

• Payment drafts must contain information specific to identify what element of loss is being paid or be accompanied by an explanation including but not limited to the applicants name, the health service providers name, the accident date, and date of service. If the payment is for lost wages then the period of reimbursement and the calculation of lost wages must be supplied.

• Proof of fact for the amount of loss sustained will not be deemed to be provided by the applicant or assignee to the insurer when the billed for services were not provided to the applicant and when the charges exceed the permissible charges under Insurance Law 5108.

65-3.9 Interest on Overdue Payments

• The insurer cannot suggest waiver of interest on an overdue claim prior to an arbitration or lawsuit being commenced as a condition to settlement.

65-3.10 Attorneys Fees Prior to Arbitration or Litigation

• The applicant or assignee can recover attorneys fees from the insurer subsequent of submission of proof of claim to the insurer but prior to initiating arbitration or litigation if the claim is denied or overdue. The fee irrespective if denied and subsequently paid or overdue cannot exceed $80.00.

• The failure to adhere to the payment of a settlement agreement during conciliation or after an arbitration award will result in an additional $80.00 attorneys fee only after written request.

65-3.11 Direct Payments

• The insurer can only now request in writing for good reason the ORIGINAL assignment or authorization for direct pay to establish proof of claim.

• The insurers failure to object to and require the submission of a prescribed assignment form when one deviates from the prescribed form does not constitute a waiver of the prohibitory language on direct payment from the assignor unless there has been a breach of the policy condition or lack of coverage.

• The assignor, assignee or the insurer cannot unilaterally revoke an assignment of benefits unless revocation is authorized in the assignment by the assignee. The assignment can only be terminated by written agreement between the assignee and assignor. The revocation or termination is not effective for services rendered PRIOR to the date of revocation or termination.

• A copy of the revocation of an assignment must be provided to the insurer.

65-3.15 Computation of Basic Economic Loss

• If the policy is exhausted prior to receipt of proof of any claim then the insurer is not liable to pay such claim.

• An insurer cannot be required to pay an amount in excess of the policy limits.

• If the insurer receives complete proof of claim on multiple service providers on the same date then the insurer must pay the claim in the order of rendition of services.

65-3.16 Measurement of No-Fault Benefits

• The proposal for dental and plastic surgeon treatment must be submitted within 21 calendar days. The timeframe does not apply if the

• In regard to lost wages if the applicant while disabled is terminated from employment because of inability to work then the insurer shall estimate and pay the amount of unemployment benefits.

• With respect to other necessary expenses, the services must be performed for charge by a person not legally obligated to render them OR would not ordinarily perform them as a resident of the same household.

65-3.19 - Offsets

• If the insurer receives an NF-2 or NF-5 indicating that the applicant was injured during the course of employment or other evidence that indicates that the applicant was injured during the course of employment then the insurer must send an NF-9 in accordance with the verification requirements. The NF-9 must be accompanied by a letter advising of the insurers belief that workers compensation is primary and that a workers compensation denial or decision of lack of coverage must be submitted before no-fault wages will be paid. The insurer is not required to send the NF-9 before receiving the completed NF-2 or NF-5 form.

• The insurer is not obligated to issue a denial until it receives the completed NF-9 and the denial or decision of lack of coverage from workers compensation. The insurer may issue a request for verification after receipt of the above.

• If there is a denial of workers compensation benefits or decision on lack of coverage then the insurer must take benefits without any deduction for workers compensation or disability.

• The insurer must also forward the completed NF-9 to the local district office of the workers compensation board. The insurer must be provided with notice of a workers compensation hearing to be present. The insurer may submit evidence to the referee and may request the referee to put specific questions to the parties.

• If the applicant fails to complete the NF-9 and the insurer is ultimately held liable then the insurer is not responsible for attorneys fees or interest on the late payment. If reimbursement is due to the insurer and the applicant fails to pay then the insurer may take a deduction on any future benefits due on the claim.

Stay tuned for arbitration and MVAIC in the next edition!

Litigation
12/7/09 Crotona Heights Med., P.C. a/a/o Daniel Medina v. GEICO Ins. Co.
Appellate Term, Second Department
Insurer Prevails On Argument of Lack of Medical Necessity Because Plaintiff Fails to Rebut.
The insurers cross-motion for summary judgment should have been partially granted as the insurer established lack of medical necessity by attaching the affirmed peer review report. The plaintiff did not rebut the report, which contained a factual basis and medical rationale for the determination of lack of medical necessity.

12/1/09 Innovative Chiropractic, P.C. a/a/o Jose Ovalles v. Travelers Ins. Co.
Appellate Term, Second Department
Insurer Again Prevails On Lack of Medical Necessity Because Plaintiff Fails to Properly Rebut.

The insurers cross-motion for summary judgment should have been partially granted. The insurer established through standard office practice and procedure the timely mailing of the NF-10. Further, the insurer submitted the affirmed peer review report which established lack of medical necessity. The plaintiffs reply in the form of an affidavit from the treating chiropractor merely asserting the treatment was medically necessary was insufficient. The affidavit failed to set forth any facts to support the conclusion of medical necessity.

11/19/09 Midwood Med. Equip. & Supply, Inc. a/a/o Catherine Almanzar v. USAA Cas. Ins. Co.
Appellate Term, Second Department
I Did Not Hit Her!
The insurers motion to reargue was properly granted on the issue that the named insured never hit the pedestrian seeking no-fault benefits. The insured submitted an affidavit attesting that while she was the operator of the motor vehicle on the day of the alleged accident, she did not strike a pedestrian while driving. The insured further attested that she was stopped at the alleged accident scene with other vehicles and pedestrians but her vehicle never came into contact with the alleged eligible injured person. The plaintiff only submitted an attorney affidavit attacking the insureds affidavit which was insufficient to raise a triable issue precluding dismissal of the complaint.

PEIPER ON PROPERTY (and POTPOURRI)

Steven E. Peiper
[email protected]

Of Property

12/10/19 Thomas Hamilton Pharmacy, Inc. v Nationwide Mutual Ins. Co.
Appellate Division, Second Department
Two Year Statute of Limitations Found Within Policy Precludes Plaintiffs Lawsuit
This case is pretty straight forward. Plaintiff commenced the above action challenging Nationwides coverage decision. However, the policy contained a clear clause which required all legal action against Nationwide to be commenced within two years of the date of the loss. Here, plaintiffs claim was unquestionably more than two years after the loss at issue.

12/03/09 Adamowicz v. North Country Insurance Company
Appellate Division, Third Department
Sending Sworn Proof of Loss to Insureds Attorney, Not Good Enough
This claim arises out of a fire loss sustained at plaintiffs residence. Although the majority of the claim was resolved without dispute, the two parties could not reach an agreement for plaintiffs claimed additional living expense losses. To move the matter along, North Country sent a demand for a sworn proof of loss, as to that issue, to plaintiffs retained legal counsel. When the insured failed to respond within the sixty (60) day deadline, North Country promptly disclaimed coverage.

To excuse her delay, plaintiff argued that North Countrys decision to mail the demand for proof of loss to plaintiffs attorney did not satisfy the terms of Insurance Law 3407(a) which requires a carrier provide notice of a demand for proof of loss to the insured. The Third Department agreed by holding that notice of the demand, when given to the insureds acknowledged legal counsel, as was done here, does not satisfy the terms of the Insurance Law.

The Third Department notes that if the counsel would have timely notified the insured of North Countrys demand for proof loss, then the demand would have been valid.

****Huh? Excuse us for being confused, but how do actions taken by plaintiffs counsel have any impact on the requirements under the Insurance Law. Either the Insurance Law requires that the notice be sent to the insured or it does not. Why the plaintiffs lawyers conduct is relevant is beyond our understanding of this.

Moreover, we note that for years courts have been permitting correspondence from carriers to insureds to be properly served upon the insureds counsel. (eg, a carriers disclaimer may be served upon the claimants legal counsel).

