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Coverage Pointers - Volume XI, No. 20

Dear Coverage Pointers Subscribers:

Warmest wishes for a happy Easter and joyous Passover celebration.   Oh yes, and Happy Taily Day.  More on that later.

We offer a special welcome to those who attended the PLRB Claims Conference in San Antonio and who, as a result, have joined the Coverage Pointers family.  We are delighted to have you with us.   A special tip-of-the-hat to my very able co-presenter, Kris Gatherum from Century Insurance.  You were mahvelous.

For our new subscribers, you should know that on alternating Friday mornings, our publication will be waiting for you in your electronic mailbox.  Each issue is introduced by a cover letter, with the issue attached.  We have a number of action-packed columns for your reading and dining pleasure.  We produce the newsletter in Microsoft Word format so that you can easily cut and paste summaries into claim diaries or pass them on to colleagues.

Environmental Alert:

Before you hit the command on your computer to print out the attached issue, we advise you that it is 83 pages in length.  If all of our subscribers did just that, we'd be using 165,000 sheets of paper.  In this issue, the first 34 pages of the attached issue contain the case summaries and the remaining pages have the full text of the reviewed decisions.  If you're printing, we'd recommend  pages 1-34.

Training:

If your office is looking for training, we provide that as well, on any number of coverage related subjects.  Also, feel free to call or write if you want to discuss some strategic issue with which you're wrestling.

Thanks, Ann:

Speaking of San Antonio, I send out a special thanks to Ann McEntee from Aspen Specialty in Boston for her very nice words.

From Audrey Seeley, Queen of No Fault:

The arbitration awards presented this edition give rise to the topic of ensuring sufficient medical reports support your position.  For those with arbitrations in Western New York you need to be mindful of the Appellate Division decision that applies to all of your cases in which IME and peer review reports are scrutinized.  If the report contains phrases like reached endpoint of care or reached maximum benefit from care then the basis for denial is construed as MMI, which is not a valid defense.  The report, while it apparently can contain this language, must contain a discussion on why the care is no longer palliative or curative thereby warranting no further care.  Further, you should consider addressing why the case is not palliative in light of multiple positive objective findings and diagnosis of an injury from the accident.  Also, why not address the treating physician's records and why those records do not demonstrate palliative care? 

The same concept applies to the medical provider.  The records and reports are also being scrutinized in these types of cases to gain an understanding of whether the care the provider gives is providing any measurable and meaningful palliative care.  The record that is devoid of any discussion as to why 3 years of physical therapy or 5 years of chiropractic care (not picking on any specialty intentionally) is providing any meaningful and measurable benefit to the patient may be problematic for the provider.

This is a great training topic and I would welcome discussing it further with you.  You can email me at [email protected] to discuss it further.

The DRI Insurance Coverage and Claims Institute is less than two weeks away.  It is never too late to register!  If you need additional information regarding the program please feel free to contact me.

Audrey Seeley
[email protected]

One Hundred Years Ago, an Astounding Recommendation: 

The (Syracuse) Post Standard
APRIL 2, 1910

JUSTICES DISCUSS

RULES OF PRACTICE

Recommend Both Sides of Case Be

Opened Before Any Evidence Is Taken

Nineteen justices of the four Appellate Divisions of the Supreme Court of the State of New York in session in Albany yesterday considered an amendment to the rules of practice .

An amendment to the rules of practice in the courts of this state, the justices believe, should be made to provide that the opening of both sides of a case shall be made to a jury before any evidence is taken was among the suggestions considered. The proposed change would require the defense to open its case immediately following the opening of the prosecution instead of waiting until the prosecution has concluded its case. This procedure is followed in several states

From Margo Lagueras, Some Musings for Perusing:

After a rather lengthy silence, our Fourth Department presents us with four "serious injury" decisions for this issue, one of which reinstates a verdict upon finding that the Judicial Hearing Officer (JHO) at the trial level erred in directing a verdict against the defendant after the jury came back with a defendant verdict (see, Bennice).  Also in this issue, the First Department reminds us that when a plaintiff is able to establish serious injury under any one category, he or she may recover for all injuries related to the accident, even if they do not meet the "serious" threshold (see, Rubin).

If you ever wish to discuss strategy with respect to "serious injury" proof or motions, contact me.

Margo Lagueras

[email protected]

Look Out Behind! Happy Taily Day:

Few have considered the history of April Fool's Day, so your editor offers some historical overview.  It is said that the tradition was started in France in 1582 when the Gregorian calendar (note, this was not a pin-up version) was introduced.  Up until then, New Year's Week was celebrated from the first day of Spring in March until April 1st but Charles IX moved New Year's Day back to January 1st.  Since this was a few years before the Internet was invented, word did not get out quite as quickly as it would now and those who continued to celebrate the beginning of the New Year on the last day of New Year's week were known as April Fools, and became the butt of practical jokes.

Speaking of being the butt of jokes, in Scotland, the April frivolity lasts two days with April 2nd being known as Taily Day.  The Scottish use that day to play gags and jokes that focus on the posterior part of the human body.  Be aware of "Kick Me" signs.

 

One Hundred Years Ago - How Far We've Come - The State of Maryland Seeks to Prevent Most African Americans From Voting:

Indianapolis Star

Sunday, April 3, 1910

Page 27

MARYLAND FINALLY PASSED DISFRANCHISEMENT BILL

Measure Restricting Negro Vote In State is Now Assured Place in Statute Book

ANNAPOLIS, MD - April 2- The so-called Digges bill for the disfranchisement of the Negro in all state and municipal elections in Maryland has been passed by the Senate and House and now goes to the Governor for his signature. It is not proposed to attempt to prevent the Negroes voting at congressional or presidential elections, the restriction applying only to state and municipal balloting,  

The original draft of the plan was amended by the insertion of a clause by which Negroes owning property assessed at $500 may vote, provided they were possessed of property thus valued two years in advance of their registration.  Being refused registration, if the bills are enacted the Negro will not be able to vote on the measures when they come before the electors in November, 1911, in the form of a constitutional amendment.

The Democrats did not insert the property qualification in the registration bill because they say they will conduct the election under the state constitution because they say the word "white" has never been expunged by any act of the state

Editor's Note:  The Bill was vetoed by Governor Crothers several days later, not because of his support of civil rights, but for tactical reasons.  The Governor commented that the purpose of the legislation was to challenge the validity of the Fifteenth Amendment but he believed this legislation would show "defiance toward the Federal Government that it would be generally misunderstood and misrepresented and might do our people and the people of the South generally much harm."  He directed the Attorney General to challenge the Fifteenth Amendment by filing suit.

Two weeks earlier, the Governor signed a similar Digges proposal to amend the Maryland Constitution to disenfranchise the African American voter.  That proposed amendment was overwhelmingly defeated by the voters in the 1911 election.

W. Mitchell Digges, the author of the Amendment, went on to serve on Maryland's highest court, the Court of Appeals as did his son, the Hon. J. Dudley Digges.  The latter Digges had a long and distinguished legal and judicial career and the J. Dudley Digges Inn of Court chapter is named in his honor.  We are not certain whether they were related to Edward S. Digges, a defrocked Maryland lawyer sentenced to a 99-year term in February 2010 for a Ponzi scheme that defrauded clients.

In This Week's Issue:

KOHANE'S COVERAGE CORNER
Dan D. Kohane

[email protected]

  • Coverage Pointers Critique Upheld; Late Notice Excuse Held Inexcusable
  • So-Called "Stolen Car," Not Stolen Enough
  • Two Years Late is Late
  • Late Disclaimer Leads to Finding of Coverage for Named Insured Under Commercial Auto Policy; Driver Operating Own Vehicle for Business Is Not Operating One Provided by Employer
  • Question of Fact Raised About Appropriateness of "Lack of Cooperation" Disclaimer in Uninsured Motorists Context
  • Mixing Apples and Oranges: Second Department Creates Additional Insured Status Out of Lease
  • "Contract Liability" Exclusion Not Broad Enough to Exclude Associated Negligence Claims
  • Broker May Be Liable to Cedent Who Lost Reinsurance Coverage in Rescission Action Brought by Reinsurers
  • Question of Fact on Oral Promise to Provide Additional Insured Status Precludes Summary Judgment
  • Additional Insured -- Priority of Coverage
  • You Can Be "In" or "Upon" a Vehicle While Standing Outside of It for SUM Purposes
  • In Order to Secure a Default Judgment in a Declaratory Judgment Action, Need Admissible Proof, Not Just Proof of Default
  • Insured Excused for Delay in Notifying of Potential Underinsured Claim Based on Doctors' View of Minor Nature of Injuries

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

[email protected]

  • Failure to Offer Reasonable Explanation for 16-Month Gap in Treatment Results in Dismissal of Claim
  • Once Jury Determines Threshold Is Met for One Category, Damages May Be Awarded for All Related Injuries, Whether "Serious" or Not
  • Defendants' Experts Fail to Address 90/180-Day Claim in BOP
  • Opinion Without Substantiating Medical Evidence, Even if Injury is Revealed in MRI, Is Insufficient
  • Certification Does Not Cure Unaffirmed Reports
  • Independent Medical Examiner's Unsworn Letter, Not Based on Objective Findings, Fails to Satisfy Burden
  • Directed Verdict Against Defendant, and Contrary to Jury's Finding, Was Error
  • Plaintiff Fails to Rebut Evidence of Preexisting Conditions
  • Plaintiff Successfully Rebuts Defendants' Prima Facie Burdens
  • Plaintiff's Failure to Submit Affidavits or Medical Records from First Year Following Accident Defeats Her Claim
  • Affidavit of Chiropractor Who First Examined Plaintiff 8 Months After Accident Is Not Contemporaneous Evidence
  • Defendants' Failure to Address 90/180-Day Claim Stated in Bill of Particulars Dooms Their Motion
  • Absent Objective Medical Evidence, Subjective Complaints of Pain Are Insufficient to Show Serious Injury
  • Plaintiffs' Deposition Testimonies Defeats Their 90/180-Day Claims
  • Injury Noted in BOP But Not Shown to Be Unrelated in Affirmed Report Results in Denial of summary Judgment
  • Affirmed Report Noting Full ROM Must Also Set Forth Objective Tests Performed
  • Unaffirmed and/or Uncertified Records and No Contemporaneous Evidence Do Not a Claim Save

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

ARBITRATION

  •        IME Report's Conclusion of Endpoint of Treatment Insufficient to Uphold Denial
  •        IME Report's Positive Findings and Summary Conclusion Insufficient to Uphold Denial
  •       Insurer Prevails on Use and Operation Defense
  •       IME Report's Conclusion of Endpoint of Treatment Coupled with Testimony Partially Sufficient to Uphold Denial

LITIGATION

  • Insurer's Contention of Failure to Submit Timely Claim Insufficient to Create Issue of Fact Precluding Summary Judgment
  • Insurer's Motion on Lack of Insured Incident Properly Granted
  • Insurer Survives Summary Judgment on Outstanding Verification Issue
  • Insurer Entitled to Summary Judgment on Issue that Verification Outstanding
  • Plaintiff's Failure to Rebut the IME Report Results in Dismissal

PEIPER ON PROPERTY (and POTPOURRI)
Steven E. Peiper

[email protected]

Of Property

  • Question of Fact Over Whether Inflated Property Damage Claim Rises to the Level of Fraud

And Potpourri

  • Ethics, Intervention and Grave Injury
  • Routine Maintenance May Still Trigger a Labor Law §240(1) Claim if the Injured Party Was Engaged in an Elevation-Related Risk at the Time of the Incident
  • Failure to Immediately Object to a Jury Determination Will Result in Any Future Appeal Being Waived
  • Falling Pipes from the Same Work Level DO NOT Constitute a Labor Law § 240(1) Claim
  • Failure to Prove an Absence of Negligence Precludes Common Law Indemnification

FIJAL'S FEDERAL FOCUS
Katherine A. Fijal

[email protected]

  • Application of Res Judicata  is Proper if Claims Could Have Been Raised in Prior Litigation
  • Insurance Law §3420 Applies Between Insurers
  • When Does the Plan Administrator Have Discretion in Adjudicating Claim?

JEN'S GEMS
Jennifer A. Ehman
[email protected]

  • Insured Bound by Two Year Suit Limitation Provision
  • No AI Status Where Written Contract Expired Prior to Injury
  • Court Finds a Question of Fact as to Whether Insured May a Specific Request for Coverage
  • No Liability Where Insurance Agent Establishes that Subcontractor Procured Insurance

EARL'S PEARLS
Earl K. Cantwell

[email protected]

A Dog Has Its Day in Court - Release Held Inapplicable

 Spring has sprung in Western New York and we're delighted to frolic in the warmth.

The IRS will see you by the 15th.  We will see you the following day.

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 COVERAGETEAM
Dan D. Kohane, Team Leader
[email protected]
Michael F. Perley
Katherine A. Fijal
Audrey A. Seeley
Steven E. Peiper
Margo M. Lagueras
Jennifer A. Ehman


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
Jennifer A. Ehman


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
Jen’s Gems
Earl’s Pearls
Across Borders


KOHANE’S COVERAGE CORNER
Dan D. Kohane

[email protected]

4/1/10             American Transit Insurance Company v. Brown
Court of Appeals
Coverage Pointers Critique Upheld; Late Notice Excuse Held Inexcusable
Its official – it takes but 3/10th of a second to locate an insurance company on the Internet, if you have its name. 

The Court of Appeals reversed an October 2009 decision of the First Department in summary fashion.  Our summary from our October 16, 2009 issue (Vol. XI, No. 8) is provided for background.  You will see that we embraced the dissenting judge’s view of this case, and now the Court of Appeals agrees.

10/8/09           American Transit Insurance Company v. Brown
Appellate Division, First Department
Insurer Moves Office from Time of Original Notice to Time of Suit Notice – Court Excuses Claimant’s Late Notice Since He Sent Notice of Suit to Earlier Address
On November 12, 2002, Brown was involved in an accident with American Transit (ATIC) insured, Batista.  In January 2003, Brown put ATIC on notice of a property damage claim and ATIC paid the claim.  In November of 2005, Brown sued Battista for personal injuries and Brown sent a copy of the summons and complaint to ATIC at the address set forth in the January 2003 letter from ATIC. ATIC had moved in November 2003.

When nobody appeared on behalf of Battista, Brown took a default judgment against him in the amount of $81,830. Brown then brought a direct action against ATIC to enforce the judgment and ATIC commenced a declaratory judgment action denying coverage based on late notice by Batista and Brown.  

The court founds that Brown’s lack of prompt notice is excused because he was never notified by ATIC of its change of address and that was a reasonable excuse for a delay in notification.

Two dissenting judges noted (oh so correctly) that there is no obligation on the part of a liability carrier to advise of a change in address.  We love this language:

To put forth the lack of such notice as a valid excuse for the failure to notify the insurer of pending litigation ignores the reality that American Transit's address could have been verified on the Internet in approximately three-tenths of a second.

The Court of Appeals held, in a single sentence:

Defendant Brown failed to provide a valid excuse for his failure to use reasonable diligence in providing plaintiff insurer with notice of the underlying personal injury action.

3/30/10           State Farm Mutual Auto. Ins. Co. v. Taveras
Appellate Division, First Department
So-Called “Stolen Car,” Not Stolen Enough
Under New York law, when an uninsured motorists (UM) arbitration demand is made, the UM carrier has 20 days to file an application with State Supreme Court seeking a permanent stay of arbitration if it believes that the other vehicle involved in the accident was not, in fact, uninsured.

State Farm did that, naming the owner and insurer of the offending vehicle as proposed respondents.  The claim that was made in the UM proceeding was that the offending vehicle was being operated by an unknown thief.  A hearing was held and the framed issue judge determined that the strong presumption of permission was not overturned by the evidence offered, with such finding affirmed by the First Department in this appeal.  The hearing court properly took into account the owner's failure to adequately explain his substantial delay in calling the police to report the alleged theft, which call immediately followed an alleged assault on the owner and his friends by a mob of angry people.

3/26/10            Teague v. Automobile Insurance Company of Hartford
Appellate Division, Fourth Department
Two Years Late is Late
Insured received notice that he was being sued for an injury allegedly caused by premises negligence.  Insured waited two years before notice was given to the carrier.  Carrier appropriately disclaimed.

3/26/10           RLI Insurance Company v. Smiedala
Appellate Division, Fourth Department
Late Disclaimer Leads to Finding of Coverage for Named Insured Under Commercial Auto Policy; Driver Operating Own Vehicle for Business Is Not Operating One Provided by Employer 
RLI commenced an action seeking a declaration that was not obligated to defend or indemnify defendants Hale and Regional Integrated Logistics, Inc. (“Regional”) in the underlying personal injury action and related third-party action under the commercial automobile insurance policy issued by plaintiff to Regional. Smiedala, the plaintiff in the underlying action, sought damages for injuries he allegedly sustained when the vehicle in which he was a passenger collided with a vehicle driven by Hale, which he had leased from defendants-third-party plaintiffs Audi Financial Services and VW Leasing, Ltd. (Audi/VW).  Hale, an employee of Regional was driving to the bank at the time of the accident in order to make a deposit for Regional. Audi/VW commenced a third-party action against Regional seeking contribution and/or indemnification for any liability arising from Hale's negligence under the doctrine of respondeat superior.
A three-judge majority declared that the notice given to RLI on 3/29/07 was notice by both Hale and Regional, and RLI failed to provide a legitimate excuse for its 95-day delay in disclaiming liability or denying coverage.  Accordingly, even though Regional’s notice may have been late, RLI lost its right to deny coverage based on that late notice, by the delay in disclaiming promptly.
However, Hale secures no coverage under the RLI policy.  He would be an insured only if he was using, with Regional's permission, an automobile owned, hired or borrowed by Regional.  This was Hale’s leased vehicle, not Regional’s, so the coverage was not available under the policy. The majority rejected the argument that Hale’s car was borrowed by Regional from Hale and then used by Hale with Regional’s permission.  A late disclaimer would not create coverage for Hale where none existed in the first place.
The two dissenting justices opined that (1) Hale was using his personal vehicle to conduct business on behalf of defendant Regional Integrated Logistics, Inc. (Regional), (2) the commercial automobile insurance policy at issue provides coverage for any automobile, regardless of ownership, subject to certain specified exceptions and (3) a determination that Hale was borrowing a Regional vehicle at the relevant time is "not an unnatural or unreasonable construction" of the policy.  It would therefore have concluded that RLI was required to timely disclaim and since it did not, coverage should be provided.

3/23/10           In the Matter of AutoOne Insurance Company v. Hutchinson
Appellate Division, Second Department
Question of Fact Raised About Appropriateness of “Lack of Cooperation” Disclaimer in Uninsured Motorists Context
Hutchinson filed a claim for uninsured motorist (UM) benefits with AutoOne.  [See discussion in 3/20 State Farm case above, on procedural posture].

AutoOne moved for stay of arbitration submitting a police accident report identifying Nationwide as the carrier and Nationwide was named as a proposed additional respondent.  
Nationwide acknowledged that it had a policy is place but submitted proof that it had disclaimed coverage to the offending vehicle for failure of the insured to cooperate in the investigation of the subject accident.  Under the test established by the Court of Appeals in Thrasher, 19 NY2d 159,  an insurer seeking to disclaim for non-cooperation has a heavy burden of proof .  It must establish that: "it acted diligently in seeking to bring about the insured's co-operation . . . that the efforts employed by the insurer were reasonably calculated to obtain the insured's co-operation . . . and that the attitude of the insured, after his co-operation was sought, was one of willful and avowed obstruction.'"  Nationwide established that the insured failed to attend an examination under oath and while that raised an issue of fact warranting a hearing, these submissions were insufficient to establish the validity of the disclaimer as a matter of law (particularly where Nationwide’s letter referenced a No Fault EUO when No Fault Insurance was not in issue).

3/23/10           Majawalla v. Utica First Insurance Company
Appellate Division, Second Department
Mixing Apples and Oranges: Second Department Creates Additional Insured Status Out of Lease
The plaintiffs in this action conducted business as the plaintiff Yashi Associates (“Yashi”).  They owned premises, leased to Glendale Convenience Store, Inc. (“Glendale”).  On 1/14/04 Janet fell in the parking lot of the store at that address.  While she first claimed she fell on the sidewalk adjacent to the store, she testified at her deposition that she fell in the lot.

On 2/2/05, Janet sued Glendale and then on 6/23/05, Janet sued the individual plaintiffs and Yashi, the actions later consolidated.

Under the lease between Yashi and Glendale, the tenant was required to secure a liability policy listing Yashi as an additional insured. Glendale secured a policy but it listed neither Yashi nor the individuals as additional insureds, and Utica, the carrier, therefore refused to defend them in Janet’s suit.  
Try to follow this analysis from the Second Department, we could not.
The court found that the CGL policy did not list Yashi as an additional insured and referenced no endorsements that added Yashi by endorsement. The court then looked at Utica’s obligations to its named insured and found that that Utica had no liability for bodily injury or property damage liability assumed under a contract.  “However” held the court, “this section further stated that this exclusion ‘does not apply to an incidental contract.’  The policy's definition of an "incidental contract" included, leases of premises, but the policy did not expressly state that the defendant was obligated to provide coverage pursuant to terms of an "incidental contract" so there was an ambiguity. 
Somehow, the court then concluded that this ambiguity led to a triable issue of fact as to whether the defendant was obligated to defend and indemnify the plaintiffs by operation of the subject insurance policy and the lease. 
On a side note, the court held (and we surely understand this one) that the lower court incorrectly concluded that the defendant properly disclaimed coverage based on a policy provision in which the defendant, expressly excluded from coverage, inter alia, "paved outdoor surfaces, including driveways, parking lots, roads and walks." This provision appears in the "property coverages" section of the policy.
Editor’s Note:  No matter how you shake out the facts, the landlord was not an additional insured.  Even if the lease was an “incidental contract” and the named insured had liability under the lease, that liability would be the tenant’s and that would not create AI status for the landlord.

3/23/10           Westpoint Inter’l, Inc., v. American Inter’l South Ins. Co. Appellate Division, First Department
“Contract Liability” Exclusion Not Broad Enough to Exclude Associated Negligence Claims
Although the policy contained a “contract liability” exclusion, some of the claims in the underlying complaint contained causes of action sounding in tort and alleging statutory violations. Accordingly, there were claims that may fall outside of the exclusion and within coverage. The insurer argued – unsuccessfully -- that the term "arising out of" in the contract liability exclusion was broad enough to exclude claims associated with the contract
The insurer also argued, without success, that the fact that the policy is not a “duty to defend” but “advancement policy,” the approach should be different.

3/23/10           American Home Assur. Co. v. Nausch, Hogan & Murray, Inc.
Appellate Division, First Department
Broker May Be Liable to Cedent Who Lost Reinsurance Coverage in Rescission Action Brought by Reinsurers
In reinsurance matter, American was ceding insurer and defendant was insurance brokers on certain contracts of reinsurance. In an arbitration related to this action that plaintiffs' reinsurer commenced, the arbitrators ordered the rescission of plaintiffs' contracts of reinsurance. The arbitrators found that broker Newman had tried to "slip one by" the reinsurer by failing to mention a fundamental change to the contracts of reinsurance in writing to the reinsurer's underwriter and that the plaintiffs' brokers had hidden a problem about plaintiffs' data from the reinsurer. The arbitrators ruled that the duty of utmost good faith (uberrima fides) and the heightened duty of disclosure that an insurance company and its agents owed to a reinsurer applied.  This, of course, led the ceding insurer to be without reinsurance for the risk for which that protection was provided,
This matter was the errors and omissions against the broker, with the cedent claiming that the brokers were responsible for any misrepresentations. In the first cause of action, the complaint seeks indemnity from the brokers for the entire repayment to the reinsurers. This cause of action presumes that the underlying arbitration award relied entirely on the misconduct of the brokers and that the insurers' liability to the reinsurers was secondary.
The brokers unsuccessfully argued that they cannot be held liable for indemnity or contribution. 
The brokers argued, with respect to indemnity, that the insurer could not receive it because there was a finding of negligence on the part of the insurer. However, the arbitration decision left open the possibility that the insurer’s liability was purely derivative of the brokers’ and thus indemnity for the finding may be viable.
With respect to the contribution claims, the brokers argued that one cannot seek contribution for a determination of rescission because rescission is a contractual and equitably remedy and contribution claims derive from negligence.  The court finds that since the rescission of the reinsurance agreements do not place the parties back to the status quo (the cedent now is facing potential claims for which it has no reinsurance), a contribution claim can be maintained to share in those damages.

3/19/10           Pyramid Brokerage Co., Inc. v. Zurich American Ins. Co.
Appellate Division, Fourth Department
Question of Fact on Oral Promise to Provide Additional Insured Status Precludes Summary Judgment
The issue facing the court was whether defendants had orally agreed to name plaintiff as an additional insured under a CGL policy.

An employee of Woodcock was injured in a construction accident.  Woodcock was a contractor under agreement with Pyramid to perform work.  When Pyramid was sued, it tendered the defense of the lawsuit to Zurich, the insurer for Comfort.  Comfort was a company related to Woodcock.  Zurich contended that while Pyramid was promised additional insured status by Comfort, under contract, there was no such promise made by Woodcock.  Pyramid then sued Zurich for coverage and Woodcock for breach of the contract to provide coverage.

