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Coverage Pointers - Volume XI, No. 24

Dear Coverage Pointers Subscribers:

Greetings from Nashville!  It is a city suffering great pain from the recent floods. It is slowly rebuilding from tremendous devastation and I trust will soon be back to its full vibrancy. Nashville will be the location for the 2011 PLRB/LIRB Claims Conference and I am here as part of a stellar and diverse planning committee helping to evaluate and develop programs for next year's conference.

I plan on being in Albany next week to speak to a joint Assembly-Senate panel against the changes currently being considered to in the No Fault "serious injury" threshold.   Adoption of the bill under consideration would, in all practicality, eradicate the threshold as it now exists and return every automobile accident case to the courthouse for jury consideration.  For those who haven't followed the proposed change, look at the most recent issues of Coverage Pointers for a review of the bill under consideration.

Favorite Case
There's a great case discussed in this week's issue involving some rather nasty sibling assault which led to a finding of neither liability nor uninsured motorist coverage available.  Stay tuned.

Check List for the NY Disclaimer

We include in this letter a special check list for New York disclaimers.  You may want to get some scissors before you settle into the rest of this issue.

All Hail Scott Gilmore - Our 2000th Subscriber!

The editorial staff at Coverage Pointers is pleased to congratulate and introduce Scott Gilmore, our 2000th direct subscriber.  This publication started with 25 e-mail subscribers when we sent out our first issue on July 9, 1999, at a time when e-mail newsletters were not in common use. Our subscription list increases when kind readers who believe their friends and colleagues might find the publication beneficial forward them a copy.

On Friday May 14, I received a request from Scott Gilmore, from State Farm, to be added to the subscription list.  I called Mr. Gilmore to advise him that he was our 2000th subscriber.  His reaction was surely appropriate.  First, he thought that I might be scamming him (who wouldn't).  Secondly, once he realized that the call (not the caller) was legitimate, he wanted to give me the shipping address for the color TV he thought he deserved to win by virtue of his accomplishment.  I assured him that a half-price subscription to Coverage Pointers was surely more valuable.

I asked Scott to introduce himself to our readership, and he was kind enough to offer the following:

Scott Gilmore is a Claim Consultant with the State Farm Insurance Companies, and has been with the company longer than he would care to admit publicly.  He is located at their corporate offices in Bloomington, Illinois and consults with State Farm's Northeast zone on auto claim related issues.  He previously worked with the company's auto claims operations in Texas, Kentucky, Tennessee and most recently Florida, where he consulted for the past 8 years.   Scott's claim handling and management career includes stints in Nebraska, California and Hawaii, as well as several corporate departments.

He is a graduate of the University of Nebraska - Lincoln and holds the CPCU and CLU designations.   He is a Nebraska Cornhuskers fan and on warm afternoons can often be found on one of his Harley Davidson motorcycles, sometimes with his wife Lou on board.   He is still disappointed that he didn't win a color television for being the 2000th subscriber to "Coverage Pointers".  

Hey Scott, welcome aboard.   You join a strong subset of our readers who wear leather jackets and ride Harleys.  We're delighted to have you in the CP family.

Recommended Reading - New ACORD Certificates of Insurance
Every so often, we come across an article we think merits review.  Our thanks to Charlie Cox from Aldrich & Cox, Inc. for allowing us to mention his publication, A&C News.  In the most recent issue, he has crafted a very good review of the new ACORD Certificates of Insurance and we suggest it is surely worth reviewing: www.aldrichandcox.com/current_issue.pdf.

From Audrey Seeley, the Queen of No Fault:

There is a very well-reasoned decision this edition from Arbitrator Benziger that is a must read.  Arbitrator Benziger addresses the issue of maximum medical improvement under Hobby and why the focus on deciding whether treatment is necessary should be on necessity of care and not searching for improper buzz words within an IME.  The rationale presented in the decision presents a logical approach to these cases and is instructive to both the medical provider and the insurer.  If you would like a full copy of the decision please email me at [email protected].

I hope that you and your family have a safe and pleasant Memorial Day weekend!

Audrey

Seven Steps to Heaven - Cut and Save - How to Properly Disclaim Coverage in New York
In 1963, Miles Davis, along with Herbie Hancock, Frank Butler and Tony Williams recorded an album entitled Seven Steps to Heaven(available with two bonus tracks on ITunes for $7.99).  However, what the great trumpeter probably didn't realize then was that the "real" seven steps to heaven would be those seven steps necessary to properly disclaim coverage in New York State.

Almost every day, someone with a "situation" calls to talk about NY disclaimers.  In my trip to New Jersey a few days ago, to provide training to some well-seasoned claims professionals, the NY rules were still mysterious. 

As a result, we thought it might be helpful to set out the general rules applicable to disclaimers and denials of coverage in New York, introduced by the statute that prescribes those rules.  It is followed by a check-list which you may wish to center on one page, print out (because using the scissors on your computer screen is not recommended) and tack the list up next to your favorite vacation photos, your children or grandchildren or the tattered sign that reads: Everyone Brings Joy to This Office:  Some When They Enter and Some When They Leave.

Here's the disclaimer:  be aware, of course, that this outline is a guide (a very useful one, we'd suggest) but nuances in developing case law could throw you the occasional curve.  First the statute, with a line-by-line summary and then the checklist:

Insurance Law §3420(d)(2)

§  3420.  Liability  insurance;  standard provisions; right of injured person. (a) No policy or contract insuring against liability for injury to person,  except  as  provided  in subsection (g) of this section, or against liability for injury to, or destruction of,  property  shall  be issued  or  delivered in this state, unless it contains in substance the following provisions or provisions that are equally or more favorable to the insured and to judgment creditors so far as such  provisions  relate to judgment creditors:

* * *

(d)(2)  If under a liability policy issued or delivered in this state, an insurer shall disclaim liability or deny coverage for death or bodily injury  arising  out  of  a  motor vehicle accident or any other type of accident occurring within this state, it shall give  written  notice  as soon as is reasonably possible of such disclaimer of liability or denial of coverage to the insured and the injured person or any other claimant.

Let's break that down:

  • The language in the introductory paragraph requiring that a policy must contain in substance the following provisions has been interpreted to mean that this is a "deeming" statute.  Even if the policy with which you are working does not contain the provisions called for in the statute, they are deemed to be included;
  • The section applies to liability policies although there have been cases that extended its provisions to coverages other than liability that are part of liability policies, including uninsured motorist, underinsured motorist and No Fault coverages;
  • The section ONLY applies to policies issued or delivered in New York;
  • While the language indicates that it applies to disclaimers and denials of coverage, there is a significant exception that has been carved by judicial interpretation.  The obligations imposed by the section do not apply if the insured never provided coverage for the risk in the first place, that is, if the loss does not fall within the grant of coverage.  It applies to coverage disclaimers based on exclusionary language or breaches of policy condition (cooperation and notice).  So, for example, if the loss occurred outside the policy period or if the claim against the insured does not apprise out, the section is inapplicable and a breach of its provisions will not create coverage where none exists.
  • As a note, there is no reference to reservation of rights letters and the term "reservation of rights" cannot be found within the Insurance Law of the State of New York.  This section requires a prompt disclaimer, complete or partial, if the insurer concludes that coverage does not exist.  New York courts have long held that a reservation of rights is not a substitute for a disclaimer as required under the section.
  • The section only applies to disclaimers for death or bodily injury and not to property damage lawsuits.  This section does not require prompt disclaimer in property damages cases.
  • The provisions are applicable only to accidents occurring with this (New York) state.

 

If all of those elements are present then:

  • The insurer shall give written notice as soon as is reasonably possible of such disclaimer of liability or denial of coverage to the insured and the injured person or any other claimant;
  • The requirement is clear:  Notice must be in writing, it must be sent as soon as reasonably possible (the courts have defined that as no longer than 28-30 days after completion of a well-documented and active investigation, if one is necessary) and it must be sent to the insured AND the injured party AND any other claimant.  The term "any other claimant" has been interpreted to mean potential cross-claimants;
  • Your disclaimer must be detailed, it must set EVERY reason for your disclaimer or denial of coverage and if a policy exclusion or condition is not raised in a disclaimer which is covered by the statute, an insurer may lose its right to ever rely on that reason again under the doctrine of "waiver";
  •  A failure to comply with the strictures of the statute, when it is applicable, may render a disclaimer ineffective and subject to collateral attack.

 

With that backdrop, here's the checklist. Cut here:

*******************************************************************************************************************

 

Kohane's Seven Steps to Heaven
Or
How to Properly Disclaim Coverage in New York

1.       Are we dealing with a liability policy?
If "yes," move to step "2" and if not, the statute in inapplicable.

2.       Was the policy issued or delivered in New York?
If "yes," move to step "3" and if not, the statute in inapplicable.

3.       Is this a disclaimer or denial of liability based on an exclusion or breach of policy condition?
If "yes," move to step "4" and if not, the statute in inapplicable.


4.       4.      Is the disclaimer or denial of coverage related to a claim for bodily injury or wrongful death?
If "yes," move to step "5" and if not, the statute in inapplicable.


5.       Did the accident which gives rise to the coverage denial occur in New York?
If "yes," move to step "6" and if not, the statute in inapplicable.


6.       Complete your investigation QUICKLY and then send out your disclaimer or denial of coverage, with particulars sufficient to outline each and every reason for your coverage position and then proceed to step "7".


7.       Send that disclaimer or denial of coverage to the:
a.      Insured;
b.      Injured Party (or his, her or its counsel);
c.      Any other potential cross claimant.  If you are in doubt whether a party might be one, err on the side of sending.

Any questions, contact me at [email protected] or 716-849-8942

 

*******************************************************************************************************************

One Hundred Years Ago Today:

Syracuse Post Standard
May 28, 1910

BRIDE OF 80 YEARS
IS AFTER A DIVORCE
Wealthy Widow, Who Married an
Employee of Lunch Restaurant,
Alleges Cruelty

LOUISVILLE, KY:  Depositions filed in the Circuit Court today show anything but connubial bliss attended the principals of one of the most startling marriages Kentucky has known, while they were wintering at the most fashionable hotels in Jacksonville, Fla.

The marriage of 80-year-old Mrs. W. K. Maxon-Smith, a wealthy and socially high widow, to U. Garland Baumgardner, 40-years-old, an employee of a dairy lunch restaurant, a few months ago, was one of the biggest surprises of the year.

Soon after the marriage the bridegroom went to and from his work in an automobile, and early in the season, the couple went to Jacksonville, Florida for the winter.  While there, they stopped at the Windsor Hotel and one of the depositions filed today was that of a chambermaid employed that time at that hotel.  They are being taken in connection with a suit for a divorce which the thrice married woman has filed, alleging cruelty and infidelity.

Emma Harley, the maid, says that Baumgardner treated his wife very cruelly and that on one occasion he scolded her for going through the hall in a kimono. The deposition alleges that Baumgardner frequented the race track with "sporty looking women" and that he seldom was with his wife.

Editor's Note:  Apparently, there was a pattern here. The April 23, 1911 edition of the Abiline Daily Reporter (page 11) contained the following story:

Man of 30 Takes Bride of 23
Woman Who Owns Between Five and Seven Millions
Was Married Three Times

PITTSBURGH, Pa., April 21.-A wedding that was somewhat out of the ordinary, took place at Pittsburgh last Tuesday afternoon, when Mrs. Katherine Maxon-Smith-Baumgardner, reputed to be the wealthiest woman of Louisville, KY embarked on the matrimonial sea for the fourth time, selecting for her on this venture young Carl Newmeyer, also of Louisville, and up to within a short time of this union a government gauger in one of the Blue Grass distilleries.

In This Week's Issue:

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

  • No Obligation to Deny Uninsured No Fault Coverage Timely, if Other Vehicle Was Insured
  • Years of Regulatory Oversight of Pollution Claims Gave Insured Obligation to Notify Carrier of Claims; No Obligation on Part of Carrier to Disclaim Promptly on Property Damage Claims
  • Three Sisters Who Were Intentionally Struck by Fourth Sister's Car, Can Reach Neither Her Liability Coverage Nor Secure Uninsured Motorist Benefits.  As Assault is Not an Accident
  • The Commencement of a Declaratory Judgment Action Can Serve as the Equivalent of a Disclaimer
  • For Purpose of Notice, the Term "Company Providing Insurance" May Mean Someone Else 
  • Without Settlement Demand Within Policy Limits and/or Loss of Opportunity to Settle, Bad Faith Claim Properly Dismissed
  • Where Contract Between Contract and Owner Did Not Require Additional Insured Status, that Status Is Not Available Under Blanket AI Provisions.  The Certificate of Insurance Does Not Change Result

 

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

  • Plaintiff's Case Fails When the Only Admissible Proof Is His Orthopedic Surgeon's Report Which Contradicts Plaintiff's Deposition Testimony
  •  Cross-Motion on Serious Injury Is Denied - It Was Made Beyond CPLR's 120-Day Period and the Issue Was Not Identical to the Original Motion
  • Plaintiff Fails to Explain 2-Year Gap in Treatment and Refutes Her 90/180-Day Claim in Her Bill of Particulars
  • Examination 7 Months After Accident Is Not Contemporaneous
  • Certified Personal Trainer Missed Only 3 Days of Work: Not Serious Injury
  •  IME that Fails to Compare Findings With What Is Normal Does Not Support Motion
  • Grant of Defendant's Cross Motion on Issue of Serious Injury Warrants Denial of Plaintiff's on Issue of Liability
  • Affirmation Relying on Unsworn MRI Reports Lacks Probative Value
  • Contemporaneous and Recent Examinations and MRI Reports Raise an Issue of Fact Where They Causally Relate Injury and Indicate Injury Is Significant and Permanent
  • Cross-Claim Is Converted to a Third-Party Claim and Defendants' Motions on Issue of Serious Injury Fail

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

ARBITRATION

  • Applicant Responsible for Bills After Failing to Appear For One IME
  • Focus Should Be On "Necessity" of Treatment And Not On Existence of Buzz Words Like Maximum Medical Improvement

LITIGATION

  • Plaintiff's Default Judgment Denied Due To Failure To Submit Proper Evidence
  • Plaintiff's Failure To Specifically Refute Expert Opinion Fails To Create Issue of Fact Precluding Summary Judgment In Favor of Insurer
  • Letters Confirming Scheduling IMEs Insufficient to Demonstrate Failure to Appear For Scheduled IMEs

PEIPER ON PROPERTY
 (and POTPOURRI)
Steven E. Peiper

[email protected]

·        Second Department Refuses to Extend Review of Arbitration Decisions

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

·        Second Circuit Certifies Question "What Is An Insured Location" to the Connecticut Supreme Court
·        Scope and Application of the Professional Services Exclusion under Texas Law

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

  • Court Dismisses Complaint as against all Parties except the Insurance Company that Issued the Policy
  • Life Insurance Policies Rescinded Based On Material Misrepresentations
  • Employee Exclusion Applies to Bar Coverage

EARL'S PEARLS
Earl K. Cantwell
[email protected]
Automatic Stay Pending Appeal

That's all folks.  Enjoy the Memorial Day Weekend.

