Dear Coverage Pointers Subscribers:

Thanks ever so much for the wonderful feedback on my last letter. I struck a familiar chord with a good number who wrote to express how they also have maintained a love for their work, craft and profession and so many expressed familiarity with "I have a situation."

This Week's Issue

My favorite case this week involved a passenger who grabbed the steering wheel from the driver and steered the vehicle into a ditch. Is the passenger entitled to coverage? Read the review below and see how a split court dealt with the issue.

Attorney Max Gershweir provides a guest review in Kathie's Federal Focus column and discusses a very interesting and all-too-common late notice issue involving the impact of a "second notice" coming from the injured party.

Poor Margo, just back from a visit to Spain, spent the day making certain that her column was in, nonetheless, and gets special thanks for her efforts. "Serious Injury" is her game.

Thanks to those of you who attended the NYS Bar Association program last week in Buffalo and a couple of you who were kind enough to say "Hi."

One Hundred Years Ago Today:

One hundred years ago today, Woolworth's became the first large retail chain to sell ice cream cones, test-marketing the treat at counters at several sites that had been supplied with modern refrigerator-freezers. It worked. Yum

Words from Audrey Seeley, The Queen of No Fault:

This edition is pretty light but please be sure to read about the recent conference with AAA regarding the updates for 2009 on New York No-Fault Administration. This conference was a great opportunity to understand what trends AAA is seeing in filings, what AAA has done within the past year to improve the administration of No-Fault, and, importantly, what issues the system users see that could be addressed. One major point I took from this conference is that it appears AAA may be focusing on improving the Master Arbitration aspect of the program in the future.

 

Now that the weather is warmer and summer is around the corner please keep in mind No-Fault training. Whether it is a need for a claims handling refresher; knowledge of the recent issues arising Upstate with regard to IMEs and Peer Reviews; strategies for drafting arbitration evidence submissions; or addressing a particular issue(s) you are facing please let me know if we can be of service at [email protected]

 

Audrey

100 Years Ago This Week: Celebrating the Birthday, Life and Legacy of "Memphis Lou" Chiozza

One hundred years ago this week, Lou Chiozza was born in Tallulah, Louisiana. I had the honor and pleasure of talking to his son, Lou, a lawyer in Memphis, Tennessee about his father. Lou (the lawyer) is the proud founder of a family operated law firm in Memphis, where he has the pleasure of practicing law with his children, all fine lawyers in their own right.

As a youngster, Memphis Lou was a star athlete, playing baseball, football and basketball. At the age of 21, he signed on to play shortstop for the Memphis Chicks, a minor league baseball team, and a charter member of the Southern Association.

Two years later, Lou. known for his speed on the base path, was drafted by the Philadelphia Phillies (at the close of the 1933 season) and played both infield and outfield. Lou's brother Dino Chiozza was also drafted by the Phillies and they were one of the first sets of brothers to play on the same team in major league baseball. Another brother, Joe, also played professional baseball but didn't make it out of the minor leagues.

First Batter in a Night Game

The headline in the Saturday, May 25, 1935 San Antonio Express reads:


Cincinnati Wins First Night Game
Reds Defeat Phillies 2-1 in Close Game Behind Paul Dehringer


"With the floodlights of Crosley Field throwing brilliance into every corner." the first night game in Major League history was played in Cincinnati the previous night. The lead-off batter for the visiting Phillies was Lou Chiozza, who became the first player ever to bat in a major league night game.


Lou and the Babe

On May 29, 1935, the Phillies were playing against the Boston Braves. By that time, Babe Ruth, at the ripe old age of 40, was plaing left field for the Braves. Reports indicated that Chiozza, just called up from the Chicks, hit a short fly ball down the left field line that should have been, at best a double. Due to his advanced age and decreased mobility, Ruth stumbled after the ball in the outfield. The shortstop ran out, retrieved the ball and threw the ball home to barely stop Chiozza from an inside the park home run.

Many in the park believed that the umpire felt sorry for the aging star and called an obviously safe Chiozza out at home plate. After Ruth realized that he was so slow that Lou almost made a home run on an ordinary base hit, he stood for a minute, folded his glove and walked off the field into the clubhouse. The Babe knew he was done and he officially retired a few days later on June 2, 1935.

At the end of the 1936 season, Lou was sold to the Giants, for, as his son recalls, three players and $25,000. Towards the end of the 1939 season, he collided with long time Giant outfielder Jo-Jo Moore and sustained a compound leg fracture that eventually led to the end of his career.

Lou's son Lou recalls that famed Broadway actress Tallulah Bankhead often visited his father in the hospital and when asked about her attraction to him, she indicated that she had a special place in her heart for a man born in Tallulah, Louisiana.

Following his retirement from baseball, Chiozza moved back to Memphis where he worked as a local liquor dealer and grocery store owner. He was President of the Memphis Italian Society, and founded Bella Vista Country Club. He married the former Catherine Lucchesi and had five children, Ann Marie, Lou, Rena, Toni and Libby. Chiozza died in 1971.

Happy Birthday "Memphis Lou" and I will take Lou the Lawyer up on his dinner invitation next time we're down there.

From Steve Peiper, the Prince of Property

Red Alert!!! No potpourri in this edition, but we finally have four legitimate first-party property damage cases. Please take a moment to review the Fourth Department's separate reviews of the often litigated two-year suit limitation clause as set forth in Cooper and Dail, respectively. In addition, the Fourth Department (rightfully so, we might add) throws out unsupported extra-contract claims in a first-party context. The Fourth Department even treats us to a discussion on dominant and efficient cause, and how that translates to applicable policy exclusions.