For the time being, however, we would strongly recommend that all First Party Notices to insureds be sent to both the insureds counsel, as well as the insured directly. Better safe than sorry! ***

12/03/09 Cohen v First Unum Life Insurance Company
Appellate Division, First Department
The Term Disability Period is Clear and Unambiguous on its Face
The First Department upholds the trial courts determination that the term disability period was unambiguous as it was used in the context of the policy at issue. Plaintiffs attempts to introduce unsupported and/or otherwise hearsay evidence did not alter this result.

and Potpourri
12/10/09 John Cahn v. Ward Trucking, Inc., Appellative Division, First Department Continued Violations of Discovery Orders Results in Defendants Answer Being Struck
Plaintiff commenced this action in April of 2004 as a result of a workplace accident that allegedly occurred in March of 2003. Plaintiffs injuries were caused when he was struck by a barrel that he believed was delivered by Ward Trucking. Ultimately, however, it was determined that the barrel was delivered by another entity, Triangle.
Upon learning of the suit, Ward tendered this matter to Triangle, and sought a defense under Triangles insurance policy. However, and despite several requests for insurance information, Ward never produced the tender letter to Triangle, or the insurance policy under which Ward was being defended. This was despite at least four (4) discovery scheduling orders which required all insurance information must be produced in the course of paper discovery.
When the existence of Triangle was eventually discovered in May of 2007, plaintiff immediately amended his Complaint to assert a cause of action against Triangle. Triangle moved to dismiss the matter on Statute of Limitation grounds, and was ultimately dismissed from the case.
At the same time, plaintiff and co-defendant Taconic (the owner of the premises where plaintiff was injured) moved to strike Wards Answer for its failure to comply with multiple discovery orders. Because of Wards delay in producing the insurance information, the statute of limitations expired before plaintiff learned of his possible claim against Triangle. Finding that Wards refusal to provide the ordered discovery was a willful and contumacious withholding of disclosure, the First Department struck Wards Answer and granted judgment in favor of the plaintiff.
12/03/09 Otero v L & M Hub Associates, LLC
Appellate Division, First Department
Conditional Order of Indemnity Ok Where the Contract Complies with General Obligations Law

In this matter, L&M moved for contractual indemnification from co-defendant Great American Construction Company (Great American). In granting L&Ms motion for contractual indemnity, the trial court failed to condition L&Ms recovery upon a showing that L&Ms negligence did not contribute to the bodily injuries sustained by the plaintiff. In modifying the trial court decision, the First Department conditioned the Order so that L&M could not recover indemnity for its own percentage (if any should be proven) of negligence.

No problems, right? Wrong! For some strange reason, the First Department discusses the fact that the contract between L&M and Great American also contained an insurance procurement requirement. As such, according to the First Department, the indemnity clause was enforceable under General Obligations Law 5-321 because it was coupled with the insurance requirement.

***Huh? First of all, General Obligations Law 5-321 applies to commercial leases and this case appears to be a construction contract which is governed by General Obligations Law 5-322.1. Okay, so maybe the two are basically the same, but when did an insurance procurement clause have anything to do with a partys indemnity rights? Stop us if youve heard this before but Coverage and Indemnity are APPLES AND ORANGES! We do not understand the logic behind this one, but it appears that evidence of an insurance procurement clause may save an indemnity clause that is otherwise in violation of the General Obligations Law. ****

FIJAL'S FEDERAL FOCUS

Katherine A. Fijal
[email protected]

Im sorry to say there have been no new insurance cases from the Second Circuit for this edition. Hopefully, we will see some new decisions before the end of the year. Well keep you posted.

EARL'S PEARLS

Earl K. Cantwell
[email protected]

UPDATE ON THE ECONOMIC LOSS DOCTRINE

A Federal District Court in Pennsylvania recently held that the economic loss doctrine precluded an owner from bringing a negligence suit against an engineer for premature, impending failure of retaining walls where there was no physical damage to other property.

The owner was building a food and warehouse distribution center. The project included construction of retaining walls designed and inspected by engineering firms hired by the architect. The walls showed early signs of distress, and indeed a section of one retaining wall had failed. The owner sued the engineering firms for negligence. American Stores Properties, Inc. v. Spotts, Stevens & McCoy, Inc., Civil Action No. 05-1461, 2009 WL 2513437 (E.D. Pa. 8/13/09). In American Stores, the engineers, who were not in privity of contract with the owner, moved to dismiss the negligence claim based on the economic loss rule, and applying state law of Pennsylvania the District Court agreed.

Significantly, the Court first noted that the economic loss rule was not limited to claims between parties not in privity of contract. Both Federal and State Court cases in Pennsylvania had refused to limit the doctrine only to cases where the parties were not in privity.

The District Court ruled that the owner did not allege any actual damage to other property which might take the claim out of the economic loss doctrine. The owner had bargained for and received construction of the retaining walls, and damage to the retaining walls themselves was not damage to other property but rather damage to the contract product itself. Such allegations and damage fell within the ambit of the economic loss doctrine.

The court did note a possible exception to the economic loss rule potentially found in the Restatement (Second) of Torts Section 552 (1977) pertaining to business guidance. A prior Pennsylvania case had applied this exception where a general contractor sought to sue the project architect for increased construction costs caused by negligent design, and using this business guidance doctrine the case had been allowed to go forward notwithstanding the economic loss rule. In American Stores, however, the District Court limited the exception to claims of negligent misrepresentation based on Section 552 of the Restatement and, in the present case, the owner had made no such an allegations.

The lessons of American Stores are, first, that the economic loss rule does apply in construction defect cases to preclude claims in negligence where there is neither alleged nor present any actual, tangible damage to other property other than the construction product or item involved. Any such claims will be relegated to the law of contracts, warranties, etc.

The second lesson is that there may be some exceptions, such as Section 552 of the Torts Restatement, where exceptions have been carved out of the economic loss rule. Good pleading and creative lawyering can perhaps find a way around the rule. Plaintiffs frequently come up with fanciful and distorted allegations of damage to some other property in an effort to avoid the rule, but those efforts are more frequently shot down than not.

Third, in alleging and presenting a construction product defect claim, it is of course advisable to sue all potentially responsible parties under as many theories as possible so that in the event one claim is dismissed, such as a negligence claim under the economic loss rule, other contract, express warranty and implied warranty claims may still remain to be pursued.

ACROSS BORDERS

Please visit the Hot Cases Section of the Federation of Defense & Corporate Counsel website: www.thefederation.org

12/08/09 Rice v. Shelter Mutual Insurance Company
Missouri Supreme Court
Inconsistent and Irreconcilable Provisions in an Insurance Policy Create Ambiguity Resolved in Favor of Insured
Shelter Mutual Insurance Company "Shelter" appeals the trial court's entry of summary judgment in favor of Jason Rice in the amount of $ 525,000 in uninsured motorist coverage under his Shelter policy. The Supreme Court of Missouri affirmed the judgment of the lower court finding the policy to be ambiguous and resolving the ambiguity in favor of coverage for the insured. Rice was injured on the job while a passenger in a truck driven by Patterson. At the time of the accident, the at fault party was operating an uninsured motor vehicle. Prior to the collision, Shelter issued three automobile insurance policies to Rice's parents. Jason Rice was insured within the meaning of the uninsured motorist coverage of the three policies, and the policies were in full force and effect on the date of the accident. The first policy provided coverage of $ 100,000 per person/$ 300,000 per accident. The second and third policies provided coverage of $ 250,000 per person/$ 500,000 per accident. The exclusion at issue provided the following: Subject to the limit of our liability stated in this Coverage, we will pay damages for bodily injury sustained by an insured which that insured, or that insured's legal representative, is legally entitled to recover from the owner or operator of an uninsured motor vehicle.

The bodily injury must be caused by accident and arise out of the ownership or use of the uninsured motorist vehicle. . . . Coverage E does not apply: (3) To damages sustained by any insured if benefits are: (a) payable to, or on behalf of, such insured under any compensation law, (b) required by any compensation law to be provided to, or on behalf of, such insured as a result of the same accident. This exclusion does not apply to the amounts of coverage mandated by any uninsured motorist insurance law or financial responsibility law applicable to the accident, but does apply to any amounts exceeding that mandate, and to coverages which are not mandated by such laws. Upon review of the policy, the Court found the policy language to be inconsistent and unable to be reconciled.

Specifically, the Court noted that the uninsured motorist provision starts with a reference to providing coverage up to the limit of liability in the declaration provisions, followed by provisions to exclude coverage if any benefits are provided to an insured under any compensation law, followed by provisions that provide that the exclusion does not apply to amounts of coverage mandated by any uninsured motorist law, followed by provisions that provide the uninsured motorist part of the policy which exceed[s] the requirements of any applicable uninsured motorist insurance law or financial responsibility law, or are not governed by it, are fully enforceable.
Submitted by: Debra T. Herron (McNeer Highland McMunn and Varner, L.C.)