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
Kohanes Coverage Corner
Margos Musings on Serious Injury
 Audreys Angles on No Fault
Peiper on Property and Potpourri
Fijals Federal Focus
Jens Gems
Earls Pearls
Across Borders

KOHANES COVERAGE CORNER
Dan D. Kohane

[email protected]


5/27/10 MVAIC v. Interboro Medical Care & Diagnostic PC
Appellate Division, First Department
No Obligation to Deny Uninsured No Fault Coverage Timely, if Other Vehicle Was Insured

MVAIC defended the arbitration on the ground that the police accident report showed that the offending vehicle was registered out-of-state and was insured. The Arbitrator refused to recognize that defense on the ground that MVAIC had not denied coverage timely. The Court ruled that the arbitrator should have considered that defense because if there is no coverage, there is no obligation to deny coverage where coverage doesnt exist.
Editors Note: Why wouldnt there have been a motion to stay?

5/20/10 The Travelers Ind. Co. v. Orange and Rockland Utilities, Inc.,
Appellate Division, First Department
Years of Regulatory Oversight of Pollution Claims Gave Insured Obligation to Notify Carrier of Claims; No Obligation on Part of Carrier to Disclaim Promptly on Property Damage Claims

The insured did not give timely notice under a liability policy when there have been ongoing discussions with environmental regulators about a specific site, the Nyack site, dating back to 1981. The US EPA even inspected the site in 1985, yet no notice was given to the carrier until 1995. The insured claimed it did not know of pollution but there were many reports, including internal reports of a likelihood of contamination at the subject site. That notice, as well as the inquiries from the regulators, gave the insured enough of a reason to investigate.
The standard with regard to a primary liability policy, such as involved here, is simply awareness of a reasonable possibility that the policy will be implicated 239-240).
The fact that the disclaimer was late is of no consequence because under Insurance Law Section 3420(d), a duty to disclaim promptly only applies to bodily injury and wrongful death cases, not property damage claims.
There was a statutory pollution exclusion which was in the Insurance Law between 1971 and 1982. That provision, (former 46) excluded liability coverage for pollution other than claims based on "sudden and accidental" discharges. The court properly applied that exclusion for all policies issued during that period. However, for the policy issued in 1970, pollution coverage could be purchased and thus for non-Nyack sites, coverage may be available under other policies.


5/1810 Travelers Indemnity Company v. Richards-Campbell
Appellate Division, Second Department
Three Sisters Who Were Intentionally Struck by Fourth Sisters Car, Can Reach Neither Her Liability Coverage Nor Secure Uninsured Motorist Benefits. As Assault is Not an Accident.

Andrews was driving a car owned by Holt and while doing so, intentionally ran down her three sisters Shekenah, Shadrach and Shekeila Campbell (Campbells). Andrews eventually pleaded guilty to three counts of assault in the second degree arising from the incident, admitting that she intentionally struck the Campbells.
The Holt car was insured by Lincoln and it disclaimed based on Andrews intentional conduct. So, the Campbells filed for uninsured motorist coverage from their mothers auto carrier, Travelers. Travelers denied coverage as well.
The Second Department held that Lincoln properly denied coverage on the grounds that the injuries were the result of intentional criminal acts. However, the uninsured motorist carrier, Travelers, was similarly entitled to deny coverage. Uninsured motorists coverage is designed to provide coverage to those injured in an auto accident by an uninsured motorist. The fact that Andrews lost her coverage because she committed an assault with her vehicle does not convert Holts insured car into an uninsured car. Similarly, the injuries to the Campbell sisters were not caused by an accident but by intentional conduct.
Editors Note: Surely the right decision. Insurance, whether it be liability insurance or UM coverage, is designed to cover accident and not assaults.
We editorialize only to comment on the dicta in the decision indicating that the the offending vehicle was not an uninsured motor vehicle within the terms of the policy (McCarthy v Motor Veh. Acc. Indem. Corp., 16 AD2d at 46). In that 1962 Fourth Department case, the court held that the MVAIC endorsement used at the time defined the term "uninsured automobile" as "an automobile with respect to the ownership, maintenance or use of which there is, in the amounts specified in the New York Motor Vehicle Financial Security Act [no] bodily injury liability bond or insurance policy, applicable to the accident". Accordingly, when the assaulter in that case lost coverage, the vehicle was still insured, but the person who committed the crime, was not.
There are situations under current definitions of uninsured motor vehicle where there are in insured autos that are considered uninsured but if fact are fully insured. For example, a stolen car is fully insured, as may be a hit-and-run vehicle.
In any event, that additional comment was unnecessary to reach the result.


5/1810 Blue Ridge Ins. Company v. Empire Contracting and Sales, Inc.
Appellate Division, Second Department
The Commencement of a Declaratory Judgment Action Can Serve as the Equivalent of a Disclaimer

Not a lot to go on in this one. However, the Court holds that an insurers commencement of a declaratory judgment action is the equivalent of a disclaimer. That is not new law, but serves as a reminder. The same time requirements that would be applicable to a disclaimer would apply to a DJ action that serves in lieu of a disclaimer. Do it promptly, generally with 30 days of the completion of a prompt investigation or, it may be considered too late.

5/11/10 Prince Seating Corp., v. QBE Insurance Company
Appellate Division, Second Department

For Purpose of Notice, the Term Company Providing Insurance May Mean Someone Else
The insured provided notice of the underlying claim to his broker, Century, rather than to his insurer (as required under the policy). That notice does not comply with the policy obligations in the absence of some principal-agent relationship between the insurer and the broker. There was no such evidence here.
However, the terminology of the policy, including the notice provision, in which the words "we," "us," and "our," referring to "the company providing this insurance," were used to describe who should be notified, is ambiguous. QBE was not clearly identified as the party to whom those terms applied. Given that ambiguity, there is an issue of fact as to whether "the contract should be interpreted to allow notice to [the] broker".


5/11/10 CBLPath, Inc. v. Lexington Insurance Company
Appellate Division, Second Department
Without Settlement Demand Within Policy Limits and/or Loss of Opportunity to Settle, Bad Faith Claim Properly Dismissed
The underlying claim was brought my Eason against CBLPath (CBL). It was claimed that CBL, a medical diagnostic laboratory, negligently switched her biopsy specimen with another, resulting in Eason being erroneously diagnosed with breast cancer, and subsequently undergoing an unnecessary double mastectomy. CBL was covered under a medical malpractice insurance policy issued by Lexington Insurance Company with $1,000,000 in limits.
The first settlement demand was made in December 2007 for $5,000,000 (five times the policy limits) and the case was eventually settled for $2,500,000 with Lexington paying its $1,000,000 limit and CBL paying the balance. Prior to the lawsuit, plaintiff tried to engage in settlement negotiations with Lexington but without success. However, it did not make a settlement demand until, as noted, its demand in December 2007.
CBL commenced this bad faith action against Lexington claiming that the insurer, by refusing to enter into pre-litigation settlement discussions with Eason's counsel, violated its duty of good faith and fair dealing to CBL. CBL sought actual and consequential damages, including, inter alia, injury to its business reputation, lost sales, increased sale expenses, lost profits, and lost business opportunities caused by the negative publicity that resulted from the commencement of the underlying action. Lexington moved for summary judgment dismissing the complaint and the lower court granted the motion.
The Second Department affirmed. It is a rare bad faith case in New York that reaches the appellate level, so its worth remembering the standard. The court holds that (a) there must be proof that a demand for settlement was made; and (b) there must be proof that the insured lost an actual opportunity to settle the claim at a time when all serious doubts about the insured's liability were removed.

Here, there was no pre-litigation settlement demand (even though liability was clear) and no proof that the insured lost an opportunity to settle the case within the policy limits.

5/11/10 Hargob Realty Associates, Inc.,v. Fireman's Fund Ins. Co.
Appellate Division, Second Department
Where Contract Between Contract and Owner Did Not Require Additional Insured Status, that Status Is Not Available Under Blanket AI Provisions. The Certificate of Insurance Does Not Change Result
Hargob entered into a construction contract with USA Interior (USAI) with USAI to perform certain demolition work at Hargobs premises. There was a one-page contract with a hold-harmless agreement running in Hargobs favor. The indemnity provisions required USAI to hold Hargob harmless, for any acts or omissions of USAI except for claims arising from Hargobs own negligence.
Firemans Fund Insurance Company (FFIC) issued a policy to USAI with a blanket additional insurance endorsement that required FFIC to insure any entity the Named insured was required in a written contract to name as an insured.
As there was no requirement in the agreement for USAI to insure Hargob, the FFIC AI endorsement is not triggered and coverage is not afforded to Hargob. The fact that a Certificate of Insurance suggests otherwise does not create coverage.
A late disclaimer does not create coverage here because Hargob is not included in the grant of coverage and a late disclaimer cannot create coverage where none exists.


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

[email protected]


5/20/10 Barner v. Shahid
Appellate Division, First Department
Plaintiffs Case Fails When the Only Admissible Proof Is His Orthopedic Surgeons Report Which Contradicts Plaintiffs Deposition Testimony

This case is almost funny. The important thing to note is that the defendants expert reviewed the MRI films themselves, not the unsworn report, and so stated. Based on his examination and review of the films, his affirmed report concluded that the plaintiffs injury was not serious, and in any event not related to the accident but rather the result of a preexisting degenerative condition. Here is why the plaintiff failed to successfully oppose the motion, despite having undergone surgery.

Plaintiff alleged he sustained a torn meniscus in his left knee which required arthroscopic surgery. He submitted the report of a physician who examined him the day after the accident, and the narrative report of his orthopedic surgeon. Neither was admissible because they were not sworn. In addition, the plaintiff never submitted the unsworn report of the MRI performed two days after the accident and which allegedly revealed the torn meniscus, and the orthopedic surgeons findings regarding the MRI were not considered because he did not state that he viewed the films rather than simply relying on the unsworn report. Without the report, it could not be determined whether the radiologist related the tear to the accident. In addition, none of the plaintiffs submissions addressed the question of preexisting degenerative condition raised by the defendant.

Plaintiffs only admissible proof was his orthopedic surgeons report based on his examination performed 6 years after the accident. Even that report did not state whether the injury was permanent, identify the limitations, or compare with what is normal. Furthermore, that report stated that the plaintiff had not worked since the accident and that he stopped treating because he had reached maximum medical benefit and improvement. However, and in direct contradiction, the plaintiffs deposition testimony was that he returned to work as a barber within four months after the accident and that, at the time of the deposition, he was working in construction. Plaintiff also testified at this deposition that he stopped treating because the center where he received physical therapy closed. Not surprisingly, the trial courts grant of summary judgment to the defendant was unanimously affirmed.

5/20/10 Leonardi v. Cruz
Appellate Division, First Department
Cross-Motion on Serious Injury Is Denied It Was Made Beyond CPLRs 120-Day Period and the Issue Was Not Identical to the Original Motion

On appeal, the defendants cross-motion is reversed on procedural grounds. The plaintiff moved for summary judgment on only the issue of liability and argued to dismiss the defendants cross-motion, brought on the issue of serious injury, as it was made beyond the 120-day period set forth in CPLR 3212(a). The Appellate Court agreed that the issues of liability and serious injury are not identical such that the court might, in its discretion, allow the untimely cross-motion.

5/18/10 Zhijian Yang v. Alston
Appellate Division, First Department
Plaintiff Fails to Explain 2-Year Gap in Treatment and Refutes Her 90/180-Day Claim in Her Bill of Particulars

Defendants submitted the affirmed report of their examining orthopedic surgeon who detailed the tests performed in concluding the plaintiff had full range-of motion in her left hip, cervical and lumbar spine, and right knee and that she had no ongoing impairment. Defendants also submitted the plaintiffs deposition testimony where she admitted having sustained injuries in both prior and subsequent accidents, and her bill of particulars where she stated she was only confined to home for a brief period.

In opposition, the plaintiff submitted her experts report that did not compare with the norm the range-of motion findings in the plaintiffs spine and shoulder, and that concluded that the range-of-motion for her hips and knees were normal. Furthermore, no explanation was given for the 2-year gap in treatment, and the prior and subsequent accidents were not mentioned. As such, his conclusions that her injuries were causally related to the accident were speculative. In addition, the plaintiffs bill of particulars clearly set forth that she was only confined to bed for two days, and to her home for a month, thereby defeating her claim under the 90/180-day category.

5/18/10 Catalano v. Kopmann
Appellate Division, Second Department
Examination 7 Months After Accident Is Not Contemporaneous

Plaintiffs treating physician examined her seven months after the accident and noted significant ROM limitations in the cervical and lumbar spines and, upon reexamination in 2008, noted limitations in the cervical spine only. However, the plaintiff did not submit any medical evidence that was actually contemporaneous with the accident and therefore she failed to raise a triable issue of fact. In addition, the submissions of her chiropractors either did not relate the injuries to the accident or did not set forth the objective tests used to arrive at their conclusions, and the plaintiffs own deposition testimony, that she missed only two or three days of work, defeated her claim under the 90/180-day category.

5/18/10 Clarke v. Delacruz
Appellate Division, Second Department
Certified Personal Trainer Missed Only 3 Days of Work: Not Serious Injury

Plaintiff, a salesperson and certified personal trainer, missed only three days of work according to his treating physician who, upon recent examination, noted that the plaintiff was working full duty, and the plaintiff did not submit any other medical evidence in support of his 90/180-day claim. He also did not submit any medical evidence that was based on recent examination to support his claims under the permanent loss, permanent consequential limitation and/or significant limitation of use categories so the trial court properly dismissed the complaint.

5/18/10 Levin v. Khan
Appellate Division, Second Department
IME that Fails to Compare Findings With What Is
Normal Does Not Support Motion
The neurologist who performed the IME on one of the plaintiffs did not compare the ROM findings of her right knee with what is normal thereby rendering the IME insufficient to support the defendants initial burden. Plaintiffs also were successful in raising an issue of fact with respect to the second plaintiff through the submissions of his treating physician, which included contemporaneous and recent examinations noting significant ROM limitations of his right shoulder and review of affirmed MRI reports revealing a torn rotator cuff. The treating physician further concluded that the injuries and limitations were significant, permanent and causally related, thus rebutting the defendants motion.