I know, I know...enjoy your coffee. See you in two weeks.
 

Steve Peiper
[email protected]

Highlights of This Week's Issue:

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

  • Homeowners Policy Excludes Claim for Wrongful Death of Insured Person
  • Effective Cancellation Leads to Uninsured Motor Vehicle
  • Contractual Additional Insured Status Not Triggered Where Underlying Contract Did Not Require Such Status
  • Exclusivity of Workers Compensation Remedy Does Not Preclude Uninsured Motorist Claim Against Employer
  • Divided Court Vacates Arbitration Award, When Earlier Decision Had Temporarily Stayed Arbitration Under Underlying Coverage Issues Were Resolved in Pennsylvania
  • Passenger Who Grabbed Steering Wheel (Even to Prevent an Accident) Is Not Entitled to Coverage as Insured, Since Not a Permissive User. Status as Permissive Passenger Not Enough to Qualify as Insured

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

  • Contemporaneous Evidence Requirement Exists Even Where There Has Been Surgery

  • Contemporaneous, Objective Proof of Injury Is Required to Meet Threshold
  • Complaint Is Dismissed Where Plaintiff's Expert Reports Full Range-of-Motion and Plaintiff Fails to Address Reports of Pre-Existing Conditions
  • Plaintiff Fails to Explain Gap in Treatment
  • Conclusion that Injuries Were Caused by Accident Is Speculative Where Reports of Preexisting Degeneration Are Not Addressed
  • Report that Range-of-Motion of Knee Is "Decreased" Is Insufficient
  • Plaintiff's Motion Denied Where She Sustained Similar Injury Three Months Earlier
  • Significant Limitations Found More than Four Years After Accident Defeat Defendant's Motion
  • Without Contemporaneous Findings, Plaintiff Cannot Raise a Triable Issue of Fact
  • Affirmation Which Relies on Unsworn Records and Reports Is Insufficient
  • Defendants Fail to Submit Evidence that Injuries Are Entirely Attributable to Prior Accidents and Not Exacerbation
  • Lost Earnings Are Not Limited to Actual Earnings Before the Accident
  • Awards for Past, Present and Future Pain and Suffering, as Well as Loss of Consortium, Are Affirmed
  • Deficiency in Opposing Motion Cannot Be Cured By Surreply
  • Contemporaneous and Recent Examinations and Review of MRI Reports Defeat Summary Judgment
  • Three Year Unexplained Gap in Treatment and Lack of Objective Medical Evidence Defeat Plaintiff's Claim
  • Failure to Specify Degree or Range-of-Motion and Compare with the Norm Creates Triable Issue of Fact
  • AUDREY'S ANGLES ON NO-FAULT
    Audrey Seeley
    [email protected]

AAA Changes Matching Claims Procedure

ARBITRATION

Medical Provider Required to Accept Fee Per PPO Contract

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

  • Dominant and Efficient Cause of Damage is Plainly Excluded by the Terms of the Policy
  • Location of the Claim was Not an Insured Location Under the Policy
  • Court Refuses to Dismiss Plaintiff's Contractual Claims on Statute of Limitations Grounds, but Dismisses Plaintiff's Extra-Contractual Claims
  • Statutory Toll for Death Precludes Merchants from Relying Upon its Two-Year Suit Limitation Clause

    FIJAL'S FEDERAL FOCUS
    Katherine A. Fijal
    [email protected]

    Second Circuit Finds that Claimant's Notice, Given After Insured's Untimely Notice, May Preserve Rights Under Policy, Ignoring Legislative History

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

    .

    • Court Holds that Notice of Claim Was Late; However, Only One Out of Three Insurers Timely Disclaimed Coverage as to Late Notice
    • Disclaimer Upheld Where Building Manager Was Notified On The Date of the Incident that the Injured Party Fell and Was Taken Away in an Ambulance
    • Court Denies Motion to Dismiss Where Evidence Indicated that Insurer Previously Provided Coverage for Work in the Five Boroughs of New York City
    • Court Holds that Injury to a Subcontractor's Employee Arose Out of Its Work
    • Court Determines that Homeowners Did Not Reside on Premises on the Date of Loss

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

      ARBITRATION: The Best Justice Money Can Buy?

      Special birthday wishes go out this week to my letter editor, who dots my i's, crosses my t's and tolerates my stories.

      Well, that's all for now. Keep writing.

      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]

      5/7/10 Cragg v. Allstate Indemnity Company
      Appellate Division, Fourth Department
      Homeowners Policy Excludes Claim for Wrongful Death of Insured Person
      Plaintiffs decedent (granddaughter) drowned in her grandparents swimming pool. Granddaughter and her mother were living in grandparents home and qualified as insureds.

      Her father who was not an insured commenced wrongful death action against mother and grandmother. Allstate had homeowners policy and disclaimed coverage for defendants under the policy pursuant to the provision excluding coverage for "bodily injury to an insured person . . . whenever any benefit of this coverage would accrue directly or indirectly to an insured person."
      Fourth Department, in case of first impression in New York, holds that Allstates policy excludes from coverage any claim to recover for the injury or resultant death of an insured person. The court rejected that contention of plaintiff that the derivative nature of his wrongful death action renders the policy exclusion inapplicable.


