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Coverage Pointers - Volume XI, No. 4

Dear Coverage Pointers Subscribers:

We had a very busy couple of weeks and I thank you all for the well wishes.  Life is returning to its usual hectic degree of normalcy and that’s fine with us.

There’s a very interesting array of decisions in this week’s issue, attached, including a few tasty late notice cases and a decision dealing with the right of an excess carrier to challenge a primary insurer’s coverage denial.  Margo has her typical eclectic offerings on “serious injury” threshold.  If you would like her to come out to your shop to do a little training in the area, do contact her directly.  I daresay that there are few lawyers in the State of New York who have read and summarized every single threshold decision from an appellate court.  She can surely help your professional staff recognize trends and understand how best to identify cases likely to be subject to a successful motion to dismiss if properly posed.

We do love the summer. 

I’m sitting by the beach, watching a storm move in our direction, while sipping on a glass of bubbly (hey, why not?) celebrating the completion of yet another issue of CP.  We do love wireless networks and champagne, not necessarily in that order.

One Hundred Years Ago, it appears, champagne was recognized for its medicinal purposes:

New York Times
August 21, 1909
Page 1

SUN BATH AND REST
FOR MR. HARRIMAN
He Must Eat Every Two Hours
and Take Champagne Baths,
Says Vienna Specialist.
DOCTORS HERE INTERESTED

Physicians in the city discussed with much interest yesterday the treatment said to have been ordered E.H. Harriman by Prof. Struempel, the Viennese specialist, to consult whom Mr. Harriman went abroad.

The report of the treatment ordered by Prof. Struempel has it that Mr. Harriman must either cease active participation in business affairs or suffer a complete physical collapse.  Three courses of treatment are outlined.

First comes the rest cure, to include several hours’ rest each day in bed.  Then Prof. Struempel insists that Mr. Harriman must partake of nourishing food, specially selected, every two hours.  This, he says, for the purpose of “counteracting the effect of years of underfeeding and improper food, and building up he wasted tissue of the financier.”

 

The sun baths are named as the third expedient, and are recommended to strengthen Mr. Harriman’s nerves/.  These are to be taken by the financier lying unclothed in the sunshine.  When there is no sunshine, champagne bats are to be substituted.

Prof. Struempel is reported as saying that Mr. Harriman has been restored to comparative health, which he should maintain, provided he lives carefully into the future.

In discussing the treatment, Dr. Charles R. Hancock, who is acting in the place of the president of the New York Academy of Medicine … told a Times reporter yesterday that it was precisely the same as would be ordered by any experienced American physician, with the exception of the champagne baths.

Dr. Hancock confessed he could not see the efficacy of the champagne baths, and though alcohol a far better substitute.  The external use of champagne, so far as Dr. Hancock knew, had only been recommended in cases of psychic trouble, and there is no suggestion of this in Mr.  Harriman’s indisposition.

Editor’s Note:  Edward.H. Harriman, the famous railroad magnate, was the father of Averill Harriman, later Governor of New York.  E.H. Harriman died a month later, on September 9, 1909, champagne baths notwithstanding.

From Audrey, the Queen of No Fault:

Well summer is finally here and it’s only August 21st.  I think I spoke too soon after last edition that in no-fault no one takes a break.  It appears that while the judges and arbitrators do not take a summer break they do take a well deserved vacation once in a while.

I do have two potential programs that may be of interest to you though.  As I have been touting for some time, there is the pure no-fault seminar by the National Business Institute (NBI) on November 18th in Buffalo and on November 19th in Syracuse.  I am hearing through the grapevine, but don't hold me to it, that there may be two arbitrators present for the Buffalo seminar.  I have spoken to NBI and have been advised that there are group discounts available.

The second program is the New York State Bar Associations Law School for Claims Professionals.  This is an annual program and is being run at various locations across the state from mid-October until early-November.  This program is geared toward insurance claims professionals and covers auto liability, premises liability, insurance coverage, and subrogation.  In the afternoon, there are two workshops to address factual and legal issues that claims professionals confront in their everyday job.

If you would like information on anyone of these programs or if you have some specific training need in your office please let me know.  My email address is [email protected].

Audrey

 

KOHANE’S COVERAGE CORNER

Dan D. Kohane
[email protected]

  • Question of Fact whether Broker’s Failure to Notify Carrier of Potential Excess Exposure Caused Harm to Insured
  • Timeliness of Notice for SUM Coverage is Elastic, but Measured by Diligence on Part of Claimant to Determine Coverage and Knowledge of Seriousness of Injury
  • No Excuse for Late Notice and a Prompt Disclaimer Lead to a Loss of Coverage
  • A Review of the “American Mailbox Rule” and Late Notice Disclaimer Requirements
  • Umbrella Carrier Has Standing to Challenge a Coverage Denial by an Underlying Carrier

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

Margo M. Lagueras
[email protected]

  • The Allegations in the Plaintiff’s Bill of Particulars Must Be Addressed by the Defendants’ Experts
  • Again, Failure to Proffer Contemporaneous Competent Medical Evidence Showing Range-of-Motion Limitations Dooms Plaintiffs’ Case
  • And Yet Again, Failure to Proffer Contemporaneous Competent Medical Evidence Showing Range-of-Motion Limitations Dooms Plaintiffs’ Case
  • Termination of No-Fault Benefits Explains Gap in Treatment
  • Plaintiff’s Deposition Testimony Undermines Her Claim Under the 90/180-Day Category
  • Expert Reports That Fail to Relate Findings to the 90/180-Day Category Alleged in the Bill of Particulars Will Not Meet the Prima Facie Burden.

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

  • Insurer’s Attachment Documentation to NF-10 Sufficient to Deny Lost Wages

Litigation

  • Defense Counsel’s Affirmation on EUO No Show Sufficient

PEIPER ON PROPERTY (and POTPOURRI)

Steven E. Peiper
[email protected]

  • Choice of Forum Clause Meant what it Said
  • Late Notice is Fatal to Contractor’s Attempted Recover of Surety Bonds
  • Bi-Economy Rears its Ugly Head

 

 

 

Hurwitz & Fine, P.C. is a full-service law firm
providing legal services throughout the State of
New York
NEWSLETTER EDITOR
Dan D. Kohane
[email protected]

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

FIRE, FIRST-PARTY AND SUBROGATION TEAM
Andrea Schillaci, Team Leader
[email protected]
Jody E. Briandi
Steven E. Peiper

NO-FAULT/UM/SUM TEAM
Audrey A. Seeley, Team Leader

[email protected]
Tasha Dandridge-Richburg
Margo M. Lagueras

APPELLATE TEAM
Jody E. Briandi, Team Leader

[email protected]
Scott M. Duquin

Index to Special Columns

Kohane’s Coverage Corner
Margo’s Musings on “Serious Injury”
 Audrey’s Angles on No Fault
Peiper on Property and Potpourri
Earl’s Pearls
Across Borders

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

8/18/09            Tully Construction Co., Inc., v. Marsh USA, Inc.
Appellate Division, Second Department     
Question of Fact whether Broker’s Failure to Notify Carrier of Potential Excess Exposure Caused Harm to Insured

