Dear Coverage Pointers Subscribers:

 

"I got a situation ."

 

I ran into a friend of mine on Thursday evening and she wondered whether I still enjoyed coming to work every day.  "Don't you get tired of doing the same thing over and over again?" she asked.

 

You know, I've been at it for better than three decades but there is still nothing (during business hours, anyway) more fun and more rewarding than answering my phone and hearing a familiar (or unfamiliar) voice with those four magic words, "I got a situation."

 

And I laugh aloud, because almost every call starts that way. I tell that to the caller, and after the laughter dies down, we can often map out a plan to move the matter forward towards resolution.

 

It makes no difference whether the call is from an insurance claims professional with whom I've been working for many, many years or someone just hired and struggling for some guidance or a brother or sister lawyer from somewhere in the United States or Europe, or a former student of my Buffalo Law School Insurance Law class to whom I have promised a free call or one of the almost 2000 subscribers of this bi-weekly missive.  The phone rings, or my e-mail alert sounds, and I'm doing what I enjoy the most - and we're doing, in our office, what we enjoy the most - providing those who need it with strategic guidance, offering the kind of advice that empowers the caller to move forward and resolve a problem (so often, without having to pay a lawyer even a nickel).

 

You got a situation?  Give us a call.

 

This Week's Offering

 

This is a healthy issue, chock full of the usual juicy tidbits that keep you wanting for more.  In my column, make certain that you spend some quality time on the third case, the lengthy additional insured / indemnity agreement decision that will please even the most ardent puzzler.  Now don't rush through it, but savor every twist and turn.  It's a good "teaching" case as it steps through both contractual indemnity and additional insured issues.

 

There's also a "faulty workmanship" opinion for those who struggle with Exclusion "j(5)" and "j(6)" as so many do on a daily basis.

 

Margo reviews, in this letter, some alarming legislation introduced this week in Albany which, if passed, all but eradicates the No Fault Serious Injury threshold.

 

I'll let Audrey introduce her column:

 

I have three things that I hope you take from this edition of Coverage Pointers.  The first is that any peer review or independent medical examination should contain a solid analysis of the how the medical records, the examination conducted and the accepted practice in the industry lead to the conclusion that a medical service is not medically necessary or that it is not causally related to an accident.  Insurers should be mindful that the expert reports are being scrutinized and it would be useful to ensure that the insurer scrutinizes the report before relying upon it.

 

The second thing pertains to the burden shifting scheme on summary judgment.  If the insurer moves or cross-moves for summary judgment based upon lack of medical necessity then plaintiff MUST rebut the conclusions and findings set for in the expert report submitted on summary judgment.  It is not sufficient, as we are finding out on appeal, for the plaintiff to merely submit the medical bills and expect to survive on summary judgment.

 

The final thing pertains to arbitration submissions of evidence.  First impressions are everything.  As a party to an arbitration the worse thing you can have happen to you during an arbitration is the inability to quickly direct the arbitrator's attention to a two page document with the 45 pages you submitted in support of your position.  It is even worse when your opponent chimes in while you are searching for the document within the submission that they attached it their papers and can be found as Exhibit X.  Now your first impression to the arbitrator is that you are not only disorganized but your opponent has demonstrated that they have come a bit more prepared to this arbitration than you.  Keep in mind while arbitration is less formal than a lawsuit the parties should not treat it that way when it comes to their evidence submissions.  The message is to take some time and place some thought into your evidence submission before sending it in.  Think about it.  If you simply submit a paragraph position statement, without specifically listing the evidence with correspondence exhibit letters, and place behind it a stack of documents leaving it to the arbitrator to figure out where everything is to support your position then do you honestly think your position is going to be taken seriously.

 

Audrey

[email protected]

 

One Hundred Years Ago Today:

 

Syracuse Post Standard

Page 1

 

Downfall Due to Sweetheart

Spurred on by Girl to Get More Money

Plans Bank Robbery

$25 a Week Not Enough

Young Mechanic Made Frantic by Hope for Riches - Now He Goes to Jail for Two Years

Robert Collister, a young automobile works mechanic upon leaving today in the custody to an officer to serve a two-year sentence . for conspiracy to rob a bank blamed an unnamed sweetheart for choosing his career of crime.

 

"She was not satisfied with my salary of $25 a week," he said, and had vague ideas of getting a millionaire.  She kept urging me to get more money.  I tried.  I failed.  I became frantic."

 

"I walked the streets of Detroit searching for a chance to make a lot of money and finally decided to rob the  . bank."

 

Collister's bank robbery scheme was revealed to the police by a fellow workman whom he invited to be his accomplice.  He pleaded guilty

 

Albany Considers (Hopefully, Not Seriously) Major Changes in the No Fault Serious Injury Threshold

 

On April 19th and 20th the plaintiffs' trial lawyers came to Albany for their Annual Lobby Days in Albany coordinated by The New York State Trial Lawyers Association.  It may be coincidental (but we doubt it) that three days earlier, companion bills were introduced in the Assembly and Senate that proposed dramatic changes in the No Fault Threshold.  Our No Fault Threshold guru, Margo Lagueras, has reviewed the proposal which now rests in the respective Insurance Committee's in each house.  It's horrendous legislation and, for all intents and purposes, eliminates the No Fault threshold in 99% of auto injury cases.  Here's Margo's review:

 

Significant No Fault "Serious Injury" Changes Proposed

Legislature Considers "The Hangnail Bill"
Margo M. Lagueras

 

Last issue we reviewed Linton v. Nawaz, a Court of Appeals decision dealing with the No-Fault threshold.  This issue we report on is a proposed bill that is in the New York Legislature and that will, if passed, completely revamp the No-Fault threshold (Ins. Law 5102(d)).  Take a look at Senate Bill 7518 [Assembly Bill 10739]:

 

            Section 1.       Subsection (d) of section 5102 of the insurance law, as amended by chapter 955 of the laws of 1984, is amended to read as follows:

            (d)       "Serious injury" means a personal injury which results in death; dismemberment; significant disfigurement; a fracture; a partial or complete tear or impingement of a nerve, tendon, ligament, muscle or cartilage; injury to any part of the spinal column that results in injury to an intervertebral disc; impingement of the spinal cord, spinal canal, nerve, tendon or muscle; loss of a fetus; permanent total or partial loss of use of a body organ, member, function or system; a surgical procedure to any injured part of the body; any other permanent consequential limitation of use of a body organ [or], member, function or system; any other significant limitation of use of a body organ, member, function or system; or [a] any other medically determined injury or impairment of a permanent or non-permanent nature which prevents the injured person from performing substantially all of the material acts which constitute such person's usual and customary daily activities for not less than ninety days during the one hundred eighty days immediately following the occurrence of the injury or impairment.  a finding of serious injury under any of the above enumerated categories in this definition shall be a sufficient basis for an award for past and/or future damages.

 

            S  2.    The insurance law is amended by adding a new section 5102-a to read as follows:

 

            S  5102-A.     issues of fact and sufficiency of the evidence.  whether an injury qualifies as a serious injury pursuant to subsection (d) of section five thousand one hundred two of this article shall be a question of fact.  where evidence is offered as to (a) whether an injury qualifies as a serious injury pursuant to subsection (d) of section five thousand one hundred two of this article, or (b) the causation of such an injury, the sufficiency of such evidence shall be determined by the trier of fact.  sufficiency and weight of evidence offered, including but not limited to that pertaining to qualitative and/or quantitative assessment of injury, shall be reserved for the trier of fact.

 

            S  3,    This act shall take effect immediately and shall be applicable to: (i)  all actions and proceedings commenced on or after the effective date of this act; and (ii)  all actions and proceedings commenced prior to the effective date of this act and pending on the effective date of this act, where as of such date a trial of the issues thereon has not yet commenced and a dispositive motion had not been filed.

 

[The underlined language is new; the two words in brackets are deleted].

 

We have dubbed this the "Hangnail Bill", because, as is evident, the "flood-gates" of serious injuries would been opened to encompass virtually every injury imaginable, with the exception of a bruise or a hangnail.  Naturally, we were intrigued by what could be the motivation behind this potential sweeping change because, after all, part of the rationale behind the "threshold" was precisely to weed out minor injuries and frivolous lawsuits to reduce the burden on the courts.  And so, for your everyday bumps and bruises (and hangnails), there was no-fault.  Well, imagine our surprise to read our sponsors' justification:

 

When the legislature originally passed N.Y.S. Ins. Law S 5102, it never intended that New York's citizens would be deprived of their constitutional right to a trial by jury where they actually sustained a serious injury.  The judicial transformation and interpretation of this statute has produced overwhelming obstacles never intended by the legislature and has clogged the courts with boilerplate "threshold motions" which monopolize judicial resources.

 

We did not think that "citizens' were deprived of their constitutional right where they actually sustained a serious injury.  We were under the obviously misguided impression that all those "boilerplate threshold" motions were necessitated precisely because our citizens were filing lawsuits for every hangnail and we were attempting to expeditiously eliminate those that had no support or substantiation.  But, it goes on:

 

The proposed amendments would curtail summary dismissal of legitimate cases involving significant injuries not objectively verifiable when the law was originally enacted in 1977.  The Courts have been flooded with countless motions and extensive appellate practice on the issue of whether a serious injury was sustained, resulting in unfair and contradictory decisions and the dismissal of meritorious claims.  Injured parties in one Judicial Department may have their case dismissed as "non-serious" while in another  Judicial Department a case with similar facts is permitted to proceed.

 

Are we still talking about New York?  Are there defense-oriented Judicial Departments in New York that deprive citizens that have actually sustained a serious injury of their just-due?  So now it is the Courts' fault:

 

Moreover, the judiciary has seemingly usurped the authority of the Legislature by unilaterally imposing "requirements" for proof of a serious injury.  While the existing statute does not require proof of contemporaneous quantitative testing or require non-stop medical treatment for all victims of vehicular negligence the judiciary has created these as additional hurdles for an injured person to leap over to prove that they are seriously injured.

 

Now this does make perfect sense.  After all, why should proof of an injury, at the time of the injury, be required?  The case will probably take a couple of years to reach a court so why impose a hurdle of having to prove that an injury that exists at the time of trial was actually the result of, and existed immediately after the accident?  Evidently causation is not a concern.  However, to say that the Courts require non-stop medical treatment to prove serious injury - we all know that is not an accurate statement as, in fact, the Courts have repeatedly held that this is not necessary.

 

Clearly, the law has not kept up with medical science.  According to the Legislative Justification, now serious injuries are "readily identifiable, and the seriousness of their effects are understood far better than ever before."  Apparently, without this amendment, meritorious cases will continue to be dismissed (and six, apparently wrongfully dismissed cases are cited just to prove the point). 

 

Also clear is that the Legislature apparently needs no justification to make this Act retroactive.  Indeed, if and when signed into law, it will apply not only to cases commenced on or after the effective date, but also to pending cases that are not, as of that date, already in trial or where a dispositive motion has not been filed.  And if the dispositive motion has not yet been filed, there will not be one in the future because this Act effectively eliminates summary judgment.  Everything will be an issue of fact for the trier of fact.  Taking every case (other than, of course, those that settle) to trial will certainly unburden the judiciary and be far more economical that all those threshold motions:

 

The amendment would further call for jury determinations on factual issues surrounding the nature and extent of the claims, rather than continuing to hamstring an already overburdened judiciary with myriad "threshold" motions.  Most importantly, these amendments would promote fair, swift, consistent, rational, just and easily comprehensible results, in keeping with the intent of the original law." 

 

Mentally add "settlement" to the enumeration of advantages that will be promoted.  Certainly that is a foreseeable, and possibly intentional, result.  naivenaivenaivenaivenaivenaivenaivenaivenaivenaivenaivenaivenaivenaivenaivenaiveAlso foreseeable, at least in our politically nave mind, is a dramatic increase in the cost of insurance and of uninsured drivers, as well as a possible decrease in the number of carriers choosing to write auto insurance in New York State.

 

Seriously, would it not be simpler to just repeal no-fault? If virtually any injury will qualify as a serious injury, what is the purpose of no-fault other than perhaps to ensure at least $50,000 to the injured person, even if they should inconceivably lose at trial?  One thing is certain: if this bill is passed, we can start from square one with our decisional authority, starting with our Court of Appeals.

 

One Hundred Years Ago This Week


New York Times

April 28, 1910

 

College Debated at 14

A.A. Berle, Jr, Aids His Team in Defeating Yale

 

New Haven, Conn. - In the annual triangular freshmen debate between Yale, Harvard and Princeton, the Yale team lost here tonight to Harvard.  Harvard had the negative of the question:

 

"Resolved, That the United States should adopt a system of ship subsidies other than the present mall subsidies for the encouragement of our merchant marine."


An interesting feature of the debate was the appearance on the Harvard team of A. A. Berle, Jr., 14 years old, who appeared on the stage in short trousers.  Berle is said to be the youngest debater that ever represented Harvard.

Editor's Note:  Adolph Augustus Berle, Jr. (1895-1971), a child prodigy who became an economic theorist and policy maker, helped craft the banking and securities laws of the New Deal and shaped twentieth-century ideas about property and power. He was born in 1895 in Boston and matriculated at Harvard University at the age of 14. He took his B.A. in History, M.A. in History, a law degree, and the bar exam by the age of 21. At 24, Berle attended the Paris Peace Conference as a delegate but resigned over the terms of the treaty. In 1932, Roosevelt relied on him as one of the original members of the "Brain Trust" that forged the New Deal. In the same era, Berle served Mayor Fiorello LaGuardia as City Chamberlain. During World War II, Berle served as Assistant Secretary of State for Latin Affairs; after the war, he acted as ambassador to Brazil.

At 14, I was flipping baseball cards in Brooklyn.

Highlights of This Week's Issue:

KOHANE'S COVERAGE CORNER
Dan D. Kohane

[email protected]

  • Direct Action Against Liability Carrier Not Available Without Judgment Against Insured and Even Then, if Insurer is State Insurance Fund, Direct Action is Unavailable to Resolve Coverage Dispute
  • Faulty Workmanship Claims Excluded by "(j)5" and "(j)6"
  • Court Dissects Additional Insured and Indemnity Relationships in Well-Reasoned Decision.  For Those Who Love Complex Indemnity/Additional Insured Decisions, This One's a Winner.  Enjoy It.
  • Uninsured Motorists Arbitration Successfully Stayed Where Unrebutted Proof Offered of Coverage
  • Rescission Determination Based on Default Judgment Not Binding on Subsequent Uninsured Motorist Proceeding
  • How Does an Insurer Prove a Lack of Cooperation: Revisiting Our Old Friend Thrasher
  • General Obligations Law 5-321 Does Not Prevent Landlord from Passing Though Its Liability to Tenant's Insurer
  • Insurer Loses Right to Contribution from Other Carriers When its Obligations to Defend and Indemnify Arise from Estoppel Rather than Policy Provisions

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

[email protected]

  • Causation Is Issue of Fact Where Degenerative Changes Are Addressed by Plaintiff's Treating Physician
  • Treating Physician's Affirmation Fails to Address Radiologist's Conclusion that Condition Is Degenerative, Not Traumatic
  • A Fracture Is a Fracture Is a Fracture
  • Affirmation Citing Unsworn Findings Is Sufficient as Limitations Observed on Examination Are Competent Evidence
  • Contemporaneous and Recent Examinations Support Claim under Permanent Consequential Limitation and/or Significant Limitation of Use Categories
  • Failure to Specify Which Body Functions or Systems Were Affected by Significant Limitation of Use Results in Reversal, Vacatur of Jury Verdict, and New Trial on Damages
  • Again, Contemporaneous and Recent Examinations Support Claim under Permanent Consequential Limitation and/or Significant Limitation of Use Categories
  • Reliance on MRI Reports that Do Not Address All Injuries Alleged in Bill of Particulars Dooms Motion
  • Yet Again, Contemporaneous and Recent Examinations Support Claim under Permanent Consequential Limitation and/or Significant Limitation of Use Categories
  • Computerized Range-of-Motion Tests Are Inadmissible if Not Affirmed by Someone with Personal Knowledge
  • Unaffirmed Reports and Uncertified Records Cannot Defeat Summary Judgment
  • Extent of Limitation Must Be Established by Comparison with the Norm
  • Trips Every Two and One-Half Weeks to Florida, as Done Prior to the Accident, Contradict Claim under the 90/180-Day Category
  • Defendant Shifts the Burden and Plaintiff Fails to Rebut
  • Defendants' Medical Expert Fails to Relate His Findings to the 90/180-Day Claim in Plaintiff's Bill of Particulars
  • Soft Tissue Claims Require Both Contemporaneous and Recent Findings

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

ARBITRATION

  •  Peer Reviewer Failure to Recite Medical Records to Support Conclusion of Lack of Medical Necessity Fatal to Denial

LITIGATION

  • Judgment After Trial Reversed for Failure of Plaintiff to Rebut Showing of Lack of Medical Necessity
  • Insurer Entitled to Summary Judgment As It Demonstrated Failure to Appear For An EUO
  • Plaintiff's Submission of the Bills Alone Is Insufficient to Oppose the Insurer's Summary Judgment Motion
  • Plaintiff's Failure to Comply With Conditional Preclusion Order Fatal
  • Plaintiff's Failure to Rebut the IME Report Results in Dismissal

PEIPER ON PROPERTY (and POTPOURRI)
Steven E. Peiper

[email protected]

Of Property

  • Policy Language DOES NOT Provide Coverage for Self-Insured Assessment Charges Under the Workers' Compensation Law
  • When the Dust Settled, Only Plaintiff's Claims of Fraud for One Policy Term Survived Defendant's Extensive Motion to Dismiss
  • Policy Means What it Says; Spouse is the Default Beneficiary

And Potpourri

 

  • Contractual Provision Providing Indemnity to Owner/Landlord Too Broad Under General Obligations Law 5-321

FIJAL'S FEDERAL FOCUS
Katherine A. Fijal

[email protected]

  • When An OSHA Standard is Violated Who Defines the Unit of Prosecution?

JEN'S GEMS
Jennifer A. Ehman

[email protected]

  • No Coverage Where Insured Misrepresented its Business Activities
  • Additional Insured Denied Coverage Based on Late Notice while Insured Is Entitled to Coverage
  • Racing Exclusion Bars Collision Coverage Under an Auto Policy 

EARL'S PEARLS
Earl K. Cantwell

[email protected]

"Direct" or Consequential" Damages:

The Difference and Definition Can Be Critical


Thanks for your support.

Dan

Hurwitz & Fine, P.C. is a full-service law firm
providing legal services throughout the State of
New York

NEWSLETTER EDITOR
Dan D. Kohane

[email protected]

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

4/29/10           National Union v. State

Appellate Division, First Department
Direct Action Against Liability Carrier Not Available Without Judgment Against Insured and Even Then, if Insurer is State Insurance Fund, Direct Action is Unavailable to Resolve Coverage Dispute
National Union (on behalf of its subrogors, Chase Manhattan Bank and Morse Diesel) filed an application to file a late notice of claim against the State Insurance Fund (SIF) that appears to be the employer’s liability carrier for Red Ball Interior.  Chase and Morse could sue the SIF’s insured under common law but not its insurer with whom they had no contractual relationship.

 

Under Section 3420(a) of the Insurance Law, in order for National Union to bring a direct action against a liability insurer for a defendant, it would have to take judgment against that insured, present it to the carrier, wait 30 days and then (and only then) would it have standing to seek to enforce that judgment against the defendant’s insurer.

 

Under Insurance Law 1108(c), the SIF is exempt from the provisions of Insurance Law 3420 so even if a judgment had been obtained against the SIF insured, an action could not be commenced against the SIF under 3420(a)(1) arguments.
Editor’s Note:  The State Insurance Fund, a creature of the State, enjoys “favored nation” status under the Insurance Law and is exempt from obligation to comply with Insurance Law Section 3420.  That would mean that it need not disclaim promptly and is not subject to direct action.  Resolving disputes with the SIF presents procedural challenges that deserve legislative consideration.

 

4/27/10           Nash v. Baumblit Construction Corporation

Appellate Division, Second Department
Faulty Workmanship Claims Excluded by “(j)5” and “(j)6”

Nash hired Baumbit to renovate their home.  After moving in to the renovated home, they discovered numerous defects in the property. Nash hired a second contract (ECD) to renovate the home a second time.

 

On the coverage issues, Nash sued Baumbit and its insurer, Admiral to recover damages for breach of contract. Baumbit sought a declaration that Admiral was obligated to defend Baumbit in the action.  

Admiral for summary judgment dismissing the cross claim asserted against it by BCC, contending that the insurance policy it issued to BCC specifically excluded coverage for BCC's defective workmanship, and thus it had no duty to defend and indemnify BCC in this action.

The Second Department found that that Admiral established, prima facie, that exclusion 2(j)(5), which applies to damage caused by BCC or one of its subcontractors to BCC's work product and exclusion 2(j)(6), which applies to work that had to be restored, repaired, or replaced because it was incorrectly performed, exclude BCC's claim from coverage.
Editor’s Note:  The “workmanship exclusions” are often debated but rarely litigated in
New York.

4/22/10           Indemnity Insurance Co. v. St. Paul Mercury Insurance Co.

Appellate Division, First Department
Court
Dissects Additional Insured and Indemnity Relationships in Well-Reasoned Decision.  For Those Who Love Complex Indemnity/Additional Insured Decisions, This One’s a Winner.  Enjoy It.
Indemnity Insurance Company of North America (IICNA) sought reimbursement from St. Paul and Yonkers Contracting Company (Yonkers) for a $2 million payment IICNA made to settle a personal injury case involving an employee of Yonkers named Flood.  Yonkers and Flood were working on a restoration project on the Manhattan Bridge when Flood was hurt. Yonkers was the General Contractor on the job hired by the City of New York.  Yonkers retained a subcontractor, Romano, to paint portions of the bridge. Romano hung some cables for tarps.

 

Two days before the accident, a Yonkers superintendent asked a Romano foreman to remove a cable that was interfering with Yonkers’ work. The Romano foreman assured Yonkers it would be done, but failed to remove the cable. When Yonkers employees were thereafter working in the area, lifting a beam, the beam became stuck on the offending cable. Flood was injured as a result.