The record contained an affidavit and the deposition testimony of plaintiff's site project manager.  He averred that that the defendant’s representatives that the named insured, Comfort and its related business entities operated as one company and that Comfort had but one CGL policy, with a single general liability insurance policy.  The Project Manager testified that there was an oral agreement to name Pyramid as an additional insured with respect to all work performed by the related entities, including Woodcock. The record also contains, however, deposition testimony of defendants' employees denying knowledge of the existence of an oral agreement as well as documentation from the project that does not reflect any requests or agreements to procure insurance naming plaintiff as an additional insured with respect to the work performed by Woodcock.

The court found that a question of fact existed on the question of the oral contract. 

3/16/10           L & B Estates, LLC, v. Allstate Insurance Company
Appellate Division, Second Department
Additional Insured -- Priority of Coverage
Guest Editor:  Elizabeth Fitzpatrick
In a case litigated by Lewis Johs' attorney, Elizabeth Fitzpatrick, the Second Department reversed the grant of summary judgment which had directed Allstate to defend and indemnify the plaintiff/landlord as an additional insured on a policy issued by Allstate to Century 21, a tenant at property owned by L&B.   The court found that any coverage available to L&B Estates under the Allstate policy was excess to a policy issued by United National Specialty Insurance Company identifying L&B Estates, LLC as a named insured and, as such, Allstate was not obligated to defend or indemnify L&B Estates in the underlying action unless the obligation to provide excess coverage was triggered.
The Allstate policy provided that the landlord was entitled to additional insured coverage only with respect to liability arising out of the ownership, maintenance or use of that part of the premises shown in the declarations as leased to the tenant.  The subject accident occurred on the sidewalk in front of the leased premises.  Allstate's position was that L&B was not an additional insured under the Allstate policy since the claim did not arise out of the ownership, maintenance or use of that part of the premises shown in the declarations as leased to the tenant. The injured party was neither entering nor exiting the property, but was a mere passerby. The court was not impressed by this argument and during oral argument of the appeal appeared concerned with the necessary “fact sensitive” nature of such an argument.  Finding that the landlord was entitled to status as an additional insured by virtue of the fact that the Administrative Code of the City of New York imposes liability on owners of commercial property for defects in sidewalks, the court found that coverage under the Allstate policy was excess to coverage provided under United National's policy and therefore, there was no obligation to either defend or indemnify the landlord.  L&B argued that Allstate had waived its right to proffer the excess argument because it had not timely disclaimed.  While not addressed explicitly by the court in its decision, he court properly rejected that argument.
Editor’s Note:  Atta-lawyer, Beth.

3/16/10           Rosado v. Hartford Fire Insurance Co.
Appellate Division, Second Department
You Can Be “In” or “Upon” a Vehicle While Standing Outside of It for SUM Purposes

Rosado was injured when he was struck by a box truck while standing outside of his delivery truck.  At the moment of impact, his feet were on the pavement and his hands were in a side bay of his beer delivery truck rearranging empty cases.  When he was struck, he was pushed approximately 10 to 12 feet, pinning him between his delivery truck and the box truck.

The box truck’s carrier offered its $25,000 policy limits.  Rosado then sought Underinsured Motorists Benefits (SUM).  His option was to file for arbitration or sue the SUM carrier and he chose the latter route. Under the SUM endorsement, Hartford provided up to $1,000,000 to the "insured" and "any other person . . . occupying . . . a motor vehicle insured for SUM under this policy." The SUM endorsement of the defendant's policy, consistent with the statutory requirement, defined "occupying" as "in, upon, entering into, or exiting from a motor vehicle".
The court found that Rosado was "in" or "upon" the delivery truck at the time of the accident such that he was "occupying" the delivery truck within the meaning of the SUM endorsement (and thus entitled to SUM benefits).

3/2/10             New South Insurance Company v. Dobbins
Appellate Division, Second Department
In Order to Secure a Default Judgment in a Declaratory Judgment Action, Need Admissible Proof, Not Just Proof of Default

This case reminds us that the mere failure of an insured or other party to answer a complaint brought by an insurer seeking declaratory relief does not mean that an insurer will always be granted a default judgment.  There remains a requirement that the insurer present evidentiary proof to the motion judge of its right to judgment.  In this case, counsel offered only hearsay and inadmissible documentation in support of the carrier’s application for default so the appellate court agreed that a default was not to be entered.

3/2/10             Matter of Tri-State Consumer Insurance Company v. Furboter
Appellate Division, Second Department
Insured Excused for Delay in Notifying of Potential Underinsured Claim Based on Doctors’ View of Minor Nature of Injuries
The context of this case was in an application to stay a claim for underinsured motorist benefits.  The SUM carrier claimed that notice was late.  The court held in determining whether notice was given in a timely fashion, the court must consider the particular circumstances of the case, including the latency, nature, and seriousness of the insured's injuries. In this case, the “uncontroverted” evidence supported the 16-month delay because of the insured’s belief of his various treating physicians “that his injuries were relatively minor and would resolve with treatment.” Once he learned the injuries were permanent, he gave prompt notice.

MARGO’S MUSINGS ON SERIOUS INJURY UNDER NEW YORK NO FAULT
Margo M. Lagueras

[email protected]

3/26/10           Semonian v. Seidenberg
Appellate Division, Fourth Department
Failure to Offer Reasonable Explanation for 16-Month Gap in Treatment Results in Dismissal of Claim

Defendants met their burden by showing that the plaintiff’s injuries were caused by degenerative disease of the cervical spine causing cervical stenosis, rather than as a result of the accident.  Plaintiffs failed to offer a reasonable explanation for a 16-month gap in treatment.  In fact, the plaintiff admitted that during that period he worked full time, moonlighted as a security guard, jogged and worked out regularly with weights.  The trial court’s decision was reversed and the complaint dismissed.

3/23/10           Rubin v. SMS Taxi Corp.
Appellate Division, First Department
Once Jury Determines Threshold Is Met for One Category, Damages May Be Awarded for All Related Injuries, Whether “Serious” or Not

The Appellate Court makes this point in a case involving the relatively rare category of significant disfigurement, where the trial court denied the plaintiff’s motion for clarification or reconsideration precisely of that issue.  The plaintiff failed to prove his claims under any category for his neck and back injuries, nor did he support his 90/180-day claim, because none of his submissions showed what medical tests were performed, their objective nature, the normal range-of-motion or the significance of the claimed limitations. 

Nevertheless, the jury determined that the scar on his face was “permanent, discolored and no treatment can improve it”, thus qualifying that injury under the significant disfigurement category.  As a result of that determination, the plaintiff was then entitled to present to the jury any of the other injuries that did not meet the threshold and receive compensation for all. 

The Court notes that this is in keeping with the Legislative intent of the No-Fault Law to “weed out frivolous claims” and promote judicial economy.  However, once serious injury is established under any category, the “gate keeping function” of the court is satisfied.  At that point, and as the case is already before the court, judicial economy is no longer a concern and “a plaintiff is entitled to recover damages that justly and fairly compensate him or her for all injuries proximately caused by the accident”.

3/23/10           Rouach v. Betts
Appellate Division, Second Department
Defendants’ Experts Fail to Address 90/180-Day Claim in BOP
Plaintiff’s bill of particulars set forth a claim under the 90/180-day category but the defendants’ experts, who failed to adequately address it and did not examine the plaintiff until more than a year after the accident, also failed to relate any of their findings to the 90/180-day claim for the period immediately following the accident.  Therefore, the defendants failed to meet their prima-facie burden, making it unnecessary to consider the plaintiff’s papers in opposition.

3/23/10           Reitz v. Seagate Trucking, Inc.
Appellate Division, Second Department
Opinion Without Substantiating Medical Evidence, Even if Injury is Revealed in MRI, Is Insufficient
Plaintiff was injured while a passenger in a stopped car that was rear-ended.  As well established, a rear-end collision with a stopped vehicle creates a prima facie case of negligence, requiring the offending driver to rebut the inference of negligence by providing a non-negligent explanation.  Here the plaintiff established her prima facie entitlement on the issue of liability by showing that her vehicle was stopped.  However, the defendants rebutted the inference of negligence with evidence that the plaintiff’s vehicle suddenly changed lanes in front of their vehicle, forcing the defendants to stop suddenly.  Therefore, the trial court should have denied all motions and counterclaims.

However, as regards the claim for serious injury, the defendants submitted an affirmed report of an orthopedist who found range-of-motion limitations in the plaintiff’s lumbosacral spine.  In addition, their neurologist found restrictions in her lumbar spine and opined that she was suffering from myofascial pain syndrome.  Both experts opined that the plaintiff’s restrictions were subjective and due to pre-existing degenerative changes seen in an MRI.  However, neither explained or substantiated with objective medical evidence the basis for their opinions and, as a result, defendants failed to meet their burden.

3/23/10           Buntin v. Rene
Appellate Division, Second Department
Certification Does Not Cure Unaffirmed Reports
On appeal, the Court affirmed the trial court which, upon renewal, had adhered to its original decision which found that the medical report, submitted by the plaintiff in support of her motion for leave to renew, and which showed plaintiff’s range-of-motion limitations shortly after the accident but was not affirmed, was insufficient to raise a triable issue of fact in opposition to defendants’ motion.

3/19/10           Bulls v. Massara
Appellate Division, Fourth Department
Independent Medical Examiner’s Unsworn Letter, Not Based on Objective Findings, Fails to Satisfy Burden

Plaintiff, the injured person’s grandfather, brought the action against both the grandson’s mother, Bulls, in whose car the grandson was riding, and the driver of the other vehicle, Massara.  Massara was granted summary judgment and the complaint was dismissed as against him when it was shown that he was not negligent as the accident resulted from the sudden crossing of lanes by Bulls’ car.

Bulls joined in Massara’s motion to the extent that Massara also moved on the issue of serious injury.  On appeal, however, the Appellate Court determined that the trial court erred in granting summary judgment to Bulls because, although Massara proved he was not at fault, he did not meet his burden with regard to whether the plaintiff’s grandson sustained a serious injury.  As such, Bulls was not entitled to summary judgment.  The Court further noted that the letter from the independent medical examiner who examined the plaintiff’s grandson stated that the findings were not objective and that, in addition there were significant losses in the range-of-motion of the grandson’s cervical spine.  Even if based only on subjective evidence, the letter itself was sufficient to raise a triable issue of fact so the burden never shifted to the plaintiff to raise a triable issue of fact.

3/19/10           Bennice v. Randall
Appellate Division, Fourth Department
Directed Verdict Against Defendant, and Contrary to Jury’s Finding, Was Error

Plaintiff was rear-ended by the defendant who conceded liability.  The matter went to a summary jury trial on the issues of causation, serious injury and damages.  Plaintiff moved for a directed verdict and the Judicial Hearing Officer (JHO) reserved his decision.  After the jury returned with a verdict in favor of the defendant finding that the defendant’s negligence was not a substantial factor in causing the plaintiff’s injuries, the JHO granted the plaintiff’s motion. 

On appeal, the Court finds that the JHO erred because a summary jury trial is “an independent contract” and setting aside or appealing the verdict is limited to instances where the rights of a party were “significantly prejudiced by . . . an error of law that occurred during the course of the trial.”  A directed verdict would be appropriate if there was no rational way by which the jury could have found in favor of the non-moving party based on the evidence presented.  Here, however, the Court determines that the jury’s verdict was rational, particularly because the plaintiff was less than forthcoming during cross-examination regarding his preexisting injuries and he had failed to advise some of his own experts of those preexisting injuries.  The jury was entitled to decide on the credibility of the various witnesses and the JHO erred in granting the plaintiff’s motion for directed verdict.

3/19/10           Barton v. Kohler
Appellate Division, Fourth Department
Plaintiff Fails to Rebut Evidence of Preexisting Conditions

Without more detail, the Court affirmed the grant of summary judgment to the defendants finding they submitted “persuasive evidence” that the plaintiff’s alleged injuries were related to preexisting conditions rather than the accident, and that the plaintiff failed to rebut those findings.

3/16/10           Walker-Bryant v. Ferrara
Appellate Division, Second Department
Plaintiff Successfully Rebuts Defendants’ Prima Facie Burdens

Here, although the defendants met their prima facie burdens of showing that the plaintiffs did not sustain a serious injury, the plaintiff rebutted by raising a triable issue of fact and successfully opposed the defendants’ motions.

3/16/10           Euvino v. Rauchbauer
Appellate Division, Second Department
Plaintiff’s Failure to Submit Affidavits or Medical Records from First Year Following Accident Defeats Her Claim

Defendants’ motion relied on affirmed reports of their neurologist and orthopedist, as well as the plaintiff’s own deposition testimony, and met their burden.  Although in opposition the plaintiff submitted affirmations from four physicians, none of them examined the plaintiff within the first year following the accident.  Plaintiff did not submit any affirmations from doctors who treated her immediately following the accident or any medical records from that period.  In addition, none of the physicians reviewed records regarding injury to her back and left arm from another accident which occurred a month before the one at issue.  Therefore, the plaintiff failed to establish any injury that was contemporaneous with the accident.

3/16/10           Kublo v. Rzadkowski
Appellate Division, Second Department
Affidavit of Chiropractor Who First Examined Plaintiff 8 Months After Accident Is Not Contemporaneous Evidence

Once again the defendants established, through affirmed reports of their orthopedist and radiologist and the plaintiff’s own deposition testimony, that the plaintiff did not sustain a serious injury.  In opposition, the plaintiff submitted the affidavit of his chiropractor who did not begin to treat him until eight months after the accident.  He did not, however, submit any medical records or affirmations from the period immediately after the accident, thus failing to provide that critical contemporaneous evidence required to defeat a summary judgment motion. 

3/16/10           Collins v. Leung
Appellate Division, Second Department
Defendants’ Failure to Address 90/180-Day Claim Stated in Bill of Particulars Dooms Their Motion

Plaintiff’s bill of particulars clearly set forth her claim under the 90/180-day category.  The defendants’ motion papers did not, however, sufficiently address it, resulting in the denial of their motion for summary judgment.

3/16/10           Ambos v. New York City Transit Authority
Appellate Division, Second Department
Absent Objective Medical Evidence, Subjective Complaints of Pain Are Insufficient to Show Serious Injury

Defendants prevail on appeal having met their burden through the submission of their orthopedist’s affirmed reports and the plaintiff’s own deposition testimony.  In opposition, the plaintiff did not submit any objective medical evidence resulting in the insufficiency of his subjective complaints to raise a triable issue of fact.

3/16/10           Sierra v. Gonzalez First Limo
Appellate Division, Second Department
Plaintiffs’ Deposition Testimonies Defeats Their 90/180-Day Claims

During Francisco Sierra’s deposition, he admitted missing only approximately two to three days of work as a result of the accident, and Julia Sierra admitted that she was not confined to bed for any period of time following the accident.  In addition, the defendants’ examining neurologist and orthopedist both noted full range-of-motion in the spine and shoulders of both plaintiffs.  In opposition, the plaintiffs did not present any range-of-motion findings that were contemporaneous with the accident, nor did they proffer any competent medical evidence in support of their 90/180-day claims.  The trial court was reversed and summary judgment granted to the defendants.

3/16/10           Senior v. Mikhailov
Appellate Division, Second Department
Injury Noted in
BOP But Not Shown to Be Unrelated in Affirmed Report Results in Denial of summary Judgment
The defendant’s examining orthopedist’s affirmed report noted that the plaintiff had a significant loss of power in his shoulder and stated that this might be related to the torn rotator cuff and labral tear alleged in the plaintiff’s bill of particulars.  The orthopedist did not, however, state that the loss of power was unrelated to the accident.  Therefore, the defendant failed to show that the plaintiff did not sustain a serious injury to his shoulder as a result of the accident and the motion was properly denied.

3/16/10           Orejuela v. Francis
Appellate Division, Second Department
Affirmed Report Noting Full ROM Must Also Set Forth Objective Tests Performed

Here the defendants relied on the affirmed report of their neurologist which noted that the plaintiff had full range-of-motion in her extremities, but did not set forth the objective tests performed in reaching that conclusion.  As such, the defendants’ motion was denied.

3/16/10           Little v. Locoh
Appellate Division, Second Department
Unaffirmed and/or Uncertified Records and No Contemporaneous Evidence Do Not a Claim Save

On appeal, the grant of summary judgment to the defendants is affirmed as the hospital records, therapy notes and reports of the plaintiff’s doctors were neither affirmed nor certified.  In addition, the affirmation of the plaintiff’s examining physician, while noting significant range-of-motion limitations in the plaintiff’s cervical spine during a recent examination, did not provide any evidence that was contemporaneous with the accident.  Furthermore, the MRI reports simply revealed the existence of a tear of a ligament in the plaintiff’s right knee but, as repeatedly noted, the mere existence of a tear is not evidence of serious injury without objective evidence of the extent of the alleged limitations and duration.

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

ARBITRATION


3/26/10           South Buffalo Chiro v. A Cent. Ins. Co.
Arbitrator Kent L. Benziger, Erie County
IME Report’s Conclusion of Endpoint of Treatment Insufficient to Uphold Denial

Here Is the Angle:   If you have an arbitration in Western New York you MUST be aware of the Appellate Division, Fourth Judicial Department’s decision in Hobby v. CNA.  Any insurer’s IME or peer review report will be scrutinized under this decision to determine whether there is ANY language that could be construed as stating maximum medical improvement (MMI).  Phrases such as “endpoint of treatment” or benefit from treatment has reached an end without any discussion as whether the care is providing curative or palliative benefits will be construed as insufficient under Hobby and the denial will not be upheld.

Here Is the Analysis:          The Applicant sought reimbursement of chiropractic care provided to the assignor as a result of a July 15, 2008, motor vehicle accident.  The care was denied by the insurer based upon the independent chiropractic examination conducted by Steven Celotto, D.C.  Mr. Celotto’s report was scrutinized by the arbitrator and because it stated that further chiropractic treatment would not result in further improvement, and that the assignor had reached an endpoint in improvement, the denials could not be upheld.  The assigned arbitrator stated that the inquiry at that point is whether the treatment is providing any curative or palliative care and if so to what degree.  In this case, Mr. Celotto’s report did not discussion in any detain how he reached his conclusion of endpoint of care.  In other words, there was no discussion as to how, based upon a review of the treating chiropractor’s records, the assignor was not receiving any curative or palliative benefit from the treatment that warranted continuing care medically necessary.

 3/25/10          Buffalo MRI & CT v. GEICO Ins. Co.
Arbitrator Veronica K. O’Connor, Erie County
IME Report’s Positive Findings and Summary Conclusion Insufficient to Uphold Denial

The Applicant sought reimbursement for MRI studies conducted on the assignor as a result of a December 19, 2003, motor vehicle accident.  The insurer denied the bill based upon the IME of Dr. Melvin Brothman.  Dr. Brothman’s report was determined to be insufficient as it indicated multiple positive findings and a diagnosis of cervical and dorso-lumbar strain/sprain that was resolving, yet summarily concluded no further orthopedic care, including diagnostic testing, was required.

3/25/10           Applicant v. Travelers Prop. Cas. Co. of Am.
Arbitrator Mary Anne Theiss, Onondaga County
Insurer Prevails on Use and Operation Defense

On March 25, 2009, the Applicant was on an airport shuttle bus.  While he was exiting the bus and on the last step he slipped off the step.  It is not noted what his injuries were but the insurer denied the entire claim as not arising out of the use and operation of a motor vehicle.  In a well reasoned decision and thorough analysis of the case law on use and operation, the assigned arbitrator upheld the insurer’s denial as the Applicant failed to meet the three prong test set forth in the well known Gholson case.

3/22/10           Daniel Cox DC PC v. Nationwide Ins. Co.
Arbitrator Kent L. Benziger, Erie County
IME Report’s Conclusion of Endpoint of Treatment Coupled with Testimony Partially Sufficient to Uphold Denial

Here Is the Angle:   This decision should be compared to the South Buffalo case initially summarized as the issues are the same.  In this case the monetary amount at issue was substantially more and warranted the testimony of the expert chiropractor.  Ultimately it assisted in reducing the amount of the award.  Great job Jennifer Schiffmacker, Esq. who defended the insurer in this arbitration!

Here Is the Analysis:          The Applicant’s assignor was involved in a May 5, 2003, motor vehicle accident and commenced a course of conservative care in the form of chiropractic treatment and massager therapy with Applicant.  The insurer denied chiropractic care based upon the independent chiropractic examination of Geoffrey Gerow, DC.  Mr. Gerow found multiple positive objective findings and diagnosed a cervicodorsal and lumbosacral sprain/strain.  He further opined that further chiropractic care would not be necessary as the assignor has received the maximum benefit from it.  The assigned arbitrator recognized that Mr. Gerow’s conclusion is essentially the assignor reached maximum medical benefits and that the treatment provided no curative or palliative benefit. 

Mr. Gerow also testified at the arbitration.  He testified that the treatment did not provide curative or palliative benefit as chiropractic care does not remedy, reverse, or even stabilize a disc or spinal canal injury.  Rather, the treatment mobilizes a portion of the spine to permit relief and has diminishing value.  In this case, Mr. Gerow opined that the treatment was not helping as in his examination of the assignor her complaints were getting worse. 

The assigned arbitrator reasoned that while Hobby v. CNA, does not uphold maximum medical improvement as a valid basis for denial, other recent decisions in other departments have recognized, as a valid basis for denial, treatment that does not provide curative or palliative benefit.  What degree of palliative benefit warrants reimbursement is an issue of fact for the arbitrator to determine. 

In weighing Mr. Gerow’s report and testimony against the treating physicians’ opinions, the assigned arbitrator awarded chiropractic care only until October 24, 2005, and denied all care after that date.

LITIGATION
3/23/10           Wyckoff Heights Med. Ctr. a/a/o Ramona Rodriguez v. Country Wide Ins. Co.
Appellate Division, Second Department
Insurer’s Contention of Failure to Submit Timely Claim Insufficient to Create Issue of Fact Precluding Summary Judgment

The insurer established its prima facie case entitlement to summary judgment through the submission of the billing forms and that payment was overdue.  The insurer failed to rebut that presumption and the contention that the plaintiff failed to submit its claim in a timely fashion was rejected.

3/19/10           Crossbay Acupuncture, PC a/a/o Kramer Daniel v. Hartford Cas. Ins. Co.
Appellate Term, Second Department
Insurer’s Motion on Lack of Insured Incident Properly Granted

The insurer’s motion to dismiss was properly treated as one for summary judgment on the issue that the injuries did not arise out of an insured incident.  The plaintiff failed to raise any issue of fact precluding summary judgment that there was insurance coverage for the incident.  Accordingly, the insurer’s motion was properly granted.

3/19/10           St. Vincent Med. Care, PC a/a/o Hesham Alsadi v. Country Wide Ins. Co.
Appellate Term, Second Department
Insurer Survives Summary Judgment on Outstanding Verification Issue

Plaintiff’s summary judgment motion should not have been granted as to most of the causes of action as the insurer established that there was still outstanding verification rendering plaintiff’s action as premature.  Otherwise, the Court held that the plaintiff established its prima facie case and its billing manager’s affidavit was sufficient to admit the billing records into evidence as business records.  The insurer’s argument that plaintiff lacked standing as the assignment of benefits form was defective was rejected as the insurer never requested timely verification on this issue and did not timely object to the assignment.

3/19/10           Tracy Ambrister, DDS a/a/o Thomas Credle v. Integon Nat’l. Ins. Co.
Appellate Term, Second Department
Insurer Entitled to Summary Judgment on Issue that Verification Outstanding

The insurer’s cross-motion for summary judgment was properly granted.  The insurer submitted sufficient evidence that it requested verification and properly delayed the claim.  While the initial verification request was not presented and the Court did not reach this issue of whether it was required to attach said request to its papers, the insurer did present evidence that its regular course of business is to stamp the original request with the words “second request” and insert the date of the second notice.  Accordingly, the insurer was entitled to summary judgment.

3/19/10           GZ Med. and Diagnostic, PC a/a/o Lina Galan v. Mercury Ins. Co.
Appellate Term, Second Department
Plaintiff’s Failure to Rebut the IME Report Results in Dismissal
The insurer’s summary judgment motion should have been granted as the plaintiff failed to rebut and meaningfully refer to or even rebut the conclusions set forth in the insurer’s IME report.  The plaintiff contended that it was not in possession of all of the records the IME physician reviewed and therefore could not oppose the motion.  This argument was rejected because the plaintiff failed to demonstrate that discovery was required to show the existence of an issue of fact.

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

Of Property

3/23/10           Forsythe v Otsego Mutual Fire Insurance Company
Appellate Division, First Department
Question of Fact Over Whether Inflated Property Damage Claim Rises to the Level of Fraud
Otsego’s motion to amend its Answer to assert the affirmative defense of fraud was permissible even though the application for leave to amend was made nearly two years after the commencement of the action.  In so holding, the First Department noted that plaintiff failed to establish any surprise or prejudice which would have opposed the proposed amendment.

However, the Court ruled that Otsego had not met its burden for summary judgment purposes of establishing  plaintiff’s allegedly overvalued statement of loss was fraudulent.  The Court noted that question of fact existed as to whether plaintiff’s excuse (that the house was uninhabitable and all of ifs furniture lost) provided a basis for the purported excessive claim.

And Potpourri

3/30/10           Severino v Brookset Housing Development Fund Corp.
Appellate Division, First Department
Ethics, Intervention and Grave Injury
By way of background, the injured party in this case, Mr. Severino, appears to have commenced a Labor Law claim against the owner and general contractor of a construction site where he was performing work.  In turn, the owner and general contractor commenced a third-part action against Mr. Severino’s employer which sought both contractual indemnification and common-law indemnification. 