Tully sued Marsh and Allied North America Insurance Brokerage (Allied).  Marsh had been Tully’s insurance broker, succeeded by Allied in May 2002.
In November 2000, an automobile collided with a parked backhoe owned by Tully, and both the owner and the operator of the automobile died from injuries sustained in the accident. Tully claims that in May 2001, it instructed Marsh to notify TIG Insurance Company, Tully’s excess carrier of the accident but Marsh did not do so. Tully also claims that that Allied negligently failed to notify TIG of lawsuits that were commenced against Tully in 2002 by the estates of the owner and operator of the automobile. TIG ultimately disclaimed coverage on the ground that it was not notified of the accident until June 2004. In an earlier lawsuit, TIG was successful in sustained its disclaimer on late notice.
Marsh claimed that notice given in May 2001 would have been late anyway so that its failure to give notice when instructed caused no harm to the insured.  However, the Appellate Division found that contrary to the finding of the lower court, Tully raised a triable issue of fact as to whether notice to TIG would have been timely if provided pursuant to Tully's May 9, 2001, request to Marsh that it provide such notice.
However, Allied demonstrated that Tully never requested that it notify TIG of the underlying lawsuits, so the claims against Allied are dismissed.


8/18/09            In the Matter of Progressive Northeastern Insurance Company v. McBride
Appellate Division, Second Department  
Timeliness of Notice for SUM Coverage is Elastic, but Measured by Diligence on Part of Claimant to Determine Coverage and Knowledge of Seriousness of Injury

A claimant seeking SUM (underinsured motorist) benefits has the burden of proving that he or she gave timely notice.  In the context of these benefits, the timeliness of notice is measured by the date when the claimant knew, or should have known, that the tortfeasors was underinsured.  What factors ought to be considered when determining whether notice was or was not timely?  Has the claimant has offered a reasonable excuse for any delay, such as latency of his/her injuries?  Has the claimant established that due diligence was exercised in attempting to establish the insurance status of the other vehicles involved in the accident.
In this case, the claimant submitted proof that several written requests were made to the tortfeasor’s carriers as well as the insurer of the taxicab in which he was a passenger, over the year following the accident.  The insurers apparently ignored his requests and/or provided erroneous information on the SUM limits of their respective policies.
8/4/09              Key Bank U.S.A., N.A. v. Interboro Insurance Company
Appellate Division, Second Department                               
No Excuse for Late Notice and a Prompt Disclaimer Lead to a Loss of Coverage

In May 2003, Interboro’s insured, Guessford was involved in an accident in which Baldi was injured.  Guessford was driving a vehicle owned by Key Bank and leased to Malliet.  Baldi sued Key Bank and Guessford later in 2003.
On August 17, 2006, Guessford's counsel in notified the defendants that Guessford was involved in the underlying action and asked whether she had insurance under the policy the defendants had issued to her covering a different vehicle that was not involved in the accident. Coverage was denied 13 days later on the grounds of late notice as well as an exclusion for vehicles regularly used by the insured other than “covered autos.”
No excuse was offered for the lateness of the notice so the insurer is able to walk away from coverage.
Editor’s Note:  Kudos to our friends, the Dachs, for an appellate victory.
8/4/09              Liriano v. Eveready Insurance Company
Appellate Division, Second Department
A Review of the “American Mailbox Rule” and Late Notice Disclaimer Requirements

Let’s see what happened here.  Liriano established, by a process server’s affidavit, that he had taken a default judgment against Eveready’s insured and then sent it along to Eveready on August 13, 2007.  However, Eveready did not disclaim on late notice by Liriano (the underlying plaintiff) until March 19, 2008.
Eveready claimed it never received the August 13, 2007 notice and came forward with a sworn denial of receipt and an affidavit of an employee with personal knowledge regarding the defendant's regular practices and procedures in retrieving, opening, and indexing its mail and in maintaining its files on existing claims. That affidavit indicated that the defendant did not receive the judgment in the mail, and instead first learned of it on March 13, 2008, promptly issuing a disclaimer only six days later.
The Appellate Division found that there was a question of fact as to whether the judgment was actually served and sent the matter back for a hearing on the subject.
The lower court had determined that the disclaimer was also defective because it did not specify that the insurer was denying based on late notice on the part of the plaintiff but the appellate court found that the notice of disclaimer was sufficient on that ground.
Editor’s Note:  There are some important counseling points in this brief decision and we don’t want to let it go by without underscoring them. 
The first deals with the American Mailbox Rule, an old but trusted maxim that runs something like this:  if you can prove you have mailed a letter, it is presumed that it is received.  That is simple but important.  Here, the plaintiff established that he mailed the default to the carrier, but submitting a process server’s affidavit where he attested to the mailing.  If the carrier merely submitted an affidavit saying that it never received it, without more, the court would have ruled that the letter was in fact received thus triggering the obligation to deny coverage back in August.
However, the insurer did more than simply deny receiving the letter.  It submitted an affidavit of an employee who was able to attest to the carrier practice of retrieving, opening and indexing mail received.  That proof was sufficient to rebut the presumption of receipt and leave the matter as a question of fact for a jury.
The second counseling point from this brief decision has to do with the content of disclaimer letters. Insurance Law Section 3420 (a) permits and empowers an injured party (in addition to the insured) to give notice of an accident or claim.  Insurance Law Section 3420(d)(2) requires an insurer to disclaim promptly and to specify the grounds for disclaimer with precision.  A failure to raise a policy exclusion or condition can lead to a waiver of the right to do so later.  Now, in this case, the first notice of the accident and lawsuit did not come from the insured, but came from the claimant (when it sent notice of the default).  The ground for disclaimer, therefore, was late notice by the injured party because it was the injured party who gave notice. 
Too often, a carrier receives notice from an injured party of an accident or suit and then denies coverage based on the INSURED’s late notice, forgetting that the notice did not come from the insured, but from the injured party.  A failure to raise defense that the late notice came from the injured party would have waived that coverage defense and that was what the injured party claimed here.  However, the court found that the disclaimer letter did in fact mention that the notice from the injured party was late.  The counseling point here is that when late notice is claimed, the carrier ought to make certain that it specifies whose late notice it is complaining about (and it is often BOTH the insured and injured party or other claimant.
8/4/09              RLI Insurance Company v. Steely
Appellate Division, Second Department

Umbrella Carrier Has Standing to Challenge a Coverage Denial by an Underlying Carrier
Steely sought insurance coverage for a boating accident under a New York Central policy and an RLI umbrella policy. NY Central claimed that Steely owned the boat and denied coverage based on policy exclusion dealing with owned boats. RLI claimed that NY Central’s disclaimer was improper because Steely did NOT own the boat.  It claimed that its coverage was excess over the NY Central policy.
The issue in the case is whether an excess carrier has the right to challenge a disclaimer by an underlying insurer.  NY Central claimed that RLI did not have an interest in its policy so it lacked standing to challenge the disclaimer.
The Second Department found that the umbrella carrier did in fact have standing to challenge the denial of coverage by the primary insurer, even though it was not in “privity” with New York Central. RLI stands to benefit from the policy and thus has sufficient interest in it to challenge the coverage denial.