Romano had agreed to hold the City and Yonkers harmless from any claims arising from or in connection with any acts or omissions in the performance of Romano's work and procure insurance coverage naming the City and Yonkers as an additional insured. Romano secured a $1,000,000 primary policy with Royal and a $10,000,000 excess policy with IICNA.  Each policy named both the City and Yonkers.  St. Paul was Yonkers’ carrier (and that policy named the City as well.

So, the set up was this: 

  • Yonkers had purchased a policy with St. Paul, naming the City as an AI
  • Romano had secured a primary policy with Royal ($1 million) and an excess policy with IICNA ($10 million) naming the City and Yonkers as AI’s

Flood sued the City and Romano, the City tendered to St. Paul which assigned counsel.  Royal provided counsel to Romano.  St, Paul tendered to Romano under the indemnity agreement. Romano asked Royal to assume the City’s defense and Royal agreed.  

When the trial started. Royal tendered the defense of the City and Romano to IICNA since it appeared that Flood's claim would exceed Royal's policy limits. The court directed a verdict against the City, as owner, under the Labor Law. IICNA then settled the case for $3 million ($1 million of Royal’s money and $2 million of IICNA’s money). St. Paul paid nothing. St. Paul’s position was that it would not participate because its insured would be entitled to reimbursement from Romano under the indemnity agreement in the trade contract.

IICNA then brought this action to recoup the amounts it paid from St. Paul arguing that St. Paul was the City’s primary carrier and should be paying. It argued that since IICNA was an excess carrier, St. Paul should pay first. IICNA argued that since it paid its $2 million on behalf of the City, and since the City had an indemnity agreement in its favor from Yonkers, the Yonkers’ carrier, St. Paul, should was responsible under subrogation principles.  

The appellate court denied IICNA’s claims on several grounds:

  • St. Paul neither participated in the settlement negotiations nor agreed to the amount of the settlement, so it was not bound by to contribute to it;
  • IICNA, which orchestrated the underlying settlement, did not have the authority to bind St. Paul
  • St. Paul never abandoned its insured, it assumed the defense and successfully tendered to Romano and Royal
  • City was able to successfully transfer its liability to Romano since Romano was responsible for the accident.  It was required to indemnify the City from any claims "arising from or in connection with any acts or omissions"
  • Even though IICNA was an excess carrier, and St. Paul a primary carrier, St. Paul was entitled to secure reimbursement from Romano, under the indemnity agreement and therefore its carriers, including IICNA were ultimately liable to pay the judgment.
  • The subrogation argument advanced by IICNA fails (IICNA’s claim for reimbursement on behalf of the City against Yonkers) because IICNA cannot subrogate against its own insured.

Editor’s Note:  This one’s decided for the right reasons and deserves being read while drinking a cognac and smoking a good cigar.

4/20/10           Matter of American International Insurance Co. v. Giovanielli
Appellate Division, Second Department
Uninsured Motorists Arbitration Successfully Stayed Where Unrebutted Proof Offered of Coverage

Uninsured motorists (UM) arbitration was filed with American International (American).  American moved to stay arbitration within 20 days as required under New York law, because it believed that Lloyds insured the offending vehicle.  American submitted the policy accident report containing the Vehicle Identification Number (VIN) of the offending auto as well as correspondence from Lloyds admitting it insured the vehicle.

 

Lloyds did not rebut the presumption established by these documents by either showing it was not the insurer or that it had properly disclaimed. Accordingly, the court ruled that Lloyds was the insurer and had to defend and indemnify its insured and that American was not responsible for UM benefits.  The arbitration was stayed.

 

In an interesting side note, Lloyds has apparently commenced a declaratory judgment action in New Jersey, before the UM arbitration demand, seeking a ruling that it was not the insurer.  Usually, a court will permit an earlier commenced action to proceed first, when the issues are the same.  However, the court refused here: "while priority in the bringing of actions is a factor to be considered in choice of forum litigation, it is not controlling, especially when commencement of the competing actions has been reasonably close in time.”  It found that NY was the “most appropriate forum” to resolve the dispute.

 

4/20/10           In the Matter of AutoOne Ins. Co. v. Valentine

Appellate Division, Second Department
Rescission Determination Based on Default Judgment Not Binding on Subsequent Uninsured Motorist Proceeding

Rutgers issued a policy of auto coverage to Rodriguez, the offending motorist.  Rodriguez was driving in Queens and collided with a car driven by Valentine.  Rutgers denied coverage, asserting that Rodriguez had fraudulently secured its policy.  Valentine filed a demand for UM benefits with AutoOne, its own carrier and AutoOne sought a permanent stay, arguing that Rutgers provided coverage and thus the vehicle was not uninsured.

 

Rutgers had commenced a rescission action in Pennsylvania but did not name AutoOne in that action and the Pennsylvania court had ruled in Rutgers’ favor based on a default by Rodriguez. AutoOne took the position that it was not a party to the Pennsylvania action and thus was not bound by the decision.  The Court agreed that AutoOne was free to raise the issue, despite the ruling in Pennsylvania that ruled the Rutgers policy as in applicable.

 

Since the determination in Pennsylvania was based on default, it was not res judicata (binding as having been decided).  The New York courts can relitigate the question and the matter was set down for a framed-issue hearing.
Editor’s Note:  Do you want to bind a person to a decision?  Make him, her or it a party.

4/20/10           Johnson v. GEICO
Appellate Division, Second Department
How Does an Insurer Prove a Lack of Cooperation: Revisiting Our Old Friend Thrasher
The rules establishing the insurer’s difficult burden in proving lack of cooperation haven’t changed much in many years.  The standards, set out in the Court of Appeals Thrasher decision have been repeated in this publication many times before:

To deny coverage based upon a failure to cooperate, the insurer must show: "(1) that it acted diligently in seeking to bring about the insured's cooperation, (2) that the efforts employed by the carrier were reasonably calculated to obtain the insured's cooperation, and (3) that the attitude of the insured, after his cooperation was sought, was one of willful and avowed obstruction"  The heavy burden of proving lack of cooperation of the insured is placed upon the insurer (see Thrasher v United States Liab. Ins. Co., 19 NY2d 159. )

Here, a question of fact existed on the insured’s failure to cooperate.

Editor’s Note:  It is still very difficult to establish an insured’s lack of cooperation.  Print out and tape the three point Thrasher test to your computer so you remember the standard.

4/20/10           East Midwood Jewish Center v. CNA Insurance Company
Appellate Division, Second Department
General Obligations Law 5-321 Does Not Prevent Landlord from Passing Though Its Liability to Tenant’s Insurer
The Senior League leased a portion of the Jewish Center (Center) and the League was required to carry insurance naming the Center as an additional insured.  The Senior League complied and CAN was the insurer.

 

When a Senior League employee claimed to have slipped on a kitchen floor, part of the leased premises, she sued the Center.  The Center’s own carrier, GuideOne, requested that CNA assume the defense and indemnify the Center.  CNA refused and the Center, through GuideOne, settled the case for $175,000.

 

GuideOne and the Center brought an action to recover the $175,000 from CNA.

 

CNA argued, unsuccessfully, that the insurance procurement provision violated the General Obligations Law Section, 5-321, that prohibits a landlord from exempting itself from liability:

 

"Every covenant, agreement or understanding in or in connection with or collateral to any lease of real property exempting the lessor from liability for damages for injuries to person or property caused by or resulting from the negligence of the lessor, his agents, servants or employees, in the operation or maintenance of the demised premises or the real property containing the demised premises shall be deemed to be void as against public policy and wholly unenforceable."

The Second Department held, following established precedent, that this provision does not prevent a landlord from passing its liability through insurance to a tenant, under a negotiated agreement.  It is designed to make certain that the landlord is unable to avoid responsibility to the injured party for a premises defect.

4/13/10           Daimler Chrysler Insurance Co.v. Zurich Insurance Co.
Appellate Division, Second Department
Insurer Loses Right to Contribution from Other Carriers When its Obligations to Defend and Indemnify Arise from Estoppel Rather than Policy Provisions

Elston  was injured when her car was struck by a van owned by the defendant RI Suresky & Sons, Inc.,(Suresky) and driven by DeStefano (the Suresky defendants). Suresky was an auto dealership and insured under a Business Auto policy issued by Daimler Chrysler Insurance Company (DCIC) and a multiple insurance coverage policy written by
Zurich. Under the DCIC policy, "covered autos" included "only the autos you own that are enrolled in the DaimlerChrysler Services North America LLC-DRAC Program."

Elston sued the Suresky defendants claiming that she was injured by a van owned by Suresky and operated by an employee in the course of his employment with Suresky (underlying action). On August 22, 2006, DCIC answered the complaint in the underlying action on behalf of the Suresky defendants. DCIC contacted Zurich and requested that Zurich assume primary coverage. Zurich refused. DCIC did not issue a formal disclaimer or a reservation of rights.

A year later, DCIC commenced a declaratory judgment action seeking a determination that it had no duty to defend or indemnify the Suresky defendants and that Zurich had the duty. The Suresky defendants claimed that DCIC had not disclaimed coverage, so they were barred from doing so now, under Insurance Law §3420(d).  They also claimed that since DCIC had taken up the defense, they were estopped from now denying coverage.

The Second Department found that there was some proof that the vehicle was enrolled in the DaimlerChrysler Services North America LLC-DRAC Program.  DCIC claimed that to be an “enrolled” vehicle, it had to be rented, but could not identify the provision in the policy that required that status.  However, in any event, DCIC’s control of the defense from the beginning, with full knowledge of its coverage issues, led to a finding that the company was estopped from denying coverage, since the insured relied upon the assumption of defense to its detriment.
Editor’s Note:  The court also found that since DCIC failed to reserve its right to disclaim coverage, estoppel bars it from seeking contribution from another carrier.  Why would the carrier be barred from seeking contribution from another carrier that may also be on the risk?  It is because coverage is being afforded NOT because the policy requires it, but because of the insurer’s conduct upon which the insured relied.  Since DCIC’s primary coverage is based upon estoppel, rather than upon coinsurance policies or contribution principles, application of the principle of pro rata coverage is inappropriate under the circumstances of this case

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


Margo M. Lagueras

[email protected]

4/27/10           McDuffie v. Rodriguez
Appellate Division, First Department
Causation Is Issue of Fact Where Degenerative Changes Are Addressed by Plaintiff’s Treating Physician

Although the defendants sufficiently supported their claim of a lack of causation between the plaintiff’s right knee pain and the subsequent arthroscopic surgery, and the accident, attributing the condition to pre-existing degenerative osteoarthritis, in opposition the plaintiff’s treating physician related the injuries to both the accident and degenerative changes.  This was sufficient to raise a triable issue of fact and defeat summary judgment.

 

4/22/10           Cabrera v. Gilpin
Appellate Division, First Department
Treating Physician’s Affirmation Fails to Address Radiologist’s Conclusion that Condition Is Degenerative, Not Traumatic

Defendants’ orthopedist found no range-of-motion limitations in plaintiff’s cervical and lumbar spine, shoulders, knees or ankles and opined that any injuries had resolved.  Defendants’ neurologist found no objective evidence of cervical or lumbosacral radiculopathy or carpal tunnel syndrome, and their radiologist, who reviewed an MRI taken before the accident, opined that the plaintiff suffered from degenerative disc condition which was not related to trauma.

 

Plaintiff’s treating physician affirmed that he treated plaintiff before the accident and again six months later, but no evidence was proffered that was contemporaneous with the accident.  In addition, he did not address defendants’ radiologist’s report that attributed plaintiff’s condition to degenerative disc disease. 

 

The trial court’s grant of summary judgment to the defendants was affirmed, as was the denial of the plaintiff’s motion for renewal.  On this point, the Appellate Court agreed that the plaintiff did not reasonably justify her failure to present the “new facts” in her original opposition and that, in any event, her doctor’s affirmation did not “fill in all the gaps” in his prior affirmation.  Plaintiff’s motion for reargument was also denied as it was taken from a nonappealable paper.

 

4/20/10           Newman v. Datta
Appellate Division, First Department
A Fracture Is a Fracture Is a Fracture

Defendants’ expert dentist found that the plaintiff had at least two fractured teeth and he did not indicate that they were not caused by the accident.  Plaintiff’s oral surgeon opined that the fractures were caused by the accident and that the plaintiff would need extensive dental treatment as a result.  Because a “fracture” is one of the statutory categories of “serious injury”, and the defendants failed to show that the fractures were unrelated to the accident, their motion was properly denied.

 

4/20/10           Arias v. Janelle Car Service Corp.
Appellate Division, Second Department

Affirmation Citing Unsworn Findings Is Sufficient as Limitations Observed on Examination Are Competent Evidence

The trial court is reversed and the defendants’ motion, with regard to plaintiff Garcia, is denied.  In opposition to the defendants’ motion, she submitted the affirmed report of her treating physician and the affirmation of her treating orthopedist that examined her at the time of the accident and noted significant, quantified range-of-motion limitations in her cervical spine as compared with the norm and opined that they were caused by the accident.  He also performed a recent examination and found that the limitations continued.  Although parts of his affirmation referenced the unsworn findings of other doctors, his own findings, based on his examinations, are competent evidence sufficient to defeat the defendants’ motion. 

 

4/20/10           Johnson v. Kara
Appellate Division, Second Department

Contemporaneous and Recent Examinations Support Claim under Permanent Consequential Limitation and/or Significant Limitation of Use Categories

The trial court is reversed where the plaintiff proffers submissions by her treating physician, based on both contemporaneous and recent examinations that revealed significant lumbar restrictions.  Her physician also reviewed MRI reports revealing disc bulges and concluded that the plaintiff’s injuries to the lumbar spine were significant, permanent, and causally related to the accident.

 

4/20/10           Elshaarawy v. U-Haul Co. of Mississippi
Appellate Division, Second Department

Failure to Specify Which Body Functions or Systems Were Affected by Significant Limitation of Use Results in Reversal, Vacatur of Jury Verdict, and New Trial on Damages

Plaintiff was pulling a tool box from the back seat of his car when it was struck in the rear by defendant who had just come around the corner.  The impact caused the plaintiff’s right rear wheel to run over his right foot and, according to the plaintiff, he fell backwards hitting his head on the sidewalk and twisting his right knee.  He alleged injuries to his right knee, back, neck and head and, about four months later, had arthroscopic surgery to the right knee to repair a tear of the lateral meniscus and the anterior cruciate ligament.  A second surgery was performed approximately one month later.

 

Plaintiff was granted his motion for summary judgment on the issue of liability.  He then moved on the issue of serious injury to his right knee under the 90/180-day category and was also granted that motion.  At the damages trial, he submitted evidence regarding the injuries to the right knee and also to his head and his cervical and lumbar spine.  The trial court instructed the jury that it was already determined that the knee injury was caused by the accident so it had to award compensation for the knee.  The verdict was that the plaintiff sustained injury under the 90/180-day category to his neck, back and/or head, caused by the accident.  The jury also found that the plaintiff sustained a significant limitation of use of the neck, back and/or knee.  However, the jury was not asked to determine which one or more of the body functions or systems were affected by the significant limitation, but only to determine if any one of them was affected.  The award was $300,000 for past pain and suffering, $500,000 for futures, and $15,000 for lost earnings.  The awards were not allocated among the various body parts, functions of systems.

 

Defendants moved to set aside the verdict and their motion was denied.  On appeal, they contended that the trial court erred in granting the plaintiff’s motion for summary judgment under the 90/180-day category for injury to the knee.  The Appellate Court agreed.  In opposition to the plaintiff’s prima facie showing, the defendants raised a triable issue of fact as to whether the knee injuries were caused by the accident through the submissions of the affirmation of their examining orthopedist, the ambulance report, and the emergency room records, which indicated that the plaintiff had not complained of injury to the knee and there was no swelling at the time of the accident.  In addition, the plaintiff’s neurologist should not have been permitted to testify as to a report interpreting MRI films of the cervical spine by a radiologist who did not testify at trial and could not be cross-examined and where the MRI films were not in evidence.

 

Because the jury was instructed that the damages award had to include compensation for the knee which the trial court had found to be caused by the accident, the jury did not specifically find that the plaintiff suffered a significant limitation of use of the knee, nor did they specifically allocate damages for any particular body part, function or system.  As such, the judgment was reversed and a new trial on damages granted.

 

4/20/10           Dizdari v. Chhon
Appellate Division, Second Department

Again, Contemporaneous and Recent Examinations Support Claim under Permanent Consequential Limitation and/or Significant Limitation of Use Categories

The affirmation of the plaintiff’s treating physician, based on both contemporaneous and recent examinations, and his review of MRI reports showing a cervical disc bulge and lumbar disc herniations, finding that the plaintiff’s range-of-motion restrictions were permanent and causally related to the accident, was sufficient to raise a triable issue of fact and win a reversal, on appeal, of the trial court.

 

4/20/10           Bright v. Moussa
Appellate Division, Second Department

Reliance on MRI Reports that Do Not Address All Injuries Alleged in Bill of Particulars Dooms Motion

Defendants did not meet their burden and the trial court erred in granting them summary judgment where they relied on MRI reports solely regarding the plaintiff’s cervical and lumbar spine, and her right knee.  In her bill of particulars, however, the plaintiff alleged injuries to other parts of her body, including the left knee and right shoulder.  Defendants’ moving papers also failed to address the plaintiff’s claim under the 90/180-day category set forth in her bill of particulars.  As such, it was unnecessary to consider the plaintiff’s opposing papers.

 

4/20/10           Walker v. Esses
Appellate Division, Second Department

Yet Again, Contemporaneous and Recent Examinations Support Claim under Permanent Consequential Limitation and/or Significant Limitation of Use Categories

Although the defendants met their prima facie burden, the affidavit of the plaintiff’s treating chiropractor, submitted in opposition, raised a triable issue of fact.  Her chiropractor examined her both contemporaneously with the accident and two years later and opined that the range-of-motion limitations observed in her cervical spine were permanent and causally related to the accident.  As such, the affidavit raised a triable issue of fact under the permanent consequential and/or significant limitation of use categories.  The affidavit also sufficiently explained the gap in treatment.

 

4/20/10           Simanovskiy v. Barbaro
Appellate Division, Second Department

Computerized Range-of-Motion Tests Are Inadmissible if Not Affirmed by Someone with Personal Knowledge

Neither plaintiff submitted competent medical evidence that was contemporaneous with the accident in opposition to the defendants’ motion.  The affirmations and affirmed reports of their treating physician, which noted “decreased” range-of motion in the cervical and lumbar regions, failed to quantify the results of the tests performed.  In addition, the computerized range-of-motion tests referred to in the affirmations were not admissible because they were not affirmed by someone with personal knowledge of the facts.  In the absence of contemporaneous evidence, the plaintiffs were unable to establish the duration of the injuries required to claim under the permanent consequential limitation or significant limitation of use categories. 

 

4/20/10           Lozusko v. Miller
Appellate Division, Second Department

Unaffirmed Reports and Uncertified Records Cannot Defeat Summary Judgment

The reports of the plaintiffs’ doctors and physical therapy notes were unaffirmed and their hospital records uncertified, and therefore did not raise a triable issue of fact.  In addition, although the plaintiffs’ submitted competent recent evidence showing significant range-of-motion restrictions, they failed to submit any competent contemporaneous evidence showing those restrictions. 

 

4/20/10           Leopold v. New York City Transit Auth.
Appellate Division, Second Department

Extent of Limitation Must Be Established by Comparison with the Norm

Defendants’ examining orthopedic surgeon observed significant range-of-motion limitations in the plaintiff’s lumbar spine, as well as of the plaintiff’s right knee.  She failed, however, to compare those limitations with what is normal and therefore, the extent of the limitation could not be ascertained.  As such, the defendants’ failed to meet their prima facie burden.

 

4/20/10           Kuperberg v. Montalbano
Appellate Division, Second Department

Trips Every Two and One-Half Weeks to Florida, as Done Prior to the Accident, Contradict Claim under the 90/180-Day Category

In November 2007, the defendant struck the plaintiff, a pedestrian.  Plaintiff was treated in the emergency room but then did not treat again until 71 days later when she saw an orthopedist.  In April 2008, she commenced this action alleging she sustained a torn right rotator cuff.  She moved for summary judgment on liability and the defendant cross-moved to dismiss the complaint based on § 5102(d). 

 

Defendant submitted an X-ray report from the emergency room and an MRI report prepared by the plaintiff’s radiologist in January 2008, showing that the plaintiff suffered from a preexisting degenerative condition in her right shoulder.  In addition, the report from the defendant’s radiologist indicated that, upon review of the MRI, she found no evidence of traumatic injury to the right shoulder.  In fact, in her deposition, the plaintiff stated that she did not miss any time from her part-time job and that she continued to make trips to Florida every two and one-half weeks, as she had prior to the accident.  The Court therefore found that the alleged injury did not prevent the plaintiff from performing “substantially all” her customary daily activities.  In opposition, the plaintiff failed to submit any objective medical evidence that was contemporaneous with the accident.  As such, the trial court should have granted the defendant’s cross-motion and denied the plaintiff’s on the issue of liability as academic.

 

4/13/10           Feyler v. Ketelsen
Appellate Division, Second Department
Defendant Shifts the Burden and Plaintiff Fails to Rebut

On appeal, the defendant’s motion is granted and the complaint is dismissed where the defendant submitted affirmed reports of his medical experts, the plaintiff’s deposition testimony, and the plaintiff’s medical records, and the plaintiff failed to submit any objective medical evidence in opposition.

 

4/13/10           Perez v. Johnson
Appellate Division, Second Department
Defendants’ Medical Expert Fails to Relate His Findings to the 90/180-Day Claim in Plaintiff’s Bill of Particulars

Plaintiff’s alleged in his bill of particulars that he was unable to engage in his employment as a landscaper for six months following the accident.  Defendants’ medical expert, however, did not relate his findings to this category of serious injury and, therefore, the defendants failed to meet their prima facie burden on summary judgment.

 

4/13/10           Stevens v. Sampson
Appellate Division, Second Department
Soft Tissue Claims Require Both Contemporaneous and Recent Findings

Here, the plaintiff claimed under the permanent consequential limitation of use, the significant limitation of use, and the 90/180-Day categories of serious injury, and failed on all counts as the affirmed reports of her treating neurologist, while noting significant range-of-motion limitations of the cervical spine, were based only on recent examination and no evidence was offered that was contemporaneous with the accident.  In addition, the affirmation and annexed MRI reports, which revealed herniated cervical discs and a bulging lumbar disc, did not offer objective evidence of the extent or duration of the alleged limitations resulting from the injury. 