      5/4/10 Matter of Lincoln General Insurance Company v. Williams
      Appellate Division, Second Department
      Effective Cancellation Leads to Uninsured Motor Vehicle

      On September 6, 2006, Williams, was operating a vehicle insured by the Lincoln when he was involved in a collision with a vehicle operated by Marina Villalta and owned by Jose E. Villalta. Williams filed a claim for uninsured motorist's benefits under the Lincoln on the ground that Villalta's vehicle was uninsured. When he filed his demand for arbitration, Lincoln sought to permanently stay the arbitration on the ground that the car was insured by AutoOne. AutoOne claimed that it had canceled the policy at Villaltas request effective August 29, 2006.

      Where an insured initiates a policy cancellation, the insurer need not send the insured a notice of termination but must send one to the Department of Motor Vehicles within 30 days of the effective date of the cancellation.

      AutoOne demonstrated compliance and needed to do nothing else. Accordingly, the Villalta vehicle was uninsured and the stay of arbitration would not be granted.

      5/4/10 140 Broadway Property v. Schindler Elevator Company
      Appellate Division, Second Department
      Contractual Additional Insured Status Not Triggered Where Underlying Contract Did Not Require Such Status

      140 Broadway Property (140) and its carrier American Home claimed additional insured status and sought defense and indemnity under a policy issued by Zurich to Schindler Elevator Company (Schindler) in an underlying personal injury. The additional insured endorsement in the Zurich policy extended coverage to any entity Schindler had agreed by written contract to insure.

      140 argued that the contract with Schindler required Schindler to obtain insurance coverage naming them as an additional insured. However, Zurich established that the written contract between Schindler and 140 Broadway did not require Schindler to name 140 Broadway as an additional insured on its general liability coverage. The Zurich general liability policy extends coverage to any entity "for whom the named insured [Schindler] has specifically agreed by written contract to procure bodily injury, property damage and personal injury liability insurance." Although the written contract between 140 Broadway and Schindler, the primary insured, requires Schindler to purchase several forms of insurance coverage, it did not expressly state that Schindler is required to name 140 Broadway as an additional insured on its general liability coverage.

      5/4/10 In re Elrac, Inc. v. Exum
      Appellate Division, First Department

      Exclusivity of Workers Compensation Remedy Does Not Preclude Uninsured Motorist Claim Against Employer
      While Exum was in the course of his employment, and was operating a car, he had an accident with an uninsured motor vehicle. He filed a demand for uninsured motorists arbitration with Elrac and Elrac moved to stay the arbitration. Elrac argued that since the accident occurred in the regular course of Exums employment, the exclusivity provisions of the Workers' Compensation Law preclude respondent from arbitrating a claim against his employer, who was self-insured.

      The court rejected the argument because the employer, like owners of all automobiles in New York, was required to provide UM benefits under the Insurance Law. The right to obtain uninsured motorist protection from a self-insurer is no less than the corresponding right under a policy issued by an insurer.
      The court also rejected the petition as untimely, it being filed 13 months, rather than within 20 days, of the arbitration demand.
      Editors Note One starts to feel sorry for Enterprise Rentals (Elrac) that seems to lose about every appeal in which they are involved. They probably dont, but it sure feels that way to us.

      4/30/10 New Hampshire Insurance Company v. Bobak
      Appellate Division, Fourth Department
      Divided Court Vacates Arbitration Award, When Earlier Decision Had Temporarily Stayed Arbitration Under Underlying Coverage Issues Were Resolved in
      Pennsylvania
      Bobak commenced a personal injury action in Pennsylvania seeking to recover for injuries sustained in that state. He then filed a claim for underinsured motorists benefits under his employers policy with New Hampshire Insurance Company (NHIC). NHIC denied benfits and Bobak filed a demand for arbitration. In an earlier appeal (reported in Volume VIII, No. 23 of CP, the Fourth Department had considered the application and had temporarily stayed arbitration to allow a Pennsylvania coverage action to proceed:

      4/20/07            Matter of AIG Claims Services, Inc. v. Bobak
      Appellate Division, Fourth Department
      Uninsured Motorist Arbitration Stayed Until Coverage Litigation Is Resolved in Pennsylvania Which Seeks to Determine Whether, in Fact, Trucking Company Is Uninsured
      AIG on behalf of New Hampshire Insurance Company (NHIC) sought stay of uninsured motorist arbitration, or, in the alternative, sought stay to bring in all other parties and conduct discovery. Injured party was hurt in Pennsylvania when truck he was operating was struck by object that fell from truck leased by B-Right Trucking and owned by Ryder,  B-Rights carrier, Reliance, became insolvent so injured party filed uninsured motorists claim with his employers insurer, NHIC.
      Another carrier provided excess coverage over the Reliance policy and there was no evidence that the other carrier had disclaimed and similarly, no evidence that Reliances assets were gone.  Those questions are being resolved in a Pennsylvania proceeding and the Appellate Division agreed that the SUM arbitration be stayed until the Pennsylvania coverage case is resolved.
      NHIC had commenced an action in Pennsylvania seeking a declaration with respect to the insurance coverage issues which was not yet resolved. Bobak's sought to have the arbitration of SUM benefits go forward but NHIC then commenced a second proceeding to stay the arbitration based on the 2007 appellate order, discussed above, arguing that allowing the arbitration to proceed would violate the 2007 determination. The lower court refused to grant the stay, the arbitration proceeded, and there was a $1 million + arbitration award confirmed by the lower court.
      Not surprisingly, the Fourth Department vacated that confirmed arbitration award, since the lower court, in not staying the arbitration, violated the 2007 Fourth Department order staying arbitration.
      The Court refused to rule, at time, whether the arbitrator exceeded his power and awarded benefits in excess of the SUM coverage because it was unclear (and would be until the Pennsylvania matter was resolved) whether the offending carriers car would have the coverage afforded by the Reliance policy or, because of State was now overseeing Reliances assets, whether the States limits would be in play.
      Two dissenting judges contended that the delays in Pennsylvania were caused by NHIC and that the lower court was right in not enforcing the stay. The dissenters argued that NHIC was taking advantage the delay and that the stay wasnt meant to last forever.