12/1/09 Jacaruso v. Lebski
Appellate Court of Connecticut
Uninsured-Underinsured Motorist Limits Reduced by Amounts Paid under Policys Liability and Umbrella Coverage
A vehicle driven by Richard F. Lebski collided with a vehicle driven by Margaret Jacaruso, in which Beatrice Picone was a passenger, resulting in injuries to Jacaruso and Picone. Geico, Lebskis liaibility insurer, exhausted its limits by paying Jacaruso and Picone $50,000.00 each. Jacaruso was insured by Nationwide Mutual Insurance Company (Nationwide), which paid $400,000 under the liability portion and umbrella portion of Jacarusos policy, to Picone to settle her claim against Jacaruso. Jacaruso then sought uninsured-underinsured motorist (UM) benefits from Nationwide pursuant to the UM coverage provision of her policy, which had limits of $300,000.00. The trial court granted Nationwides motion for summary judgment, finding that Nationwide was not liable to Jacaruso for UM benefits because the $300,000 policy limit was reduced to zero by the $100,000 in combined payments Geico had made to Picone and Jacaruso, as well as the $400,000 [that Nationwide] had paid to Picone to settle her negligence claim against Jacaruso, and that Connecticuts insurance regulations allowed for such a reduction. The Appellate Court of Connecticut affirmed the trial courts judgment, holding that the Nationwide policy at issue unambiguously allowed for such a reduction as follows: The limits of this [UM] coverage and/or any amounts payable under this cover, whichever are less, will be reduced by: [a] any amount paid by or for any liable parties.
Submitted by: Joseph Gill and Joanna Gomez

REPORTED DECISIONS

Commercial Insurance Company of Newark, New Jersey v. Popadich

Koenig & Samberg, Mineola (Arnold Koenig of counsel), for
appellant.
Lewis Johs Avallone Aviles, LLP, Melville (Elizabeth A.
Fitzpatrick of counsel), for respondent.
Order, Supreme Court, New York County (Marylin G. Diamond, J.), entered July 1, 2008, which, upon defendant Mangat's motion for reargument, adhered to a prior order granting plaintiff summary judgment, unanimously affirmed, with costs.
Plaintiff insurer seeks a declaration that it owed no duty to defend or indemnify defendant Popadich, the insured, in personal injury actions commenced against him by the other defendants, including Mangat. By his own admission, Popadich, on two dates in February 2002, ran down 27 pedestrians with his automobile on the streets of Manhattan. Plaintiff had appointed counsel to represent Popadich in a Kings County action that ended with an award of summary judgment determining that Mangat's injuries were caused by Popodich's negligence. That result does not collaterally estop plaintiff in this action because the Kings County action did not involve the issue of intentional conduct (see Color by Pergament v O'Henry's Film Works, 278 AD2d 92 [2000]). In addition, plaintiff and Popadich are not in privity, as their interests ceased to be identical and instead became adversarial when plaintiff proceeded to defend Popadich under a reservation of rights and subsequently denied coverage (see Public Serv. Mut. Ins. Co. v Goldfarb, 53 NY2d 392, 401 [1981]). Contrary to Mangat's apparent contention, plaintiff could not have caused Popadich's counsel in the Kings County action to raise the issue of whether Popadich had committed an intentional tort (see Farm Bur. Mut. Auto. Ins. Co. v Hammer, 177 F2d 793, 801 [4th Cir 1949], cert denied sub nom. Beverage v Farm Bur. Mut. Auto. Ins. Co., 339 US 914 [1950]); cf. Pavia v State Farm Mut. Auto. Ins. Co., 82 NY2d 445, 452 [1993] ["under established agency principles [insurer] may fairly be required to act in the insured's best interests"]).
The statements made by Popadich after his arrest support summary judgment in plaintiff's favor. In particular, the transcript of his confession, which he signed and the accuracy of which was sworn to by a detective, shows that Popadich admitted that he had driven his vehicle into Manhattan on two occasions with the purpose of running over as many people as possible. That confession is not hearsay, and is admissible against Mangat as a declaration against interest (see Basile v Huntington Util. Fuel Corp., 60 AD2d 616, 617 [1977] ["Unlike an admission, which may be used only against the party who made it or against his privies in interest, a declaration against interest may be introduced in evidence by or against any one"] [internal quotation marks omitted]).
Finally, when construing an insurance policy, the tests to be applied are common speech and the reasonable expectation of an ordinary person (see Ace Wire & Cable Co. v Aetna Cas. & Sur. Co., 60 NY2d 390, 398 [1983]). Here, the automobile liability policy issued by plaintiff provides no coverage for bodily injury that "[m]ay reasonably be expected to result from the intentional or criminal acts of any covered person" or "[i]s in fact intended by any covered person." "Thus, there is no insurance coverage under the terms of the policy if the resulting injury could reasonably be expected from the conduct. The court must look at the transaction as a whole in determining whether an accident has occurred" (Allstate Ins. Co. v Ruggiero, 239 AD2d 369, 370 [1997][internal citation omitted]). Based on the evidence, Mangat's injuries were to be reasonably expected by Popadich when he drove his vehicle through the streets of Manhattan with the purpose of causing as much harm to as many people as possible. Accordingly, plaintiff was not obligated to defend or indemnify him.
Lopez v. Abdul-Wahab

Dominick W. Lavelle, Mineola, for appellant.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York
(Stacy R. Seldin of counsel), for respondents.
Order, Supreme Court, Bronx County (Kenneth L. Thompson, J.), entered October 8, 2008, which granted defendant's motion for summary judgment dismissing the complaint on the ground that plaintiff did not sustain a serious injury within the meaning of the Insurance Law, unanimously affirmed, without costs.
Plaintiff was 28 years old at the time of the motor vehicle accident, in December 2004, in which he allegedly sustained injuries to his cervical and lumbar spine and left shoulder. Defendants established their prima facie entitlement to judgment that plaintiff had not sustained a "serious injury" within the meaning of Insurance Law 5102(d) by submitting medical affirmations stating that no evidence of recent trauma was found on plaintiff's diagnostic films, and reporting normal ranges of motion in all tested body areas by specifying the objective tests they used to arrive at the measurements (such as palpation, impingement sign and straight leg raising), concluding that plaintiff's injuries were resolved without permanency (see DeJesus v Paulino, 61 AD3d 605 [2009]). Reference to plaintiff's own proof and deposition testimony sufficiently refuted the "permanence" and "significant" categories of serious injury under 5102(d) (see Colon v Tavares, 60 AD3d 419 [2009]). The affirmation submitted by defendants' expert radiologist was not equivocal. From her review of the MRIs, she observed preexisting disc dessication at all of the cervical and lumbar disc levels at which injuries were alleged, explaining that desiccation is a drying out of disc material that develops over time and could not have occurred so quickly after the accident (see e.g. Depena v Sylla, 63 AD3d 504, 505 [2009], lv denied 13 NY3d 706 [2009]; Jean v Kabaya, 63 AD3d 509, 510 [2009]). Any injury in the nature of an annular lumbar tear was not identified in the bill of particulars and need not be addressed by this Court (see Sharma v Diaz, 48 AD3d 442, 443 [2008]), and in any event, defendants' expert radiologist found "clear evidence of pre-existing degenerative disease in the lower lumbar spine."
In opposition to defendants' motion, plaintiff improperly relied on the unaffirmed medical reports of his treating physicians (see Grasso v Angerami, 79 NY2d 813 [1991]). The report of plaintiff's expert was, in the absence of objective, contemporaneous evidence of the extent and duration of the alleged physical limitations resulting from the injury, insufficient (cf. Ayala v Douglas, 57 AD3d 266, 267 [2008]). Even considering the unaffirmed reports, plaintiff's experts failed to address the findings of defendants' expert radiologist, who opined that plaintiff had preexisting degenerative disease in his cervical and lower spine (see Valentin v Pomilla, 59 AD3d 184 [2009]). Plaintiff's deposition testimony that he was never confined to his home following the accident and missed no time from work negated his chance of establishing a 90/180-day serious-injury claim under 5102(d) (see Nguyen v Abdel-Hamed, 61 AD3d 429, 430 [2009]).
Chanda v. Varughese