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

ARBITRATION

4/19/10           Western New York MRI LLP v. Erie Ins. Co. of NY
Arbitrator Kent L. Benziger, Erie County
Peer Reviewer Failure to Recite Medical Records to Support Conclusion of Lack of Medical Necessity Fatal to Denial

The Applicant sought reimbursement for a cervical spine MRI conducted on the eligible injured person nearly three years post accident.  The insurer denied the MRI based upon a peer review conducted by Dr. Frank Hudak.  Dr. Hudak indicated that from his review of the medical records there was no prospect for surgery, a progressive neurological condition or diagnostic dilemma warranting the MRI.  Dr. Hudak also cited to medical journals to support his conclusion.

The assigned arbitration determined that the denial based upon Dr. Hudak’s peer review could not be upheld because there was a failure to discuss in detail the medical records reviewed and how the conclusion was reached.  This was particularly warranted since there were positive findings with a diagnosis of a persistent neurological condition which was not addressed in the peer review.

LITIGATION

4/16/10           Speciality Surgical Services a/a/o Clara Ocasio v. Travelers Ins. Co.
Appellate Term, Second Department
Judgment After Trial Reversed for Failure of Plaintiff to Rebut Showing of Lack of Medical Necessity

The judgment entered after trial in favor of the plaintiff was reversed as the insurer presented sufficient evidence of lack of medical necessity.  The insurer’s evidence consisted of the testimony from the expert physician as well as submission of his affirmed peer review report which set forth a factual basis and medical rationale for the conclusion of lack of medical necessity.  The plaintiff failed to submit any evidence to rebut the insurer’s showing of lack of medical necessity.

4/16/10           Crotona Heights Med. PC a/a/o Edwin Toribio v. Farm Family Cas. Ins. Co.

Appellate Term, Second Department
Insurer Entitled to Summary Judgment As It Demonstrated Failure to Appear For An
EUO

The insurer’s cross-motion should have been granted as it submitted sufficient evidence to demonstrate that the plaintiff failed to appear for an examination under oath (“EUO”).  The insurer submitted an affidavit from counsel retained to conduct the EUO which established the plaintiff failed to appear.  Further, insurer submitted sufficient evidence to demonstrate that its request for plaintiff to appear for an EUO was a proper request. 

 

4/13/10           Alur Med. Supply, Inc. a/a/o Katherine Castellanos v. Clarendon Nat. Ins. Co.

Appellate Term, Second Department
Plaintiff’s Submission of the Bills Alone Is Insufficient to Oppose the Insurer’s Summary Judgment Motion

The trial court denied both parties summary judgment motions and the failure to grant the insurer’s motion was in error.  The plaintiff established its prima facie case entitlement for summary judgment by demonstrating it submitted claims forms to the insurer.  The insurer in support of its cross-motion and in opposition to plaintiff’s motion demonstrated its entitlement to summary judgment by demonstrating it issued timely denials based upon a peer review.  The plaintiff conceded that the insurer issued timely denials.  Yet, the plaintiff argued that the existence of the peer review report creates an issue of fact precluding summary judgment in favor of the insurer.

 

The Court disagreed as it looked to what evidence the plaintiff submitted to oppose the insurer’s cross-motion for summary judgment that the medical service was medically necessary.  Upon review, the plaintiff had not submitted any evidence to rebut the finding and conclusions in the peer review report to create an issue of fact precluding summary judgment in favor of the insurer. 

 

4/9/10             Nordique Med. Services, PC a/a/o Margie Kohn v. Travelers Ins. Co.

Appellate Term, Second Department
Plaintiff’s Failure to Comply With Conditional Preclusion Order Fatal

The insurer’s motion to dismiss plaintiff’s complaint should have been granted based upon plaintiff’s failure to comply with a 45 day discovery preclusion order.  The plaintiff to avoid the effects of the order was required to demonstrate excusable default and a meritorious cause of action which it failed to do.

 

4/9/10             RIU Chiropractic, PC a/a/o Dorothy Braxton v. AutoOne 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 insurer demonstrated the eligible injured person’s failure to appear for duly scheduled IMEs.  The insurer submitted an affidavit from its litigation specialist demonstrating that the IME scheduling letters were timely sent pursuant to standard office practice and procedure.  In addition, after civil court instruction, the insurer submitted an affidavit from the examining physician that the eligible injured person failed to appear for the scheduled IMEs.

PEIPER ON PROPERTY (and POTPOURRI)
Steven E. Peiper

[email protected]

Of Property

 

4/27/10           Roman Catholic Diocese of Rockville Centre v Certain Underwriters at Lloyd's London

Appellate Division, Second Department

Policy Language DOES NOT Provide Coverage for Self-Insured Assessment Charges Under the Workers’ Compensation Law

In this case, the Diocese maintained several excess policies through Lloyds.  Although primarily self-insured, the policies issued by Lloyds also provided limited Workers’ Compensation coverage to the Diocese.  However, even though it maintained some level of coverage under the Lloyds’ policies, the Diocese was required to make certain payments, as a self-insured entity, pursuant to the Workers’ Compensation law. 

 

The Diocese commenced the instant action alleging that these additional payments were covered under its various policies with Lloyds.   Unfortunately for the Diocese, the Trial Court held that the Lloyds’ policies did not provide coverage for assessments owed by self-insureds under the Workers’ Compensation law.  The Trial Court’s ruling was affirmed by a unanimous Second Department which noted that there was no ambiguity in the terms of the Lloyds’ policies, and that as such the policies could not be extended to provide coverage that was clearly outside the scope of its terms. 

 

4/27/10           Pike v New York Life Insurance Company

Appellate Division, Second Department

When the Dust Settled, Only Plaintiff’s Claims of Fraud for One Policy Term Survived Defendant’s Extensive Motion to Dismiss

Gary Pike, his wife Kelly Pike, and their four children, purchased a number of annuities from the defendant New York Life from 1997 through 2002.  In 2006, the Pike’s commenced the instant action alleging that the New York Life’s agent induced them to purchase policies that were “unsuitable” to their respective needs.  Specifically, plaintiff alleged causes of action for breach of contract, fraudulent misrepresentation, fraudulent inducement, suitability, breach of fiduciary duty, breach of GBL § 349, and breach of the Insurance Law. 

 

After settlement negotiations were unsuccessful, defendant moved to dismiss all causes of action on a number of different grounds. Initially, all causes of action asserted by the plaintiffs for policies that were purchased in 1997, 1999 and 2000, respectively, were dismissed as time barred under the relevant statutes of limitations.

 

Moreover, seven other causes of action which arose from policies purchased by non-party, Kathleen Pike, were dismissed for lack of standing.  Essentially, the court ruled that where, as here, the named insured was not a party to the action, strangers to those policies were not permitted to prosecute claims against New York Life.


At that point, the litany of claims asserted by the Pike’s was reduced to those policies that were issued in 2002.   With respect to these policies, the Appellate Division ruled that the first cause of action asserting a breach of the insurance policy was dismissed for failing to state a cause of action.  Although the Pike’s did not assert that any portion of the policy was breached, they maintained that New York Life had breached its implied covenant of good faith and fair dealing. 

 

The Appellate Division noted that a breach of the implied covenant of good faith and fair dealing only applied where the insured could establish that he or she did not receive benefits under the policy at issue.  Where, as here, the insured could not establish that an accrued benefit was not provided; his or her claim based on a breach of the covenant of good faith was not actionable. 

 

Finally, the fifth cause of action asserting that New York Life had breached a fiduciary duty to the Pike’s was dismissed where the insureds failed to provide demonstrate the existence of a special relationship between themselves and New York Life.

 

New York Life also sought to dismiss the remaining causes of action on the basis of the “voluntary payment “ doctrine.  However, as aptly noted by the Appellate Division, that defense only applies were there is no evidence of fraud.  Having pleaded fraud as a cause of action, the Court concluded that the doctrine could not apply to bar that claim.

 

4/20/10           Ivaldi v. Metlife Investors Insurance Company

Appellate Division, Second Department

Policy Means What it Says; Spouse is the Default Beneficiary

Plaintiff commenced the instant action seeking to recover as the beneficiary of an annuity issued to John Baumann which was originally purchased in 2004.  Mr. Baumann died in 2006, and the policy was automatically changed to provide that his wife, Jane Baumann, was the primary beneficiary. At that time, Mrs. Baumann was presented with several options under the annuity policy.  However, if none of the options were exercised by Mrs. Baumann, the default of the policy was to provide death benefits resulting from Mr. Baumann’s passing directly to her.

 

Mrs. Baumann died without ever selecting one of the several options available under the variable policy.  As such, the death benefit arising from Mr. Baumann’s death became an asset of Mrs. Baumann’s estate.  Plaintiff claimed that despite the policy’s wording, she was entitled to the death benefits as the initial beneficiary. 

 

In affirming the Trial Court’s decision, the Second Department ruled that the policy clearly provided that Mrs. Baumann was entitled to the benefits unless and until she elected one of the several other available options under the annuity.  Where no such options were elected, the default was triggered and the benefits became payable to Mrs. Baumann (or in this case, her estate). 

 

And Potpourri

 

4/13/10           Ben Lee Distributors, Inc. v Halstead Harrison Partnership

Appellate Division, Second Department

Contractual Provision Providing Indemnity to Owner/Landlord Too Broad Under General Obligations Law § 5-321

In the instant matter, defendants sought an award of contractual indemnification for property damage allegedly sustained at a premises they rented to plaintiff.  Plaintiff, Ben Lee, opposed said request for contractual indemnification on the basis that the indemnity clause at issue was in violation of General Obligations Law § 5-321, and therefore void.

 

The Appellate Division, Second Department affirmed the Trial Court’s holding that the clause at issue was in violation of the General Obligations Law’s prohibition of agreements which provide indemnity for an owner or landlord’s own negligence.  The Court noted that parties may chose to allocate risk through insurance, but in doing so each such party must agree to waive subrogation claims against the other or agree that the loss will totally be enveloped by procured insurance.

FIJAL’S FEDERAL FOCUS
Katherine A. Fijal

[email protected]

4/16/10           National Association of Home Builders v. Occupational Safety & Health Administration and Department of Labor

United States Court of Appeals for the District of Columbia Circuit

When An OSHA Standard is Violated Who Defines the Unit of Prosecution?

There has been no significant activity in the Circuit Courts on insurance issues over the past two weeks so I thought I would report on a recent decision in the D.C. Circuit involving OSHA standards.

 

In this case the Secretary of Labor amended rules under the Occupational Safety and Health Act to clarify that an employer’s failure to provide respirators or workplace training constitutes not one violation of the applicable health and safety standards, but separate violations for each employee who did no receive respirator training. See e.g., 29 C.F.R., §1910.9(a), (b).  Three trade associations whose members are subject to these amended rules claim the Secretary had not statutory authority to issue the amendments. 

 

The Secretary promulgates workplace “standards”.  A “standard” requires conditions, or the adoption or use of one or more practices, means, methods, operations, or processes, reasonably necessary or appropriate to provide safe or healthful employment and places of employment.  When the Secretary discovers that an employer has violated a standard, she may issue a citation and propose a financial penalty. 

 

The Occupational Safety and Health Review Commission, an independent tribunal, hears employers’ objections to the Secretary’s citations.  The Commission acts as a neutral arbiter and determines whether the Secretary’s citations should be enforced.

 

The rulemaking here came in response to the Commission’s decision in Erik K. Ho, 2003 WL 22232014 (O.S.H.R.C.), aff’d. partly on other grounds, Chao v. Occupational Safety & Health Review Comm’n, 401 F.3d 355 (5th Cir. 2005).  Ho hired eleven workers to renovate a building containing asbestos.  He failed to rain them or to provide them with respirators.  The Secretary cited Ho for eleven violations of the asbestos training standard and eleven violations of the respirator standard. 

 

The Commission rejected the Secretary’s employee-by-employee approach and held the standards required the employer to institute a single training program and to provide respirators to employees as a group.

 

The petitioners had one basic argument, i.e., that under the Act, the Secretary had no authority to specify units of prosecution because Congress assigned such determinations to the Commission.  The Circuit Court disagreed with that argument.

 

The Circuit Court noted that the unit of prosecution is derived from the duty set forth in the Secretary’s standard.  The Court stated that the petitioners failed to recognize that to define the violation is to define the unit of prosecution.  Here, the concerned was not with statutory violations, but violations of the Secretary’s standards.  In that respect, the Secretary essentially stands in the shoes of the legislature.  The Court held that in giving the Secretary the authority to define what constitutes a violation, the Act necessarily gave the Secretary the authority to define the unit of prosecution.

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

4/13/10           Holyoke Mut. Ins. Co. v. Works Home Improvement

Supreme Court, Nassau County

No Coverage Where Insured Misrepresented its Business Activities

A Businessowners Policy was issued to Works Home Improvement, a contractor.  The policy provided liability coverage, and it contained an additional contractor’s tools and equipment endorsement. 

 

Unbeknownst to the insurer, in additional to home renovation, the president and sole employee of Works Home Improvement also operated an unincorporated snow plow business.  One client of the snow plow business was an apartment complex.  The contract between the parties contained an insurance procurement clause.  Accordingly, the apartment complex was named as an insured under the Businessowners Policy issued to Works Home Improvement. 

 

Subsequently, a woman fell on ice in the apartment complex’s parking lot and commenced an action against the complex.  The complex then brought a third-party action against Works Home Improvement.

 

The insurer denied coverage asserting that the snow plowing activity, out of which the claim arose, was not a covered risk under the Businessowners Policy.  It also advised Works Home Improvement that it was declaring the policy “to be void ab initio”.  The insurer then commenced this action and moved for summary judgment.   

 

In granting the insurer’s motion, the court examined testimony of the insurer’s Vice President of commercial lines underwriting who attested that if the insurer had been aware of the snow removal activities it would not have issued the Businessowners Policy.  Also, the court examined the subject commercial line manuals which listed the various contractor categories eligible for Businessowners coverage in New York.  Notably, there was no reference to snow plowing as an eligible category or work.  Further, the court also considered the insurance application submitted by Works Home Improvement which stated that the business was “100% residential and in particular, 33% Tile; 33% Siding Installation; 33% Carpentry.”  Lastly, the court relied upon the president of Works Home Improvement’s own statements that the snow removal work was performed by a completely separate and distinct business entity, and that he purposefully omitted reference to the snow plowing business out of a belief that he was applying for coverage solely for the home improvement company. 

 

3/10/10           Ayers v. Allstate Ins. Co.

Supreme Court, Nassau County

Additional Insured Denied Coverage Based on Late Notice while Insured Is Entitled to Coverage

Trocom Construction Corp. entered into a contract with the City of New York for the construction of a path along the Hudson River.  The contract required Trocom to obtain a Commercial General Liability policy naming the City as an additional insured.  On November 6, 1999, a car collided with another car and went into the guardrail in the vicinity of Trocom’s work. 

 

On approximately February 1, 2000, the City received a notice of claim on behalf of a passenger in the vehicle.  On or about January 30, 2001, thirteen months later, the City was served with a copy of the summons and complaint.  The City then tendered its defense to Allstate, Trocom’s insurer.  Allstate denied coverage based on late notice.  Subsequently, on or about October 31, 2002, the passenger amended his complaint to add Trocom as a defendant.  Trocom then provided Allstate with a copy of the amended complaint.  Interestingly, Allstate agreed to defend the action on Trocom’s behalf, but maintained its denial of the City’s tender. 

 

The City then commenced this action.  In making its determination that the City was not entitled to coverage, the court reasoned that an additional insured has an independent obligation to provide timely notice of a claim to the insurer.  As the City waited approximately thirteen months to provide notice following receipt of the notice of claim, its notice was late.  Additionally, the City offered no explanation for the delay beyond its meritless assertion that it had no duty to give notice. 

 

3/8/10             Stephan v. Clarendon Natl. Ins.

Civil Court of the City of New York, New York County

Racing Exclusion Bars Collision Coverage Under an Auto Policy

 

Plaintiff was involved in a motor vehicle accident while operating his 1989 BMW E 30 vehicle during the Ultimate Driver’s School event at Watkins Glen, New York.  At the time of the accident, plaintiff was traveling approximately 50-70 miles per hour. 

 

Defendant issued an insurance policy to plaintiff for the subject BMW.  However, defendant disclaimed coverage pursuant to a policy provision that provided “[t]here is no collision or comprehensive coverage for the following…loss to any auto or trailer while inside any racing facility for the purpose of practicing for, preparing for, or participating in any prearranged or organized racing or speeding contest.”  In upholding the denial, the court reasoned that the totality of the circumstances, including the BMW’s modification and plaintiff’s experience as an amateur racer, established that plaintiff’s operation of the vehicle during the automobile driver’s school event located at the racing facility constituted “practicing for, preparing for, or participating in any prearranged or organized racing or speeding contest” as defined by the terms of the policy. 

 

EARL’S PEARLS
Earl K. Cantwell

[email protected]

“Direct” or Consequential” Damages:

The Difference and Definition Can Be Critical

 

Due to various statutes and contractual provisions, whether a claimant alleges and categorizes damages as “direct” or “consequential” may be determinative and critical.  A court in Cherokee County Co-Generation Partners L.P. v. Dynegy Marketing & Trade, 2009 Texas Appeals LEXIS 9682 (Tex. App., December 22, 2009), reviewed a party’s claim, the definitions, and the law on this subject in reversing a trial court’s grant of summary judgment and allowing a substantial commercial damages claim to proceed.

 

Under a Gas Purchase Agreement, Dynegy agreed to supply Cherokee County Co-Generation Partners a fixed quantity of natural gas daily at a set price, described in the agreement as the “Commodity Charge”.  Cherokee was able to purchase the gas and, at its discretion, use it to fuel its co-generation facility or resell the gas to third parties. 

 

The contract also contained a provision that neither party would be liable for “consequential, incidental, special or punitive damages” which might be suffered by the other as a result of failure to deliver required quantities of gas.  If Dynegy failed to deliver the full amount of contract gas, Cherokee’s remedy was to recover the difference between the agreed upon contract price and the prevailing market price for undelivered gas.  Following Hurricanes Katrina and Rita, Dynegy declared force majeure and did not supply full contract amounts of natural gas.  During that time, the market price of natural gas substantially increased over the Commodity Charge in the contract.  Cherokee sued Dynegy for breach of contract and declaratory judgment alleging that Dynegy could have performed its contract obligations, but instead improperly declared force majeure to capitalize on the higher gas market price. 

 

At trial, Dynegy moved for partial summary judgment claiming that Cherokee’s damages claim sought “consequential” damages consisting of lost profits Cherokee could have earned by reselling the gas to third parties.  The trial court granted the summary judgment, but the appellate court reversed and allowed the claim to proceed.

 

The appellate court first noted that the parties had not contractually defined the term “consequential damages”.  Actual damages may be direct or consequential.  “Direct” damages flow naturally and necessarily from the breach and compensate for a loss that is presumed to have been foreseen as a usual and necessary consequence of the breach.  “Consequential” damages, on the other hand, may result naturally but not necessarily from the breach of contract.  Consequential damages may encompass some, but not all, claims for lost profits.  Dynegy’s argument, and the trial court decision, depended upon the description of Cherokee’s damages as profits lost on other contracts.  Profits lost on the contract itself are direct damages.  However, if a party’s expectation of profit is incidental to performance of the contract, the loss of that expectancy is only consequential and may be limited or subsumed by various statutory or contractual limitations. 

 

The appellate court held that Dynegy’s alleged breach naturally and necessarily caused Cherokee to incur direct damages in the form of profits lost under the agreement itself.  Notably, the agreement permitted Cherokee to recover the market value of gas not delivered less the contract purchase price which provided a measure of direct as opposed to consequential damages.  This interpretation was not only in accord with the contract, but also with UCC Section 2-713(a).  Since the damages could be defined as direct and not consequential damages, they were allowed notwithstanding the contract, and the trial court’s summary judgment decision was reversed. 

 

The lesson of Cherokee County is that it is important to define and describe the nature of the damages being sought, and if there are statutory or contractual restrictions define the various items, types and amounts of damages as “direct” damages flowing from a breach of the contract in a manner foreseen by the parties, and depriving one party of the benefit of the bargain of the contract itself.  Conversely, the adversary may attempt to portray various damages as “consequential” damages and thus barred by a contractual provision if they are remote and speculative in the sense of constituting lost profit or commercial opportunity in dealings with third parties or in different transactions than the contract at hand.  Such disputes may turn on the types of damages being claimed, the particular contract language involved, factual testimony of the parties, and perhaps expert testimony from accountants or economists breaking down various types of damages and describing them as “direct” or “consequential”.  

 

Cherokee County stands for the proposition that how damages are characterized and defined, and what is the reality of the damages being claimed, may all be important, particularly in determining whether all or part of those damages may be recoverable in the face of contract provisions barring “consequential”, “incidental” or “special” damages.

ACROSS BORDERS
Courtesy of the
FDCC Website
www.thefederation.org

4/26/2010      Zurich American Insurance Company v. O’Hara
Eleventh Circuit Court of Appeals

Zurich Obtains Summary Judgment Against Insured and His Attorney in a Suit to Recover Medical Payments Made to Plaintiff who Settled Claim Against Tortfeasor
11th Circuit Court of Appeals

Zurich was the sponsor and fiduciary of the Zurich Medical Plan which covered Keith O’Hara for medical benefits. Mr. O’Hara was involved in a motor vehicle accident and the Zurich Plan paid $262,611.92 in related medical expenses. When Mr. O’Hara settled with the tortfeasor for more than $1.2 million, Zurich asserted its right of subrogation under the Plan, but Mr. O’Hara refused to repay the Plan. Zurich filed suit pursuant to section 502(a)(3) of the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1132(a)(3), against Keith O’Hara, seeking reimbursement for medical expenses the Plan had paid on O’Hara’s behalf. On cross motions for summary judgment, the District Court held that the Plan had a clear and unambiguous right to reimbursement under the Plan. The Court further disclaimed any “common fund doctrine” which precluded the deduction of attorney’s fees from Zurich’s tort recovery.

Submitted by: James B. Thompson, Jr., of Thompson Goodis Thompson Groseclose Richardson & Miller PA.