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

8/18/09            Alvarez v. Dematas
Appellate Division, Second Department
The Allegations in the Plaintiff’s Bill of Particulars Must Be Addressed by the Defendants’ Experts
The defendant’s motion papers were insufficient to meet her prima facie burden as they failed to adequately address the plaintiff’s claims, set forth in her bill of particulars, that she was confined to her home for a year after the accident as a result of the accident.  In addition, one of the defendant’s own experts established that the plaintiff had not returned to work seven months after the accident, while another stated that the plaintiff was unable to return to work a year and five months after the accident.  Defendant’s examining orthopedic surgeon also noted that the plaintiff had significant range-of-motion limitations of the cervical spine and none of the examining specialists related their findings to the 90/180-day category of serious injury claimed in the plaintiff’s bill of particulars. 

8/18/09            Sutton v. Yener
Appellate Division, Second Department
Again, Failure to Proffer Contemporaneous Competent Medical Evidence Showing Range-of-Motion Limitations Dooms Plaintiffs’ Case
Here the defendants win a reversal.  Not only were one plaintiff’s hospital records inadmissible because they were unsworn, the affirmed medical reports, noting range-of-motion limitations in the cervical and lumbar spines, did not include any competent medical evidence that was contemporaneous with the accident.  Nor was any competent medical evidence proffered in support of the plaintiffs’ 90/180-day claims, and the MRI reports merely revealed the existence of bulging discs with the requisite objective evidence of the extent and duration of the alleged injuries.

8/18/09            Knox v. Lennihan
Appellate Division, Second Department
And Yet Again, Failure to Proffer Contemporaneous Competent Medical Evidence Showing Range-of-Motion Limitations Dooms Plaintiffs’ Case
As seen so often before, the plaintiff’s affirmed medical reports fail to raise a triable issue of fact because they do not contain any competent medical evidence of the existence of the range-of-motion limitations that were contemporaneous with the accident.  Here, in addition, the plaintiff’s radiologist failed to opine as to the causation of the herniation seen in the MRI, which also revealed evidence of degenerative cervical spondylosis.

8/11/09            Gaviria v Alvardo
Appellate Division, Second Department
Termination of No-Fault Benefits Explains Gap in Treatment
The Appellate Court determined that the plaintiff sufficiently explained that he treated for only seven months following the accident because his no-fault benefits were terminated and he could not afford to pay for further treatment.  In addition, his treating physician affirmed that the plaintiff stopped treating, among other reasons, because he had reached maximum medical improvement and any further treatment would be palliative.  As regarded the difference in interpretation of the plaintiff’s cervical and lumbar MRIs by his neurologist and the defendant’s radiologist, those conflicting opinions were sufficient to raise a triable issue of fact to defeat summary judgment.

8/4/09              Blasse v. Laub
Appellate Division, Second Department
Plaintiff’s Deposition Testimony Undermines Her Claim Under the 90/180-Day Category
The trial court is reversed and summary judgment is granted to the defendant.  The plaintiff admitted during her deposition that she missed, at most, one day of work as a result of the accident.  She also failed to submit any competent medical evidence that her alleged injuries prevented her from performing substantially all of her daily activities.  Her claims under the significant limitation of use category and/or the permanent consequential limitation of use category also failed because her submissions were not based on a recent examination.

8/4/09              Ismail v. Tejeda
Appellate Division, Second Department
Expert Reports That Fail to Relate Findings to the 90/180-Day Category Alleged in the Bill of Particulars Will Not Meet the Prima Facie Burden
Plaintiff’s appeal is successful and defendants’ motion is denied where the plaintiff clearly alleged injury under the 90/180-day category in his bill of particulars but the affirmed report of defendants’ expert did not relate any of his findings to that category, nor did the defendants submit any other evidence refuting the plaintiff’s claim.  As is the case where the defendant fails to meet its prima facie burden, the court does not need to consider the sufficiency of the plaintiff’s submissions.

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

Arbitration
8/13/09            Applicant v. Progressive Northeastern Insurance Company
Arbitrator Thomas J. McCorry (Erie County)
Insurer’s Attachment Documentation to NF-10 Sufficient to Deny Lost Wages
The Applicant, the eligible injured person (“EIP”), sought lost wages from May 21, 2008 forward.  The insurer paid the EIP lost wages until December 4, 2008.  The insurer denied all lost wages based upon medical examination reports that were attached to the denial.

An issue in this arbitration arose with respect to the sufficiency on the insurer’s explanation as to the basis for the denial.  The assigned arbitrator noted that had the insurer not attached all of the reports it relied upon, its denial may have been insufficient based solely upon the Box 33 explanation.  Overall, the insurer’s evidence submission revealed that there was no disability related to the motor vehicle accident.  To the contrary, it appeared that the EIP was disabled from a prior work related injury.

[Note: Great job to my colleague Michelle Murphy-Louden, Esq. who represented the insurer in this one.]

Litigation
7/31/09            W&Z Acupuncture, P.C. a/a/o Corinne Porter v. Amex Assurance Co.
Appellate Term, Second Department
Defense Counsel’s Affirmation on EUO No Show Sufficient
The insurer’s cross-motion for summary judgment should have been granted as plaintiff’s owner failed to appear for scheduled EUOs.  The affirmation from the insurer’s defense counsel was sufficient to demonstrate that plaintiff failed to appear for scheduled EUOs.  The court further reaffirmed the obligation of an eligible injured person’s assignee to appear at an EUO as a condition precedent to coverage under the policy (Stephen Fogel Psycho., P.C. v. Progressive Cas. Ins. Co., 35 AD3d 720 (2006)).

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

08/13/09          Tatko Stone Products, Inc. v. Davis-Giovinzazzo Construction Co., Inc.  
Appellate Division, Third Department
Choice of Forum Clause Meant what it Said
Plaintiff provided materials to defendant Davis for a project that was located in New Jersey.  For its part, Great American issued a surety bond to Davis relative to the materials that were being advanced by plaintiff Tatko.  Importantly, the bond at issue contained a forum selection clause which mandated any action to recovery from the security had to be commenced in the jurisdiction where the underlying work was located.  Here, as the project was located in New Jersey, pursuant to the forum clause any action had to be commenced in a New Jersey court. 

Giving full credit to the language of the bill at issue, the Third Department affirmed that trial court’s determination that plaintiff failed to provide the court with subject matter jurisdiction. Accordingly, the action was dismissed with instructions that it be commenced in the appropriate forum.

08/04/09          Peri Formwork Systems, Inc. v. Lumbermens Mutual Casualty Company
Appellate Division, Second Department
Late Notice is Fatal to Contractor’s Attempted Recover of Surety Bonds
Plaintiff commenced this action to recover payment pursuant to several bonds that were issued to a non-party.  Lumbermens, among other issuers of bonds, opposed plaintiff’s motion for summary judgment on the basis that plaintiff failed to comply with notice provisions which were a condition precedent to recovery. 

