Coverage Pointers - Volume XI, No. 14

Dear Coverage Pointers Subscribers:

Welcome to the first issue of the New Year. We have nicely survived the holidays and are delighted to return with a cornucopia of coverage decisions from the New York appellate courts. We've added a dozen or so new subscribers in the past couple of weeks, and for those of you who just joined us, a special welcome. We're in your mailbox every other Friday morning and for those who cannot sleep on the night preceding, you're likely to see the issue in your mailbox on Thursday evening. Read the issue from cover-to-cover and we are promising a solution for insomnia.

Each issue is introduced by a cover letter from yours truly and the attached issue is provided in Microsoft Word format. This format assures that you can copy and paste cases and summaries into claim files or forward them to others. If you do forward materials to others, all we ask is that you let them know this is a Hurwitz & Fine, PC publication. Just recently, some sent me the "must read" review of a recent case, crafted as if he or she had authored it. I chuckled, seeing our own handiwork from the previous issue of Coverage Pointers.

In this week's issue, you'll find a variety of interesting decisions including one where inconsistent decisions in two different proceedings left a claimant without the availability of either excess auto liability coverage or uninsured motorist benefits, a number of finely cut late notice and disclaimer cases, and a few that provide lessons (or, if you prefer, "coverage pointers") for insurers trying to make the right decisions at the right time in the right way.

One Hundred Years Ago Today:

One hundred years ago today, the Syracuse newspapers were still reporting on the story of a double-fatality fire which occurred within the city limits the previous week. The post-fire drill hasn't changed much in a century. The fire, the cleanup, the insurance claims:

Syracuse Post Standard
January 8, 1910
Page 10

WIDOW ASKS FOR LETTERS
IN ROSENBLOOM ESTATE

But Insurance Companies May Refuse Payment Upon Damaged Clothing Stock

Mrs. Celia Rosenbloom yesterday applied for letters of administration in the estate of her husband, Moses Rosenbloom, who, with Wolf Pearlman, met death in a fire in the Star Credit Parlors in the Nottingham Building one week ago to-night. Thus far no proof loss has been given the companies which carried $9,500 worth of insurance upon Mr. Rosenbloom's stock, and it was said last night companies might refuse to pay the claim under a clause in the insurance policies forbidding the taking of gasoline into the store. This, however, will not affect the policies of W. D. Andrews or those of the owners of the building. It was also reported last night that an accident insurance company which sold a $5,000 policy to Mr. Rosenbloom, on which it is liable for $10,000 for death in a fire, might contest the claim.

Editor's Note: Note that under "innocent insured" doctrine, other insureds, including the property owner, were able to have their claims paid by the insurers.

On April 10, 1912, the Syracuse Post Standard reported, on page 3, that Mrs. Rosenbloom lost the first of five lawsuits she commenced against various insurers. The insurers believed that the fire was not accidental and was started either by Rosenbloom or someone acting on his behalf. The jury sided with the insurers.

Speaking of the Innocent Insured Doctrine:

For over 20 years, I have been teaching Insurance Law at the Buffalo Law School to second and third year law students. Ably assisted by Mike Perley and Audrey Seeley, we do our best to mold the minds of 60 - 80 second and third year law students in the fall semester.

In December, we administered the final exam and one of the short answer questions happened to be:

What is the innocent insured doctrine? When does it apply?

We thought we would share one of the more creative answers, submitted by someone who is destined for a fine legal career (but obviously, in another field other than insurance):

The innocent insured doctrine is a relic of the Byzantium Empire and one of the last vestiges of imperial splendor. It was secretly smuggled away and hidden from the Ottoman hordes by a chivalrous religious sect that pledged fealty to the Pope and to apostolic acts. The doctrine survived and was recently discovered in remote catacombs in Portugal. Its meaning has been lost to time and scholars will debate about it for decades to come.

Professor's Note: Partial credit was awarded for entertainment value. Surely, the anonymous student is destined for a judicial position. He or she) used eloquent words to underscore a total lack of understanding of the topic, but did so in a convincing manner.

Words from the Prince of Property Insurance, Steve Peiper:

Relax! It is not a holiday, you are, in fact, scheduled to be at work today. Greetings and Happy New Year!

We ease into 2010 with our first property damage case of the year. We submit the Park Country Club decision as proof that you can, indeed, discuss golf and law without mentioning Tiger Woods.

Among our potpourri in this issue, please take a moment to review the underage drinking/parental supervision decision recently issued by the Fourth Department. As always, we have yet another case on the interpretation of indemnity and insurance agreements; and, finally, we offer a case that turns the tables on an unsuspecting broker.

Thanks for reading, and best wishes on a successful 2010.

Steve
[email protected]

In This Week's Issue:

KOHANE'S COVERAGE CORNER
Dan D. Kohane
[email protected]

• Rationale for Delay in Disclaimer Must be Documented
• "Products/Completed Operations Exception to Pollution Exclusion Leads to Determination of Coverage for Pollution. Fuel in Insured's Pipeline Is Considered by Majority of Split Court to Be No Longer in Insured's Physical Possession.
• Late Notice of Accident Not Excused by Actions of Insured
• The Undefined Term "Additional Insured" Means Any Insured Other Than the Named Insured
• All It Would Have Taken Was Two More Stamps; Disclaimer Not Proper if Addressed to Corporate Insured, but Not Addressed to Others at Same Location, Invalid as to Non-Addressees
• Claimant Euchred by Inconsistent Coverage Decisions; Loses Both Excess Coverage from Defendant's Carrier and SUM Coverage from Her Own
• No Duty to Defend Under Title Policy as Policy Overrides "Certificate of Title"
  

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

• Work, Standing Alone, Does Not Meet The "Prevented From Performing Substantially All" Requirement of The 90/180-Day Category
• Does Spondylolysis Qualify As A "Fracture"?
• Range-of-Motion Findings Not Based On Objective Tests Are Not Probative
• Plaintiff's Own Deposition Testimony May Be Sufficient To Defeat Claim
• Treating Neurologist's Examination Two Years Post Accident Is Not "Contemporaneous"
• Conclusion That Range-of-Motion Restrictions Are Self-Imposed Must Be Supported With Objective Medical Evidence
  

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

Arbitration

• Insurer Permitted to Raise Causation Issue for Intentional Injury for First Time at Arbitration
• Generic Medical Necessity Letters and Failure to Rebut Peer Report Insufficient
• 30 Day Rule Violated and Applicant Failed to Provide Any Reasonable Justification
• Applicant Entitled Only to $80.00 Fee if Insurer Pays Claim in Full Prior to
• Arbitrator Assignment.

Litigation

• Plaintiff's Action Premature Due to Outstanding Verification
• Insurer Created Issue of Fact Precluding Summary Judgment
• Yet Again, Insurer Created Issue of Fact Precluding Summary Judgment
• Defective Assignment Cannot be Cured Once Litigation Commenced
• Yet Another Summary Judgment Motion Order Vacated As Insurer Created an Issue of Fact.
  

PEIPER ON PROPERTY (and POTPOURRI)
Steven E. Peiper
[email protected]

Of Property

"Sand Save" - Insured Entitled to Coverage for Damage to Bunkers Caused by Flood Waters

And Potpourri

• In Certain Circumstances, Parent's NOT Liable for Underage Drinking at the Family Home
• Measure of Damages for Failure to Procure Insurance Remains the Costs of Premium and All Related Incidental Expenditures
• Turn About Is, In Fact, Fair Play - Broker's Claim for Recovery Against The Carrier Is Dismissed Where The Broker Could Not Establish a Special Relationship
  

EARL'S PEARLS
Earl K. Cantwell
[email protected]

Model Indemnity Clauses

Well, that's about all for now. Contact us about training and call us if you need us.
All the best for a prosperous 2010,

Dan

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]

12/31/09 Scott McLaughlin Truck & Equipment Sales, Inc. v. Selective Ins. Co.
Appellate Division, Third Department
Rationale for Delay in Disclaimer Must be Documented
This is another late disclaimer case under Insurance Law Section 3420(d) for your consideration. A reminder, if an insurer fails to disclaim coverage promptly, it will lose its right to deny coverage based on a breach of policy condition (e.g. late notice or cooperate) or exclusion.

The timeliness of a carriers disclaimer is measured from the moment when it first learned of the grounds for disclaimer. In this case, the time to disclaim began to run when it had knowledge that the insureds notice was arguably late.

What happened here? Selective was first made aware of a claim in a May 26, 2005 fax which set out the facts of the claim and included a note from McLaughlin's insurance agent that, to his knowledge, the claim had not been previously reported. It took two months from then, until July 26, before Selective disclaimed.

Why did it take so long? The burden of justifying that two-month delay in disclaiming rested with Selective. Without detail, Selective asserted that difficulties in its investigation of the claim caused the delay. However, the court noted that there was no explanation of why given the facts made known to it in the May 26, 2005 fax anything beyond a cursory investigation was necessary to determine whether McLaughlin had timely notified it of the claim.

Selective failed to show that the delay was reasonably related to its completion of a thorough and diligent investigation.
Editors Note: It is certainly appropriate for an insurer to conduct a diligent investigation before denying coverage in order to determine, for example, when the insured knew of the accident or occurrence and why notice was not given earlier. However, the insurer must carefully document that investigation and justify any delay in reaching a coverage conclusion, certainly if the disclaimer is more than 30 days after receiving notice. There are three key words to remember: Document. Document. Document.

12/31/09 Griffith Oil Company, Inc. v. National Union Fire Insurance
Appellate Division, Fourth Department
Products/Completed Operations Exception to Pollution Exclusion Leads to Determination of Coverage for Pollution. Fuel in Insureds Pipeline Is Considered by Majority of Split Court to Be No Longer in Insureds Physical Possession.
Griffith Oil Company (Oil Company) sought coverage in connection with a pipeline oil leak both with respect to property damage claims and claims by the US Environmental Protection Agency (EPA)
While the oil leak constituted pollution and the policy excludes pollution claims there was an exception to the pollution exclusion. The exclusion did not apply to any property damage "that may arise out of the products completed operations hazard' for . . . [t]he sale, storage and/or transportation of fuels."
Here, Oil Company established that fuel in the spur pipeline was either being transported or stored. The term "products completed operations hazard" typically refers to an exclusion of coverage for damages caused by a product that was manufactured at or sold from the insured's premises and was then released into the stream of commerce where the injury occurred or injuries that occur after the work was completed. In this case, the term was used to extend coverage to property damage' occurring away from premises you own or rent and arising out of your product' . . . except: [p]roducts that are still in your physical possession."
Here, the property damage occurred "away from premises" owned by plaintiffs, the property damage arose as a result of fuel purchased by plaintiffs that leaked either while it was transported to plaintiffs' facility or stored in the spur awaiting transportation.
The question for the three-judge majority focused on an interpretation of the term still in your physical possession. The court concluded that the term excludes coverage for damage from pollution that occurs on the insured's premises. Once the fuel was in the pipeline, it was no longer on the insureds premises. Accordingly coverage existed: the pollution exclusion would have eliminated coverage but for the exception to that exclusion applies because the damage occurred away from premises owned by plaintiffs and was caused by plaintiffs' product during the storage or transportation of fuel.
Two dissenting judges disagreed reasoning that the insured still controlled the fuel in its pipeline, so it was still in the insureds physical possession.

12/31/09 Bramer v. Utica Mutual Insurance Company
Appellate Division, Fourth Department
Late Notice of Accident Not Excused by Actions of Insured
This is another late notice case. Since it involved a policy issued or renewed prior to January 18, 2009, late notice by the insured did not require prejudice on the part of the carrier to constitute a breach of policy obligations and loss of coverage.
However, a failure to provide prompt notice can be excused by a good faith belief that no claim will be asserted against the insured, provided that the belief is reasonable under all of the circumstances. The court goes on to say, somewhat incompletely, that another acceptable excuse is "a justifiable lack of knowledge of insurance coverage may excuse a delay in reporting an occurrence" citing to Winstead v UniondaleUnionFreeSchool Dist., 201 AD2d 721, 723 (2nd Dept. 1994). .
It is important to remember what the court said in Winstead. Ignorance of the existence of insurance coverage is not enough to justify a delay in reporting, but the insured must first make a diligent search for coverage:
[The insured] failed to meet his burden of proving that he was justifiably ignorant of the insurance coverage available to him under his father's homeowner's policy. It is true that a justifiable lack of knowledge of insurance coverage may excuse a delay in reporting an occurrence However, in order to prevail on this theory, the insured person must prove not only that he or she was ignorant of the available coverage, but also that he or she made reasonably diligent efforts to ascertain whether coverage existed
Here, the insured knew of the conditions giving rise to the lawsuit in September 1998, contacted a different insurer (other than the one raising the late notice defense) and did not notify the appropriate carrier until December 2000. The insured failed to carry its burden of proof that the delay was justifiable and coverage was lost.