 

4/19/10           Pierides v. GEICO Insurance Company
New
Jersey, Appellate Division

Court Reverses Summary Judgment for Plaintiffs that Reformed Auto Policy to Increase PIP and UM Coverages
GEICO appealed an order that granted summary judgment to plaintiffs and denied its motion for summary judgment. The order resulted in the reformation of a New York automobile insurance policy issued to plaintiffs, who are New Jersey residents, to increase the amount of coverage provided to $250,000 in personal injury protection (PIP) benefits and $300,000 in uninsured motorist (UM) coverage. Plaintiffs had moved from New York to New Jersey after the policy was issued. The lower court reformed the policy to include higher coverage amounts because of failure to send a Buyer’s Guide to plaintiffs when they moved to New Jersey. The appellate court reversed because GEICO had no duty to send the Buyer’s Guide, and at any rate the failure to do so would not entitle plaintiffs to reformation.

Submitted by: Clark Cole and Matthew Shorey, Armstrong Teasdale LLP

REPORTED DECISIONS

Feyler v. Ketelsen


Richard T. Lau,
Jericho, N.Y. (Kathleen E. Fioretti of counsel), for
appellant.

DECISION & ORDER

In an action to recover damages for personal injuries, the defendant appeals, as limited by his brief, from so much of an order of the Supreme Court, Nassau County (Cozzens, J.), dated January 26, 2009, as denied his motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and the defendant's motion for summary judgment dismissing the complaint is granted.

The defendant established, prima facie, through the affirmed reports of his medical experts, the plaintiff's medical and hospital records, 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; House v MTA Bus Co.,AD3d, 2010 NY Slip Op 01924 [2d Dept 2010]). In opposition, the plaintiff failed to submit any objective medical evidence sufficient to raise a triable issue of fact as to whether she sustained a serious injury to her head or brain within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see House v MTA Bus Co., AD3d, 2010 NY Slip Op 01924 [2d Dept 2010]; Noh v Duffe, 70 AD3d 1017).

Perez v. Johnson


Milene Mansouri,
Forest Hills, N.Y., for appellant.
Martyn, Toher & Martyn,
Mineola, N.Y. (Christine J. Hill of
counsel), for respondents.

DECISION & ORDER

In an action to recover damages for personal injuries and property damage, the plaintiff appeals, as limited by his brief, from so much of an order of the Supreme Court, Nassau County (Woodard, J.), entered September 26, 2008, as granted that branch of the defendants' motion which was for summary judgment dismissing the complaint insofar as asserted against the defendant Lamont E. Johnson on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and that branch of the defendants' motion which was for summary judgment dismissing the complaint insofar as asserted against the defendant Lamont E. Johnson on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) is denied.

On March 15, 2006, at the intersection of Greenwich Street and Jerusalem Avenue in Hempstead, an automobile owned and driven by the plaintiff collided with an automobile leased by the defendant Lamont E. Johnson. The accident allegedly resulted in injuries to the plaintiff and damage to his automobile. The plaintiff commenced this action against Johnson and the lessor of the car driven by Johnson. After issue was joined, the defendants moved for summary judgment dismissing the complaint, inter alia, on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d). The Supreme Court granted the motion. The plaintiff appeals from so much of the Supreme Court's order as granted that branch of the defendants' motion which was for summary judgment dismissing the complaint insofar as asserted against Johnson. We reverse.

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 motor vehicle accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345). The motion papers failed to adequately address the plaintiff's claim, clearly set forth in his bill of particulars, that he sustained a medically determined injury or impairment of a nonpermanent nature which prevented him from performing substantially all of the material acts which constituted his usual and customary daily activities for not less than 90 days during the 180 days immediately following the subject accident (see Alvarez v Dematas, 65 AD3d 598, 599). In that bill of particulars, the plaintiff alleged that he was incapacitated from his employment as a landscaper for six months following the accident. Notably, the affirmed medical report prepared by the defendants' medical expert failed to relate his findings to this category of serious injury for the period of time immediately following the accident (id. at 599-600). Inasmuch as the defendants failed to meet their prima facie burden, we need not consider the sufficiency of the plaintiff's opposition papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853; Mariaca-Olmos v Mizrhy, 226 AD2d 437, 438).

Stevens v. Sampson


Dominick W. Lavelle,
Mineola, N.Y., for appellant.
Robert P. Tusa,
Lake Success, N.Y. (Sweetbaum &
Sweetbaum [Marshall D. Sweetbaum] of
counsel), for respondent.

DECISION & ORDER

In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Kings County (Vaughan, J.), dated April 29, 2009, which granted the defendant's motion for summary judgment dismissing the complaint on the ground that she did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is affirmed, with costs.

The Supreme Court properly concluded that the defendant met his prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957).

In opposition, the plaintiff failed to raise a triable issue of fact. Initially, the medical report of Dr. Serge Delaleu was insufficient to raise a triable issue of fact since it was unaffirmed (see Haber v Ullah, 69 AD3d 796; Patterson v NY Alarm Response Corp., 45 AD3d 656; Nociforo v Penna, 42 AD3d 514 ; see also Grasso v Angerami, 79 NY2d 813; Pagano v Kingsbury, 182 AD2d 268). The affirmed medical reports of Dr. Aric Hausknecht, the plaintiff's treating neurologist, were also insufficient to raise a triable issue of fact. While Dr. Hausknecht noted significant limitations in the range of motion of the plaintiff's cervical spine on recent examinations, neither he nor the plaintiff proffered competent medical evidence that revealed the existence of significant limitations in the cervical region of her spine that were contemporaneous with the subject accident. Thus, the plaintiff did not raise a triable issue of fact as to whether she sustained a serious injury under the permanent consequential limitation of use or the significant limitation of use category of Insurance Law § 5102(d) (see Bleszcz v Hiscock, 69 AD3d 890; Taylor v Flaherty, 65 AD3d 1328; Ferraro v Ridge Car Serv., 49 AD3d 498).

The affirmation of Dr. Ayoob Khodadadi, with annexed magnetic resonance imaging reports, merely revealed the existence of herniated discs in the cervical region of the plaintiff's spine and a bulging disc in the lumbar region of the spine. The mere existence of a herniated or bulging disc is not evidence of a serious injury in the absence of objective evidence of the extent of the alleged physical limitations resulting from the disc injury, as well as its duration (see Bleszcz v Hiscock, 69 AD3d 890; Chanda v Varughese, 67 AD3d 947; Niles v Lam Pakie Ho, 61 AD3d 657; Sealy v Riteway-1, Inc., 54 AD3d 1018; Kilakos v Mascera, 53 AD3d 527; Kearse v New York City Tr. Auth., 16 AD3d 45, 49). The plaintiff's affidavit was insufficient to raise a triable issue of fact (see Hargrove v New York City Tr. Auth., 49 AD3d 692; Shvartsman v Vildman, 47 AD3d 700; Tobias v Chupenko, 41 AD3d 583, 584).

The plaintiff's admissible medical submissions were insufficient to establish that she sustained a medically-determined injury of a nonpermanent nature which prevented her from performing her usual and customary activities for 90 of the 180 days following the subject accident (see Hargrove v New York City Tr. Auth., 49 AD3d at 693; Sainte-Aime v Ho, 274 AD2d 569, 570).

Daimler Chrysler Insurance Company v. Zurich Insurance Company


Carman, Callahan & Ingham, LLP,
Farmingdale, N.Y. (Michael
F. Ingham of counsel), for appellant.
Steinberg & Cavaliere, LLP,
White Plains, N.Y. (Kevin F.
Cavaliere and Robert P. Pagano of
counsel), for respondents.

DECISION & ORDER

In an action, inter alia, for a judgment declaring that the plaintiff has no duty to defend or indemnify the defendants Charles DeStefano and RI Suresky & Sons, Inc., in an underlying personal injury action entitled Elston v DeStefano, pending in the Supreme Court, Orange County, under Index No. 5283/06, the plaintiff appeals from a judgment of the Supreme Court, Orange County (Owen, J.), entered October 30, 2008, which, upon an order of the same court dated August 28, 2008, denying its motion for summary judgment and granting the cross motion of the defendants Zurich Insurance Company, Charles DeStefano, and RI Suresky & Sons, Inc., for summary judgment, declared, inter alia, that it is obligated to defend and indemnify the defendants Charles DeStefano and RI Suresky & Sons, Inc., in the underlying action.

ORDERED that the judgment is affirmed, with costs.

The defendant Rebecca Elston allegedly was injured when her car was struck by a van owned by the defendant RI Suresky & Sons, Inc., and driven by the defendant Charles DeStefano (hereinafter together the Suresky defendants). At the time, RI Suresky & Sons, Inc., an auto dealership, was an insured under both a "Business Auto Insurance Policy" issued by the plaintiff, Daimler Chrysler Insurance Company (hereinafter DCIC), and a multiple insurance coverage policy written by "Universal Underwriters Insurance Company." Under the DCIC policy, "covered autos" included "[o]nly the autos you own that are enrolled in the DaimlerChrysler Services North America LLC-DRAC Program."

Elston subsequently commenced an action against the Suresky defendants alleging that she was injured by a van that was owned by the dealership and operated by an employee within the scope of his employment (hereianfter the underlying action). On August 22, 2006, DCIC answered the complaint in the underlying action on behalf of the Suresky defendants. After assuming the defense, DCIC contacted the defendant Zurich Insurance Company (hereinafter Zurich), the carrier of the policy written by "Universal Underwriters Insurance Company," and requested that Zurich assume primary coverage. Zurich refused, and DCIC did not issue a formal disclaimer or a reservation of rights.

On October 25, 2007, DCIC commenced this action seeking, inter alia, a declaration that it had no duty to defend or indemnify the Suresky defendants in the underlying action and that the Zurich policy provided primary coverage. DCIC moved for summary judgment, and Zurich and the Suresky defendants (hereinafter collectively the respondents) cross-moved for summary judgment asserting, inter alia, that DCIC was barred from denying coverage by Insurance Law § 3420(d) for failure to issue a timely disclaimer and by the common-law doctrine of estoppel. The Supreme Court denied DCIC's motion, granted the respondents' cross motion, and declared that DCIC was obligated to defend and indemnify the Suresky defendants in the underlying action. Although the court stated that "at best there are issues of fact" as to whether the vehicle was covered under the DCIC policy, it determined that Zurich had made a prima facie showing that DCIC was estopped from denying coverage and that DCIC failed to raise a triable issue of fact on estoppel. DCIC appeals and we affirm. Contrary to the Supreme Court's conclusion, however, the respondents met their prima facie burden of demonstrating that the vehicle was covered by the DCIC policy, and DCIC failed to raise a triable issue of fact. In any event, we agree with the Supreme Court that DCIC is estopped from denying coverage.

The respondents submitted documentary evidence demonstrating that the vehicle was enrolled in the DRAC program and, thus, covered by DCIC's policy. In opposition, DCIC admitted that the vehicle was enrolled in the DRAC program, but contended that, as an additional prerequisite, the vehicle needed to be "rented" in order to be a "covered auto." Despite this contention, DCIC failed to point to any language in the policy specifically demonstrating this alleged prerequisite. Consequently, it failed to raise a triable issue of fact as to whether its policy covered the vehicle.

In any event, the Supreme Court properly granted the respondents' cross motion for summary judgment because they established, prima facie, that DCIC was estopped from denying coverage (see Utica Mut. Ins. Co. v 215 W. 91st St. Corp., 283 AD2d 421, 422-423; Indemnity Ins. Co. of N. Am. v Charter Oak Ins. Co., 235 AD2d 521, 522), and DCIC failed to raise a triable issue of fact in opposition. From the inception of the underlying action, DCIC controlled the defense and had knowledge of the facts constituting the basis of its denial of coverage (see Utica Mut. Ins. Co. v 215 W. 91st St. Corp., 283 AD2d at 422-423; cf. Federated Dept. Stores, Inc. v Twin City Fire Ins. Co., 28 AD3d 32). Since DCIC failed to reserve its right to disclaim coverage, estoppel bars it from denying coverage or seeking contribution (see Fireman's Fund Ins. Co. v. Zurich Am. Ins. Co., 37 AD3d 521; Donato v City of New York, 156 AD2d 505, 508).

Newman v. Datta


Baker, McEvoy, Morrissey & Moskovits, P.C.,
New York
(Stacy R. Seldin of counsel), for appellants.
Sinel & Associates, PLLC,
New York (Jessica Keeley of
counsel), for respondent.

Order, Supreme Court, New York County (Paul Wooten, J.), entered July 7, 2009, which denied defendants' motion for summary judgment dismissing the complaint, unanimously affirmed, without costs.

Insofar as "a fracture" is one statutory definition of "serious injury" (Insurance Law § 5102[d]), we conclude that defendants failed to establish prima facie that plaintiff's dental injury did not constitute a serious injury within the meaning of the statute (see Kennedy v Anthony, 195 AD2d 942, 944 [1993]; see also Sanchez v Romano, 292 AD2d 202, 203 [2002]). Defendants' expert dentist, based on his examination of plaintiff, identified at least two fractured teeth about which he made no finding that the fractures antedated plaintiff's accident (see Pommells v Perez, 4 NY3d 566, 572 [2005]).

We would find, in any event, that plaintiff raised an issue of fact through an affidavit by her oral surgeon, who stated that, based upon his examination of her and review of her dental records, it was his opinion that the accident caused fractures in two of plaintiff's teeth and that, as a result, plaintiff would be required to undergo extensive and ongoing dental treatment (see Kennedy, 195 AD2d at 944).

East Midwood Jewish Center v. CNA Insurance Company, appellant.


Barry,
McTiernan & Moore, New York, N.Y. (Laurel A.
Wedinger of counsel), for appellant.
Simon Lesser, P.C.,
New York, N.Y. (Leonard F. Lesser and
Eleftherios Kravaris of counsel), for
respondents.

DECISION & ORDER

In an action to recover damages pursuant to a commercial general liability insurance policy and for a judgment declaring that the defendant is obligated to defend or indemnify the plaintiff East Midwood Jewish Center in an underlying personal injury action entitled Rosdeitcher v East Midwood Jewish Center, Inc., commenced in the Supreme Court, Kings County, under Index No. 7731/05, the defendant appeals from (1) an order of the Supreme Court, Kings County (Schmidt, J.), dated April 7, 2008, which granted that branch of the motion of the plaintiff East Midwood Jewish Center which was for summary judgment declaring that the defendant is obligated to reimburse its insurer, the plaintiff GuideOne Mutual Insurance Co., in the sum of $175,000, constituting the full settlement amount of the underlying action plus reasonable costs and attorneys' fees in defending the underlying action, and (2) a judgment of the same court dated February 3, 2009, which, upon the order, is in favor of the plaintiff GuideOne Mutual Insurance Co. and against it in the principal sum of $175,000.

ORDERED that the appeal from the order is dismissed; and it is further,

ORDERED that the judgment is affirmed; and it is further,

ORDERED that one bill of costs is awarded to the plaintiffs.

The appeal from the intermediate order must be dismissed because the right of direct appeal therefrom terminated with the entry of judgment in the action (see Matter of Aho, 39 NY2d 241, 248). The issues raised on the appeal from the order are brought up for review and have been considered on the appeal from the judgment (see CPLR 5501[a][1]).

The Senior League of Flatbush, Inc. (hereinafter the Senior League), leased portions of the plaintiff East Midwood Jewish Center (hereinafter the plaintiff). The lease required the Senior League to carry insurance that named the plaintiff as an additional insured. The plaintiff therefore was named as an additional insured in the Senior League's insurance policy with the defendant, CNA Insurance Company (hereinafter CNA).

Subsequently, a Senior League employee alleged that she slipped and fell on the kitchen floor, an area covered by the lease. The employee commenced an action against, among others, the plaintiff, to recover damages for personal injuries. The plaintiff, through its insurance company, GuideOne Specialty Mutual Insurance Co. (hereinafter GuideOne), requested that CNA defend it in the underlying action in accordance with its status as an additional insured under the CNA policy. CNA disclaimed coverage, and the underlying action was settled for $175,000.

Thereafter, the plaintiff brought this action, adding its insurer, GuideOne, as a plaintiff, and moved for summary judgment, inter alia, declaring that CNA is obligated to reimburse GuideOne, as the insurer of the Jewish Center, in the sum of $175,000, constituting the full settlement amount of the underlying action, plus reasonable costs and attorney's fees. In the order appealed from, the Supreme Court granted that branch of the plaintiff's motion, and in the judgment appealed from, the Supreme Court awarded GuideOne the principal sum of $175,000. We affirm.

Contrary to CNA's contention, the insurance procurement provision does not violate General Obligations Law § 5-321 under the circumstances of this case (see Great N. Ins. Co. v Interior Constr. Corp., 7 NY3d 412, 419; Kinney v Lisk Co., 76 NY2d 215, 218; Hogeland v Sibley, Lindsay & Curr Co., 42 NY2d 153; Tishman Constr. Corp. of N.Y. v CNA Ins. Co., 236 AD2d 211; Schumacher v Lutheran Community Servs., 177 AD2d 568; Jensen v Chevron Corp., 160 AD2d 767).

Indemnity Insurance Company v. St. Paul Mercury Insurance Company

Plaintiff appeals from an order of the Supreme Court, New York County (Marylin G. Diamond, J.), entered February 21, 2008, which denied its cross motions for summary judgment against St. Paul Mercury Insurance Company and Yonkers Contracting Company, Inc. and granted St. Paul's and Yonkers's motions for summary judgment dismissing the complaint.

Nixon Peabody LLP,
New York (Aidan M.
McCormack, Mark L. Deckman and
Jonathan Schapp of counsel),
for appellant.
Lazare Potter & Giacovas, LLP,
New York (Stephen
M. Lazare of counsel), for St.
Paul Mercury Insurance
Company, respondent.
Nicoletti,
Hornig & Sweeney, New York (Barbara A.
Sheehan and Lawrence C.
Glynn of counsel), for
Yonkers Contracting Company,
Inc., respondent.

RICHTER, J.

In this insurance coverage dispute, plaintiff Insurance Indemnity Company of North America (IICNA) seeks reimbursement from defendants St. Paul Mercury Insurance Company (St. Paul) and Yonkers Contracting Company, Inc. (Yonkers) for a $2 million payment IICNA made to settle an underlying personal injury suit. In the underlying action, Eugene Flood, an employee of Yonkers, was performing restoration work on the Manhattan Bridge when he was injured. Yonkers was retained by the City of New York as the general contractor on the restoration project. As part of this project, Yonkers hired subcontractor Romano Enterprises of New York, Inc. (Romano) to paint certain portions of the bridge. In painting the bridge, Romano had draped a series of steel cables along the sides of the bridge to serve as supports from which to hang scaffolding.

Two days before Flood's accident, Ronald Taylor, a Yonkers superintendent, spotted a cable left on the bridge by Romano that would interfere with Yonkers's work. Taylor asked John Graham, a Romano foreman, to remove the cable. Flood also told Graham that the cable had to be removed. Graham assured both men that he would make sure the cable was taken down, but failed to do so. On the day of the accident, Yonkers workers attempted to hoist a five-ton iron beam horizontally through the bridge's lattices and suspension cables. Halfway through the process, the beam became stuck on the cable left by Romano. Flood climbed onto the beam to investigate and walked along its length looking for the obstruction. As he reached the end of the beam, the beam tilted and Romano's cable snapped, hitting Flood in the ankle and injuring him.

Under its subcontract with Yonkers, Romano agreed to (1) indemnify and hold harmless the City and Yonkers from any claims arising from or in connection with any acts or omissions in the performance of Romano's work and (2) procure all necessary and adequate insurance naming the City and Yonkers as additional insureds. In accordance with the subcontract, Romano obtained a policy with nonparty Royal Insurance Company of America (Royal), which provided for $1 million in primary general liability coverage. Romano's excess insurer, IICNA, supplied umbrella excess liability coverage in the amount of $10 million. The City and Yonkers were additional insureds under both the Royal and IICNA policies. St. Paul insured Yonkers, and the City as an additional insured, under a commercial policy with general liability coverage of $1 million and umbrella coverage of $5 million.

In January 2001, Flood commenced the underlying action against the City and Romano, asserting claims under the Labor Law as well as under principles of common-law negligence [FN1]. The City tendered its defense to St. Paul, which then assigned counsel to represent the City. Romano was represented by counsel assigned by its carrier, Royal. Several months later, St. Paul asked Romano to assume the City's defense and indemnification pursuant to the indemnification clause in the Yonkers-Romano subcontract. Romano agreed that its indemnification obligation to the City was clear and recommended that Royal accept tender of the City's defense. In response, Royal agreed to indemnify and defend the City without reservation or qualification.

Trial of Flood's personal injury action began in February 2003. Soon thereafter, Royal tendered the defense of the City and Romano to IICNA since it appeared that Flood's claim would exceed Royal's policy limits. After opening statements, the court granted Flood's motion for a directed verdict against the City as to liability on his Labor Law § 240(1) claim, finding the City vicariously liable as the owner of the bridge.

On February 10, 2003, after Flood's case rested on the remaining issues, IICNA settled the case for $3 million. IICNA negotiated the settlement whereby Royal would pay $1 million and IICNA the $2 million balance. Flood's counsel stated on the record that the settlement was made with respect to Flood's claim against the City and that his client's claims against Romano would be discontinued with prejudice. However, the general release stated that the settlement amount was paid on behalf of both the City and Romano. St. Paul did not participate in the settlement agreement, having concluded that Romano was ultimately liable as a result of its agreement to indemnify the City, a position that Romano had previously agreed with.

IICNA subsequently commenced this action against St. Paul and Yonkers, seeking to recoup the $2 million it had paid to settle the underlying action. In the first cause of action, brought against St. Paul, IICNA maintained that the St. Paul policy covering the City was the primary insurance covering the loss at issue. IICNA sought a declaration that the IICNA policy is excess to the St. Paul policy, thus obligating St. Paul to reimburse IICNA the $2 million it paid to Flood. In the second cause of action, sounding in subrogation, IICNA sought a judgment against Yonkers in the amount of $2 million. IICNA contended that Yonkers was contractually obligated to indemnify the City and thus was responsible for reimbursing IICNA for the payment IICNA made purportedly on the City's behalf. The motion court denied IICNA's cross motions for summary judgment as against Yonkers and St. Paul and granted St. Paul's and Yonkers's motions for summary judgment dismissing the complaint.