The trial court agreed, and the Second Department affirmed, that plaintiff’s failure to provide timely notice of its claim resulted in a breach of the bonds at issue.  Accordingly, plaintiff was precluded from recovery.  Further, the Second Department also held that plaintiff’s right to recovery under several mechanics liens was conditioned on plaintiff establishing that it was still entitled to payment for work performed at the project.

6/09                 Chernish v. Massachusetts Mutual Life Insurance Company
United States District Court, Northern District of New York
Bi-Economy Rears its Ugly Head
Although we normally do not cover trial court level decisions, this one was too interesting to pass up.  Special Thanks to Ward Hamlin, Esq. of Brown & Kelly, LLP for bringing it to our attention. 

This case has its origins in Mass Mutual’s denial of plaintiff’s disability benefits.  The denial resulted in the present lawsuit which consists of three distinct causes of action.  The first simply alleges breach of contract, and seeks a declaration that Ms. Chernish is in fact entitled to disability coverage under her policy.  The second cause of action alleges that Mass Mutual’s denial amounted to a breach of the covenant of good faith and fair dealing; otherwise know as bad faith.  Finally, the third cause of action seeks recovery for violations of General Business Law § 349.

Mass Mutual immediately moved to dismiss the second and third causes of action, respectively.  Mass Mutual also moved to dismiss plaintiff’s claims for attorneys’ fees incurred by commencing the instant lawsuit. 

Here is where it gets strange.  The Court, relying on the Court of Appeals past holdings in Bi-Economy and Panasia Estates, held that plaintiff had pled a valid claim for breach of the duty of good faith and fair dealing.  In so holding, the Court noted that plaintiff’s allegations of emotional distress could also fall within the realm of consequential damages created by the Bi-Economy and Panasia Estates decisions, respectively.  

Fortunately, the Court dismissed the third cause of action where plaintiff failed to produce any evidence that the carrier’s conduct was “consumer oriented” as required by the statute. 

Finally, the court ruled that the Court of Appeals’ decisions in Bi-Economy and Panasia Estates, respectively, could be extended to require a carrier to reimburse its insured for the insured’s costs related to prosecuting a declaratory judgment action.  The reason being, we presume, that costs related to a challenge of a carrier’s coverage position should be “within the contemplation of the parties as a probable result of a breach [of contract].”

This was the case even though the second cause of action, it appears, never even mentioned consequential damages.  Rather, the second cause of action seeks damages as a result of bad faith.  Of course, the Court of Appeals’ majority opinion in Bi-Economy stressed that claims for consequential damages and claims of bad faith are two distinct causes of action.  Hence, your humble author’s confusion with this decision. 

First, the decision, for the first time under New York law recognizes emotional distress claims as possible consequential damages resulting from a breach of contract.  We note that other jurisdictions have had this rule for years, but New York courts have never adopted it.

Secondly, the Court denies Mass Mutual’s motion to dismiss by relying upon the Court of Appeals’ directives in Bi-Economy and Panasia Estates.  However, a review of those decisions reveals that the Court of Appeals was not changing previous law with respect to bad faith allegations relative to a first party policy of insurance.  Rather, the Bi-Economy decision created a route for recovery of consequential damages as a cause of action that was separate and distinct from a claim for bad faith.  The decision was not meant to alter established precedent for bad faith claims.    

We could see reference to Bi-Economy if the plaintiff had asserted a claim for consequential damages.  Of course, a review of the decision reveals no reference to any such claims.  Again, the Court appears to be endorsing the position that a claim for consequential damages and a claim for bad faith are essentially the same claim.

Shall I continue? How about the fact that the Court, in relying upon a claim for consequential damages that may not even have been pled, avoids discussion of years of judicial precedent that have uniformly held an insured is not entitled to recovery of attorneys’ fees expended in challenging a carrier’s coverage denial. 

It is important to note that the Court did not actually rule that plaintiff was entitled to consequential damages and therewith attorneys’ fees.  Rather, the Court has merely opened the door to their inclusion should a breach of contract be proven throughout the course of this litigation.  Nonetheless, we are proceeding down the dangerously slippery slope that Justice Smith’s apt dissent in Bi-Economy warned us about. 

We would imagine that this matter will be taken up to the Second Circuit on appeal, and ultimately end up before the Court of Appeals.  Be certain that as it proceeds, we will continue to track it. 

EARL’S PEARLS
Earl K. Cantwell, II
[email protected]

On hiatus this week.

ACROSS BORDERS

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

8/17/09            Maldonado v. First Liberty Insurance Corp.
Eleventh Circuit Court of Appeals
Insurer Avoids Bad Faith Claim and $3M Verdict After Court of Appeal Upholds Disputed Standard Applied by District Court

Plaintiff’s estate agreed to release defendants for death caused by motor vehicle accident in exchange for policy limits of $25,000 and a schedule of the defendants’ assets. Defendants-insureds refused to provide the asset schedule, and a $3M judgment was rendered against them in the subsequent lawsuit. Plaintiffs then sued defendants’ insurer for bad faith by “stepping into the shoes of insured,” alleging that the excess judgment was rendered because of insurer’s unwillingness to pay limits. The district court found no bad faith, since the failure of the insurer to tender limits was caused by insured-defendants’ unwillingness to provide asset schedule. On appeal, estate of plaintiff, in the shoes of the insured, claimed that the wrong standard of care was applied by the lower court in determining existence of bad faith. The court of appeals affirmed the lower court decision, even though lower court added an element to the standard bad-faith test; specifically, the lower court required proof that the insurer put its interest above the insured in order to show bad faith, in addition to the core elements. Because the insurer nonetheless acted in good faith under the core elements and the extra element would not have changed the outcome, the court of appeals upheld the decision.
Submitted by: Gerald A. Melchiode, Galloway, Johnson, Tompkins, Burr and Smith.

8/5/09              Wientjes v. American Bankers Insurance Co. of Florida
Fifth Circuit Court of Appeals
Summary Judgment was Proper When Plaintiffs Failed to Submit Proof of Loss
Plaintiffs brought suit when America Bankers Insurance denied their additional claims for damages to their home caused by Hurricane Katrina. They had received both an initial and supplemental payment from Defendant. They then sought additional benefits for damages to their foundation and to the home’s exterior plywood sheathing for which the claim was denied. They then brought suit for payment despite having failed to submit proof of loss. Plaintiffs argued that they were not required to submit a proof of loss prior to filing suit on their claims. They argued that a press release issued by FEMA waived the proof of loss requirement. The FEMA release stated in pertenant part that the National Flood Insurance Program “has waived the usual requirement that the policyholder must submit a proof-of-loss and instead where the policyholder agrees, will rely on a report by the claims adjustor.” Plaintiffs believed this to be an unconditional waiver of the ordinary proof of loss requirement. They believed that a report by a claims adjustor was a proper substitute for a sworn proof of loss even if the carrier does not agree to pay part of a submitted claim. Plaintiffs also claimed that if the proof of loss requirement has been waived that it deprives them of a meaningful opportunity to contest American Banker’s adjustment of their claims. The FEMA requirement was that the claim be filed within one year. They argued that an adjustor could spend more than one year adjusting a claim thereby leaving the insured with no avenue to challenge its adjustment decisions. The Court held that Plaintiffs knew of their disagreement with the payment of their claims well before the one year cutoff. The initial adjustor’s report in December 2005 stated that the foundation damage was excluded from coverage under their flood policy. The Court found they had ample opportunity to file a proof of loss within the one year deadline. Plaintiffs also argued that the one year proof of loss requirement violated their constitutional rights including the right to equal protection and due process. They argued that FEMA enforces the proof of loss requirement arbitrarily, granting waivers to some but not others. They believed that such FEMA conduct treats holders of federally funded flood insurance policies differently without a rational basis. They also argued that the one-year limitation for filing a proof of loss violated due process by foreclosing judicial review of adjustment decisions made more than one year after a loss. The Court found that Plaintiffs failed to cite any legal authority to support their propositions. The Court held that the few district courts to have reached similar issues have concluded that the proof of loss requirement did not violate the constitutional rights of the insured.
Submitted by: Amy Kempfert and Jeffrey Hensley (Best & Sharp, P.C.)