Although not clear in the decision, it appears that the employer was being defended by both its Commercial General Liability carrier (presumably in response to the contractual indemnity claim) and is Workers’ Compensation Carrier under the 1B-Employer Liability Coverage (presumably in response to the common law indemnity claim).  As you know, traditionally, common law indemnification claims fall within the 1B coverage afforded under a Workers’ Compensation policy.  However, a claim for common-law indemnity against an employer is only possible where the injured worker sustained a “grave injury” as that term is defined in the Workers’ Compensation Law.  Where the injured party did not sustain a “grave injury”, any claim for common law indemnification and/or contribution is barred by Section 11 of the Workers’ Compensation Law. 

Apparently, in the current instance, a question existed as to whether Mr. Severino’s injuries qualified as “grave injuries.”  Knowing this, the Workers’ Compensation carrier appears to have become concerned that, perhaps, defense counsel might strategically maneuver this case so that Mr. Severino’s injuries were determined to have fallen within the “grave injury” category.

Under the Workers’ Compensation carrier’s own analysis, the employer is in a far greater position if the Mr. Severino is determined to have sustained a “grave injury.”  Again, a “grave injury” triggers the employer’s 1B coverage which is unlimited.  If there is no “grave injury”, the employer’s coverage under its Commercial General Liability coverage is capped at the policies limit.  Understanding that unlimited is far better than limited, in this author’s opinion, the Workers’ Compensation Carrier had good reason to be concerned.

It is worth nothing that everyone else involved in this lawsuit had a financial incentive for the 1B coverage to be triggered.  Certainly, all of the parties to the lawsuit had an incentive for unlimited coverage to be found.  Moreover, the employer’s Commercial General Liability carrier had an incentive for the 1B coverage to be triggered as well.  So long as the 1B coverage was triggered, the Commercial General Liability policy was “co-primary”, and as such very likely shared all costs (including defense costs) on a 50/50 basis with the 1B coverage.

Understanding this unique circumstance, the Workers’ Compensation carrier petitioned the Court for leave to intervene so that its interested vis-à-vis the “grave injury” issue were adequately protected.  However, in denying the motion to intervene, the First Department noted that the Workers’ Compensation carrier’s alleged fears were nothing more than speculation and mere conjecture.  The Court noted that defense counsel had asserted the Workers’ Compensation § 11 bar as an Affirmative Defense in the employer’s Answer as proof that there was no movement of afoot to ensure the 1B coverage was triggered. 

Further, the Court then notes that there is no fear that counsel might act “unethically” in its own interests so that counsel can ensure payment from the 1B coverage.  As the Court aptly notes, if the common law indemnity claim is barred due to the lack of a “grave injury,” defense counsel will still get paid by the Commercial General Liability coverage. 

Peiper’s Point:  For what its worth, the issue of who gets paid from whom really passes on the much larger question of the very sticky ethical and fiduciary predicaments this case presents.  The Workers’ Compensation carrier appears to acknowledge that defense counsel, in representing its client, would be justified in working to preserve the 1B coverage.  If this is not the Workers’ Compensation carrier’s position, it would have no reason to have intervened in the first place.  This case goes to the very heart of the tri-part relationship between insured, insurer and defense counsel, and it would have been very interesting to have seen the Court’s opinion on whether defense counsel could appropriately handle the case in a manner that ensured unlimited coverage for his client, the insured. 

Alas, the perhaps the Court chose not to fight this battle…on this date…and left it to us coverage junkies to debate endlessly.  In that vein, if you have any thoughts, or want to further discuss, please do not hesitate to give us a call or drop us a line.  We’d love to hear your thoughts.

3/30/10           Parraguirre v  27th St. Holding, LLC
Appellate Division, First Department
Routine Maintenance May Still Trigger a Labor Law §240(1) Claim if the Injured Party Was Engaged in an Elevation-Related Risk at the Time of the Incident
In this case, plaintiff sustained injury when he fell from the roof a cement mixing plant.  At the time of the fall, plaintiff was removing dust filters from vents on the buildings roof, and transporting them to the ground level for cleaning.  As a result of the incident, plaintiff commenced the instant action sounding in Labor Law § 240(1), among other claims, against the building’s owner.

The Trial Court granted defendant’s motion for summary judgment on the basis that, at the time of injury, plaintiff was engaged in routine maintenance.  As you know, routine maintenance is not a protected activity under the statute and typically will not support a Labor Law § 240(1) claim.

Not so fast said the First Department in reversing the Trial Court, and granting plaintiff’s motion for summary judgment on the 240(1) claim.  Because plaintiff, in the Court’s view, was engaged in the “type of elevation-related risk that the statute was intended t address” the defendants were required to provide adequate safety protection as mandated by the statute.  Where, as here, there were no safety devices provided, plaintiff is entitled to summary judgment as a matter of law.

3/26/10           Santillo v Thompson
Appellate Division, Fourth Department
Failure to Immediately Object to a Jury Determination Will Result in Any Future Appeal Being Waived
Plaintiff commenced the current action after being struck by an automobile being driven by defendant. At trial, upon deliberation, the jury found that defendant was negligent in the operation of his vehicle.  However, the jury also found that the defendant’s negligence was not a substantial factor in the incident. 

At some point thereafter, plaintiff filed a motion to set aside the verdict.  However, where, as here, the appellant fails to object to the jury verdict at the time it is rendered, and argument to overturn the verdict is waived.

Further, the Court noted that even if the motion to set aside the verdict be preserved, the jury verdict, as rendered, was not inconsistent.  Rather, the Court ruled that a jury could reasonable conclude that, although the defendant was negligent, his negligence was not the cause of the collision.     

3/23/10           Wilinski v 334 East 92nd Housing Development Fund Corp.
Appellate Division, First Department
Falling Pipes from the Same Work Level DO NOT Constitute a Labor Law § 240(1) Claim
Plaintiff sustained injury when he was struck by two falling pipes that had become dislodged by a collapsing wall that was being demolished.  Because the pipes were at the same level that the plaintiff was standing, the Court ruled that defendant was entitled to the dismissal of plaintiff’s Labor Law § 240(1) claim. 

However, plaintiff’s Labor Law § 241(6) claim was preserved as a question of fact where, pursuant to Industrial Code § 23-3.3(b)(3), defendants were required to monitor potentially dangerous conditions during demolition operations.

3/19/10           Syracuse University v. Games 2002, LLC
Appellate Division, Fourth Department
Failure to Prove an Absence of Negligence Precludes Common Law Indemnification
In an earlier Labor Law action, Syracuse University appears to have paid approximately $750,000 to an injured worker who fell from the roof of the Carrier Dome on Syracuse’s campus.  The current action is Syracuse’s claim for common law and/or contractual indemnification against Games 2002.  However, because Syracuse was unable to establish that it was free from negligence in the underlying case, the Fourth Department ruled that Syracuse was not entitled to any indemnity protection.  In so holding, the Court noted that Syracuse failed to establish that it did not direct, supervise or control any of the work performed by the injured party.
In dissent, Justice Carni argues that Syracuse was only required to establish that it did not supervise, direct or control the actual activity giving rise to the underlying plaintiff’s injury.  In Justice Carni’s dissenting opinion, the fact that Syracuse may have directed or controlled other aspects of the work was irrelevant.  It follows that Justice Carni noted that the injured party was solely under the direction and control of another subcontractor at the time of the incident involving the injured party.
Peiper’s Point – This, again, underscores the need for any motion for indemnification to coupled with a motion dismissing plaintiff’s common law negligence/Labor Law § 200 claims.  Unless and until the common law negligence claims are dismissed, pursuant to the ruling of the Fourth Department above, no third-party indemnity claim will have ripened. 

FIJAL’S FEDERAL FOCUS
Katherine A. Fijal

[email protected]

4/1/10             New York State Insurance Fund v. Mount Vernon Fire Ins. Co.
United States Court of Appeals, Second Circuit
Insurance Law §3420 Applies Between Insurers
Guest Editor:  Elizabeth Fitzpatrick
In this matter the 2nd Circuit affirmed the decision of the Southern District holding that, under the circumstances presented, a disclaimer issued by Mount Vernon to its insured was subject to New York's timely disclaimer requirement as set forth in Insurance Law §3420(d).  The disclaimer was issued some two years after Mount Vernon was placed on notice of the loss and undertook its insured's unconditional defense and 56 days after the jury rendered a verdict in the underlying bodily injury action.

In support of its argument that it was not obligated to adhere to the timely disclaimer requirements of §3420, Mount Vernon contended that the provisions do not apply to disputes between insurers, citing a decision of the First Department entitled Bovis Lend Lease LMB, Inc. v. Royal Surplus Lines Ins. Co., 27 AD3d 84 (1st Dept. 2005).  The court found Mount Vernon’s reliance upon Bovis was misplaced, noting that this was not a dispute between co-insurers, but rather NYSIF sought contribution from Mount Vernon for its share of the verdict based upon the concept of equitable subrogation.  The court thus concluded that NYSIF had a real stake in the outcome so as to invoke the protections of Insurance Law §3420.  The Second Circuit also found that Mount Vernon's insured had not engaged in a material misrepresentation so as to void the policy ab initio.
Editor’s Note:  A good week for Beth Fitzpatrick, so a second “atta lawyer” goes out to her and to Lewis Johs.

3/31/10           Duane Reade Inc. v. St. Paul Fire & Marine Ins. Co.
United States Court of Appeals, Second Circuit
Application of Res Judicata  is Proper if Claims Could Have Been Raised in Prior Litigation
This is an insurance dispute arising out of  the September 11, 2001 destruction of a Duane Reade drugstore in the World Trade Center [“WTC”].  Duane Reade appeals from a judgment of the United States District Court for the Southern District of New York against property insurer St. Paul, on the basis of res judicata.

The Court noted that this has been a remarkably protracted coverage dispute with no fewer than four opinions from the district court and one from the Second Circuit. 

The procedural background in this case is long and convoluted but the central issue addressed by the Second Circuit was whether the district court erred in finding that Duane Reade’s claims related to the loss at the store based on the Leasehold Interest, Attraction Properties, and Contingent Business Interruption provisions in the policy are barred by the doctrine of res judicata

The court noted that under both New York law and federal law, the doctrine of res judicata, or claim preclusion, provides that “a final judgment on the merits of an action precludes the parties from relitigating issues that were or could have been raised in that action.”

There is, however, a declaratory judgment exception to res judicata.  This exception, which is recognized by both New York and federal law limits preclusive effect of the declaratory judgment to the subject matter of the declaratory relief sought, and permits the plaintiff or defendant to “continue to pursue further declaratory or coercive relief”.  In other words, the preclusive effect of a declaratory judgment action applies only to the matters declared and to any issues actually litigated or determined in the action.

As you might expect Duane Reade argued that its claims come within the declaratory judgment exception because the prior action was limited to a request for declaratory relief.  The Court disagreed because in its initial action Duane Reade brought two claims for declaratory relief and two claims for breach of contact.  St. Paul, in response, counterclaimed with its own breach of contract claims, which the district court dismissed with prejudice.  At that point the request was no longer only a request for declaratory relief.

The court determined that when St. Paul raised its counterclaims, Duane Reade was compelled by Rule 13 to file its own claims arising out of the same transaction or occurrence or else be precluded from pursuing those claims in a subsequent lawsuit.  In sum, the court held, the prior action did not involve only a request for declaratory relief and, as such, the declaratory judgment exception is unavailable. 

Having concluded that the declaratory judgment exception does not apply to Duane Reade’s prior action the court addressed the issue of whether its claims based on provisions of the policy that were not raised in its initial action were barred by the doctrine of res judicata.

The Court held that Duane Reade’s claims were barred because it could have sought recovery based on the Leasehold Interest, Attraction Properties, and Contingent Business Interruption provisions in the policies in its prior litigation and it did not. The subject matter of the initial action was the scope of the Policy and not, as Duane Reade contends, the narrower issues of the application of the Business Interruption provision.  According to the district judge all parties understood at the time, the prior action addressed the overall scope of coverage under the policy.  Yet despite acknowledging the necessity of discerning the overall scope of coverage under the Policy, Duane Reade neither addressed nor sought through the appraisal process compensation under the provisions of the Policy it now seeks to invoke.  Particularly when Duane Reade acknowledged that the scope of the coverage must be determined in advance of seeking appraisal, the court and opposing party were entitled to understand that Duane Reade identified all bases for coverage on which it relied.  Essentially, Duane Reade was dissatisfied with the amount awarded based on the Policy’s Business Interruption provision that it invoked in the initial action and now seeks recovery based on other provisions of the policy.

Although the court recognized that Duane Reade will be unable to recover under the Policy what it might have been able to recover had it invoked other provisions of the Policy in its initial action, the court was faced with the unavoidable fact that Duane Reade’s current claims were based on the Leasehold Interests, Attraction Properties, and Contingent Business Interruption provisions and therefore precluded.

3/19/10           Jobe v. Medical Life Insurance Co.
United States Court of Appeals, Eighth Circuit
When Does the Plan Administrator Have Discretion in Adjudicating Claim?
Plaintiff, Jobe, was employed by Lake Regional Health System as a medical transcriptionist, and became eligible for disability benefits under an insurance policy issued to Fort Dearborn Life Insurance Company [“Fort Dearborn”].  The Dearborn policy was part of a health and welfare plan [“the plan”] that is subject to the Employee Retirement Income Security Act of 1974 [“ERISA”].

As required by ERISA, 29 U.S.C. §1102(a)(1), the plan was in writing.  One of the plan documents, the Group Insurance Policy, defined the terms and explained the benefits of the plan.  The policy informed the policyholder that the insurer “will provide a Certificate to the participating employer for delivery to each insured.”  Further stating, that “if the terms of a Certificate and this policy differ, this policy will govern”. 

The certificate of coverage was provided to Jobe as part of a document titled “Voluntary Long-Term Disability Insurance; Employee Benefit Booklet.”  Appended to the Booklet was the “ERISA Information Statement”.  The Information Statement provided that, “in the case of any item not covered by the Summary Plan Description, or in the event of any conflict between the summary plan description and the policy, the Plan will always control. . .”.

The ERISA Information Sheet also states that, “The Plan Administrator has full discretionary authority and control over the Plan.”  However, no such grant of discretion appears in the policy.

Fort Dearborn employed a company named Disability RMS [“DRMS”], a third-party administrator to process the Jobe’s claim.  DRMS denied the claim and Jobe filed suit.

The District court held that the plan administrator’s decision to deny benefits was subject to review for an abuse of discretion.  Finding no abuse of discretion, the district court granted summary judgment in favor of Fort Dearborn and Jobe appeals.

In her appeal Jobe argued that the district court should have applied a de novo standard of review because the plan does not vest the plan administrator with the power to exercise discretionary authority in making benefits determinations.  The Eighth Circuit agreed with Jobe.

Jobe essentially argued that the summary plan description, granting discretion where the policy is silent, amounts to an unauthorized amendment of the policy in contravention of the procedures amendment laid out by the policy itself.
Fort Dearborn’s opposition was premised on the Eighth Circuit’s statement in Jensen v. SIPCO, Inc., 38 F.3d945 (8th Cir. 1994), that summary plan descriptions “are considered part of the ERISA plan documents”.  Fort Dearborn argued that in the past this court has held that a summary plan description prevails in cases where the summary granted a beneficiary certain rights or privileges that the policy did not, and that the same rule should apply where a summary plan description secures additional rights to a plan administrator.  See, Admin. Comm. Of the Wal-Mart Stores, Inc. v. Gamboa, 479 F.3d 538 (8th Cir. 2007)(where no other source of benefits exists, the summary plan description is the formal plan document).

In this case the Eighth Circuit distinguished Gamboa on two grounds.  First, in Gamboa there was no written policy underlying the summary plan description.  In light of ERISA’s requirement that such a writing exists, 29 U.S.C. §1102(a)(1), the court held the summary plan description was the policy.  In contrast, in this matter, a detailed written policy comprehensively delineates the rights and responsibilities of the parties.

Second, the court emphasized the distinct circumstances of this cases which implicate, in a correspondingly distinct way, the ERISA requirements and ERISA’s underlying policies that originally led us to hold that a summary plan description can prevail over a conflicting policy.  The court noted that from the first time it indicated that a summary plan description provision would prevail over a conflicting policy provision, it justified the proposition by reference to the importance of disclosure to the ERISA statutory regime.

In analyzing the facts of this case the court determined, however, that the disclosure purpose will not always be advanced by holding that the summary plan description prevails over the policy in all circumstances.  The summary plan description “is intended to be a document easily interpreted by a layman.

The Court noted that the two plan documents in this case were in conflict regarding the extent of the administrator’s authority to interpret the plan and that if an employee, realizing the discrepancy and attempting to resolve it, were to look elsewhere in the two plan documents, she could reasonably determine that the documents uniformly tell her the policy prevails over the plan description.  She could then look back to the policy and conclude – justifiably that the administrator possessed no discretion to interpret the policy and no entitlement to deferential review.  The court concluded that to hold that the summary plan description always prevails over the policy, even where the summary plan description indicates the policy prevails, would only invite further confusion to the employee.

Whether a summary plan description prevails over the formal policy where the summary grants to a plan administrator a right not present in the formal policy, yet also indicates that the policy prevails if the two documents conflict, was an issue of first impression for this circuit.

In reviewing case law for other jurisdictions, the court agreed with those circuits which held that a grant of discretion to a plan administrator, appearing only in the plan description, does not vest the administrator with discretion where the policy provides a mechanism for amendment and disclaims the power of the summary plan description to alter the plan.

The Court held that rather than blindly applying a rule that the summary plan description always prevails, it must give the language of the two documents a “common and ordinary meaning”.  The summary plan description expressly states that no rights accrue by reason of the summary.  The court was of the opinion that the average plan participant would read that provision and conclude that the policy prevails if it conflicts with the summary, and that the summary could not, standing alone, grant Fort Dearborn with the discretion it claims to have.

JEN’S GEMS
Jennifer A. Ehman
[email protected]

3/31/10           BNS Bldg., LLC v. Greenwich Ins. Co.
Supreme Court, New York County
Insured Bound by Two Year Suit Limitation Provision
On or about October 20, 2006, the Insured sustained property damage.  Approximately 17 months later, the insured provided its insurer Greenwich Ins. Co. with notice of loss.  The insurer then denied coverage four months later based on the insured’s failure to cooperate with the insurer’s investigation of the claim. 

On August 11, 2009, the insured commenced this action.  The insurer moved to dismiss the case pursuant to a condition in the policy entitled Legal Action Against Us which prevented the insured from bring a legal action against the insurer unless the action was brought within two years after the date on which the direct physical loss or damage occurred. 

In opposition, the insured argued that the mandatory “New York Changes” endorsement contained in the policy had a separate condition also entitled Legal Action Against Us.  Accordingly, the mandatory provision, which contained no equivalent requirement, superseded the two year suit limitation, and rendered this action timely. 

The court disagreed and enforced the two year suit limitation provision.  It noted that such suit limitation provisions have been enforced by the Court of Appeals and are recognized by statute.  It further held that the “New York Changes” endorsement did not supersede this provision or render it ambiguous because the endorsement clearly and unequivocally stated that it replaced “Legal Action Against Us Condition in the Legal Liability Coverage Form.”  Herein, the Insured’s claim was under the commercial liability part of the policy.  (Note: the Legal Liability Coverage Form is an endorsement in some policies that provides coverage for sums that the insured becomes legally obligated to pay because of direct physical loss or damage).

The court also rejected the insured’s argument that the application to dismiss was premature because there had been no discovery.  The court held that the insured had not set forth a viable basis for which discovery would be needed.  In the court’s view, discovery would involve little more than a fishing expedition to determine whether there was in fact an ambiguity concerning whether or not the “New York Changes” endorsement applied to the two year suit limitation. 

3/30/10           Chase Manhattan Bank, NA v. Zurich Am. Ins. Co.
Supreme Court, Nassau County
No AI Status Where Written Contract Expired Prior to Injury
This case arises out of a slip and fall on water at a Chase bank.  The injured party commenced an action against Chase.  Chase then tendered its defense to its janitorial services company, Collins Building Services, Inc. 

Chase and Collins had a written contract effective April 1, 2000 through April 1, 2005.  The contract stated that Collins would provide insurance protecting both parties from any and all claims made during the term of the agreement.  After the contract expired,  Collins continued to provide janitorial services.  In December of 2005, the slip and fall occurred. 

Zurich, Collin’s insurer, denied Chase’s tender alleging that Chase was not an additional insured under its policy issued to Collins.  The “additional insured” endorsement designated as additional insureds “any person or organization as required by a written contract.”

The court held that as the contract between Chase and Collins had expired, there was no written contract in place at the time of the incident.  Accordingly, Chase was not an additional insured under the policy.  The court rejected Chase’s argument that the parties’ course of conduct created a new agreement.  The court pointed to the requirement that the contract be in writing. 

3/26/10           American Bldg. Supply Corp. v. Petrocelli Group, Inc.
Supreme Court, New York County
Court Finds a Question of Fact as to Whether Insured May a Specific Request for Coverage
Tenant, American Building Supply Corp. (“ABS”), commenced this action for negligence and breach of contract in connection with its insurance brokers’, Petrocelli Group, Inc. and Pollak Associates, failure to procure a general liability insurance policy with sufficient coverage. 

Pollak was plaintiff’s broker from 2002 through 2004.  During this time, Pollak procured a general liability policy with Burlington Ins. Co. for the period from June 14, 2004 through June 14, 2005.  In 2004, the tenant replaced Pollak with Petrocelli.  In 2005, Petrocelli oversaw the renewal of the Burlington policy on the same terms. 

Accordingly to the testimony of the tenant’s general manager, he told Petrocelli that “ABS needed certain limits of liability, including general liability for the employees and for the customers in Manhattan if anybody was to trip and fall and get injured in any way” (internal quotations omitted).  Further, the tenant’s president testified that he expressed to Petrocelli to “make sure everybody’s covered.”  Nevertheless, the tenant’s general manager testified that he did not recall discussing any other particular requirements with Petrocelli, or requesting that the terms of the policy initially procured by Pollak be changed or modified in any way. 

Subsequently, an employee of the tenant was injured.  Burlington disclaimed coverage based on an exclusion for bodily injury to a present, former, future or prospective employee of any insured. 

The court held that a party who engages an insurance broker to procure adequate insurance may recover for breach of contract if the policy obtained does not cover a loss for which the broker contracted to provide insurance, and the insurance company refuses to cover the loss.  The court found a question of fact as to whether a jury could rationally conclude that ABS made a specific request for coverage when its general manager stated that ABS needed, among other things, “general liability for the employees…if anyone was to trip and fall and get injured in any way.”

3/23/10           GPH Partners LLC v. Westchester Fire Ins. Co.
Supreme Court, New York County
No Liability Where Insurance Agent Establishes that Subcontractor Procured Insurance
An employee of subcontractor Manhattan Demolition Co. was injured while working on a construction site owned by plaintiffs.  After plaintiffs were sued, they tendered their defense to the subcontractor’s insurer who disclaimed coverage based on late notice.  Plaintiffs then brought an action against the subcontractor, pursuant to the contract, for failure to procure general commercial liability insurance naming them as additional insureds.  The subcontractor then brought a third-party complaint against its insurance agent for failure to provide timely notice of claim to defendant.

The agent then moved to dismiss the only cause of action against the subcontractor on the ground that documentary evidence existed to refute plaintiffs’ claim that the subcontractor failed to procure insurance.  The agent also moved to dismiss the subcontractor’s complaint against it.  

Based on the policy’s blanket additional insured endorsement, the court held that the subcontractor did not breach its agreement to procure insurance for plaintiffs.  The subcontractor’s insurer’s refusal to cover the claim did not change this conclusion.  The court also held that an impleader claim must be tied to the liability that a plaintiff alleges against a defendant.  As the subcontractor did not breach its agreement to procure insurance, and that being the only basis for liability asserted against the subcontractor, the court dismissed the third-party complaint against the agent.      

EARL’S PEARLS
Earl K. Cantwell

[email protected]

A Dog Has Its Day in Court – Release Held Inapplicable

A Florida appellate court, in Tatman v. Space Coast Kennel Club Inc., 2009 Fla. App. LEXIS 20537 (12/31/09) had to decide whether a business release form adequately defined the injuries covered and circumstances specified so as to preclude a personal injury claim.  The plaintiff and her husband sued the Space Coast Kennel Club for dog bite injuries inflicted by a dog participating in a show.  The plaintiffs attended the show because their dog was being shown, although they apparently attended absent their canine companion since their dog was not shown.  However, as a dog owner, the plaintiff had signed an entry form with the following language, “I certify that I am the owner of this dog and furthermore, I (We) certify and represent that the dog entered is not a hazard to persons or other dogs.  I agree to not hold SCKC or Brevard County Parks and Recreation Dept. liable for any accident or injury.”

Dog owners had to complete this form, but other people such as volunteers, spectators, and Kennel Club officers and directors were not required to sign the release.  The release was drafted for persons entering a dog in the show, even if the dog was not actually shown or displayed by the owners.

The plaintiff and her husband brought suit against various parties, including the Kennel Club, which then moved for summary judgment based on the release language in the dog show entry form.  The trial court granted the motion to dismiss, but the appellate court gave “paws” to reflect, concluded that the lower court was barking up the wrong tree, and reversed.