We conclude that IICNA is not entitled to reimbursement from St. Paul because St. Paul neither participated in the settlement negotiations nor agreed to the amount of the settlement. In AIU Ins. Co. v Valley Forge Ins. Co. (303 AD2d 325 [2003]), this Court found that where the insurer did not take part in settlement negotiations or agree to the settlement of an underlying personal injury action, it was not required to contribute to that settlement. Similarly here, IICNA, which orchestrated the underlying settlement, did not have the authority to bind St. Paul. We also note that the St. Paul insurance policy prohibited the City from assuming any financial obligation without St. Paul's consent (see Royal Zenith Corp. v New York Mar. Mgrs, 192 AD2d 390 [1993]). Since it is undisputed that St. Paul did not consent to the settlement, IICNA may not seek reimbursement from St. Paul.

There is no merit to IICNA's claim that St. Paul abandoned its insured, the City. In fact, St. Paul tendered the City's defense to Romano pursuant to Romano's contractual obligation to indemnify the City. Upon such tender, Romano and its insurer, Royal, unconditionally and without reservation agreed to defend and indemnify the City. Under these circumstances, it cannot be said that St. Paul abandoned its insured. Nor, as IICNA argues, did St. Paul take an improper coverage position when it declined to participate in the settlement. St. Paul correctly determined that the City, whose liability was purely statutory, was entitled to contractual indemnification from Romano and a complete pass-through of liability to Romano and its insurers, Royal and IICNA (see AIU Ins. Co., 303 AD2d at 325-326).

IICNA unpersuasively argues that the City could not transfer its liability to Romano because the accident was not caused by Romano's negligence. However, the contract between Romano and Yonkers did not require any showing of negligence on Romano's part. Instead, it required Romano to indemnify the City from any claims "arising from or in connection with any acts or omissions" in the performance of Romano's work. It is undisputed that Flood's injury occurred when a cable installed by Romano as part of the restoration project, and that Romano failed to remove, obstructed the work being performed, and snapped and hit Flood in the ankle. Thus, there can be no question that the accident arose from and was connected with Romano's act or omission (see Masciotta v Morse Diesel Int'l, 303 AD2d 309 [2003]).

There is no merit to IICNA's argument that the St. Paul policy covering the City as an additional insured must be exhausted prior to the application of the IICNA policy. In determining priority of coverage among different insurers covering the same risk, a court must consider the intended purpose of each policy "as evidenced by both its stated coverage and the premium paid for it, as well as . . . the wording of its provision concerning excess insurance" (Tishman Constr. Corp. of N.Y. v Great Am. Ins. Co., 53 AD3d 416, 419 [2008] [internal quotation marks and citation omitted]). Here, however, priority of coverage is irrelevant. Even if St. Paul's coverage of the City were primary to that of IICNA, the City's liability still would pass through to Romano and its insurers, Royal and IICNA. This is particularly so because Romano accepted tender of the City's defense and unconditionally and without reservation agreed to defend and indemnify the City. In light of this, and of the fact that IICNA settled the action without the consent of St. Paul, IICNA's claim for reimbursement from St. Paul must fail (see AIU Ins. Co., 303 AD2d at 325).

In its second cause of action, brought in subrogation, IICNA alleged that Yonkers was responsible for reimbursing IICNA for the $2 million it paid on the City's behalf. Subrogation is an equitable doctrine that "allows an insurer to stand in the shoes of its insured and seek indemnification from third parties whose wrongdoing has caused a loss for which the insurer is bound to reimburse" (Kaf-Kaf, Inc. v Rodless Decorations, 90 NY2d 654, 660 [1997]). However, under the antisubrogation rule, an insurer "has no right of subrogation against its own insured for a claim arising from the very risk for which the insured was covered" (North Star Reins. Corp. v Continental Ins. Co., 82 NY2d 281, 294 [1993]).

IICNA's claim against Yonkers is barred by the antisubrogation rule because Yonkers was an additional insured under the excess policy issued by IICNA. That policy includes as an insured any entity included as an additional insured under the underlying Royal policy. The Royal policy, in turn, provides that "[a]ny person or organization [Romano is] required by written contract . . . to name as an insured is an insured but only with respect to liability arising out of . . . [Romano's] work' performed for that insured."

In a similarly worded additional insured provision, the phrase "arising out of" was interpreted by the Court of Appeals "to mean originating from, incident to, or having connection with,' and requires only that there be some causal relationship between the injury and the risk for which coverage is provided'" (Worth Constr. Co., Inc. v Admiral Ins. Co., 10 NY3d 411, 415 [2008] [citations omitted]). The focus "is not on the precise cause of the accident but the general nature of the operation in the course of which the injury was sustained" (id. at 416 [internal quotation marks and citation omitted]).

There is no question that the liability here arose out of Romano's work. Flood's injury occurred because Romano failed to remove a cable it had erected, despite being requested to do so. That same cable obstructed the work being performed by Yonkers, and when Flood went to investigate, it snapped and hit him in the ankle. Accordingly, since Yonkers was an additional insured under the IICNA policy, IICNA is barred by the antisubrogation rule from seeking reimbursement from Yonkers.

We modify only to declare in St. Paul's favor (see Lanza v Wagner, 11 NY2d 317, 334 [1962], cert denied 371 US 901 [1962]).

We have considered IICNA's remaining contentions and find them unavailing.

Accordingly, the order of Supreme Court, New York County (Marylin G. Diamond, J.), entered February 21, 2008, which denied IICNA's cross motions for summary judgment against St. Paul and Yonkers and granted St. Paul's and Yonkers's motions for summary judgment dismissing the complaint, should be modified, on the law, to declare that St. Paul is not obligated to indemnify IICNA
in the amount of $2 million, and otherwise affirmed, without costs.

Johnson v. GEICO


Thaniel J. Beinert,
Brooklyn, N.Y. (Marc A. Merolesi and Kelly C.
Griffin of counsel), for appellant.
Connors & Connors, P.C.,
Staten Island, N.Y. (David S. Heller
of counsel), for respondent.

DECISION & ORDER

In an action, inter alia, to recover damages for breach of an insurance policy, the plaintiff appeals from an order of the Supreme Court, Richmond County (McGrail, Ct. Atty. Ref.), dated January 23, 2009, which granted those branches of the defendant's motion which were for summary judgment dismissing the first cause of action and pursuant to CPLR 3211(a)(7) to dismiss the second and third causes of action for failure to state a cause of action.

ORDERED that the order is modified, on the law, by deleting the provision thereof granting that branch of the defendant's motion which was for summary judgment dismissing the first cause of action and substituting therefor a provision denying that branch of the motion; as so modified, the order is affirmed, without costs or disbursements.

The Supreme Court erred in granting that branch of the defendant's motion which was for summary judgment dismissing the first cause of action alleging breach of contract. To deny coverage based upon a failure to cooperate, the insurer must show: "(1) that it acted diligently in seeking to bring about the insured's cooperation, (2) that the efforts employed by the carrier were reasonably calculated to obtain the insured's cooperation, and (3) that the attitude of the insured, after his cooperation was sought, was one of willful and avowed obstruction" (Baghaloo-White v Allstate Ins. Co., 270 AD2d 296). The heavy burden of proving lack of cooperation of the insured is placed upon the insurer (see Thrasher v United States Liab. Ins. Co., 19 NY2d 159, 168; Physicians' Reciprocal Insurers v Keller, 243 AD2d 547). Where, as here, there is an issue of fact as to whether the plaintiff failed to cooperate, summary judgment should be denied (see Van Gordon v Otsego Mut. Fire Ins. Co., 232 AD2d 405).

That branch of the defendant's motion which was to disqualify the plaintiff's attorney was not addressed by the Supreme Court. Therefore, it remains pending and undecided, and any issue raised with respect thereto are not properly before this Court (see Katz v Katz, 68 AD2d 536).

Matter of American International Insurance Company v. Giovanielli


Wade Clark Mulcahy,
New York, N.Y. (David F. Tavella of counsel),
for appellant.
Bryan M. Rothenberg (Cheven,
Keely & Hatzis, New York, N.Y.
[Constantine Hatzis and Mayu
Miyashita], of counsel), for petitioner-
respondent.
Subin Associates, LLP,
New York, N.Y. (Brooke Lombardi of
counsel), for respondent-respondent.

DECISION & ORDER

In a proceeding pursuant to CPLR article 75 to stay arbitration of an uninsured motorist claim, Lloyd's of London/Transportation Insurers, Inc., appeals from an order and judgment (one paper) of the Supreme Court, Queens County (Rios, J.), entered August 5, 2008, which, after a hearing, granted the petition and directed Lloyd's of London/Transportation Insurers, Inc., to defend and indemnify Eduardo Rivera in an underlying action to recover damages for personal injuries.

ORDERED that the order and judgment is affirmed, with costs.

"In a proceeding to stay arbitration of a claim for uninsured motorist benefits, the claimants' insurer has the initial burden of proving that the offending vehicle was insured at the time of the accident, and thereafter the burden is on the party opposing the stay to rebut that prima facie showing" (Matter of Lumbermens Mut. Cas. Co. v Quintero, 305 AD2d 684, 684-685; see Matter of Eagle Ins. Co. v Tichman, 185 AD2d 884). Here, the petitioner, American International Insurance Company, made a prima facie showing that the alleged offending vehicle was insured by Lloyd's of London/Transportation Insurers, Inc. (hereinafter Lloyd's) at the time of the accident by submitting the police accident report containing the vehicle's insurance policy number and correspondence from Lloyd's representative identifying Lloyd's as the insurer of the vehicle (see Matter of Mercury Ins. Group v Ocana, 46 AD3d 561, 562; Matter of Government Empls. Ins. Co. v McFarland, 286 AD2d 500; Matter of Eagle Ins. Co. v Olephant, 81 AD2d 886, 887). In opposition, Lloyd's failed to establish a lack of coverage or a timely and valid disclaimer of coverage (see Matter of State Farm Mut. Auto. Ins. Co. v Mazyck, 48 AD3d 580, 581; Matter of Eagle Ins. Co. v Rodriguez, 15 AD3d 399, 400; Matter of Lumbermens Mut. Cas. Co. v Quintero, 305 AD2d 684). Accordingly, the Supreme Court properly granted the petition to stay arbitration of the uninsured motorist claim, and directed Lloyd's to defend and indemnify Eduardo Rivera in an underlying action to recover damages for personal injuries.

Lloyd's contends that the Supreme Court should have stayed the framed-issue hearing pending the resolution of Lloyd's first-filed declaratory judgment action in New Jersey. However, "[w]hile priority in the bringing of actions is a factor to be considered in choice of forum litigation, it is not controlling, especially when commencement of the competing actions has been reasonably close in time" (Flintkote Co. v American Mut. Liab. Ins. Co., 103 AD2d 501, 505). Under the circumstances, New York is the most appropriate forum for resolution of the parties' dispute (see Brooklyn Navy Yard Cogeneration Partners v PMNC, 254 AD2d 447; White Light Prods. v On The Scene Prods., 231 AD2d 90; Flintkote Co. v American Mut. Liab. Ins. Co., 103 AD2d 501).

In the Matter of AutoOne Ins. Co. v. Valentine

 

Smith & Newman, LLP, New York, N.Y. (Kristine Gorka of
counsel), for additional respondent-appellant.
David J. Tetlak,
Huntington Station, N.Y. (Albert J. Galatan of
counsel), for petitioner-respondent.

DECISION & ORDER

In a proceeding pursuant to CPLR article 75 to permanently stay arbitration of a claim for supplementary uninsured motorist benefits, the proposed additional respondent Rutgers Casualty Insurance Company appeals, as limited by its brief, from so much of an order of the Supreme Court, Queens County (Rios, J.), dated January 7, 2009, as granted the petition to the extent that it, in effect, granted leave pursuant to CPLR 401 to join it as an additional respondent, directed a hearing on the issue of coverage under a policy of automobile insurance issued by it to the proposed additional respondent Brainy Jose Rodriguez, and temporarily stayed the arbitration pending the hearing.

ORDERED that on the Court's own motion, the notice of appeal from so much of the order as granted the petition to the extent of directing a hearing is deemed an application for leave to appeal from that portion of the order, and leave to appeal is granted (see CPLR 5701; Matter of Hermitage Ins. Co. v Escobar, 61 AD3d 869; Matter of Standard Fire Ins. Co. v Mouchette, 47 AD3d 636); and it is further,

ORDERED that the order is affirmed insofar as appealed from, with costs.

In 2003 the proposed additional respondent Rutgers Casualty Insurance Company (hereinafter Rutgers Casualty) issued a policy of automobile insurance (hereinafter the tortfeasor's policy) to the proposed additional respondent Brainy Jose Rodriguez. On January 3, 2004, the respondent Edwin Valentine was involved in an automobile accident in Queens with a motor vehicle operated by Rodriguez (hereinafter the tortfeasor's vehicle). The petitioner, AutoOne Insurance Company, issued a policy of automobile insurance to Valentine (hereinafter Valentine's policy) covering the vehicle owned and operated by Valentine at the time of the subject accident.

In 2005 Rutgers Casualty commenced an action (hereinafter the Pennsylvania action) in the Court of Common Pleas in Philadelphia, Pennsylvania (hereinafter the Pennsylvania court) against, among others, Rodriguez and Valentine. The petitioner was not a party to the Pennsylvania action. The complaint therein alleged, inter alia, that Rodriguez had fraudulently represented on his application for insurance that he resided in Pennsylvania and that the tortfeasor's vehicle was garaged there. Rutgers Casualty sought to have the tortfeasor's policy declared void ab initio. The complaint also stated in paragraph three thereof that "[a]ll other defendants named herein are so named FOR THE PURPOSE OF NOTICE ONLY," referring to Valentine and all of the defendants other than Rodriguez.

In an order of the Pennsylvania court dated October 6, 2006 (hereinafter the Pennsylvania court order), the court declared the tortfeasor's policy void ab initio upon the default of Rodriguez and granted Rutgers Casualty's request to discontinue the Pennsylvania action insofar as asserted against, among others, Valentine.

Sometime thereafter, the petitioner received an undated application for supplementary uninsured motorist benefits (hereinafter SUM benefits) from Valentine and a demand to arbitrate his claim for SUM benefits. On July 11, 2008, the petitioner commenced this proceeding, inter alia, in effect, pursuant to CPLR 401, for leave to join Rutgers Casualty, the proposed additional respondent Mario Serrano, and Rodriguez, as additional respondents and to stay arbitration of Valentine's claim for SUM benefits pending a hearing on the determination of coverage under the tortfeasor's policy.

Under the doctrine of res judicata, a valid final judgment bars future actions between the same parties on the same cause of action (see Parker v Blauvelt Volunteer Fire Co., 93 NY2d 343, 347; Matter of Reilly v Reid, 45 NY2d 24, 27). As a general rule, "once a claim is brought to a final conclusion, all other claims arising out of the same transaction or series of transactions are barred, even if based upon different theories or if seeking a different remedy" (O'Brien v City of Syracuse, 54 NY2d 353, 357; see Parker v Blauvelt Volunteer Fire Co., 93 NY2d at 347). Here, although the petition to stay arbitration of Valentine's claim for SUM benefits arises out of the same automobile accident as did the Pennsylvania action, the Pennsylvania court order on which Rutgers Casualty relies was not a final judgment on the merits which would be entitled to res judicata effect in this proceeding (see Forte v Kaneka Am. Corp., 110 AD2d 81, 85).

A voluntary discontinuance ordinarily is not a decision on the merits, and res judicata does not bar a petitioner from maintaining another proceeding for the same claim unless the order of discontinuance recites that the claim was discontinued or settled on the merits (see Kret v Brookdale Hosp. Med. Ctr., 93 AD2d 449, 453; see generally CPLR 3217[c]). Here, the discontinuance as to Valentine, the petitioner's insured, did not state that it was granted with prejudice and, thus, does not operate as an adjudication on the merits (see Forte v Kaneka Am. Corp., 110 AD2d at 85; see generally CPLR 3217[c]; cf. Karniol v Good Move Trucking, 281 AD2d 287, 287-288).

Furthermore, the doctrine of collateral estoppel is not applicable here because the issue of whether the tortfeasor's vehicle was insured at the time of the accident never was litigated and decided in the Pennsylvania action (see generally Schwartz v Public Adm'r of County of Bronx, 24 NY2d 65, 71). The Pennsylvania court order which determined that the tortfeasor's policy was void ab initio was made on the default of Rodriguez (see Kaufman v Eli Lilly & Co., 65 NY2d 449, 456-457; Chambers v City of New York, 309 AD2d 81; Holt v Holt, 262 AD2d 530, 530; Rourke v Travelers Ins. Co., 254 AD2d 730, 731; Pigliavento v Tyler Equip. Corp., 233 AD2d 810, 811). Thus, the doctrine of collateral estoppel does not preclude the petitioner from litigating that issue in this proceeding.

Rutgers Casualty's remaining contentions are without merit.

Accordingly, the Supreme Court properly granted the petition to the extent that it, in effect, granted leave pursuant to CPLR 401 to join Rutgers Casualty as an additional respondent, directed a hearing on the issue of coverage under the tortfeasor's policy, and temporarily stayed the arbitration pending the hearing.

Cabrera v. Gilpin


Ginsberg & Broome, P.C.,
New York (Robert M. Ginsberg of
counsel), for appellant.
Richard T. Lau & Associates,
Jericho (Linda Meisler of
counsel), for respondents.

Order, Supreme Court, Bronx County (Sallie Manzanet-Daniels, J.), entered April 9, 2009, which granted defendants' motion for summary judgment dismissing the complaint, unanimously affirmed, without costs. Order, same court (Barry Salman, J.), entered October 20, 2009, insofar as it denied plaintiff's motion for renewal, unanimously affirmed, without costs. Appeal from that part of the October 20, 2009 order that denied plaintiff's motion for reargument unanimously dismissed, without costs, as taken from a nonappealable paper.

Defendants demonstrated prima facie that plaintiff did not sustain a "serious injury" as defined by Insurance Law § 5102(d) through the affirmed reports of an orthopedist who found no limitations in range of motion in her cervical and lumber spine, shoulders, knees and ankles and opined that any injuries to those areas had resolved, a neurologist who reported a normal neurological examination and no objective neurological findings to support cervical or lumbosacral radiculopathy or carpal tunnel syndrome, and a radiologist who opined that an MRI taken of
plaintiff before the instant accident revealed a degenerative disc condition not attributable to trauma.

In opposition, plaintiff submitted her doctor's affirmation in which he stated that he treated plaintiff before the accident and then again six months after the accident; she submitted no objective medical evidence contemporaneous with the accident (see Toulson v Young Han Pae, 13 AD3d 317, 319 [2004]). Moreover, her doctor failed to address the conclusion of defendants' radiologist that plaintiff's condition was the result of a degenerative disease (see Valentin v Pomilla, 59 AD3d 184 [2009]).

On her motion for renewal, plaintiff failed to provide a reasonable justification for her failure to present the "new
facts" in her original opposition to defendants' motion (see American Audio Serv. Bur. Inc. v AT & T Corp., 33 AD3d 473, 476 [2006]). In any event, her doctor's affirmation did not fill in all the gaps in his earlier affirmation.

Arias v. Janelle Car Service Corp.


Michelstein & Associates, PLLC,
New York, N.Y. (Mark D. Plush
of counsel), for appellants.
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 plaintiffs appeal from an order of the Supreme Court, Queens County (Satterfield, J.), dated April 7, 2009, which granted the defendants' motion for summary judgment dismissing the complaint insofar as asserted by the plaintiff Magaly Garcia on the ground that she did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the appeal by the plaintiff Armando Arias is dismissed, without costs or disbursements, as that plaintiff is not aggrieved by the order appealed from (see CPLR 5511); and it is further,

ORDERED that the order is reversed on the appeal by the plaintiff Magaly Garcia, on the law, and the defendants' motion for summary judgment dismissing the complaint insofar as asserted by her is denied; and it is further,

ORDERED that one bill of costs is awarded to the plaintiff Magaly Garcia.

The defendants sustained their prima facie burden of showing that the plaintiff Magaly Garcia (hereinafter 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, 956-967). However, in opposition to the motion, the plaintiff raised a triable issue of fact as to whether she sustained a serious injury to her cervical spine through, inter alia, the affirmed medical report of her treating physician, Harold James, and the affirmation of her treating orthopedist, Randall V. Ehrlich. Dr. James found, based upon his examination of the plaintiff, that she had significant, quantified, range-of-motion limitations in her cervical spine, as compared to the norm, contemporaneous with the 2004 accident. Dr. Ehrlich similarly found, based upon examinations conducted in 2008, that the plaintiff continued to have significant, quantified, range-of-motion limitations in her cervical spine, as compared to the norm, which he opined had been caused by the subject accident. Although portions of Dr. Ehrlich's affirmation improperly recited the unsworn findings of other physicians, the limitations he observed based upon his own examinations are competent evidence (see Casiano v Zedan, 66 AD3d 730, 731; McNeil v New York City Tr. Auth., 60 AD3d 1018, 1019). The plaintiff additionally submitted the affirmation of a radiologist who interpreted magnetic resonance imaging films of her cervical spine, and concluded that she had a disc bulge at the C5-6 level. Contrary to the Supreme Court's determination, these submissions raised a triable issue of fact as to whether the plaintiff sustained a serious injury to her cervical spine under the permanent consequential limitation of use and/or significant limitation of use categories of Insurance Law § 5102(d) as a result of the subject accident (see Parker v Singh, 71 AD3d 750; Bachan v Paratransit, 71 AD3d 610; Reyes v Dagostino, 67 AD3d 983; Noel v Choudhury, 65 AD3d 1316).

Bright v. Moussa


Ameduri, Galante & Friscia,
Staten Island, N.Y. (Marvin Ben-
Aron of counsel), for appellant.
Kay and Gray,
Westbury, N.Y. (William Gitter of counsel), for
respondents Noha Moussa and Maher
Moussa (no brief filed).
Votto & Cassata, LLP,
Staten Island, N.Y. (Serafina M.
Cassata of counsel), for respondents Thomas
Parish and Village Limo, Inc.

DECISION & ORDER

In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Richmond County (McMahon, J.), dated April 21, 2009, which granted the motion of the defendants Thomas Parish and Village Limo, Inc., and the separate motion of the defendants Noha Moussa and Maher Moussa, for summary judgment dismissing the complaint insofar as asserted against them on the ground that she did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is reversed, on the law, with one bill of costs, and the defendants' separate motions 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) are denied.

The defendants failed to meet their prima facie burdens of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). The defendants' respective motion papers failed to adequately 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 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).