5/18/10 Mullally v. Saclaridis
Appellate Division, Second Department
Grant of Defendants Cross Motion on Issue of Serious Injury Warrants Denial of Plaintiffs on Issue of Liability

Plaintiff moved on the issue of liability and defendant cross moved on the issue of serious injury and was successful in showing that the plaintiff, who limited her injury claims to her right shoulder, did not sustain a serious injury under 5102(d). Therefore, the trial court properly denied, as academic, the plaintiffs motion on the issue of liability.

5/18/10 Vasquez v. John Doe #1
Appellate Division, Second Department
Affirmation Relying on Unsworn
MRI Reports Lacks Probative Value
Here, it seems the plaintiffs treating physicians affirmation was defective in every way possible. First, he relied on the unsworn MRI reports of another doctor. Then, although he reported ROM restrictions of the plaintiffs left knee and cervical and lumbar spine during an examination in 2009, he did not reconcile those findings with his prior findings of minor or no restrictions in 2007. In addition, he did not summarize or even reference his own reports in his affirmation. Thus those reports, as well as the hospital records, MRI reports, physical therapy and chiropractic records and reports, which were all unaffirmed, were not admissible. Finally, no explanation was proffered for the plaintiffs cessation of treatment just three or four months after the accident.

5/11/10 Pearce v. Olivera-Puerto
Appellate Division, Second Department
Contemporaneous and Recent Examinations and
MRI Reports Raise an Issue of Fact Where They Causally Relate Injury and Indicate Injury Is Significant and Permanent
On appeal, the trial court is reversed and the complaint reinstated where the plaintiffs submissions raised issues of fact as to both the nexus with the accident and the seriousness of the injury. Plaintiff submitted contemporaneous and recent examinations, as well as MRI reports, which revealed numerous cervical herniations and lumbar bulges. The submissions indicated that the injuries resulted in significant and permanent range-of-motion limitations and that these were causally related to the accident.

5/11/10 Vardanian v. Morelli
Appellate Division, Second Department
Cross-Claim Is Converted to a Third-Party Claim and Defendants Motions on Issue of Serious Injury Fail

Plaintiff alleged that defendant, Morelli, ran a stop sign and struck her vehicle, which had the right of way, causing her serious injury. Plaintiff also asserted a claim against co-defendant, Prohaske, the owner of the property at the intersection, for allowing the vegetation on his property to obscure visibility, in violation of town code. Witnesses testified at their depositions that Morelli did not stop at the stop sign, while Morelli testified that he did but that his view was obscured by the vegetation on Prohaskes property.

Both Morelli and Prohaske moved for summary judgment to dismiss the complaint and cross-claims on the grounds that the plaintiff did not sustain a serious injury and that they were not negligent. The trial court denied Morellis motion but granted Prohaskes cross-motion finding that there was no evidence he violated the town code even if there was a triable issue as to serious injury. On appeal, the Court modified finding that the papers relied upon by both Morelli and Prohaske did not affirmatively establish that the plaintiff did not sustain a serious injury and, as such, Morellis motion was properly denied. However, Prohaskes cross-motion should have been denied because he did not establish that vegetation on his property was not in violation of town code, did not obstruct visibility and was not a proximate cause of the accident. As such, his cross-motion should have been denied and converted to a third-party action.


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


ARBITRATION
5/26/10 Applicant v. GEICO Ins. Co.
Arbitrator Mary Anne Theiss, Onondaga County
Applicant Responsible for Bills After Failing to Appear For One IME.

The Applicant, eligible injured person, was denied No-Fault benefits for failure to appear for two IMEs. The Applicant had attended prior IMEs without issue. The Applicant was scheduled for an IME with a physician she had previously appeared before, yet the physicians street number had changed. The Applicant appeared at the physicians old location and it appears that the examination was rescheduled by the insurer. The Applicant missed the rescheduled examination because she completely forgot about it due to preparing for this arbitration.

The assigned arbitrator determined that the proffered excuse was not valid but did not find that the policy conditions were violated. Instead, any bills up to the date of the decision were deemed the Applicants responsibility and any bills post decision are justified unless a subsequent IME finds otherwise.

NOTE: While some may question the rationale as the initial reaction is a breach is a breach we point out that the initial IME was rescheduled by the insurer and therefore cannot be deemed a no show. Thus there actually, based upon the facts set forth in the decision, was not a failure to appear for two scheduled IMEs.

5/25/10 Walden Bailey Chiro. Ctr. v. Allstate Ins. Co.
Arbitrator Kent L. Benziger, Erie County
Focus Should Be On Necessity of Treatment And Not On Existence of Buzz Words Like Maximum Medical Improvement.

The Applicants assignor was involved in a November 30, 2006, motor vehicle accident resulting in injury to the cervical spine. The Applicants assignor was deemed a surgical candidate by Dr. Capicotto but chose to take a more conservative approach with Applicant and through pain management with Dr. Gosy.

The Applicant treated the assignor from September 2007 through July 2009. The Applicant testified that his treatment to the assignor was palliative and not curative. The Applicant further testified that he could not cure a cervical disc herniation but could provide temporary relief. Further, the assignor would need treatment for the remainder of his life. While the Applicant acknowledged guidelines exist for a chiropractor to treat a patient while providing no curative benefit the Applicant disagreed with those guidelines. Also, the Applicant could not specify how long the palliative benefit would last.

The insurer denied chiropractic care based upon the IME of Gary Kostek, D.C. While Mr. Kosteks examination revealed positive objective findings and a causally related injury he determined that the assignor reached a logical end result in relationship to chiropractic treatment that has been provided. Further, Mr. Kostek opined that there was no decrease in frequency of treatment as would be expected if therapeutic gain were being made. Thus, chiropractic care was denied by the insurer.

The Applicant argued that Mr. Kosteks conclusion was maximum medical improvement, which under the Hobby case, is not a recognized basis for denying medical treatment under No-Fault. However, the assigned arbitrator reasoned that recent decisions, namely Ray Gaul and Commercial Union Ins. Co., 268 AD2d 816 (3d Dept. 2000), have determined that a finding that treatment which no longer benefits or improves the assignor is a side step to the phrase maximum medical improvement. The term palliative care was determined to be treatment that lessens the severity of pain and suffering and improving the quality of life without necessarily affecting a cure.

The assigned arbitrator declined the rephrase Mr. Kosteks opinion as maximum medical improvement just because he used the term logical end in treatment. Instead, he reasoned that treatment in no necessary if it is not improving or benefiting the assignor in a meaningful or necessary way.

Thereafter, the assigned arbitrator reasoned that the focus, as seen in the Gaul case, should be on whether the medical treatment is necessary as opposed to focusing on whether buzz words are present in the report to defeat the defense of lack of medical necessity. Thus the issue is whether the chiropractic care in this case is providing palliative relief that equates to necessary treatment under No-Fault.

Then the question becomes what degree of palliative relief is reimbursable under No-Fault. This issue is one of fact for the assigned arbitrator to determine. In this case, the assigned arbitrator determined that the treatment was not necessary post September 11, 2008. This determination was based upon the medical records and Applicants testimony. The Applicant failed to quantify the specific palliative benefits of the treatment after the electrodiagnostic testing was performed which was fatal to its claim.


LITIGATION
5/13/10 Balance Chiropractic, PC a/a/o Cirilo Acosta v. Property and Ca. Ins. Co. of Hartford
Appellate Term, Second Department
Plaintiffs Default Judgment Denied Due To Failure To Submit Proper Evidence.

The plaintiffs motion for a default judgment was properly denied as it failed to establish a prima facie case entitlement to judgment as a matter of law. The plaintiff failed to proffer an affidavit or a verified complaint from the party with personal knowledge of the claim. The verified complaint by counsel was insufficient as was the affidavit from the third-party billing company president who lacked personal knowledge of the documents attached to plaintiffs motion.

5/13/10 Innovative Chiropractic, PC a/a/o Wanda Batista v. New York Cent. Mut. Fire Ins. Co.
Appellate Term, Second Department
Plaintiffs Failure To Specifically Refute Expert Opinion Fails To Create Issue of Fact Precluding Summary Judgment In Favor of Insurer.

The insurers motion for summary judgment should have been granted as the plaintiff failed to submit an affidavit which specifically refuted the experts opinion. Instead, the plaintiffs submitted affidavit merely concluded that the treatment rendered was medically necessary. This failed to create an issue of fact precluding summary judgment in favor of the insurer.

5/13/10 Central Radiology Services, PC a/a/o Jefferson Bonilla v. MVAIC
Appellate Term, Second Department
Letters Confirming Scheduling IMEs Insufficient to Demonstrate Failure to Appear For Scheduled IMEs.

The plaintiffs cross-motion should have been granted as the insurer did not demonstrate that the assignor failed to appear for two scheduled IMEs. The evidence proffered by the insurer in the form of a letter from a third-party vendor to the insurer only confirming a request to schedule the IMEs was insufficient to demonstrate that the assignor had not only been notified of the IMEs but failed to show.


PEIPER ON PROPERTY (and POTPOURRI)
Steven E. Peiper

[email protected]


05/11/10 In the Matter of Judy Chin v State Farm Insurance Company
Appellate Division, Second Department
Second Department Refuses to Extend Review of Arbitration Decisions

In this case, the Second Department reviews the limited grounds upon which an arbitration award can be vacated under Article 75 of the CPLR. Here, plaintiff petitioned the Supreme Court to modify/overturn a duly rendered arbitration decision.

In refusing the disturb the arbitration award, the Court noted that a decision may only vacated if it is (1) violative of public policy, (2) is completely irrational or (3) exceeds the scope of the arbitrators power. The Court noted that even if the arbitrator applied the wrong law, there is no form of review. Whereas here the plaintiff failed to establish a violation of one of the three aforementioned grounds, her attempt to vacate the decision was denied and dismissed accordingly.


FIJALS FEDERAL FOCUS
Katherine A. Fijal

[email protected]


 5/18/10 Arrowood Indemnity Co. v. Pendleton King, et. al.
United States Court of Appeals for the Second Circuit
Second Circuit Certifies Question What Is An Insured Location to the Connecticut Supreme Court.
Defendants appeal from a declaratory judgment of the United States District Court for the District of Connecticut holding in favor of insurers that none of the three separate residence-related liability policies owned by the Kings covered their alleged liability to a third-party child who was seriously injured in an accident involving an all-terrain vehicle the Kings owned [ATV].

The Kings home, located in Deer Park, a private residential development in Greenwich, Connecticut, is managed by a homeowners association. There are private roads within the Deer Park boundaries. On May 5, 2002, the Kings son and a neighbor, both 14 years old at the time, were playing with an ATV owned by the Kings. The Kings son, Junior, was driving the ATV while towing his friend who was standing on a skateboard and holding a rope tied to the back of the ATV. As the teenagers traveled within the Deer Park development, Juniors friend fell and struck the pavement, causing him to sustain life threatening head trauma. The accident occurred approximately 50 to 75 feed north of the intersection where the Kings resided.

The Kings had three liability policies which were in effect at the time of the accident: (1) a homeowners policy issued by Royal Indemnity ($500,000); (2) an umbrella policy issued by Royal Insurance Company of America ($5,000,000); and (3) an excess liability policy issued by National Surety Corporation ($5,000,000).

The Kings put their insurers on notice after receiving an attorney representation letter more than a year after the accident. After an investigation Royal disclaimed on both the primary and the umbrella policies. Royal then filed a declaratory judgment action in the United States District Court of Connecticut.

At issue was a provision of the Kings homeowners policy which covers any person using a recreational vehicle owned by an Insured and on an Insured location. The policy defined an Insured Location to include the residence premises; that part of other premises, other structures and grounds used by the policyholders as a residence and which is shown in the declarations, or, which is acquired by you during the policy period for your use as a residence; and; any premises used by you in connection with either of the foregoing.

The homeowners policy generally excluded coverage for injuries arising out of any use associated with a motorized land conveyance vehicle and, specifically, for any vicarious liability arising out of the actions of a minor in connection with the use of such a conveyance, even if statutorily imposed. However, the policy also provided that this general exclusion did not apply to a motored land conveyance designed for recreational use off public roads, not subject to motor vehicle registration and . . . owned by an Insured and on an Insured location.

The umbrella policy would not provide coverage unless the recreation vehicle was covered by the primary insurance and was described as being covered in the declarations. The Excess policy followed form to the umbrella policy.

In the declaratory judgment action Royal took the position that the homeowners insurance did not apply because the injuries were not sustained on an insured location and the umbrella policy did not apply because the ATV was not listed in the policy declarations.

The Kings argued that the accident site was an insured location because it was a private way owned by the Deer Park Association for the exclusive use and benefit of Deer Park residence, and therefore, was used by them in connection with their residence premises.

The District Court held that, with respect to the homeowners policy the coverage inquiry turned on the location of the accident rather than the location where the actual entrustment of the ATV had occurred. As to the umbrella policy, the District Court found that the umbrella policy did not apply because it expressly excluded coverage for all ATVs except those listed in the declarations, and the Kings had failed to list the ATV involved in the accident. The District Court also concluded that since the excess policy follows form to the umbrella policy the Kings were not eligible for coverage under the excess policy.

In addressing the negligent entrustment claim asserted in the complaint the Second Circuit found that the Connecticut law was unsettled as to whether a negligent entrustment claim in this context should be deemed to arise where the subject vehicle was entrusted, where the vehicle was housed, or where the accident itself took place.

No Connecticut court has ruled on whether a road (public or private) should be considered a premises within the meaning of an insurance contract. Nor have Connecticut courts dealt with the follow-up question of whether such a situs can satisfy the used in connection with a residence premises standard. The Second Circuit then identified several approaches which the Connecticut Supreme Court may analyze when rendering a decision: (1) repeated use of the site by the insured; (2) integral use, i.e., premises used in connection with the residence premises; (3) property ownership and legal right to use, is the policy term insured location broad enough to include roads in a private development which are available for use in achieving access to the insured residence; (4) foreseeable use; (5) actual use, the approach used by the district court.

Another issue addressed by the Second Circuit and Certified to the Connecticut Supreme Court was whether the Kings provided timely notice to the insurers. Notice was not provided until the Kings received a letter or representation from an attorney more than a year after the accident. The Kings based their argument on timely notice on their social interaction with the parents of the injured teenager which gave the Kings no indication that a lawsuit was forthcoming. The Second Circuit found that it was unclear under Connecticut law whether the Kings reliance on social interaction is enough to create a material issue of fact as to whether prior to the attorney representation letter, the situation would have suggested to a person of ordinary and reasonable prudence that liability may have been incurred.

We will await the decision of the Connecticut Supreme Court and report accordingly

5/21/10 Admiral Insurance Co. v. Randall K. Ford
United States Court of Appeals for the Fifth Circuit
Scope and Application of the Professional Services Exclusion under Texas Law
Defendant, Ford, purchased two insurance policies from Admiral. A commercial general liability policy [CGL] which was occurrence based and provided $1,000,000 of coverage and a professional liability [PL] policy which was claims-made coverage covering oil and gas consultant operations with a $50,000 limit per claim.