The ruling stated with the traditional view that exculpatory clauses are strictly construed against a party seeking to be relieved of liability.  Such clauses are generally enforceable only if the intention and language to be relieved from liability is clear and unambiguous.  According to the appeals court, this release of liability did not meet requirements of clarity and precision.  The court held that the release language was a mangy cur of a mongrel with unclear origins and suspect interpretation.

For example, the court held that the release language failed to define whose injuries were covered, or under what circumstances.  The release did not precisely state whether injuries to the signer of the form, or to their dog, or both were covered, nor did the release seemingly include injuries caused by a dog to third parties.  The clause also did not define whether the injuries included any not associated with a dog attack, such as a slip and fall on the property during the dog show.  Obviously, the appellate court was going to keep this release language on a short leash.  In short, it was not abundantly clear and unambiguous that the release language covered personal injuries to third parties caused by an attack by Feckless Fido.  The appeals court also deemed it important that the release language was placed on the entry form for the dog.  There is no indication whether the dog affixed its pawprint or other “signature” on its part to the document.

The Kennel Club could not avoid the collar based on the release language.  The court held that the release was most easily understood as a release from liability for injury to a dog entered in the show, as opposed to injury to a person or the dog owner.  The court concluded that the release was ambiguous and that summary judgment in favor of the Kennel Club should not have been granted.  Thus, this dog and dog bite claim were destined to have their day in court. 

The lesson to be learned from Tatman is that when drafting and preparing a release, make sure it is clear, concise and that you have all the Vet and shot papers in order.

ACROSS BORDERS

3/30/10           Premo v. United States, et al
Sixth Circuit Court of Appeals
The Sixth Circuit’s Interpretation of the Federal Tort Claims Act – A State’s “No-Fault Act” is No Problem for the Federal Government
Premo was operating her bicycle on a cross walk, when she was struck by a United States Postal Service (“USPS”) postal truck and was subsequently injured. Without any of her own automobile insurance, Premo’s counsel contacted the USPS to file a claim for insurance benefits under the USPS insurance plan, pursuant to a Michigan state statute. The USPS declined Premo’s request for benefits stating that the USPS is self-insured and is exempt/immune from the state’s vehicle insurance statutes, under the Supremacy Clause.

However, one exception, aside from agreeing to allow state regulation, is the Federal Tort Claims Act, 28 U.S.C. 2671-80 (“FTCA”), which provides exclusive means of pursuing a claim against the federal government based on the negligence of one of its agencies or its employees and not for claims grounded in strict liability.

Premo filed such a claim and the USPS denied stating that Premo did not establish a negligent act or omission on the part of the USPS employee. Premo appeals the district court’s grant of summary judgment regarding the application of state regulations and the denial of her request for interest and attorney’s fees. The USPS appeals the district court’s grant of summary judgment regarding the award of economic damages to Premo.

There is a two step analysis under the FTCA: 1) the district court applies local law, as it is the location of the tortious act, to determine liability and to assess damages; and 2) the federal law is invoked to bar proscribed recoveries, such as punitive damages. In the application of Michigan’s law, a person can recover without any regard to fault. Therefore, under this state law, the federal government is absolutely liable because the statute does not require a finding of fault, or negligence. The Sixth Circuit held that because the FDCA requires a finding of fault, or negligence, and the state statute does not, then the Plaintiff here cannot recover economic damages.
Submitted by: John Rahoy and Jaimie Thompson, Brown & James, P.C.

3/29/10           Mid-Continent Casualty Company v. American Pride Bldg. Co.
Eleventh Circuit Court of Appeals

As An Insurer, if a Conditional Defense Under a Reservation of Rights is to Be Tendered to an Insured, Disclosure of All Material Terms of the Conditional Defense is Crucial
American Pride is a homebuilder in Florida. Mid-Continent is an insurance company which issued general liability insurance policies to American Pride. Groff, another homebuilder in Florida, brought a suit against American Pride alleging copyright infringement and unfair competition, specifically alleging that American Pride and others, printed flyers for homes built by American Pride, which infringed Groff’s copyright in two home designs. Mid-Continent initially denied defending American Pride under a reservation of rights. It then decided to provide a defense to American Pride thereafter. Mid-Continent then decided to possibly deny coverage, but still continue to defend American Pride in the suit.

None of Mid-Continent’s reservation of rights letters advised its insured that it had the right to reject conditional defense or that if the insured accepted the conditional defense, it could not later reject that defense, nor did it inform its insured that they may have to reimburse Mid-Continent for attorneys’ fees or costs expended. After Mid-Continent refused to authorize a reasonable settlement based upon its hired attorney’s advice, American Pride demanded that Mid-Continent withdraw its reservation of rights within 10 days or American Pride would reject Mid-Continents conditional defense. Mid-Continent responded that under Florida law American Pride could no longer reject the defense and if it did so and settled the case, Mid-Continent would sue American Pride for breach of its duties under the policy. Mid-Continent continued to represent American Pride and continued to make an unreasonable offer to settle.

American Pride shared its thoughts about settling the case for more than which Mid-Continent was willing to settle and told Mid-Continent’s hired attorney that it wished to negotiate a reasonable settlement with Groff. Immediately thereafter, Mid-Continent filed suit seeking declaratory judgment that it is not obligated to defend American Pride based upon American Pride’s failure to cooperate and, for the first time, stated that American Pride is obligated to pay Mid-Continent’s attorneys’ fees and expenses. The day after suit was filed, American Pride rejected Mid-Continent’s conditional defense. Shortly thereafter, American Pride and Groff settled the case.

If, under a reservation of rights, the insurer offers to defend, “the insured has the right to reject the defense and hire its own attorneys and control the defense.” However, by accepting this defense and not rejecting it, an insured is required to cooperate with the insurer throughout the litigation, regardless if the insurer acts in good faith in that defense. An insured may reject the conditional defense after acceptance if the insurer changes the terms of the conditional defense in a material way. By asserting in its declaratory judgment action that American Pride was liable for attorney’s fees and expenses, the terms of the conditional defense were materially altered. Therefore, there is evidence that American Pride rightfully rejected the defense. Also, the court found that American Pride did not violate the policy’s cooperation clause because American Pride did not secretly negotiate a settlement prior to rejecting Mid-Continent’s defense. There was evidence that the negotiations were just preliminary and subject to review and comments.
Submitted by: John Rahoy and Jaimie Thompson, Brown & James, P.C.

REPORTED DECISIONS

Rosado v. Hartford Fire Insurance Co.

Lewis Johs Avallone Aviles, LLP, Riverhead, N.Y. (John B. Saville
of counsel), for appellant-respondent.
Michael F. Troiano, Brooklyn, N.Y. (Thomas Torto and Jason
Levine of counsel), for respondents-
appellants.

DECISION & ORDER
In an action to recover underinsured motorist benefits, the defendant appeals, as limited by its brief, from so much of an order of the Supreme Court, Kings County (Martin, J.), dated August 18, 2008, as denied its motion for summary judgment dismissing the complaint, and the plaintiffs cross-appeal, as limited by their brief, from so much of the same order as denied that branch of their cross motion which was, in effect, for summary judgment on the issue of liability on the first cause of action.
ORDERED that the order is affirmed insofar as appealed from; and it is further,
ORDERED that the order is reversed insofar as cross-appealed from, on the law, and that branch of the plaintiffs' cross motion which was, in effect, for summary judgment on the issue of liability on the first cause of action is granted; and it is further,
ORDERED that one bill of costs is awarded to the plaintiffs.
The plaintiff Jesus Rosado (hereinafter the injured plaintiff) allegedly was struck by a box truck while standing outside of his delivery truck. At the time of the accident, the injured plaintiff was standing with his feet on the pavement, reaching with his hands into a side bay of the delivery truck to rearrange empty cases of beer. When the box truck hit the plaintiff, it pushed him approximately 10 to 12 feet, pinning him between his delivery truck and the box truck, until he came to a stop against the first side bay of the truck on the driver's side.
The insurance carrier for the box truck, Countrywide Insurance, thereafter tendered to the injured plaintiff the full policy amount of $25,000. In lieu of filing a demand for arbitration, the plaintiffs commenced the instant action to recover underinsured motorist benefits under the Supplementary Uninsured/Underinsured Motorist (hereinafter SUM) endorsement of the insurance policy issued by the defendant Hartford Fire Insurance Co. to the injured plaintiff's employer, Windmill Distributing Company, LP, doing business as Phoenix Beverages, Inc. Under the SUM endorsement, the defendant provided underinsured motorist benefits up to the sum of $1,000,000 to the "insured" and "[a]ny other person . . . occupying . . . a motor vehicle insured for SUM under this policy." The SUM endorsement of the defendant's policy, consistent with the statutory requirement, defines "occupying" as "in, upon, entering into, or exiting from a motor vehicle" (see Insurance Law § 3420[f][3]).
In accordance with the liberal interpretation afforded the term "occupying" (see Rowell v Utica Mut. Ins. Co., 77 NY2d 636, 639), we find, as a matter of law, that the injured plaintiff was "in" or "upon" the delivery truck at the time of the accident such that he was "occupying" the delivery truck within the meaning of the SUM endorsement (cf. Matter of Rice v Allstate Ins. Co., 32 NY2d 6, 11; Matter of Travelers Prop. Cas. Co. v Landau, 27 AD3d 477; Matter of Travelers Ins. Co. [Youdas], 13 AD3d 1044; Matter of Coregis Ins. Co. v McQuade, 7 AD3d 794; Matter of Travelers Ins. Co. v Wright, 202 AD2d 680; Matter of State Farm Auto. Ins. Co. v Antunovich, 160 AD2d 1009).
Accordingly, the Supreme Court erred in denying that branch of the plaintiffs' cross motion which was, in effect, for summary judgment on the issue of liability on the first cause of action. For the same reasons, the Supreme Court properly denied the defendant's motion for summary judgment dismissing the complaint.
New South Insurance Company v. Dobbins

McDonnell & Adels, PLLC, Garden City, N.Y. (Korri Abrams
Frampton and Martha S. Henley of counsel), for appellant.

DECISION & ORDER
In an action, inter alia, for a judgment declaring that the plaintiff is not obligated to provide insurance coverage in connection with a vehicular accident that occurred on July 31, 2006, the plaintiff appeals from so much of an order of the Supreme Court, Nassau County (Winslow, J.), entered July 23, 2008, as, upon renewal and reargument, adhered to a prior determination in an order dated November 21, 2007, denying that branch of its motion which was for leave to enter judgment against the defendants James Dobbins, Jr., and Felita Dobbins, upon their default in answering the complaint.
ORDERED that the order entered July 23, 2008, is affirmed insofar as appealed from, without costs or disbursements.
The Supreme Court properly, upon renewal and reargument, adhered to so much of its original determination as denied the plaintiff leave to enter judgment against the defendants James Dobbins, Jr., and Felita Dobbins, upon their default in answering the complaint. In support of its motion, the plaintiff offered the complaint, which was verified by plaintiff's counsel, and an affidavit of the plaintiff's investigator, neither of whom possessed personal knowledge of the facts constituting the claim (see CPLR 3215; Woodson v Mendon Leasing Corp., 100 NY2d 62, 70-71; Hosten v Oladapo, 44 AD3d 1006; Finnegan v Sheahan, 269 AD2d 491). The statements from the driver of the other vehicle that the plaintiff's investigator relied upon in his affidavit constituted inadmissible hearsay (see CPLR 4518[a]; Hochhauser v Electric Ins. Co., 46 AD3d 174, 179-183; Metropolitan Cas. Ins. Co. v Shaid, 23 Misc 3d 1140[A]). Accordingly, entry of a default judgment against these defendants was properly denied on the papers before the Supreme Court.
In the Matter of Tri-State Consumer Insurance Company v. Furboter


Robert F. Carlini II, Jericho, N.Y. (Kathleen Geiger of counsel), for
appellant.
Cerussi & Gunn, P.C., Garden City, N.Y. (Brian R. Gunn of
counsel), for respondent.

DECISION & ORDER
In a proceeding pursuant to CPLR article 75, inter alia, to permanently stay arbitration of an underinsured motorist claim, the petitioner appeals from an order of the Supreme Court, Nassau County (Woodard, J.), entered April 13, 2009, which denied the petition and dismissed the proceeding on the merits.
ORDERED that the order is affirmed, with costs.
Contrary to the petitioner's contention, the Supreme Court properly denied its petition to permanently stay the arbitration of the respondent's underinsured motorist benefits claim on the ground of late notice. In determining whether notice was given in a timely fashion, the court must consider the particular circumstances of the case, including, inter alia, the latency, nature, and seriousness of the insured's injuries (see Matter of Metropolitan Prop. & Cas. Ins. Co. v Mancuso, 93 NY2d 487, 493; Matter of Progressive Northeastern Ins. Co. v McBride, 65 AD3d 632, 633). In the instant case, the uncontroverted affidavit and medical records of the respondent demonstrated that his delay of some 16 months in notifying the petitioner of his claim for underinsurance benefits was attributable to the belief of his various treating physicians that his injuries were relatively minor and would resolve with treatment. Moreover, the respondent gave notice promptly after he was made aware of the worsening and permanent nature of his injuries (see Matter of Progressive N. Ins. Co. v Sachs, 50 AD3d 803, 804-805; Matter of New York Cent. Mut. Fire Ins. Co. [Guarino], 11 AD3d 909, 911; Medina v State Farm Mut. Auto. Ins. Co., 303 AD2d 987; Matter of Nationwide Ins. Co. [Bellreng], 288 AD2d 925; Matter of Nationwide Ins. Enter. [Leavy], 268 AD2d 661, 662-663). Accordingly, the respondent complied with his obligation to give notice "[a]s soon as practicable" under the policy.
L & B Estates, LLC, v. Allstate Insurance Company


Lewis Johs Avallone Aviles, LLP, Melville, N.Y. (Elizabeth A.
Fitzpatrick of counsel), for appellant.
Smith Mazure Director Wilkins Young & Yagerman, P.C.,
New York, N.Y. (Anna A. Higgins and
Angela Y. Baker-Spencer of counsel),
for respondent.

DECISION & ORDER
In an action, inter alia, to recover damages for breach of contract and for a judgment declaring that L & B Estates, LLC, is an additional insured under a certain policy of insurance issued by the defendant Allstate Insurance and that the defendant Allstate Insurance is obligated, as the primary insurer, to defend and indemnify L & B Estates, LLC, in an underlying personal injury action entitled Coddett v L & B Estates, LLC, pending in the Supreme Court, Kings County, under Index No. 33035/06, the defendant Allstate Insurance appeals, as limited by its brief, from so much of an order of the Supreme Court, Kings County (Knipel, J.), dated June 10, 2009, as granted those branches of the cross motion of L & B Estates, LLC, which were for summary judgment on the complaint insofar as asserted against it.
ORDERED that the order is modified, on the law, by deleting the provisions thereof granting those branches of the cross motion of L & B Estates, LLC, which were for summary judgment on so much of the complaint as sought to recover damages against the defendant Allstate Insurance and declaring that the defendant Allstate Insurance is the primary insurer and, therefore, is obligated to defend and indemnify L & B Estates, LLC, in the underlying action; as so modified, the order is affirmed insofar as appealed from, with costs to the appellant, upon searching the record, summary judgment is awarded to the defendant Allstate Insurance dismissing so much of the complaint as sought to recover damages against it, and declaring that the defendant Allstate Insurance is not the primary insurer, that the policy of insurance issued by the defendant Allstate Insurance provides coverage excess to the coverage provided to L & B Estates, LLC, under a policy issued by United National Specialty Insurance Company, and that, therefore, the defendant Allstate Insurance is not obligated to defend or indemnify L & B Estates, LLC, in the underlying action unless the obligation of that defendant to provide excess coverage is triggered, and the matter is remitted to the Supreme Court, Kings County, for the entry of a judgment, inter alia, declaring that the defendant Allstate Insurance is not the primary insurer, that the policy of insurance issued by the defendant Allstate Insurance provides coverage excess to the coverage provided to L & B Estates, LLC, under a policy issued by United National Specialty Insurance Company, and that, therefore, the defendant Allstate Insurance is not obligated to defend or indemnify L & B Estates, LLC, in the underlying action unless the obligation of that defendant to provide excess coverage is triggered.
The defendant Century 21 Achievers (hereinafter Century) leased premises on Flatbush Avenue, in Brooklyn (hereinafter the premises), from the plaintiff, L & B Estates, LLC (hereinafter L & B). As required under the terms of the lease, Century obtained, from the defendant Allstate Insurance (hereinafter Allstate), a commercial liability insurance policy (hereinafter the Allstate policy) naming L & B as an additional insured. The Allstate policy provided that L & B was an additional insured, but "only with respect to liability arising out of the ownership, maintenance or use of that part of the premises shown in the [d]eclarations as leased to [Century]." The declarations set forth in the Allstate policy did not mention the sidewalk in front of the premises as having been leased to Century. Moreover, L & B was covered by a policy of insurance issued by United National Specialty Insurance Company (hereinafter the United policy). The Allstate policy and the United policy each contained "other insurance" provisions.
In November 2005 Tilma Coddett allegedly was injured when she tripped and fell as a result of an alleged defect in the sidewalk in front of the premises. In June 2006 notice of Coddett's claim against L & B and Century was tendered on their behalf to Allstate, which did not immediately respond. In October 2006 Coddett commenced an action against L & B and Century, seeking to recover damages for her injuries. In May 2007 Allstate rejected the tender of the claim insofar as made against L & B on the ground that L & B was not an additional insured under the Allstate policy since Coddett's claim did not arise "out of the ownership, maintenance or use of that part of the premises shown in the Declarations as leased to [Century]." L & B commenced this action, seeking, inter alia, a judgment declaring that it was entitled to a defense and indemnification from Allstate as an additional insured under the policy, as well as damages for breach of contract against Allstate and Century. L & B eventually moved for summary judgment on the complaint against Allstate and Century, and the Supreme Court granted L & B's motion. We modify.
L & B established its prima facie entitlement to judgment as a matter of law against Allstate by submitting, among other things, the Allstate policy, which established that it was an additional insured with respect to Coddett's claim, and that Allstate had refused to provide coverage. Inasmuch as Administrative Code of the City of New York § 7-210 imposes liability on owners of commercial property for defects in sidewalks, L & B's potential liability arises from its ownership of the premises leased to Century. Since unambiguous terms in an insurance contract are given their plain and ordinary meaning (see Antoine v City of New York, 56 AD3d 583, 584), L & B is an additional insured under the Allstate policy for claims arising from defective conditions on the sidewalk in front of the premises.
In opposition, however, Allstate established, as a matter of law, that its coverage of L & B under the Allstate policy was excess to the coverage provided to L & B under the United policy. When a policy provides only excess coverage, the duty to defend or indemnify is not triggered until coverage under the primary policy has been exhausted or otherwise terminated (see Great N. Ins. Co. v Mount Vernon Fire Ins. Co., 92 NY2d 682, 686-687; Sport Rock Intl., Inc. v American Cas. Co. of Reading, Pa., 65 AD3d 12, 20; Osorio v Kenart Realty, Inc., 48 AD3d 650, 653). Consequently, upon searching the record, Allstate is entitled to summary judgment declaring that it is not the primary insurer, that the coverage it provided to L & B is excess to that provided by the United policy, and that, therefor, it was not obligated to defend or indemnify L & B in the underlying action unless its obligated to provide excess coverage is triggered.
The parties' remaining contentions either are without merit or need not be addressed in light of our determination.
Since this is, in part, a declaratory judgment action, the matter must be remitted to the Supreme Court, Kings County, for the entry of a judgment, inter alia, declaring that L & B is an additional insured under the Allstate policy, that Allstate is not the primary insurer, that the coverage provided to L & B under the Allstate policy is excess to the coverage provided to L & B under the United policy, and that, therefore, Allstate is not obligated to defend or indemnify L & B in the underlying action unless its obligation to provide excess coverage is triggered (see Lanza v Wagner, 11 NY2d 317, 334, appeal dismissed 371 US 74, cert denied 371 US 901; Ponok Realty Corp. v United Natl. Specialty Ins. Co., 69 AD3d 596).
American Home Assurance Co. v. Nausch, Hogan & Murray, Inc.


Jenner & Block, LLP, Chicago, IL (David M. Kroeger of
counsel), for Nausch, Hogan & Murray, Inc., appellant.
Crowell & Moring, LLP, New York (Harry P. Cohen of
counsel), for Newman Martin and Buchan Limited, appellant.
Quinn Emanuel Urquhart Oliver & Hedges, LLP, New York
(Kathleen M. Sullivan of counsel), for respondents.
Orders, Supreme Court, New York County (Richard B. Lowe III, J.), entered April 1, 2009, that denied defendants' motions to dismiss the complaint, unanimously affirmed, with costs.
Plaintiffs are ceding insurers. Defendants were their insurance brokers on certain contracts of reinsurance. In an arbitration related to this action that plaintiffs' reinsurer commenced, the arbitrators ordered the rescission of plaintiffs' contracts of reinsurance. After an 11-day hearing, the arbitrators found that broker Newman had tried to "slip one by" the reinsurer by failing to mention a fundamental change to the contracts of reinsurance in writing to the reinsurer's underwriter. The arbitrators also found that plaintiffs' brokers had hidden a problem about plaintiffs' data from the reinsurer. The arbitrators ruled that the duty of utmost good faith (uberrima fides) and the heightened duty of disclosure that an insurance company and its agents owed to a reinsurer applied. Consequently, rescission was appropriate even if the misrepresentation was merely negligent rather than intentional. As a consequence of the rescission order, plaintiffs had to refund $12,185,253 to the reinsurers, allegedly still owe about $11,278,326 and incurred costs such as attorneys' fees while defending the arbitration. Plaintiffs also remain exposed to liability to their insureds for 100% of any covered losses because plaintiffs no longer have reinsurance.
In this lawsuit, plaintiffs sued their brokers who placed the reinsurance policies, blaming the brokers for the misrepresentations. In the first cause of action, the complaint seeks indemnity from the brokers for the entire repayment to the reinsurers. This cause of action presumes that the underlying arbitration award relied entirely on the misconduct of the brokers and that the insurers' liability to the reinsurers was secondary.
As an alternative, the second cause of action seeks pro rata contribution to the extent that the plaintiffs might have participated in the underlying misrepresentations. The remaining causes of action are for: (1) breach of fiduciary duty, (2) negligence in the placing and administering of the reinsurance for plaintiffs and (3) unjust enrichment.
A motion to dismiss ensued that the motion court denied in its entirety. We now affirm.
The motion court properly upheld the common-law indemnity claim, notwithstanding dicta in the arbitration award that the insurers had committed "intentional and negligent acts, errors and omissions" including "negligent oversight of their agents." (see Pollicino v Roemer & Featherstonhaugh, 277 AD2d 666, 668 [2000]). The body of the decision did not mention negligent oversight and notably, the arbitrators found that the brokers had failed to inform plaintiffs about the problem with the data. Accordingly, the record is sufficient at this juncture to support a theory that plaintiffs' liability was vicarious only, and therefore an indemnity claim is appropriate (see Urban v No. 5 Times Square Dev. LLC. 62 AD3d 553, 557 [2009]). Nor was the indemnity claim a device to circumvent the statute of limitations (see City Of New York v Lead Indus. Assn., 222 AD2d 119, 127 [1996]).
Defendants argue that the motion court should have dismissed the contribution claim because plaintiffs' liability derives from rescission of a contract and contribution lies only with respect to liability in tort, not in contract. Although research revealed no New York State case law allowing contribution when the underlying action results in the rescission of a contract, plaintiffs do not really seek contribution for rescission. Therefore, under the circumstances of this case, it was proper to uphold the contribution claim.
CPLR 1401 authorizes contribution in cases where "two or more persons . . . are subject to liability for damages for the same personal injury, injury to property or wrongful death." (emphasis added). However, "purely economic loss resulting from a breach of contract does not constitute injury to property'" (Board of Educ. of Hudson City School Dist. v Sargent, Webster, Crenshaw and Folley, 71 NY2d 21, 26 [1987]; see also Children's Corner Learning Ctr. v A. Miranda Contr. Corp., 64 AD3d 318, 323 [2009]).
Here, there is no question that the brokers are subject to liability for the "same" injury because the brokers stand accused of the same misrepresentations for which the insurer-plaintiffs were held responsible in the underlying arbitration. Nor do defendants contest that this case involves "injury to property" (see Masterwear Corp. v Bernard, 3 AD3d 305, 307 ["it is settled that any tortious act (other than personal injury), including conversion, resulting in damage constitutes an injury to property' within the meaning of CPLR 1401"]).
Instead, defendants argue that plaintiffs were never subject to "liability for damages" because the monies plaintiffs paid resulted from the rescission of the contract between plaintiff and its reinsurer. As rescission merely returns the parties to the status quo, rather than awarding damages, defendants surmise plaintiffs merely seek the benefit of their bargain, the sort of economic loss that is not apportionable under a contribution theory (see Children's Place, 64 AD3d at 323-324).
However, defendants ignore the realities of how reinsurance operates and therefore overlook that plaintiffs have been subject to liability for damages. The arbitration did not involve a typical rescission that returns the parties to the status quo as if the contract had never occurred. The reinsurance was to provide coverage for a substantial portion of plaintiffs' primary layer risk in connection with its insurance policies. The loss of plaintiffs' reinsurance program left plaintiffs directly liable to the underlying insureds for 100% of the losses on their "all risks" insurance policies covering certain construction businesses located in the Southern Pacific Rim and on certain energy risk insurance policies. The arbitration decision ordering rescission also rendered plaintiffs liable to the reinsurer to reimburse the funds the reinsurer had already paid out under the reinsurance contract. Thus, plaintiffs are not merely deprived of the benefit of their bargain, but have actually had to cover far more of the underlying losses than they would have but for defendants' tortious conduct (see Ruddy v Lexington Ins. Co., 40 AD3d 733, 735 [2007] [retail insurance broker could maintain contribution claim against wholesale insurance broker for failure to obtain sufficient coverage]).
The negligence, breach of fiduciary duty and unjust enrichment claims accrued from the time of injury when the arbitrators ruled in 2007 and were therefore timely (see IDT Corp. v Morgan Stanley Dean Witter & Co., 12 NY3d 132, 140 [2009]; Kronos, Inc. v AVX Corp., 81 NY2d 90, 94 [1993]). Whether the duty of utmost good faith between the parties rose to the level of a fiduciary one depends on the circumstances, and, giving plaintiffs the benefit of every inference, we should not resolve it at this juncture (see EBC I, Inc. v Goldman, Sachs & Co., 5 NY3d 11, 19-22 [2005]; compare Christina Gen. Ins. Corp. of New York v Great Am. Ins. Co., 745 F Supp 150, 161 [1990] with Compagnie de Reassurance d'Ile de France v New England Reinsurance Corp., 944 F Supp 986, 995-996 [1996]).
In view of the foregoing, it is unnecessary to address the parties' other contentions.
Westpoint Inter’l, Inc., v. American Inter’l South Insurance Company.