While the defendants relied on the plaintiff's magnetic resonance imaging reports concerning the cervical and lumbar regions of her spine and her right knee, these reports were insufficient to meet their prima facie burdens. These reports dealt solely with the cervical and lumbar regions of the plaintiff's spine, as well as her right knee, whereas, in her bill of particulars, she alleged additional injuries to other regions of her body, such as her left knee and right shoulder (see Menezes v Khan, 67 AD3d 654; Takaroff v A.M. USA, Inc., 63 AD3d 1142, 1143; Delayhaye v Caledonia Limo & Car Serv., Inc., 61 AD3d 814, 815; Carr v KMO Transp., Inc., 58 AD3d 783, 784-785; Jensen v Nicmanda Trucking, Inc., 47 AD3d 769, 770).

Since the defendants failed to meet their respective prima facie burdens, it is unnecessary to determine whether the papers submitted by the plaintiff in opposition were sufficient to raise a triable issue of fact (see Menezes v Khan, 67 AD3d at 654; Alvarez v Dematas, 65 AD3d at 600; Coscia v 938 Trading Corp.,

Dizdari v. Chhon


Rimland & Associates,
Brooklyn, N.Y. (Antony M. Grisanti of
counsel), for appellant.
Andrea G. Sawyers,
Melville, N.Y. (Scott W. Driver of
counsel), for respondents.

DECISION & ORDER

In an action, inter alia, to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Queens County (McDonald, J.), entered October 23, 2009, which granted the defendants' motion for summary judgment dismissing the complaint on the ground that he did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is reversed, on the law, with costs, and the defendants' motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) is denied.

The defendants met their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 956-957; see also Kearse v New York City Tr. Auth., 16 AD3d 45, 49-50). In opposition, the plaintiff raised a triable issue of fact through the affirmation of his treating physician, Dr. Nathan Levin, as to whether he sustained a serious injury to the cervical and/or lumbar regions of his spine, under the significant limitation of use and/or permanent consequential limitation of use categories of Insurance Law § 5102(d) as a result of the subject accident (see Nisanov v Kiriyenko, 66 AD3d 655; Su gil Yun v Barber, 63 AD3d 1140; Pearson v Guapisaca, 61 AD3d 833; Williams v Clark, 54 AD3d 942; Casey v Mas Transp., Inc., 48 AD3d 610; Acosta v Rubin, 2 AD3d 657). Dr. Levin opined, based on his contemporaneous and recent examinations of the plaintiff, as well as on his review of the plaintiff's magnetic resonance imaging reports, which showed, inter alia, a disc bulge in the cervical spine and disc herniations in the lumbar spine, that the plaintiff's lumbar and cervical injuries and observed range of motion limitations were permanent and causally related to the subject accident.

Contrary to the defendants' assertions, the plaintiff adequately explained, through the affirmation of Dr. Levin, the reason for the lengthy gap in his treatment history (see Pommells v Perez, 4 NY3d 566, 577; Eusebio v Yannetti, 68 AD3d 919; Gaviria v Alvardo, 65 AD3d 567; Bonilla v Tortoriello, 62 AD3d 637).

Elshaarawy v. U-Haul Co. of Mississippi


Mayer Brown LLP,
New York, N.Y. (Andrew H. Schapiro and
Christopher J. Houpt of counsel), for appellants.
Wittenstein & Associates, P.C.,
Brooklyn, N.Y. (Harlan
Wittenstein of counsel), for respondent.

DECISION & ORDER

In a consolidated action to recover damages for personal injuries, the defendants U-Haul Co. of Mississippi, Jeffrey Cranford, U-Haul Company of Arizona, and Amanda Cranford appeal from (1) an order of the Supreme Court, Kings County (F. Rivera, J.), entered April 15, 2008, which denied their motion pursuant to CPLR 4404(a) to set aside a jury verdict on the issue of damages and for a new trial on the issue of damages, and (2) a judgment of the same court entered October 20, 2008, which upon the order entered April 15, 2008, and upon an order of the same court (Johnson, J.), dated January 4, 2007, granting the plaintiff's motion for summary judgment on the issue of serious injury to his right knee, is in favor of the plaintiff and against them in the principal sum of $984,374.45, representing the net present value of the damages awards plus interest from June 15, 2006, to October 20, 2008.

ORDERED that the appeal from the order entered April 15, 2008, is dismissed; and it is further,

ORDERED that the judgment is reversed, on the law, the plaintiff's motion for summary judgment on the issue of serious injury to his right knee is denied, the order dated January 4, 2007, is modified accordingly, the order entered April 15, 2008, is vacated, and the matter is remitted to the Supreme Court, Kings County, for a new trial on the issue of damages; and it is further,

ORDERED that one bill of costs is awarded to the appellants.

The appeal from the intermediate order entered April 15, 2008, must be dismissed because the right of direct appeal therefrom terminated with the entry of judgment in the action (see Matter of Aho, 39 NY2d 241). The issues raised on the appeal from that order are brought up for review and have been considered on the appeal from the judgment (see CPLR 5501[a][1]).

On July 8, 2004, the plaintiff parked his car near the intersection of 77th Street and 6th Avenue in Brooklyn, exited the vehicle, and opened the rear passenger door to retrieve a tool box from the back seat. As the plaintiff was pulling the tool box out of his car, a rented U-Haul van operated by the defendant Jeffrey Cranford made a right turn onto 77th Street, and struck the plaintiff's car in the rear. The impact pushed the plaintiff's vehicle forward, and the right rear tire of the car ran over the plaintiff's right foot. According to the plaintiff, the sudden movement of his vehicle also caused him to lose his balance and fall back, hitting his head on the sidewalk and twisting his knee. The plaintiff alleges that, as a result of the accident, he sustained injuries to his right knee, back, neck, and head. Approximately four months later, the plaintiff underwent arthroscopic surgery on his right knee, which revealed that he had sustained a tear of the lateral meniscus, and a tear of the anterior cruciate ligament. A second surgical procedure was performed on the plaintiff's right knee on December 14, 2004.

The plaintiff commenced one action against U-Haul Co. of Mississippi and Jeffrey Cranford, and a second action against, among others, U-Haul Company of Arizona and Amanda Cranford (hereinafter collectively the defendants). After the two actions were consolidated, the plaintiff moved for summary judgment on the issue of liability, and the Supreme Court granted his motion. The plaintiff subsequently moved for summary judgment on the issue of serious injury to his right knee under the 90/180 day category of Insurance Law § 5102(d). In an order dated January 4, 2007, the Supreme Court granted the plaintiff's motion.

At the ensuing trial on the issue of damages, the plaintiff presented evidence regarding the injuries to his right knee, as well as additional injuries to his head and the cervical and lumbar regions of his spine.

In accordance with the order dated January 4, 2007, the jury was instructed that "[t]he court has already determined that plaintiff's knee injury was caused by this accident and caused an impairment, a medically determined impairment that fits this description. So, that issue is no longer before you with regard to his knee, which means that no matter what, you will have to give an award of what you consider fair and reasonable compensation for the knee injury that the court has determined was causally linked to this accident." The jury subsequently returned a verdict finding that the plaintiff sustained a medically determined injury or impairment of a nonpermanent nature to his neck, back, and/or head that prevented him from performing substantially all of his usual and customary daily activities for not less than 90 days during the 180 days immediately following the accident, and that the accident was a substantial factor in causing these injuries. The jury further found that the plaintiff had sustained a significant limitation of use of a body function or system "as to the neck, back and/or knee," and that the accident was a substantial factor in causing these injuries. The jury was not explicitly asked to determine which one or more of these three body functions or systems were affected by a significant limitation of use, but only to determine whether any one of them was so affected by such a significant limitation of use. The jury awarded the plaintiff the principal sums of $300,000 for past pain and suffering, $500,000 for future pain and suffering, and $15,000 for lost earnings, but was not asked to allocate the awards among the plaintiff's various injured body parts, functions, or systems. The defendants thereafter moved pursuant to CPLR 4404(a) to set aside the verdict on the issue of damages and for a new trial, and the Supreme Court denied their motion. A judgment in favor of the plaintiff and against the defendants was subsequently entered, and the defendants appeal from the judgment.

On appeal, the defendants contend that the Supreme Court erred in granting the plaintiff's motion for summary judgment on the issue of serious injury to his right knee under the 90/180 day category of Insurance Law § 5102(d). We agree. As the proponent of the summary judgment motion, the plaintiff had the burden of making a prima facie showing that he suffered a serious injury pursuant to Insurance Law § 5102(d), and that his injury was causally related to the accident (see Autiello v Cummins, 66 AD3d 1072; McHugh v Marfoglia, 65 AD3d 828, 829; LaForte v Tiedemann, 41 AD3d 1191, 1192; Ellithorpe v Marion, 34 AD3d 1195). The plaintiff satisfied this burden by submitting the affirmation of his orthopedic surgeon and his own affidavit, which established that as a result of the accident he had sustained a "a medically determined injury" to his right knee which prevented him from performing substantially all of his usual and customary daily activities for at least 90 of the first 180 days following the accident (Insurance Law § 5102[d]; see Ellithorpe v Marion, 34 AD3d 1195, 1197). However, in opposition, the defendants raised a triable issue of fact as to whether the plaintiff's knee injuries were caused by the subject accident by submitting the affirmation of their examining orthopedic surgeon, and the plaintiff's ambulance report and hospital emergency room records, which indicated that he made no complaints of knee pain immediately after the accident, and that examination of his knees revealed no swelling. Although the ambulance report and hospital emergency room records were uncertified, a defendant may rely upon unsworn medical reports and uncertified records of an injured plaintiff's treating medical care providers in order to demonstrate the lack of serious injury (see Hernandez v Taub, 19 AD3d 368; Kearse v New York City Tr. Auth., 16 AD3d 45, 47; Itkin v Devlin, 286 AD2d 477; Abrahamson v Premier Car Rental of Smithtown, 261 AD2d 562; Pagano v Kingsbury, 182 AD2d 268, 271). Accordingly, the plaintiff's motion for summary judgment on the issue of serious injury to his right knee under the 90/180 day category should have been denied. Since the jury was instructed that its damages award must include compensation for the plaintiff's knee injuries, which the Supreme Court determined to be causally linked to the accident, the jury did not expressly find that the plaintiff sustained a significant limitation of use of his right knee, and the jury did not specifically allocate damages to compensate the plaintiff for injuries to any particular parts, functions, or systems of his body, the judgment must be reversed, and a new trial on the issue of damages must be granted.

We further note that the Supreme Court erred in permitting the plaintiff's treating neurologist to testify as to the contents of a report interpreting magnetic resonance imaging (hereinafter MRI) films of the plaintiff's cervical spine, which was prepared by a radiologist who did not testify at trial (see Wagman v Bradshaw, 292 AD2d 84; see also Clevenger v Mitnick, 38 AD3d 586, 587; Jemmott v Lazofsky, 5 AD3d 558, 560; Beresford v Waheed, 302 AD2d 342, 343; DeLuca v Ding Ju Liu, 297 AD2d 307). This testimony was improperly admitted because the MRI films were not in evidence, the plaintiff failed to elicit sufficient proof to establish that the MRI report interpreting the films was reliable, and the defendants had no opportunity to cross-examine the radiologist who prepared the report (see Wagman v Bradshaw, 292 AD2d at 89-90).

In light of our determination, we need not address the defendants' remaining contentions.

Johnson v. Kara


Baker, McEvoy, Morrissey & Moskovits, P.C.,
New York, N.Y.
(Stacy R. Seldin of counsel), for appellants.
Ferraro Wyatt PLLC,
New York, N.Y. (Justin Wyatt of counsel),
for respondent.

DECISION & ORDER

In an action to recover damages for personal injuries, the defendants appeal, as limited by their brief, from so much of an order of the Supreme Court, Kings County (Hinds-Radix, J.), dated August 28, 2009, as denied those branches of their motion which were for summary judgment dismissing the plaintiff's claims of serious injury under the permanent consequential limitation of use and significant limitation of use categories of Insurance Law § 5102(d) on the ground that the plaintiff did not sustain a serious injury within the meaning of those categories of the statute.

ORDERED that the order is affirmed insofar as appealed from, with costs.

The defendants met their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident under the permanent consequential limitation of use and significant limitation of use categories of that statute (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In opposition, the plaintiff raised a triable issue of fact as to whether she sustained a serious injury to her lumbar spine under those categories of Insurance Law § 5102(d) as a result of the subject accident. The plaintiff relied upon, inter alia, certain submissions of Dr. Leslie Theodore, her treating physician. Based on her contemporaneous and recent examinations of the plaintiff, which revealed significant limitations in the plaintiff's lumbar spine, and her review of the reports of magnetic resonance imaging scans of the plaintiff's lumbar spine, which showed disc bulges in that region of the plaintiff's spine, Dr. Theodore concluded that the injuries to the lumbar region of the plaintiff's spine, and range-of-motion limitations observed during the examinations, were significant, permanent, and causally related to the subject accident (see Nisanov v Kiriyenko, 66 AD3d 655; Su Gil Yun v Barber, 63 AD3d 1140, 1141; Pearson v Guapisaca, 61 AD3d 833, 834; Williams v Clark, 54 AD3d 942, 943; Casey v Mas Transp., Inc., 48 AD3d 610, 611; Acosta v Rubin, 2 AD3d 657, 659).

Kuperberg v. Montalbano


Eisenberg & Kirsch,
Liberty, N.Y. (Michael D. Wolff of counsel),
for appellant.
Wingate, Russotti & Shapiro, LLP,
New York, N.Y. (David M.
Schwarz of counsel), for respondent.

DECISION & ORDER

In an action to recover damages for personal injuries, the defendant appeals from an order of the Supreme Court, Nassau County (Mahon, J.), entered August 14, 2009, which granted the plaintiff's motion for summary judgment on the issue of liability and denied her cross motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is reversed, on the law, with costs, the defendant's cross motion for summary judgment dismissing the complaint is granted, and the plaintiff's motion for summary judgment is denied as academic.

On November 12, 2007, a motor vehicle being operated by the defendant made contact with the plaintiff, a pedestrian, in the parking lot of a shopping center in Bayshore. After receiving treatment at the emergency room of Franklin Hospital later on the day of the occurrence, the plaintiff did not receive any additional treatment for her alleged injuries, until January 22, 2008, 71 days later, when she was treated by Timothy Reish, an orthopedist. On or about April 2008, the plaintiff commenced the present action, alleging that, as a result of the contact with the defendant's motor vehicle, she sustained a torn rotator cuff in her right shoulder.

After joinder of issue, the plaintiff moved for summary judgment on the issue of liability, and the defendant cross-moved 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). The defendant met her 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; Rivera v Bushwick Ridgewood Props., Inc., 63 AD3d 712). The defendant's evidence, which included, inter alia, an X-ray report prepared in the emergency room on the day of the occurrence and a magnetic resonance imaging (hereinafter MRI) report prepared by the plaintiff's own radiologist with regard to an MRI of the plaintiff's right shoulder performed in January 2008, indicated that she suffered from a preexisting degenerative disorder in her right shoulder. The affirmed report prepared by the defendant's radiologist, Dr. Jessica Berkowitz, which the defendant also submitted in support of her cross motion, indicated that Dr. Berkowitz had reviewed the foregoing MRI and found that it revealed no evidence of acute traumatic injury to the plaintiff's right shoulder. Moreover, at her deposition, the plaintiff acknowledged that she had not missed any time from her part-time job as a result of the accident and continued to take trips to Florida every two and one-half weeks, as she had done prior to the accident. The plaintiff's alleged injuries did not prevent her from performing "substantially all" of the material acts constituting her customary daily activities during at least 90 out of the first 180 days following the accident (see Sanchez v Williamsburg Volunteer of Hatzoloh, Inc., 48 AD3d 664, 665).

The admissible medical evidence submitted by the plaintiff in opposition to the cross motion failed to raise a triable issue of fact (see CPLR 3212[b]). The plaintiff failed to proffer any objective medical evidence that revealed the existence of a significant limitation in her right shoulder that was contemporaneous with the subject accident (see Rivera v Bushwick Ridgewood Props., Inc., 63 AD3d at 713). Based upon the record before it, the Supreme Court should have granted the defendant's cross motion for summary judgment and denied as academic the plaintiff's motion for summary judgment on the issue of liability.

Leopold v. New York City Transit Authority


DECISION & ORDER

In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Kings County (Velasquez, J.), dated January 14, 2009, which granted the defendants' motion for summary judgment dismissing the complaint on the ground that she did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is reversed, on the law, with costs, the defendants' motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) is denied, and a subsequent order of the same court dated August 12, 2009, made upon renewal, is vacated.

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). In support of their motion, the defendants relied upon, inter alia, the affirmed medical report of Barbara Joyce Freeman, their examining orthopedic surgeon. In that report, Dr. Freeman noted significant limitations in the range of motion within the region of the plaintiff's lumbar spine (see Catalan v G and A Processing, Inc.,AD3d, 2010 NY Slip Op 02734 [2d Dept 2010]; Croyle v Monroe Woodbury Central School District, 71 AD3d 944; Kjono v Fenning, 69 AD3d 581; Held v Heideman, 63 AD3d 1105; Torres v Garcia, 59 AD3d 705; Bagot v Singh, 59 AD3d 368; Hurtte v Budget Roadside Care, 54 AD3d 362; Jenkins v Miled Hacking Corp., 43 AD3d 393; Bentivegna v Stein, 42 AD3d 555, 556; Zamaniyan v Vrabeck, 41 AD3d 472, 473). Furthermore, while Dr. Freeman set forth findings in the report concerning the range of motion in the plaintiff's right knee, she failed to compare those findings to what was normal (see Chiara v Dernago, 70 AD3d 746; Page v Belmonte, 45 AD3d 825; Malave v Basikov, 45 AD3d 539; Fleury v Benitez, 44 AD3d 996; Nociforo v Penna, 42 AD3d 514). The extent of the limitation in the range of motion of the plaintiff's right knee indicated in the report cannot be ascertained given the fact that Dr. Freeman failed to compare any of those findings to what was normal (see Gaccione v Krebs, 53 AD3d 524; Iles v Jonat, 35 AD3d 537; McCrary v Street, 34 AD3d 768; Whittaker v Webster Trucking Corp., 33 AD3d 613; Yashayev v Rodriguez, 28 AD3d 651).

Since the defendants failed to meet their prima facie burden, it is unnecessary to determine whether the plaintiff's papers submitted in opposition were sufficient to raise a triable issue of fact (see Kjono v Fenning, 69 AD3d at 581; Chiara v Dernago, 70 AD3d at 746; Gaccione v Krebs, 53 AD3d 524; Coscia v 938 Trading Corp., 283 AD2d 538, 538).

Lozusko v. Miller


The Berkman Law Office, LLC,
Brooklyn, N.Y. (Robert J. Tolchin
and Eileen Kaplan of counsel), for appellants.
Callan, Koster, Brady & Brennan LLP,
New York, N.Y.
(Michael P. Kandler and Stephen J. Barrett
of counsel), for respondents.

DECISION & ORDER

In an action, inter alia, to recover damages for personal injuries, etc., the plaintiffs appeal from an order of the Supreme Court, Kings County (Velasquez, J.), dated March 29, 2009, which, in effect, granted the motion of the defendants Harriet Miller and Israel Miller for summary judgment dismissing the complaint insofar as asserted against them on the ground that the plaintiff Isyslav Lozusko did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is affirmed, with costs.

The defendants Harriet Miller and Israel Miller (hereinafter together the Millers) established, prima facie, that the plaintiff Isyslav Lozusko (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, 956-957).
In opposition to the Millers' showing, the plaintiffs failed to raise a triable issue of fact. The medical reports of Dr. Y. George Krementsov, the initial report of Dr. Zina Turovsky, and the injured plaintiff's physical therapy reports were unaffirmed, and the injured plaintiff's hospital records were uncertified and, thus, failed to raise a triable issue of fact (see Grasso v Angerami, 79 NY2d 813; Bleszcz v Hiscock, 69 AD3d 890; Singh v Mohamed, 54 AD3d 933; Verette v Zia, 44 AD3d 747; Nociforo v Penna, 42 AD3d 514; Mejia v DeRose, 35 AD3d 407).

Although the plaintiffs' reliance on unaffirmed reports of magnetic resonance imaging (hereinafter MRI) scans was not improper since the results of those MRI scans were set forth in the affirmed medical report of the Millers' examining orthopedic surgeon (see Zarate v McDonald, 31 AD3d 632; Ayzen v Melendez, 299 AD2d 381), those reports failed to raise a triable issue of fact, as they merely showed that, as of August 2003, the injured plaintiff had sustained, among other things, disc herniations in his cervical spine, and a disc herniation and disc bulges in his lumbar spine. The mere existence of those herniations and bulges, in the absence of objective evidence as to the extent of the alleged physical limitations resulting from the injuries and their duration, are not evidence of serious injury (see Shvartsman v Vildman, 47 AD3d 700; Patterson v NY Alarm Response Corp., 45 AD3d 656; Tobias v Chupenko, 41 AD3d 583; Mejia v DeRose, 35 AD3d 407).

While the plaintiffs submitted competent medical evidence that recent medical examinations revealed significant range-of-motion limitations in the cervical and lumbar regions of the injured plaintiff's spine, they failed to proffer competent medical evidence of the existence of significant limitations in either spinal region that were contemporaneous with the subject accident (see Sutton v Yener, 65 AD3d 625, 626; Jules v Calderon, 62 AD3d 958; Garcia v Lopez, 59 AD3d 593).

The plaintiffs also failed to offer competent medical evidence that the injured plaintiff sustained a medically-determined injury of a nonpermanent nature that prevented him, for 90 of the 180 days following the subject accident, from performing his usual and customary daily activities (see Rabolt v Park, 50 AD3d 995; Sainte-Aime v Ho, 274 AD2d 569).

Finally, the injured plaintiff's affidavit failed to raise a triable issue of fact as to whether he sustained a serious injury within the meaning of Insurance Law § 5102(d)(see Verette v Zia, 44 AD3d 747; Nociforo v Penna, 42 AD3d 514; Tobias v Chupenko, 41 AD3d at 584; Mejia v DeRose, 35 AD3d 407).