The CGL policy contained an exclusion for designated professional services, describing Professional Services as All Operations of the Insured. The exclusion also provided that coverage does not apply to bodily injury, property damage, personal injury or advertising injury due to the rendering or failure to render any professional service.

Ford was hired by Exco Resources to create a drilling plan for an oil well and to consult and assist in the drilling of the well. During the drilling the well had a blowout, and Exco sued Ford.

Admiral paid Ford $50,000 pursuant to the PL policy, then filed the instant lawsuit for a declaratory judgment that it did not owe Ford any coverage under either the CGL or the PL policy. Admiral later abandoned its efforts with respect to the PL policy.

Admiral claimed that the professional services exclusion to the CGL excludes coverage for Excos lawsuit because the underlying conduct required Fords specialized or technical knowledge. Ford argued that because the professional services exclusion purports to apply to all operations of the insured, the exclusion destroyed any grant of CGL coverage, and therefore should not be given effect.

The district court ruled in favor of Ford, finding that the professional services exclusion was illusory because it defined professional services as all operations of the insured. For the following reasons the Fifth Circuit reversed.

In its appeal Admiral argued that the all operations language does not define professional services, but rather provides the scope of the exclusion. The all operations language meant only that the parties intended the legal definition of professional services to exclude coverage for professional services in any of Fords operations. The legal definition of professional services articulated by Texas courts limit professional services to those that require the professionals specialized knowledge or training.

Ford, on the other hand, relied on the district courts plain language reading, urging the courts not to rewrite the exclusion.

Under Texas law the court must adopt the construction of an exclusionary clause urged by the insured as long as that construction is not unreasonable, even if the construction urged by the insurer appears to be more reasonable or a more accurate reflection of the parties intent. Utica Natl Ins. Co. v. Tex. v. Am. Indem. Co., 141 S.W. 3d 198 (Tex. 2004). Terms are giving their ordinary meaning unless the insurance policy shows that the words were meant in a technical or different sense. Markel Ins. Co. v. Muzyka, 293 S.W.3d 380 (2009).

The Fifth Circuit found that although Fords plain language argument was simple, it was strange. The Court noted that Ford read the exclusion so broadly as to defeat any coverage, and then claims that because the coverage is rendered illusory under this broad interpretation, the exclusion should be given no effect. The court found it difficult to understand why Ford would purchase a policy that it believed to exclude all of its operations from coverage. The court concluded that although the provision is confusingly worded and a literal interpretation would imply that all operations are excluded as professional services, the literal interpretation is unreasonable. The court determined that Admiral advanced the only reasonable interpretation of the exclusion that the parties intended the legal definition of professional services to exclude coverage for professional services in any of Fords operations.

Having decided that exclusion was operative, the court addressed the issued of whether the exclusion defeats coverage. In determining the applicability of a professional services exclusion, Texas courts apply the eight corners rule. They look only to the four corners of the policy and the four corners of the underlying complaint to determine whether a duty to defend exists. Natl Union Fire Ins. Co. of Pittsburgh, Pa. v. Merchs. Fast Motor Lines, Inc., 939 S.W.2d 139 (Tex. 1997).

In analyzing the complaint, the Fifth Circuit noted that aside for Excos bald statement that certain unspecified acts were non-professional, the only arguably non-professional conduct alleged was failing to look for metal shavings or to use a magnet to detect shavings in the mud. The court stated, however, that Exco is not suing Ford because Ford was told to watch for the pipe wear and metal shavings and failed to do so. Rather, the complaint is that Ford failed to act upon its specialized knowledge that those tasks needed to be performed. Ultimately, the underlying suit alleges the existence of an failure to fulfill a contract, the very subject of which was Fords expertise in drilling operations.

The Court held that Ford was tasked with ensuring that the well did not blow out. Taking, or not taking, certain measures to ensure that the drill pipe did not fail under the particular drilling conditions requires Fords specialized knowledge and training, and thus is an excluded professional services.


 JENS GEMS
Jennifer A. Ehman
[email protected]

5/18/10 Brother Jimmys BBQ, Inc. v. American Intl. Group, Inc.
Supreme Court, New York County
Court Dismisses Complaint as against all Parties except the Insurance Company that Issued the Policy
An employee of plaintiff failed to heed the all important lesson do not pour 150 proof rum on a bar and light it on fire. As a result of the fire, a customer was injured and commenced an action against the plaintiff and Barcardi (the rum manufacturer).

Plaintiffs insurer disclaimed coverage (Note: the case doesnt specify why coverage was disclaimed; perhaps, based on an expected or intended injury exclusion). The plaintiff subsequently brought this action against Bacardi, AIG, AIG Domestic Claims, Inc. and Illinois National Insurance Company for breach of contract. Bacardi, AIG and AIG Domestic Claims moved to dismiss the amended complaint for failure to state a cause of action.

Barcardi argued that it was not a necessary party to this action as it was a complete stranger to the insurance contracts. In response, plaintiff argued that Bacardi was a necessary party because the aggregate total of collectible insurance policies might influence the injured partys trial strategy in the underlying action, and because of the potential for joint and several liability. The court rejected this argument. It reasoned that plaintiff did not argue that Barcardi was an insured under the subject policy; moreover, Barcardis liability in the underlying action had no bearing on the plaintiffs coverage or the interpretation of the insurance policy.

AIG and AIG Domestic Claims argued that Illinois National Insurance issued the policy to plaintiff. Thus, there was no privity of contract between plaintiff and AIG or AIG Domestic Claims. They further contended that AIG, as the parent corporation of Illinois National may not be held liable for any breach of contract by its affiliates or subsidiaries. Further, AIG Domestic Claims merely acted as the claims administrator for Illinois National. In response, the plaintiff contended, among other things, that there was as issue of fact as to whether these entities held themselves out as making the coverage determinations under the subject policy.

The court disagreed and dismissed plaintiffs complaint as to these entities as well. It held that plaintiff failed to allege that AIG exercised complete dominion and/or control over Illinois National. Thus, AIG, as a holding company for Illinois National, had no involvement in the investigation or denial of plaintiffs claims. Moreover, AIG Domestic Claims had no basis for liability in this action as, according to New York law, an agent for a disclosed principal is not personally bound unless there is clear and explicit evidence of the agents intention to substitute its personal liability for that of the principal.

5/10/10 Ashkenazi v. AXA Equitable Life Ins. Co.
Supreme Court, New York County
Life Insurance Policies Rescinded Based On Material Misrepresentations
Defendant issued two life insurance policies upon the life of Estelle Zablidowsky. Following Ms. Zablidowskys death, defendant denied plaintiffs claim for benefits claiming that the application contained misrepresentations concerning Ms. Zablidowskys financial condition. Defendant attempted to rescind the policies by refunding the premiums.

Plaintiff commenced this action. As part of its discovery, plaintiff requested that defendant produce evidence of other similar risks in order to determine its past behavior (i.e., applications of policies issued in the four year period surrounding Ms. Zablidowskys application to insureds over 80 years old with a face value over $5 million). Defendant did not produce the evidence.

Defendant then moved for summary judgment seeking dismissal of plaintiffs complaint along with rescission of the policies. In support, defendant submitted its underwriting guidelines and an affidavit from the underwriter stating that the policies would not have been issued had the insured been truthful about her financial condition.

In opposition, plaintiff argued that even if Ms. Zablidowsky misrepresented her financial condition, the misrepresentation was not material to the issuance of the policies since it did not increase or decrease the risk taken by the insurer. In other words, Ms. Zablidowskys financial condition did not relate in any way to her life expectancy. Plaintiff also argued that as defendant had not provided the requested applications the motion was premature.

The court dismissed plaintiffs complaint and rescinded the policies. Plaintiff then moved to renew and/or reargue the motion. In making its determination on the motion to reargue, the court reasoned that the outstanding discovery did in fact, contrary to it prior decision, render the summary judgment motion premature; however, the court still affirmed its prior decision noting that such discovery would not tend to show whether defendant voided polices containing misrepresentations of financial net worth because defendant issued policies to individuals over 66 on a case by case basis. Likewise, the court denied plaintiffs motion to renew. It reasoned that no new evidence had been presented and there was no change in the law. According to the court, the purported new fact relied upon by plaintiff was that defendant had not tendered the premiums. The court noted that return of the premiums was not a condition precedent to rescission especially where, as here, defendant may be entitled to recover commissions it paid to agents on the policies it rescinded.

5/3/10 Essex Ins. Co. v. Bossart Bldrs. Inc.
Supreme Court, Queens County
Employee Exclusion Applies to Bar Coverage
Assembly of Christian Churches Rock of Salvation, property owner, hired defendant to act as the construction manager for the erection of a new church. The property owner also hired all of the other contractors on the project. Thereafter, an employee of a subcontractor was injured while installing drywall.

After the employee commenced an action against the property owner and defendant, defendants insurer disclaimed coverage citing an endorsement that excluded from the grant of coverage bodily injury sustained by any contractor, self-employed contractor, and/or subcontractor, or any employee

Defendants insurer then commenced this action and moved for summary judgment seeking a declaration that it had no duty to defend or indemnify the property owner or defendant for the subject accident. The coverage dispute involved whether the employee exclusion applied to contractors and subcontractors which defendant did not hire.

The court held that plaintiff had no duty to defend and indemnify the defendant in the underlying action. The court reasoned that, in New York, the terms of a contract are not considered ambiguous merely because the parties interpret them differently. Rather, the ambiguity must be genuine, that is, one which prevents the average policyholder from determining the boundaries of its coverage. Accordingly, the court held that defendant could not have had a reasonable expectation of coverage in view of the use of the term any in the employee exclusion, coupled with defendants lack of any reasonable explanation why the policy would limit coverage only for its own subcontractors. Moreover, according to the court, defendant could not successfully argue that the employee exclusion took him by surprise since employee exclusion clauses in insurance policies are common and have repeatedly been upheld by the courts.


EARLS PEARLS
Earl K. Cantwell

[email protected]


AUTOMATIC STAY PENDING APPEAL

The question of whether an insured may be entitled to an automatic stay of enforcement of any judgment or verdict pending an appeal is an important one that can affect trial decisions, post-trial strategy, and settlement negotiations. The following is a brief summary of the New York State rules codified in CPLR 5519(b) where a party can obtain an automatic stay of enforcement in certain circumstances based upon insurance coverage pending appeal.
First, the appeal must be taken from a judgment or order entered against an insured in an action which was defended by the insurance carrier under a policy of insurance where the limit of liability is LESS than the amount of the judgment. This is a counterintuitive provision since one would expect that an automatic stay should be available if the policy limits exceed, or even greatly exceed, the amount of the judgment, but that is not what the statute provides. The statute explicitly grants an automatic stay only in situations where the policy limits are less than the judgment. If the policy limits exceed the judgment, it would seem that the appropriate action would be to seek a discretionary stay from the court citing the excess insurance coverage, but there is no guarantee a court will necessarily grant a stay pending appeal.
Under the statute, if a stay is sought it can stop all proceedings to enforce the judgment, as well as any action against the insurer for payment under the policy. However, there are some quick procedural steps that need to be taken to perfect an automatic stay:
First, make sure that the appeal is timely noticed and taken.
Second, the insurer must file with the court clerk a sworn statement of an officer describing the nature of the policy, the amount of coverage, and a statement that if the judgment or order appealed from is affirmed, the insurer shall pay the amount directed to be paid by the judgment to the extent of the limits of liability on the policy, plus interest and costs. In brief, this is a type of self-executing undertaking posted by the carrier.
Third, a copy of this sworn statement and undertaking must be served upon the judgment creditor or his attorney (it seems that attorney service is sufficient under the statute).
Fourth, you must then deliver or mail to the insured written notice that enforcement of the judgment is NOT stayed to the extent the judgment exceeds the policy limits. This letter notifies the insured that the appeal has been bonded to the extent of the policy limits, but if the judgment exceeds the policy limits, the insured must be given written notice that no stay is in effect. A stay of enforcement of the balance of the judgment may be obtained by or on behalf of the insured by providing an appeal bond, security, or as otherwise permitted under the CPLR.
In short, if the policy limits exceed the judgment, the statute does not provide for an automatic stay, and a stay of enforcement has to be obtained under some other provision of the statue such as by providing an undertaking, security, or presumably if the insurer filed an undertaking that if the appeal is affirmed or dismissed the insurer will immediately pay the amount of the judgment plus interest and costs, if that is within the policy limits.
If the judgment exceeds the policy limits, an automatic stay can be obtained up to the amount of the policy limits by following the procedures set forth above, notifying the insured that there is a judgment balance which is not stayed, and then the insured or the carrier may seek to stay the judgment balance under some other provision of the statute by providing an undertaking, giving security, etc.


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

On hiatus this week.


REPORTED DECISIONS

 

CBLPath, Inc. v. Lexington Insurance Company,


Levi Lubarsky & Feigenbaum LLP, New York, N.Y. (Richard F.
Lubarsky of counsel), for appellants.
Fiedelman & McGaw, Jericho, N.Y. (Andrew Zajac of
counsel), for respondent.