D'Amato & Lynch, LLP, New York (Kevin J. Windels of
counsel), for appellant.
Sills Cummis & Gross P.C., New York (Jacob S. Buurma of
counsel), and Sills Cummis & Gross P.C., Newark, NJ
(Thomas S. Novak, Jr., of the New Jersey bar, admitted pro hac vice,
of counsel), for respondents.
Order, Supreme Court, New York County (Emily Jane Goodman, J.), entered July 17, 2009, which, insofar as appealed from, denied defendant's motion to dismiss the complaint, unanimously affirmed, with costs.
Although the underlying complaint contains some causes of action that are arguably subject to the insurance policy's "contract liability" exclusion, it alleges, in addition to a single cause of action for breach of contract, several causes of action sounding in tort and alleging statutory violations. Thus, defendant failed to demonstrate that the allegations cast the underlying complaint wholly within the exclusion, that no other reasonable interpretation of the exclusion is possible, and that no legal or factual basis exists that would potentially obligate
defendant to indemnify plaintiffs (see Frontier Insulation Contrs. v Merchants Mut. Ins. Co., 91 NY2d 169, 175 [1997]).
We reject defendant's apparent argument, based on Maroney v New York Cent. Mut. Fire Ins. Co. (5 NY3d 467, 472 [2005]), that the term "arising out of" in the contract liability exclusion is so broad as to comprehend any loss with even the slightest "causal relationship" to a breach of contract and that each cause of action in the underlying complaint stands in such a relationship to a breach of contract and is therefore excluded from coverage. Maroney is inapposite here, where, in addition to the contract claims, tort and statutory claims are asserted. An insurer has a duty to defend so long as there is any possibility of coverage under the policy, and here the possibility of coverage has not been eliminated (see Frontier Insulation Contrs., 91 NY2d at 175).
Nor is there any merit to defendant's argument that, because the policy defines "Claim" to mean lawsuit, rather than cause of action, the determination of whether the exclusion applies must be based not on separate causes of action but on the complaint as a whole. This is an unduly rigid construction of the term "[c]laim" in light of the realities of litigation, as well as "a strained, implausible reading of the complaint that is linguistically conceivable but tortured and unreasonable" (Northville Indus. Corp. v National Union Fire Ins. Co. of Pittsburgh, Pa., 89 NY2d 621, 635 [1997] [internal quotation marks and citation omitted]). In any event, the thrust of the underlying action is not plaintiffs' breaches of the various contracts at issue, but their marginalizing of the underlying plaintiff lenders' shareholder rights and devaluing of their collateral, which actions give rise primarily to the tort and statutory claims asserted in the action and which would provide a basis for the action even in the absence of the agreements.
Although defendant makes much of it, the fact that the policy is not a "duty to defend" policy is not dispositive here (see Federal Ins. Co. v Kozlowski, 18 AD3d 33, 41-42 [2005]), since the policy expressly requires defendant to advance defense costs, subject to recoupment of any amounts advanced for claims ultimately determined not to be covered. Having failed to demonstrate that there is no possibility of coverage, defendant cannot avoid its obligation to advance defense costs (see e.g. Vigilant Ins. Co. v Credit Suisse First Boston Corp., 10 AD3d 528, 529 [2004]; Stonewall Ins. Co. v Asbestos Claims Mgt. Corp., 73 F3d 1178, 1219 [2d Cir. 1995]).
Rubin v. SMS Taxi Corp.


Kreindler & Kreindler, LLP, New York (Orla M. Brady of
counsel), for appellant.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York
(Stacy R. Seldin of counsel), for respondents.
Order, Supreme Court, New York County (Debra A. Kaplan, J.), entered February 11, 2008, that to the extent appealed from, granted the motion by defendants SMS Taxi and Lachheb for summary judgment dismissing the complaint for failure to demonstrate serious injury, except with respect to the claim for significant disfigurement, unanimously affirmed without costs. Order, same court (Paul Wooten, J.), entered December 23, 2008, that denied plaintiff's motion for clarification or reconsideration, unanimously reversed, on the law, without costs, the motion granted and the prior order clarified so as to state that once a jury determines plaintiff has met the threshold for serious injury, the jury may award damages for all of plaintiff's injuries causally related to the accident, even those not meeting the serious injury threshold.
As the motion court found, defendants met their initial burden of producing evidentiary proof in admissible form sufficient to show that plaintiff's neck and back injuries did not meet any serious injury thresholds. Plaintiff's medical submissions were devoid of information to substantiate his 90/180 claim. The plaintiff also failed to raise an issue of fact as to any other category from Insurance Law § 5102 because he did not show: (1) what medical tests were performed, (2) the objective nature of the tests, (3) what the normal range of motion should be and (4) the significance of plaintiff's limitations. Plaintiff thus failed to raise an issue of fact as to the claims for permanent loss, permanent consequential limitation and significant limitation of use of a body part, system or function (see Marsh v City of New York, 61 AD3d 552 [2009]; Valentin v Pomilla, 59 AD3d 184, 186 [2009]). Further, plaintiff's unsworn affirmation is insufficient to explain his cessation of treatment (see Pommells v Perez, 4 NY3d 566, 574 [2005]).
Plaintiff also failed to offer the requisite competent medical proof of incapacity during 90 of the first 180 days following the accident (see Moses v Gelco Corp., 63 AD3d 548 [2009]; Dr. Valderrama's assertion that he advised plaintiff to take off from work until at least July 10 after the June 16 accident does not satisfy this requirement. Plaintiff's claimed inability to perform his job was also not supported by documentation from his employer (see Ortiz v Ash Leasing, Inc., 63 AD3d 556 [2009]).
However, the motion court found that plaintiff did meet the serious injury threshold on his claim for significant disfigurement of a body part in that the scar on his face "is permanent, discolored and no treatment can improve it." This portion of the motion court's ruling is not an issue on appeal. At issue on the motion for clarification or reconsideration is whether or not plaintiff can still present to the jury the injuries the court found did not meet the "serious injury" threshold within the meaning of Insurance Law § 5102(d). "Once a prima facie case of serious injury has been established and the trier of fact determines that a serious injury has been sustained, plaintiff is entitled to recover for all injuries incurred as a result of the accident" (Obdulio v Fabian, 33 AD3d 418, 419 [1st Dept 2006]; see also Prieston v Massaro, 107 AD2d 742 [2d Dept 1985]; Marte v New York City Transit Auth., 59 AD3d 398, 399 [2d Dept 2009]). Consequently, plaintiff is entitled to present his claim involving facial scarring to meet the threshold for serious injury under Insurance Law § 5102(d)(iii) (significant disfigurement). Once a jury determines that plaintiff has met the threshold for serious injury, the jury may award damages for all of plaintiff's injuries causally related to the accident, even those not meeting the serious injury threshold. Whether plaintiff's back and neck injuries were causally related to the accident are questions of fact for the jury to resolve.
The legislative intent of New York's No-Fault law was to "significantly reduce the number of automobile personal injury cases litigated in the courts," (Licari v Elliot, 57 NY2d 230, 236 [1982]) and to "weed out frivolous claims and limit recovery to significant injuries" (Dufel v Green, 84 NY2d [1995]). Accordingly, once an alleged claim meets at least one of the serious injury thresholds, the statute's gate keeping function, to reduce caseloads by limiting what the courts adjudicate, is satisfied. As the case is already in the gate, so to speak, judicial economy is no longer a reason to preclude plaintiff from presenting to the jury all injuries causally related to the accident. This comports with the general principle that a plaintiff is entitled to recover damages that justly and fairly compensates him or her for all injuries proximately caused by the accident.
The court denied the motion for reconsideration or clarification of the initial order, but because it did address the merits in adhering to the initial determination, the subsequent order is appealable (see Nawi v Dixon, 59 AD3d 363, 364 [2009]).
Ambos v. New York City Transit Auth.


Douglas & London, P.C. (Arnold E. DiJoseph, P.C., New York,
N.Y. [Arnold E. DiJoseph III], of counsel), for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendants appeal from an order of the Supreme Court, Kings County (Velasquez, J.), dated January 21, 2009, which denied their motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed, on the law, with costs, and the defendants' motion for summary judgment dismissing the complaint is granted.
The defendants established, prima facie, through the affirmed reports of their expert orthopedist, Dr. Barbara Freeman, and the plaintiff's deposition testimony, 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; Richards v Tyson, 64 AD3d 760; Berson v Rosada Cab Corp., 62 AD3d 636; Byrd v J.R.R. Limo, 61 AD3d 801). The plaintiff failed to submit any objective medical evidence sufficient to raise a triable issue of fact (see LaMarre v Michelle Taxi, Inc., 60 AD3d 911; Fiorillo v Arriaza, 52 AD3d 465; Piperis v Wan, 49 AD3d 840; Young Hwan Park v Orellana, 49 AD3d 721). In the absence of such evidence, the plaintiff's subjective complaints of pain were insufficient to establish a serious injury (see Dantini v Cuffie, 59 AD3d 490; Villeda v Cassas, 56 AD3d 762; Ranzie v Abdul-Massih, 28 AD3d 447).
Collins v. Leung


Martin, Fallon & MullÉ, Huntington, N.Y. (Richard C. MullÉ of
counsel), for appellants.
Daniel Collins, Hauppauge, N.Y., for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendants appeal from an order of the Supreme Court, Nassau County (Galasso, J.), entered September 2, 2009, which denied their motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is affirmed, with costs.
The defendants failed to meet their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). The defendants' motion papers failed adequately to address the plaintiff's claim, clearly set forth in her bill of particulars, that she sustained a medically-determined injury or impairment of a nonpermanent nature which prevented her from performing substantially all of the material acts which constituted her usual and customary daily activities for not less than 90 days during the 180 days immediately following the subject accident (see Smith v Quicci, 62 AD3d 858; Alexandre v Dweck, 44 AD3d 597; Sayers v Hot, 23 AD3d 453, 454).
Since the defendants failed to meet their prima facie burden, it is unnecessary to consider whether the papers submitted by the plaintiff in opposition to the defendants' motion were sufficient to raise a triable issue of fact (see Gaccione v Krebs, 53 AD3d 524; Yashayev v Rodriguez, 28 AD3d 651; Coscia v 938 Trading Corp., 283 AD2d 538).
Euvino v. Rauchbauer


Mallilo & Grossman, Flushing, N.Y. (Francesco Pomara, Jr., of
counsel), for appellant.
Morris Duffy Alonso & Faley, New York, N.Y. (Anna J. Ervolina
and Andrea M. Alonso of counsel), for
respondents.

DECISION & ORDER
In an action, inter alia, to recover damages for personal injuries, the plaintiff appeals, as limited by her brief, from so much of an order of the Supreme Court, Queens County (Agate, J.), entered May 28, 2009, as granted that branch of the defendants' motion which was for summary judgment dismissing the first cause of action to recover damages for personal injuries on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is affirmed insofar as appealed from, with costs.
The defendants established, prima facie, through the affirmed reports of their expert neurologist and orthopedist, as well as the plaintiff's deposition testimony, 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, 352; Gaddy v Eyler, 79 NY2d 955, 956-957; Richards v Tyson, 64 AD3d 760, 761; Berson v Rosada Cab Corp., 62 AD3d 636, 637; Byrd v J.R.R. Limo, 61 AD3d 801, 802). In opposition, the plaintiff's submissions were insufficient to raise a triable issue of fact as to whether she sustained a serious injury.
The plaintiff submitted affirmations from four physicians, none of whom saw the plaintiff during the first year after the accident. The plaintiff did not provide any affirmations from any of the physicians who had treated her in the months immediately following the accident, nor did she submit any medical records from that time period, although they were available from her initial treating physician's office after he died and physicians from his practice continued to treat her. She therefore failed to set forth any evidence that she suffered from any injuries contemporaneous with the accident (see Collado v Satellite Solutions & Electronics of WNY, LLC, 56 AD3d 411; Kurin v Zyuz, 54 AD3d 902, 903; Perdomo v Scott, 50 AD3d 1115, 1116; Scotto v Suh, 50 AD3d 1012, 1013; Morris v Edmond, 48 AD3d 432, 433). In addition, none of the physicians indicated that they had reviewed the medical records from an accident that had occurred just a month before the instant accident and in which the plaintiff had injured her back and left arm (see Cantave v Gelle, 60 AD3d 988, 989; Gentilella v Board of Educ. of Wantagh Union Free School Dist., 60 AD3d 629, 630; Silla v Mohammad, 52 AD3d 681, 682). Accordingly, the defendants were entitled to summary judgment dismissing the first cause of action to recover damages for personal injuries.
Kublo v. Rzadkowski


Mallilo & Grossman, Flushing, N.Y. (Francesco Pomara, Jr., of
counsel), for appellant.
Abamont & Associates (Congdon, Flaherty, O'Callaghan, Reid,
Donlon, Travis & Fishlinger,
Uniondale, N.Y. [Gregory A. Cascino], of
counsel), for respondents.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Nassau County (Diamond, J.), entered April 24, 2009, which granted the defendants' motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is affirmed, with costs.
The defendants established, prima facie, through the affirmed reports of their expert orthopedist and radiologist, as well as the plaintiff's deposition testimony, 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, 352; Gaddy v Eyler, 79 NY2d 955, 956-957; Richards v Tyson, 64 AD3d 760; Berson v Rosada Cab Corp., 62 AD3d 636; Byrd v J.R.R. Limo, 61 AD3d 801). The plaintiff's submissions in opposition to the defendant's motion were insufficient to raise a triable issue of fact. In this case, the plaintiff submitted the affidavit of a chiropractor, who indicated that he first examined the plaintiff on April 30, 2004, nearly eight months after the accident. The plaintiff did not provide affirmations from any of the physicians who had treated him in the months immediately following the accident, nor did he submit any medical records from that time period. Therefore, he failed to set forth any evidence that he suffered from any limitations contemporaneous with the accident (see Collado v Satellite Solutions & Electronics of WNY, LLC, 56 AD3d 411; Kurin v Zyuz, 54 AD3d 902; Perdomo v Scott, 50 AD3d 1115; Scotto v Suh, 50 AD3d 1012; Morris v Edmond, 48 AD3d 432). In addition, neither the plaintiff's chiropractor nor his radiologist addressed the findings of the defendants' examining radiologist, which attributed the condition of the plaintiff's lumbar spine to degenerative processes (see Ciordia v Luchian, 54 AD3d 708; Roman v Fast Lane Car Serv., Inc., 46 AD3d 535; Khan v Finchler, 33 AD3d 966). Accordingly, the defendants were entitled to summary judgment dismissing the complaint.
Little v. Locoh


Edelman, Krasin & Jaye, PLLC, Carle Place, N.Y. (Thomas S.
Russo of counsel), for appellant.
James Hiebler (Shayne, Dachs, Corker, Sauer & Dachs, LLP,
Mineola, N.Y. [Jonathan A. Dachs], of
counsel), for respondent Fogan
Locoh.
Picciano & Scahill, P.C., Westbury, N.Y. (Francis J. Scahill
and Andrea E. Ferrucci of counsel),
for respondent Gloria Moultrie.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Queens County (Grays, J.), dated March 20, 2009, which granted the defendants' separate motions for summary judgment dismissing the complaint insofar as asserted against each of 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 one bill of costs.
The Supreme Court properly determined that the defendants met 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.
The ambulance call report, hospital records, the reports of Drs. S. K. Reddy and Paul S. Raphael, and the therapy notes which the plaintiff submitted in opposition to the defendants' motions were unaffirmed and/or uncertified. Therefore, those submissions were without probative value and were insufficient to raise a triable issue of fact as to whether the plaintiff sustained a serious injury within the meaning of Insurance Law § 5102(d) (see Grasso v Angerami, 79 NY2d 813; Maffei v Santiago, 63 AD3d 1011, 1012; Niles v Lam Pakie Ho, 61 AD3d 657, 658; Uribe-Zapata v Capallan, 54 AD3d 936, 937; Patterson v NY Alarm Response Corp., 45 AD3d 656, 656; Verette v Zia, 44 AD3d 747, 748; Nociforo v Penna, 42 AD3d 514, 515; Pagano v Kingsbury, 182 AD2d 268).
The affirmation of Dr. Jay Simoncic, the plaintiff's examining physician, also failed to raise a triable issue of fact. While Dr. Simoncic noted significant limitations in the plaintiff's cervical spine range of motion based on his recent examination of her on November 10, 2008, neither he nor the plaintiff proffered competent medical evidence that revealed the existence of significant limitations in her spine range of motion that were contemporaneous with the subject accident (see Sutton v Yener, 65 AD3d 625, 626; Jules v Calderon, 62 AD3d 958, 958; Garcia v Lopez, 59 AD3d 593, 594; Leeber v Ward, 55 AD3d 563, 563; Ferraro v Ridge Car Serv., 49 AD3d 498, 498; D'Onofrio v Floton, Inc., 45 AD3d 525, 525).
The affirmed magnetic resonance imaging reports of Dr. Robert Solomon merely revealed the existence of a tear of the anterior cruciate ligament in the plaintiff's right knee and various bulging discs in her cervical spine. A tear in tendons, as well as a tear in a ligament, or a bulging disc is not evidence of a serious injury in the absence of objective evidence of the extent of the alleged physical limitations resulting from the injury and its duration (see Ciancio v Nolan, 65 AD3d 1273, 1274; Niles v Lam Pakie Ho, 61 AD3d at 658-659; Sealy v Riteway-1, Inc., 54 AD3d 1018, 1019; Kilakos v Mascera, 53 AD3d 527, 528-529; Cornelius v Cintas Corp., 50 AD3d 1085, 1087). Such evidence was clearly lacking in opposition to the defendants' motions here. The affidavit of the plaintiff was also insufficient to meet this requirement (see Luizzi-Schwenk v Singh, 58 AD3d 811, 812; Sealy v Riteway-1, Inc., 54 AD3d at 1019).
The plaintiff failed to submit competent medical evidence that the injuries allegedly sustained by her in the subject accident rendered her unable to perform substantially all of her usual and customary daily activities for not less than 90 days of the first 180 days subsequent to the subject accident (see Rabolt v Park, 50 AD3d 995, 996; Sainte-Aime v Ho, 274 AD2d 569, 570).
Accordingly, the defendants' separate motions for summary judgment dismissing the complaint insofar as asserted against each of them were properly granted.
Orejuela v. Francis


Cannon & Acosta, LLP, Huntington Station, N.Y. (June Redeker of
counsel), for appellant.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y.
(Stacy R. Seldin of counsel), for
respondents.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Suffolk County (Jones, Jr., J.), dated April 15, 2009, which granted the defendants' motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed, on the law, with costs, and the defendants' motion for summary judgment dismissing the complaint is denied.
The defendants failed to meet their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident. In support of their motion, the defendants relied upon, inter alia, the affirmed medical report of Edward Weiland, a neurologist, who examined the plaintiff on April 24, 2008. While Weiland noted in his report that the plaintiff had full range of motion in her extremities, he failed to set forth the objective tests he performed to arrive at that conclusion (see Stern v Oceanside School Dist., 55 AD3d 596; Cedillo v Rivera, 39 AD3d 453; McLaughlin v Rizzo, 38 AD3d 856; Geba v Obermeyer, 38 AD3d 597).
Since the defendants failed to meet their prima facie burden, it is unnecessary to consider whether the papers submitted by the plaintiff in opposition to the defendants' motion were sufficient to raise a triable issue of fact (see Gaccione v Krebs, 53 AD3d 524; Yashayev v Rodriguez, 28 AD3d 651; Coscia v 938 Trading Corp., 283 AD2d 538).
Senior v. Mikhailov


Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y.
(Colin F. Morrissey of counsel), for appellant.
Clay M. Evall, Esq., P.C., New York, N.Y., for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendant Atlantis Taxi Corp. appeals, as limited by its brief, from so much of an order of the Supreme Court, Kings County (Battaglia, J.), dated May 1, 2009, as denied its motion for summary judgment dismissing the complaint insofar as asserted against it on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is affirmed insofar as appealed from, with costs.
The defendant Atlantis Taxi Corp. (hereinafter the defendant) failed to meet its prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). The defendant's examining orthopedist noted, in his affirmed medical report, that the plaintiff, inter alia, had a significant loss of power in his right shoulder and stated that this finding may be related to the rotator cuff tear and labral tear noted in the bill of particulars. Since the defendant's orthopedist did not state that this significant loss of power was unrelated to the injuries sustained in the accident, the defendant's proof failed to objectively demonstrate that the plaintiff did not sustain a serious injury to his right shoulder as a result of the subject accident. Since the defendant failed to meet his prima facie burden, the sufficiency of the plaintiff's opposition papers need not be considered (see Facci v Kaminsky, 18 AD3d 806).
Sierra v. Gonzalez First Limo


Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y.
(Robert D. Grace of counsel), for appellants.
Steinberg & Gruber, P.C., Garden City, N.Y. (Hermann P.
Gruber of counsel), for respondents.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendants appeal from an order of the Supreme Court, Kings County (F. Rivera, J.), dated May 27, 2009, which denied their motion for summary judgment dismissing the complaint on the ground that neither plaintiff sustained a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed, on the law, with costs, and the defendants' motion for summary judgment dismissing the complaint is granted.
The defendants established, prima facie, that neither plaintiff sustained a serious injury within the meaning of Insurance Law § 5102(d) (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955). At his deposition, the plaintiff Francisco Sierra acknowledged that he missed approximately two or three days of work during the month following the subject motor vehicle accident and that there was no period of time when he could not work at all as a result of the accident (see Morris v Edmond, 48 AD3d 432). The plaintiff Julia Sierra's deposition showed that she was not confined to her bed for any length of time as a result of the accident. Moreover, the affirmed medical reports of the defendants' neurologist and orthopedist concluded, based upon objective range-of-motion tests, that each of the plaintiffs had full range of motion in the cervical and lumbar regions of their spine, and in both shoulders.
In opposition to the motion, both of the plaintiffs failed to present any range of motion findings which 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). Both plaintiffs also failed to proffer competent medical evidence that they sustained a medically-determined injury of a nonpermanent nature which prevented them, for 90 of the 180 days following the subject accident, from performing their usual and customary activities (see Morris v Edmond, 48 AD3d at 433). Therefore, the evidence submitted by the plaintiffs failed to raise a triable issue of fact (see CPLR 3212[b]), and the Supreme Court should have granted the defendants' motion.
Walker-Bryant v. Ferrara


McCabe, Collins, McGeough & Fowler, LLP, Carle Place, N.Y.
(Barry L. Manus of counsel), for appellant Gennaro Ferrara.
Picciano & Scahill, P.C., Westbury, N.Y. (Francis J. Scahill and
Andrea E. Ferrucci of counsel), for
appellant Carmella Ferrara.
Weiss & Rosenbloom, P.C., New York, N.Y. (Erik L. Gray and
Andrea Krugman Tessler of counsel),
for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendants Gennaro Ferrara and Carmella Ferrara separately appeal, as limited by their briefs, from so much of an order of the Supreme Court, Kings County (Jacobson, J.), dated February 3, 2009, as denied their separate motions for summary judgment dismissing the complaint insofar as asserted against each of them on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d), and the defendant Elizabeth Ferrara, a/k/a Elizabeth Mazzitelli, appeals from the same order.
ORDERED that the appeal by the defendant Elizabeth Ferrara, a/k/a Elizabeth Mazzitelli, is dismissed as abandoned (see 22 NYCRR 670.8[e]); and it is further,
ORDERED that the order is affirmed insofar as appealed from by the defendants Gennaro Ferrara and Carmella Ferrara; and it is further,
ORDERED that one bill of costs is awarded to the plaintiff, payable by the defendants Gennaro Ferrara and Carmella Ferrara.
In support of their motions for summary judgment, the defendants Gennaro Ferrara and Carmella Ferrara (hereinafter the appellants) met their respective 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 to the motions, the plaintiff raised a triable issue of fact (see Sanevich v Lyubomir, 66 AD3d 665; Azor v Torado, 59 AD3d 367, 368). Consequently, the Supreme Court properly denied the appellants' respective motions.
Bulls v. Massara


Appeal from an order and judgment (one paper) of the Supreme Court, Erie County (John A. Michalek, J.), entered December 29, 2008 in a personal injury action. The order and judgment granted the motion of defendants for summary judgment and dismissed the amended complaint.