Beck & Strauss, PLLC, Uniondale, N.Y. (Leland Stuart Beck of
counsel), for appellant.
Richard T. Lau, Jericho, N.Y. (Marcella Gerbasi Crewe of
counsel), for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Nassau County (Adams, J.), dated March 17, 2009, which granted the defendant's motion for summary judgment dismissing the complaint on the ground that she did not sustain a serious injury within the meaning of Insurance Law 5102(d).
ORDERED that the order is affirmed, with costs.
The defendant met his prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957).
In opposition, the plaintiff failed to raise a triable issue of fact. The plaintiff principally relied upon the affidavit of her treating chiropractor, and while that chiropractor noted therein significant limitations in the ranges of motion of the cervical and thoracolumbar regions of the plaintiff's spine, which were based on his contemporaneous and recent examinations of the plaintiff, he failed to acknowledge that the plaintiff previously injured the cervical and lumbar regions of her spine in a prior 2004 accident. That failure rendered speculative his conclusion that the injuries and limitations observed by him were the result of the subject accident (see Joseph v A & H Livery, 58 AD3d 688; Penaloza v Chavez, 48 AD3d 654; Zinger v Zylberberg, 35 AD3d 851, 852; Tudisco v James, 28 AD3d 536; Bennett v Genas, 27 AD3d 601; Allyn v Hanley, 2 AD3d 470).
The plaintiff's affirmed magnetic resonance imaging reports merely showed that, as of February and March 2006, the plaintiff had evidence of bulging discs at L2-3, L3-4, and L4-5, as well as herniated discs at L3-4, L4-5, L5-S1, C4-5, and C5-6. 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, as well as its duration (see Niles v Lam Pakie Ho, 61 AD3d 657; 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 plaintiff's medical reports from North Shore University Hospital were unaffirmed and thus insufficient to raise a triable issue of fact (see Grasso v Angerami, 79 NY2d 813; Sutton v Yener, 65 AD3d 625; McNeil v New York City Tr. Auth., 60 AD3d 1018; Sapienza v Ruggiero, 57 AD3d 643).
Reyes v. Dagostino

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Queens County (Satterfield, J.), dated August 14, 2008, which granted the defendants' motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law 5102(d).
ORDERED that the order is reversed, on the law, with costs, and the defendants' motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law 5102(d) is denied.
The defendants met their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957).
In opposition, however, the plaintiff raised a triable issue of fact as to whether he sustained a serious injury to the lumbar and cervical regions of his spine under the permanent consequential limitation and/or significant limitation of use categories of Insurance Law 5102(d) as a result of the subject accident (see Noel v Choudhury, 65 AD3d 1316; Gaviria v Alvardo, 65 AD3d 567). The affirmation of Dr. Jatinder Bakshi, one of the plaintiff's treating physicians, revealed, inter alia, significant limitations in the lumbar and cervical regions of the plaintiff's spine contemporaneous with the subject accident. The affirmed medical report of Dr. Panagiotis Zenetos, another of the plaintiff's treating physicians, which was based on an examination conducted in April 2008, showed that the plaintiff had significant limitations of motion in the lumbar and cervical regions of his spine. These physicians also properly recited the affirmed findings contained in reports of magnetic resonance imaging scans of the plaintiff's spine that revealed, among other things, herniated discs in the lumbar and cervical regions of his spine. Both physicians concluded that the injuries noted were caused by the subject accident and were permanent. Consequently, the defendants' motion for summary judgment dismissing the complaint should have been denied.
In re Liberty Mutual Insurance Company v. Mohabir

Buratti, Kaplan, McCarthy & McCarthy, Yonkers (Michael A.
Zarkower of counsel), for appellants.
Burke Lipton & Gordon, White Plains (Philip J. Dillon of
counsel), for respondent.
Order, Supreme Court, Bronx County (Patricia Anne Williams, J.), entered July 31, 2008, which granted reargument and adhered to the prior determination granting the petition to stay an uninsured motorist arbitration pending a framed-issue hearing on insurance coverage and added additional respondents to the proceeding, unanimously affirmed, without costs. Appeal from order, same court and Justice, entered March 28, 2008, unanimously dismissed as superseded by the appeal from the order of July 31, 2008.
Supreme Court correctly determined that petitioner presented a prima facie case that additional respondent Singh's vehicle was involved in the accident, which, in view of Singh's sworn denial of involvement, raises a genuine triable issue of fact justifying a stay pending a framed-issue hearing to determine whether the offending vehicle was his (see Matter of AIU Ins. Co. v Cabreja, 301 AD2d 448 [2003]; cf. Matter of New York Cent. Mut. Fire Ins. Co. [Reid], 34 AD3d 333 [2006]).
In re Progressive Insurance Company v. Dillon

Shayne, Dachs, Corker, Sauer & Dachs, LLP, Mineola
(Jonathan A. Dachs of counsel), for appellants.
Brand, Glick & Brand, P.C., Garden City (Peter M. Khrinenko
of counsel), for respondent.
Order, Supreme Court, New York County (James A. Yates, J.), entered November 26, 2008, which granted petitioner's motion to stay arbitration to the extent of directing an evidentiary hearing on the preliminary issue of insurance coverage, unanimously modified, on the law, to redefine the framed issue as "whether the insured's policy included underinsured motorist coverage," and otherwise affirmed, without costs.
The court correctly declined to address respondents' other arguments pending a determination of the issue of underinsured motorist coverage, since estoppel cannot be used to create coverage where none exists, regardless of whether the insurance company timely issued its disclaimer (Wausau Ins. Cos. v Feldman, 213 AD2d 179, 180 [1995]). We modify only to redefine the framed issue as indicated. We reject respondents' attempts to liken the court's previous orders to a judicial determination that coverage existed. There is no other basis in the current record for finding that coverage existed.
We have considered respondents' remaining contentions and find them unavailing.
In the Matter of Liberty Mutual Insurance Company v. Gallagher

Peter A. Hurwitz, PLLC, New City, N.Y., for appellants.
Burke Lipton & Gordon, White Plains, N.Y. (Philip J. Dillon of
counsel), for respondent.


DECISION & ORDER
In a proceeding pursuant to CPLR article 75 to permanently stay arbitration of a claim for underinsured motorist benefits, the appeal is from a judgment of the Supreme Court, Rockland County (Nelson, J.), entered January 22, 2009, which, after a hearing, and upon an order of the same court dated June 10, 2008, granting the petition, is in favor of the petitioner permanently staying the arbitration.
ORDERED that the judgment is affirmed, with costs.
"Where, as here, an insured is required to provide notice of a claim as soon as practicable, such notice must be given within a reasonable time under all of the circumstances" (Matter of State Farm Mut. Auto. Ins. Co. v Bombace, 5 AD3d 782, 782; see Security Mut. Ins. Co. of N.Y. v. Acker-Fitzsimons Corp., 31 NY2d 436, 441; Matter of State Farm Mut. Auto. Ins. Co. v Adams, 259 AD2d 551, 551-552). "In the context of supplementary uninsured/underinsured motorist (hereinafter SUM) claims, it is the claimant's burden to prove timeliness of notice, which is measured by the date the claimant knew or should have known that the tortfeasor was underinsured" (Matter of Progressive Northeastern Ins. Co. v McBride, 65 AD3d 632, 633; see Matter of Metropolitan Prop. & Cas. Ins. Co. v. Mancuso, 93 NY2d 487, 495). "Timeliness of notice is an elastic concept, the resolution of which is highly dependent on the particular circumstances" (Matter of Progressive Northeastern Ins. Co. v McBride, 65 AD3d at 633; see Matter of Metropolitan Prop. & Cas. Ins. Co. v. Mancuso, 93 NY2d at 494-495). "In determining whether notice was timely, factors to consider include, inter alia, whether the claimant has offered a reasonable excuse for any delay, such as latency of his/her injuries, and evidence of the claimant's due diligence in attempting to establish the insurance status of the other vehicles involved in the accident" (Matter of Progressive Northeastern Ins. Co. v McBride, 65 AD3d at 633; see Matter of Metropolitan Prop. & Cas. Ins. Co. v. Mancuso, 93 NY2d at 492-493).
Under the circumstances of this case, the appellant Raymond Gallagher failed to file written notice of his SUM claim as soon as practicable, as was required by his insurance policy, and he failed to sustain his burden of demonstrating due diligence or a reasonable excuse for the delay in ascertaining the alleged tortfeasor's insurance status (see Matter of Continental Ins. Co. v Marshall, 12 AD3d 508, 508-509; Matter of Nationwide Mut. Ins. Co. v DiGregorio, 294 AD2d 579, 580-581; see also Matter of State Farm Mut. Auto Ins. Co. v Adams, 259 AD2d at 552). Accordingly, the Supreme Court properly granted the petition to permanently stay arbitration of the claim for SUM benefits.
The appellants' remaining contentions either are without merit, or are not properly before this Court.
Ortiz v. S & A Taxi Corp.