      4/30/10 Progressive Halcyon Insurance Company v. Giacometti
      Appellate Division, Fourth Department
      Passenger Who Grabbed Steering Wheel (Even to Prevent an Accident) Is Not Entitled to Coverage as Insured, Since Not a Permissive User. Status as Permissive Passenger Not Enough to Qualify as Insured
      This ones interesting and entertaining;; it could become a mini-series, or a bodice ripper. A battle for control of the car, claims of negligent entrustment and an intellectual debate of use of a vehicle all lead to an interesting coverage opinion

      There was a three-car accident in North Carolina. Shannon Doyle (Shannon the Driver) was driving a car with two passengers, Amy Giacometti and Marle Fiocco. For reasons in dispute, the driver, Shannon steered the wheel to the left and Amy grabbed the wheel (Amy the Grabber) and steered it to the right. Apparently, Amy was stronger and the car left the road, crashed into trees and all three women were injured

      Doyle had leased the vehicle from GMAC and the vehicle was insured by Progressive. Shannon the Driver sued Amy the Grabber. Amy the Grabber sued Shannon the Driver and Marle sued everyone, including GMAC. The claim by Marle against GMAC was that it negligently entrusted the car to Shannon the Driver.

      The Fourth Department found that Progressive had no obligation to defend Amy the Grabber since she did not have permission, express or implied to grab the wheel and operate the car and therefore was not an insured under the policy. Amy claimed that she had grabbed the wheel to prevent an accident but the court held that this didnt make Amy a permissive user. While a long term lessee, like Shannon is considered a owner of the vehicle under New York law and while there is a strong presumption that anyone using the vehicle is doing so with the permission of the owner, here, the presumption was rebutted.

      Progressive, however was order to pay GMAC for defending the negligent entrustment claim. Whether that claim has merit or not, the claims are auto-related and fall within the protection of the policy. Since Progressive commenced that declaratory judgment action against GMAC, and did not prevail, under Mighty Midgets v Centennial Ins. Co., 47 NY2d 12, it is obligated not only to pay defense costs in the underlying action but the attorneys fees incurred by GMAC in defending the declaratory judgment action.

      Marle had also claimed that Shannon the Drive entrusted Amy the Grabber with the use of the vehicle, a claim the court rejected.
      .
      Justice Fahey dissented in part with a very interesting analysis. He argued thjat whether Amy the Grabber had permission, or not, to grab the steering wheel and drive or control the car was of no consequence. The policy, he contended, provides coverage to not only the permissive operator but the permissive user as well. A passenger is using the vehicle even if she is not operating it. Amy, he posited, was clearly a permissive passenger and therefore a permissive user. Accordingly, whether she was given permission to operate the car or not was inconsequential to her status as an insured: utilizing a vehicle for acts that occur in the interimincluding the acts of a passenger traveling from one point to anothermay be fairly characterized as the "use" of that vehicle.

      While we appreciate the fact that the term use may be different than operation, Justice Faheys broad view of the term would provide coverage to anyone in a car doing anything, so long as the car was moving. Should the person who commits an assault and battery in a moving car be entitled to coverage? We think not.

      MARGOS MUSINGS ON SERIOUS INJURY UNDER NEWYORK NO FAULT
      Margo M. Lagueras

      [email protected]

      5/13/10 DeJesus v. Cruz
      Appellate Division, First Department
      Contemporaneous Evidence Requirement Exists Even Where There Has Been Surgery

      Plaintiff was a pedestrian struck by the car operated by the defendant and owned by the co-defendant. She allegedly injured her left knee, cervical and lumbar spine. Defendants expert orthopedist, however, found normal range-of-motion and no evidence of traumatic injury of the knee, normal range-of-motion of the cervical spine and normal range-of-motion of the lumbar spine except for lateral movement. In addition, the defendants expert neurologist determined that all the plaintiffs complaints were due to pre-existing, degenerative conditions.

      In opposition, the plaintiff failed to proffer sufficient objective evidence that was contemporaneous with the accident. Even where, as here, there is surgery on the knee, contemporaneous evidence showing range-of-motion limitation is a requirement. Plaintiffs physician also failed to address the findings of the defendants experts that the conditions alleged were due to pre-existing, degenerative changes and not traumatic injury. As such, the trial court was unanimously reversed and the defendants motion granted.

      5/13/10 Lazarus v. Perez
      Appellate Division, First Department
      Contemporaneous, Objective Proof of Injury Is Required to Meet Threshold

      On appeal, the court affirms the trial courts denial of the plaintiffs motion to renew as there were no new facts not offered on the prior motion. The court further noted that the plaintiffs argument was, in any event, without merit as the unsworn and uncertified contemporaneous records from South Africa, which were admissible because the defendants referred to them in their motion, did not reveal any abnormalities or spinal defects, nor did they contain any quantitative assessments of range-of-motion limitations. With regard to the plaintiffs claim under the 90/180-day category, her contention that she missed some time from college was insufficient absent medical evidence in support.