CANTOR, LUKASIK, DOLCE & PANEPINTO, P.C., BUFFALO (SEAN E. COONEY OF COUNSEL), FOR PLAINTIFF-APPELLANT.
LAW OFFICE OF MARY A. BJORK, BUFFALO (MATTHEW T. MURRAY OF COUNSEL), FOR DEFENDANT-RESPONDENT ROBERT MASSARA, JR.
LAW OFFICES OF DANIEL R. ARCHILLA, BUFFALO (THOMAS D. SEAMAN OF COUNSEL), FOR DEFENDANT-RESPONDENT NICHELLE BULLS.

It is hereby ORDERED that the order and judgment so appealed from is unanimously modified on the law by denying the motion in part and reinstating the amended complaint against defendant Nichelle Bulls and as modified the order and judgment is affirmed without costs.
Memorandum: Plaintiff, as grandparent and legal guardian of his grandson, commenced this action seeking damages for injuries sustained by his grandson when the vehicle in which the grandson was a passenger, which was owned and operated by his mother, defendant Nichelle Bulls, was struck by a vehicle owned and operated by defendant Robert Massara, Jr. Contrary to plaintiff's contention, we conclude that Supreme Court properly granted the motion of Massara for summary judgment dismissing the amended complaint against him on the ground that he was not negligent. Massara met his initial burden of establishing "both that [Bulls'] vehicle suddenly entered the lane where [Massara] was operating [his vehicle] in a lawful and prudent manner and that there was nothing [Massara] could have done to avoid the collision' " (Fratangelo v Benson, 294 AD2d 880, 881; see e.g. Maleski v Lenander, 38 AD3d 1192, lv denied 9 NY3d 803; Pomietlasz v Smith, 31 AD3d 1173; Rak v Kossakowski, 24 AD3d 1191). Neither plaintiff nor Bulls raised a triable issue of fact whether Massara was negligent in any respect (cf. Harris v Jackson, 30 AD3d 1027; Cooley v Urban, 1 AD3d 900).
The record establishes that Bulls joined in Massara's motion to the extent that Massara also sought summary judgment dismissing the amended complaint on the ground that plaintiff's grandson did not sustain a serious injury within the meaning of Insurance Law § 5102 (d). We agree with plaintiff that the court erred in granting that part of the motion with respect to Bulls. Although Massara established his entitlement to summary judgment dismissing the amended complaint against him on the ground that he was not negligent, he failed to meet his initial burden of establishing "the absence of a serious injury as a matter of law" (McElroy v Sivasubramaniam, 305 AD2d 944, 945). Thus, Bulls likewise is not entitled to summary judgment dismissing the amended complaint against her to the extent that she joined in Massara's motion on that ground. We therefore modify the order and judgment accordingly. Even assuming, arguendo, that we may consider the unsworn letter of an independent medical examiner (IME) who examined plaintiff's grandson (see generally Grasso v Angerami, 79 NY2d 813), we conclude that the letter fails to establish that plaintiff's grandson did not sustain a serious injury. The IME noted in his letter that his findings were not objective, and we thus conclude that the IME's letter does not establish by the requisite "qualitative, objective medical proof" that plaintiff's grandson did not sustain a serious injury (Toure v Avis Rent A Car Sys., 98 NY2d 345, 350). Indeed, the IME documented significant losses in the range of motion in the cervical spine of plaintiff's grandson and, even if that finding was based merely on subjective evidence, we conclude at the very least that the letter of the IME itself raises a triable issue of fact whether plaintiff's grandson sustained a serious injury. Thus, the burden never shifted to plaintiff to raise an issue of fact in that respect (see generally Zuckerman v City of New York, 49 NY2d 557, 562).
Barton v. Kohler


Appeal from an order of the Supreme Court, Erie County (Kevin M. Dillon, J.), entered February 13, 2009 in a personal injury action. The order, among other things, granted defendants' motion for summary judgment.

VINAL & VINAL, BUFFALO (JEANNE M. VINAL OF COUNSEL), FOR PLAINTIFF-APPELLANT.
COHEN & LOMBARDO, P.C., BUFFALO (JAMES J. NASH OF COUNSEL), FOR DEFENDANTS-RESPONDENTS.

It is hereby ORDERED that the order so appealed from is unanimously affirmed without costs.
Memorandum: Plaintiff commenced this action seeking damages for injuries she allegedly sustained when her vehicle was struck by a vehicle owned by defendant Terry H. Kohler and operated by defendant Jennifer L. Kohler. Supreme Court properly granted defendants' motion seeking summary judgment dismissing the complaint on the ground that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102 (d). "Defendants met their initial burden by submitting medical records and reports constituting persuasive evidence that plaintiff's alleged pain and injuries were related to . . . preexisting condition[s]' . . ., and plaintiff[] failed to raise a triable issue of fact whether [her] alleged pain and injuries were related to the subject accident rather than those preexisting conditions" (Spanos v Fanto, 63 AD3d 1665, 1666).
Bennice v. Randall


Appeal from an order of the Supreme Court, Chautauqua County (Joseph Gerace, J.H.O.), entered June 10, 2009 in a personal injury action. The order granted plaintiff's motion for a directed verdict.

HAGELIN KENT LLC, BUFFALO (VICTOR M. WRIGHT OF COUNSEL), FOR DEFENDANTS-APPELLANTS.
DAVID M. CIVILETTE, P.C., DUNKIRK (ELENA J. ANCONA OF COUNSEL), FOR PLAINTIFF-RESPONDENT.

It is hereby ORDERED that the order so appealed from is unanimously reversed on the law without costs, the motion is denied and the verdict is reinstated.
Memorandum: Plaintiff commenced this action seeking damages for injuries he allegedly sustained when his vehicle was rear-ended by a vehicle operated by Marguerite M. Randall (defendant) and owned by defendant S.T. Kaczmierczak. Defendants conceded that the accident resulted from defendant's negligence, and the matter proceeded to a summary jury trial on the issues of causation, serious injury and damages. At the close of proof, plaintiff moved for a directed verdict pursuant to CPLR 4401 on the issue of causation and with respect to the permanent consequential limitation of use, significant limitation of use, and 90/180-day categories of serious injury within the meaning of Insurance Law § 5102 (d). The Judicial Hearing Officer (JHO) reserved his decision and, after the jury returned a verdict finding that defendant's negligence was not a substantial factor in causing plaintiff's injuries, the JHO granted the motion. We reverse.
At the outset, we agree with defendants that this appeal is properly before us. A summary jury trial agreement " is an independent contract subject to the principles of contract interpretation' " (Grochowski v Fudella, 70 AD3d 1407), and the agreement at issue provides that "[t]he right to move to set aside the verdict, or to appeal, is limited to instances in which the rights of a party were significantly prejudiced by . . . an error of law that occurred during the course of the trial." We conclude that whether the JHO erred in directing a verdict in plaintiff's favor presents a question of law and thus the order is appealable pursuant to the summary jury trial agreement (see generally CPLR 4401).
Turning to the merits, a directed verdict is "appropriate where the . . . court finds that, upon the evidence presented, there is no rational process by which the fact trier could base a finding in favor of the nonmoving party" (Szczerbiak v Pilat, 90 NY2d 553, 556; see Cummings v Jiayan Gu, 42 AD3d 920, 921). In considering a motion for a directed verdict pursuant to CPLR 4401, "the . . . court must afford the party opposing the motion every inference which may properly be drawn from the facts presented, and the facts must be considered in a light most favorable to the nonmovant" (Szczerbiak, 90 NY2d at 556).
Here, there is a rational process by which the jury could have found that defendant's negligence was not a substantial factor in causing plaintiff's alleged injuries. Plaintiff presented the testimony of several medical experts who examined him and concluded that the cervical and lumbar injuries at issue were causally related to the accident. Nevertheless, the lack of candor demonstrated by plaintiff when questioned on cross-examination about his preexisting injuries, together with his failure to advise some of those experts of his history of back pain, could have led the jury to reject the opinions of those experts (see Salisbury v Christian, 68 AD3d 1664, 1665). Further, the jury was entitled to credit the report of defendants' expert neurologist, who concluded that plaintiff's complaints of pain were subjective and could not be linked to the accident. The further allegation of plaintiff that the accident caused him to sustain urinary problems was not conclusively supported by his treating urologist and, in any event, that allegation was contradicted by defendants' expert. Thus, we agree with defendants that the JHO erred in granting the motion (see generally Szczerbiak, 90 NY2d at 556).
Teague v. Automobile Insurance Company of Hartford


Appeal from a judgment (denominated judgment and order) of the Supreme Court, Monroe County (John J. Ark, J.), entered May 7, 2009 in a declaratory judgment action. The judgment, among other things, granted the motion of defendant Automobile Insurance Company of Hartford, Connecticut for summary judgment.


HALL AND KARZ, CANANDAIGUA (PETER ROLPH OF COUNSEL), FOR PLAINTIFFS-APPELLANTS.
KENNEY SHELTON LIPTAK NOWAK LLP, BUFFALO (JESSE J. COOKE OF COUNSEL), FOR DEFENDANT-RESPONDENT AUTOMOBILE INSURANCE COMPANY OF HARTFORD, CONNECTICUT.

It is hereby ORDERED that the judgment so appealed from is unanimously modified on the law by vacating the provision dismissing the complaint and as modified the judgment is affirmed without costs.
Memorandum: Plaintiffs commenced this action seeking, inter alia, a declaration that Automobile Insurance Company of Hartford, Connecticut (defendant) is obligated to defend plaintiffs in the underlying action. Paul Bloser and Carole Bloser, defendants herein, commenced the underlying action seeking damages for injuries sustained by Paul Bloser when he slipped and fell during the course of repair work at plaintiffs' residence. Contrary to the contention of plaintiffs, we conclude that Supreme Court properly granted the motion of defendant for summary judgment declaring that it is not obligated to defend or indemnify plaintiffs in the underlying action.
It is well established that "[t]he requirement that an insured notify its liability carrier of a potential claim as soon as practicable' operates as a condition precedent to coverage" (White v City of New York, 81 NY2d 955, 957). "Absent a valid excuse, a failure to satisfy the notice requirement vitiates the policy . . ., and the insurer need not show prejudice before it can assert the defense of noncompliance" (Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp., 31 NY2d 436, 440). "[T]here may be circumstances that excuse a failure to give timely notice, such as where the insured has a good-faith belief of nonliability,' provided that belief is reasonable" (Great Canal Realty Corp. v Seneca Ins. Co., Inc., 5 NY3d 742, 743). Specifically, "[w]hen the facts of an occurrence are such that an insured acting in good faith would not reasonably believe that liability on his [or her] part will result, notice of the occurrence given by the insured to the insurer is given as soon as practicable' if given promptly after the insured receives notice that a claim against him [or her] will in fact be made" (Merchants Mut. Ins. Co. v Hoffman, 56 NY2d 799, 801; see D'Aloia v Travelers Ins. Co., 85 NY2d 825, rearg denied 85 NY2d 968). The insured bears the burden of establishing a reasonable excuse for his or her delay in providing notice (see Security Mut. Ins. Co. of N.Y., 31 NY2d at 441; Philadelphia Indem. Ins. Co. v Genesee Val. Improvement Corp., 41 AD3d 44, 46).
The homeowners' insurance policy issued by defendant requires
plaintiffs to notify it "as soon as practical" of an " [o]currence,' "which is defined as "[a]n accident . . . [that] results in bodily injury' or property damage' during the policy period." Here, the record establishes that plaintiffs received notice that Paul Bloser sustained " bodily injury' " in the accident on their property no later than March 2004, when he sent plaintiffs a letter stating that he was "proceeding with legal action" against them "for injuries sustained when [he] fell on [their] ice-covered sidewalk steps" (see generally D'Aloia, 85 NY2d 825; Merchants Mut. Ins. Co., 56 NY2d at 801). Plaintiffs did not, however, notify defendant of the accident and seek coverage under the homeowners' insurance policy until March 2006. That delay is unreasonable as a matter of law (see Philadelphia Indem. Ins. Co., 41 AD3d at 46-47; Lyell Party House v Travelers Indem. Co., 11 AD3d 972, 973), and plaintiffs failed to raise a triable issue of fact establishing a reasonable excuse for their delay (see generally Lyell Party House, 11 AD3d at 973).
We further conclude, however, that the court erred in dismissing the complaint in this declaratory judgment action (see City of New York v State of New York, 94 NY2d 577, 588 n 3), and we therefore modify the judgment by vacating the provision dismissing the complaint.
Majawalla v. Utica First Insurance Company


Mark J. Fox, New York, N.Y., for appellant.
Milber Markis Plousadis & Seiden, LLP, White Plains, N.Y.
(Lorin A. Donnelly and David S.
Taylor of counsel), for respondent.


DECISION & ORDER
In an action, inter alia, for a judgment declaring that the defendant is obligated to defend and indemnify the plaintiffs in an underlying action entitled Mangerino v Mirani, pending in the Supreme Court, Queens County, under Index No. 3118/05, the plaintiffs appeal from an order of the Supreme Court, Queens County (Satterfield, J.), dated November 19, 2008, which granted the defendant's motion for summary judgment declaring that the defendant is not so obligated.
ORDERED that the order is reversed, on the law, with costs, and the defendant's motion for summary judgment is denied.
The individual plaintiffs in this action conducted business as the plaintiff Yashi Associates. In that capacity, they owned the premises at 65-00 Myrtle Avenue in Glendale and leased it to nonparty Glendale Convenience Store, Inc. (hereinafter Glendale Convenience). On or about January 14, 2004, nonparty Janet Mangerino allegedly fell in the parking lot of the store at that address, sustaining injuries. While Mangerino originally asserted that she fell on the sidewalk adjacent to the store, at her deposition she unequivocally testified that she fell in the parking lot, not on the sidewalk.
On or about February 2, 2005, Mangerino commenced an action against the plaintiff Ghanshyam Mirani and Glendale Convenience, seeking to recover damages for personal injuries allegedly sustained as a result of her fall. On or about June 23, 2005, Mangerino commenced a personal injury action against the plaintiffs Yusuf K. Majawalla, Shoaib F. Haveliwala, and Yashi Associates based on the same occurrence. In an order dated August 15, 2006, upon stipulation of the parties, the Supreme Court, Queens County, consolidated the two actions into what is the underlying action here.
A provision of the lease between Yashi Associates, as lessor, and Glendale Convenience, as lessee, required the lessee to maintain an insurance policy in connection with the leased premises, and to name the lessor as an additional insured under the policy. However, the policy obtained by the lessee did not name Yashi Associates or the individual plaintiffs as additional insureds. When the plaintiffs demanded that the defendant defend and indemnify them in the underlying action, the defendant disclaimed coverage.
The plaintiffs commenced this action, inter alia, for a judgment declaring that the defendant is obligated to defend and indemnify them in the underlying action. The defendant moved for summary judgment declaring that it had no duty to defend the plaintiffs in the underlying action. The Supreme Court granted the defendant's motion. We reverse.
The defendant established, prima facie, that the plaintiffs were not entitled to coverage as additional insureds under the subject policy as they were not named as insureds or additional insureds therein (see Home Depot U.S.A., Inc. v National Fire & Mar. Ins. Co., 55 AD3d 671, 673; see also Tribeca Broadway Assoc. v Mount Vernon Fire Ins. Co., 5 AD3d 198, 200). However, in opposition, the plaintiffs raised a triable issue of fact. In its commercial liability section, the policy provided that the defendant would not pay for bodily injury or property damage liability assumed under a contract. However, this section further stated that this exclusion "does not apply to an incidental contract." The policy's definition of an "incidental contract" included, inter alia, leases of premises, but the policy did not expressly state that the defendant was obligated to provide coverage pursuant to terms of an "incidental contract" (compare Kassis v Ohio Cas. Ins. Co., 12 NY3d 595). "Where, as here, the language of a contract is ambiguous, its construction presents a question of fact which may not be resolved by the court on a motion for summary judgment" (Pepco Constr. of N.Y., Inc. v CNA Ins. Co., 15 AD3d 464, 465). The ambiguity here raised a triable issue of fact as to whether the defendant was obligated to defend and indemnify the plaintiffs by operation of the subject insurance policy and the lease (cf. Travelers Ins. Co. v Utica Mut. Ins. Co., 27 AD3d 456; State Farm Fire & Cas. Ins. Co. v Meis, 23 AD3d 372; Pepco Constr. of N.Y., Inc. v CNA Ins. Co., 15 AD3d 464). A triable issue of fact also exists as to whether the defendant would be obligated to defend and indemnify the plaintiffs based on where the accident occurred and whether the location constituted the "demised premises," whether it constituted an area "in or about the demised premises or any part thereof" as referred to in the provision of the rider to the lease pertaining to insurance, or whether it was not part of the demised premises and, thus, not subject to coverage by the defendant. Further, we note that a motion for summary judgment by Glendale Convenience, the named insured, was granted by the Supreme Court, Queens County, in an order dated April 20, 2007. If the defendant is found to be obligated to defend and indemnify the plaintiffs by operation of the insurance policy and lease, a triable issue of fact exists as to whether the defendant would be released from that obligation because Glendale Convenience has been absolved of all liability in the underlying action. In this regard, the term "additional insured" is typically understood to mean " an entity enjoying the same protection as the named insured'" (Kassis v Ohio Cas. Ins. Co., 12 NY3d at 599-600, quoting Pecker Iron Works of N.Y. v Traveler's Ins. Co., 99 NY2d 391, 393 [internal quotation marks omitted]).
With regard to the validity of the lease, the defendant established its prima facie entitlement to judgment as a matter of law by demonstrating that the lease and rider were executed only by the plaintiff Ghanshyam Mirani on behalf of the landlord, and not by the tenant. However, in opposition, the plaintiffs submitted what they alleged to be a recently-discovered copy of the lease and rider executed by both parties, as well as an affidavit describing the alleged recent discovery of the fully executed lease and rider. Under the circumstances presented here, this was sufficient to raise a triable issue of fact as to whether the lease and rider were authentic and in effect at the time of the alleged accident.
The Supreme Court incorrectly concluded that the defendant properly disclaimed coverage based on a policy provision in which the defendant, expressly excluded from coverage, inter alia, "paved outdoor surfaces, including driveways, parking lots, roads and walks." This provision appears in the "property coverages" section of the policy. No similar exclusion is found in the "commercial liability coverages" portion of the policy. Thus, the policy does not expressly exclude from coverage commercial liability for incidents occurring in the parking lot.
The defendant's remaining contentions are without merit.
The individual plaintiffs in this action conducted business as the plaintiff Yashi Associates. In that capacity, they owned the premises at 65-00 Myrtle Avenue in Glendale and leased it to nonparty Glendale Convenience Store, Inc. (hereinafter Glendale Convenience). On or about January 14, 2004, nonparty Janet Mangerino allegedly fell in the parking lot of the store at that address, sustaining injuries. While Mangerino originally asserted that she fell on the sidewalk adjacent to the store, at her deposition she unequivocally testified that she fell in the parking lot, not on the sidewalk.
On or about February 2, 2005, Mangerino commenced an action against the plaintiff Ghanshyam Mirani and Glendale Convenience, seeking to recover damages for personal injuries allegedly sustained as a result of her fall. On or about June 23, 2005, Mangerino commenced a personal injury action against the plaintiffs Yusuf K. Majawalla, Shoaib F. Haveliwala, and Yashi Associates based on the same occurrence. In an order dated August 15, 2006, upon stipulation of the parties, the Supreme Court, Queens County, consolidated the two actions into what is the underlying action here.
A provision of the lease between Yashi Associates, as lessor, and Glendale Convenience, as lessee, required the lessee to maintain an insurance policy in connection with the leased premises, and to name the lessor as an additional insured under the policy. However, the policy obtained by the lessee did not name Yashi Associates or the individual plaintiffs as additional insureds. When the plaintiffs demanded that the defendant defend and indemnify them in the underlying action, the defendant disclaimed coverage.
The plaintiffs commenced this action, inter alia, for a judgment declaring that the defendant is obligated to defend and indemnify them in the underlying action. The defendant moved for summary judgment declaring that it had no duty to defend the plaintiffs in the underlying action. The Supreme Court granted the defendant's motion. We reverse.
The defendant established, prima facie, that the plaintiffs were not entitled to coverage as additional insureds under the subject policy as they were not named as insureds or additional insureds therein (see Home Depot U.S.A., Inc. v National Fire & Mar. Ins. Co., 55 AD3d 671, 673; see also Tribeca Broadway Assoc. v Mount Vernon Fire Ins. Co., 5 AD3d 198, 200). However, in opposition, the plaintiffs raised a triable issue of fact. In its commercial liability section, the policy provided that the defendant would not pay for bodily injury or property damage liability assumed under a contract. However, this section further stated that this exclusion "does not apply to an incidental contract." The policy's definition of an "incidental contract" included, inter alia, leases of premises, but the policy did not expressly state that the defendant was obligated to provide coverage pursuant to terms of an "incidental contract" (compare Kassis v Ohio Cas. Ins. Co., 12 NY3d 595). "Where, as here, the language of a contract is ambiguous, its construction presents a question of fact which may not be resolved by the court on a motion for summary judgment" (Pepco Constr. of N.Y., Inc. v CNA Ins. Co., 15 AD3d 464, 465). The ambiguity here raised a triable issue of fact as to whether the defendant was obligated to defend and indemnify the plaintiffs by operation of the subject insurance policy and the lease (cf. Travelers Ins. Co. v Utica Mut. Ins. Co., 27 AD3d 456; State Farm Fire & Cas. Ins. Co. v Meis, 23 AD3d 372; Pepco Constr. of N.Y., Inc. v CNA Ins. Co., 15 AD3d 464). A triable issue of fact also exists as to whether the defendant would be obligated to defend and indemnify the plaintiffs based on where the accident occurred and whether the location constituted the "demised premises," whether it constituted an area "in or about the demised premises or any part thereof" as referred to in the provision of the rider to the lease pertaining to insurance, or whether it was not part of the demised premises and, thus, not subject to coverage by the defendant. Further, we note that a motion for summary judgment by Glendale Convenience, the named insured, was granted by the Supreme Court, Queens County, in an order dated April 20, 2007. If the defendant is found to be obligated to defend and indemnify the plaintiffs by operation of the insurance policy and lease, a triable issue of fact exists as to whether the defendant would be released from that obligation because Glendale Convenience has been absolved of all liability in the underlying action. In this regard, the term "additional insured" is typically understood to mean " an entity enjoying the same protection as the named insured'" (Kassis v Ohio Cas. Ins. Co., 12 NY3d at 599-600, quoting Pecker Iron Works of N.Y. v Traveler's Ins. Co., 99 NY2d 391, 393 [internal quotation marks omitted]).
With regard to the validity of the lease, the defendant established its prima facie entitlement to judgment as a matter of law by demonstrating that the lease and rider were executed only by the plaintiff Ghanshyam Mirani on behalf of the landlord, and not by the tenant. However, in opposition, the plaintiffs submitted what they alleged to be a recently-discovered copy of the lease and rider executed by both parties, as well as an affidavit describing the alleged recent discovery of the fully executed lease and rider. Under the circumstances presented here, this was sufficient to raise a triable issue of fact as to whether the lease and rider were authentic and in effect at the time of the alleged accident.
The Supreme Court incorrectly concluded that the defendant properly disclaimed coverage based on a policy provision in which the defendant, expressly excluded from coverage, inter alia, "paved outdoor surfaces, including driveways, parking lots, roads and walks." This provision appears in the "property coverages" section of the policy. No similar exclusion is found in the "commercial liability coverages" portion of the policy. Thus, the policy does not expressly exclude from coverage commercial liability for incidents occurring in the parking lot.
In the Matter of AutoOne Insurance Company v. Hutchinson


David J. Tetlak, Huntington Station, N.Y. (Albert J. Galatan of
counsel), for appellant.
Epstein & Rayhill, Elmsford, N.Y. (David M. Heller of counsel),
for proposed additional respondent-
respondent.