12/29/09 Kerrigan v. RM Associates, Inc.
Appellate Division, First Department
The Undefined Term Additional Insured Means Any Insured Other Than the Named Insured
When Connelly was killed in a construction site accident his Estate sued various contractors at the site. It was claimed that Connelly had entered into agreement with Erin Erectors (Erin) to provide labor, work and services at the site. One of the contractors brought claim against Erin for contractual indemnification and counterclaimed against Connelly, also for contractual indemnification. Erin had an excess policy with Westchester. The question before the court was whether Connelly, not named as a named insured on the excess policy, was entitled to coverage under the excess policy for the counterclaim for contractual indemnification.

In the excess policy, the term "Insured" was to include, at Erin's option, any person, other than Erin, "included as an additional insured" in the underlying comprehensive general liability insurance; and that the underlying CGL policy lists Erin and Connelly as insureds
The Estate argues that Connelly was an "additional insured" within the meaning of Westchester's excess policy by virtue of his being a named insured in the underlying CGL policy. Westchester argued that the terms additional insured and named insured are not synonymous in the [underlying] CGL policy," and that because Connelly was listed as a named insured in the CGL policy, not an additional insured, he was not covered under the excess policy.
The First Department agreed with the Estate. Since the term "additional insured" is not defined in either the underlying or excess policy, once must look to the reasonable expectations of the ordinary businessman when making an ordinary business contract."
Under an ordinary interpretation of an ordinary business contract, the term "additional insured" in the excess policy would be understood to mean anyone other than the "Named Insured" in the excess policy (i.e., Erin) who is insured under the underlying CGL policy.
In any event, under Pecker Iron Works, an additional insured enjoys the same protection under the policy as a named insured.
12/22/09 Maughn v. RLI Insurance Company
Appellate Division, Second Department
All It Would Have Taken Was Two More Stamps; Disclaimer Not Proper if Addressed to Corporate Insured, but Not Addressed to Others at Same Location, Invalid as to Non-Addressees
Fay Neiss, individually, and 91-01 through 91-11 Church Limited Liability (hereinafter Church) established that RLI Insurance Company (RLI) did not properly disclaim coverage. RLI disclaimed but did not address the letter to them. Actual notice of the disclaimer may have been sent to the address in which all of the defendants were located, but it was only addressed to Neiss Management Corp. It was therefore ineffective as to Fay Neiss and Church, to whom it was not addressed.
The disclaimer to Management was timely, being sent three weeks of receiving notice of the accident.
12/22/09 In the Matter of New York Central Mutual v. Steiert
Appellate Division, Second Department
Claimant Euchred by Inconsistent Coverage Decisions; Loses Both Excess Coverage from Defendants Carrier and SUM Coverage from Her Own
New York Central Mutual (NYCM) sought to permanently stay arbitration of a claim for supplemental uninsured/underinsured motorists benefits (SUM). Dawn Steiert filed a claim. The standard SUM endorsement required Dawn to exhaust the limits of liability under all other insurance policies applicable at the time of the accident. After the accident, Steiert had made a claim for coverage from Kemper, under a policy issued to the drivers grandfather, Bohn, with whom the driver resided at the time of the accident.
Kemper argued that its policy was not implicated because the car involved in the accident was provided to the driver by the drivers dad for his regular use.
There was a coverage lawsuit involving Kemper and the various members of the drivers family, but NYCM was not a party to that action. It found the Kemper policy inapplicable but Kemper argued that it should not be bound by a decision in which it was not a party. Previously the court held that NYCM was not bound by the coverage determination because it was not a party to it. We reported on that decision in our 9/21/07 edition.
As a result, a framed issue hearing was scheduled, to determine whether Kempers disclaimer was valid. Kemper lost the coverage battle this time. Kempers disclaimer was based on a policy exclusion and the court held that it did not disclaim as soon as reasonably possible thus rendering its denial void under Insurance Law 3420(d). Kemper had conducted an EUP of the family members on January 2, 2002 but did not deny coverage until February 27th of the same year.
Accordingly, the SUM arbitration is stayed.
Editors Note: Of course, now the injured person is completely out of luck. Because she was dealing with different coverage issues at different times, she gets neither Kempers excess coverage nor NYCMs SUM coverage. While NYCM was not bound by the previous coverage determination, surely Steiert, a party to the earlier DJ, is bound.

12/22/09 Frydman v. Fidelity National Title Insurance Company
Appellate Division, First Department
No Duty to Defend Under Title Policy as Policy Overrides Certificate of Title
The title insurance policy specifically excluded fences ... [that] vary with the record lines," as indicated in a 1972 "survey report," as well as a May 5, 1999 "survey inspection" reporting no changes to the property's "boundary indicator." The underlying complaint for adverse possession against plaintiffs by their neighbors was based entirely on the location of a fence that varied from the actual boundary line. Thus, the policy's exception to coverage for varying fences clearly applies.

A pre-policy certificate of title which was suggested an intention to cover claims based on a fence that varied from the boundary line. However, any such intention did not survive the issuance of the policy. The certificate of title stated that when the policy was issued, the certificate becomes null and void.

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

01/7/10 Blake v. Portexit Corp.
Appellate Division, First Department
Work, Standing Alone, Does Not Meet the Prevented From Performing Substantially All Requirement of the 90/180-Day Category
The plaintiff missed more than 90 days of work. Not determinative, states the Court. The requirement is that one be prevented from performing substantially all of the material acts which constitute [his] usual and customary daily activities and work alone does not fill the bill. Moreover, even adding on not being able to play sports with his children, going up stairs, and getting into cars for six months after the accident does the plaintiff meet his burden because, according to the First Department, these activities do not constitute substantially all of his activities.

Note: We note that many of us would likely disagree with the Court that work does not constitute substantially all of our usual and customary daily activities. However, in all fairness, the Court also stated that the plaintiff did not support his statement that he was unable to play, etc., with medical evidence.

12/30/09 Borzillieri v. Jones
Appellate Division, Fourth Department
Does Spondylolysis Qualify As A Fracture?
The majority of the Court affirmed the trial courts decision and dismissed the complaint finding that the plaintiff did not sustain a serious injury under any of the four categories alleged in the complaint and as amplified in the bill of particulars: fracture, permanent consequential limitation of use, significant limitation of use, and the 90/180-day categories. However, the dissent, consisting of one judge, would have modified to reinstate the complaint as regards the fracture category. He noted that the defendant submitted a CT scan report indicating that the plaintiff had spondylolysis at L5-S1. He reasoned that:

Spondylolysis, which is defined as the [breaking down or degeneration of a vertebra, has been characterized as a fracture, and thus evidence of an injury of that nature raises a triable issue of fact whether plaintiff sustained a serious injury under the fracture category. The opinion of defendants expert that the spondylolysis is unrelated to the accident is speculative and unsupported by any evidentiary foundation. Consequently, in my view, defendant failed to meet his burden on that part of the motion with respect to the fracture category of serious injury (internal citations omitted).

Note: This is an interesting interpretation and application so watch out for the arguments regarding causal relationship. If this view gains in popularity, it may become that much easier to defeat summary judgment as regards fractures.

12/29/09 Simantov C. Kipps Taxi, Inc.
Appellate Division, First Department
Range-of-Motion Findings Not Based On Objective Tests Are Not Probative
The defendants examining neurologists findings were not probative because he neither reviewed any of the plaintiffs medical records nor based his range-of-motion findings on objective tests. The defendants also failed to meet their burden because their radiologist did not address numerous injuries claimed in the plaintiffs bill of particulars, and they only addressed the plaintiffs 90/180-day claim for the first time in their reply.

12/22/09 Fest v. Agnew
Appellate Division, Second Department
Plaintiffs Own Deposition Testimony May Be Sufficient to Defeat Claim
Here the defendant presented the plaintiffs deposition testimony, together with the affirmation of an examining orthopedist, and defeated the plaintiffs claim.

12/22/09 Menaker v. White Express Cab Corp.
Appellate Division, Second Department
Treating Neurologists Examination Two Years Post Accident Is Not Contemporaneous
In opposition to the defendants motions, the plaintiff relied on her treating neurologists affirmation in which he noted significant range-of-motion limitations in her cervical and lumbar spine. Although his recent examination revealed similar findings, his first examination was performed two years after the date of the accident and, therefore, was not contemporaneous. The plaintiff also failed to offer any other evidence that was contemporaneous with the accident and thus failed to raise a triable issue of fact.

12/22/09 Bengaly v. Singh
Appellate Division, Second Department
Conclusion That Range-of-Motion Restrictions Are Self-Imposed Must Be Supported With Objective Medical Evidence
The defendants examining orthopedic surgeon noted significant range-of-motion restrictions in the plaintiffs cervical spine and concluded that the limitations were self-restricted. He failed, however, to explain or substantiate this conclusion with any objective medical evidence. He also failed to substantiate his opinion that the MRI of the plaintiffs cervical spine revealed degenerative changes. As such, the defendant did not meet his prima facie burden and his motion to dismiss the complaint was denied.

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

12/28/09 Applicant v. State Farm Ins. Co.
Arbitrator Thomas J. McCorry, Esq. (Erie County)
Insurer Permitted to Raise Causation Issue for Intentional Injury for First Time at Arbitration
On August 23, 2008, around 4:00 A.M. the EIP, a 31 year old male, was waiting in the parking lot of T.C. Hooligans for his girlfriend to pick him up. After she arrived a few hours late an argument ensured between the two. The EIP intentionally struck the passenger side rear window resulting in an injury. Further, the police report indicated that both the EIP and the girlfriend were intox during the incident.

The insurer had requested verification in the form of wage information as well as an EUO, which the EIP concededly failed to attend. The insurer had not issued any denial or payment of no-fault benefits and the EIP filed the arbitration. The insurer raised for the first time at the arbitration that there was no insurance coverage as the EIP intentionally cause his own injury. The assigned Arbitrator determined that under Central Gen. Hosp. v. Chubb the insurer could raise this causation issue and an untimely denial did not preclude the defense. Accordingly, since the EIP intentionally caused his own injury there was no coverage under the policy and the claim was denied.

12/24/09 Elite Medical Supply v. Travelers Property Cas. Co.
Arbitrator Kent L. Benziger, Esq. (Erie County)
Generic Medical Necessity Letters and Failure to Rebut Peer Report Insufficient.
The insurer properly denied reimbursement for an LSO brace and cervical traction collar based upon a peer review by Chester Bogdan, D.C. The assigned Arbitrator determined that the peer reviewers report was sufficient to establish lack of medical necessity and that the prescribing chiropractor, Anthony Amabile, only provided generic letters of medical necessity. Further, this case presented a unique medical history of a failed cervical spine fusion which was never mentioned by the prescribing chiropractor. Likewise, the prescribing chiropractor failed to respond to the conclusions in the peer review report.

12/24/09 Kevin Cichocki DC v. Erie Ins. Co. of NY
Arbitrator Kent L. Benziger, Esq. (Erie County)
30 Day Rule Violated and Applicant Failed to Provide Any Reasonable Justification
The insurer denial no-fault benefits based upon the eligible injured persons (EIP) failure to provide written notice of claim within 30 days from the accident date. The insurer admittedly received notice of the accident and the accident report which listed the EIP as a passenger. However, the insurer had no notice that the EIP sustained any injury until three months post accident. The assigned Arbitrator determined that the EIP failed to provide timely notice and that the Applicant failed to submit any proof of reasonable justification.

12/23/09 Vision Radiology v. State Farm Mut. Auto. Ins. Co.
Arbitrator Kent L. Benziger, Esq. (Erie County)
Applicant Entitled Only to $80.00 Fee if Insurer Pays Claim in Full Prior to Arbitrator Assignment
This case addresses an interesting issue of not only what the attorneys fee is if the claim is resolved prior to arbitrator assignment but also comments on the potential problems with permitting a paralegal to handle settlement discussions.

In this case, during the conciliation process the insurer, acting pro se, contacted via telephone opposing counsel to discuss resolution of the claim prior to arbitrator assignment. The parties versions of this telephone conference differ slightly according to the Arbitrators interpretation. The insurers representative requested to speak with someone at opposing counsels firm with settlement authority on the claim. The representative was transferred to an individual who failed provide any identity as to position within the firm but ultimately was a paralegal within the law firm. The representative presented a settlement offer which included an $80.00 attorney fee. The paralegal rejected the offer seeking the 20% attorney fee but stated that if the representative would increase the offer to 100% of the bills, plus interest and the $40.00 filing fee, then the $80.00 attorney fee would be accepted. The representative accepted the paralegals demand and believed the case was resolved. Immediately after the paralegal advised that an attorney within the firm needed to be consulted to ensure this could be accepted by applicant. Thereafter, the paralegal advised that the settlement could not be accepted because of the $80.00 attorney fee and that the law firm wanted a 20% attorney fee.

The paralegals version indicated that he told the representative that he could only entertain the acceptance of the $80.00 attorney fee.

The insurers representative issued a check after the conference with the paralegal for the settlement that was agreed upon.