      5/4/10 Weinberg v. Okapi Taxi, Inc.
      Appellate Division, First Department
      Complaint Is Dismissed Where Plaintiffs Expert Reports Full Range-of-Motion and Plaintiff Fails to Address Reports of Pre-Existing Conditions

      Plaintiffs orthopedist consistently reported that the plaintiff had full range-of-motion of the ankle and the plaintiffs claims of limitations were not supported by objective medical evidence comparing the alleged limitations with normal function. In addition, the plaintiff did not address the degenerative changes seen in the emergency room x-rays or the opinions of the defendants expert that the injuries were pre-existing. As regards the claim under the 90/180-day category, the plaintiffs claimed inability to work for more than 90 days is not dispositive of a 90/180-day injury.

      5/4/10 Gnahore v. Gonzalez
      Appellate Division, Second Department
      Plaintiff Fails to Explain Gap in Treatment

      On appeal, the trial court is affirmed and the plaintiffs complaint dismissed where he submitted unaffirmed and uncertified medical records and reports in opposition and failed to explain the gap between his cessation of treatment and his re-examination for the purpose of opposing the defendants motion.

      5/4/10 Nieves v. Michael
      Appellate Division, Second Department
      Conclusion that Injuries Were Caused by Accident Is Speculative Where Reports of Preexisting Degeneration Are Not Addressed

      Plaintiffs treating physician did not address the findings of the defendants examining physician who concluded that the plaintiffs injuries and range-of-motion limitations were due to preexisting degeneration. As such, his conclusion that the injuries were caused by the accident were speculative. In addition, although the plaintiff was examined soon after the accident and loss of motion in her shoulder was noted, the objective tests used and the extent of the limitations were not. Therefore, while the recent examination noted significant limitations, there were no contemporaneous findings of the shoulder limitations, causing the plaintiffs claims under the permanent loss, permanent consequential limitation or the significant limitation of use categories to fail. Furthermore, her claim under the 90/180-day category failed because her own deposition testimony established she only missed seven days of work and that she return to her same duties as before the accident.

      5/4/10 Ortiz v. Ianina Taxi Services, Inc.
      Appellate Division, Second Department
      Report that Range-of-Motion of Knee Is Decreased Is Insufficient

      On appeal, the trial court is reversed and the defendants motion granted. While plaintiffs treating physician noted, during a recent examination, that the plaintiffs range-of-motion of her right knee was decreased, he did not set forth any of the objective tests used, nor did he quantify the limitation or provide a qualitative assessment. Similarly, the MRI reports of cervical and lumbar bulging discs did not set forth the extent of the limitations or the duration of the injuries and were, therefore, insufficient.

      5/4/10 Rasporskaya v. New York City Transit Authority
      Appellate Division, Second Department
      Plaintiffs Motion Denied Where She Sustained Similar Injury Three Months Earlier

      Defendants successfully opposed the plaintiffs motion by showing that the injury to her right shoulder did not prevent her from performing substantially all her customary daily activities and that, even if she did sustain an injury to the right shoulder in the subject accident, she had sustained a similar injury in a prior accident three months earlier.

      5/4/10 Smith v. Hartman
      Appellate Division, Second Department
      Significant Limitations Found More than Four Years After Accident Defeat Defendants Motion

      Defendant failed to meet his prima facie burden where his examining orthopedist reported significant range-of-motion limitations during testing of both plaintiffs more than four years after the occurrence. Therefore, there was no need to consider the plaintiffs opposing papers.

      5/4/10 Villante v. Miterko
      Appellate Division, Second Department
      Without Contemporaneous Findings, Plaintiff Cannot Raise a Triable Issue of Fact

      In opposition to the defendants motion, the plaintiff only submitted the affirmation of her treating physician which noted significant range-of-motion limitations of her lumbar spine based on recent examination. Although the affirmation also stated that the plaintiff was examined contemporaneously with the accident and also ten months later, and that restrictions were found at those times, the tests performed were not noted. Without the contemporaneous findings, the plaintiff could not oppose the defendants motion.

      5/4/10 Vilomar v. Castillo
      Appellate Division, Second Department
      Affirmation Which Relies on Unsworn Records and Reports Is Insufficient

      Defendants examining orthopedic surgeon found the plaintiffs right knee limitations were insignificant and plaintiffs claims under the permanent loss of use, permanent consequential limitation of use, and significant limitation of use categories fail. In opposition, the plaintiff submitted unaffirmed reports and an affirmation that relied on unsworn records and reports. In addition, the plaintiff did not offer any contemporaneous evidence of limitations to his cervical and lumbar spine, nor did the affirmed report noting a torn tendon raise an issue of fact because, as well established, the mere existence of a torn tendon is not evidence of serious injury without evidence of the extent of the alleged limitations or the duration.

      4/30/10 Benson v. Lillie
      Appellate Division, Fourth Department
      Defendants Fail to Submit Evidence that Injuries Are Entirely Attributable to Prior Accidents and Not Exacerbation

      Plaintiff was rear-ended while completely stopped at an intersection. Defendants submitted evidence that the plaintiff had cervical and lumbar spine injuries, but argued that those injuries were due to prior accidents. The trial courts ruling denying the defendants motion was affirmed on appeal because the defendants did not submit evidence that, as a matter of law, the injuries were entirely attributable to prior accidents and were not exacerbated by the current accident.

      4/30/10 Shubbuck v. Conners
      Appellate Division, Fourth Department
      Lost Earnings Are Not Limited to Actual Earnings Before the Accident

      Plaintiff was injured when the taxi he was driving collided with defendants vehicle. The trial court granted his pre-trial motion for partial summary judgment on the issue of serious injury and on appeal this ruling was affirmed. At trial, the issue was whether the assessment of damages could be based upon future probabilities. Plaintiff alleged that other managers at the construction company where he worked made $15.00 per hour where he only made $10.00, and that this was due to his inability, due to his injuries, to perform the physical labor performed by the others. On appeal, the court reiterated its prior determination that a plaintiffs testimony concerning earnings is sufficient to support a claim for lost wages.