Simanovskiy v. Barbaro


Richard T. Lau,
Jericho, N.Y. (Kathleen E. Fioretti of counsel), for
defendants-appellants/counterclaim plaintiffs-respondents.
James G. Bilello,
Westbury, N.Y. (Patricia McDonagh of
counsel), for appellant Boris Simanovskiy on
the counterclaim.
Harmon,
Linder & Rogowsky, New York, N.Y. (Mitchell
Dranow of counsel), for plaintiffs-
respondents.

DECISION & ORDER

In an action to recover damages for personal injuries, the defendants appeal, as limited by their brief, from so much of an order of the Supreme Court, Kings County (Hinds-Radix, J.), dated April 23, 2009, as denied their motion for summary judgment dismissing the complaint on the ground that neither of the plaintiffs sustained a serious injury within the meaning of Insurance Law § 5102(d), and the counterclaim defendant Boris Simanovskiy cross-appeals from stated portions of the same order.

ORDERED that the order is reversed insofar as appealed from, on the law, and the defendants' motion for summary judgment dismissing the complaint is granted; and it is further,

ORDERED that the cross appeal is dismissed as academic; and it is further,

ORDERED that one bill of costs is awarded to the defendants, payable by the plaintiffs-respondents.

The defendants met their prima facie burden of showing that neither of the plaintiffs sustained 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, 350-351; Gaddy v Eyler, 79 NY2d 955, 956-957). In opposition, the plaintiffs failed to raise an issue of fact.

Neither plaintiff offered competent medical evidence to demonstrate the existence of a significant range-of-motion limitation in the cervical or lumbar regions of their spines contemporaneous with the subject accident (see Bleszcz v Hiscock, 69 AD3d 890; Caraballo v Kim, 63 AD3d 976, 977; Niles v Lam Pakie Ho, 61 AD3d 657, 659; Washington v Mendoza, 57 AD3d 972; Magid v Lincoln Servs. Corp., 60 AD3d 1008). Although the affirmations and affirmed medical reports of the plaintiffs' treating physician, Dr. Boris Dudelzak, found "decreased" range of motion in the cervical and lumbar regions of both plaintiffs' spines, he failed to quantify the results of his range-of-motion tests (see Barnett v Smith, 64 AD3d 669, 671; Kuchero v Tabachnikov, 54 AD3d 729, 730; Duke v Saurelis, 41 AD3d 770, 771). Furthermore, the computerized range-of-motion tests referred to in Dr. Dudelzak's affirmations were not in admissible form because they were not affirmed by someone with personal knowledge of the facts (see Taylor v Flaherty, 65 AD3d 1328; see also Luna v Mann, 58 AD3d 699, 700; Washington v Mendoza, 57 AD3d 972). Without admissible evidence of quantified range-of-motion limitations contemporaneous with the accident, the plaintiffs could not have established the duration of the injuries required to raise a triable issue of fact as to whether they sustained a serious injury under the permanent consequential limitation or significant limitation of use categories of the no-fault law (see Kuchero v Tabachnikov, 54 AD3d at 730; Ferraro v Ridge Car Serv., 49 AD3d 498).

The affirmed magnetic resonance imaging reports of the plaintiffs' radiologist, which indicated that the plaintiff Boris Simanovskiy suffered from bulging cervical and lumbar discs, and that the plaintiff Nadezhda Simanovskaya suffered from a torn meniscus, also were insufficient to raise a triable issue of fact. The existence of bulging discs and torn ligaments is not evidence of a serious injury in the absence of objective evidence of the extent and duration of the alleged physical limitations resulting from these injuries (see Casimir v Bailey, 70 AD3d 994; Bleszcz v Hiscock, 69 AD3d 890; Mora v Riddick, 69 AD3d 591; Caraballo v Kim, 63 AD3d 976, 977-978).

In light of our determination, the cross appeal has been rendered academic.

Walker v. Esses


Brown & Gropper, LLP,
New York, N.Y. (Joshua Gropper of
counsel), for appellant.
Robert P. Tusa (Sweetbaum & Sweetbaum,
Lake Success,
N.Y.
[Marshall D. Sweetbaum], of
counsel), for respondents John A.
Alway and Sandra A. Alway.
James G. Bilello,
Westbury, N.Y. (Andrew Gentile of counsel),
for respondent Marc D. Jones.

DECISION & ORDER

In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Kings County (Vaughan, J.), entered May 14, 2009, which granted the motion of the defendant Marc D. Jones, and the separate motion of the defendants John A. Alway and Sandra A. Alway, for summary judgment dismissing the complaint insofar as asserted against each of them on the ground that she did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is reversed, on the law, with one bill of costs payable by the respondents appearing separately and filing separate briefs, and the motion of the defendant Marc. D. Jones, and the separate motion of the defendants John A. Alway and Sandra A. Alway, for summary judgment dismissing the complaint insofar as asserted against each of them are denied.

In support of their separate motions for summary judgment, the defendant Marc D. Jones, and the defendants John A. Alway and Sandra A. Alway (hereinafter collectively the defendants), sustained 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, 956-967).

However, in opposition to that showing, the plaintiff raised a triable issue of fact, through the affidavit of her treating chiropractor, as to whether she sustained a serious injury to her cervical spine. The chiropractor's affidavit revealed that the plaintiff had significant range-of-motion limitations in her cervical spine contemporaneous with the accident, and that significant limitations were still present when the plaintiff was examined over two years after the accident. The chiropractor opined that these range-of-motion limitations, which he observed during his own examinations, were permanent and causally related to the subject accident. Thus, the chiropractor's affidavit was sufficient to raise a triable issue of fact as to whether the plaintiff sustained a serious injury to her cervical spine under the permanent consequential limitation of use and/or significant limitation of use categories of Insurance Law § 5102(d) as a result of the subject accident (see Yeong Hee Kwak v Villamar,AD3d, 2010 NY Slip Op 01955 [2d Dept 2010]; Parker v Singh,AD3d, 2010 NY Slip Op 01942 [2d Dept 2010]; Benitez v Lashnitz, 70 AD3d 879; Eusebio v Yannetti, 68 AD3d 919; Casiano v Zedan, 66 AD3d 730, 731).

Contrary to the defendants' contentions on appeal, the affidavit of the plaintiff's treating chiropractor also adequately explained the gap in her treatment (see Pommells v Perez, 4 NY3d 566, 577; Whitehead v Olsen, 70 AD3d 678; Eusebio v Yannetti, 68 AD3d 919; Gaviria v Alvardo, 65 AD3d 567, 569).

McDuffie v. Rodriguez


Pollack, Pollack,
Isaac & DeCicco, New York (Jillian Rosen of
counsel), for appellant.
Baker, McEvoy, Morrissey & Moskovits, P.C.,
New York
(Stacy R. Seldin of counsel), for respondents.

Order, Supreme Court, Bronx County (Alan Saks, J.), entered on or about June 19, 2009, which granted defendants' motion for summary judgment dismissing the complaint on the ground that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d), unanimously reversed, on the law, without costs, and the complaint reinstated.

Defendants met their prima facie burden of establishing that plaintiff did not sustain a serious injury by submitting the affirmed reports of experts who, after examining plaintiff and reviewing her medical records and MRI studies, found a lack of causation between her complaint of right knee pain and the subsequent arthroscopic surgical repair and the accident, and instead attributed plaintiff's condition to pre-existing degenerative osteoarthritis (see Jean v Kabaya, 63 AD3d 509 [2009]). In opposition, plaintiff raised a triable issue of fact, as her treating physician noted acute injuries related to the automobile accident as well as degenerative changes. Defendants' remaining arguments need not be addressed.

Roman Catholic Diocese of Rockville Centre

V

 Certain Underwriters at Lloyd's London


Lynch & Lynch,
Mineola, N.Y. (Brian Hussey of counsel), for
appellant.
Stalker, Vogrin, Bracken & Frimet, LLP,
New York, N.Y.
(Michael J. Frimet of counsel), for
respondents.


DECISION & ORDER

In an action to recover damages for breach of contract and for a judgment declaring that certain assessments the plaintiff was mandated to pay under the Workers' Compensation Law are covered under the insurance policies issued by the defendants, the plaintiff appeals from an order of the Supreme Court, Nassau County (Austin, J.), entered December 1, 2008, which denied its motion for summary judgment dismissing the defendants' seventh affirmative defense and granted the defendants' cross motion for summary judgment.

ORDERED that the order is affirmed, with costs, and the matter is remitted to the Supreme Court, Nassau County, for the entry of a judgment declaring that the assessments the plaintiff was mandated to pay under the Workers' Compensation Law are not covered under the insurance policies issued by the defendants.

Between 1976 and 1996 (hereinafter the covered period), the plaintiff, a self-insured employer, obtained a series of excess insurance policies from the defendants. Each of the policies provided coverage for Workers' Compensation, the scope of which was set forth in the policies. During the covered period, the plaintiff was required to pay a number of assessments imposed upon self-insurers under certain sections of the Workers' Compensation Law (see Workers' Compensation Law § 15[8][h]; § 25-a[3]; see also §§ 50, 151[2][b]). The plaintiff initiated this action against the defendants, demanding, inter alia, a judgment declaring that, pursuant to the terms of the policies, the defendants are obligated to indemnify the plaintiff for these statutorily-mandated assessments.

The plaintiff moved for summary judgment dismissing the defendants' seventh affirmative defense, wherein the defendants asserted that the plaintiff's "claims are either not covered and/or excluded" from the subject policies. The defendants opposed the motion and cross-moved for summary judgment. The Supreme Court denied the plaintiff's motion for summary judgment dismissing the defendants' seventh affirmative defense and granted the defendants' cross motion for summary judgment. The Supreme Court found that the language in the policies clearly and unambiguously did not require payment of the statutorily-mandated assessments. We affirm.

" [C]ourts bear the responsibility of determining the rights or obligations of parties under insurance contracts based on the specific language of the policies'" (Sanabria v American Home Assur. Co., 68 NY2d 866, 868, quoting State of New York v Home Indem. Co., 66 NY2d 669, 671). Where a provision is unambiguous, it must be given its "plain and ordinary meaning" (United States Fid. & Guar. Co. v Annunziata, 67 NY2d 229, 232; see Maroney v New York Cent. Mut. Fire Ins. Co., 5 NY3d 467, 471-472; Catucci v Greenwich Ins. Co., 37 AD3d 513, 514). Here, there is no ambiguity in the relevant terms of the insurance policies and, as the Supreme Court properly determined, the terms cannot reasonably be read to include the assessments imposed upon the plaintiff under the Workers' Compensation Law.
Since this is, in part, a declaratory judgment action, we remit the matter to the Supreme Court, Nassau County, for the entry of a judgment declaring that the statutorily-mandated assessments are not covered under the subject insurance policies (see Lanza v Wagner, 11 NY2d 317, 334, appeal dismissed 371 US 74, cert denied 371 US 90).
COVELLO, J.P., FLORIO, ENG and CHAMBERS, JJ., concur.

Pike v New York Life Insurance Company


Lally Mahon & Rooney, LLP,
Mineola, N.Y. (Christopher Rooney
of counsel), for appellants-respondents.
Ruskin Moscou Faltischek, P.C.,
Uniondale, N.Y. (Robert F.
Regan of counsel), for respondents-
appellants.
Winget, Spadafora & Schwartzberg, LLP,
New York, N.Y.
(Michael Schwartzberg and Steven Mellen of
counsel), for defendants-respondents.


DECISION & ORDER

In an action, inter alia, to recover damages for breach of contract, the defendants New York Life Insurance Company and New York Life Annuity Corporation appeal from so much of an order and judgment (one paper) of the Supreme Court, Suffolk County (Rebolini, J.), entered October 21, 2008, as denied their motion for leave to amend their answer to assert affirmative defenses based on, among other things, the applicable statutes of limitations and lack of standing, and to dismiss the complaint insofar as asserted against them, in effect, pursuant to CPLR 3211(a)(3), (5), and (7), or in the alternative, for summary judgment dismissing the complaint insofar as asserted against them, and the plaintiffs cross-appeal from so much of the same order and judgment as, in effect, granted the motion of the defendants Alfonso Meneses and Douglas W. Brown to dismiss the complaint insofar as asserted against them pursuant to CPLR 3211(a)(1), (5), (7), and CPLR 3016(b), with leave to replead only so much of the first cause of action as sought to recover damages against those defendants for breach of contract with respect to certain insurance policies numbered 57 219 142, 63 653 267, and 63 653 295, and dismissed the complaint insofar as asserted against those defendants with leave to replead.

ORDERED that the order and judgment is modified, on the law, on the facts, and in the exercise of discretion, (1) by deleting the provision thereof denying that branch of the motion of the defendants New York Life Insurance Company and New York Life Annuity Corporation which was for leave to amend their answer to assert affirmative defenses based on, among other things, the applicable statutes of limitations and lack of standing, and substituting therefor a provision granting that branch of the motion, (2) by deleting the provision thereof denying that branch of the motion of the defendants New York Life Insurance Company and New York Life Annuity Corporation which was, in effect, pursuant to CPLR 3211(a)(5) to dismiss so much of the complaint insofar as asserted against them as was premised upon insurance policies purchased in 1997 and 1999 as time-barred, and substituting therefor a provision granting that branch of the motion, (3) by deleting the provision thereof denying that branch of the motion [*2]of the defendants New York Life Insurance Company and New York Life Annuity Corporation which was, in effect, pursuant to CPLR 3211(a) (5) to dismiss so much of the fourth, sixth, and seventh causes of action insofar as asserted against them as were premised upon insurance policies purchased in 2000 as time-barred, and substituting therefor a provision granting that branch of the motion, (4) by deleting the provision thereof denying that branch of the motion of the defendants New York Life Insurance Company and New York Life Annuity Corporation which was, in effect, pursuant to CPLR 3211(a)(3) to dismiss so much of the first, second, third, and fifth causes of action insofar as asserted against them as were premised on certain insurance policies numbered 63 652 948, 63 653 120, 63 652 972, and 63 658 547 for lack of standing, and substituting therefor a provision granting that branch of the motion, (5) by deleting the provision thereof denying that branch of the motion of the defendants New York Life Insurance Company and New York Life Annuity Corporation which was, in effect, pursuant to CPLR 3211(a)(7) to dismiss so much of the first and fifth causes of action insofar as asserted against them as were premised on certain insurance policies numbered 57 219 142, 63 653 267, and 63 653 295 for failure to state a cause of action, and substituting therefor a provision granting that branch of the motion, and (6) by deleting the provisions thereof granting those branches of the motion of the defendants Alfonso Meneses and Douglas W. Brown which were pursuant to CPLR 3211(a)(7) and CPLR 3016(b) to dismiss so much of the second and third causes of action insofar as asserted against Douglas W. Brown as were premised upon certain insurance policies numbered 57 219 142, 63 653 267, and 63 653 295 and dismissing that portion of the complaint, and substituting therefor a provision denying that branch of the motion; as so modified, the order and judgment is affirmed insofar as appealed and cross-appealed from, without costs or disbursements.

Between 1997 and 2002, the plaintiffs, Gary M. Pike, Kelly Ann Pike, and their four minor children, purchased 14 policies, including life insurance policies and variable annuities, from the defendants New York Life Insurance Company (hereinafter NY Life) and New York Life Insurance and Annuity Corporation (hereinafter NYIAC). Six of the policies were purchased in 1997, one in 1999, and the remaining seven in 2000. The plaintiffs purchased all of the policies through the defendant Douglas W. Brown, a servicing agent with NY Life and NYIAC (hereinafter together the defendant companies). The defendant Alfonso Meneses became the servicing agent on the policies in 2002 when Brown left the companies.

In May 2006 the plaintiffs brought this action against all of the defendants asserting causes of action sounding in breach of contract (first), fraudulent misrepresentation (second), fraudulent inducement (third), suitability (fourth), breach of fiduciary duty (fifth), breach of General Business Law § 349 (sixth), and breach of the Insurance Law (seventh). The gravamen of the complaint was that Brown induced them to purchase multiple policies which were unsuitable for their needs and which they could not reasonably afford.

The defendant companies answered, asserting general denials. The parties engaged in settlement negotiations, and when the negotiations failed, Brown and Meneses submitted a pre-answer motion to dismiss the complaint insofar as asserted against them, based on the statute of limitations, failure to state a cause of action (CPLR 3211[a][7]), and failure to plead the fraud causes of action with specificity (CPLR 3016[b]). Thereafter, the defendant companies moved, inter alia, for leave to amend their answer to assert affirmative defenses based on, among other things, the statute of limitations and lack of standing; and to dismiss the complaint insofar as asserted against them, in effect pursuant to CPLR 3211(a)(3), (5), and (7). The plaintiffs opposed both motions.

In an order and interlocutory judgment entered October 21, 2008, the Supreme Court denied the motion of the defendant companies in its entirety, dismissed the first cause of action (breach of contract) insofar as asserted against Brown and Meneses, with leave to replead as to certain policy numbers, and dismissed the plaintiffs' remaining claims against Brown and Meneses.

With respect to the defendant companies' appeal, the Supreme Court improvidently exercised its discretion in denying that branch of their motion with was for leave to amend their answer to assert affirmative defenses. Permission to amend a pleading should be "freely given" (CPLR 3025[b]). As a general rule, leave to amend a pleading should be granted where there is no significant prejudice or surprise to the opposing party and where the documentary evidence submitted in support of the motion indicates that the proposed amendment may have merit (see Edenwald Contr. Co. v City of New York, 60 NY2d 957, 959; Ingrami v. Rovner, 45 AD3d 806; Sayers v Albicocco, 298 AD2d 572, 573; Travelers Prop. Cas. v Powell, 289 AD2d 564, 565). Here, the defendant companies' proposed affirmative defenses may have merit, and the plaintiff failed to show surprise or prejudice resulting from their delay in asserting the affirmative defenses (see Edenwald Contr. Co. v City of New York, 60 NY2d at 959; McCaskey, Davies & Assoc. v New York City Health & Hosps. Corp., 59 NY2d 755, 757; Frumento v On Rite Co., Inc., 66 AD3d 828; Ingrami v. Rovner, 45 AD3d 806; Mackenzie v Croce, 54 AD3d 825).

Next, based upon the defendant companies' proposed affirmative defenses (see e.g. Frumento v On Rite Co., Inc., 66 AD3d 828), all of the causes of action with respect to the six policies purchased in 1997 and the one purchased in 1999 should have been dismissed as time-barred insofar as asserted against them. The plaintiffs brought this action in May 2006. Their causes of action sounding in breach of contract, fraudulent misrepresentation, and fraudulent inducement are all governed by a six-year statute of limitations (see CPLR 213[2], [8]), as was their breach of fiduciary duty cause of action, which was based on allegations of fraud (see CPLR 213[8]; Klein v Gutman, 12 AD3d 417, 419; Kaufman v Cohen, 307 AD2d 113). The plaintiffs' breach of General Business Law § 349 and breach of the Insurance Law causes of action are both governed by a three-year statute of limitations (see CPLR 214[2]; Gaidon v Guardian Life Ins. Co. of Am., 96 NY2d 201, 208; Dolce v Northwestern Mut. Life Ins. Co., 272 AD2d 432), and their fourth cause of action, alleging that the subject policies were unsuitable for their needs, was properly treated by the court as an attempt to state a claim under 28 USC § 1658(b), the Sarbanes-Oxley Act, which is governed by a statute of limitations of two years after the discovery of the facts constituting the violation, or five years after the violation. Therefore, all the causes of action asserted herein are governed by either two, three, five, or six year limitation periods. Since the latest of the 1997 and 1999 policies was purchased in February 1999, all the causes of action relating to them are time-barred even under the longest statute of limitations applicable to any of the causes of action. Accordingly, the Supreme Court should have dismissed all the causes of action based on the policies purchased in 1997 and 1999 insofar as asserted against the defendant companies.

Further, with respect to the seven policies purchased in 2000, the fourth, sixth and seventh causes of action, to recover damages for "unsuitability," violations of General Business Law § 349, and violations of the Insurance Law respectively, carry statutes of limitations of less than six years and are therefore also time-barred (see 28 USC § 1658[b]; CPLR 214[2]; Gaidon v Guardian Life Ins. Co. of Am., 96 NY2d at 208; Dolce v Northwestern Mut. Life Ins. Co., 272 AD2d 432).

Contrary to the plaintiffs' contention, the continuing wrong doctrine does not apply to toll the statutes of limitations herein. Although the plaintiffs allege that they were induced to purchase unsuitable policies, and that they were unaware that they would have to pay "substantial" premiums, they do not point to any specific wrong that occurred each time they paid a premium, other than having to pay it. Thus, any wrong accrued at the time of purchase of the policies, not at the time of payment of each premium (cf. Harvey v Metropolitan Life Ins. Co., 34 AD3d 364; Beller v William Penn Life Ins. Co. of N.Y., 8 AD3d 310, 314).

Similarly, the plaintiffs' contention that the continuous representation doctrine should have tolled the statutes of limitations on their causes of action is without merit. Insurance brokers are not considered "professionals" for statute of limitations purposes, and therefore this doctrine is inapplicable to them (Chase Scientific Research v NIA Group, 96 NY2d 20, 30; see Eastman Kodak Co. v Prometheus Funding Corp., 283 AD2d 216, 217; see also Manes Org. v Meadowbrook-Richman, Inc., 2 AD3d 292, 293).

The remaining causes of action alleging breach of contract, fraudulent misrepresentation, fraudulent inducement, and breach of fiduciary duty, premised on the seven policies purchased in 2000, should have been dismissed insofar as premised on policy numbers 63 652 948, 63 653 120, 63 652 972, 63 658 547, for lack of standing. Those policies were owned by Kathleen Pike, a nonparty. Only the policy owner has standing to sue based on an insurance policy (see e.g. Berardino v Ochlan, 2 AD3d 556; Heslin v Metropolitan Life Ins. Co., 287 AD2d 113, 114 n1; see also Gaidon v Guardian Life Ins. Co. of Am., 272 AD2d 60, affd 96 NY2d 201). The plaintiffs argue that they had standing to sue based on these policies because Kathleen Pike was a custodian of the policies for the minor children plaintiffs under the Uniform Transfer to Minors Act (hereinafter UTMA), and, pursuant to that statute, the property was "indefeasibly vested in the minor" (EPTL 7-6.11[b]). This contention is without merit. EPTL 7-6.11(b) states that "the custodian has all the rights, powers, duties, and authority provided in this part, and neither the minor nor the minor's legal representative has any right, power, duty, or authority with respect to the custodial property except as provided in this part." Accordingly, the minor plaintiffs had no standing under UTMA to bring suit based on these policies.