The sole issue before the Arbitrator was whether the insurer owed 20% or $80.00 as an attorney fee in the case. The Arbitrator determined that only an $80.00 attorney is owed. The Arbitrators decision was based first and foremost on fundamental fairness grounds. The Arbitrator indicated that the insurers representative believed she was negotiating with a person possessing settlement authority within opposing counsels firm. The paralegal presented settlement terms which were accepted by the representative when the paralegal in essence did not possess the authority to close the deal. The Arbitrator declined to address whether it is appropriate for a paralegal to engage in settlement discussions. Yet, the Arbitrator did state:

This Arbitrator does have difficulty with a paralegal proposing settlement offers and then having to check with a supervising attorney as to whether those terms should have been offered. The strategic implications of such methods do not foster a fundamental fairness in the process, and the just resolution of claims.

Then the Arbitrator relied upon a few arbitration decisions regarding interpretation of the no-fault regulations that if the case is resolved during the conciliation process prior to arbitrator assignment the attorney fee is $80.00, if the claim is denied.

Litigation

12/23/09 Velen Med. Supply, Inc. a/a/o Damien Dickenson v. Country-Wide Ins. Co.
Appellate Term, Second Department
Plaintiffs Action Premature Due to Outstanding Verification
The insurer undisputedly issued a timely verification request to plaintiff. The plaintiff failed to provide the requested information and the insurer send a follow-up request on the 29th day after the initial verification request was mailed. This plaintiffs case was premature as the insurers verification request remained outstanding.

12/23/09 Quality Rehab and P.T., P.C. a/a/o Phillip Lawson v. GEICO Ins. Co.
Appellate Term, Second Department
Insurer Created Issue of Fact Precluding Summary Judgment
The order granting plaintiffs summary judgment was vacated as the insurers claims representatives affidavit sufficiently established that timely denial of claim forms were mailed. The opposing papers also contained the affirmed independent medical examination reports which set forth a factual basis and medical rationale for the peer reviewers opinion that the services were not medically necessary.

12/23/09 Staten Island Advanced Surgical Supply a/a/o Xiao Min Huang v. GEICO Ins. Co.
Appellate Term, Second Department
Yet Again, Insurer Created Issue of Fact Precluding Summary Judgment
Yet another decision where the order granting summary judgment in plaintiffs favor was vacated. The insurer submitted an affidavit from an employee with knowledge of its standard office practices or procedures which ensured that items were properly addressed and mailed. Further, the insurer attached a copy of the affirmed peer review report that contained a factual basis and medical rationale for the conclusion that the equipment was not medically necessary.

12/23/09 Bedford Park Neurology, P.C. a/a/o Mario Vasconcellos v. New York Cent. Mut. Fire Ins. Co.
Appellate Term, Second Department
Defective Assignment Cannot be Cured Once Litigation Commenced
The plaintiffs claim was denied based upon lack of standing. The medical bill submitted was from a physician as the provider and never referenced plaintiff, a professional services corporation. Further, it never set forth the physicians relationship to the plaintiff. The bill did contain a handwritten note next to the physicians name of Bedford Park. This entity is not the same as the plaintiff professional corporation. Therefore the plaintiff attempts after litigation was commenced to establish that the physician was plaintiffs employee or principal was insufficient to cure the original defect.

12/23/09 Right Aid Diagnostic Medicine P.C. a/a/o Jermaine Brown v. GEICO Ins. Co.
Appellate Term, Second Department
Yet Another Summary Judgment Motion Order Vacated As Insurer Created an Issue of Fact
Yet again, the order granting plaintiff summary judgment was vacated as the insurer presented the sufficient affidavit of mailing and the affirmed independent review report containing a factual basis and medical rationale for the conclusion of lack of medical necessity.

PEIPER ON PROPERTY (and POTPOURRI)
Steven E. Peiper
[email protected]

Of Property

12/31/04 The Park Country Club of Buffalo, Inc. v. Tower Insurance Company
Appellate Division, Fourth Department
Sand Save Insured Entitled to Coverage for Damage to Bunkers Caused by Flood Waters
Plaintiff commenced the current action seeking recovery for damages sustained to sand traps which were caused by flood waters. In affirming the Trial Courts motion for summary judgment, the Fourth Department noted that the insured established sand traps were covered property under the terms of the insurance policy. Moreover, the Court held that the insured further established that the Flood Endorsement found within the policy provide coverage for any damage to covered property.

Accordingly, under the clear and unambiguous coverage available under the policy at issue, the insured was entitled to recovery.

And Potpourri

12/30/09 Aquino v. Higgins
Appellate Division, Fourth Department
In Certain Circumstances, Parents NOT Liable for Underage Drinking at the Family Home
Plaintiff commenced this action after sustaining injuries in an automobile accident. At that time of the accident, the automobile was being operated by the defendants son. From the evidence produced, it appears that the defendants permitted a party to be held in the basement of the family resident. The parents provided food and soda, but explicitly instructed that alcohol was not to be consumed. Toward the end of the evening, one of the defendants discovered empty beer cans on the basement floor.

At that time, the defendants also noticed that their son appeared to have been consuming alcohol. As a result, the son was taken to his room and instructed to go to bed. At the same time, the parents observed each of the other attendees of the party, and concluded that no-one was intoxicated. Nevertheless, the defendants offered all party-goers a ride home.

Shortly thereafter, in disobeyance of his parents directives, the defendants son drove two to a different location. The accident at issue occurred which they were in route, and was approximately 5 to 10 minutes from the family home.

The Trial Court ruled that there was a question of fact regarding whether the defendants provided adequate supervision of the party. The Fourth Department reversed by holding that no liability could be found where the incident occurred away from an area within the defendants direct control. Moreover, the Court noted that even if there could be liability the defendants met their burden of establishing adequate supervision. In support of this conclusion, the Fourth Department noted that the parents reasonably believed alcohol would not be present and took steps assess the situation upon discovering the alcohol.

We note that two Justices dissented with the holding. The dissent argued that a question of fact remained regarding whether the defendants actions provide the plaintiff with a safe method to return home.

With a 3-2 split, we expect the Court of Appeals will weigh in sometime in the near future.

12/29/09 David Cucinotta v The City of New York
Appellate Division, First Department
Measure of Damages for Failure to Procure Insurance Remains the Costs of Premium and All Related Incidental Expenditures
In this case, plaintiff commenced an action against, among others, Northside Realty, in connection with a trip and fall accident that happened in 2004. Having previous executed a lease with Meriken, which contained indemnity and insurance procurement provisions contained within it, Northside commenced a third-party action seeking both common law and contractual indemnity from Meriken. In addition, Northside also sought recovery for any and all damages incurred as a result of Merikens failure to procure insurance on behalf of Northside.

Initially, the due the facts of this particular case, the First Department ruled that Meriken did not owe any indemnity obligations to Northside. However, the Court ruled that Meriken had violated the terms of the contract which required Meriken to provide insurance for Northside. In so holding, the Court noted that if Northside had coverage in place, Northsides recovery would be limited to the amount that Northside expended in premiums and other related costs.

Because there Northsides insurance information was not in the Record before the Court, the matter was remanded to the Trial Court for a decision on the amount of damages recoverable.

12/29/09 Silvers v State of New York
Appellate Division, First Department
Turn About Is, In Fact, Fair Play - Brokers Claim for Recovery Against The Carrier Is Dismissed Where The Broker Could Not Establish a Special Relationship
With a tip of the cap to our editor, in this case, what is good for the goose was, this time, good for the gander. As we have reported so many times in the past, brokers are often insulated from liability unless the party seeking recovery can establish the existence of a special relationship, that misinformation was provided by the broker, and that the injured party relied upon the misinformation to its detriment.

Here, plaintiff sustained damage when he was forced to repay premiums earned on workers compensation coverage he procured that did not provide coverage to out-of-state employees. The plaintiff argued that he had procured coverage on behalf of his client based upon the representations of someone affiliated with the State Insurance Fund. It is clear that if these representations were made, such statements were incorrect. It is also clear that plaintiff relied upon these misrepresentations to his detriment. However, where, as here, the plaintiff could not establish a special relationship with the State Fund, his claim for negligent misrepresentation failed.

FIJAL'S FEDERAL FOCUS

Katherine A. Fijal
[email protected]

I guess we start off the New Year the same way we ended the old year no new coverage cases from the Second Circuit.

My best wishes to everyone for a happy and prosperous new year.

EARLS PEARLS

Earl K. Cantwell
[email protected]

Model Indemnity Clauses

The scope of a contractual indemnification provision is important and should be carefully considered. The party agreeing to provide indemnification should consider the ramifications, and the facts and relationships between the parties. There are typically three types of indemnification: (1) broad; (2) intermediate; and (3) limited form. In each of the indemnification provisions, one party agrees to provide the other with some type of indemnity for loss or damages incurred on a project or contract.

Broad Form Transfers the entire risk of loss from one party to another, regardless of fault or complicity of either party. The broad form applies to any loss that one party may suffer, even if attributable to the indemnified partys conduct:

Subcontractor agrees to indemnify the Contractor from all claims, losses, damages and expenses arising out of, caused by, related to, or in any way connected with the Project or Subcontractors work and services.

Intermediate Form - Places the entire risk of the loss upon another party regardless of that partys degree of responsibility. However, the indemnitor is exempted from the obligation when the indemnitee is solely at fault or responsible for the loss:

Subcontractor agrees to indemnify the Contractor from all claims, losses, damages and expenses arising out of, cause by, related to, or in any way connected with the Project or the Subcontractors work and services, except those losses, damages and expenses caused solely by the Contractor.

Limited Form Each party is responsible for its own conduct or negligence. This is similar to the remedies available at common law:

Subcontractor agrees to indemnify the Contractor from all claims, losses, damages and expenses caused by Subcontractors negligence.

Partial Indemnification One trend in recent years has been for courts to construe indemnification provisions to provide partial indemnification, but only if the provision contain language supporting such differentiation. Therefore, the precise language of the indemnification provision is critical to the determination whether partial indemnification is available, or in violation of state laws that prohibit a party from seeking indemnification from its own negligence. Thus, care should be taken to draft an indemnification provision to mirror language which has successfully yielded an interpretation or result of partial indemnification. If the intent is to permit partial indemnification, spell it out in the contract:

If Contractor is entitled to defense or indemnification from the Subcontractor for part or a portion of any losses, expenses or liabilities but not for the entire amount, the Subcontractor shall indemnify Contractor for the portion of such losses, expenses and liabilities for which Contractor may be indemnified.

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

12/29/09 Graham v. Hartford Life & Accident Co.
Tenth Circuit Court of Appeals
Plaintiffs Disability Retirement Plan did not Qualify as a Governmental Plan and Therefore was Preempted by ERISA
Plaintiff, a former postal employee, suffered knee and ankle injuries that eventually led to her retirement. The postal service granted her application for disability retirement, but the insurer, Hartford, denied her disability claims. ERISA does not apply to governmental plans, which is defined to include plans established or maintained by a governmental entity. Since the plan was neither established by the United States Post Office nor the result of collective bargaining, it was not a governmental plan and therefore ERISA preempted Plaintiffs state law claims. Plaintiffs exclusive remedy was, therefore, one for benefits under ERISA. The court went on to hold that Hartfords denial of benefits was not arbitrary and capricious. An independent medical review by Hartfords expert was held reliable, and Plaintiffs previous medical records were inconclusive. Thus, the court found a reasoned basis for denial of benefits.
Submitted by: John P. Scott, Starnes Atchison - Posted: 01/05/2010

REPORTED DECISIONS

Frydman v. Fidelity National Title Insurance Company

Frydman LLC, New York (David S. Frydman of counsel), for
appellants.
McCullough, Goldberger & Staudt, LLP, White Plains
(Patricia Wetmore Gurahian of counsel), for respondent.
Judgment, Supreme Court, New York County (Debra A. James, J.), entered March 3, 2009, declaring that defendant title insurer has no obligation to defend and indemnify plaintiffs in an underlying action, unanimously affirmed, with costs.
The subject title policy took effect as of May 26, 1999, the date the insureds acquired title to the insured property. Insofar as pertinent to the appeal, the policy specifically excludes from coverage "rights of tenants or persons in possession." It additionally excludes "fences ... [that] vary with the record lines," as indicated in a 1972 "survey report," as well as a May 5, 1999 "survey inspection" reporting no changes to the property's "boundary indicator."
The 2002 underlying complaint for adverse possession against plaintiffs by their neighbors was based entirely on the location of a fence that varied from the actual boundary line. Thus, the policy's exception to coverage for varying fences clearly applies.
Assuming, as plaintiffs argue, that the pre-policy "certificate of title," dated May 26, 1999, and the attached "marked title report" reveal an intention to cover claims based on a fence that varied from the actual boundary line, we would find that any such intention did not survive issuance of the policy. The certificate of title specifically states that upon delivery of the final policy, the certificate becomes null and void. Moreover, Section 15 of the policy specifically states that, together with any attached endorsements, it constitutes the entire contract between the parties, and defendant's liability is limited only to its terms (see Hess v Baccarat, 287 AD2d 834 [2001]).
Plaintiffs' reliance on Fresh Pond Rd. Assoc. v TRW Title Ins. of N.Y. (176 AD2d 660 [1991]) is misplaced, since the case is distinguishable. In that case, since the insurance policy contained only general exclusionary language and a marked title report contained handwritten notes indicating that certain specific exclusions were to be omitted from the policy, we found issues of fact as to the intended scope of the policy. Here, the policy contains specific exclusions, and pursuant to its terms is the sole agreement between the parties. We have considered plaintiffs' argument that the court improperly converted a breach of contract action into a declaratory judgment action and, without CPLR 3211(c) notice, converted a motion by defendant to dismiss the complaint into a motion for summary judgment, and find it to be unavailing (see CPLR 2002; Shah v Shah, 215 AD2d 287, 289 [1995]). This case contains no factual disputes, and by submitting before the Supreme Court every relevant piece of documentary evidence, along with affidavits of representatives of both parties discussing the application of such evidence, the parties have charted a course for summary judgment. Accordingly, the court properly entered a declaratory judgment in favor of defendants.
In the Matter of New York Central Mutual v. Steiert

Cullen and Dykman, LLP, Brooklyn, N.Y. (Andrew Giuseppe Vassalle
and Djordje Caran of counsel), for appellant.
Votto & Cassata, LLP, Staten Island, N.Y. (Joseph Votto of
counsel), for respondent-respondent
Dawn Steiert.