REPORTED DECISIONS

Key Bank U.S.A., N.A. v. Interboro Insurance Company


Shayne, Dachs, Corker, Sauer & Dachs, LLP, Mineola, N.Y.
(Norman H. Dachs and Jonathan A. Dachs of counsel), for appellants.
Smith Mazure Director Wilkins Young & Yagerman, P.C.,
New York, N.Y. (Marcia K. Raicus of
counsel), for respondent.

DECISION & ORDER
In an action, inter alia, for a judgment declaring that the defendants are required to indemnify the plaintiff for a payment it made in connection with the settlement of a personal injury action entitled Baldi v Key Bank U.S.A., in the Supreme Court, Suffolk County, Index No. 16737/03, the defendants appeal from an order of the Supreme Court, Nassau County (Brandveen, J.), dated February 3, 2009, which denied their motion for summary judgment.
ORDERED that the order is reversed, on the law, with costs, the defendants' motion for summary judgment is granted, and the matter is remitted to the Supreme Court, Nassau County, for entry of a judgment, inter alia, declaring that the defendants are not required to indemnify the plaintiff for a payment it made in connection with the settlement of the underlying action entitled Baldi v Key Bank U.S.A., in the Supreme Court, Suffolk County, Index No. 16737/03.
On May 7, 2003, the defendants' insured, Kimberly M. Guessford, was involved in an accident in which Vincent P. Baldi was injured. At the time, Guessford was driving an automobile leased to Michael Malliet and owned by Key Bank U.S.A., N.A., the plaintiff in this action (hereinafter the plaintiff). Thereafter, sometime in 2003, Baldi commenced a personal injury action entitled Baldi v Key Bank U.S.A. (hereinafter the underlying action) in the Supreme Court, Suffolk County, against, among others, Guessford and the plaintiff.
By letter dated August 17, 2006, Guessford's counsel in the underlying action notified the defendants herein that Guessford was involved in the underlying action and asked whether she had insurance under the policy the defendants had issued to her covering a different vehicle that was not involved in the accident. The defendants, by letter dated August 30, 2006, disclaimed coverage on the grounds that they were not timely notified of the claim, as required by the policy, and because the policy excluded coverage for a vehicle regularly used by the insured other than the "covered auto" under the policy. The defendants alleged that Guessford was injured while driving a vehicle she regularly used, that was not the "covered auto" under the policy.
According to the plaintiff, the underlying action was settled in September 2006 for the sum of $300,000, $200,000 of which was paid by the plaintiff. Thereafter, by summons and complaint filed August 18, 2008, the plaintiff commenced this action seeking, inter alia, a declaration that the defendants were required to indemnify it for the payment it made towards the settlement of the underlying action. The defendants, in an answer sworn to on October 1, 2008, essentially denied all the material allegations but "admitted," inter alia, that they had disclaimed coverage by way of the aforementioned August 30, 2006, letter.
Thereafter, the defendants moved for summary judgment on the ground, inter alia, that the plaintiff forfeited any right to coverage by breaching the policy provision requiring prompt notice of any claim. The Supreme Court denied the motion. We reverse.
The defendants demonstrated that the first notice they received of the accident was by the letter dated August 17, 2006, and that they disclaimed coverage in the letter dated August 30, 2006. They further demonstrated that the first notice they received of the plaintiff's claim was the summons and complaint filed August 18, 2008, which they appear to have received on September 5, 2008, and that they disclaimed coverage in their answer. Neither the August 17, 2006, letter nor the plaintiff's summons and complaint in this action set forth any excuse for the delay in notifying the defendants of the May 7, 2003, accident.
This was sufficient to make a prima facie showing that the delay in notifying the defendants of the claim, whether by way of the 2006 letter or the 2008 summons and complaint, was unreasonable as a matter of law and breached the condition precedent in the policy requiring timely notification. Since the plaintiff did not offer any excuse for the delay, the defendants' timely disclaimer based on the delay in notifying it of the accident and/or claim vitiated any obligation they had under the policy they had with Guessford (see Evangelos Car Wash, Inc. v Utica First Ins. Co., 45 AD3d 727; Gershow Recycling Corp. v Transcontinental Ins. Co., 22 AD3d 460, 461; City of New York v St. Paul Fire & Mar. Ins. Co., 21 AD3d 978; American Mfrs. Mut. Ins. Co. v CMA Enter., 246 AD2d 373). Therefore, the defendants' motion should have been granted (see generally Alvarez v Prospect Hosp., 68 NY2d 320, 324).
The plaintiff's remaining contentions either are without merit, are improperly raised for the first time on appeal, or need not be addressed in light of this determination.
Since this is, in part, a declaratory judgment action, the matter must be remitted to the Supreme Court, Nassau County, for the entry of an appropriate judgment in accordance herewith (see Lanza v Wagner, 11 NY2d 317, 334, appeal dismissed 371 US 74, cert denied 371 US 901).

Liriano v. Eveready Insurance Company


Sweetbaum & Sweetbaum, Lake Success, N.Y. (Marshall D.
Sweetbaum of counsel), for appellant.
Ramon Liriano, Corona, N.Y., respondent pro se.