      The dissent, however, would have set aside the award because it found the plaintiffs testimony to be unsubstantiated as it was based only on the plaintiffs opinion. While expert testimony is not required, the dissent found that the plaintiff failed to establish his future wage loss with the required reasonable certainty.

      4/29/10 Garrison v. Lapine
      Appellate Division, Third Department
      Awards for Past, Present and Future Pain and Suffering, as Well as Loss of Consortium, Are Affirmed

      Plaintiff suffered traumatic brain injury. Defendants conceded liability and a trial was held to determine causation and damages. The jury awarded $500,000 for past pain and suffering, $2 million for future pain and suffering for a period of 31 years, and $400,000 for the husbands claim for loss or consortium. On appeal, the court determined that the jurys verdict did not materially deviate from what would be reasonable compensation and that the jury was entitled to decide which witnesses testimonies to credit. The appellate court also agreed that the trial courts use of the 10-year treasury bond rate in place at the time of the accident to determine the present value of the future damage award was proper.

      4/29/10 Henry v. Peguero
      Appellate Division, First Department
      Deficiency in Opposing Motion Cannot Be Cured By Surreply

      On appeal, the court finds that leave to renew was not properly granted to the plaintiff who offered an addendum in an attempt to relate the degenerative changes in his spine, reported by the defendants experts, to the accident. The addendum was not the result of an additional examination or testing but was based on information available at the time the initial affidavit was prepared. The court further noted that the addendum was itself insufficient to rebut the defendants finding of degenerative change because it failed to explain the two-week gap between the accident and the commencement of treatment, during which time the plaintiff flew to Florida to visit a friend. This broke the chain of causation between the accident and the alleged injury.

      The two-judge dissent opined that it was within the trial courts discretion to grant leave to renew and that the failure to include the information contained in the addendum was sufficiently explained.

      4/27/10 Barry v. Valerio
      Appellate Division, Second Department
      Contemporaneous and Recent Examinations and Review of
      MRI Reports Defeat Summary Judgment
      Plaintiff was in a three-car accident and claimed injuries under the permanent consequential limitation and/or significant limitation of use categories. Based on both contemporaneous and recent examinations, and review of MRI reports showing multiple lumbar and cervical herniations, the plaintiffs treating physician quantified the limitations and opined that that the injuries were permanent, significant and causally related to the accident, thus raising a triable issue of fact.

      4/27/10 Milosevic v. Mouladi
      Appellate Division, Second Department
      Three Year Unexplained Gap in Treatment and Lack of Objective Medical Evidence Defeat Plaintiffs Claim

      Plaintiff claimed a serious injury to his right knee under the permanent consequential and/or significant limitation of use categories but failed to offer any findings of significant limitations that were contemporaneous with the accident. He also failed to submit any competent medical evidence to support his claim under the 90/180-day category, nor did he or his doctors explain the gap in treatment between December 2006 and January 2009.

      4/27/10 Sentino v. Valerio
      Appellate Division, Second Department
      Failure to Specify Degree or Range-of-Motion and Compare with the Norm Creates Triable Issue of Fact

      Here the plaintiff was the passenger in the same three-car accident as the Barry action previously discussed. The court determined that the defendants failed to submit sufficient support for summary judgment on either the issue of serious injury or liability. In this case, the affirmed report of the defendants neurologist failed to specify the degree of range-of-motion the plaintiff could achieve with her right hand or compare those findings with what is normal. An issue of fact also remained with regard to whether excessive speed resulted in the inability to avoid the collision.


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

      The decisions and award are light this time but we have other events in the No-Fault world to disclose this edition.

      On May 12, 2010, I attended the American Arbitration Associations Annual System Group User Meeting. There was a healthy balance of provider/injured person and insurer representation at the meeting. The purpose of the meeting was to update those who participate in the No-Fault arbitration system on the events occurring within the past year of administration of New York No-Fault arbitration.

      AAA has reported a nearly 20% increase in arbitration filings since 2009. Further, there has been a reduction in the number of arbitrators but AAA assured everyone that this will not lead to a backlog of cases. AAA announced that the Buffalo area gained a third arbitrator, Arbitrator Kent Benziger, due to increased volume. Also, there are a number of arbitrators who will be moving to different geographic areas:
      Arbitrators moving to Suffolk County

      • Ken Rybacki
      • Henry Sawits
      • Laura Yantsos

      Arbitrators moving to Nassau County

      • Michael Achtziger
      • Tim McNamara
      • Victor Moritz
      • Ann Russo
      • Jay Skelton

      Arbitrators moving within Manhattan/Brooklyn

      • Aladar Gyimesi
      • Robyn McAllister

      AAA further announced that the arbitrators, beginning in June 2010, will add an additional day within the month for hearings to accommodate the increased filings.

      AAA Changes Matching Claims Procedure
      The American Arbitration Association (AAA) released an announcement that it is changing its procedure for matching (previously called batching) and consolidating claims which involve the same injured person.

      The new procedure will now only match, not consolidate, the cases filed by the health care provider involving the same injured person. In those matched cases the insurer is only charged one case assessment cost. AAA announced that this procedure took effect in July 2009.