DECISION & ORDER
In a proceeding pursuant to CPLR article 75, inter alia, to permanently stay arbitration of a claim for supplemental underinsured/uninsured motorist benefits, the petitioner appeals from an order of the Supreme Court, Nassau County (Davis, J.), entered July 22, 2008, which, after a framed-issue hearing, denied the petition and directed the parties to proceed to arbitration.
ORDERED that the order is reversed, on the law, with costs, the petition is granted, and the arbitration is permanently stayed.
In this proceeding, the petitioner New York Central Mutual Fire Insurance Company (hereinafter NYCM) sought to permanently stay arbitration of a claim for supplemental underinsured/uninsured motorist (hereinafter SUM) benefits filed by the respondent Dawn Steiert, under a policy held by her mother. One ground upon which NYCM sought to stay the arbitration was that Steiert failed to comply with a requirement contained in the SUM policy endorsement that she first exhaust the limits of liability under all other insurance policies applicable at the time of the accident. After the accident, Steiert had made a claim for coverage from Kemper Auto and Home Insurance Company (hereinafter Kemper) under a policy held by the additional respondent Erich A. Bohn, the driver's grandfather, with whom he resided at the time of the accident. Kemper disclaimed coverage based upon a policy exclusion, on the ground that the vehicle involved in the accident was provided to the driver, the proposed additional respondent Erich John Bohn, by his father, the proposed additional respondent Erich M. Bohn (who resided elsewhere), for his regular use. Steiert thereafter commenced a declaratory judgment action against Kemper challenging the disclaimer. By order dated March 22, 2004, the Supreme Court, Nassau County, awarded summary judgment to Kemper, declaring that it was not obligated to provide coverage for the accident. Notably, NYCM was not a party to that action. In the instant proceeding, in an order dated February 10, 2005, the Supreme Court found that the prior declaratory judgment action was determinative on the issue of whether Steiert had exhausted all available coverage, and thus any recovery on the SUM claim would not be barred by her failure to comply with the exhaustion requirement. That order was appealed to this Court, which held in Matter of New York Cent. Mut. Fire Ins. Co. v Steiert (43 AD3d 1065, 1067), that NYCM was not collaterally estopped by the ruling in the prior declaratory judgment action, and therefore was entitled to litigate Kemper's disclaimer on the merits. A framed-issue hearing [*2]was then conducted on the issue of the validity of Kemper's disclaimer and the Supreme Court held that the disclaimer was not only timely, but that Kemper was under no duty to timely disclaim since the claim did not fall within the coverage terms of the liability policy. We now reverse and permanently stay arbitration of the SUM claim.
Contrary to the holding of the Supreme Court, since the basis for Kemper's disclaimer of coverage was a policy exclusion rather than a lack of coverage, it was under a duty to give notice of its disclaimer "as soon as is reasonably possible" (Insurance Law 3420[d][2]; see Markevics v Liberty Mut. Ins. Co., 97 NY2d 646, 648; Matter of Worcester Ins. Co. v Bettenhauser, 95 NY2d 185, 188-189; Handelsman v Sea Ins. Co., 85 NY2d 96; City of New York v St. Paul Fire & Mar. Ins. Co., 21 AD3d 978, 981).
"The timeliness of an insurer's disclaimer is measured from the point in time when the insurer first learns of the grounds for disclaimer of liability or denial of coverage" (Tex Dev. Co., LLC v. Greenwich Ins. Co., 51 AD3d 775, 778; see First Fin. Ins. Co. v Jetco Contr. Corp., 1 NY3d 64, 68-69). Here, Kemper acquired facts entitling it to disclaim after conducting examinations under oath of Erich A. Bohn and Erich John Bohn on January 2, 2002, triggering its duty to provide prompt notice pursuant to Insurance Law 3420(d) (see Matter of American Express Prop. Cas. Co. v Vinci, 18 AD3d 655, 656). Under these circumstances, Kemper's failure to disclaim coverage until February 27, 2002, for which no valid excuse was established, was unreasonable as a matter of law (id.; see Moore v Ewing, 9 AD3d 484, 488; Matter of Colonial Penn Ins. Co. v Pevzher, 266 AD2d 391).
Accordingly, the petition to permanently stay arbitration should have been granted.
Maughn v. RLI Insurance Company

Kenney Shelton Liptak Nowak LLP, Buffalo, N.Y. (Timothy E.
Delahunt of counsel), for appellant.
Shayne, Dachs, Corker, Sauer & Dachs, LLP, Mineola, N.Y.
(Norman H. Dachs and Jonathan A.
Dachs of counsel), for respondents.

DECISION & ORDER
In an action for a judgment declaring, inter alia, that the defendant RLI Insurance Company is obligated to defend and indemnify the defendants Fay Neiss, 91-01 through 91-11 Church Limited Liability, and Neiss Management Corp. in an underlying personal injury action entitled Maughn v Neiss, pending in the Supreme Court, Kings County, under Index No. 8569/07, the defendant RLI Insurance Company appeals, as limited by its brief, from so much of an order of the Supreme Court, Kings County (F. Rivera, J.), dated December 5, 2008, as granted that branch of the motion of the defendants Fay Neiss, 91-01 through 91-11 Church Limited Liability, and Neiss Management Corp. which was, in effect, for summary judgment declaring that RLI Insurance Company is obligated to defend and indemnify them in the underlying personal injury action, and, in effect, denied its cross motion for summary judgment against those defendants.
ORDERED that the order is modified, on the law, (1) by deleting the provision thereof granting that branch of the motion which was, in effect, for summary judgment declaring that the defendant RLI Insurance Company is obligated to defend and indemnify the defendant Neiss Management Corp. in the underlying personal injury action and substituting therefor a provision denying that branch of the motion, and (2) by deleting the provision thereof, in effect, denying that branch of the appellant's cross motion which was for summary judgment declaring that it is not obligated to defend and indemnify the defendant Neiss Management Corp. in the underlying pesonal injury action, and substituting therefor a provision granting that branch of the cross motion; as so modified, the order is affirmed insofar as appealed from, without costs or disbursements, and the matter is remitted to the Supreme Court, Kings County, for the entry of a judgment declaring that the defendant RLI Insurance Company is obligated to defend and indemnify the defendants Fay Neiss and 91-01 through 91-11 Church Limited Liability in the underlying personal injury action and is not obligated to defend and indemnify the defendant Neiss Management Corp. in that action.
On their motion for summary judgment, the defendants Fay Neiss and 91-01 through 91-11 Church Limited Liability (hereinafter Church) met their burden of establishing that the defendant RLI Insurance Company (hereinafter RLI) did not properly disclaim coverage as to them by submitting RLI's disclaimer letter, which was not addressed to them specifically (see Matter of Eveready Ins. Co. v Dabach, 176 AD2d 879). In response, RLI failed to raise a triable issue of fact. Although actual notice of RLI's disclaimer letter may have been sent to the address at which all of the moving defendants were located, the disclaimer was only addressed to the defendant Neiss Management Corp. (hereinafter Management). That disclaimer, therefore, was ineffective as to Fay Neiss and Church, to whom it was not addressed (see Insurance Law 3420[d][2]), and the Supreme Court properly granted that branch of the motion which was for summary judgment as to those defendants.
However, the Supreme Court erred in granting that branch of the motion which was for summary judgment in favor of Management, and, in effect, denying that branch of RLI's cross motion which was for summary judgment against Management. In support of its cross motion, RLI submitted, inter alia, the disclaimer letter, which was properly addressed and issued to Management, through its building manager, within three weeks of receiving notice of the accident, and established that the notice provided to it by Management was untimely (see DeFreitas v TIG Ins. Co., 16 AD3d 451; Yarar v Children's Museum of Manhattan, 4 AD3d 420, 421; cf. 875 Forest Ave. Corp. v Aetna Cas. & Sur. Co., 30 NY2d 726). Therefore, RLI met its prima facie burden of establishing its entitlement to judgment as a matter of law against Management. In opposition, Management failed to raise a triable issue of fact.
Since this is a declaratory judgment action, we remit the matter to the Supreme Court, Kings County, for the entry of judgment declaring that RLI is obligated to defend and indemnify the defendants Fay Neiss and 91-01 through 91-11 Church Limited Liability in the underlying personal injury action, and is not obligated to defendant and indemnify Management in that action (see Lanza v Wagner, 11 NY2d 317, 334, appeal dismissed 371 US 74, cert denied 371 US 901).
Kerrigan v. RM Associates, Inc.

Milber Makris Plousadis & Seiden, LLP, Rochelle Park, NJ
(Debra Miller Krebs of counsel), for appellants-respondents.
B. Jennifer Jaffee, New York, for respondents-appellants.
Nixon Peabody LLP, New York (Aidan M. McCormack of
counsel), for respondents.
Order, Supreme Court, New York County (Shirley Werner Kornreich, J.), entered December 12, 2008, which, in an action seeking, inter alia, a declaration that plaintiff Estate of Thomas Connelly is covered under an excess insurance policy issued by defendant Westchester Fire Insurance Company, inter alia, granted Westchester's motion to dismiss plaintiffs' cause of action for breach of contract insofar as asserted against it, and denied the motion by the broker defendants (collectively, Omni) to dismiss the breach of contract and negligent misrepresentation claims insofar as asserted against them, unanimously modified, on the law, to reinstate plaintiffs' cause of action for breach of contract insofar as asserted against Westchester, to declare that the subject excess policy issued by Westchester covers the Estate of Thomas Connelly, and to dismiss, as academic, plaintiffs' remaining causes of action against Omni, and otherwise affirmed, without costs.
It appears that Connelly was killed in a construction site accident; that his estate brought the underlying action against, among others, various contractors at the site, alleging, inter alia, that Connelly had entered into an agreement with Erin Erectors (Erin), the Estate's co-plaintiff herein, to provide work, labor and services at the site; that one of the contractors counterclaimed against the Estate for contractual indemnification; and that plaintiffs and Westchester dispute whether Connelly was covered under Westchester's excess policy, and thus whether his Estate is entitled to indemnification under that policy. It further appears that Westchester's excess policy lists Erin as the only "Named Insured," and defines the term "Insured" to include, at Erin's option, any person, other than Erin, "included as an additional insured" in the underlying comprehensive general liability insurance; and that the underlying CGL policy lists Erin, Connelly and a company called Erin Interiors as the named insureds, and lists no additional insureds.
Plaintiffs argue that Connelly was an "additional insured" within the meaning of Westchester's excess policy by virtue of his being a named insured in the underlying CGL policy. The motion court rejected that argument, holding that the "[t]he terms additional insured and named insured are not synonymous in the [underlying] CGL policy," and that because Connelly was listed as a named insured in the CGL policy, not an additional insured, he was not covered under the excess policy. We disagree because, as plaintiffs and Omni accurately point out, the term "additional insured" is nowhere defined in either the underlying or excess policy. Absent such definition, Westchester's excess policy should be interpreted based on "common speech" (Ace Wire & Cable Co. v Aetna Cas. & Sur. Co., 60 NY2d 390, 398 [1983]) and "the reasonable expectation and purpose of the ordinary businessman when making an ordinary business contract" (General Motors Acceptance Corp. v Nationwide Ins. Co., 4 NY3d 451, 457 [2005] [internal quotation marks omitted]). Under an ordinary interpretation of an ordinary business contract, the term "additional insured" in the excess policy would be understood to mean anyone other than the "Named Insured" in the excess policy (i.e., Erin) who is insured under the underlying CGL policy (i.e., Connelly and Erin Interiors) (see St. Paul Fire & Mar. Ins. Co. v American Intl. Specialty Lines Ins. Co., 365 F3d 263, 277 [2004]). Such interpretation, we would add, is not inconsistent with the well-understood meaning of "additional insured" as "an entity enjoying the same protection as the named insured" (Pecker Iron Works of N.Y. v Traveler's Ins. Co., 99 NY2d 391, 393 [2003] [internal quotation marks omitted]). The cases cited by the motion court (General Sec. Prop. & Cas. Co. v American Fleet Mgt., Inc., 37 AD3d 345 [2007], affg 10 Misc 3d 1075[A], 814 NYS2d 890, 2005 NY Slip Op 52244[U] [2005], affd 37 AD3d 345 [2007]; Wausau Underwriters Ins. Co. v QBE Ins. Corp., 496 F Supp 2d 357 [2007]), which draw distinctions between additional insureds and named insureds by differentiating between their obligations to pay deductibles or give notice to the insurer, do not require a finding that an ordinary businessperson would be mindful of these distinctions in entering into an ordinary business contract.
As the Estate is covered under the excess policy, Omni cannot be held liable for failing to obtain the appropriate coverage, and, accordingly, the remaining claims asserted against Omni are dismissed as academic.
Westchester's argument urging dismissal of the action as against certain of its apparently affiliated entities is raised for the first time on appeal, and we accordingly do not consider it.
Bramer v. Utica Mutual Insurance Cpmpany

Appeal from a judgment (denominated order and judgment) of the Supreme Court, Wyoming County (Mark H. Dadd, A.J.), entered April 13, 2009 in a declaratory judgment action. The judgment, among other things, granted the motion of defendants Utica Mutual Insurance Company and its affiliated companies including Republic Franklin Insurance Co. and Graphic Arts Mutual Insurance Company for summary judgment.