DECISION & ORDER
In an action pursuant to Insurance Law § 3420(a)(2) to recover the amount of an unsatisfied judgment against the defendant's insured, the defendant appeals from (1) an order of the Supreme Court, Queens County (Cullen, J.), dated September 29, 2008, which granted the plaintiff's motion for summary judgment on the complaint, and (2) a judgment of the same court entered November 21, 2008, which, upon the order, is in favor of the plaintiff and against it in the principal sum of $40,112.06.
ORDERED that the appeal from the order is dismissed; and it is further,
ORDERED that the judgment is reversed, on the law, the plaintiff's motion for summary judgment is denied, and the order dated September 29, 2008, is modified accordingly; and it is further,
ORDERED that the defendant is awarded one bill of costs.
The appeal from the intermediate order must be dismissed because the right of direct appeal therefrom terminated with the entry of judgment in the action (see Matter of Aho, 39 NY2d 241, 248). The issues raised on the appeal from the order are brought up for review and have been considered on the appeal from the judgment (see CPLR 5501[a][1]).
The Supreme Court improperly granted the plaintiff's motion for summary judgment on the complaint. The plaintiff submitted a process server's affidavit of service indicating that the defendant was served by mail on August 13, 2007, with a default judgment against its insured in the underlying action, which constituted prima facie evidence of proper service (see Kihl v Pfeffer, 94 NY2d 118, 122; Matter of de Sanchez, 57 AD3d 452, 454). In response, the defendant came forward with a sworn denial of receipt and an affidavit of an employee with personal knowledge regarding the defendant's regular practices and procedures in retrieving, opening, and indexing its mail and in maintaining its files on existing claims. That affidavit indicated that the defendant did not receive the judgment in the mail, and instead first learned of it on March 13, 2008, promptly issuing a disclaimer only six days later. Under the circumstances of this case, the defendant's submissions sufficed to raise a triable issue of fact regarding the service of the judgment, and the question of whether the defendant's disclaimer of coverage was timely must await the resolution of that issue (see e.g. Matter of TNT Petroleum, Inc. v Sea Petroleum, Inc., 40 AD3d 771; Johnson v Deas, 32 AD3d 253; First Union Mtge. Corp. v Silverman, 242 AD2d 258; Long Is. Sav. Bank v Meliso, 229 AD2d 478; Poet v Kolenda, 142 AD2d 633).
Contrary to the plaintiff's contention and the determination of the Supreme Court, the letter of disclaimer was not defective and, therefore, was not invalid as against the plaintiff. Rather, the letter sent to the plaintiff adequately recited that the defendant was disclaiming coverage as to the plaintiff on the ground that he failed to provide the defendant with timely notice of the underlying litigation and with legal papers filed in connection therewith (see American Tr. Ins. Co. v Sartor, 3 NY3d 71; Matter of GEICO Co. v Wingo, 36 AD3d 908; cf. Shell v Fireman's Fund Ins. Co., 17 AD3d 444; Vacca v State Farm Ins. Co., 15 AD3d 473).

RLI Insurance Company v. Steely


Quirk and Bakalor, P.C., New York, N.Y. (Richard H. Bakalor and
Janet Lee of counsel), for appellant.
Saretsky Katz Dranoff & Glass, LLP, New York, N.Y. (Eric
Dranoff of counsel), for respondent.

DECISION & ORDER
In an action for a judgment declaring, inter alia, that any coverage provided by the policy issued by the plaintiff is excess to any coverage provided by the policy issued by the defendant New York Central Mutual Fire Insurance Company, the plaintiff appeals from so much of an order of the Supreme Court, Westchester County (Donovan, J.), entered March 4, 2008, as granted that branch of the motion of the defendant New York Central Mutual Fire Insurance Company pursuant to CPLR 3211 which was to dismiss the complaint for lack of standing insofar as asserted against it.
ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and that branch of the motion of the defendant New York Central Mutual Fire Insurance Company pursuant to CPLR 3211 which was to dismiss the complaint for lack of standing insofar as asserted against it is denied.
The defendant William Steely sought insurance coverage for a boating accident pursuant to, inter alia, a homeowner's policy issued to him by the defendant New York Central Mutual Fire Insurance Company (hereinafter NY Mutual), and an umbrella policy issued to him by the plaintiff, RLI Insurance Company. NY Mutual allegedly denied coverage on the ground that, inasmuch as Steely owned the boat on the date of the accident, there was no coverage because of a specific exclusion under its policy. The plaintiff commenced this action for a judgment declaring, inter alia, that NY Mutual was obligated to provide coverage to Steely because he did not, in fact, own the boat on the date of the accident, and that any such coverage provided by the plaintiff's policy was excess to any coverage provided by NY Mutual's policy.
NY Mutual moved, inter alia, pursuant to CPLR 3211 to dismiss the complaint for lack of standing insofar as asserted against it. NY Mutual argued, among other things, that the plaintiff lacked standing to challenge its disclaimer of coverage to its insured. The Supreme Court, inter alia, granted that branch of NY Mutual's motion which was to dismiss the complaint insofar as asserted against it. We reverse the order insofar as appealed from.
We find that the plaintiff has standing to challenge NY Mutual's disclaimer of coverage to its insured. "A plaintiff need not be privy to an insurance contract to commence a declaratory judgment action to determine the rights and obligations of the respective parties, so long as the plaintiff stands to benefit from the policy" (Mortillaro v Public Serv. Mut. Ins. Co., 285 AD2d 586, 587). Here, the plaintiff clearly stands to benefit from NY Mutual's policy.

Blasse v. Laub


Martin, Fallon & MullÉ, Huntington, N.Y. (Richard C. MullÉ of
counsel), for appellant.
Sanders, Sanders, Block, Woycik, Viener & Grossman, P.C.,
Mineola, N.Y. (Mark R. Bernstein of
counsel), for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendant appeals, as limited by her brief, from so much of an order of the Supreme Court, Nassau County (Martin, J.), dated August 12, 2008, as denied her cross motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and the defendant's cross motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) is granted.
Contrary to the Supreme Court's determination, the defendant met her prima facie burden by 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's submissions were insufficient to raise a triable issue of fact as to whether she sustained a serious injury under the significant limitation of use and/or the permanent consequential limitation of use categories of Insurance Law § 5102(d), since those submissions were not based on a recent examination (see Kin Chong Ku v Baldwin-Bell, 61 AD3d 938; Diaz v Lopresti, 57 AD3d 832; Soriano v Darrell, 55 AD3d 900; Diaz v Wiggins, 271 AD2d 639; Kauderer v Penta, 261 AD2d 365; Marin v Kakivelis, 251 AD2d 462). The plaintiff also failed to submit competent medical evidence that the injuries she allegedly sustained in 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 subsequent to the subject accident (see Kin Chong Ku v Baldwin-Bell, 61 AD3d 938; Roman v Fast Lane Car Serv., Inc., 46 AD3d 535; Sainte-Aime v Ho, 274 AD2d 569). In this respect, the plaintiff admitted in her deposition testimony that she missed, at most, a single day from work as a result of the subject accident.

Ismail v. Tejeda


Tumelty & Spier, LLP, New York, N.Y. (Michael J. Andrews 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 (Schack, J.), dated August 8, 2008, which granted the defendants' motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed, on the law, with costs, and the defendants' motion for summary judgment dismissing the complaint is denied.
The defendants did not meet their 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, 352; Gaddy v Eyler, 79 NY2d 955). The plaintiff clearly alleged in his bill of particulars that he had sustained, inter alia, a medically-determined injury or impairment of a nonpermanent nature which prevented him from performing substantially all of the material acts constituting his usual and customary activities for not less than 90 days during the 180 days immediately following the accident. However, the affirmed report of the defendants' examining physician did not specifically relate any of his findings to the 90/180 day category of serious injury for the relevant time period following the accident, and the defendants did not submit any other evidence to refute the plaintiff's claim (see Neuburger v Sidoruk, 60 AD3d 650; Miller v Bah, 58 AD3d 815; Scinto v Hoyte, 57 AD3d 646). Since the defendants failed to meet their prima facie burden with respect to the 90/180 day category of a serious injury, it is unnecessary to examine the sufficiency of the plaintiff's opposition papers in this regard (see Neuburger v Sidoruk, 60 AD3d at 652; Miller v Bah, 58 AD3d at 816; Scinto v Hoyte, 57 AD3d at 647).
In light of the foregoing, the defendants' remaining contention has been rendered academic (see Insurance Law § 5102[d]).