Baker, McCoy, Morrissey & Moskovits, P.C., New York, N.Y.
(Timothy M. Sullivan of counsel), for appellants.
Krause & Associates, P.C., New York, N.Y. (Karen Gale
O'Reilly of counsel), for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendants appeal from an order of the Supreme Court, Kings County (Schmidt, J.), entered April 2, 2009, which denied their motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law 5102(d).
ORDERED that the order is affirmed, with costs.
While we affirm the order appealed from, we do so on a ground other than that relied upon by the Supreme Court. Contrary to the defendants' contention on appeal, they failed to meet their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In support of their motion, the defendants relied, inter alia, upon the affirmed medical report of their examining orthopedic surgeon, in which he noted the existence of a significant limitation in the range of motion, i.e., flexing, of the plaintiff's lumbar spine (see Buono v Sarnes, 66 AD3d 809; Held v Heideman, 63 AD3d 1105). While he opined that this limitation was "subjective," he failed to explain or substantiate his basis for that conclusion.
Under the circumstances, it is unnecessary to consider the sufficiency of the plaintiff's opposition papers (see Buono v Sarnes, 66 AD3d 809; Held v Heideman, 63 AD3d 1105; Coscia v 938 Trading Corp., 283 AD2d 538). Accordingly, the Supreme Court properly denied the defendants' motion for summary judgment dismissing the complaint.

United States Fid. & Guar. Co. v. Excess Ca. Reinsurance Assoc.

Quinn Emanuel Urquhart Oliver & Hedges, LLP, New York
(Michael B. Carlinsky of counsel), for appellants.
Simpson Thacher & Bartlett LLP, New York (Mary Kay
Vyskocil of counsel), for respondents.
Orders, Supreme Court, New York County (Richard B. Lowe, III, J.), entered October 21, 2008, January 9, 2009 and January 23, 2009, which, inter alia, denied defendants-appellants' (reinsurers) motion to compel plaintiff (cedant) to disclose attorney-client communications, unanimously affirmed, with costs.
Our prior decision in American Re-Insurance Co. v United States Fid. & Guar. Co. (40 AD3d 486, 492-493 [2007]) held that cedant's waiver of the attorney-client privilege was limited to communications between its officer, James Kleinberg, and Robert Omrod, the in-house lawyer whose advice Kleinberg disclosed at his EBT, regarding preparation of cedant's re-insurance bill. Our citation to Kirschner v Klemons (2001 US Dist LEXIS 17863, 2001 WL 1346008 [SDNY 2001]) ought to have made it clear that, based on cedant's representation that it did not intend to use "advice of counsel" as a defense, our finding of waiver did not extend to cedant's communications with any other attorneys concerning this subject matter. In view of cedant's concession, however, that it will not raise the "advice of counsel" defense and make any reference to attorney-client communications by cedant at the trial, we agree that the court should not permit cedant to raise this defense to reinsurers' claims, or refer to any such communications.
Decided and Entered: December 3, 2009

506786
ADAMOWICZ v NORTH COUNTRY INSURANCE COMPANY

Calendar Date: October 15, 2009
Before: Peters, J.P., Rose, Kane, Kavanagh and McCarthy, JJ.

Brennan & White, L.L.P., Queensbury (Eric C.
Schwenker of counsel), for appellant.
Flink Smith, L.L.C., Latham (Paul J. Campito of
counsel), for respondent.


Rose, J.
Appeal from an order of the Supreme Court (Dawson, J.), entered January 2, 2009 in Essex County, which granted defendant's motion for summary judgment dismissing the complaint.
Plaintiff sought reimbursement under an insurance policy issued by defendant for the costs she incurred after her home was damaged by fire. Although the parties were able to settle all of plaintiff's other claims, they were unable to settle her claim for additional living expenses. Defendant then sent a letter to plaintiff's attorney demanding submission of sworn proof of loss as to that claim within 60 days. When no proof of loss was received, defendant disclaimed coverage. Plaintiff then commenced this action to recover her additional living expenses, and defendant moved for summary judgment dismissing the complaint for plaintiff's failure to comply with the insurance policy's provisions regarding proof of loss. Supreme Court granted defendant's motion, and this appeal ensued.
We find merit in plaintiff's argument that by sending the demand for sworn proof of loss to her attorney and not to her, defendant failed to comply with the requirements of Insurance Law 3407 (a). That statute precludes the denial of an insured's claim for lack of proof of loss unless the insurer first "give[s] to such insured a written notice that it . . . desire[s] proof of loss to be furnished by such insured." By requiring the insurer to alert the insured to this duty, "the Legislature sought to protect the insured from the consequences of . . . oversight or neglect in complying with one of the conditions precedent to a recovery under the policy" (Ball v Allstate Ins. Co., 81 NY2d 22, 25 [1993] [internal quotation marks and citations omitted]).
Here, defendant did not mail the required demand to plaintiff, but to her attorney alone. While this demand could have been effective if plaintiff had, in fact, obtained the demand from her attorney (see Esa v New York Prop. Ins. Underwriting Assn., 89 AD2d 865, 866 [1982]), that did not occur here. Since the record fails to establish that defendant gave plaintiff the notice prescribed by Insurance Law 3407 (a), defendant's motion should have been denied.
Peters, J.P., Kane, Kavanagh and McCarthy, JJ., concur.
ORDERED that the order is reversed, on the law, with costs, and motion denied.
Decided on December 8, 2009
Tom, J.P., Nardelli, Renwick, Freedman, Roman, JJ.

1684N 1684NA 1684NB 604517/02
United States Fidelity & Guaranty Company

v
Excess Casualty Reinsurance Association

Quinn Emanuel Urquhart Oliver & Hedges, LLP, New York
(Michael B. Carlinsky of counsel), for appellants.
Simpson Thacher & Bartlett LLP, New York (Mary Kay
Vyskocil of counsel), for respondents.
Orders, Supreme Court, New York County (Richard B. Lowe, III, J.), entered October 21, 2008, January 9, 2009 and January 23, 2009, which, inter alia, denied defendants-appellants' (reinsurers) motion to compel plaintiff (cedant) to disclose attorney-client communications, unanimously affirmed, with costs.
Our prior decision in American Re-Insurance Co. v United States Fid. & Guar. Co. (40 AD3d 486, 492-493 [2007]) held that cedant's waiver of the attorney-client privilege was limited to communications between its officer, James Kleinberg, and Robert Omrod, the in-house lawyer whose advice Kleinberg disclosed at his EBT, regarding preparation of cedant's re-insurance bill. Our citation to Kirschner v Klemons (2001 US Dist LEXIS 17863, 2001 WL 1346008 [SDNY 2001]) ought to have made it clear that, based on cedant's representation that it did not intend to use "advice of counsel" as a defense, our finding of waiver did not extend to cedant's communications with any other attorneys concerning this subject matter. In view of cedant's concession, however, that it will not raise the "advice of counsel" defense and make any reference to attorney-client communications by cedant at the trial, we agree that the court should not permit cedant to raise this defense to reinsurers' claims, or refer to any such communications.
THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: DECEMBER 8, 2009
CLERK

Decided on December 3, 2009
Gonzalez, P.J., Tom, Andrias, Nardelli, Richter, JJ.

1625 113533/07
Cohen v First Unum Life Insurance Company

Yoeli & Gottlieb LLP, New York (Michael Yoeli of counsel),
for appellant.
Begos Horgan & Brown LLP, Bronxville (Patrick W. Begos of
counsel), for respondent.
Order, Supreme Court, New York County (Joan A. Madden, J.), entered on or about July 17, 2008, which granted defendant's motion for summary judgment dismissing the complaint and denied plaintiff's cross motion to dismiss defendant's defenses, unanimously affirmed, with costs.
Plaintiff's efforts to create an ambiguity in the insurance policy are unavailing (see Moore v Kopel, 237 AD2d 124, 125 [1997]). The term "disability period" as used in the policy is reasonably susceptible of only one meaning. An unsupported hearsay statement attributed by plaintiff to a purported agent of defendant neither changes the policy's terms nor renders them ambiguous (see Kass v Kass, 91 NY2d 554, 566 [1998]).
We have considered and rejected plaintiff's remaining contention.
THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: DECEMBER 3, 2009
CLERK
Alberto Otero v L & M Hub Associates, LLC