MICHAEL J. KELLY, PERRY, FOR PLAINTIFF-APPELLANT.
GOLDBERG SEGALLA LLP, BUFFALO (CARRIE P. APPLER OF COUNSEL), FOR DEFENDANTS-RESPONDENTS.

It is hereby ORDERED that the judgment so appealed from is unanimously affirmed without costs.
Memorandum: Plaintiff appeals from a judgment that, inter alia, declared that defendants-respondents (hereafter, defendants) are not obligated to defend or indemnify plaintiff in an underlying action commenced by New York State pursuant to Navigation Law 181 seeking to recover the cost of remediating petroleum contamination (State of New York v Essex Prop. Mgt., LLC, 12 AD3d 1123). We affirm.
It is well settled that notice provisions of an insurance policy "operate[] as a condition precedent to coverage" (White v City of New York, 81 NY2d 955, 957), and that the insurer is not required to demonstrate prejudice before disclaiming coverage based on the unexcused failure to comply with the notice requirements (see Great Canal Realty Corp. v Seneca Ins. Co., Inc., 5 NY3d 742, 743). Failure to provide the insurer with timely notice, however, may be excused by a good faith belief that no claim will be asserted against the insured, provided that the belief is reasonable under all of the circumstances (see Philadelphia Indem. Ins. Co. v Genesee Val. Improvement Corp., 41 AD3d 44, 46). " [A]t issue is not whether the insured believes he will ultimately be found liable for the injury' " (id.). In addition, "a justifiable lack of knowledge of insurance coverage may excuse a delay in reporting an occurrence" (Winstead v UniondaleUnionFreeSchool Dist., 201 AD2d 721, 723). "The burden of establishing a reasonable excuse for the delay is upon the insured" (Matter of Travelers Ins. Co. [DeLosh], 249 AD2d 924, 925; see Great Canal Realty Corp., 5 NY3d at 744).
Here, the record establishes that plaintiff received notice of the condition giving rise to the underlying action no later than September 1998 and that plaintiff contacted an insurer other than defendants seeking "legal representation reimbursement" at approximately the same time. Plaintiff did not, however, notify defendants of the condition and seek coverage under the applicable policies until December 7, 2000. That delay is unreasonable as a matter of law (see e.g. Philadelphia Indem. Ins. Co., 41 AD3d at 46-47; Lyell Party House v Travelers Indem. Co., 11 AD3d 972, 973) and, under the circumstances of this case, plaintiff failed to meet its burden of establishing that its delay in providing notice to defendants "was reasonably founded upon a good-faith belief that it should not have anticipated a claim" (Philadelphia Indem. Ins. Co., 41 AD3d at 47). Contrary to the contention of plaintiff, he also failed to meet his burden of establishing that he was justifiably ignorant of the insurance coverage available to him under the policies issued by defendants (see Winstead, 201 AD2d at 723).
In view of our determination, we do not address plaintiff's remaining contentions.
Griffith Oil Company, Inc. v. National Union Fire Insurance

Appeal from a judgment (denominated order) of the Supreme Court, Monroe County (Harold L. Galloway, J.), entered July 17, 2008 in a declaratory judgment action. The judgment, insofar as appealed from, upon reargument granted the motion of defendant National Union Fire Insurance Company of Pittsburgh, Pa. for partial summary judgment and denied that part of the cross motion of plaintiffs for summary judgment.

KNAUF SHAW LLP, ROCHESTER (ALAN J. KNAUF OF COUNSEL), FOR PLAINTIFFS-APPELLANTS.
GOLDBERG SEGALLA LLP, ALBANY (MATTHEW S. LERNER OF COUNSEL), AND LAW OFFICES OF BETH ZARO GREEN, BROOKLYN, FOR DEFENDANT-RESPONDENT.
WILEY REIN LLP, WASHINGTON, D.C., CHAMBERLAIN D'AMANDA OPPENHEIMER & GREENFIELD LLP, ROCHESTER (K. WADE EATON OF COUNSEL), FOR COMPLEX INSURANCE CLAIMS LITIGATION ASSOCIATION, AMICUS CURIAE.
ANDERSON KILL & OLICK, P.C., NEW YORK CITY (JOHN G. NEVIUS OF COUNSEL), FOR UNITED POLICYHOLDERS, AMICUS CURIAE. It is hereby ORDERED that the judgment insofar as appealed from is reversed on the law without costs, the motion of defendant National Union Fire Insurance Company of Pittsburgh, Pa. is denied, the declaration is vacated, the cross motion is granted in part, and judgment is granted in favor of plaintiffs as follows:

It is ADJUDGED and DECLARED that defendant National Union Fire Insurance Company of Pittsburgh, Pa. is obligated to indemnify plaintiffs in the underlying actions and the proceeding commenced by the United States Environmental Protection Agency.
Memorandum: Plaintiffs commenced this action seeking, inter alia, a declaration that defendant-respondent (hereafter, defendant) is obligated to indemnify them in underlying actions, and a proceeding brought against them in connection with a spur pipeline oil leak in Steuben County (see e.g. Steuben Contr. v Griffith Oil Co., 283 AD2d 1008). We conclude that Supreme Court erred in granting the motion of defendant for partial summary judgment seeking a declaration that it is not obligated to indemnify plaintiffs under its policy with respect to the action commenced in Steuben County as well as a proceeding commenced by the United States Environmental Protection Agency (EPA). We note in addition that it appears on the record before us that the court granted relief beyond that sought by defendant by declaring that it also is not obligated to indemnify plaintiffs with respect to any "underlying property damage lawsuits regarding oil leaks from the Spur Pipeline." We instead conclude that the court should have granted that part of plaintiffs' cross motion for summary judgment seeking a declaration that defendant is obligated to indemnify them in the underlying actions and the proceeding commenced by the EPA, inasmuch as they established that the exception to the pollution exclusion clause in the policy is applicable herein, and defendant failed to raise an issue of fact sufficient to defeat that part of the cross motion (cf. Griffith Oil Co., Inc. v National Union Fire Ins. Co. of Pittsburgh, Pa., 15 AD3d 982, 984).
It is undisputed that the oil leak constitutes pollution and that the policy excludes coverage for property damage caused by a pollutant. The policy further provides, however, that the exclusionary clause does not apply to any property damage "that may arise out of the products completed operations hazard' for . . . [t]he sale, storage and/or transportation of fuels." "As with any contract, unambiguous provisions of an insurance contract must be given their plain and ordinary meaning . . ., and the interpretation of such provisions is a question of law for the court" (White v Continental Cas. Co., 9 NY3d 264, 267). Plaintiffs established that the fuel in the spur pipeline was either being transported or stored. We note with respect to the term "products completed operations hazard" that such term typically defines an exclusion of coverage. Indeed, that term typically refers to an exclusion of coverage for damages caused by a product that was manufactured at or sold from the insured's premises and was then released into the stream of commerce where the injury occurred (see Frontier Insulation Contrs. v Merchants Mut. Ins. Co., 91 NY2d 169, 176;Logan's Silo Sales & Serv. v Nationwide Mut. Fire Ins. Co., 185 AD2d 651; Associated Mut. Ins. Coop. v Bader, 10 Misc 3d 1028). The term is also used to exclude coverage in connection with work performed by the insured that caused injury after the work was completed (see Berger Bros. Elec. Motors, Inc. v New Amsterdam Cas. Co., 293 NY 523, 527). Here, however, the term "products completed operations hazard" defines coverage rather than an exclusion of coverage.
The policy defines the term "products completed operations hazard" in relevant part as " property damage' occurring away from premises you own or rent and arising out of your product' . . . except: [p]roducts that are still in your physical possession." Here, it is undisputed that the property damage occurred "away from premises" owned by plaintiffs and that the property damage arose as a result of fuel purchased by plaintiffs that leaked either while it was transported to plaintiffs' facility or stored in the spur awaiting transportation. Thus, we conclude that the property damage arose out of plaintiffs' product. The court erred in determining that the word "still" in the context of the phrase "still in your physical possession" required that the product have been sent into the stream of commerce from plaintiffs' facility in order to construe the policy as providing coverage. Thus, according to the court's interpretation, there would be coverage only in the event that the damage resulting from pollution occurred while plaintiffs were in the process of transporting it from the facility, after having received it. The policy, however, does not support that interpretation inasmuch as it does not specify that the damage resulting from the pollution must have occurred after the product was released from plaintiffs' facility into the stream of commerce (cf. Associated Mut. Ins. Coop., 10 Misc 3d at 1030). Rather, the phrase "still in your physical possession" excludes coverage for damage from pollution that occurs on the insured's premises. Even assuming, arguendo, that the term "still" renders the clause ambiguous, we conclude that it must be read in favor of providing coverage, based on the well-settled principle that any ambiguity must be construed in favor of the insured (see White, 9 NY3d at 267).
Thus, although we conclude that the pollution exclusion applies based upon the unambiguous terms of the policy, we further conclude that the exception to that exclusion applies because the damage occurred away from premises owned by plaintiffs and was caused by plaintiffs' product during the storage or transportation of fuel.
All concur except Hurlbutt and Peradotto, JJ., who dissent and vote to affirm in the following Memorandum: We respectfully dissent. In our view, Supreme Court properly determined that the commercial general liability policy issued by defendant-respondent does not cover plaintiffs for property damage caused by an oil leak from a spur pipeline through which plaintiff Griffith Oil Company, Inc. (Griffith), a petroleum distributor, received oil from its supplier. As the majority recognizes, the policy excludes coverage for property damage caused by a pollutant, i.e., the oil spill, unless an exception to the exclusion applies. In this case, an exception to the exclusion would apply in the event that the property damage arose out of a "products completed operations hazard." That term, as defined in the policy, includes property damage "occurring away from [the insured's] premises and arising out of [the insured's] product' . . . except . . . [p]roducts that are still in [the insured's] physical possession." The insured's "product" is defined in relevant part as "[a]ny goods or products . . . manufactured, sold, handled, distributed or disposed of by" the insured. It is undisputed that the oil that leaked from the spur pipeline had not yet come into Griffith's possession, but was awaiting delivery.
In Frontier Insulation Contrs. v Merchants Mut. Ins. Co. (91 NY2d 169), the Court of Appeals noted in addressing a product-hazard exclusion that "[t]he distinct risk of loss occasioned by a defect in the insured's product, which manifests itself only after the insured has relinquished control of the product and at a location away from the insured's normal business premises, is covered by the purchase of separate products hazard' coverage" (id. at 176). Thus, product-hazard insurance is intended to cover "events that occur after [the] insured's product is placed in the stream of commerce" (id.). Here, inasmuch as the oil was spilled before it ever came into the possession of Griffith, it had not been placed in the stream of commerce, nor was it "manufactured, sold, handled, distributed or disposed of" by Griffith. We thus agree with the court that the pollution exclusion applies, and we would affirm.
The Park Country Club of Buffalo, Inc. v. Tower Insurance Company

Appeal from an order of the Supreme Court, Erie County (Frederick J. Marshall, J.), entered January 20, 2009. The order, insofar as appealed from, granted plaintiff's motion for partial summary judgment on the first cause of action and denied in part defendant's cross motion for summary judgment dismissing the complaint.

MURA & STORM, PLLC, BUFFALO (ROY A. MURA OF COUNSEL), FOR DEFENDANT-APPELLANT.
LAW OFFICE OF J. MICHAEL HAYES, BUFFALO (J. MICHAEL HAYES OF COUNSEL), FOR PLAINTIFF-RESPONDENT.