DECISION & ORDER
In an action to recover damages for breach of the covenant of good faith and fair dealing implied in an insurance contract, the plaintiffs appeal from an order of the Supreme Court, Westchester County (Rudolph, J.), entered March 3, 2009, which granted the defendant's motion for summary judgment dismissing the complaint and denied their cross motion to dismiss the defendant's affirmative defenses.
ORDERED that the order is affirmed, with costs.
Underlying the instant action is a claim against the plaintiffs, CBLPath, Inc., and CBLPath Holdings Corporation (hereinafter together CBL), by Darrie Eason, who alleged that, in March 2006, CBL, a medical diagnostic laboratory, negligently switched her biopsy specimen with a biopsy specimen from another individual, which resulted in Eason being erroneously diagnosed with breast cancer, and subsequently undergoing an unnecessary double mastectomy. At the time, CBL was covered under a medical malpractice insurance policy issued by the defendant Lexington Insurance Company (hereinafter Lexington), a subsidiary of American International Group, Inc. (hereinafter AIG). The policy provided CBL with coverage for medical malpractice liability of up to the sum of $1,000,000 per medical incident. CBL timely reported the claim to Lexington, which referred the matter for handling on its behalf to AIG Domestic Claims (hereinafter AIGDC), also an AIG subsidiary.
From February 2007 through September 2007, Eason's counsel made several attempts to open settlement discussions, but AIGDC, which in February 2007 allegedly exercised its right as the sole authority to handle the Eason claim, never made a substantive response to those inquiries. Eason commenced the underlying action in October 2007. Lexington contends (and CBL does not dispute) that Eason's counsel did not issue the first settlement demand until December 2007, which was after the commencement of the underlying action, and demanded the sum of $5,000,000, which was five times more than the policy limit. The underlying action was settled several months later for the sum of $2,500,000, with Lexington paying the policy limit in the sum of $1,000,000 and CBL paying the balance. CBL thereafter commenced the instant action against Lexington, asserting a single cause of action for breach of the covenant of good faith and fair dealing implied in the insurance contract. The gravamen of CBL's complaint is that AIGDC, which had asserted sole control over the Eason claim, acted in bad faith by refusing to enter into pre-litigation settlement discussions with Eason's counsel. CBL sought actual and consequential damages, including, inter alia, injury to its business reputation, lost sales, increased sale expenses, lost profits, and lost business opportunities caused by the negative publicity that resulted from the commencement of the underlying action. After joinder of issue, Lexington moved for summary judgment dismissing the complaint, and CBL cross-moved to dismiss Lexington's affirmative defenses. The Supreme Court granted Lexington's motion and denied CBL's cross motion. CBL appeals, and we affirm.
"For a breach of contract based only on a failure to make reasonable settlement of a claim within the policy limits, damages are measured by the policy limits. For a breach of implied conditions of the contract to act in its performance in good faith in refusing to settle within the policy limits, the damages may exceed the policy limits" (Gordon v Nationwide Mut. Ins. Co., 30 NY2d 427, 436-437, cert denied 410 US 931). Since an award of damages exceeding the policy limits is punitive in nature, it "is not applied routinely for breach of contract; and bad faith requires an extraordinary showing of a disingenuous or dishonest failure to carry out a contract" (id. at 437).
An insurer "may be held liable for the breach of its duty of good faith' in defending and settling claims over which it exercises exclusive control on behalf of its insured" (Pavia v State Farm Mut. Auto. Ins. Co., 82 NY2d 445, 452). The root of this doctrine is that, typically, an insurer exercises "complete control over the settlement and defense of claims against their insureds, and, thus, under established agency principles may fairly be required to act in the insured's best interests" (id.). However, since courts are understandably reluctant to expose insurers to liability exceeding the policy limits, the bad faith must be for conduct that is clearly more than ordinary negligence, i.e., more than merely poor judgment (id. at 453).
"Naturally, proof that a demand for settlement was made is a prerequisite to a bad-faith action for failure to settle. [Additionally,] the plaintiff in a bad-faith action must show that the insured lost an actual opportunity to settle the . . . claim at a time when all serious doubts about the insured's liability were removed.
"Bad faith is established only where the liability is clear and the potential recovery far exceeds the insurance coverage" (id. at 454 [internal quotations marks and citations omitted]; see also Smith v General Acc. Ins. Co., 91 NY2d 648, 653; Soto v State Farm Ins. Co., 83 NY2d 718, 723; Vecchione v Amica Mut. Ins. Co., 274 AD2d 576, 578; cf. United States Fid. & Guar. Co. v Copfer, 48 NY2d 871, 873).
Here, Lexington met its prima facie burden of establishing its entitlement to judgment as a matter of law (see Alvarez v Prospect Hosp., 68 NY2d 320, 324; Zuckerman v City of New York, 49 NY2d 557, 562) by submitting, inter alia, an affirmation of an AIGDC attorney who had handled the Eason claim. In that affirmation, the attorney stated that Eason's counsel did not issue the first settlement demand until after commencement of the underlying action, and that once such demand was made, negotiations ensued, and a settlement was reached, with Lexington paying the policy limit in the sum of $1,000,000, and CBL responsible for the balance in the sum of $1,500,000. Thus, Lexington established that CBL's bad faith claim could not stand, as there was no pre-litigation settlement demand made within the policy limits (see Smith v General Acc. Ins. Co., 91 NY2d at 653; Soto v State Farm Ins. Co., 83 NY2d at 723; Pavia v State Farm Mut. Auto. Ins. Co., 82 NY2d at 454).
In opposition, CBL failed to raise a triable issue of fact. CBL submitted, inter alia, an affidavit of its vice president and corporate controller, who indicated that after AIGDC asserted exclusive control over the Eason claim in February 2007, it thereafter refused to contact Eason's counsel to settle her claim and avoid negative publicity to CBL. Notably, however, CBL's opposition did not raise a triable issue of fact as to whether Eason's counsel had made a pre-litigation settlement demand within the policy limits. As such, while it may arguably be some evidence of bad faith that AIGDC failed to enter into pre-litigation settlement discussions with Eason's counsel at a time when CBL's liability was not in doubt and the nature of Eason's injuries indicated that her recovery would exceed the policy limit, we are constrained to find that Lexington was entitled to summary judgment because CBL failed to raise a triable issue of fact as to whether Eason made a pre-litigation settlement demand within the policy limit (see Pavia v State Farm Mut. Auto. Ins. Co., 82 NY2d at 453; see also Smith v General Acc. Ins. Co., 91 NY2d at 653; Soto v State Farm Ins. Co., 83 NY2d at 723; Vecchione v Amica Mut. Ins. Co., 274 AD2d at 578). Under the circumstances, CBL cannot show that, because of AIGDC's conduct, it lost an actual opportunity to settle and, thus, any damages it asserts are based on mere speculation (see United States Fid. & Guar. Co. v Copfer, 48 NY2d at 873).
In light of our determination, CBL's remaining contentions have been rendered academic.


Hargob Realty Associates, Inc.,v. Fireman's Fund Insurance Co.


Goldberg Weprin Finkel Goldstein, LLP, New York, N.Y., for
appellant.
Rivkin Radler, LLP, Uniondale, N.Y. (Evan H. Krinick, Gary D.
Centola, and Harris J. Zakarin of
counsel), for respondent.


DECISION & ORDER
In an action, inter alia, for a judgment declaring that the defendant is obligated to defend and indemnify the plaintiff in an underlying action entitled Bonilla v Hargob Realty Assoc., pending in the Supreme Court, Kings County, under Index No. 9854/05, the plaintiff appeals from an order of the Supreme Court, Nassau County (Phelan, J.), entered April 2, 2009, which granted the defendant's motion for summary judgment, in effect, declaring that it is not so obligated.
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 defendant is not obligated to defend and indemnify the plaintiff in an underlying action entitled Bonilla v Hargob Realty Assoc., pending in the Supreme Court, Kings County, under Index No. 9854/05.
The plaintiff entered into a construction contract with nonparty U.S.A. Interior, LLC (hereinafter USAI), pursuant to which USAI was to perform demolition work (hereinafter the project) at certain premises owned by the plaintiff. The only written agreements between USAI and the plaintiff pertaining to the project were a one-page proposal from USAI specifying the bid price and work to be performed (hereinafter the proposal) and a hold harmless agreement. Pursuant to the hold harmless agreement, USAI, as the subcontractor, agreed to indemnify and hold harmless the plaintiff, as the owner, "from and against any and all claims, suits, liens, judgment, damages, losses and expenses arising in whole or in part . . . from the acts, omissions, breach or default of [USAI] in connection with the performance of any work by or for [USAI]," except for claims arising from Hargob's own negligence.
The defendant Fireman's Fund Insurance Company, doing business as Interstate Fire & Casualty Company (hereinafter the defendant insurer), issued a policy of commercial general liability insurance to USAI that contained an additional insured endorsement. Pursuant to that endorsement, added to the insured persons covered under the subject policy was "any entity the Named Insured is required in a written contract to name as an insured (hereinafter called Additional Insured) . . . but only with respect to liability arising out of work performed by or on behalf of the Named Insured for the Additional Insured [emphasis added]."
"The four corners of an insurance agreement govern who is covered and the extent of coverage" (Sixty Sutton Corp. v Illinois Union Ins. Co., 34 AD3d 386, 388; see Stainless, Inc. v Employers Fire Ins. Co., 69 AD2d 27, 33, affd 49 NY2d 924). Where a third party seeks the benefit of coverage, the terms of the policy must clearly evince such intent (see Stainless, Inc. v Employers Fire Ins. Co., 69 AD2d at 33). Thus, when determining whether a third party is an additional insured under an insurance policy, a court must ascertain the intention of the parties to the policy, as determined from within the four corners of the policy itself (see Binasco v Break-Away Demolition Corp., 256 AD2d 291, 292; I.S.A. In N.J. v Effective Sec. Sys., 138 AD2d 681, 682).
Here, as noted, the additional insured endorsement of the subject policy added to Section II, which defines the persons insured, afforded bodily injury liability coverage under Section I of the policy to any entity that the named insured "is required in a written contract to name as an insured." Thus, notwithstanding USAI's written agreement to indemnify the plaintiff, the hold harmless agreement did not contain any requirement that USAI name the plaintiff as an additional insured under the subject policy (cf. Superior Ice Rink, Inc. v Nescon Contr. Corp., 52 AD3d 688). Therefore, the defendant insurer demonstrated its entitlement to judgment as a matter of law based upon its submission, inter alia, of the subject policy, the hold harmless agreement, and an excerpt of the deposition of one of the plaintiff's principals, who averred that the proposal and hold harmless agreements were the only written contracts between the plaintiff and USAI pertaining to the project.
In opposition, the plaintiff failed to raise a triable issue of fact. The USAI certificate of insurance proffered in opposition, listing the plaintiff as an additional insured under the subject policy, was insufficient to alter the language of the policy itself, especially since the certificate recited that it was for informational purposes only, that it conferred no rights upon the holder, and that it did not amend, alter, or extend the coverage afforded by the policy (see School Constr. Consultants, Inc. v ARA Plumbing & Heating Corp., 63 AD3d 1029; Home Depot U.S.A., Inc. v National Fire & Mar. Ins. Co., 55 AD3d 671, 673; Metropolitan Heat & Power Co., Inc. v AIG Claims Servs., Inc., 47 AD3d 621).
In addition, and contrary to the plaintiff's contention, the denial of coverage under the additional insured endorsement constituted a denial based upon a "lack of inclusion" rather than "by reason of exclusion" and, thus, the defendant insurer was not required to deny coverage where none existed (Zappone v Home Ins. Co., 55 NY2d 131, 137). Therefore, to the extent that the defendant insurer's denial of coverage was based upon lack of coverage as an additional insured pursuant to the additional insured endorsement, a timely disclaimer was unnecessary (see Markevics v Liberty Mut. Ins. Co., 97 NY2d 646, 648; Matter of Worcester Ins. Co. v Bettenhauser, 95 NY2d 185, 188; see e.g. Kmaps Corp. v Nova Cas. Co., 53 AD3d 1043; Perkins v Allstate Ins. Co., 51 AD3d 647; cf. Rael Automatic Sprinkler Co., Inc. v Schaefer Agency, 52 AD3d 670).
Further, the supplementary payments provision of the policy, which obligates the defendant insurer to defend an indemnitee of the named insured when certain specified conditions are met, does not also afford liability coverage. Contrary to the plaintiff's contention, the supplementary payments provision did not demonstrate an intent by the defendant insurer to afford the plaintiff coverage solely on the basis that it is an indemnitee of the named insured, in the absence of the plaintiff's addition as "an insured" under Section II of the subject policy pursuant to the additional insured endorsement (see Stainless, Inc. v Employers Fire Ins. Co., 69 AD2d at 33). Liability coverage under the policy is afforded by Section I, not the supplementary payments provision. Therefore, Hargob's status as an indemnitee does not operate to confer upon it status as an additional insured, and it is, thus, not entitled to liability coverage under the subject policy pursuant to the supplementary payments provision.
Accordingly, the Supreme Court properly granted the defendant insurer's motion for summary judgment, in effect, declaring that it is not obligated to defend and indemnify the plaintiff in the underlying action.
Since the complaint asserts a cause of action for a declaratory judgment, we remit the matter to the Supreme Court, Nassau County, for the entry of a judgment declaring that the defendant insurer is not obligated to defend and indemnify the plaintiff in the underlying personal injury action pursuant to the subject insurance policy (see Lanza v Wagner, 11 NY2d 317, 334, appeal dismissed 371 US 74, cert denied 371 US 901).


Prince Seating Corp., v. QBE Insurance Company


Abrams, Gorelick, Friedman & Jacobson, P.C., New York, N.Y.
(Michael E. Gorelick of counsel), for appellant.
Seidemann & Mermelstein, Brooklyn, N.Y. (David J. Seidemann
of counsel), for respondent.


DECISION & ORDER
In an action, inter alia, for a judgment declaring that the defendant QBE Insurance Company is obligated to defend and indemnify the plaintiff in an action entitled Rabideau v Prince Seating Corp., pending in the Circuit Court of Fairfax County, Virginia, under At Law No. 213800, the defendant QBE Insurance Company appeals, as limited by its brief, from so much of an order of the Supreme Court, Kings County (Jacobson, J.), dated January 29, 2009, as denied its motion for summary judgment declaring that it is not obligated to defend or indemnify the plaintiff in the underlying action, and dismissing the second amended complaint insofar as asserted against it.
ORDERED that the order is affirmed insofar as appealed from, with costs.
The plaintiff allegedly provided notice of the underlying claim to its broker, the defendant Century Coverage Corp. (hereinafter Century), rather than, as required by the subject policy, to the insurer, the appellant, QBE Insurance Company (hereinafter QBE). It is well settled that, absent some evidence of an agency relationship, even timely notice of an accident by an insured to a broker is not effective and does not constitute notice to the insurance company, as a broker is considered to be an agent only of the insured (see Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimmons Corp., 31 NY2d 436; Matter of Temple Constr. Corp. v Sirius Am. Ins. Co., 40 AD3d 1109, 1111-1112; 120 Whitehall Realty Assoc., LLC v Hermitage Ins. Co., 40 AD3d 719, 721; Gershow Recycling Corp. v Transcontinental Ins. Co., 22 AD3d 460, 462; Rendiero v State-Wide Ins. Co., 8 AD3d 253). Moreover, absent a valid excuse, the failure to satisfy a provision in an insurance policy requiring notice of a covered occurrence, a condition precedent to the insurer's duty to defend and/or indemnify claims against the insured, vitiates the policy (see Empire City Subway Co. v Greater N.Y. Mut. Ins. Co., 35 NY2d 8; Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimmons Corp., 31 NY2d at 440; Jeffrey v Allcity Ins. Co., 26 AD3d 355, 356; Centrone v Staste Farm Fire & Cas., 275 AD2d 728). In this case, there is no evidence that a principal-agent relationship between Century and QBE existed.
However, the terminology of the policy, including the notice provision, in which the words "we," "us," and "our," referring to "the company providing this insurance," were used to describe who should be notified, is ambiguous. QBE was not clearly identified as the party to whom those terms applied. Given that ambiguity, there is an issue of fact as to whether "the contract should be interpreted to allow notice to [the] broker" (Jeffrey v Allcity Ins. Co., 26 AD3d at 356).
Accordingly, the Supreme Court correctly denied QBE's motion.
In light of our determination, we do not reach the parties' remaining contentions.