DECISION & ORDER
In a proceeding pursuant to CPLR article 75, inter alia, to permanently stay arbitration of claims for uninsured motorist benefits, the petitioner appeals (1), as limited by its brief, from so much of an order of the Supreme Court, Westchester County (Lefkowitz, J.), entered May 13, 2009, as denied, without a hearing, that branch of the petition which was to permanently stay arbitration, and (2) from an order of the same court entered July 20, 2009, which denied its motion, denominated as one for leave to renew and reargue, but which was, in actuality, for leave to reargue.
ORDERED that the appeal from the order entered July 20, 2009, is dismissed, as no appeal lies from an order denying leave to reargue; and it is further,
ORDERED that the order entered May 13, 2009, is reversed insofar as appealed from, on the law, and the matter is remitted to the Supreme Court, Westchester County, for an evidentiary hearing to determine whether Nationwide Mutual Fire Insurance Company validly disclaimed coverage of the offending vehicle for the subject accident, and thereafter, for a new determination of that branch of the petition which was to permanently stay arbitration; and it is further,
ORDERED that one bill of costs is awarded to the appellant, payable by the respondents-respondents and proposed additional respondent-respondent.
The petitioner AutoOne Insurance Company made a prima facie showing that the offending vehicle was insured by Nationwide Mutual Fire Insurance Company (hereinafter Nationwide) through the submission of a police accident report containing the vehicle's insurance code (see Matter of Continental Ins. Co. v Biondo, 50 AD3d 1034; Matter of State Farm Mut. Auto. Ins. Co. v Mazyck, 48 AD3d 580, 581; Matter of Mercury Ins. Group v Ocana, 46 AD3d 561, 562; Matter of Utica Mut. Ins. Co. v Colon, 25 AD3d 617, 618; Matter of AIU Ins. Co. v Nunez, 17 AD3d 668, 669; Matter of Lumbermens Mut. Cas. Co. v Beliard, 256 AD2d 579, 580).
In opposition to the petition, Nationwide submitted evidence that it had disclaimed coverage for the offending vehicle based upon its insured's failure to cooperate in the investigation of the subject accident. However, since a disclaimer based upon lack of cooperation penalizes the injured party for the actions of the insured and "frustrates the policy of this State that innocent victims of motor vehicle accidents be recompensed for the injuries inflicted upon them," an insurer seeking to disclaim for noncooperation has a heavy burden of proof (Thrasher v United States Liab. Ins. Co., 19 NY2d 159, 168; see Continental Cas. Co. v Stradford, 11 NY3d 443, 450). To sustain its burden of establishing lack of cooperation, the insurer must demonstrate that "it acted diligently in seeking to bring about the insured's co-operation . . . that the efforts employed by the insurer were reasonably calculated to obtain the insure[d]'s co-operation . . . and that the attitude of the insured, after his co-operation was sought, was one of willful and avowed obstruction'" (Thrasher v United States Liab. Ins. Co., 19 NY2d at 168, quoting Coleman v New Amsterdam Cas. Co., 247 NY 271, 276; see Matter of State Farm Indem. Co. v Moore, 58 AD3d 429, 430; Matter of State Farm Mut. Auto. Ins. Co. v Campbell, 44 AD3d 1059; Matter of Eveready Ins. Co. v Mack, 15 AD3d 400, 400). Here, while Nationwide's disclaimer letter and evidentiary proof that its insured failed to attend an examination under oath were sufficient to raise an issue of fact warranting a hearing, these submissions were insufficient to establish the validity of the disclaimer as a matter of law (see Matter of Mercury Ins. Group. v Ocana, 46 AD3d 562, 563; Matter of Allstate Ins. Co. v Anderson, 303 AD2d 496, 497; Matter of New York Cent. Mut. Ins. Co. v Davalos, 39 AD3d 654, 656; Matter of Lumbermens Mut. Cas. Co. v Beliard, 256 AD2d 579, 580). In this regard, we note that Nationwide's letters demanding that its insured appear at an examination under oath made reference to his purported status as a claimant for no-fault benefits, and warned him that the failure to appear could result in the denial of such benefits, despite the fact that there is no indication that the insured was injured in the accident and sought no-fault benefits. Under these circumstances, the Supreme Court should not have determined that Nationwide validly disclaimed coverage without conducting a hearing. Accordingly, we remit this matter to the Supreme Court, Westchester County, for an evidentiary hearing to determine the issue of whether Nationwide validly disclaimed coverage, and thereafter, for a new determination of that branch of the petition which was to permanently stay arbitration
RLI Insurance Company v. Smiedala


Appeal from a judgment (denominated order) of the Supreme Court, Niagara County (Frank Caruso, J.), entered March 25, 2009 in a declaratory judgment action. The judgment, inter alia, granted the motion of defendants Michael J. Hale and Regional Integrated Logistics, Inc. for summary judgment and declared that plaintiff is obligated to defend and indemnify them in the underlying action.


SCHINDEL, FARMAN, LIPSIUS, GARDNER & RABINOVICH LLP, NEW YORK CITY (DAVID BENHAIM OF COUNSEL), FOR PLAINTIFF-APPELLANT.
SLIWA & LANE, BUFFALO (KEVIN A. LANE OF COUNSEL), FOR DEFENDANTS-RESPONDENTS. It is hereby ORDERED that the judgment so appealed from is modified on the law by denying the motion seeking summary judgment in part, vacating the declaration in part and granting judgment in favor of plaintiff as follows:


It is ADJUDGED and DECLARED that plaintiff is not obligated to defend or indemnify defendant Michael J. Hale in the underlying action and as modified the judgment is affirmed without costs.
Memorandum: Plaintiff commenced this action seeking judgment declaring that it is not obligated to defend or indemnify defendants Michael J. Hale and Regional Integrated Logistics, Inc. (Regional) in the underlying personal injury action and related third-party action under the commercial automobile insurance policy issued by plaintiff to Regional. Defendant Leslie Smiedala, the plaintiff in the underlying action, seeks damages for injuries he allegedly sustained when the vehicle in which he was a passenger collided with a vehicle driven by Hale, which he had leased from defendants-third-party plaintiffs Audi Financial Services and VW Leasing, Ltd. (Audi/VW). Hale, an employee of Regional, was driving to the bank at the time of the accident in order to make a deposit for Regional. Audi/VW commenced a third-party action against Regional seeking contribution and/or indemnification for any liability arising from Hale's negligence under the doctrine of respondeat superior.
Supreme Court denied the initial motion of Hale and Regional seeking summary judgment declaring that plaintiff must defend and indemnify them under the policy, but thereafter granted their motion for leave to reargue and, upon granting the motion for reargument, granted the initial motion and issued the declaration sought by Hale and Regional. We conclude that the court properly granted that part of the initial motion seeking summary judgment declaring that plaintiff must defend and indemnify Regional in the underlying action. The "Notice of Occurrence/Claim" submitted to plaintiff on March 29, 2007 constituted notice of the occurrence on behalf of both Hale and Regional, and plaintiff failed to provide a legitimate excuse for its 95-day delay in disclaiming liability or denying coverage (see First Fin. Ins. Co. v Jetco Contr. Corp., 1 NY3d 64, 68-69). That unexcused delay is unreasonable as a matter of law, and thus plaintiff "may not disclaim liability or deny coverage in this case" with respect to Regional, regardless of whether Regional's notice of the occurrence was timely (Hartford Ins. Co. v County of Nassau, 46 NY2d 1028, 1030, rearg denied 47 NY2d 951; see First Fin. Ins. Co., 1 NY3d at 67).
We further conclude, however, that the court erred in granting that part of the initial motion with respect to Hale. He is an insured under the policy only if he was using, with Regional's permission, an automobile owned, hired or borrowed by Regional, and it is undisputed that the automobile was not owned or hired by Regional. Considering "the plain language of the contract as it would be understood by an average or ordinary citizen" (Salimbene v Merchants Mut. Ins. Co., 217 AD2d 991, 992), we conclude that only "an unnatural or unreasonable construction" of that provision supports an interpretation that Hale's personal vehicle was borrowed by Regional and then used by Hale with Regional's permission (Maurice Goldman & Sons v Hanover Ins. Co., 80 NY2d 986, 987; see Richmond Farms Dairy, LLC v National Grange Mut. Ins. Co., 60 AD3d 1411, 1415). Thus, given that Hale is not an insured under the policy, plaintiff was not required to disclaim liability or deny coverage in a timely manner (see Matter of Worcester Ins. Co. v Bettenhauser, 95 NY2d 185, 188). We therefore modify the judgment accordingly.
Peradotto and Green, JJ., concur; Carni, J., concurs in the result in the following Memorandum: I respectfully concur in the result. I agree with the conclusion of the majority that defendant Michael J. Hale is not an insured under the insurance policy issued by plaintiff to defendant Regional Integrated Logistics, Inc. (Regional), but my reasoning differs from that of the majority. Regardless of whether Regional owned, hired, or borrowed Hale's 2000 Audi motor vehicle, there is no dispute that Hale's vehicle was a "private passenger type auto" within the meaning of the "Who is An Insured" section of the policy. The definition of an insured under Regional's policy is contained in the "Coverage" section of the policy, and the "Exclusions" from coverage are contained in an entirely distinct section of the policy. The plain language of the coverage section of the policy provides that "[t]he owner or anyone else from whom you hire or borrow a covered private passenger type auto' " is not an insured. Inasmuch as Hale was operating a "private passenger type auto," he was not an insured under the coverage section of the policy, and there is no coverage. Because there is no coverage, Regional had "no obligation to disclaim or deny" coverage (Zappone v Home Ins. Co., 55 NY2d 131, 139).
Scudder, P.J., and Gorski, J., dissent in part and vote to affirm in the following Memorandum: We respectfully dissent in part. In our view, this is not a case in which the policy "covers neither the person nor the vehicle involved in [the] automobile accident" (Zappone v Home Ins. Co., 55 NY2d 131, 139). At the time of the accident, defendant Michael J. Hale was using his personal vehicle to conduct business on behalf of defendant Regional Integrated Logistics, Inc. (Regional). The commercial automobile insurance policy at issue provides coverage for any automobile, regardless of ownership, subject to certain specified exceptions. In light of the broad and inclusive language of the policy, we disagree with the conclusion of the majority that a determination that Hale was borrowing a Regional vehicle at the relevant time is "an unnatural or unreasonable construction" of the policy (Maurice Goldman & Sons v Hanover Ins. Co., 80 NY2d 986, 987). We therefore conclude that, but for the application of specified exceptions to coverage, Hale's claim falls within the policy's coverage provisions, and Regional was required to provide a timely denial of coverage based upon those specified exceptions (see Matter of Worcester Ins. Co. v Bettenhauser, 95 NY2d 185, 190; Penn-America Group v Zoobar, Inc., 305 AD2d 1116, 1117-1118, lv denied 100 NY2d 511). Inasmuch as we agree with the majority that plaintiff failed to provide a legitimate excuse for its untimely disclaimer of liability or denial of coverage (see First Fin. Ins. Co. v Jetco Contr. Corp., 1 NY3d 64, 68-69; Hartford Ins. Co. v County of Nassau, 46 NY2d 1028, 1030, rearg denied 47 NY2d 951), we would affirm the judgment in its entirety.
Buntin v. Rene


Elliot Ifraimoff & Associates, P.C. (Arnold E. DiJoseph, P.C.,
New York, N.Y. [Cory E. Skolnick-Haber], of counsel), for
appellant.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York,
N.Y. (Stacy R. Seldin of counsel), for
respondent Luckson Rene.
Picciano & Scahill, P.C., Westbury, N.Y. (Francis J. Scahill
and Gilbert J. Hardy of counsel), for
respondents K. Vasiliades and Helen
Sierra.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff appeals, as limited by her brief, from so much of an order of the Supreme Court, Queens County (Agate, J.), entered February 3, 2009, as, upon renewal, adhered to an original determination in an order entered July 24, 2008, granting the respective motions of the defendant Luckson Rene, and the defendants K. Vasiliades and Helen Sierra, which were 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 insofar as appealed from, with one bill of costs payable to the defendants appearing separately and filing separate briefs.
The Supreme Court, upon renewal, properly adhered to its original determination granting the respective motions of the defendant Luckson Rene, and the defendants K. Vasiliades and Helen Sierra, which were 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). The medical report of Dr. Hamid I. Lalani submitted in support of the plaintiff's motion for leave to renew, which contained the plaintiff's range of motion findings shortly after the subject accident, failed to raise a triable issue of fact (see Zuckerman v City of New York, 49 NY2d 557). The Supreme Court correctly determined that the report was not affirmed, and certification did not cure this defect (see CPLR 2106; see also Washington v Mendoza, 57 AD3d 972; Matter of Bronstein-Becher v Becher, 25 AD3d 796, 797). Dr. Lalani's other reports, as well as the reports of STZ Chiropractic, P.C., and Ming Hua Acupuncture, P.C., submitted on the motion for leave to renew, also were unaffirmed.
Reitz v. Seagate Trucking, Inc.


DeSena & Sweeney, LLP, Hauppauge, N.Y. (Shawn P.
O'Shaughnessy of counsel), for defendants/counterclaim plaintiffs-
appellants.
Schwartzapfel Truhowsky Marcus, P.C. (Alexander J. Wulwick,
New York, N.Y., of counsel), for
plaintiff/counterclaim defendant-respondent
and plaintiff-respondent.
Richard T. Lau & Associates, Jericho, N.Y. (Keith E. Ford of
counsel), for plaintiff/counterclaim
defendant-respondent on the
counterclaim.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendants/counterclaim plaintiffs appeal (1), as limited by their brief, from so much of an order of the Supreme Court, Suffolk County (Tanenbaum, J.), dated August 4, 2008, as granted the plaintiffs' motion for summary judgment on the issue of liability and granted the plaintiff/counterclaim defendant's motion for summary judgment dismissing the counterclaim, and (2) from an order of the same court dated December 4, 2008, which denied their cross motion for summary judgment dismissing the complaint insofar as asserted by the plaintiff Lois Reitz on the ground that she did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order dated August 4, 2008, is reversed insofar as appealed from, on the law, without costs or disbursements, the plaintiffs' motion for summary judgment on the issue of liability and the plaintiff/counterclaim defendant's motion for summary judgment dismissing the counterclaim are denied; and it is further,
ORDERED that the order dated December 4, 2008, is affirmed, without costs or disbursements.
On the morning of August 27, 2006, the plaintiff Lois Reitz was a passenger in a vehicle operated by the plaintiff/counterclaim defendant, William Reitz, when it was struck from behind by a vehicle owned by the defendant Seagate Trucking, Inc., and operated by the defendant Izzet Cebeci.
"A rear-end collision with a stopped or stopping vehicle creates a prima facie case of negligence against the operator of the rear vehicle, thereby requiring that operator to rebut the inference of negligence by providing a nonnegligent explanation for the collision" (Klopchin v Masri, 45 AD3d 737, 737; see Harrington v Kern, 52 AD3d 473; Rainford v Sung S. Han, 18 AD3d 638). Here, in support of their motion for summary judgment on the issue of liability, the plaintiffs established their prima facie entitlement to judgment as a matter of law on the issue of liablity against the defendants by submitting evidence showing that their vehicle had been stopped for approximately one minute when the defendants' vehicle rear-ended their vehicle. In opposition, however, the defendants rebutted the inference of negligence by adducing evidence that the plaintiffs' vehicle suddenly changed lanes directly in front of their vehicle, forcing the defendant Cebeci to stop suddenly (see Delayhaye v Caledonia Limo & Car Serv., Inc., 49 AD3d 588; Morrison v Montzoutsos, 40 AD3d 717; Brodie v Global Asset Recovery, Inc., 12 AD3d 390). Accordingly, the Supreme Court should have denied the plaintiffs' motion for summary judgment on the issue of liability and the plaintiff/counterclaim defendant's motion for summary judgment dismissing the counterclaim.
In support of their cross motion for summary judgment dismissing the complaint insofar as asserted by the plaintiff Lois Reitz on the ground that she did not sustain a serious injury within the meaning of Insurance Law § 5102(d), the defendants failed to meet their prima facie burden of establishing that she 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). The defendants submitted, inter alia, an affirmed medical report of Dr. Edward A. Toriello, an orthopedist, who examined Lois Reitz on March 25, 2008, and found range-of-motion restrictions in her lumbosacral spine. Similarly, the affirmed medical report of Dr. Mark J. Zuckerman, the defendants' neurologist, found a restriction in Lois Reitz's lumbar spine and stated that she suffers from myofascial pain syndrome as a result of the subject accident. Although both physicians opined that any restrictions were subjective and resulted from preexisting degenerative changes noted in a December 2006 magnetic resonance imaging scan and not the subject accident, they failed to explain or substantiate, with objective medical evidence, the basis for their conclusions (see Hi Oak Park-Lee v Voleriaperia, 67 AD3d 734; Moriera v Durango, 65 AD3d 1024; Busljeta v Plandome Leasing, Inc., 57 AD3d 469). Accordingly, we need not consider the sufficiency of the papers submitted by the plaintiffs in opposition to the cross motion (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853).
Rouach v. Betts


Borrell & Riso, LLP, Staten Island, N.Y. (John Riso of counsel),
for appellants.

DECISION & ORDER
In an action to recover damages for personal injuries, etc., the plaintiffs appeal from an order of the Supreme Court, Kings County (Velasquez, J.), dated March 25, 2009, which granted the defendants' motion for summary judgment dismissing the complaint on the ground that the plaintiff Gina Diana Rouach did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed, on the law, with costs, and the defendants' motion for summary judgment dismissing the complaint is denied.
Contrary to the Supreme Court's determination, the defendants failed to meet their prima facie burden of showing that the plaintiff Gina Diana Rouach (hereinafter the injured 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). The defendants' motion papers failed to adequately address the injured plaintiff's claim, clearly alleged in her bill of particulars, that she sustained a medically-determined injury or impairment of a nonpermanent nature which prevented her from performing substantially all of the material acts which constituted her usual and customary daily activities for not less than 90 days during the 180 days immediately following the accident (hereinafter the 90/180 category) (see Encarnacion v Smith, 70 AD3d 628; Alvarez v Dematas, 65 AD3d 598; Smith v Quicci, 62 AD3d 858; Alexandre v Dweck, 44 AD3d 597; Sayers v Hot, 23 AD3d 453, 454). The injured plaintiff was not examined by the defendants' examining neurologist and orthopedist until more than one year after the accident, and both failed to relate their findings to the 90/180 category of serious injury for the period of time immediately following the accident. The defendants' submissions failed to show that the injured plaintiff, during this time, was able to perform substantially all of the material acts which constituted her usual and customary daily activities for not less than 90 days during the 180 days immediately following the accident.
Since the defendants failed to meet their prima facie burden, it is unnecessary to consider whether the papers submitted by the plaintiffs in opposition to the defendants' motion were sufficient to raise a triable issue of fact (see Encarnacion v Smith, 70 AD3d 628; Alvarez v Dematas, 65 AD3d 598; Smith v Quicci, 62 AD3d 858; Alexandre v Dweck, 44 AD3d 597; Sayers v Hot, 23 AD3d 453).
Semonian v. Seidenberg


Appeal from an order of the Supreme Court, Erie County (James H. Dillon, J.), entered June 1, 2009 in a personal injury action. The order denied the motion of defendants for summary judgment.

CHELUS, HERDZIK, SPEYER & MONTE, P.C., BUFFALO (KEVIN E. LOFTUS OF COUNSEL), FOR DEFENDANTS-APPELLANTS.
HOGAN WILLIG, LOCKPORT (NORTON T. LOWE OF COUNSEL), FOR PLAINTIFFS-RESPONDENTS.

It is hereby ORDERED that the order so appealed from is unanimously reversed on the law without costs, the motion is granted and the complaint is dismissed.
Memorandum: Plaintiffs commenced this action seeking damages for injuries sustained by Richard D. Semonian (plaintiff) when the vehicle that he was driving was struck by a vehicle operated by defendant Janice O. Seidenberg and owned by defendant The Buffalo News, Inc. We agree with defendants that Supreme Court erred in denying their motion for summary judgment dismissing the complaint. We conclude that defendants met their initial burden of establishing that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102 (d) in the instant accident but instead suffers from a "diffuse degenerative disease of his cervical spine which is causing cervical stenosis." Plaintiffs failed to raise an issue of fact to defeat the motion, particularly in view of their failure to offer a reasonable explanation for the 16-month gap in plaintiff's treatment (see Pommells v Perez, 4 NY3d 566, 572; McConnell v Freeman, 52 AD3d 1190; McCarthy v Bellamy, 39 AD3d 1166). We also note that plaintiff admitted that, during the 16-month period in question, he continued to work on a full-time basis, moonlighted as a security guard, and exercised regularly by lifting weights and jogging. We thus conclude under the circumstances of this case that the court erred in denying defendants' motion.
State Farm Mutual Auto. Ins. Co. v. Taveras

Sweetbaum & Sweetbaum, Lake Success (Marshall D.
Sweetbaum of counsel), for appellants.
Richard T. Lau & Associates, Jericho (Joseph G. Gallo of
counsel), for State Farm Mutual Automobile Insurance
Company, respondent.
Order, Supreme Court, Bronx County (Edgar G. Walker, J.), entered on or about November 9, 2009, which granted petitioner insurer's application to permanently stay an uninsured motorist arbitration, unanimously affirmed, without costs. Appeal from short-form order, entered on or about September 14, 2009, unanimously dismissed, without costs, as subsumed in the appeal from the above order.
Additional respondents, the owner and insurer of the offending vehicle, assert that the vehicle was uninsured at the time of the accident because it was being driven by an unknown thief. No basis exists to disturb the court's finding, after a framed-issue hearing, that the evidence of such theft and nonpermissive use was insufficient to overcome the presumption of permissive use (see Murdza v Zimmerman, 99 NY2d 375, 380 [2003] ["substantial" evidence needed to overcome presumption of permissive use]; Thoreson v Penthouse Intl., 80 NY2d 490, 495 [1992] [fact-finding court's decision should not be disturbed on appeal unless it is "obvious" that its conclusions could not be reached under any fair interpretation of the evidence, especially where findings of fact largely rest on witness credibility]). In so finding, the hearing court properly took into account the owner's failure to adequately explain his substantial delay in calling the police to report the alleged theft, which call immediately followed an alleged assault on the owner and his friends by a mob of angry people (see Minaya v Horner, 279 AD2d 333 [2001]). There being no dispute that the burden of proof was initially on additional respondents to prove nonpermissive use, it does not avail them that the hearing court also rejected as incredible the testimony of one of the victims, called by petitioner, that he had seen the owner sitting in the passenger side of the car in the seconds before the car jumped the curb and knocked him down.
Forsythe v Otsego Mutual Fire Insurance Company


Tell, Cheser & Breitbart, Garden City (Kenneth R. Feit of
counsel), for appellant.
Patton, Eakins, Lipsett, Martin & Savage, New York (John G.
Lipsett of counsel), for respondents.
Order, Supreme Court, New York County (Jane S. Solomon, J.), entered September 9, 2009, which denied defendant's motion for summary judgment dismissing the complaint and for leave to amend its answer to assert the defense of fraud, unanimously modified, on the law, to grant so much of the motion as sought leave to amend, and otherwise affirmed, without costs.
Although defendant did not move for leave to amend until approximately two years after it answered the complaint, plaintiffs do not show, or even allege, prejudice or surprise as a result of the delay (see CPLR 3025[b]; Arellano v HSBC Bank USA, 67 AD3d 554 [2009]).
However, defendant failed to demonstrate as a matter of law that plaintiffs' proof of loss was fraudulent (see Saks & Co. v Continental Ins. Co., 23 NY2d 161, 164-165 [1968]). Plaintiffs' explanation for their overvaluation of the loss, that the house was uninhabitable and all their furniture destroyed, raises an issue of fact whether they intended to defraud defendant (see Latha Rest. Corp. v Tower Ins. Co., 38 AD3d 321 [2007], lv denied 9 NY3d 803 [2007], cert denied 552 US 1010 [2007]; Kyong Nam Chang v General Acc. Ins. Co. of Am., 193 AD2d 521 [1993]).
Severino v Brookset Housing Development Fund Corp.


Fiedelman & McGaw, Jericho (Ross P. Masler of counsel), for
appellant/appellant.
Andrew H. Rosenbaum, New York, for Carlos Severino,
respondent.
Weiner Millo & Morgan, LLC, New York (Alissa A. Mendys
of counsel), for Brookset Housing Development Fund Corp.,
respondent/respondent.
Order, Supreme Court, Bronx County (Howard R. Silver, J.), entered November 17, 2008, which, in an action for personal injuries by a construction worker against the construction site's owners and general contractors, and a third-party action against plaintiff's employer (the employer), denied the motion of the employer's workers' compensation and liability insurer (the insurer) to intervene in the third-party action, unanimously affirmed, without costs.
The insurer argues that its "employer's liability policy" covers only the common-law, not the contractual, indemnification claims asserted against the employer in the third-party action; that coverage under its policy is conditioned upon the existence of a "grave injury" within the meaning of the Workers' Compensation Law; that the common-law claims against the employer in the third-party action cannot be maintained unless third-party plaintiffs show that plaintiff sustained a grave injury; and that the employer's counsel, who is being paid by the insurer, "is potentially faced with an ethical conflict if asked by [the insurer] to move to have the common law claims dismissed, because in doing so counsel risks the loss of coverage afforded by the employer's liability policy," and thus "may properly refuse to move to dismiss the third-party action based upon lack of grave injury.'" Notably, in its verified answer, the employer asserts as its tenth affirmative defense that the third-party action against it is barred by the Workers' Compensation Law.
The insurer's motion to intervene should be denied because the insurer does no more than posit the possibility that notwithstanding the tenth affirmative defense, the employer's counsel might not seek dismissal of the common-law indemnification claims on the ground that plaintiff did not sustain a grave injury. Such speculation is not enough to show that the insurer's rights are not being adequately represented (see generally Osman v Sternberg, 168 AD2d 490, 490 [1990]). To the extent the posited possibility is based on the theory that counsel would no longer be paid by the insurer to represent the employer on the contractual claims once the common-law claims were dismissed, absent an additional reason, we cannot accept that counsel might unethically act in its own interests. We also note that the insurer asserted in its motion that it believed the contractual claims were covered by general liability insurance the employer obtained from another insurer. Nonetheless, the insurer provides no reason to suppose that in the event the common-law claims were dismissed, counsel would not continue to represent the employer and be paid by the other insurer (or the employer in the event there was no other insurance). To the extent the posited possibility is based on the theory that counsel might conclude that making the motion was not in the employer's interest because the employer would be harmed if the common-law claims against it were dismissed, the speculative character of that theory also is apparent from the insurer's own moving papers indicating that other coverage is available to the employer. Finally, we note that the interests of the insured cannot be compromised unless a meritorious motion to dismiss could be brought on that ground. The insurer, however, does not attempt to show that such a meritorious motion could be made.
THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: MARCH 30, 2010
CLERK
SANTILLO v THOMPSON


CELLINO & BARNES, P.C., BUFFALO (MICHAEL J. COOPER OF COUNSEL), FOR
PLAINTIFF-APPELLANT.
HAGELIN KENT LLC, BUFFALO (LAUREN YANNUZZI OF COUNSEL), FOR
DEFENDANT-RESPONDENT.