It is hereby ORDERED that the order so appealed from is unanimously affirmed without costs.
Memorandum: Plaintiff commenced this action contending, inter alia, that defendant was required pursuant to the terms of its insurance contract with plaintiff to pay for the damages incurred to sand traps located on its property caused by flooding and to pay for plaintiff's loss of business income. Defendant appeals from an order that granted plaintiff's motion for partial summary judgment on the first cause of action, seeking damages with respect to the sand traps, and denied those parts of defendant's cross motion for summary judgment dismissing the first cause of action as well as the second cause of action, seeking damages for the loss of business income. We affirm.
Contrary to defendant's contention, we conclude that Supreme Court properly granted plaintiff's motion. " The construction and effect of a contract of insurance is a question of law to be determined by the court where[, as here,] there is no occasion to resort to extrinsic proof' " (Topor v Erie Ins. Co., 28 AD3d 1199, 1200) and, "[w]here an insurance policy is clear and unambiguous, it must be enforced as written" (Woods v General Accident Ins., 292 AD2d 802, 802). We note in addition that " [a]n insured seeking to recover for a loss under an insurance policy has the burden of proving that a loss occurred and also that the loss was a covered event within the terms of the policy' " (Gongolewski v Travelers Ins. Co., 252 AD2d 569, 569, lv denied 92 NY2d 815; see Fernandes v Allstate Ins. Co., 305 AD2d 1065). We agree with the court that plaintiff met that burden with respect to the first cause of action (cf. Topor, 28 AD3d at 1200), and defendant failed to raise a triable issue of fact (see generally Zuckerman v City of New York, 49 NY2d 557, 562).
The evidence submitted by plaintiff in support of its motion established that its sand traps were damaged by flooding. Section (A) (1) (e) of the Security for Golf Courses - Golf Course Grounds and Outdoor Property Endorsement in the insurance policy specifically modified section A (1) of the policy to include golf course sand traps within "Covered Property," and the Flood Endorsement specifically indicated that defendant would pay for damages to "Covered Property" caused by flood or surface waters. We agree with the court that the only reasonable interpretation of those endorsements is that the policy covers flood damage to plaintiff's sand traps, and we thus conclude that the court also properly denied defendant's cross motion with respect to the second cause of action, for loss of business income.
Finally, we reject defendant's further contention that the court erred in considering an affidavit submitted by plaintiff in its reply papers in support of the motion. A court may consider evidence submitted for the first time in reply papers where, as here, the opposing party had an opportunity to respond and submit papers in surreply (see Hoffman v Kessler, 28 AD3d 718; see also Fiore v Oakwood Plaza Shopping Ctr., 164 AD2d 737, 739, affd 78 NY2d 572, rearg denied 79 NY2d 916, cert denied 506 US 823).
Scott McLaughlin Truck & Equipment Sales, Inc. v. Selective Ins. Co.

Calendar Date: November 19, 2009
Before: Cardona, P.J., Mercure, Spain, Lahtinen and Kane, JJ.

Boeggeman, George & Corde, P.C., Albany (Paul A.
Hurley of counsel), for appellant.
Stafford, Carr & McNally, P.C., Lake George (Robert
P. McNally of counsel), for Scott McLaughlin Truck &
Equipment Sales, Inc. and another, respondents.
Martin, Harding & Mazzotti, L.L.P., Albany (Keith J.
Starlin of counsel), for William W. Winchell Sr., respondent.
MEMORANDUM AND ORDER

Mercure, J.
Appeal from an order of the Supreme Court (Hall Jr., J.), entered October 21, 2008 in Washington County, which, among other things, granted plaintiffs' motion for summary judgment.
William W. Winchell Jr. was injured in 2001 when plaintiff Jeff Paris, an employee of plaintiff Scott McLaughlin Truck & Equipment Sales, Inc., mistakenly lowered a trailer onto Winchell's right foot. McLaughlin's liability insurance carrier, defendant Selective Insurance Company of America, was not notified of the accident until 2005. Selective disclaimed coverage, asserting that McLaughlin had not provided timely notice of the incident.
Not long after, Winchell's father, defendant William W. Winchell Sr. (hereinafter the father), commenced a personal injury action against plaintiffs. Plaintiffs then commenced this action against defendants, seeking a declaration that Selective must indemnify and defend them in the father's action. Following joinder of issue and discovery, plaintiffs and the father separately moved, and Selective cross-moved, for summary judgment. Supreme Court granted plaintiffs' and the father's motions, determining that McLaughlin provided timely notice of the claim and that Selective's disclaimer of coverage was untimely, and Selective now appeals.
We affirm. It is well settled that, "if an insurer does not disclaim coverage in writing to the insured as soon as is reasonably possible, it is precluded from disclaiming coverage based upon late notice" (One Beacon Ins. v Travelers Prop. Cas. Co. of Am., 51 AD3d 1198, 1200 [2008]; see Insurance Law 3420 former [d]; First Fin. Ins. Co. v Jetco Contr. Corp., 1 NY3d 64, 67 [2003]; Hartford Ins. Co. v County of Nassau, 46 NY2d 1028, 1029 [1979]). This is true even if, as Selective claims, McLaughlin's notice of the claim was, in fact, untimely (see Matter of New York Cent. Mut. Fire Co. v Aguirre, 7 NY3d 772, 774 [2006]; First Fin. Ins. Co. v Jetco Contr. Corp., 1 NY3d at 67; Tex Dev. Co., LLC v Greenwich Ins. Co., 51 AD3d 775, 778 [2008]). The timeliness of Selective's disclaimer is measured from the moment when it first learned of the grounds for disclaimer i.e., that McLaughlin's notice of claim was arguably late (see Continental Cas. Co. v Stradford, 11 NY3d 443, 449 [2008]; Matter of New York Cent. Mut. Fire Ins. Co. v Aguirre, 7 NY3d at 774).
Here, Selective was first made aware of the claim in a May 26, 2005 fax which set out the facts of the claim and included a note from McLaughlin's insurance agent that, to his knowledge, the claim had not been previously reported. Selective did not disclaim on the ground of late notice, however, until July 26, 2005. The burden of justifying that two-month delay in disclaiming rests with Selective and, while the timeliness of such a disclaimer generally presents a question of fact, "an insurer's explanation is insufficient as a matter of law where the basis for denying coverage was or should have been readily apparent before the onset of the delay" (First Fin. Ins. Co. v Jetco Contr. Corp., 1 NY3d at 69; see Continental Cas. Co. v Stradford, 11 NY3d at 449; Matter of New York Cent. Mut. Fire Ins. Co. v Aguirre, 7 NY3d at 774). Selective asserts that difficulties in its investigation of the claim caused the delay, but does not explain why given the facts made known to it in the May 26, 2005 fax anything beyond a cursory investigation was necessary to determine whether McLaughlin had timely notified it of the claim. As Selective failed to show "that the delay . . . was reasonably related to its completion of a thorough and diligent investigation," its explanation for the delay was legally insufficient and Supreme Court properly granted plaintiffs' and the father's motions for summary judgment (Schulman v Indian Harbor Ins. Co., 40 AD3d 957, 958 [2007]; see Hartford Ins. Co. v County of Nassau, 46 NY2d at 1029-1030; Saitta v New York City Tr. Auth., 55 AD3d 422, 423 [2008]; Uptown Whole Foods v Liberty Mut. Fire Ins. Co., 302 AD2d 592, 593 [2003]; Mohawk Minden Ins. Co. v Ferry, 251 AD2d 846, 848 [1998]).
Simantov v. Kipps Taxi, Inc.

Mead, Hecht, Conklin & Gallagher, LLP, Mamaroneck
(Elizabeth M. Hecht of counsel), for appellants.
Gary B. Pillersdorf & Associates, P.C., New York (Heidi L.
Wickstrom of counsel), for respondent.
Order, Supreme Court, Bronx County (Patricia Anne Williams, J.), entered July 14, 2009, which denied defendants' motion for summary judgment dismissing the complaint on the ground that plaintiff did not suffer a serious injury within the meaning of Insurance Law 5102(d), unanimously affirmed, without costs.
Defendants failed to make a prima facie showing of entitlement to judgment as a matter of law. The range of motion findings of defendants' neurologist, who had not reviewed any of plaintiff's medical records, were not probative since they were not stated to be based on objective tests (see Linton v Nawaz, 62 AD3d 434, 438-439 [2009]; Glynn v Hopkins, 55 AD3d 498 [2008]), and their radiologist failed to address a number of the injuries claimed in the bill of particulars (see Menezes v Khan, __ AD3d __, 2009 NY Slip Op 7991 [2d Dept 2009]; Delayhaye v Caledonia Limo & Car Serv., Inc., 61 AD3d 814, 815 [2009]). Furthermore, defendants only addressed plaintiff's claimed 90/180 day disability in reply (see Ritt v Lenox Hill Hosp., 182 AD2d 560, 562 [1992]).
Defendants' failure to meet their initial burden of establishing a prima facie case renders it unnecessary to consider plaintiff's opposition to the motion (see Offman v Singh, 27 AD3d 284 [2006]).
Bengaly v. Singh

Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y.
(Stacy R. Seldin of counsel), for appellant.
Gary B. Pillersdorf & Associates, P.C., New York, N.Y. (Dara
L. Warren and Jason M. Bernstein of
counsel), for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendant appeals from an order of the Supreme Court, Queens County (Satterfield, J.), entered March 5, 2009, which denied his motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law 5102(d).
ORDERED that the order is affirmed, with costs.
The Supreme Court properly denied the defendant's motion for summary judgment dismissing the complaint since he failed to meet his prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In support of his motion, the defendant relied on, inter alia, the affirmed medical report of his examining orthopedic surgeon. In his report, which was based on an examination of the plaintiff on February 22, 2008, the orthopedic surgeon noted significant limitations in the plaintiff's cervical spine range of motion (see Chang Ai Chung v Levy, 66 AD3d 946; Alvarez v Dematas, 65 AD3d 598; Landman v Sarcona, 63 AD3d 690). While the orthopedic surgeon concluded that the range-of-motion limitation noted in the cervical spine was a "subjective examination parameter," he failed to explain or substantiate, with any objective medical evidence, the basis for his conclusion that the noted limitations were self-restricted (see Moriera v Durango, 65 AD3d 1024). While he further opined that the plaintiff's magnetic resonance imaging findings concerning his cervical spine revealed mild degenerative changes, he provided no foundation for this conclusion (see Franchini v Palmieri, 1 NY3d 536; see also Buono v Sarnes, 66 AD3d 809).
Accordingly, the Supreme Court properly denied the defendant's motion for summary judgment without considering the sufficiency of the plaintiff's opposition papers (see Chang Ai Chung v Levy, 66 AD3d at 947; Moriera v Durango, 65 AD3d at 1025; Landman v Sarcona, 63 AD3d at 691).
Fest v. Agnew

William Pager, Brooklyn, N.Y., for appellant.
James G. Bilello, Westbury, N.Y. (Patricia McDonagh of
counsel), for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Kings County (Solomon, J.), dated December 11, 2008, which granted the motion of the defendant Sergey Barbashov for summary judgment dismissing the complaint insofar as asserted against him on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law 5102(d).
ORDERED that the order is affirmed, with costs.
The defendant Sergey Barbashov established his prima facie entitlement to judgment as a matter of law by submitting evidence, including the plaintiff's deposition testimony and the affirmation of Barbashov's retained examining orthopedist, that the plaintiff did not sustain a serious injury within the meaning of Insurance Law 5102(d) (see Charley v Goss, 12 NY3d 750; Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957; Luckey v Bauch, 17 AD3d 411; Sims v Megaris, 15 AD3d 468; Check v Gacevk, 14 AD3d 586; Paul v Trerotola, 11 AD3d 441; Mastaccioula v Sciarra, 11 AD3d 434). In opposition, the plaintiff failed to raise a triable issue of fact.
Menaker v. White Express Cab Corp.

Torgan & Cooper, P.C. (Pollack, Pollack, Isaac & De Cicco,
New York, N.Y. [Brian J. Isaac], of counsel), for appellant.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York,
N.Y. (Stacy R. Seldin of counsel), for
respondents White Express Cab Corp.
and Shuminov Elkhan.