The Travelers Indemnity Company v. Orange and Rockland Utilities, Inc.,


Dickstein Shapiro LLP, New York (David L. Elkind of counsel)
and Dickstein Shapiro LLP, Washington, DC (Selena J. Linde of
the Bar of the State of Maryland, admitted pro hac vice, of
counsel), for Orange and Rockland Utilities, Inc.,
appellant/respondent.
Steptoe & Johnson LLP, Washington, D.C., (Roger E. Warin
of Bar of the District of Columbia, admitted pro hac vice) and
Clyde & Co US LLP, New York (Daren S. McNally of
counsel), for The Travelers Indemnity Company, respondent/appellant.
Order, Supreme Court, New York County (Eileen Bransten, J.), entered August 19, 2009, which granted defendant insured's motion for partial summary judgment on the issue of late notice and denied plaintiff insurer's motion for partial summary judgment, unanimously reversed, on the law, without costs, defendant's motion denied, and plaintiff's motion granted to declare denial of coverage on the basis of untimely notice. Order (same court, Justice and entry date), which granted plaintiff's motion for partial summary judgment to exclude certain coverage based on the pollution exclusion in the policy, unanimously modified, on the law, the motion denied as to the 1970 policy and sites other than Nyack, and otherwise affirmed, without costs.
Defendant did not give timely notice under the policy, which is a requirement for coverage (Paramount Ins. Co. v RosedaleGardens, 293 AD2d 235, 239-240 [2002]). Defendant's ongoing contacts with environmental regulators about the Nyack site dated back to 1981, and there was even a site inspection by the Environmental Protection Agency in 1985, yet defendant never provided any notice to its insurer of these contacts or the questions they raised until 1995. Defendant's argument that it never had actual notice of any pollution was insufficient. The many reports, including internal reports of a likelihood of contamination at the subject site, as well as inquiries from regulators, placed it on notice. Its willful failure to investigate negates any lack of awareness of an occurrence of pollution (see Technicon Elecs. Corp. of N.Y. v American Home Assur. Co., 74 NY2d 66, 75 [1989]). The court mistakenly held defendant to the much more lenient standard for the timing of notice applicable in excess insurance cases. The standard with regard to a primary liability policy, such as involved here, is simply awareness of a reasonable possibility that the policy will be implicated (Paramount, 293 AD2d at 239-240).
Similarly, the court erred in holding that plaintiff waived its right to disclaim for late notice simply as a result of the passage of time. Contrary to the court's assumption, Insurance Law 3420 applies only to claims for death and bodily injury (Fairmont Funding v Utica Mut. Ins. Co., 264 AD2d 581, 582 [1999]), and not to pollution insurance.
Between 1971 and 1982, a provision of the Insurance Law then in effect (former 46) excluded liability coverage for pollution other than claims based on "sudden and accidental" discharges. The court properly applied that exclusion for all policies issued during that period (see Maryland Cas. Co. v Continental Cas. Co., 332 F3d 145, 159-160 [2d Cir 2003]). We do not find persuasive defendant's argument that plaintiff waived the "benefit" of the statute by issuing policies in contravention of its terms. Section 46 did not confer any benefit or right on insurers, but rather was intended to impose a penalty on polluters like the insured herein. The court correctly concluded that defendant failed to meet its burden of establishing that the pollution complained of was caused by "sudden and accidental" discharges (Borg-Warner Corp. v Insurance Co. of N. Am., 174 AD2d 24, 31 [1992], lv denied 80 NY2d 753 [1992]). While its longtime employee testified that there were many accidental spills during routine operations, this was not sufficiently definite as to quantity, nature or effect of these spills to prove they fell outside the exclusion.
However, the court erred in applying the 46 exclusion to the policy issued in 1970, prior to enactment of the short-lived statute, since a contract generally incorporates the state of the law in existence at the time of its formation (see People ex rel. Platt v Wemple, 117 NY 136, 148-149 [1889], appeal dismissed 140 US 694 [1890]). It also erred in granting plaintiff summary declaratory relief as to other sites,[FN1] in light of plaintiff's concession that the court's ruling on the issue of the statutory pollution exclusion be limited to the Nyack site.


Blue Ridge Insurance Company v. Empire Contracting and Sales, Inc.


Kelly, Luglio & Arcuri, LLP, Deer Park, N.Y. (Andrew A. Arcuri
of counsel), for appellant.
Daniel W. Coffey, Albany, N.Y. (Mark W. Blanchfield of
counsel), for respondent.


DECISION & ORDER
In an action for a judgment declaring that the plaintiff is not obligated to defend or indemnify the defendant Empire Contracting and Sales, Inc., in an underlying personal injury action entitled Patenaude v Empire Contracting and Sales, Inc., pending in the Supreme Court, Clinton County, under Index No. 01-0349, the plaintiff appeals from an order of the Supreme Court, Suffolk County (Cohalan, J.), dated May 21, 2009, which granted the motion of the defendant Mitchell Juneau for summary judgment.
ORDERED that the order is reversed, on the law, with costs, and the motion of the defendant Mitchell Juneau for summary judgment is denied.
Under the facts of this case, the Supreme Court erred in granting the motion of the defendant Mitchell Juneau for summary judgment. In support of his motion, Juneau failed to make a prima facie showing of entitlement to judgment as a matter of law (see generally Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853).
Pursuant to Insurance Law 3420(d)(2), an insurer "shall give written notice as soon as is reasonably possible of [its] disclaimer of liability or denial of coverage to the insured and the injured person or any other claimant." Here, the plaintiff's commencement of the subject declaratory judgment action on August 15, 2001, constituted timely notice of disclaimer as to Juneau (see Generali-U.S. Branch v Rothschild, 295 AD2d 236, 237-238; see also Continental Cas. Co. v Employers Ins. Co. of Wausau, 60 AD3d 128, 135).


Travelers Indemnity Company v. Richards-Campbell


Karen C. Dodson, New York, N.Y. (Andre Del Re of counsel), for
appellant.
Nancy S. Linden, Bethpage, N.Y. (Barbara-Ann Anzelmo of
counsel), for additional respondents-
respondents.


DECISION & ORDER
In a proceeding pursuant to CPLR article 75, inter alia, to permanently stay arbitration of a claim for uninsured motorist benefits, the petitioner appeals, as limited by its brief, from so much of an order of the Supreme Court, Orange County (Owen, J.), entered May 4, 2009, as, upon granting renewal, in effect, adhered to the original determination in an order of the same court dated August 15, 2008, denying that branch of the petition which was to permanently stay arbitration, and thereupon dismissed the proceeding.
ORDERED that the order entered May 4, 2009, is reversed insofar as appealed from, on the law, with costs, upon renewal, so much of the order dated August 15, 2008, as denied that branch of the petition which was to permanently stay arbitration is vacated, that branch of the petition is granted, and the matter is remitted to the Supreme Court, Orange County, for the entry of an appropriate judgment.
This proceeding arises out of an incident in which the additional respondent Jamille Andrews, while driving an automobile owned by the additional respondent Cheryl P. Holt, intentionally struck three siblings, the respondents, Shekenah Campbell, Shadrach Campbell and Shekeila Campbell (hereinafter collectively the Campbells), allegedly causing them to sustain injuries. After criminal charges were filed against Andrews for hitting the Campbells, Andrews pleaded guilty to three counts of assault in the second degree arising from the incident, admitting that she intentionally struck the Campbells.
Since the offending vehicle owned by Holt was covered under an automobile liability insurance policy issued by the additional respondent Lincoln General Insurance Company (hereinafter Lincoln), the Campbells sought coverage for the incident from Lincoln, which disclaimed coverage based on Andrews's intentional conduct. The Campbells then sought to recover uninsured motorist benefits for the incident as insured relatives under the automobile insurance policy of their mother, the respondent Denise Richards-Campbell, underwritten by the petitioner, Travelers Indemnity Company (hereinafter Travelers). Travelers also disclaimed coverage.
The Campbells thereafter demanded arbitration of the uninsured motorist claim from Travelers, which, in turn, commenced this proceeding, inter alia, to permanently stay arbitration. In the order appealed from, the Supreme Court, upon renewal, in effect, adhered to a prior determination denying the petition, inter alia, to permanently stay arbitration, and thereupon dismissed the proceeding. We reverse.
The Supreme Court correctly determined that Lincoln was not obligated to provide coverage under its automobile insurance liability policy, given that the Campbells' injuries were not the result of an accident, but rather, of an intentional criminal act by Andrews (see Matter of American Mfrs. Mut. Ins. Co. v Burke, 63 AD3d 732, 733; State Farm Mut. Auto. Ins. Co. v Langan, 55 AD3d 281, 283; Met Life Auto & Home v Kalendarev, 54 AD3d 830, 831; State Farm Mut. Auto. Ins. Co. v Langan, 18 AD3d 860, 862). However, the Supreme Court improperly determined, in effect, that Travelers was obligated to provide uninsured motorist benefits under its policy with the Campbells (see McCarthy v Motor Veh. Acc. Indem. Corp., 16 AD2d 35, 42, affd no opn 12 NY2d 922).
The record reveals that Travelers properly disclaimed the Campbells' claim for uninsured motorist benefits under the subject insurance policy by establishing that their bodily injuries were caused by Andrews's intentional criminal acts (see Matter of American Mfrs. Mut. Ins. Co. v Burke, 63 AD3d at 733; Westchester Med. Ctr. v Travelers Prop. Cas. Ins. Co., 309 AD2d 927, 928; Matter of Progressive Northwestern Ins. Co. v Van Dina, 282 AD2d 680; Matter of Aetna Cas. & Sur. Co. v Perry, 220 AD2d 497), and that the offending vehicle was not an "uninsured motor vehicle" within the terms of the policy (McCarthy v Motor Veh. Acc. Indem. Corp., 16 AD2d at 46). Accordingly, the Supreme Court should have upheld Travelers' disclaimer and granted that branch of the petition which was to permanently stay arbitration.


Pearce v. Olivera-Puerto


Harmon, Linder, & Rogowsky, New York, N.Y. (Mitchell Dranow
of counsel), for appellant.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y.
(Stacy R. Seldin of counsel), for
respondents.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Kings County (Balter, J.), dated December 11, 2008, 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, 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.
Although the Supreme Court properly determined that 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, 350-351; Gaddy v Eyler, 79 NY2d 955, 956-957), it erred in determining that the plaintiff failed to raise a triable issue of fact in opposition. The plaintiff's submissions in opposition demonstrated the existence of factual issues both as to the injury and its nexus with the accident (see Whitehead v Olsen, 70 AD3d 678; Eusebio v Yannetti, 68 AD3d 919; Sanevich v Lyubomir, 66 AD3d 665).
The contemporaneous and most recent examinations and magnetic resonance imaging reports submitted by the plaintiff revealed herniations at C3-4, C4-5, C5-6, and C6-7, and bulging at L4-5 and L5-S1, and indicated that these injuries resulted in observed significant and permanent range-of-motion limitations in the cervical and lumbar regions of the plaintiff's spine causally related to the subject accident. Thus, the plaintiff raised a triable issue of fact as to whether she sustained serious injury to the cervical and/or lumbar regions of her 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 Sanevich v Lyubomir, 66 AD3d 665).


Vardanian v. Morelli


Abamont & Associates (Congdon, Flaherty, O'Callaghan, Reid,
Donlon, Travis & Fishlinger, Uniondale, N.Y. [Gregory A.
Cascino and Kathleen D. Foley], of counsel), for appellants.
Dino J. Domina, P.C. (Lisa M. Comeau, Garden City, N.Y., of
counsel), for plaintiff-respondent.
Epstein & Grammatico, Hauppauge, N.Y. (Andrew J. Frank of
counsel), for defendant-respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendants Matthew Morelli and Donna Morelli appeal from an order of the Supreme Court, Suffolk County (Molia, J.), dated June 2, 2008, which denied their motion for summary judgment dismissing the complaint and all cross claims insofar as asserted against them on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law 5102(d) and granted the cross motion of the defendant Eugene Prohaske for summary judgment dismissing the complaint and the cross claim insofar as asserted against him.
ORDERED that the appeal from so much of the order as granted that branch of the cross motion of the defendant Eugene Prohaske which was for summary judgment dismissing the complaint insofar as asserted against him is dismissed, as the appellants are not aggrieved by that portion of the order (see CPLR 5511); and it is further,
ORDERED that the order is modified, on the law, (1) by deleting the provision thereof granting that branch of the cross motion of the defendant Eugene Prohaske which was for summary judgment dismissing the cross claim asserted by the appellants against him and substituting therefor a provision denying that branch of the cross motion, and (2) by adding a provision thereto converting the cross claim asserted against the defendant Eugene Prohaske into a third-party claim; as so modified, the order is affirmed insofar as reviewed; and it is further,
ORDERED that one bill of costs is awarded to the appellants, payable by the defendant Eugene Prohaske, and one bill of costs is awarded to the plaintiff, payable by the appellants.
On the afternoon of March 24, 2005, at the intersection of Darrow Lane and Danville Drive in the Town of Huntington, a motor vehicle owned by the defendant Donna Morelli and driven by the defendant Matthew Morelli (hereinafter together the Morellis) collided with a motor vehicle operated by the plaintiff, allegedly causing her to sustain a serious injury (see Insurance Law 5102[d]). The plaintiff asserted claims against the Morellis, essentially on the ground that Matthew Morelli, while traveling on Danville Drive, failed to stop at a stop sign and proceeded into the intersection, colliding with her vehicle, which had the right of way. The plaintiff also asserted a claim against the defendant Eugene Prohaske, the owner of property at the intersection, alleging that vegetation on his property obscured Matthew Morelli's view of traffic on Darrow Lane. Several witnesses, including the plaintiff and a motorist who was not involved in the collision, testified at their depositions that Matthew Morelli did not stop at the stop sign. Matthew Morelli testified at his depositions that he did stop at the stop sign and proceeded slowly into the intersection, but that his view of the plaintiff's approaching vehicle was obscured by vegetation on Prohaske's property.
The Morellis moved, and Prohaske cross-moved, for summary judgment dismissing the complaint and all cross claims insofar as asserted against each of them on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law 5102(d), and also on the ground that they were not negligent. In their opposition to Prohaske's cross motion, the Morellis cited the Town Code of the Town of Huntington 156-45(b), which provides, in pertinent part, that "[i]t shall be unlawful for any person . . . who owns or occupies a parcel of land to cause, suffer, permit and/or maintain any one of the following conditions . . . Overhanging natural growth which forms a visual obstruction to motorists or pedestrians utilizing any highway, roadway, or street for ingress or egress" (Town Code of the Town of Huntington 156-45; cf. Lubitz v Village of Scarsdale, 31 AD3d 618). The Supreme Court denied the Morellis' motion, but granted Prohaske's cross motion, finding that, although there was a triable issue of fact as to whether the plaintiff sustained a serious injury as a result of the subject accident, there was no evidence that Prohaske violated the cited provision of the Town Code of the Town of Huntington. We modify.
The Morellis failed to establish, prima facie, 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; Powell v Prego, 59 AD3d 417). The papers submitted by the Morellis in support of their motion, upon which Prohaske also relied, did not affirmatively establish that the plaintiff did not sustain a serious injury (see Powell v Prego, 59 AD3d at 418419). Therefore, the Supreme Court properly denied the Morellis' motion for summary judgment dismissing the complaint insofar as asserted against them.
The Supreme Court erred, however, in granting that branch of Prohaske's cross motion which was for summary judgment dismissing the cross claim asserted by the Morellis against him on the ground that there was no evidence that he had violated Town Code of the Town of Huntington 156-45(B). As the proponent of the motion, Prohaske bore the burden of establishing, prima facie, that there was no "[o]verhanging natural growth which form[ed] a visual obstruction to motorists" or that such violation was not a proximate cause of the accident (Town Code of the Town of Huntington 156-45; cf. Lubitz v Village of Scarsdale, 31 AD3d at 620). Prohaske failed to present evidence sufficient to meet his prima facie burden (cf. Lubitz v Village of Scarsdale, 31 AD3d at 620). Consequently, that branch of Prohaske's cross motion which was for summary judgment dismissing the cross claim asserted against him should have been denied and the cross claim should have been converted to a third-party claim (see Nelson v Chelsea GCA Realty, Inc., 18 AD3d 838, 839).