Appeal from an order of the Supreme Court, Erie County (Paula L. Feroleto, J.), entered June 10, 2009 in a personal injury action. The order denied the motion of plaintiff to set aside the verdict.  It is hereby ORDERED that the order so appealed from is unanimously affirmed without costs.

Memorandum: Plaintiff commenced this action seeking damages for injuries she sustained when the vehicle she was driving collided with a vehicle driven by defendant as he exited a gas station. Following a bifurcated trial on liability, the jury found that defendant was negligent but that his negligence was not a substantial factor in causing the accident. Plaintiff thereafter moved to set aside the verdict on the grounds that the verdict was inconsistent and against the weight of the evidence. We conclude that Supreme Court properly denied the motion.

At the outset, defendant contends that we are precluded from reviewing the merits of the motion because petitioner waived her right to make such a motion by failing to do so in a timely manner. We reject that contention. The court exercised its discretion in determining the motion on the merits (see generally Ehrman v Ehrman, 67 AD3d 955, 956), and there is no indication in the record that the return date of the motion was adversely affected. We agree with defendant, however, that by failing to object to the alleged inconsistency of the verdict before the jury was discharged, plaintiff failed to preserve for our review her contention that the court erred in denying her motion on that ground (see Haller v Gacioch, 68 AD3d 1759; Bleiberg v City of New York, 43 AD3d 969, 971; Skowronski v Mordino, 4 AD3d 782).

We reject the further contention of plaintiff that the court erred in denying her motion to set aside the verdict as against the weight of the evidence. A verdict is not against the weight of the evidence merely because the jury finds a defendant negligent but determines that his or her negligence is not a proximate cause of the accident. “The issue of whether a defendant’s negligence was a proximate cause of an accident is separate and distinct from the negligence determination” (Ohdan v City of New York, 268 AD2d 86, 89, appeal dismissed 95 NY2d 885, lv denied 95 NY2d 769; see Giraldo v Rossberg, 297 AD2d 534). A verdict finding that a defendant was negligent but that such negligence was not a proximate cause of the accident is “ ‘against the weight of the evidence only when [those] issues are so inextricably interwoven as to make it logically impossible to find negligence without also finding proximate cause’ ” (Jones v Radeker, 32 AD3d 494, 495; see Szymanski v Holenstein, 15 AD3d 941; Skowronski, 4 AD3d 782), and that is not the case here. We conclude that the jury could reasonably find that defendant was negligent based on his failure to observe plaintiff behind another vehicle when he exited the gas station but that his negligence was not the proximate cause of the accident because plaintiff was operating her vehicle in the median of the roadway in violation of Vehicle and Traffic Law § 1126 (a) and § 1128 (d). Thus, “the evidence [did not] so preponderate[] in favor of the [plaintiff] that [the verdict] could not have been reached on any fair interpretation of the evidence”(Lolik v Big V Supermarkets, 86 NY2d 744, 746 [internal quotation marks omitted]; see Dunnaville v Metropolitan Tr. Auth. of City of N.Y., 68 AD3d 1047; Rubino v Scherrer, 68 AD3d 1090, 1091-1092).

Finally, plaintiff failed to preserve for our review her contention that the court erred in allowing the police investigator who responded to the accident scene to testify with respect to the position of the vehicles and the location of the debris in the road. Plaintiff did not object to that testimony at trial and raised her contention for the first time in her reply to defendant’s opposing papers (see Schissler v Athens Assoc., 19 AD3d 979).

Wilinski v 334 East 92nd Housing Development Fund Corp.


Gallo Vitucci & Klar, New York (Kenneth J. Kutner of
counsel), for appellants.
Law Office of Souren A. Israelyan, New York (Souren A.
Israelyan of counsel), for respondents.
Order, Supreme Court, New York County (Debra A. James, J.), entered March 23, 2009, which granted plaintiffs' motion for summary judgment on the issue of liability under Labor Law § 240(1), and denied defendants' cross motion for summary judgment dismissing the complaint, unanimously modified, on the law, to deny plaintiffs' motion and to grant defendants' motion to the extent of dismissing the section 240(1) claim, and otherwise affirmed, without costs.
Plaintiff Antoni Wilinski, while engaged in the demolition of a wall, was struck in the head by two large pipes that had been standing unsecured following the removal of the floor and ceiling above and toppled over when they were hit by debris from another wall undergoing demolition. The collapse of the pipes, like the collapse of a wall in Misseritti v Mark IV Constr. Co. (86 NY2d 487 [1995]), is not the "type of elevation-related accident that section 240(1) is intended to guard against" (id. at 491). "Rather, the accident that resulted in [plaintiff's] . . . injuries is the type of peril a construction worker usually encounters on the job site" (id.). Since both the pipes and plaintiff "were at the same level at the time of the collapse the incident was not sufficiently attributable to elevation differentials to warrant imposition of liability pursuant to Labor Law § 240(1)" (Brink v Yeshiva Univ., 259 AD2d 265, 265 [1999]).
With respect to plaintiffs' Labor Law § 241(6) claim, however, defendants' argument that Industrial Code (12 NYCRR) §§ 23-3.3(b)(3) and (c) are inapplicable is unavailing. Defendants contend that 12 NYCRR 23-3.3(b)(3), which provides that parts of buildings "shall not be left unguarded in such condition that such parts may fall, collapse or be weakened by wind pressure or vibration," is inapplicable because there is no evidence that wind pressure or vibration caused the pipes to topple. A fair reading of the section, however, leads to the conclusion that the phrase "by wind pressure or vibration," does not attach to the words "fall" or "collapse," but only to the immediately preceding words, "be weakened." Thus, the toppling of the pipes need not be shown to have been caused by wind pressure or vibration in order for liability to arise under the section.
12 NYCRR 23-3.3(c) provides that "[d]uring hand demolition operations, continuing inspections shall be made by designated persons . . . to detect any hazards . . . resulting from weakened or deteriorated floors or walls or from loosened material," and mandates protection against such hazards "by shoring, bracing or other effective means." Defendants contend that this provision is inapplicable because plaintiff's accident was the result not of any "weakened or deteriorated floors or walls or from loosened material," but of the performance of the demolition work itself. However, defendants, as summary judgment movants, failed to meet their burden of demonstrating the absence of questions of fact as to whether they complied with the standard of care required under the section, including the designation of persons to conduct the mandated inspections, and, as well, as to whether the pipes did not constitute "loosened material" (see Cardenas v One State St., LLC, 68 AD3d 436 [2009]).
Finally, we observe that the motion court did not err in considering defendants' untimely cross motion to the extent that it addressed the Labor Law causes of action that were the subject
of plaintiffs' timely motion (see Filannino v Triborough Bridge & Tunnel Auth., 34 AD3d 280, 281 [2006], appeal dismissed 9 NY3d 862 [2007]).
THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: MARCH 23, 2010
SYRACUSE UNIVERSITY v GAMES 2002, LLC

Appeal from an order of the Supreme Court, Onondaga County (James P. Murphy, J.), entered September 5, 2008 in an action for contractual and common-law indemnification. The order, insofar as appealed from, denied that part of the motion of plaintiff for summary judgment on the first cause of action, for contractual indemnification, and granted the cross motion of defendant to the extent that it sought leave to amend its answer.


HISCOCK & BARCLAY, LLP, ROCHESTER (ROBERT A. BARRER OF COUNSEL), FOR PLAINTIFF-APPELLANT.
GETNICK LIVINGSTON ATKINSON & PRIORE, LLP, UTICA (PATRICK G. RADEL OF COUNSEL), FOR DEFENDANT-RESPONDENT.

It is hereby ORDERED that the order so appealed from is affirmed without costs.
Memorandum: Supreme Court properly denied plaintiff's motion for summary judgment on the complaint, which asserts causes of action for contractual and common-law indemnification and seeks judgment in the amount of $750,000 plus interest and costs, based on plaintiff's settlement of an underlying Labor Law and common-law negligence action commenced against, inter alia, the parties herein (Aton v Syracuse Univ., 24 AD3d 1315). The plaintiff in the underlying action was an employee who fell from a tower while installing a "lighting/roof grid system" in the Carrier Dome for the 2002 Empire State Games. Plaintiff and defendant had entered into a contract pursuant to which plaintiff agreed to allow defendant to use the Carrier Dome for the opening ceremonies of the games, and the contract provided that defendant would indemnify plaintiff for any liability arising out of defendant's use of the Carrier Dome. We conclude on the record before us that plaintiff failed to establish its entitlement to either common-law or contractual indemnification. Plaintiff failed to establish as a matter of law that it was not itself negligent and that any liability on its part for the injuries sustained by the plaintiff in the underlying action, who was an employee of a subcontractor of defendant, was vicarious only, inasmuch as plaintiff failed to establish that it exercised no supervision or control over the work of the injured employee (see e.g. State of New York v Santoro Indus., Inc., 48 AD3d 1101, 1102-1103; Baillie Lbr. Co., L.P. v A.L. Burke, Inc., 43 AD3d 1290; Brickel v Buffalo Mun. Hous. Auth., 280 AD2d 985). Even assuming, arguendo, that plaintiff met its initial burden on the motion, we would conclude that plaintiff's motion is premature because discovery has not been completed, including depositions concerning the respective roles, if any, of the parties involved in the accident(see CPLR 3212 [f]; see generally JCS Controls, Inc. v Stacey, 57 AD3d 1372, 1374).
We further conclude that the court properly granted the cross motion of defendant to the extent that it sought leave to amend its answer (see generally CPLR 3025 [b]; Edenwald Contr. Co. v City of New York, 60 NY2d 957, 959). Here, the proposed amendments are not patently lacking in merit (see generally Carro v Lyons Falls Pulp & Paper, Inc., 56 AD3d 1276, 1277), and there has been no showing of prejudice to plaintiff (see generally Torvec, Inc. v CXO on the GO of Del., LLC, 38 AD3d 1175, 1176-1177).
All concur except Carni, J., who dissents and votes to reverse the order insofar as appealed from in accordance with the following Memorandum: I respectfully dissent, because in my view plaintiff established as a matter of law that it was not negligent, that it did not control the injury producing work, and that its liability to the injured employee was vicarious only. I therefore conclude that plaintiff is entitled to contractual indemnification from defendant, Games 2002, LLC (Games 2002), and would reverse the order insofar as appealed from.
In 2002 plaintiff entered into a written agreement with the Games 2002 concerning the use of the Carrier Dome and other facilities on plaintiff's campus. The agreement contained a provision providing for the "indemnification of plaintiff by the Games 2002 for any injury . . . caused by the negligent . . . act or omission of the [Games 2002] or [its] contractors, officers, servants, agents, or employees." The Games 2002 in turn entered into an agreement with National Audio, Inc. (National Audio) to install a "lighting/roof grid system" in conjunction with the event. Thomas Aton, an employee of National Audio, was injured when he fell during the erection of an aluminum tower in the Carrier Dome designed to support overhead lighting for the event. Following the issuance of our decision in Aton v Syracuse Univ. (24 AD3d 1315), in which we modified the order on appeal by granting the motion of Aton for partial summary judgment on liability on his Labor Law § 240 (1) cause of action, plaintiff settled that action and now seeks summary judgment on its cause of action against the Games 2002 for contractual indemnification under the agreement.
The majority concludes that plaintiff failed to establish that it "was not itself negligent and that any liability on its part for the injuries sustained by [Aton] . . . was vicarious only, inasmuch as plaintiff failed to establish that it exercised no supervision or control over the work of" Aton, the injured employee. I submit that the analysis of this case should be more sharply focused. Additionally, the majority fails to identify what theory of negligence or factual issue plaintiff failed to eliminate in order to establish its entitlement to summary judgment.
It is well settled that, in order to establish its entitlement to contractual indemnification, a party must establish that it was not itself negligent and that any liability on its part for the injuries sustained by a subcontractor's employee was vicarious only (see General Obligations Law § 5-322.1; State of New York v Santaro Indus., Inc., 48 AD3d 1101, 1102-1103). In attempting to establish that it was not negligent in conjunction with its request for indemnification, plaintiff in my view was required to establish that it did not control or supervise the injury producing work rather than, in a broader sense, the "work of the injured employee." In Sikorski v Springbrook Fire Dist. of Town of Elma (225 AD2d 1041), we held that "[a] vicariously liable party may obtain common-law [and contractual] indemnification from a contractor where the party did not control, direct, or supervise the injury-producing work" (emphasis added). The focus on the "injury producing work" is uniformly applied by all of the Appellate Divisions in the indemnification analysis (see Torres v LPE Land Dev. & Constr., Inc., 54 AD3d 668, 669-670 [2d Dept]; Colozzo v National Ctr. Found., Inc., 30 AD3d 251, 252 [1st Dept]; Colyer v K Mart Corp., 273 AD2d 809, 810 [4th Dept]; Doyne v Barry, Bette & Led Duke, 246 AD2d 756, 758-760 [3d Dept]).
In the underlying Labor Law and common-law negligence action arising out of Aton's fall, we wrote that "[t]he record establishes . . . that the accident occurred after [Aton] had been informed that he could climb the tower" (Aton, 24 AD3d at 1316). The record before us similarly establishes Aton had been informed that it was "okay" to climb the tower, and the person who gave Aton that information was Amir Efrati, also an employee of National Audio. The record also establishes that Efrati was the only person responsible for securing the bolts required as part of and during the tower assembly. There is no factual dispute that Efrati did not properly secure and tighten the bolts, which caused the instability of the tower and resulted in Aton's fall. While the record indicates that plaintiff's students may have been assisting National Audio employees by holding ropes in order to stabilize the tower, it also unequivocally establishes that Efrati instructed all of the rope holders to "let go of the ropes" because he made the decision that the tower was properly bolted and thus was safe for Aton to climb.
Therefore, in my view, plaintiff met its burden of demonstrating that it did not control or supervise the injury producing work, i.e., the placement and tightening of the bolts, the direction to Aton to climb the tower, and the instruction and ensuing decision to let go of the ropes. To the extent that the majority in reaching its determination relies upon the fact that plaintiff had a representative present who generally supervised students who were working at the Carrier Dome, I conclude that the majority's reliance thereon is misplaced. The Games 2002 failed to raise an issue of fact with respect to how plaintiff exercised any supervision or control over the injury producing work or - even in the broader sense - over Aton's work. Indeed, Efrati testified at his deposition that, after Aton's fall, National Audio revised its procedure with respect to the use of ropes. In my view, that subsequent remedial measure unequivocally establishes National Audio's control over the use of ropes during the tower assembly (see Hyman v Aurora Contrs., 294 AD2d 229).
Finally, I note that the majority relies on JCS Controls, Inc. v Stacey (57 AD3d 1372, 1374) for its conclusion that plaintiff's motion was premature because discovery has not been completed. That case is distinguishable, however, because it involved a motion by plaintiff to obtain discovery and a cross motion by defendant for partial summary judgment dismissing two causes of action. Here, the Games 2002 made no attempt to demonstrate that "facts essential to justify opposition may exist but cannot then be stated" (CPLR 3212 [f]; cf. Sweeney Steel Serv. Corp. v Fidelity & Deposit Co. of Md., 6 AD3d 1075, 1076). The Games 2002 did not identify any outstanding discovery demands it had served or any particular discovery device that would potentially lead to facts essential to its opposition of plaintiff's motion. Indeed, the Games 2002 itself cross-moved for summary judgment on the issue of contractual indemnification and relied upon the same record as plaintiff, which includes extensive deposition testimony from the underlying action.
I therefore would reverse the order insofar as appealed from, grant that part of plaintiff's motion for summary judgment on the first cause of action, for contractual indemnification, and deny the cross motion of the Games 2002 to the extent it sought leave to amend its answer, thereby denying the cross motion in its entirety. I further would order that judgment be entered in favor of plaintiff and against the Games 2002 in the amount of $750,000, plus interest at the rate of 9% per annum commencing August 2, 2006 and costs.

 Parraguirre v  27th St. Holding, LLC

Pollack, Pollack, Isaac & DeCicco, New York (Brian J. Isaac
of counsel), for appellant-respondent.
Wilson Elser Moskowitz Edelman & Dicker LLP, New York
(Patrick J. Lawless of counsel), for respondents-appellants.
Order, Supreme Court, Bronx County (Kenneth L. Thompson, Jr., J.), entered June 23, 2009, which, insofar as appealed from, as limited by the briefs, denied plaintiff's motion for summary judgment as to his Labor Law § 240(1) claim, granted so much of defendants' motion for summary judgment as sought dismissal of said claim and denied defendants' motion as to plaintiff's Labor Law § 200 and common-law negligence claims, unanimously modified, on the law, to deny defendants' motion to dismiss plaintiff's
§ 240(1) claim and grant plaintiff's motion for summary judgment on the § 240(1) claim; grant defendants' motion to the extent of dismissing plaintiff's Labor Law § 200 and common-law negligence claims against defendants 27th St. Holding, LLC and Principe-Danna, Inc., and otherwise affirmed, without costs.
Plaintiff, while transporting dust filters from a cement mixing plant's rooftop structure to a ground level garage where the filters were to be cleaned, fell to a lower level roof and sustained injuries. The motion court determined that plaintiff was engaged in routine maintenance, and thus not in a protected activity under Labor Law § 240(1). However, it is necessary to ascertain whether the activity "created the type of elevation-related risk that the statute was intended to address" (Swiderska v New York Univ., 10 NY3d 792-793 [2008] citing Broggy v Rockefeller Group, Inc., 8 NY3d 675, 680 [2007]). In removing the six foot long filters from an elevated structure and transporting them to ground level, plaintiff was engaging in activity that encompassed an ever present elevation-related risk that the safety devices enumerated in § 240(1) were designed to protect against. Furthermore, the filter room was clearly a "structure" for the purposes of § 240(1). The record is clear in that no safety devices of any kind were provided to plaintiff. Therefore, plaintiff should be granted summary judgment on the
§ 240(1) claim.
There is no issue of fact on the question of whether plaintiff disregarded specific instructions to use the stairs to transport the steel filters from the building rather than throw them from the plant's rooftop, because defendant Fordham Road's president never stated that he told plaintiff not to use the roof in performing the filter removal. Thus, Fordham Road is not entitled to summary judgment on plaintiff's Labor Law § 200 and common law negligence claims. Nevertheless, those claims should have been dismissed as against property owners 27th St. Holding, LLC and Principe-Danna, Inc., since they demonstrated that they had no authority to control the activity bringing about the injury or actual or constructive notice of the allegedly unsafe condition that caused the accident (see Gordon v American Museum of Natural History, 67 NY2d 836 [1986]; Mitchell v New York Univ., 12 AD3d 200 [2004]).
Finally, the court properly determined that the record does not demonstrate, as a matter of law, that plaintiff was Fordham Road's special employee so as to bar his claims under the Workers' Compensation Law (see Thompson v Grumman Aerospace Corp., 78 NY2d 553, 557 [1991]).
THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
Pyramid Brokerage Company, Inc. v. Zurich American Insurance Company


Appeal and cross appeal from an order of the Supreme Court, Onondaga County (Brian F. DeJoseph, J.), entered February 18, 2009. The order, among other things, granted in part defendants' cross motion for summary judgment in action

HANCOCK & ESTABROOK, LLP, SYRACUSE (ALAN J. PIERCE OF COUNSEL), FOR PLAINTIFF-APPELLANT-RESPONDENT.
TREVETT CRISTO SALZER & ANDOLINA P.C., ROCHESTER (VALERIE L. BARBIC OF COUNSEL), FOR DEFENDANTS-RESPONDENTS-APPELLANTS.


It is hereby ORDERED that the order so appealed from is unanimously modified on the law by denying that part of the cross motion seeking summary judgment dismissing the fourth cause of action in action No. 2 and reinstating that cause of action and as modified the order is affirmed without costs.
Memorandum: Pyramid Brokerage Company, Inc., the plaintiff in both actions, commenced action No. 1 seeking a declaration that defendant Zurich American Insurance Company (Zurich) was obligated to defend and indemnify it in the underlying Labor Law action (White v General Motors Corp., 38 AD3d 1193), which was commenced by an employee of Woodcock & Armani Mechanical Contractors, formerly known as Armani Mechanical and Woodcock & Associates, Inc. (Woodcock), a defendant in action No. 2. Plaintiff thereafter commenced action No. 2 against defendant Comfort Systems USA, Inc. (Comfort) and its related [*2]business entities, including Woodcock (collectively, defendants), asserting causes of action for, inter alia, breach of contract, negligent misrepresentation and intentional misrepresentation. While action No. 2 was pending, Supreme Court declared in action No. 1 that plaintiff was not an insured under the Zurich policy and that Zurich had no duty to defend or indemnify plaintiff in the underlying action. This appeal by plaintiff and cross appeal by defendants concerns only action No. 2.

We conclude that the court properly denied those parts of plaintiff's motion and defendants' cross motion seeking summary judgment on the breach of contract cause of action inasmuch as there is an issue of fact whether defendants orally agreed to name plaintiff as an additional insured under its general liability policy. The record contains an affidavit and the deposition testimony of plaintiff's site project manager. He asserts therein that defendants' representatives informed him that Comfort and its related business entities operated as one company, with a single general liability insurance policy, and that they orally agreed to name plaintiff as an additional insured with respect to all work performed by the related entities, including Woodcock. The record also contains, however, deposition testimony of defendants' employees denying knowledge of the existence of an oral agreement as well as documentation from the project that does not reflect any requests or agreements to procure insurance naming plaintiff as an additional insured with respect to the work performed by Woodcock. We thus conclude on the record before us that there is an issue of fact with respect to the existence of an oral agreement, rendering summary judgment on the breach of contract cause of action inappropriate (see Repka v Arctic Cat, Inc., 20 AD3d 916, 918-919; see generally Zuckerman v City of New York, 49 NY2d 557, 562).

We agree with plaintiff, however, that the court erred in granting that part of the cross motion seeking summary judgment dismissing the intentional misrepresentation cause of action, and we therefore modify the order accordingly. Contrary to defendants' contention, that cause of action sounds in fraud (see New York Univ. v Continental Ins. Co., 87 NY2d 308, 318) and, accordingly, is governed by the six-year statute of limitations set forth in CPLR 213 (8) (see Old Republic Ins. Co. v Hansa World Cargo Serv., Inc., 51 F Supp 2d 457, 470; see also Fandy Corp. v Lung-Fong Chen, 262 AD2d 352). Here, plaintiff learned of defendants' alleged misrepresentation no earlier than January 2003, when Zurich disclaimed coverage on the ground that plaintiff was not named as an additional insured under the policy. Thus, action No. 2, which was commenced in September 2005, is not barred by the statute of limitations. We further note that plaintiff does not contend in its brief that the court erred in granting that part of defendants' cross motion seeking summary judgment dismissing the cause of action for negligent misrepresentation, and we therefore deem abandoned any issues with respect thereto (see Ciesinski v Town of Aurora, 202 AD2d 984).

Finally, we reject defendants' contention that the court exceeded the scope of plaintiff's motion by concluding as a matter of law that, if an oral agreement existed, defendants breached that agreement and that plaintiff was damaged thereby. Plaintiff moved for summary judgment on the second through fourth causes of action, and sought "all damages" resulting from defendants' failure to name it as an additional insured under the general liability policy. Plaintiff also submitted the affidavit of its president setting forth the damages incurred by plaintiff. Neither in opposition to the motion nor in support of their cross motion did defendants address the alleged breach of contract in the event that an oral agreement was made, and they also did not address the specified damages. We thus conclude that the court properly determined that there were no remaining issues of fact in the event that there was an oral agreement (see CPLR 3212 [e]; see also Levey v Saphier, 74 AD2d 918, 919).

American Transit Insurance Company v. Brown


Submitted by Marjorie E. Bornes, for appellant.
Submitted by Scott Star, for respondent.

On review of submissions pursuant to section 500.11 of the Rules, order reversed, with costs, defendant Brown's motion for summary judgment denied, plaintiff's motion for summary judgment granted and judgment granted declaring that plaintiff's disclaimer of coverage was proper, that it had no obligation to defend or indemnify its insured in the subject underlying action and that it is not responsible for payment of any portion of the judgment rendered therein. Defendant Brown failed to provide a valid excuse for his failure to use reasonable diligence in providing plaintiff insurer with notice of the underlying personal injury action. Chief Judge Lippman and Judges Ciparick, Graffeo, Read, Smith, Pigott and Jones concur.

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