DECISION & ORDER
In an action, inter alia, to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Kings County (Starkey, J.), dated July 1, 2008, which granted the motion of the defendants White Express Cab Corp. and Shuminov Elkhan, and the separate motion of the defendant Francisco Lopez, for summary judgment dismissing the complaint insofar as asserted against them on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law 5102(d).
ORDERED that the order is affirmed, with costs.
The respective defendants, in support of their motions for summary judgment, relied on the same submissions. Those submissions were sufficient to meet their prima facie burdens 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.
While the plaintiff relied on the affirmation of her treating neurologist, in which he revealed that the plaintiff had significant limitations in her cervical and lumbar spine two years post-accident, as well as more recently, neither he nor the plaintiff proffered competent medical evidence of significant limitations in either her cervical or lumbar regions that were contemporaneous with the subject accident (see Taylor v Flaherty, 65 AD3d 1328; Fung v Uddin, 60 AD3d 992; Gould v Ombrellino, 57 AD3d 608; Kuchero v Tabachnikov, 54 AD3d 729; Ferraro v Ridge Car Serv., 49 AD3d 498).
Finally, the plaintiff failed to set forth any competent medical evidence to establish that she sustained a medically-determined injury of a nonpermanent nature which prevented her from performing her usual and customary activities for 90 of the 180 days following the subject accident (see Sainte-Aime v Ho, 274 AD2d 569).
David Cucinotta v The City of New York

Marshall Conway Wright & Bradley P.C., New York (Leonard
Steven Silverman of counsel), for appellant.
Epstein & Rayhill, Elmsford (Russell Monaco of counsel), for
Northside Realty Corporation, respondent.
Order, Supreme Court, New York County (Eileen A. Rakower, J.), entered May 19, 2008, which denied defendant-tenant Meriken Ltd.'s motion for summary judgment dismissing the complaint and defendant-owner Northside Realty Corp's cross claim as against it and granted defendant Northside's cross motion for common-law and contractual indemnification against Meriken to the extent of holding Meriken liable for all damages, including defense costs incurred by Northside arising from Meriken's failure to procure insurance naming Northside as an additional insured, unanimously modified, on the law, to grant Meriken's motion to dismiss the cross claims for common-law and contractual indemnification as against it, and to direct a trial of Northside's damages arising from Meriken's failure to procure insurance, and otherwise affirmed, without costs. Appeal from so much of the order as denied Meriken's motion for summary judgment dismissing the complaint as against it, unanimously dismissed.[FN1]
Plaintiff was allegedly injured on August 21, 2004 when he tripped and fell on an allegedly defective sidewalk abutting the premises located at 162 West 21st Street, New York. The premises was owned by Northside, and leased by Meriken (the restaurant), pursuant to a lease agreement (lease) and a rider to the lease (rider) dated July 7, 2004.
Section 4 of the lease required Meriken to make all nonstructural repairs to the sidewalks. Paragraph 43(a) of the rider assigned responsibility to Meriken for, inter alia, structural repairs to the premises which arose from its negligence or misconduct or from a breach of any obligation or covenant to be performed by it under the lease. Further, paragraph 52 of the rider identified with specificity the restaurant's responsibilities regarding floors and sidewalk as follows:
"[Restaurant] shall keep the floors of the [p]remises and the sidewalk in front thereof, and extending 18 inches into the street, free and clean of snow, ice, dirt, debris and other foreign matter and will, at its sole cost and expense, make suitable arrangements to dispose of all waste and rubbish in compliance with all laws, regulations and ordinances pertaining thereto."
Paragraph 45(a) of the rider (indemnification provision) requires Meriken to indemnify Northside for claims arising from, relating to or in connection with:
"(i) [Meriken's] use or occupancy of the Premises or the conduct of business in or management of the Premises or any work or thing whatsoever done or any condition created in or about the Premises during the term of this lease; (ii) any act or omission of [Meriken]...; and (iii) any default in the performance or observance of any of the terms, provisions, conditions, or covenants of this lease on [Meriken's] part to be observed or performed."
Paragraph 45(b) of the rider (insurance provision) required Meriken to, inter alia, obtain insurance in Northside's name independent of Meriken's management of the property, acts/omissions or its defaulting on requirements of the lease.
On January 13, 2005, plaintiff commenced this negligence action against, inter alia, Northside and Meriken. Northside cross-claimed against Meriken based upon Meriken's alleged negligence and contractual indemnification. On January 28, 2008, Meriken moved for summary judgment and sought dismissal of both plaintiff's action and of Northside's cross claims as to indemnification. Northside cross-moved for indemnification and defense pursuant to the terms of the lease.
By order entered on May 19, 2008, the motion court (1) denied Meriken's motion for summary judgment against both plaintiff and Northside and (2) granted Northside's cross motion "only to the extent that defendant [Meriken] shall be liable for all damages, including the costs of defending the lawsuit as against Northside, which arise from its failure to procure insurance naming Northside as an additional insured."
On appeal, Meriken contends that the motion court, in granting Northside's cross motion for summary judgment based upon Meriken's contractual failure to list Northside as an additional insured, incorrectly held that the measure of damages to Northside was "all damages, including the costs of defending the lawsuit." Instead, Meriken contends that Northside is only entitled to the full cost of insurance to Northside including premiums paid and any out-of-pocket costs incidental to obtaining such insurance that might have been incurred. Meriken also argues that since there is no evidence that the alleged defect was caused by its negligence or misconduct, it should not be responsible for indemnity under the contract or common law. For the reasons set forth below, we agree and modify.
At the outset, we find that Meriken met its burden of establishing that the lease and rider did not shift responsibility for the structurally defective concrete slab on the sidewalk from Northside to Meriken (see Administrative Code of the City of New York 7-210). Moreover, the record does not raise any triable issues of fact with respect to whether the condition of the sidewalk was due to any acts of negligence on Meriken's part (Berkowitz v Dayton Constr., 2 AD3d 764 [2003]; cf. Margolin v New York Life Ins. Co., 32 NY2d 149, 154 [1973]). Meriken therefore was entitled to summary judgment dismissing Northside's cross claims for common-law and contractual indemnification against it insofar as those claims are premised on the indemnification provision of the rider (see Berkowitz at 765-766).
However, to the extent Northside's cross claims are premised on Meriken's undisputed failure to obtain insurance naming Northside as an additional insured, pursuant to the insurance provision of the rider, we find that the motion court correctly granted Northside's cross motion. In Inchaustegui v 666 5th Ave. Ltd. Partnership (268 AD2d 121 [2000], affd 96 NY2d 111 [2001]), this Court addressed the damages recoverable by a landlord for a subtenant's breach of a sublease provision requiring the subtenant to procure liability insurance covering the landlord after the landlord was sued for personal injuries covered under its policy. Notably, in Inchaustegui, the landlord had procured its own insurance. We held that the damages were limited to the landlord's costs of purchasing substitute insurance and other out-of-pocket expenses arising from the liability claim not covered by the substitute insurance, such as any deductibles or any increase in premiums resulting from the liability claim (Inchaustegui at 127).
In this Court, Meriken alleges for the first time, in mitigation, that Northside itself purchased insurance equivalent to that which Meriken was contractually obligated to procure. Thus, citing Inchaustegui, Meriken contends that the measure of damages is limited to the cost of Northside's insurance, including premiums paid and any out-of-pocket costs incidental to obtaining such insurance that might have been incurred. Although Northside does not deny that it obtained such insurance, the record does not indicate that this allegation was before the motion court. Therefore, the appropriate measure of damages must be determined upon proper proof at trial.
THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
Footnotes

Footnote 1: In April 2009 there was a trial on the underlying case. Meriken was granted a directed verdict at the trial. Accordingly, the appeal is moot with respect to whether Meriken's motion for summary judgment dismissing the complaint against it was properly denied.

Lon Silvers v State of New York

Kenneth Cooperstein, Centerport, for appellant-respondent.
Andrew M. Cuomo, Attorney General, Albany (Michael S.
Buskus of counsel), for respondents-appellants.
Order of the Court of Claims of the State of New York (Thomas H. Scuccimarra, J.), entered May 2, 2007, which, in an action seeking recoupment of money paid to the client of an insurance broker, denied the parties' respective motions for summary judgment, unanimously modified, on the law, to grant defendants' motion for summary judgment dismissing the complaint, and otherwise affirmed, without costs. The Clerk is directed to enter judgment in favor of defendants dismissing the complaint.
Claimant insurance broker seeks recoupment of money from defendant State Insurance Fund (SIF) that he was compelled to pay one of his clients after it was determined that he had negligently failed to obtain workers' compensation insurance for that entity's out-of-state employees (see Electronic Servs. Intl. v Silvers, 284 AD2d 367 [2001], lv dismissed 97 NY2d 700 [2002], lv denied 99 NY2d 508 [2003]). Although SIF has never sold out-of-state coverage, claimant maintains that one of SIF's field representatives advised him that the policy that he had acquired on behalf of his client would cover its out-of-state employees, and the Court of Claims found the existence of triable issues of fact precluding summary judgment to either side. However, in the absence of any evidence that this field representative was authorized to speak for SIF with respect to coverage for out-of-state employees, any statement on his part is not an admission that can be received in evidence against the principal (see Loschiavo v Port Auth. of N.Y. & N.J., 58 NY2d 1040 [1983]; Aquino v Kuczinski, Vila & Assoc., P.C., 39 AD3d 216, 221 [2007].
Furthermore, even assuming that such field representative could bind SIF by his statements to claimant, any reliance by claimant upon the representative's purported misrepresentations was unreasonable as a matter of law. "A claim for negligent misrepresentation requires the [claimant] to demonstrate (1) the existence of a special or privity-like relationship imposing a duty on the defendant to impart correct information to the [claimant]; (2) that the information was incorrect; and (3) reasonable reliance on the information" (J.A.O. Acquisition Corp. v Stavitsky, 8 NY3d 144, 148 [2007]). Here, apart from the fact that the arm's-length business relationship, such as that between claimant and the field representative, is not generally considered to be of the sort of a confidential or fiduciary nature that would support a cause of action for negligent misrepresentation (see e.g. Dobroshi v Bank of Am., N.A., 65 AD3d 882, 884 [2009]), claimant, as a sophisticated insurance broker, is unable to show any reasonable reliance upon the representative's alleged misrepresentations inasmuch as a broker is presumed to have read, and have knowledge of, the insurance policy that is being procured on behalf of the insured (see Western Bldg. Restoration Co., Inc. v Lovell Safety Mgt. Co., LLC, 61 AD3d 1095, 1100 [2009]; Greater N.Y. Mut. Ins. Co. v White Knight Restoration, Ltd., 7 AD3d 292 [2004]).
THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
Borzillieri v. Jones

Appeal from an order of the Supreme Court, Erie County (Timothy J. Drury, J.), entered May 15, 2008 in a personal injury action. The order granted the motion of defendant for summary judgment and dismissed the complaint.

THE LAW OFFICE OF KENNETH P. BERNAS, BUFFALO (KENNETH P. BERNAS OF COUNSEL), FOR PLAINTIFF-APPELLANT.
BURGIO, KITA & CURVIN, BUFFALO (HILARY C. BANKER OF COUNSEL), FOR DEFENDANT-RESPONDENT.

It is hereby ORDERED that the order so appealed from is affirmed without costs.
Memorandum: Plaintiff commenced this action seeking damages for injuries he allegedly sustained when the vehicle in which he was a passenger collided with a vehicle operated by defendant. Supreme Court properly 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 Insurance Law 5102 (d). Defendant met his initial burden on the motion by submitting evidence establishing that plaintiff did not sustain a serious injury under the four categories alleged by plaintiff in the complaint, as amplified by the bill of particulars, i.e., fracture, permanent consequential limitation of use, significant limitation of use and 90/180-day categories (see Charley v Goss, 54 AD3d 569, 570-571, affd 12 NY3d 750). In support of his motion, defendant submitted the affirmation and report of a physician specializing in neurology who, upon examining plaintiff at defendant's request, observed various ranges of motion and performed a number of objective tests (see id.). The physician reviewed plaintiff's medical records and concluded that plaintiff's CT scan revealed lumbar disc bulges that were without clinical significance and that the accident resulted in a lumbar strain involving transient complaints of pain without any objective findings.
In opposition to the motion, plaintiff failed to raise a triable issue of fact (see generally Zuckerman v City of New York, 49 NY2d 557, 562). Plaintiff submitted a CT scan report indicating that he sustained "[d]isc protrusions and/or herniations at multiple levels" and the affidavit and records of his chiropractor demonstrating that he experienced pain, tenderness, and loss of motion. Plaintiff did not begin treatment with his chiropractor until approximately 16 months following the accident, and the range of motion tests were performed by his chiropractor approximately 19 months after the accident. Plaintiff thus failed to submit any evidence that his limited range of motion was contemporaneous with the accident (see Jimenez v Rojas, 26 AD3d 256). "Proof of a herniated disc, without additional objective medical evidence establishing that the accident resulted in significant physical limitations, is not alone sufficient to establish a serious injury" (Pommells v Perez, 4 NY3d 566, 574).
We have considered plaintiff's remaining contentions and conclude that they are without merit.
All concur except Fahey, J., who dissents in part and votes to modify in accordance with the following Memorandum: I respectfully dissent in part and would modify the order by denying defendant's motion in part and reinstating the complaint, as amplified by the bill of particulars, with respect to the fracture category of serious injury within the meaning of Insurance Law 5102 (d). In support of his motion, defendant submitted a report that addressed a CT scan performed after the accident, indicating that plaintiff had spondylolysis at L5-S1. Spondylolysis, which is defined as the "[b]reaking down or degeneration of a vertebra" (Am Jur Proof of Facts 3d, Attorney's Illustrated Medical Dictionary S58), has been characterized as a fracture, and thus evidence of an injury of that nature raises a triable issue of fact whether plaintiff sustained a serious injury under the fracture category (see Bethea v Pacheco Auto Collision, 207 AD2d 424). The opinion of defendant's expert that the spondylolysis is unrelated to the accident is speculative and unsupported by any evidentiary foundation (see Diaz v New York Downtown Hosp., 99 NY2d 542, 544). Consequently, in my view, defendant failed to meet his burden on that part of the motion with respect to the fracture category of serious injury (see generally Zuckerman v City of New York, 49 NY2d 557, 562).
Blake v. Portexit Corp.