Rubin, Fiorella & Friedman LLP, New York (Michael C.
O'Malley of counsel), for appellant-respondent.
Lester Schwab Katz & Dwyer, LLP, New York (Harry
Steinberg of counsel), for respondents-appellants.
Friedman & Simon, L.L.P., Jericho (Lauren Cristofano of
counsel), for respondents.
Order, Supreme Court, Bronx County (Patricia Anne Williams, J.), entered October 23, 2008, which, insofar as appealed from, in this action for personal injuries, denied defendant Great American Construction Corp.'s motion for summary judgment dismissing the cross claim of defendants L & M Hub Associates, LLC (L & M) and C & C Affordable Management LLC (C & C) for contractual indemnification against it and granted L & M and C & C's cross motion for summary judgment on said cross claim, and which granted plaintiff's motion for partial summary judgment on the issue of liability as against L & M and C & C, unanimously modified, on the law, to condition the grant of L & M and C & C's cross motion for indemnification upon a finding that the accident was caused, in whole or in part, by negligence of Great American, and to deny plaintiff's motion, and otherwise affirm, without costs.
Great American's motion for summary judgment was properly denied, as the only evidence it offered that it had not contracted to install window guards was the testimony of its principal. However, the contract unambiguously stated that Great American was to perform this work, and in light of the contract, there was no issue of fact as to the scope of the indemnity (see Omansky v Whitacre, 55 AD3d 373 [2008]).
Great American also contends that issues of fact as to the negligence of L & M and C & C (respectively, the owner and managing agent of the building) should have precluded summary judgment to them on the issue of contractual indemnification. While this issue is raised for the first time on appeal, we can reach it, since it is determinative and may be determined on the instant record (see Vanship Holdings Ltd. v Energy Infrastructure Acquisition Corp., 65 AD3d 405, 408 [2009]). On the merits, the indemnification clause of Great American's contract will not be enforceable in the event it is determined that negligence of L & M and C & C was the sole cause of the accident (see Zeigler-Bonds v Structure Tone, 245 AD2d 80, 81 [1997]). Accordingly, we modify to condition the grant of summary judgment to L & M and C & C as to indemnification on a determination being made that the accident was caused, in whole or in part, by negligence of Great American. We note that, notwithstanding General Obligations Law 5-321, the indemnification clause is enforceable to the extent indicated because it is coupled with an agreement by Great American to purchase insurance for the parties to be indemnified (see Great N. Ins. Co. v Interior Const. Corp., 7 NY3d 412 [2006].
Furthermore, plaintiff's motion for summary judgment on the issue of liability as against L & M and C & C is denied, since the motion was predicated on the incorrect assumption that a violation of Administrative Code of City of NY 17-123 gives rise to negligence per se (see Elliott v City of New York, 95 NY2d 730 [2001]).
THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: DECEMBER 3, 2009
CLERK
Thomas Hamilton Pharmacy, Inc. v Nationwide Mutual Insurance Company

Alan Jay Martin (Feldman, Rudy, Kirby & Farquharson, P.C.,
Westbury, N.Y. [Bruce W. Farquharson], of counsel), for appellant.
Bartlett, McDonough, Bastone & Monaghan, LLP, White Plains,
N.Y. (Edward J. Guardaro, Jr., and Gina
Bernardi Di Folco of counsel), for
respondent.


DECISION & ORDER
In an action, inter alia, to recover damages for breach of contract, the plaintiff appeals, as limited by its brief, from so much of an order of the Supreme Court, Westchester County (Nicolai, J.), entered September 19, 2008, as granted that branch of the cross motion of the defendant Nationwide Mutual Insurance Company which was for summary judgment dismissing the complaint insofar as asserted against it and denied that branch of its motion which was for summary judgment on its first cause of action.
ORDERED that the order is affirmed insofar as appealed from, with costs.
The defendant Nationwide Mutual Insurance Company (hereinafter Nationwide) met its initial burden of establishing that the plaintiff commenced this action after expiration of the two-year limitations period contained in the subject insurance policy (see Gilbert Frank Corp. v Federal Ins. Co., 70 NY2d 966, 967-968; Halim v State Farm Fire & Cas. Co., 31 AD3d 710; Schachter v Royal Ins. Co. of Am., 21 AD3d 1024). In opposition, the plaintiff failed to raise a triable issue of fact as to whether the action was governed by the six-year statute of limitations set forth in CPLR 213(2). Moreover, the plaintiff failed to raise a triable issue of fact as to waiver (see Gilbert Frank Corp. v Federal Ins. Co., 70 NY2d at 968; Saxena v New York Prop. Ins. Underwriting Assn., 232 AD2d 622), or estoppel (see Gilbert Frank Corp. v Federal Ins. Co., 70 NY2d at 968; Proc v Home Ins. Co., 17 NY2d 239, 245-246; Culinary Inst. of Am. v Aetna Cas. & Sur. Co., 151 AD2d 638).
In light of our determination, the plaintiff's remaining contention has been rendered academic.
MASTRO, J.P., BELEN, HALL and AUSTIN, JJ., concur.
John Cahn v Ward Trucking, Inc., et al.

Law Office of James J. Toomey, New York (Evy L. Kazansky
of counsel), for appellants-respondents.
Pollack, Pollack, Isaac & DeCicco, New York (Brian J. Isaac
of counsel), for respondent-appellant.
Downing & Peck, P.C., New York (John M. Downing, Jr. of
counsel), for Ward Trucking, Inc., respondent.
Quirk and Bakalor, P.C., New York (Debra E. Seidman of
counsel), for Atlantic Coastal Trucking, Inc. and Triangle Trucking,
respondents.
Order, Supreme Court, New York County (Michael D. Stallman, J.), entered March 12, 2008, which, inter alia, (1) granted the motion of second third-party defendants Atlantic Coastal Trucking, Inc., and Triangle Trucking (collectively "Triangle") to dismiss plaintiff's second amended complaint as against them as time-barred, and (2) denied the cross motion of defendants Taconic Management Company LLC and 450 Park Avenue South Associates, LLC (collectively, "Taconic") to strike the answers of Triangle and defendant Ward Trucking, Inc. ("Ward"), unanimously modified, on the facts, to the extent of finding that Ward failed to comply with court orders directing disclosure and that such noncompliance was willful and contumacious, and directing that as a sanction Ward is precluded at trial from denying that it delivered the subject drums to the building where the injury occurred, and otherwise affirmed, without costs.
Plaintiff alleges that, on March 12, 2003, as he was walking in the lobby of the building where he works, a large drum of chemical solution fell off a shipping pallet and struck his leg, injuring him. Plaintiff commenced this action in April 2004, asserting claims in negligence against, inter alia, Taconic, the building's owner, and Ward, the company that plaintiff believed had delivered the drum to the building. Unbeknownst to plaintiff and the other parties to the action, except Ward, the drums had actually been delivered to the building by Triangle, another trucking company, pursuant to a standing Cartage Agreement between Ward and Triangle. Although Ward and Triangle were independent companies with no common officers, shareholders, or employees, Ward relied exclusively on Triangle to make all of its deliveries in New York City, and the two companies had facilities at the same address in New Jersey. The two companies also sometimes shared trailers pursuant to an Interchange Agreement. Triangle had access to Ward's computer system for purposes of inputting delivery information, and Triangle used Ward's delivery receipts when making deliveries on Ward's behalf.
Pursuant to the Cartage Agreement, Triangle had Ward named as an additional insured on a liability policy issued by New Jersey Manufacturers Insurance Company. In a November 2003 letter, plaintiff's attorneys advised Ward of plaintiff's claim and requested that Ward forward their letter to its attorney; instead, Ward forwarded the letter to Triangle with its own letter to Triangle, dated November 17, 2003, requesting that Triangle and its insurer contact plaintiff's attorneys and advise them of Triangle's "involvement" and Ward's "non-involvement."
On July 1, 2005, plaintiff served a set of discovery demands on all defendants, among which was a request for all incident-related insurance policies and "reports" made in the regular course of business. Ward responded on July 8, 2005, stating that the policies would "be provided" and that there were no such reports. In the latter regard, Ward argues that its letter was not a report made in the regular course of business because it did not deliver the drum. Ward also answered at least one discovery demand in a manner that was misleading in that it obscured Triangle's involvement in making the delivery of the drum that allegedly injured plaintiff.
In August 2005, November 2005, and March 2006, Supreme Court issued conference orders directing defendants to produce all outstanding requested documents, including insurance-related documents. However, Ward did not produce the policy under which it was being represented until December 2006. Furthermore, there is no evidence that the November 2003 letter from Ward to Triangle was produced prior to Ward's May 2007 deposition.
In June 2007, plaintiff served a second amended complaint asserting claims against Triangle. Because more than three years had passed since the incident, Triangle moved to dismiss the complaint as time-barred. Taconic cross-moved for, among other things, an order striking Ward's answer for its willful failure to timely disclose Triangle's involvement in the incident.
Supreme Court correctly granted Triangle's motion to dismiss the second amended complaint as time-barred. Because Ward did not exercise control over Triangle's delivery of the drums, and because Ward may have been independently negligent in its handling of the drums prior to transferring them to Triangle, the parties have differing defenses to plaintiff's claims, and therefore are not "united in interest" for purposes of the relation-back doctrine (Raymond v Melohn Props., Inc., 47 AD3d 504, 505 [2008]; Xavier v RY Mgt. Co., Inc., 45 AD3d 677, 679 [2007]).
The circumstances, including Ward's generally evasive responses to plaintiff's demands and close business relationship with Triangle, compel a finding that Ward's unexplained delay in producing a copy of Triangle's New Jersey Manufacturers insurance policy in contravention of three court orders directing its production, and inadequately explained delay in producing its November 2003 letter to Triangle reporting plaintiff's claim, were a willful and contumacious withholding of disclosure until after the three-year statute of limitations had run, in an attempt to hide Triangle's involvement in the incident and shield Triangle from exposure to liability.
We have considered and rejected appellants' other arguments.
THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: DECEMBER 10, 2009
Wallace v. Adam Rental Transportation, Inc.