Gaviria v. Alvardo


Harmon, Linder, & Rogowsky, New York, N.Y. (Mitchell
Dranow, Mineola, N.Y., 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 to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Queens County (Agate, J.), dated August 20, 2008, which granted the defendant's motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed, on the law, with costs, and the defendant's motion for summary judgment dismissing the complaint is denied.
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 raised a triable issue of fact as to whether he sustained a serious injury to his cervical and/or lumbar regions of his spine under the permanent consequential limitation and/or significant limitation of use categories of Insurance Law § 5102(d) as a result of the subject accident (see Williams v Clark, 54 AD3d 942; Casey v Mas Transp., Inc., 48 AD3d 610; Green v Nara Car
& Limo, Inc.,
42 AD3d 430
; Francovig v Senekis Cab Corp., 41 AD3d 643, 644-645; Acosta v Rubin, 2 AD3d 657).
The plaintiff raised a triable issue of fact based on the submissions of Dr. Richard J. Rizzuti, Dr. John J. McGee, and Dr. Aric Hausknecht. Dr. McGee, the plaintiff's treating physician, established in his initial examination report dated May 9, 2003, that the plaintiff had significant limitations in the ranges of motion of the cervical and lumbar regions of his spine. These contemporaneous significant limitations were deemed by Dr. McGee to have been caused by the subject accident. Shortly after the accident, the plaintiff underwent magnetic resonance imaging (hereinafter MRI) scans of the cervical and lumbar regions of his spine, which were read by Dr. Rizzuti, his examining radiologist. The cervical MRI showed posterior disc herniations at C3-4 and C4-5 with impingement on the anterior aspect of the spinal canal and the left intervertebral foramen at C3-4. The lumbar MRI showed posterior disc herniations at L4-5 and L5-S1 with impingement on the anterior aspect of the spinal canal, the neural foramina bilaterally at L4-5, and the nerve roots bilaterally at L5-S1. In his report of his recent examination of the plaintiff and his personal review of the MRI films, Dr. Hausknecht, the plaintiff's examining neurologist, noted his agreement with Dr. Rizzuti's interpretation of the plaintiff's MRIs, and opined that the plaintiff had significant limitations in the range of motion of the cervical and lumbar regions of his spine, and that these limitations were permanent and causally related to the subject accident. Dr. Hausknecht further opined that the plaintiff sustained permanent consequential limitations of use of the cervical and lumbar regions of his spine, and that the limitations noted were significant.
While it is true that the defendant's radiologist opined that the MRI scans taken of the cervical and lumbar regions of the plaintiff's spine revealed only bulging discs which were degenerative in nature, Dr. Hausknecht, who reviewed the same films, observed herniated discs, which he deemed to be caused by the subject accident. Thus, the conflicting medical opinions regarding the nature and etiology of the injuries to the cervical and lumbar regions of the plaintiff's spine were sufficient to raise a triable issue of fact (see Cariddi v Hassan, 45 AD3d 516).
Contrary to the defendant's assertions, the plaintiff adequately explained the lengthy gap in his treatment. The plaintiff admitted in his affidavit that he treated for only seven months after the subject accident, but stated that he stopped because his no-fault benefits terminated and he could not thereafter afford to pay for further treatments out of his own pocket (see Black v Robinson, 305 AD2d 438). Moreover, Dr. McGee stated in his affirmation that the plaintiff stopped treating, inter alia, because he had reached his maximum medical improvement and any further treatment would essentially be palliative in nature (see Bonilla v Tortoriello, 62 AD3d 637; Shtesl v Kokoros, 56 AD3d 544, 546-547).

Peri Formwork Systems, Inc. v. Lumbermens Mutual Casualty Company, et al.,


Daniel E. Clement, New York, N.Y. (Jessica A. DuHoffmann of
counsel), for appellant-respondent.
DelBello Donnellan Weingarten Wise & Wiederkehr, LLP,
White Plains, N.Y. (Patrick M. Reilly
and Michael J. Schwarz of counsel),
for respondents-appellants and
respondents.

DECISION & ORDER
In a consolidated action, inter alia, to recover on payment bonds and bonds filed to discharge mechanic's liens, the plaintiff appeals, as limited by its brief, from so much of an order of the Supreme Court, Westchester County (Rudolph, J.), entered March 26, 2008, as denied those branches of its motion which were for summary judgment on its claims to recover on payment bonds issued by the defendants Lumbermens Mutual Casualty Company, American Motorists Insurance Company, and Arch Insurance Company, and on its claims for an award of an attorney's fee against the defendant LC White Plains, LLC, and granted that branch of the defendants' cross motion which was for summary judgment dismissing those claims, and the defendants Arch Insurance Company, LC White Plains, LLC, George A. Fuller Company, Inc., and Cappelli Enterprises, Inc. cross-appeal, as limited by their brief, from so much of the same order as denied that branch of their cross motion which was for summary judgment dismissing the plaintiff's claims to recover on two bonds filed to discharge its mechanic's liens and granted that branch of the plaintiff's motion which was for summary judgment on those claims.
ORDERED that the order is modified, on the law, by deleting the provision thereof granting that branch of the plaintiff's motion which was for summary judgment on its claims to recover on two bonds filed to discharge its mechanic's liens, and substituting therefor a provision denying that branch of the plaintiff's motion; as so modified, the order is affirmed insofar as appealed and cross-appealed from, without costs or disbursements.
The Supreme Court properly denied those branches of the plaintiff's motion which were for summary judgment on its claims to recover on payment bonds issued by the defendants Lumbermens Mutual Casualty Company, American Motorists Insurance Company, and Arch Insurance Company and on its claims for an award of an attorney's fee against the defendant LC White Plains, LLC (hereinafter LC), and properly granted that branch of the cross motion which was for summary judgment dismissing those claims. Here, the plaintiff, a third-party beneficiary under the payment bonds at issue, failed to make a prima facie showing that it complied with the notice requirements of the payment bonds. In opposition to the motion and in support of the cross motion, the defendants' submissions established, prima facie, that the plaintiff breached a condition precedent to recovery by not complying with the notice requirements (see Lynbrook Glass & Architectural Metals Corp. v. Elite Assoc., 225 AD2d 525), and the plaintiff failed to raise a triable issue of fact in response. Since the plaintiff failed to establish its entitlement to recover on the bonds, it was not entitled to an attorney's fee pursuant to General Obligations Law § 5-322.3 due to the failure of LC to file the bonds with the County Clerk.
However, the Supreme Court erred in granting that branch of the plaintiff's motion which was for summary judgment on its claims to recover on two bonds filed to discharge its mechanic's liens. The plaintiff's liens were valid only as to any amount still due and unpaid to the subcontractor, Rogers & Sons Concrete, Inc. (see Clifford Broman & Son v Town of Babylon, 222 AD2d 643; Ace Constr Co. v Garfield & Arma Assoc., 148 Misc 2d 475, 477). Since a triable issue of fact exists as to whether the subcontractor was owed any money and, if so, the amount, at the time the plaintiff's liens were filed, the plaintiff was not entitled to summary judgment (see CPLR 3212[b]; Zuckerman v City of New York, 49 NY2d 557). For the same reasons, the Supreme Court properly denied that branch of the defendants' cross motion which was for summary judgment dismissing these claims.
The defendants' remaining contention is without merit.