Baker, McEvoy, Morrissey & Moskovits, P.C., New York
(Stacy R. Seldin of counsel), for appellants.
Stillman & Stillman, P.C., Bronx (Robert A. Birnbaum of
counsel), for respondent.
Order, Supreme Court, Bronx County (Wilma Guzman, J.), entered May 19, 2009, which denied defendants' motion for summary judgment dismissing the complaint, unanimously modified, on the law, to grant the motion as to plaintiff's knee injury and 90/180-day claim, and otherwise affirmed, without costs.
Defendants satisfied their initial burden on summary judgment by establishing, prima facie, with the submission of the medical reports of their expert neurologist, orthopedist and radiologist, that plaintiff did not suffer a serious injury within the meaning of Insurance Law 5102(d). Defendants set forth objective tests supporting their claim that plaintiff suffered no limitation in range of motion.
Plaintiff, in response, raised a triable issue of fact as to whether he suffered a significant or permanent consequential limitation of use of his spine. His chiropractor "identified measurements of loss of range of motion in plaintiff's cervical and lumbar spine, and on that predicate opined that plaintiff suffered severe and permanent injuries as a result of the accident" (Pommells v Perez, 4 NY3d 566, 577 [2005]. The chiropractor adequately related plaintiff's spinal injuries to the accident.
However, plaintiff failed to raise a triable issue of fact as to whether his knee injury constituted a serious injury pursuant to Insurance Law 5102(d) (see Antonio v Gear Trans Corp., 65 AD3d 869, 870 [2009]; see also DeJesus v Paulino, 61 AD3d 605, 608 [2009]).
Plaintiff also failed to raise a triable issue of fact as to his 90/180-day claim. The fact that he missed more than 90 days of work is not determinative (see e.g. Ortiz v Ash Leasing, Inc., 63 AD3d 556, 557 [2009]); the statute requires plaintiff to be prevented "from performing substantially all of the material acts which constitute [his] usual and customary daily activities" (Insurance Law 5102[d] [emphasis added]). Plaintiff's chiropractor's affidavit, which said that plaintiff was "totally disabled," was too general to raise an issue of fact (see Valentin v Pomilla, 59 AD3d 184, 186-187 [2009]; see also Antonio, 65 AD3d at 869-870), and the chiropractor's advice not to lift anything heavy, also fails to create an issue of fact (see Onishi v N & B Taxi, Inc., 51 AD3d 594, 595 [2008]; Gorden v Tribulcio, 50 AD3d 460, 463 [2008]). Even if one reads plaintiff's affidavit to say that for the first six months after the accident, he could not play sports with his children and had difficulty walking, going up stairs, and getting into cars, it does not raise a triable issue of fact because plaintiff's statement is unsupported by medical evidence (see e.g. Pinkhasov v Weaver, 57 AD3d 334, 335 [2008]) and because the activities listed therein do not constitute substantially all of his activities (see Gibbs v Hee Hong, 63 AD3d 559, 560 [2009]).
Aquino v Higgins

Appeal and cross appeal from an order and judgment (one paper) of the Supreme Court, Erie County (Christopher J. Burns, J.), entered February 20, 2009. The order and judgment granted in part and denied in part the motion of defendants John Higgins and Heather Higgins for summary judgment.

DENNIS J. BISCHOF, LLC, WILLIAMSVILLE (DENNIS J. BISCHOF OF COUNSEL), FOR DEFENDANTS-APPELLANTS-RESPONDENTS.
BROWN CHIARI LLP, LANCASTER (SAMUEL J. CAPIZZI OF COUNSEL), FOR PLAINTIFF-RESPONDENT-APPELLANT.

It is hereby ORDERED that the order and judgment so appealed from is modified on the law by granting in its entirety the motion of defendants John Higgins and Heather Higgins and dismissing the complaint against them and as modified the order and judgment is affirmed without costs.
Memorandum: Plaintiff commenced this action seeking damages for injuries he sustained while he was a passenger in a vehicle that was driven by then 19-year-old defendant Michael Higgins and was owned by his parents (hereafter, defendant parents). We conclude that Supreme Court erred in denying that part of the motion of defendant parents seeking summary judgment dismissing the fourth cause of action, and we therefore modify the order and judgment by granting in its entirety their motion for summary judgment and dismissing the complaint against them. Plaintiff alleged in the fourth cause of action that defendant parents were negligent because they failed to ensure that plaintiff, who was a minor at the time of the accident, had a safe means of returning home from the party hosted by them, in light of their knowledge that alcohol had been consumed by guests at the party.
The record establishes that defendant parents permitted their daughter to host a party at their residence following a high school dinner dance and that defendant father expressly told his daughter that defendant parents would not permit any alcohol to be served. The record further establishes that defendant parents provided food, soda and water for the daughter's guests. Although defendant parents observed the guests arrive, they did not observe anyone take alcohol into the basement where the party was held. Defendant parents were not aware that there was alcohol present at the party until defendant mother entered the basement at the end of the party and observed approximately 12 beer cans. Defendant father suspected that his son, defendant Michael Higgins, had been drinking, and he escorted his son to the son's bedroom and instructed the son to go to bed. Meanwhile, defendant mother asked the guests whether anyone needed a ride home, but no one accepted the offer. Defendant parents had each observed the guests after discovering the alcohol, and they each testified at their depositions that none of the guests appeared to be intoxicated. Plaintiff, however, presented the deposition testimony of other guests who testified that plaintiff appeared to be intoxicated. Defendant parents were unaware that their son had left the house to drive plaintiff and another person home until they were notified of the accident that is the subject of this action.
In denying that part of the motion seeking summary judgment dismissing the fourth cause of action, the court determined that there is an issue of fact whether defendant parents provided adequate supervision for the guests at their daughter's party. Plaintiff contended in opposition to that part of the motion that defendant parents were negligent in failing to ensure that the guests had adequate transportation home.
In order to establish a prima facie case of negligence against defendant parents, plaintiff must demonstrate that they owed a duty to him; that the duty was breached; and that he was injured as a result of that breach of duty (see Mary A. Z.Z. v Blasen, 284 AD2d 773, 774). We conclude that defendant parents met their initial burden of establishing that they were not negligent and that plaintiff failed to raise an issue of fact (see generally Zuckerman v City of New York, 49 NY2d 557, 562). Although it is of course well established that a landowner may be liable for injuries caused by an intoxicated guest on the landowner's property, or in an area under the landowner's control (see D'Amico v Christie, 71 NY2d 76, 85), here, plaintiff was injured in a vehicle driven by defendant son on a public road, 5 to 10 minutes from defendant parents' home (see Lombart v Chambery, 19 AD3d 1110, 1111). In Lombart, the defendant grandmother permitted alcohol to be served to individuals under the legal drinking age, including the plaintiff, and we concluded that the claim against the defendant grandmother was properly dismissed inasmuch as the plaintiff was injured in an accident "miles away" from defendant's property (id.).
In a case involving a minor plaintiff, the Second Department determined that the defendants were not liable for injuries sustained by the plaintiff, who was struck by a vehicle after leaving a party at the defendants' home (Rudden v Bernstein, 61 AD3d 736). The party was attended by 13- and 14-year-old children who had consumed alcohol during the party on property that was near the defendants' property (id. at 738). The defendant parents in that case became aware that children were intoxicated before the children left the party. The Second Department noted, however, that the defendant parents did not serve alcohol and that the defendant mother observed the plaintiff and other children walk toward a vehicle parked on the roadway, when in fact the plaintiff and another child walked home, at which time the plaintiff was struck by a vehicle.
Although a person other than a parent has a duty to use reasonable care to protect an infant over whom that person has assumed temporary custody or control (see Appell v Mandel, 296 AD2d 514), such a person is not an insurer of the safety of that infant (see Moreno v Weiner, 39 AD3d 830, 831, lv denied 9 NY3d 807). Here, defendant parents reasonably believed that alcohol would not be served at the party (cf. Lombart, 19 AD3d at 1110-1111) and, upon discovering that alcohol had been served, observed the guests and believed that none of them was intoxicated (cf. Rudden, 61 AD3d at 737). Furthermore, defendant mother ascertained that none of the guests needed a ride home. Thus, we conclude that defendant parents satisfied their duty to provide adequate supervision for the guests at the party while the guests were under their control (see generally id. at 738;Moreno, 39 AD3d at 831). That duty does not extend to an area not within the control of defendant parents (see Rudden, 61 AD3d at 738; Lombart, 19 AD3d at 1111).
All concur except Green and Gorski, JJ., who dissent in part and vote to affirm in the following Memorandum: We respectfully dissent in part. Although we do not agree with the reasoning of Supreme Court in denying that part of the motion of defendant parents seeking summary judgment dismissing the fourth cause of action, we nevertheless agree with plaintiff that the court properly denied that part of the motion. In our view, there is an issue of fact with respect to the alleged negligence of defendant parents, i.e., whether they adequately ensured that plaintiff, who was a minor at the time of the accident, had a safe means of returning home from the party hosted by them, in light of their knowledge that alcohol had been consumed by guests at the party (cf. Rudden v Bernstein, 61 AD3d 736, 738; see generally Moreno v Weiner, 39 AD3d 830). In Rudden, a case cited by the majority, the Second Department concluded that the defendant parents were not liable for the injuries sustained by a minor who attended a party at their home because, inter alia, the alcohol was not consumed on their premises and the accident occurred after the intoxicated minor "left their property, apparently in the company of his friends and a responsible adult who was driving them home" (id. at 738 [emphasis added]). Here, there is evidence in the record that a significant amount of alcohol had been brought to the party by 10 or more different guests, that the alcohol was consumed on the premises, that defendant parents became aware of the alcohol prior to plaintiff's departure from the party, and that plaintiff was visibly intoxicated when he left the premises after 1:00 a.m. Unlike in Rudden, however, defendant parents in this case did not observe plaintiff leave in the company of a responsible adult. Thus, contrary to the conclusion of the majority, we believe that under the facts of this case defendant parents had a duty of care to ensure that plaintiff had a safe means of transportation from their premises. We therefore would affirm
Lon Silvers v State of New York

Kenneth Cooperstein, Centerport, for appellant-respondent.
Andrew M. Cuomo, Attorney General, Albany (Michael S.
Buskus of counsel), for respondents-appellants.
Order of the Court of Claims of the State of New York (Thomas H. Scuccimarra, J.), entered May 2, 2007, which, in an action seeking recoupment of money paid to the client of an insurance broker, denied the parties' respective motions for summary judgment, unanimously modified, on the law, to grant defendants' motion for summary judgment dismissing the complaint, and otherwise affirmed, without costs. The Clerk is directed to enter judgment in favor of defendants dismissing the complaint.
Claimant insurance broker seeks recoupment of money from defendant State Insurance Fund (SIF) that he was compelled to pay one of his clients after it was determined that he had negligently failed to obtain workers' compensation insurance for that entity's out-of-state employees (see Electronic Servs. Intl. v Silvers, 284 AD2d 367 [2001], lv dismissed 97 NY2d 700 [2002], lv denied 99 NY2d 508 [2003]). Although SIF has never sold out-of-state coverage, claimant maintains that one of SIF's field representatives advised him that the policy that he had acquired on behalf of his client would cover its out-of-state employees, and the Court of Claims found the existence of triable issues of fact precluding summary judgment to either side. However, in the absence of any evidence that this field representative was authorized to speak for SIF with respect to coverage for out-of-state employees, any statement on his part is not an admission that can be received in evidence against the principal (see Loschiavo v Port Auth. of N.Y. & N.J., 58 NY2d 1040 [1983]; Aquino v Kuczinski, Vila & Assoc., P.C., 39 AD3d 216, 221 [2007].
Furthermore, even assuming that such field representative could bind SIF by his statements to claimant, any reliance by claimant upon the representative's purported misrepresentations was unreasonable as a matter of law. "A claim for negligent misrepresentation requires the [claimant] to demonstrate (1) the existence of a special or privity-like relationship imposing a duty on the defendant to impart correct information to the [claimant]; (2) that the information was incorrect; and (3) reasonable reliance on the information" (J.A.O. Acquisition Corp. v Stavitsky, 8 NY3d 144, 148 [2007]). Here, apart from the fact that the arm's-length business relationship, such as that between claimant and the field representative, is not generally considered to be of the sort of a confidential or fiduciary nature that would support a cause of action for negligent misrepresentation (see e.g. Dobroshi v Bank of Am., N.A., 65 AD3d 882, 884 [2009]), claimant, as a sophisticated insurance broker, is unable to show any reasonable reliance upon the representative's alleged misrepresentations inasmuch as a broker is presumed to have read, and have knowledge of, the insurance policy that is being procured on behalf of the insured (see Western Bldg. Restoration Co., Inc. v Lovell Safety Mgt. Co., LLC, 61 AD3d 1095, 1100 [2009]; Greater N.Y. Mut. Ins. Co. v White Knight Restoration, Ltd., 7 AD3d 292 [2004]).