Mallilo & Grossman, Flushing, N.Y. (Francesco Pomara, Jr., of
counsel), for appellant.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y.
(Stacy R. Seldin of counsel), for
respondents.

DECISION & ORDER
In a consolidated action to recover damages for personal injuries, the plaintiff Joanne Bailey appeals from an order of the Supreme Court, Kings County (Vaughan, J.), dated January 14, 2009, which granted the motion of the defendants Horton Transportation II, Inc., and Arif Gardashov for summary judgment dismissing the complaint insofar as asserted by her against them on the ground that she did not sustain a serious injury within the meaning of Insurance Law 5102(d).
ORDERED that the order is affirmed, with costs.
The defendants Horton Transportation II, Inc., and Arif Gardashov met their prima facie burden of showing that the plaintiff Joanne Bailey did not sustain a serious injury within the meaning of Insurance Law 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957; see also Giraldo v Mandanici, 24 AD3d 419; Meyers v Bobower Yeshiva Bnei Zion, 20 AD3d 456). In opposition, Bailey failed to raise a triable issue of fact. In opposition, Bailey principally relied on the affirmation of her treating physician, Dr. Boris Kleyman. That affirmation was insufficient to raise any triable issues of fact. While Kleyman set forth range-of-motion findings with respect to Bailey's right shoulder that were contemporaneous with the accident, he failed to compare those findings to what is normal (see Page v Belmonte, 45 AD3d 825; Malave v Basikov, 45 AD3d 539; Fleury v Benitez, 44 AD3d 996; Nociforo v Penna, 42 AD3d 514). Moreover, Kleyman failed to set forth any recent range-of-motion findings concerning Bailey's right shoulder in his affirmation.
As to Bailey's right knee, Dr. Kleyman failed to set forth any range-of-motion findings (see LaMarre v Michelle Taxi, Inc., 60 AD3d 911; Ponciano v Schaefer, 59 AD3d 605; Fiorillo v Arriaza, 52 AD3d 465; Sharma v Diaz, 48 AD3d 442; Porto v Blum, 39 AD3d 614).
With respect to Bailey's lumbar spine, Kleyman noted significant limitations therein based on examinations contemporaneous with the subject accident, as well as recent examinations, but failed to acknowledge the fact that the plaintiff was involved in a prior accident in which she injured her lower back. This failure rendered speculative Kleyman's conclusion that the injuries and limitations he noted with respect to Bailey's lumbar spine were the result of the subject accident (see Joseph v A & H Livery, 58 AD3d 688; Penaloza v Chavez, 48 AD3d 654; Zinger v Zylberberg, 35 AD3d 851, 852; Tudisco v James, 28 AD3d 536; Bennett v Genas, 27 AD3d 601; Allyn v Hanley, 2 AD3d 470).

Wallace v. Adam Rental Transportation, Inc.

Harvey Gladstein & Partners, LLC, New York, N.Y. (Richard M.
Sands and Jan B. Rothman of counsel), for appellants.
Joseph M. Settipane, New York, N.Y., for respondent.

DECISION & ORDER
In a consolidated action to recover damages for personal injuries, the defendants Horton Transportation, Inc., Horton Transportation II, Inc., and Arif Gardashov appeal from an order of the Supreme Court, Kings County (Vaughan, J.), entered June 4, 2008, which denied their motion for summary judgment dismissing the complaint insofar as asserted by the plaintiff Lorraine Wallace against them on the ground that she did not sustain a serious injury within the meaning of Insurance Law 5102(d).
ORDERED that the order is affirmed, with costs.
The appellants failed to meet their prima facie burden of showing that the plaintiff Lorraine Wallace did not sustain a serious injury within the meaning of Insurance Law 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In support of their motion, the appellants relied on, inter alia, the affirmed medical report of Dr. Wayne Kerness, their examining orthopedic surgeon. In that report, Kerness noted significant limitations in the range of motion of Wallace's left shoulder (see Alvarez v Dematas, 65 AD3d 598; Landman v Sarcona, 63 AD3d 690; Bagot v Singh, 59 AD3d 368; Hurtte v Budget Roadside Care, 54 AD3d 362). While Kerness broadly opined that the all of his findings regarding Wallace were normal becauseWallace suffered from pre-existing degenerative changes of, inter alia, the left shoulder, he failed to set forth any foundation for that conclusion (see Franchini v Palmieri, 1 NY3d 536).
Since the appellants failed to meet their prima facie burden, it is unnecessary to consider the sufficiency of the evidence submitted in opposition to the motion (see Alvarez v Dematas, 65 AD3d 598; Landman v Sarcona, 63 AD3d 690).

Annan v. Abdelaziz

Cheven, Keely & Hatzis, New York, N.Y. (William B. Stock of
counsel), for appellants.
Borrell & Riso, LLP, Staten Island, N.Y. (John Riso of counsel),
for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendants appeal from an order of the Supreme Court, Kings County (Schmidt, J.), dated January 8, 2009, which denied their motion for summary judgment dismissing the complaint insofar as asserted against them by the plaintiff Rodney Blake on the ground that he did not sustain a serious injury within the meaning of Insurance Law 5102(d).
ORDERED that the order is reversed, on the law, with costs, and the defendants' motion for summary judgment dismissing the complaint insofar as asserted against them by the plaintiff Rodney Blake is granted.
The defendants met their prima facie burden of showing that the plaintiff Rodney Blake 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, Blake failed to raise a triable issue of fact. Initially, Blake's medical record from Staten Island Chiropractic Associates failed to raise a triable issue of fact because it was uncertified and unauthenticated and, thus, not in admissible form (see CPLR 4518[c]; Stock v Otis Elev. Co., 52 AD3d 816). Moreover, the narrative reports of physicians and other health care providers contained in the medical record are unsworn and, thus, also not in admissible form (see Grasso v Angerami, 79 NY2d 813; Sutton v Yener, 65 AD3d 625; McNeil v New York City Tr. Auth., 60 AD3d 1018; Sapienza v Ruggiero, 57 AD3d 643).
The affidavit of Blake's treating chiropractor, Dr. Denny Julewicz, also failed to raise a triable issue of fact. While Julewicz noted that Blake had significant limitations in the ranges of motion of the lumbar and cervical regions of his spine upon initial testing conducted on July 14, 2004, no such significant limitations existed when Blake was re-examined on November 14, 2008. In fact, on November 14, 2008, Blake had normal lumbar spine range of motion. While Blake showed some cervical spine limitation upon the testing on November 14, 2008, those limitations were not significant within the meaning of Insurance Law 5102(d), and did not amount to a serious injury (see Waldman v Dong Kook Chang, 175 AD2d 204; see also Trotter v Hart, 285 AD2d 772).
Blake also failed to raise a triable issue of fact as to whether he sustained a medically-determined injury of a nonpermanent nature which prevented him from performing his usual and customary daily activities for 90 of the 180 days following the subject accident (see Sainte-Aime v Ho, 274 AD2d 569). In this case, the plaintiff was cleared by his own physician to return to work within one month of the subject accident.
American Cleaners, Inc. v. American Interl Specialty Lines Ins.