Zhijian Yang v. Alston


Richard T. Lau & Associates, Jericho (Gene W. Wiggins of
counsel), for appellants.
Ross Legan Rosenberg Zelan & Flaks, LLP, New York (Evan
Ross of counsel), for respondent.
Order, Supreme Court, Bronx County (Edgar G. Walker, J.), entered December 16, 2009, which to the extent appealed from, granted plaintiff's motion to renew a prior order, same court and Justice, entered June 11, 2009, granting defendants' motion for summary judgment, and upon renewal, vacated the June 11, 2009 order and denied defendants' motion for summary judgment, unanimously modified, on the law, vacatur denied, defendants' motion for summary judgment granted, and otherwise affirmed, without costs. The Clerk is directed to enter judgment accordingly.
Defendants met their initial burden of establishing prima facie that plaintiff did not sustain a serious injury (Insurance Law 5102[d]) by submitting the affirmed report of an orthopedic surgeon detailing the objective tests he had performed on examination, finding that plaintiff had full range of motion in her left hip, cervical and lumbar spine, and right knee, and concluding that plaintiff had no ongoing impairment resulting from the accident. Defendants pointed to plaintiff's deposition testimony wherein she admitted having been injured in both a prior and a subsequent accident, as well as her verified bill of particulars wherein she admitted only a brief convalescence.
The burden then shifted to plaintiff. Initially, we find that in the absence of any prejudice to defendants, renewal was properly granted to plaintiff to correct a procedural oversight on the previous motion and allow the submission of her examining physician's report in admissible form (see Cespedes v McNamee, 308 AD2d 409 [2003]). However, upon renewal, Supreme Court should have adhered to its original determination granting defendants' motion for summary judgment because plaintiff failed to raise a triable issue of material fact as to whether she sustained a serious injury in this accident.
The affirmed report of plaintiff's expert, submitted in support of the motion to renew, was deficient in several respects. While in his report the examining physician attempted to set forth range-of-motion findings with respect to plaintiff's spine and shoulder, he did not compare those findings to the standards for normal ranges of motion (see Johnson v Paulino, 49 AD3d 379 [2008]). The range of motion testing for the hips and knees yielded normal results with no loss of range of motion. In addition, the expert offered no explanation for plaintiff's two-year cessation of treatment; and he failed to mention, much less account for, plaintiff's prior and subsequent accidents, thus rendering speculative his conclusion that plaintiff's injuries were causally related to the subject accident (see Style v Joseph, 32 AD3d 212, 214-215 [2006]).
Plaintiff's serious-injury claim, predicated on an alleged inability to engage in substantially all of her daily activities for 90 of the first 180 days after the accident, was refuted by admissions in her verified bill of particulars that she was confined to bed for only two days and to home for one month. No competent medical proof was offered to substantiate her claim under the 90/180-day test (see Rossi v Alhassan, 48 AD3d 270 [2008]).


Leonardi v. Cruz


Goidel & Siegel, LLP, New York (Andrew B. Siegel of
counsel), for appellant.
O'Connor, McGuinness, Conte, Doyle & Oleson, White Plains
(Tracey A. Stewart of counsel), for respondent.
Order, Supreme Court, Bronx County (Maryann Brigantti-Hughes, J.), entered October 2, 2008, which, to the extent appealed from, granted that part of defendant Cruz's cross motion for summary judgment dismissing the complaint as against her on the ground that plaintiff failed to sustain a serious injury within the meaning of Insurance Law 5102(d), unanimously reversed, on the law, without costs, the cross motion denied and the complaint reinstated as against Cruz. Appeal from order, same court and Justice, entered April 21, 2009, which, upon renewal and reargument, adhered to its prior determination, unanimously dismissed, without costs, as academic.
The record establishes that plaintiff sufficiently preserved her argument that Cruz's cross motion for summary judgment was untimely by raising the issue in her opposition to the cross motion. It is undisputed that Cruz's cross motion was made
after the expiration of the 120-day period set forth in CPLR 3212(a) and Cruz did not provide an excuse for the delay in bringing the motion. Accordingly, since plaintiff moved for summary judgment only on the issue of liability, that part of Cruz's cross motion for summary judgment on the issue of serious injury was untimely (see Covert v Samuel, 53 AD3d 1147, 1148 [2008]). Furthermore, although "[a] cross motion for summary judgment made after the expiration of the statutory 120-day period may be considered by the court, even in the absence of good cause, where a timely motion for summary judgment was made seeking relief nearly identical to that sought by the cross motion" (Filannino v Triborough Bridge & Tunnel Auth., 34 AD3d 280, 281 [2006], appeal dismissed 9 NY3d 862 [2007] [internal quotation marks and citations omitted]), the issues of liability and serious injury are not so intertwined or nearly identical (see Covert, 53 AD3d at 1148).
In view of the foregoing, we need not consider plaintiff's arguments with respect to the merits of the cross motion.


Barner v. Shahid


Phillips, Krantz & Associates, LLP, New York (Heath T.
Buzin of counsel), for appellant.
Law Offices of Kenneth L. Aron, New York (Kenneth L. Aron
of counsel), for respondent.
Order, Supreme Court, Bronx County (Lucindo Suarez, J.), entered August 27, 2009, which granted defendant's motion for summary judgment dismissing the complaint on the ground that plaintiff did not sustain a serious injury within the meaning of Insurance Law 5102(d), unanimously affirmed, without costs.
Defendant established prima facie, through the submission of affirmations of medical experts who examined plaintiff and who reviewed plaintiff's MRI films, that the injury to plaintiff's left knee was not the result of the motor vehicle accident on January 29, 2003 and that, in any event, it was not "serious" within the meaning of Insurance Law 5102(d). In opposition, plaintiff failed to submit objective medical evidence in admissible form sufficient to raise a triable issue of fact (see Shinn v Catanzaro, 1 AD3d 195, 197 [2003]).
Plaintiff alleges that he suffered a torn meniscus in his left knee, for which he underwent arthroscopic surgery, as a result of the accident. However, he failed to raise an issue of fact whether the torn meniscus was causally related to the accident (see Gibbs v Hee Hong, 63 AD3d 559 [2009]). The unsigned and unsworn report of a physician who performed an initial examination of plaintiff on January 30, 2003, the day after the accident, as well as the unsworn narrative report of plaintiff's orthopedic surgeon, Laxmidhar Diwan, based on his examination of plaintiff on March 20, 2003, and Dr. Diwan's unsworn operative report dated March 25, 2003, were properly rejected by the motion court because they were not in admissible form. In addition, plaintiff never submitted to the court a copy of the unsworn report of the MRI performed on his left knee two days after the accident, which allegedly showed a torn meniscus, and the court properly rejected Dr. Diwan's findings with respect to the MRI report because Dr. Diwan did not state that he personally viewed the films, rather than simply relying on the unsworn reports (see Thompson v Abbasi, 15 AD3d 95, 97 [2005]). Without the MRI report, it is unknown whether plaintiff's radiologist linked the torn meniscus to the accident. Moreover, nowhere in any of plaintiff's submissions does he address the fact that defendant's radiologist determined that the changes in plaintiff's left knee were the result of a longstanding preexisting degenerative condition (see Pommells v Perez, 4 NY3d 566, 579-580 [2005]; Valentin v Pomilla, 59 AD3d 184, 186 [2009]).
The only proof in admissible form offered by plaintiff is the sworn report of Dr. Diwan dated June 1, 2009, based upon his examination of plaintiff 6 years after the accident. In the report, Dr. Diwan failed to state whether plaintiff's injury was permanent, failed to identify any limitations in plaintiff's functions and compare those limitations to normal functions, and simply stated that plaintiff had difficulty in the activities of daily living, without identifying those difficulties or offering any objective medical findings to support that statement. In addition, Dr. Diwan's statement that plaintiff had not worked since the accident conflicted with plaintiff's deposition testimony that within four months of the accident he had returned to work as a barber and that at the time of the deposition, three years after the accident, he was working in construction, finishing drywall. Finally, plaintiff failed sufficiently to explain his cessation of medical treatment seven months after the accident to raise an issue of fact as to the seriousness of his injury. His statement that he stopped the treatment because the facility where he was receiving physical therapy closed was contradicted by Dr. Diwan's statement that plaintiff stopped the treatment because he appeared to have reached the maximum level of medical benefit and maximum improvement (see Pommells, 4 NY3d at 571; Charley v Goss, 54 AD3d 569, 570 [2008], affd 12 NY3d 750 [2009]).
We have considered plaintiff's remaining contentions and find them without merit.


Catalano v. Kopmann


Levine & Wiss, PLLC, Mineola, N.Y. (Anthony A. Ferrante of
counsel), for appellant.
Abamont & Associates (Congdon, Flaherty, O'Callaghan, Reid,
Donlon, Travis & Fishlinger,
Uniondale, N.Y. [Kathleen D. Foley], of
counsel), for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Nassau County (Lally, J.), entered April 9, 2009, which granted the defendant's motion for summary judgment dismissing the complaint on the ground that she did not sustain a serious injury within the meaning of Insurance Law 5102(d).
ORDERED that the order is affirmed, with costs.
The defendant met her prima facie burden of establishing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In opposition, the plaintiff failed to raise a triable issue of fact.
The submissions of Bonnie Corey, one of the plaintiff's treating chiropractors, failed to raise a triable issue of fact. Dr. Corey failed to express any opinion as to whether any injuries or limitations she noted were caused by the subject accident (see Shaji v City of New Rochelle, 66 AD3d 760; Morris v Edmond, 48 AD3d 432; Itskovich v Lichenstadter, 2 AD3d 406, 407).
The submissions of Jeffrey Rosenberg, another chiropractor for the plaintiff, also failed to raise a triable issue of fact. Those submissions set forth no findings based on objective testing of the plaintiff. At most, those submissions noted the plaintiff's subjective complaints of pain (see Sham v B & P Chimney Cleaning & Repair Co., Inc., 71 AD3d 978; Ambos v New York City Tr. Auth., 71 AD3d 801; House v MTA Bus Co., 71 AD3d 732).
The submissions of Roman Sorin, the plaintiff's treating physician, also failed to raise a triable issue of fact. Although Dr. Sorin examined the plaintiff seven months after the accident and noted during the examination significant limitations in the range of motion in the cervical and lumbar regions of the plaintiff's spine, and examined the plaintiff again in 2008 noting significant limitations in the cervical region of the plaintiff's spine only, neither he nor the plaintiff proffered competent medical evidence that revealed the existence of significant limitations in either region of the plaintiff's spine that were contemporaneous with the subject accident (see Bleszcz v Hiscock, 69 AD3d 890; Taylor v Flaherty, 65 AD3d 1328; Fung v Uddin, 60 AD3d 992; Gould v Ombrellino, 57 AD3d 608; Kuchero v Tabachnikov, 54 AD3d 729; Ferraro v Ridge Car Serv., 49 AD3d 498). Thus, the plaintiff did not raise a triable issue of fact as to whether she sustained a serious injury under the permanent loss, permanent consequential limitation of use, or significant limitation of use categories of Insurance Law 5102(d) (see Jack v Acapulco Car Serv., Inc.,AD3d , 2010 NY Slip Op 02923 [2d Dept 2010]; Bleszcz v Hiscock, 69 AD3d at 891; Taylor v Flaherty, 65 AD3d at 1328-1329; Ferraro v Ridge Car Serv., 49 AD3d at 498).
The evidence submitted by the plaintiff, which revealed the existence of herniated discs at C3-4 and C5-6, and a bulging disc at L4-5, on its own, did not raise a triable issue of fact. 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 and its duration (see Keith v Duval, 71 AD3d 1093; Casimir v Bailey, 70 AD3d 994; Rivera v Bushwick Ridgewood Props., Inc., 63 AD3d 712; Pompey v Carney, 59 AD3d 416). The plaintiff's affidavit was insufficient to meet this requirement (see Luizzi-Schwenk v Singh, 58 AD3d 811, 812).
The plaintiff failed to submit competent medical evidence that the injuries she allegedly sustained as a result of the subject accident rendered her unable to perform substantially all of her daily activities for not less than 90 days of the first 180 days thereafter (see Haber v Ullah, 69 AD3d 796, 797; Sainte-Aime v Ho, 274 AD2d 569). The plaintiff's own deposition testimony established that she missed, at most, two to three days of work as a result of the subject accident.


Clarke v. Delacruz


Robert S. Fader (Sweetbaum & Sweetbaum, Lake Success,
N.Y. [Marshall D. Sweetbaum], of counsel), for appellant.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York,
N.Y. (Stacy R. Seldin of counsel),
for respondent.