With respect to the remaining three policy numbers, the Supreme Court should have dismissed the plaintiffs' first cause of action to recover damages for breach of contract insofar as asserted against the defendant companies pursuant to CPLR 3211(a)(7). Upon a motion to dismiss for failure to state a cause of action, a pleading must be given the benefit of every possible favorable inference to be drawn, and every fact alleged must be assumed to be true (see Maurillo v Park Slope U-Haul, 194 AD2d 142, 145). Additionally, "a court may freely consider affidavits submitted by the plaintiff to remedy any defects in the complaint" (Well v Yeshiva Rambam, 300 AD2d 580, 580; see Rovello v Orofino Realty Co., 40 NY2d 633, 635-636). Therefore, in addition to the allegations asserted in the complaint, the facts alleged in Gary M. Pike's affidavit submitted in opposition to the defendants' motions must also be assumed to be true and considered in determining the motions.

Here, the plaintiffs did not, in either the complaint or the affidavit, point to any provisions of any agreement with the defendant companies that were breached. Contrary to their contention, a cause of action based on a breach of the implied covenant of good faith cannot be sustained where the plaintiff fails to plead that the defendant "injured [his or her] right to receive the benefits of [the] agreement" (EBC I, Inc. v Goldman Sachs & Co., 5 NY3d 11, 2). Here, the plaintiffs alleged that they were induced to purchase "unsuitable" policies. They did not allege that any of the defendants injured their right to receive the benefits of the policies or of any agreement between the defendants and the plaintiffs for the purchase of insurance (id.). Thus, their breach of contract claim should have dismissed insofar as asserted against the defendant companies for failure to state a cause of action.

The Supreme Court also should have dismissed the fifth cause of action, to recover damages for breach of fiduciary duty, premised on policy numbers 57 219 142, 63 653 267, and 63 653 295, insofar as asserted against the defendant companies. The plaintiffs did not allege facts sufficient to demonstrate that the defendants created a special relationship between themselves and the Pikes, and therefore failed to sustain their breach of fiduciary duty cause of action (cf. Lynch v McQueen, 309 AD2d 790, 790-791).

Additionally, although CPLR 3016(b) requires that the circumstances constituting fraud claims "shall be stated in detail," "[t]his provision requires only that the misconduct complained of be set forth in sufficient detail to clearly inform a defendant with respect to the incidents complained of and is not to be interpreted so strictly as to prevent an otherwise valid cause of action in situations where it may be impossible to state in detail the circumstances constituting a fraud" (Lanzi v Brooks, 43 NY2d 778, 780 [internal quotation marks omitted]). Here, the plaintiffs, in their complaint and as supplemented by Gary M. Pike's affidavit, described the misrepresentations and omissions in sufficient detail "to clearly inform [the defendants] with respect to the incidents complained of" (id. at 780). Accordingly, the plaintiffs' second and third causes of action to recover damages for fraudulent misrepresentation and fraudulent inducement respectively, were pleaded with sufficient specificity to survive CPLR 3016(b) (see Lynch v McQueen, 309 AD2d at 792).

The defendant companies also asserted the defenses of voluntary payment and waiver. However, neither defense is applicable herein. The "voluntary payment doctrine bars recovery of payments made with full knowledge of the facts" (Dillon v U-A Columbia Cablevision of Westchester, 292 AD2d 25, 27, affd 100 NY2d 525; see Westfall v Chase Lincoln First Bank, 258 AD2d 299, 300). However, this doctrine only bars recovery of payments made "in the absence of fraud" (Lonner v Simon Prop. Group, Inc., 57 AD3d 100, 109 [internal quotation marks omitted]; see Morales v Copy Right, Inc., 28 AD3d 440, 441). Here, the plaintiffs' second and third causes of action are based in part on allegations that the defendants fraudulently induced the plaintiffs to purchase the policies, and misrepresented the policies as good investments. Thus, the voluntary payment doctrine does not bar these causes of action.

The defendant companies asserted the defense of waiver with respect to policy number 57 219 142 only. On December 13, 2006, Kelly Ann Pike assigned this policy to AXA Equitable Life Insurance Company. While the language in the assignment states that she "understand[s] that by executing this assignment, I irrevocably waive all rights, claims and demands under the Original Certificate/Contract," "a written waiver in any form cannot operate to shield a party from his own fraud" (Sterling Natl. Bank & Trust Co. of N.Y. v Giannetti, 53 AD2d 533, 533; see European American Bank v Mr. Wemmick, Ltd., 160 AD2d 905, 907). Therefore, contrary to the defendant companies' contention, the language contained in the assignment document does not bar the second and third causes of action.

Accordingly, the plaintiffs' second and third causes of action, as premised on policy numbers 57 219 142, 63 653 267, and 63 653 295, remain, insofar as asserted against the defendant companies.

Turning to the plaintiffs' cross appeal, for the reasons set forth above, the Supreme Court properly dismissed all of the causes of action premised on the 1997 and 1999 policies as time-barred, properly dismissed the fourth, sixth, and seventh causes of action, alleging "unsuitability," violations of GBL 349, and violations of the Insurance Law, respectively, premised on the 2000 policies, as time-barred, properly dismissed all causes of action premised on the policies owned by Kathleen Pike (policy numbers 63 652 948, 63 653 120, 63 652 972, and 63 658 547), for lack of standing, and properly dismissed the first and fifth causes of action, to recover damages for breach of contract and breach of fiduciary duty, respectively, based on CPLR 3211(a)(7), all insofar as asserted against Brown and Meneses.

Moreover, the Supreme Court properly dismissed all of the causes of action insofar as asserted against Meneses. The documentary evidence shows that Meneses became the Pikes' servicing agent in March 2002, long after the purchase of the last policy at issue. The plaintiffs have alleged no facts, either in their complaint or their affidavit, which support any of the causes of action against Meneses (see CPLR 3211[a][1], [7]).

However, for the reasons set forth above, the Supreme Court erred in dismissing the second and third causes of action, to recover damages for fraudulent misrepresentation and fraudulent inducement, respectively, premised on policy numbers 57 219 142, 63 653 267, and 63 653 295, insofar as asserted against Brown.

The remaining contentions of the plaintiffs and the defendant companies are without merit or have been rendered academic by this determination.
DILLON, J.P., MILLER, ENG and ROMAN, JJ., concur.

ENTER:

Ivaldi v. Metlife Investors Insurance Company


Gathman & Bennett, LLP,
Huntington, N.Y. (John C. Bennett of
counsel), for appellant.
Michael J. Eng and Patricia Curran Reinhardt, New York, N.Y.,
for respondents Metlife Investors
Insurance Company, Metlife Investors
USA Insurance Company, and First
Metlife Investors Insurance Company.
Craco & Ellsworth, LLP,
Huntington, N.Y. (Andrew Ellsworth
of counsel), for respondents David
Briggs and Jessica Beam, as co-
executors of the estate of Jane Baumann.


DECISION & ORDER

In an action, inter alia, to recover money due as the beneficiary of an annuity contract, the plaintiff appeals from an order of the Supreme Court, Suffolk County (Kerins, J.), entered November 7, 2008, which denied her motion for summary judgment on the complaint and granted the separate cross motions of the defendants Metlife Investors Insurance Company, Metlife Investors USA Insurance Company, and First Metlife Investors Insurance Company, and the defendants David Briggs and Jessica Beam, as co-executors of the estate of Jane Baumann, for summary judgment dismissing the complaint insofar as asserted against each of them.

ORDERED that the order is affirmed, with one bill of costs to the respondents appearing separately and filing separate briefs.

Jane Baumann and her husband, John Baumann, were joint owners of an annuity purchased in 2004, and the plaintiff was listed as their primary beneficiary. John Baumann died during the accumulation period in December 2006 and, pursuant to the terms of the annuity policy, that event immediately changed the terms of the annuity policy, leaving Jane Baumann as the primary beneficiary, and requiring the annuity policy death benefit to become payable to Jane Baumann at that time. Once the death benefit became payable, the annuity policy provided Jane Baumann, in her capacity as the remaining owner of the annuity policy, with several options with regard to the death benefit. However, neither Jane Baumann nor her representatives exercised any of those options prior to her death in January 2007. The defendant Metlife Investors Insurance Company (hereinafter Metlife) paid the death benefit to the estate of Jane Baumann.

Contrary to the plaintiff's contention, the Supreme Court properly determined, as a matter of law, that she was not entitled to the death benefit payments under the variable annuity policy issued by Metlife. The annuity contract clearly and unambiguously specified that benefits thereunder were payable to the surviving joint owner of the annuity if the other enumerated options available to the surviving joint owner were not exericsed (see Fisher v Metropolitan Life Ins. Co., 120 Misc 2d 635). Since Joan Baumann, the surviving joint owner, failed to exercise the election to continue the annuity, and the death benefit amount of the annuity vested in her upon the death of John Baumann, that death benefit was payable to the estate of Jane Baumann as personalty at the time of her own death. Consequently, Metlife properly paid the death benefit to the estate of Jane Baumann (see Taurone v Presidential Life Ins. Co, 301 AD2d 587; Aiello v Manufacturers Life Ins. Co. of N.Y., 298 AD2d 662).

The defendants established their respective prima facie entitlements to judgment as a matter of law dismissing the complaint by demonstrating that the death benefit under the relevant annuity policy was properly paid to the estate of Jane Baumann upon her death, and the plaintiff failed to raise a triable issue of fact in opposition. For the same reason, the plaintiff failed to establish her own entitlement to judgment as a matter of law. Accordingly, the Supreme Court correctly denied the plaintiff's motion for summary judgment on the complaint and granted the defendants' respective cross motions for summary judgment dismissing the complaint (see Alvarez v Prospect Hosp., 68 NY2d 320, 324; Zuckerman v City of New York, 49 NY2d 557).

The plaintiff's remaining contentions are without merit.
SKELOS, J.P., AUSTIN, ROMAN and SGROI, JJ., concur.

Ben Lee Distributors, Inc. v Halstead Harrison Partnership



Shay & Maguire, LLP,
East Meadow, N.Y. (Kenneth R. Maguire
and Jaret SanPietro of counsel), for appellants.
Abraham, Lerner & Arnold, LLP,
New York, N.Y. (Jonathan
D. Abraham of counsel), for
respondents.


DECISION & ORDER

In an action to recover damages for injury to property, the defendants Halstead Harrison Partnership and Minskoff Grant Realty & Management Corp. appeal, as limited by their brief, from so much of an order of the Supreme Court, Westchester County (DiBella, J.), entered May 14, 2009, as denied their motion for summary judgment dismissing the complaint insofar as asserted against them.

ORDERED that the order is affirmed insofar as appealed from, with costs.

"Pursuant to General Obligations Law § 5-321, a lease provision which purports to exempt a lessor from liability for its own acts of negligence is void and unenforceable" (Rego v 55 Leone Lane, LLC, 56 AD3d 748, 749; see Gross v Sweet, 49 NY2d 102, 107; Breakaway Farm, Ltd. v Ward, 15 AD3d 517, 518; Radius, Ltd. v Newhouse, 213 AD2d 614, 615). "Further, although lease provisions in which the parties allocate between themselves the risk of liability to third parties through the use of insurance are generally enforceable (see Kinney v Lisk Co., 76 NY2d 215; Hogeland v Sibley, Lindsay & Curr Co., 42 NY2d 153), a landlord may not circumvent General Obligations Law § 5-321 simply by placing the burden to procure insurance on the tenant'" (Breakaway Farm, Ltd. v Ward, 15 AD3d at 518, quoting Graphic Arts Supply v Raynor, 91 AD2d 827, 828).

Accordingly, here, the lease provision purporting to hold the defendants Halstead Harrison Partnership, the owner of the property, and Minskoff Grant Realty & Management Corp., the managing agent (hereinafter together the defendants), harmless for injury to the plaintiffs' property is unenforceable pursuant to General Obligations Law § 5-321 because it attempts to relieve the defendants of their responsibility for damages caused as a result of their own negligence (see Breakaway Farm, Ltd. v Ward, 15 AD3d at 518; Glens Falls Ins. Co. v City of New York, 293 AD2d 568, 570-571; A to Z Applique Die Cutting v 319 McKibbin St. Corp., 232 AD2d 512, 513). Since there remain triable issues of fact as to whether, among other things, the defendants were required to make certain repairs to the subject premises during the term of the lease, whether they were negligent in failing to make or failing to properly make those repairs, and whether Hurricane Frances was the sole proximate cause of the damage to the plaintiffs' property, the Supreme Court properly denied the defendants' motion for summary judgment dismissing the complaint insofar as asserted against them.

The defendants' remaining contentions are without merit.
DILLON, J.P., BALKIN, DICKERSON and LOTT, JJ., concur.

Nash v. Baumblit Construction Corporation


Dean Lakis, Garden City, N.Y., for appellant-respondent.
Kral, Clerkin,
Redmond, Ryan, Perry & Girvan, LLP, Mineola,
N.Y.
(Michael G. Walker of counsel),
for appellant.
Brad S. Maistrow, P.C.,
New York, N.Y., for respondents.


DECISION & ORDER

In an action, inter alia, to recover damages for breach of contract, the defendant Baumblit Construction Corporation appeals from so much of an order of the Supreme Court, Nassau County (Parga, J.), entered January 12, 2009, as granted that branch of the plaintiffs' motion which was for summary judgment on the issue of liability against it, and the defendant Admiral Insurance Company separately appeals from so much of the same order as denied its motion for summary judgment dismissing the cross claim asserted against it by the defendant Baumblit Construction Corporation.

ORDERED that the order is reversed insofar as appealed from by the defendant Admiral Insurance Company, on the law, and the motion of the defendant Admiral Insurance Company for summary judgment dismissing the cross claim asserted against it by the defendant Baumblit Construction Corporation is granted; and it is further,

ORDERED that the order is affirmed insofar as appealed from by the defendant Baumblit Construction Corporation; and it is further,

ORDERED that one bill of costs is awarded to the plaintiffs and the defendant Admiral Insurance Company, payable by the defendant Baumblit Construction Corporation.

The plaintiffs hired the defendant Baumblit Construction Corporation (hereinafter BCC) in November 2003 to extensively renovate a house they had recently purchased. Soon after the plaintiffs moved into the renovated house in June 2004, they encountered numerous problems, including water leaks, bouncing and uneven floors, water-stained ceilings, cracked grout in the bathrooms, and falling roof tiles. Among other things, the plaintiffs hired a second contractor, Expressions Custom Design (hereinafter ECD). ECD spent approximately one year extensively renovating the house a second time.

The plaintiffs brought this action against, among others, BCC and BCC's insurer, Admiral Insurance Company (hereinafter Admiral), asserting causes of action, inter alia, to recover damages for breach of contract. BCC, among other things, asserted a cross claim against Admiral, seeking a declaration that Admiral was required to defend and indemnify BCC in this action.

Before the completion of discovery, the plaintiffs moved, inter alia, for summary judgment on the issue of liability against BCC. Admiral also moved for summary judgment dismissing the cross claim asserted against it by BCC, contending that the insurance policy it issued to BCC specifically excluded coverage for BCC's defective workmanship, and thus it had no duty to defend and indemnify BCC in this action. The Supreme Court, in pertinent part, granted that branch of the plaintiffs' motion which was for summary judgment on the issue of liability against BCC and denied Admiral's motion for summary judgment dismissing the cross claim asserted against it by BCC. Although the plaintiffs voluntarily discontinued their causes of action against, among others, Admiral, because of BCC's cross claim, Admiral remains in the action. We modify.

The plaintiffs established their prima facie entitlement to judgment as a matter of law on the issue of liability against BCC by setting forth evidence that BCC's work product was defective. Specifically, the affidavit of Noel Atieh, a licensed general contractor and president of ECD, averred that much of BCC's work did not comport with the building plans and did not meet building requirements for the Town of Hempstead, and was so defective that ECD had to reconstruct nearly the entire house. Atieh's affidavit provided specific details of numerous structural defects in the house resulting from BCC's work, including a foundation addition that went down 23 inches instead of the required 36 inches, improperly-installed and undersized beams and joists throughout the house, improperly-installed and framed headers throughout the house that caused sagging ceilings and leaks, an uneven and improperly-installed subfloor on the second floor that caused the shower pan in the master bathroom and the tiles in both bathrooms to crack, which in turn caused water to leak into the first-floor kitchen. Atieh also noted that BCC had improperly installed a sewer waste line running to the kitchen, causing it to leak, and had improperly installed a gas line in the kitchen without protection sleeves, which substantially increased the risk of gas leaks, fires, and explosions. Atieh also noted that ECD had to demolish the third floor bathroom because the shower pan and plumbing were improperly installed and leaked, which caused mold and mildew to develop in the walls. Accordingly, the plaintiffs met their initial burden of establishing their entitlement to judgment as a matter of law on the issue of liability against BCC (see generally Alvarez v Prospect Hosp., 68 NY2d 320; Winegrad v New York Univ. Med. Ctr., 64 NY2d 851).

In opposition, BCC failed to raise a triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d at 324; cf. XLI Corp. v Battle Const. Co., Inc., 50 AD3d 1474). The report of Brian Flynn, an engineer, was insufficient, as it demonstrated that he largely ignored any of the structural problems identified by Atieh, and primarily reported only on issues he could ascertain by a visual inspection. To the extent that Flynn did examine structural defects, it is notable that he described the sliding door in the first floor den as difficult to open and that the living room ceiling had a two-foot seam and was bowed at two locations. The affidavit of Vladimir Baumblit, the president of BCC, also failed to raise a triable issue of fact since it contained only conclusory denials of the structural defects identified by the plaintiffs, which are insufficient to defeat a motion for summary judgment (see Zuckerman v City of New York, 49 NY2d 557, 562; J.F.J. Fuel v Ortiz, 234 AD2d 424; Spancrete Northeast, Inc. v Elite Assoc., 184 AD2d 562).

Further, in its opposition, BCC failed to demonstrate that the plaintiffs' motion was premature on the ground that discovery may lead to relevant evidence (see CPLR 3212[f]; Wylie v District Attorney of County of Kings, 2 AD3d 714, 717). BCC failed to show that facts essential to justify opposition may exist upon further discovery (see Panasuk v Viola Park Realty, LLC, 41 AD3d 804, 805; Ruttura & Sons Constr. Co. v Petrocelli Constr., 257 AD2d 614, 615), and failed to specify what facts, necessary to oppose the motion, were uniquely in the plaintiffs' possession (see Kraeling v Leading Edge Elec., 2 AD3d 789, 790-791). Accordingly, the Supreme Court properly granted that branch of the plaintiffs' motion which was for summary judgment on the issue of liability against BCC.

However, the Supreme Court erred in denying Admiral's motion for summary judgment dismissing the cross claim asserted against it by BCC. Admiral established, prima facie, that exclusion 2(j)(5), which applies to damage caused by BCC or one of its subcontractors to BCC's work product and exclusion 2(j)(6), which applies to work that had to be restored, repaired, or replaced because it was incorrectly performed, exclude BCC's claim from coverage (see Kay Bee Bldrs. Inc. v Merchant's Mut. Ins. Co., 10 AD3d 631; Poulos v United States Fid. & Guar. Co., 227 AD2d 539; George A. Fuller Co. v United States Fid. & Guar. Co., 200 AD2d 255, 260). In opposition, BCC failed to raise a triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d at 324). Accordingly, the Supreme Court should have granted Admiral's motion for summary judgment dismissing the cross claim asserted against it by BCC.

National Union Fire Insurance Company of Pittsburgh, PA. v. State of New York


Lester Schwab Katz & Dwyer, LLP,
New York (Steven B.
Prystowsky of counsel), for appellant.
Herzfeld & Rubin P.C.,
New York (David B. Hamm of
counsel), for respondent.

Order of the Court of Claims of the State of New York (Melvin L. Schweitzer, J.), entered December 9, 2008, which denied claimant's motion for summary judgment and granted defendant's motion for summary judgment dismissing the complaint, unanimously affirmed, without costs.

Contrary to claimant's contention, this is an action under Insurance Law § 3420. In both its motion for leave to file a late notice of claim and its amended claim, claimant relied on Insurance Law § 3420(a)(2). Furthermore, "the subrogee possesses only such rights as the subrogor possessed, with no enlargement or diminution" (Allstate Ins. Co. v Stein, 1 NY3d 416, 421 [2004] [internal quotation marks and citation omitted]). Under the common law, the subrogors (Chase Manhattan Bank and Morse Diesel International) would have been able to sue Red Ball Interior Demolition Corp. (the alleged wrongdoer), but they would not have been able to sue the State Insurance Fund (Red Ball's insurer), with whom they had no contractual relationship (see Lang v Hanover Ins. Co., 3 NY3d 350, 353 [2004]). Like claimant, Chase and Morse Diesel would have had to use Insurance Law § 3420 to sue the State Insurance Fund. However, "the State Insurance Fund is exempt from the requirements of Insurance Law § 3420(a) and (b)" due to Insurance Law § 1108(c) (see Kenmore-Tonawanda School Dist. v State of New York, 38 AD3d 203, 203 [2007], lv denied 10 NY3d 702 [2008]), and we decline to depart from this precedent, which the Court of Appeals chose not to review.

Even if, arguendo, Insurance Law § 3420 applied to the State Insurance Fund, Chase and Morse Diesel did not obtain a judgment against Red Ball, which is a condition precedent to a direct suit against Red Ball's insurer (see Lang, 3 NY3d at 352, 354). Contrary to claimant's contention, Lang is applicable even though the claim was filed before Lang was decided (see Weierheiser v Hermitage Ins. Co., 17 AD3d 1133, 1134 [2005]; see also Geissler v Liberty Mut. Ins. Co., 23 AD3d 432, 433 [2005]). Furthermore, we decline to consider claimant's argument, made for the first time in its reply brief on appeal, that we should hold this appeal in abeyance while it attempts to obtain a money judgment. Although orders are sometimes treated as judgments (see Matter of New York State Crime Victims Bd. v Gordon, 66 AD3d 1213, 1214 [2009]), the kind of order that Gordon permitted to be treated as a judgment was one directing the payment of money (id. at 1214-1215). By contrast, the order obtained by Chase and Morse Diesel set the matter down for an inquest, which never occurred.

In view of the foregoing, it is not necessary to reach claimant's remaining arguments.