Kalter, Kaplan, Zeiger & Forman, Woodbourne, N.Y. (Terry S.
Forman of counsel), for appellant.
Beth Zaro Green, Brooklyn, N.Y. (Erika C. Aljens and Michael
Fleming of counsel), for respondent
American International Specialty Lines
Insurance Company.
Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, New
York, N.Y. (Mathew P. Ross and
Debra A. Adler of counsel), for
respondents Konover & Associates, Inc.,
Konover Management Corporation,
and Koncal Associates Limited
Partnership.


DECISION & ORDER
In an action, inter alia, in effect, for a judgment declaring that the plaintiff is covered by an insurance policy issued by the defendant American International Specialty Lines Insurance Company naming the defendant Konover & Associates, Inc., as the insured, the plaintiff appeals from (1) an order of the Supreme Court, Orange County (Owen, J.), dated September 16, 2008, which granted the motion of the defendant American International Specialty Lines Insurance Company, and the separate motion of the defendants Konover & Associates, Inc., Konover Management Corporation, and Koncal Associates Limited Partnership for summary judgment and denied the plaintiff's cross motion for leave to amend the complaint to interpose additional causes of action, and (2) a judgment of the same court dated November 10, 2008, which, upon the order, among other things, declared, in effect, that the plaintiff is not covered by the subject insurance policy.
ORDERED that the appeal from the order is dismissed; and it is further,
ORDERED that the judgment is affirmed; and it is further,
ORDERED that one bill of costs is awarded to the respondents appearing separately and filing separate briefs.
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). 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 Supreme Court properly granted the motion of the defendant American International Specialty Lines Insurance Company (hereinafter American International) for summary judgment. "The four corners of an insurance agreement govern who is covered and the extent of coverage" (Sixty Sutton Corp. v Illinois Union Ins. Co., 34 AD3d 386, 388; see Stainless, Inc. v Employers Fire Ins. Co., 69 AD2d 27, 33, affd 49 NY2d 924). Moreover, where a third party seeks the benefit of coverage, the terms of the policy must clearly evince such intent (see Stainless, Inc. v Employers Fire Ins. Co., 69 AD2d at 33). Here, by submitting the subject policy of insurance, which lists the defendant Konover & Associates, Inc., as the only named insured, American International demonstrated, prima facie, that the plaintiff was not entitled to a declaration of coverage. In opposition, the plaintiff failed to raise a triable issue of fact (see Zuckerman v City of New York, 49 NY2d 557).
Likewise, the court properly granted the motion of the defendants Konover & Associates, Inc., Konover Management Corporation, and Koncal Associates Limited Partnership (hereinafter the Konover defendants) for summary judgment. The Konover defendants demonstrated their prima facie entitlement to judgment as a matter of law by submitting a lease executed by Koncal Associates Limited Partnership, as landlord, and the plaintiff, as tenant, which did not obligate them to name the plaintiff as an additional insured. In opposition to this showing, the plaintiff failed to raise a triable issue of fact.
Furthermore, the court providently exercised its discretion in denying the plaintiff's cross motion, made on the eve of trial, for leave to amend the complaint to add causes of action sounding in breach of contract, common-law indemnification, and indemnification under the Navigation Law. "Generally, [i]n the absence of prejudice or surprise to the opposing party, leave to amend a pleading should be freely granted unless the proposed amendment is palpably insufficient or patently devoid of merit'" (Morris v Queens Long Is. Med. Group, P.C., 49 AD3d 827, quoting G.K. Alan Assoc., Inc. v Lazzari, 44 AD3d 95, 99, affd 10 NY3d 941; see CPLR 3025[b]; Sampson v Contillo, 55 AD3d 591; Lucido v Mancuso, 49 AD3d 220; Trataros Constr., Inc. v New York City School Constr. Auth., 46 AD3d 874, 874). "However, where the application for leave to amend is made long after the action has been certified for trial, judicial discretion in allowing such amendments should be discrete, circumspect, prudent, and cautious'" (Morris v Queens Long Is. Med. Group, P.C., 49 AD3d at 828, quoting Clarkin v Staten Isl. Univ. Hosp., 242 AD2d 552, 552). "Moreover, when . . . leave is sought on the eve of trial, judicial discretion should be exercised sparingly" (Morris v Queens Long Is. Med. Group, P.C., 49 AD3d at 828; see Comsewogue Union Free School Dist. v Allied-Trent Roofing Sys., Inc., 15 AD3d 523, 525; Rosse-Glickman v Beth Israel Med. Ctr.-Kings Hwy. Div., 309 AD2d 846). "In exercising its discretion, the court should consider how long the party seeking the amendment was aware of the facts upon which the motion was predicated, whether a reasonable excuse for the delay was offered, and whether prejudice resulted therefrom" (Cohen v Ho, 38 AD3d 705, 706). The Supreme Court properly weighed all of these considerations, including the plaintiff's failure to proffer a reasonable excuse for the delay, in denying the plaintiff's cross motion.
The Board of Managers of the 1235 Park Condo. v. Clermont Specialty

Turek Roth Mester LLP, New York (Charles L. Mester of
counsel), for appellants.
White Fleischner & Fino, LLP, New York (Nancy Davis
Lyness of counsel), for respondents.
Order, Supreme Court, New York County (Marylin G. Diamond, J.), entered April 10, 2008, which, upon the parties' motions for summary judgment, declared that defendants (collectively, the insurer) have no duty to defend and indemnify plaintiffs (collectively, the insured) in an underlying action for personal injuries sustained by a worker on the insured's premises, unanimously affirmed, without costs.
The worker was taken to the hospital by ambulance after falling off a ladder while installing a water tank on the roof of the insured's building; the insured immediately learned of the accident; and the insured's notice of claim was admittedly untimely. The insured argues that the untimeliness should be excused because it had a reasonable, good-faith belief that no claim would be asserted against it, based on a phone call it made to the worker's employer on the day of the accident in which it was informed that the worker was not admitted to the hospital, did not sustain any serious injuries, and was expected to return to work the next day. Given the nature of the work that the worker was performing and the insured's knowledge that the worker had fallen off a ladder and been taken to the hospital by ambulance, this single phone call on the day of the accident was not an adequate inquiry into the circumstances of the accident and its outcome, and, as a matter of law, could not have caused the insured to reasonably believe that there was no reasonable possibility of the policy's involvement (see Great Canal Realty Corp. v Seneca Ins. Co., 5 NY3d 742, 744 [2005]; Paramount Ins. Co. v Rosedale Gardens, 293 AD2d 235, 239-240 [2002]; SSBSS Realty Corp. v Public Serv. Ins. Co., 253 AD2d 583, 585 [1998]). Nor is there merit to the insured's argument that the recent amendment to Insurance Law 3420(a) adding paragraph 5 (L 2008, ch 388, 2, eff Jan 17, 2009), requiring a showing of prejudice before an insurer denies coverage on the ground of untimely notice, applies retroactively to the instant 2003 policy; the amendment expressly applies to policies issued on or after its effective date (id., 8; see Safeco Ins. Co. of Am. v Discover Prop. & Cas. Ins. Co., 2009 US Dist LEXIS 18735, *14, n 3, 2009 WL 436329, *5 (SD NY 2009).
In the Matter of State-Wide Ins. Co. v. Luna

Shayne, Dachs, Corker, Sauer & Dachs, LLP, Mineola, N.Y.
(Jonathan A. Dachs of counsel), for appellant.
Bruno, Gerbino & Soriano, LLP, Melville, N.Y. (Charles W.
Benton of counsel), for respondent-
respondent.


DECISION & ORDER
In a proceeding pursuant to CPLR article 75 to permanently stay arbitration of claims for uninsured motorist benefits, the petitioner appeals from an order of the Supreme Court, Kings County (Marano, J.H.O.), dated July 25, 2008, which, after a hearing, denied the petition and directed the parties to proceed to arbitration.
ORDERED that the order is affirmed, with costs.
Contrary to the petitioner's contention, State Farm Fire & Casualty Company established that it properly disclaimed coverage under its insured's insurance policy on the ground of noncooperation by demonstrating that it acted diligently in seeking to bring about its insured's cooperation, that its efforts were reasonably calculated to obtain its insured's cooperation, and that the attitude of its insured, after the cooperation of its insured was sought, was one of "wilful and avowed obstruction" (Thrasher v United States Liab. Ins. Co., 19 NY2d 159, 168; see State Farm Fire & Cas. Co. v Imeri, 182 AD2d 683, 683-684). Accordingly, the Supreme Court properly denied the petition and directed the parties to proceed to arbitration (see Matter of Allstate Ins. Co. v Guillaume, 23 AD3d 379, 380).
The petitioner's remaining contentions are without merit.