DECISION & ORDER
In an action, inter alia, to recover damages for personal injuries, the plaintiff appeals, as limited by his brief, from so much of an order of the Supreme Court, Kings County (Kramer, J.), dated May 19, 2009, as granted that branch of the defendant's motion which was for summary judgment dismissing the first cause of action to recover damages for personal injuries on the ground that he did not sustain a serious injury within the meaning of Insurance Law 5102(d).
ORDERED that the order is affirmed insofar as appealed from, with costs.
The defendant 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, 350; Gaddy v Eyler, 79 NY2d 955, 956-957; see also Kearse v New York City Tr. Auth., 16 AD3d 45, 49-50). In opposition, the plaintiff failed to raise a triable issue of fact as to whether he sustained such an injury within the meaning of the statute. The plaintiff failed to raise a triable issue of fact as to whether he sustained a serious injury under the permanent loss, permanent consequential limitation, or significant limitation of use categories of Insurance Law 5102(d) since he did not submit any medical evidence that was based on a recent examination of him (see Kin Chong Ku v Baldwin-Bell, 61 AD3d 938; Diaz v Lopresti, 57 AD3d 832, 832-833; Soriano v Darrell, 55 AD3d 900-901; Diaz v Wiggins, 271 AD2d 639, 640; Kauderer v Penta, 261 AD2d 365, 366; Marin v Kakivelis, 251 AD2d 462, 463).
Moreover, the plaintiff failed to submit competent medical evidence that the injuries he allegedly sustained in the subject accident rendered him unable to perform substantially all of his usual and customary daily activities for not less than 90 days of the first 180 days subsequent to the subject accident (see Little v Locoh, 71 AD3d 837, 838; Sainte-Aime v Ho, 274 AD2d 569, 570). As part of the plaintiff's opposition, he relied on the reports of his treating physician, Dr. Adam C. Carter. In one such report, based on an examination of the plaintiff on August 29, 2007, Dr. Carter noted that the plaintiff worked as a salesperson and certified personal trainer at the time of the subject accident, and missed only three days of work. In his followup report, based on an examination of the plaintiff on September 17, 2007, he noted that the plaintiff was "currently working full duty."


Levin v. Khan


James F. Sullivan, New York, N.Y. (Kyle B. Stefanczyk of counsel),
for respondents Ponciano E. Perez and Luz Perez.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiffs appeal from an order of the Supreme Court, Kings County (Partnow, J.), dated February 24, 2009, which granted the separate motions of the defendants Ponciano E. Perez and Luz Perez, the defendant Segundo A. Alao, and the defendant Muhammad A. Khan, for summary judgment dismissing the complaint insofar as asserted against each of them on the ground that neither of the plaintiffs sustained a serious injury within the meaning of Insurance Law 5102(d).
ORDERED that the order is reversed, on the law, with costs, and the separate motions of the defendants Ponciano E. Perez and Luz Perez, the defendant Segundo A. Alao, and the defendant Muhammad A. Khan, for summary judgment dismissing the complaint insofar as asserted against each of them on the ground that neither of the plaintiffs sustained a serious injury within the meaning of Insurance Law 5102(d) are denied.
The plaintiffs commenced this action after allegedly sustaining injuries in an automobile accident involving vehicles owned and/or operated by the defendants. After the defendants Ponciano E. Perez and Luz Perez (hereinafter together the Perez defendants) moved for summary judgment dismissing the complaint insofar as asserted against them on the ground that neither of the plaintiffs sustained a serious injury within the meaning of Insurance Law 5102(d), the defendants Segundo A. Alao and Muhammad A. Khan separately moved for the same relief, relying upon the evidentiary submissions proffered by the Perez defendants in support of their motion. The Supreme Court granted the motions. We reverse.
The Supreme Court should have denied the defendants' separate motions for summary judgment dismissing the complaint insofar as asserted against each of them. With regard to the plaintiff Vladlen Levin, the defendants made a prima facie showing that Levin did not sustain a serious injury within the meaning of Insurance Law 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345, 352). In opposition, however, the plaintiffs raised a triable issue of fact as to whether Levin sustained a serious injury to his right shoulder under the significant limitation of use category of Insurance Law 5102(d) as a result of the subject accident. The plaintiffs relied upon, inter alia, affirmed submissions of Dr. Joseph Paul, Levin's treating physician. Based on Dr. Paul's contemporaneous and most recent examinations of Levin, which revealed significant limitations in Levin's right shoulder, and his review of the affirmed reports of magnetic resonance imaging scans of Levin's right shoulder, which showed a torn rotator cuff, Dr. Paul concluded that the injuries to Levin's right shoulder, and range-of-motion limitations observed during the examinations, were significant, permanent, and causally related to the subject accident (see Johnson v Kara,AD3d , 2010 NY Slip Op 03285 [2nd Dept 2010]; Nisanov v Kiriyenko, 66 AD3d 655, 655-656; Su Gil Yun v Barber, 63 AD3d 1140, 1141; Pearson v Guapisaca, 61 AD3d 833, 834). Moreover, Dr. Paul's submissions adequately explained the lengthy gap in Levin's treatment history (see Gaviria v Alvardo, 65 AD3d 567, 569; Bonilla v Tortoriello, 62 AD3d 637, 639; Shtesl v Kokoros, 56 AD3d 544, 546-547).
With regard to the plaintiff Simona Levina, the defendants failed to establish, prima facie, that Levina did not sustain a serious injury within the meaning of Insurance Law 5102(d) as a result of the subject accident (see Gaddy v Eyler, 79 NY2d 955, 956-957). In an affirmed medical report relied upon by the defendants in support of their respective motions, the neurologist who performed an independent medical examination of Levina failed to compare the right knee range-of-motion findings against what is considered a normal range of motion (see Page v Belmonte, 45 AD3d 825, 826; Spektor v Dichy, 34 AD3d 557, 558). Since the defendants failed to satisfy their initial burden on their respective motions with regard to Levina, it is not necessary to consider whether the plaintiffs' papers in opposition were sufficient to raise a triable issue of fact (see Page v Belmonte, 45 AD3d at 826).


Mullally v. Saclaridis


Nora Constance Marino, Great Neck, N.Y., for appellant.
Richard T. Lau, Jericho, N.Y. (Linda Meisler of counsel), for
respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff appeals from a judgment of the Supreme Court, Nassau County (Adams, J.), entered May 4, 2009, which, upon an order of the same court dated April 7, 2009, granting the defendant's cross 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), and denying, as academic, her motion for summary judgment on the issue of liability, is in favor of the defendant and against her dismissing the complaint.
ORDERED that the judgment is affirmed, with costs.
The defendant met his prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In opposition, the plaintiff, who limited her claims of injury to only her right shoulder, failed to raise a triable issue of fact (see Gaddy v Eyler, 79 NY2d 955).
Since the Supreme Court properly granted the defendant's motion for summary judgment, it also properly denied, as academic, the plaintiff's motion for summary judgment on the issue of liability.


Vasquez v. John Doe #1
Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y.
(Stacy R. Seldin of counsel), for appellant.
Cherny & Podolsky, PLLC, Brooklyn, N.Y. (Steven V. Podolsky
of counsel), for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendant Pierre M. Colvert appeals from an order of the Supreme Court, Kings County (Bayne, J.), dated December 14, 2009, which denied his motion for summary judgment dismissing the complaint insofar as asserted against him on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law 5102(d).
ORDERED that the order is reversed, on the law, with costs, and the motion of the defendant Pierre M. Colvert for summary judgment dismissing the complaint insofar as asserted against him on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law 5102(d) is granted.
The defendant Pierre M. Colvert 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). In opposition, the plaintiff failed to raise a triable issue of fact.
The reports of the plaintiff's treating physician, Dr. Benjamin Cortijo, which were not summarized in the doctor's affirmation or referenced therein, as well as the plaintiff's hospital records, magnetic resonance imaging (hereinafter MRI) reports, and the records and reports concerning the plaintiff's physical therapy and chiropractic treatment were all unaffirmed or uncertified, and thus, failed to raise a triable issue of fact (see Grasso v Angerami, 79 NY2d 813; Lozusko v Miller,AD3d, 2010 NY Slip Op 03291 [2d Dept 2010]; 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).
The affirmation of Dr. Cortijo also was without probative value in opposing the motion since, in arriving at his conclusions, Dr. Cortijo clearly relied on the unsworn MRI reports authored by another physician (see Vickers v Francis, 63 AD3d 1150; Magid v Lincoln Servs. Corp., 60 AD3d 1008; Sorto v Morales, 55 AD3d 718; Malave v Basikov, 45 AD3d 539; Verette v Zia, 44 AD3d 747; Furrs v Griffith, 43 AD3d 389). Moreover, although Dr. Cortijo reported finding restrictions in the ranges of motion of the plaintiff's left knee, cervical spine, and lumbar spine during a May 2009 examination, he failed to reconcile those findings with his findings of little to no restrictions in those regions when he examined the plaintiff in September 2007 and November 2007 (see Carrillo v DiPaola, 56 AD3d 712; Felix v Wildred, 54 AD3d 891; Magarin v Kropf, 24 AD3d 733).
The plaintiff also failed to adequately explain the cessation of his medical treatment three to four months post-accident (see Pommells v Perez, 4 NY3d 566, 574; Haber v Ullah, 69 AD3d 796).
Finally, the plaintiff failed to submit competent medical evidence that the injuries allegedly sustained by him as a result of the subject accident rendered him unable to perform substantially all of his daily activities for not less than 90 days of the first 180 days thereafter (see Menaker v White Express Cab Corp., 68 AD3d 1069; Sainte-Aime v Ho, 274 AD2d 569).


In the Matter of Judy Chin v State Farm Insurance Company
Lawrence L. Kaye, P.C., Brooklyn, N.Y., for appellant.
Martin, Fallon & Mull, Huntington, N.Y. (Richard C. Mull
of counsel), for respondent.


DECISION & ORDER
In a proceeding pursuant to CPLR article 75 to vacate an arbitration award dated October 29, 2008, as modified December 1, 2008, the petitioner appeals from a judgment of the Supreme Court, Suffolk County (Cohen, J.), entered July 9, 2009, which, upon a decision of the same court dated May 13, 2009, denied the petition and dismissed the proceeding.
ORDERED that the judgment is modified, on the law, by adding thereto a provision pursuant to CPLR 7511(e) confirming the award dated October 29, 2008, as modified December 1, 2008; as so modified, the judgment is affirmed, with costs payable by the petitioner.
"Consistent with the public policy in favor of arbitration, the grounds specified in CPLR 7511 for vacating or modifying a no-fault arbitration award are few in number and narrowly applied" (Matter of Mercury Cas. Co. v Healthmakers Med. Group, P.C., 67 AD3d 1017, 1017). "An arbitration award can be vacated by a court pursuant to CPLR 7511(b) on only three narrow grounds: if it is clearly violative of a strong public policy, if it is totally or completely irrational, or if it manifestly exceeds a specific, enumerated limitation on the arbitrator's power" (Matter of Erin Constr. & Dev. Co., Inc. v Meltzer, 58 AD3d 729, 729; see Matter of United Fedn. of Teachers, Local 2, AFT, AFL-CIO v Board of Educ. of City School Dist. of City of N.Y., 1 NY3d 72, 79; Matter of Board of Educ. of Arlington Cent. School Dist. v Arlington Teachers Assn., 78 NY2d 33, 37; Cifuentes v Rose & Thistle, Ltd., 32 AD3d 816; Matter of RocklandCountyBd. of Coop. Educ. Servs. v BOCES Staff Assn., 308 AD2d 452, 453). "An award is irrational if there is no proof whatever to justify the award'" (Matter of Erin Constr. & Dev. Co., Inc. v Meltzer, 58 AD3d at 730, quoting Matter of Peckerman v D & D Assoc., 165 AD2d 289, 296). "Even if the arbitrators misapply substantive rules of law or make an error of fact, unless one of the three narrow grounds applies in the particular case, the award will not be vacated" (Matter of Erin Constr. & Dev. Co., Inc. v Meltzer, 58 AD3d at 730; see Wien & Malkin LLP v Helmsley-Spear, Inc., 6 NY3d 471; Matter of Silverman [Benmor Coats], 61 NY2d 299, 308; Matter of Sprinzen [Nomberg], 46 NY2d 623, 629; Cifuentes v Rose & Thistle, Ltd., 32 AD3d at 821). "An arbitrator is not bound by principles of substantive law or rules of evidence, and may do justice and apply his or her own sense of law and equity to the facts as he or she finds them to be" (Matter of Erin Constr. & Dev. Co., Inc. v Meltzer, 58 AD3d at 730; see Matter of Silverman [Benmor Coats], [*2]61 NY2d at 308).
Here, the petitioner failed to demonstrate the existence of any of the statutory grounds for vacating the arbitrator's award. Contrary to the petitioner's contention, the arbitrator's award, as modified, finds evidentiary support in the record and was rationally based (see Matter of American Express Prop. Cas. Co. v Vinci, 63 AD3d 1055, 1055; Matter of Mangano v United States Fire Ins. Co., 55 AD3d 916, 917). In addition, even if the arbitrator failed to consider specified evidence, vacatur of the award would not be warranted (see Matter of American Express Prop. Cas. Co. v Vinci, 63 AD3d at 1056; see also Montanez v New York City Hous. Auth., 52 AD3d 338, 339).
Upon denying a motion to vacate or modify an arbitration award, the court must confirm the award (see CPLR 7511[e]; Matter of Mercury Cas. Co. v Healthmakers Med. Group, P.C., 67 AD3d at 1017-1018). Thus, given this Court's affirmance of the Supreme Court's denial of the petition to vacate or modify the award, the award must be confirmed (see CPLR 7511[e]).
COVELLO, J.P., SANTUCCI, ANGIOLILLO and DICKERSON, JJ., concur.


MVAIC v. Interboro Medical Care & Diagnostic PC
Marshall & Marshall, Jericho (Jeffrey Kadushin of counsel),
for appellant.
Order, Supreme Court, New York County (Eileen A. Rakower, J.), entered March 12, 2009, which denied petitioner MVAIC's application to vacate a no-fault arbitration award, unanimously reversed, on the law, without costs, the motion granted, the award vacated, and the matter remanded for a determination on the merits of the coverage issue.
MVAIC defended the arbitration on the ground that the police accident report showed that the offending vehicle was registered out-of-state and was insured, but the arbitrator refused to consider that defense on the merits on the ground that MVAIC had failed to pay or deny the claim within 30 days of its submission, as required by the no-fault law (Insurance Law 5106[a]; 11 NYCRR 65-3.8[a][1]; [c]). This was contrary to settled law (see generally Matter of State Farm Mut. Auto. Ins. Co. v Lumbermens Mut. Cas. Co., 18 AD3d 762, 763 [2005]) recognizing a narrow exception to the 30-day deadline for defenses based on lack of coverage (Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 318 [2007]). New York Hosp. Med. Ctr. of Queens v MVAIC (12 AD3d 429 [2d Dept 2004], lv denied 4 NY3d 705 [2005]), relied on by the arbitrator, did not involve a lack of coverage issue. We would add that the burden is on MVAIC to prove its lack-of-coverage defense.

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