      ARBITRATION

      5/10/10 Cichocki & Cichocki, LLP v. Travelers Indem. Ins. Co. of Connecticut
      Arbitrator Veronica K. OConnor, Erie County
      Medical Provider Required to Accept Fee Per PPO Contract

      The Applicants assignor was involved in a July 2, 2004, motor vehicle accident and began chiropractic care with the Applicant. The Applicant entered into a Preferred Provider Organization (PPO) contract serviced by CorVel for the insurer. Due to the PPO contract terms, the Applicants bills were reimbursed at 80%, which the Applicant challenged in this arbitration.

      The Applicant argued that the PPO contract was unconscionable due to the reimbursement requirement being below the workers compensation fee schedule. The insurer argued that the Insurance Department has previously issued an opinion on this issue which does not prohibit the lower reimbursement rate. The Insurance Department opinion reasoned that the Insurance Law does not prohibit an insurer from affiliating with a network of health care providers on a voluntary basis by the eligible injured person (EIP) covered under No-Fault. While the EIP can choose to seek treatment with a participating physician under the PPO the insurer cannot induce or require the EIP to do so. The Applicant in this case voluntarily entered into the PPO contract with the insurer. The Applicants assignor chose to seek treatment from Applicant. Therefore, the bills were properly reimbursed at 80% pursuant to the PPO contract provisions.
      Also, of interest in this decision is that another provider apparently was part of the arbitration Gary Smith, DC and J. Donald Dishman, DC of General Diagnostic Associates. It was determined that they were independent contractors and the Applicant lacked standing to proceed with the arbitration.

      PEIPER ON PROPERTY (and POTPOURRI)
      Steven E. Peiper

      [email protected]


      5/07/10 Gravino v Allstate Ins. Co.
      Appellate Division, Fourth Department
      Dominant and Efficient Cause of Damage is Plainly Excluded by the Terms of the Policy
      Plaintiff commenced the instant action seeking coverage under his homeowners policy for damage to his swimming pool after it lifted from the concrete and surrounding ground. The damage occurred after the pool had been drained for several days, and was in the process of being painted.

      Upon receipt of the claim, Allstate denied coverage on the basis of an exclusion that precluded payment for damages to swimming pools arising from pressure or weight of water. Importantly, experts from both sides agreed that the cause of the damage was due to hydrostatic pressure in the soil surrounding the pool. As such, the Fourth Department ruled that the claim fell within the pressure/weight of water exclusion described above. Accordingly, Allstates coverage denial was affirmed.

      In so holding, the Court rejected plaintiffs argument that the damage occurred not due to pressure or weight of water, but because the plaintiff had drained the pool several days earlier. Had the pool not been drained, argued the plaintiff, the damage would not have occurred. In response, the Court noted that the dominant and efficient cause of the damage was the pressure of water in the surrounding soil. As the dominant and efficient cause of loss was plainly excluded under the policy, the Fourth Department concluded that coverage was barred.

      5/04/10 Megafu v Tower Ins. Co. of New York
      Appellate Division, Second Department
      Location of the Claim was Not an Insured Location Under the Policy
      Plaintiffs claim was dismissed where Tower established, as a matter of law, that the location of the claim was not a covered premises under the policy. Where the claim fell outside of the scope of the policy, the burden then shifted to the plaintiff to raise an issue of fact as to the breadth of the insuring agreement. Here, plaintiff could not overcome that burden.

      4/30/10 Cooper v New York Central Mutual Fire Ins. Co.
      Appellate Division, Fourth Department
      Court Refuses to Dismiss Plaintiffs Contractual Claims on Statute of Limitations Grounds, but Dismisses Plaintiffs Extra-Contractual Claims
      New York Central moved to dismiss plaintiffs property damage claim on the basis of the two year suit limitation clause found within the policy. As with most homeowners policies, the policy at issue required the insured to commence legal action against New York Central within two years of the date of loss.

      Although plaintiffs lawsuit was commenced more than two years after the date of loss (and therefore in violation of the policy), the Appellate Division refused to dismiss the claim. Rather, the Court ruled that a question of fact existed regarding whether New York Centrals activities lulled the plaintiff into inaction.

      Further, the Fourth Department went on to deny New York Centrals motion to dismiss on the basis that plaintiff had failed to cooperate with the carriers investigation. Although the plaintiff did not provide certain documents requested by New York Central, she offered plausible reasons for not providing the same. As such, the Court held that her conduct did not rise to willful and avowed obstruction which is required to establish a denial on the basis of a failure to cooperate.

      However, all was not lost for New York Central, the Fourth Department dismissed plaintiffs claims for bad faith on the basis that the plaintiff failed to plead any facts which alleged that the carrier acted with gross disregard of the insureds interests. Plaintiffs claims for fraud were dismissed where her allegations were simply restatements of the breach of contract claim.

      In addition, plaintiffs General Business Law 349 claim was also dismissed. In so holding, the Fourth Department noted that the current claim was simply a contractual dispute that was unique to the individual parties in the instant litigation. Finally, plaintiffs claims for punitive damages were dismissed where there was no evidence of evil or reprehensible motives on the part of New York Central.

      Peiper's Point: With all due respect to the Court, we have a problem with its reasoning on the bad faith claim. The matter, as presented, is a first-party property damage claim. As such, bad faith claims are governed by the well-established Rocanova and NYU standard. However, in dismissing plaintiffs claims, the Court references the Pavia standard of gross disregard for the insureds interests. The Pavia standard, as all faithful readers of Coverage Pointers know, applies to third-party claims. As it turns out, the bad faith claim should have been dismissed under the Rocanova test as well. No harm, no foul, we guess.

      4/30/10 Dail v Merchants Mut. Ins. Co.
      Appellate Division, Fourth Department
      Statutory Toll for Death Precludes Merchants from Relying Upon its Two-Year Suit Limitation Clause
      Just as above, Merchants, this time, sought to dismiss Ms. Dails claim for first-party property damage on the basis that it was commenced more than two-years after the date of loss. In this case, however, the named insured died during the two year time to commence legal action. The Estate, thereafter, commenced the instant action approximately six months after the two-year suit period had expired.

      Ms. Dail argued that the CPLRs one year toll of statute of limitations after an claimants death applied to extend the time to commence the claim under the terms of the policy. In opposition, defendant argued that the two-year limitation was a condition precedent to coverage under the policy, and was not, as such, a statute of limitations. In applying the statutory toll, the Fourth Department noted that the two year limitations did not arise from the policy but rather from statute (Ins. Law 3404[e]). As such, plaintiffs claim was deemed timely, and permitted to proceed.

      FIJAL'S FEDERAL FOCUS
      Katherine A. Fijal
      [email protected]

      Editors Introduction: From time to time, we are delighted to provide you summaries provided by excellent coverage practitioners from around the state. This week, we are fortunate to include, with permission, a summary of Second Circuit coverage case involving late notice, with the review provided by Max Gershweir of Tower Insurance. For long-time readers of our humble offering, you will recognize him as the recipient of many Attaboy Max accolades for his many successful coverage wins at the appellate level. Max even earns an attaboy for the Tower Insurance case decided at the lower court level and reported in Jen's Gems below. Max is a regular contributor to the New York Insurance group on LinkedIn that your editor organized and operates. Thanks Max:

      4/29/10 Continental Insurance Co. v. Atlantic Casualty Insurance Co.
      United States Court of Appeals for the Second Circuit
      Second Circuit Finds that Claimant's Notice, Given After Insured's Untimely Notice, May Preserve Rights Under Policy, Ignoring Legislative History
      In Continental Insurance Co. v. Atlantic Casualty Insurance Co., 09-2882-cv (2d Cir. Apr. 29, 2010), the court was faced with a situation in which the insured judgment debtor gave its insurer untimely notice of the subject accident, while the claimant-judgment creditor allegedly gave reasonably prompt notice to the insurer (after factoring in its alleged difficulty in ascertaining the insurer's identity), per its right under Insurance Law 3420(a)(3), but not until days after the insured's untimely notice. The Southern District Court found that the first notice controlled, and thus that since first notice came from the insured and was untimely, the claimant, whose secondary notice was "superfluous," was out of luck. The Second Circuit disagreed, finding that the claimant's notice must be judged on its own merits, but affirmed the order granting the defendant-insurer summary judgment on separate grounds.

      The Second Circuit's determination as respects notice probably comes as no surprise to state-court practitioners who have looked at this issue, since the Appellate Divisions, in quite a few opinions, have so found over the past three decades. Some federal district courts applying New York law on this subject, however, including obviously the court that rendered the subject order on appeal, had found otherwise, reasoning that any secondary notice is "superfluous" for notice purposes. See U.S. Liab. Ins. Co. v. Winchester Fine Arts Servs., Inc., 337 F.Supp.2d 435, 448 (S.D.N.Y. 2004); Mt. Vernon Fire Ins. Co. v. Orange Intercept, Ltd., No. CV-92-1986, 1992 WL 368085, *3 (E.D.N.Y. Nov. 19, 1992). Judge Lynch, who authored the Second Circuit opinion (and is a terrific judge), provides, by far, the most thorough and well-reasoned discussion of the subject in any court opinion, including a detailed recounting of state-court decisions addressing the issue and public-policy reasons supporting the court's finding.
      Specifically, apart form state-court precedent, the Second Circuit justified its conclusion as follows: (1) since 3420(a)(3) was intended to give claimants an independent right to recovery against tortfeasors' insurers through their diligence in giving notice, a rule allowing the insured's lack of such diligence to interfere with that right would undermine that intent; (2) a first-notice-controls rule would lead to the anomaly of a diligent claimant's right to recovery being cut off where the insured gives first-but-untimely-notice, even though there would have been no such cut-off had the insured given no notice at all; (3) a claimant's notice should be judged more liberally than an insured's based on the former's initial unfamiliarity with the insurer's identity, as per the long-held Lauritano rule.

      As thorough and well-reasoned as the court's determination is, however, its analysis is still not entirely complete. Absent from its discussion is any mention of 3420(a)(3)'s (formerly 167(c)(1)) legislative history.  The New York Court of Appeals, in Bazar v. Great American Indemnity Co., 306 N.Y. 481, 488 (1954) (dictum), recounted that history, which contravenes the Second Circuit's finding, as follows:

      [T]he revisers had in mind certain supposed cases where an insured for some reason might not give notice to the company but where the injured person might give the insurer notice, and that the revisers were willing to provide that, if the insured gave no notice, notice from the injured person would be required to be in writing. Thus, all concerned were talking about the new proposed statutory law to the effect that notice requirements would be satisfied by the injured person giving a notice to the company when the insured had given no notice.

      The Appellate Divisions, in much-later cases addressing this issue, evidently lost sight of this legislative history, and the Court of Appeals' recounting of it. One would have hoped, however, that Judge Lynch, who clearly took a much closer look at this issue, would not have done so. It would have been interesting, at least, to see how Judge Lynch would have balanced, on the one hand, the court's belief that, under the statute, a claimant's later-but-reasonably-prompt notice should effectively cancel out the insured's earlier-but-untimely notice - and the state-courts' concurrence with that belief - with this divergent legislative history, on the other.

      Guest Editor: Max Gershweir, Managing attorney, Law Office of Max W. Gershweir