Tatko Stone Products, Inc. v. Davis-Giovinzazzo Construction Company, Inc.  

Calendar Date: May 29, 2009
Before: Peters, J.P., Spain, Lahtinen, Kavanagh and McCarthy, JJ.

Macero & Associates, P.C., Cambridge,
Massachusetts (Rosemary A. Macero of counsel), for appellants.
Neil B. Connelly, P.L.L.C., White Plains (Aaron A.
Mitchell of counsel), for respondent.
MEMORANDUM AND ORDER

McCarthy, J.
Appeal from an order of the Supreme Court (Krogmann, J.), entered May 22, 2008 in Washington County, which granted a motion by defendant Great American Insurance Company to dismiss the complaint.
Defendant Great American Insurance Company issued a surety bond for masonry work performed by defendant Davis-Giovinzazzo Construction Company, Inc. on a construction project located in New Jersey. Plaintiff contracted to supply material to Davis for the project and now seeks payment under the surety bond for unpaid invoices. The bond, however, contains a forum selection clause which requires that any suit or action on it be brought in the state where the project was located, i.e., New Jersey. At issue is an order of Supreme Court granting a motion by Great American to dismiss the complaint on the ground of improper venue.
We note first that, having raised the issue of improper venue as an affirmative defense in the answer, Great American did not waive the issue and could thereafter rely upon this defense in seeking dismissal of the action (see Lischinskaya v Carnival Corp., 56 AD3d 116, 118 [2008], lv denied ___ NY3d ___ [June 30, 2009]). In addition, as Great American did not follow the precise statutory procedures outlined under CPLR 511 (see CPLR 511 [a], [b]), the relief sought in its application became a discretionary matter (see Callanan Indus. v Sovereign Constr. Co., 44 AD2d 292, 295 [1974])[FN1] . While Supreme Court may have erred in deciding the matter on subject matter jurisdiction grounds (see Matter of Lucchese v Rotella, 97 AD2d 645, 646 [1983], affd 60 NY2d 815 [1983]), we find that dismissal of the complaint was nevertheless warranted based on the venue provision of the bond (see CPLR 501; see also Dogmoch Intl. Corp. v Dresdner Bank AG, 304 AD2d 396, 397 [2003]; Premium Risk Group v Legion Ins. Co., 294 AD2d 345, 345-346 [2002]; B & H Interior Contr. v Yonkers Contr. Co., 234 AD2d 44, 45 [1996]; Alwinseal, Inc. v Travelers Indem. Co., 61 AD2d 803, 803-804 [1978]).
"It is well established that forum selection clauses are valid absent a showing that enforcement would be unreasonable and unjust or that the clause is invalid because of fraud or overreaching" (VOR Assoc. v Ontario Aircraft Sales & Leasing, 198 AD2d 638, 639 [1993] [citations omitted]; see Brooke Group v JCH Syndicate 488, 87 NY2d 530, 534 [1996]; Harry Casper, Inc. v Pines Assoc., L.P., 53 AD3d 764, 764-765 [2008]). Here, in seeking to enforce the bond as a third-party beneficiary of it, plaintiff, in absence of any evidence of unreasonableness, fraud or overreaching (compare 3H Enters. v Bennett, 276 AD2d 965, 966 [2000], lv denied 96 NY2d 710 [2001]), is bound by its forum selection provision (see B & H Interior Contr. v Yonkers Contr. Co., 234 AD2d at 45; Buhler v French Woods Festival of Performing Arts, 154 AD2d 303, 305 [1989]; Alwinseal, Inc. v Travelers Indem. Co., 61 AD2d at 803-804; Callanan Indus. v Sovereign Constr. Co., 44 AD2d at 294; Khan Enter. Constr., Inc. v P & K Contr., Inc., 13 Misc 3d 1207[A] [2006]; Flush Metal Partition Corp. v Nuovo Corp., 57 Misc 2d 900, 901 [1968]; Frontier Excavating v St. Paul Fire & Mar. Ins. Co., 50 Misc 2d 232, 233 [1966]; see generally Harry Casper, Inc. v Pines Assoc., L.P., 53 AD3d at 765). As plaintiff has advanced unpersuasive grounds upon which this Court might disregard the forum selection provision in the bond, we affirm dismissal of the action (see e.g. Dogmoch Intl. Corp. v Dresdner Bank AG, 304 AD2d at 397; Premium Risk Group v Legion Ins. Co., 294 AD2d at 346; British W. Indies Guar. Trust Co. v Banque Internationale A Luxembourg, 172 AD2d 234, 234 [1991]; Di Ruocco v Flamingo Beach Hotel & Casino, 163 AD2d 270, 271-272 [1990]).
Particularly unpersuasive is plaintiff's claim that dismissal is improper because Great American failed to demonstrate that the subject bond was "properly authenticated." While it would have been preferable for Great American to include the entire, properly-executed bond agreement in its moving papers, we are unpersuaded that this omission was fatal to the requested relief. First, there can be no real dispute that a valid and enforceable surety bond exists; indeed, plaintiff is relying upon it for relief in the first instance. More importantly, Great American submitted an affidavit of a senior claims analyst who averred that the subject bond contained a "venue provision" which requires that this action be venued in New Jersey. The analyst attached the relevant excerpt from a copy of the bond to his affidavit. This evidence was sufficient for Great American to establish the precise language of the subject forum selection clause.
Footnotes

Footnote 1: Great American moved to dismiss the action on venue grounds 17 days after an improperly-entered default judgment was vacated.

Alvarez v. Dematas


Finger & Finger, A Professional Corporation, White Plains, N.Y.
(Daniel S. Finger of counsel), for appellant.
Buratti, Kaplan, McCarthy & McCarthy, Yonkers, N.Y.
(Cristin E. Calvi 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, Westchester County (Nicolai, J.), entered August 12, 2008, 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), and, in effect, denied, as academic, her cross motion for summary judgment on the issue of liability.
ORDERED that the order is reversed, on the law, with costs, the defendant's motion for summary judgment dismissing the complaint is denied, and the matter is remitted to the Supreme Court, Westchester County, to determine the plaintiff's cross motion on the merits.
The defendant failed to meet her prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). The defendant's motion papers failed to adequately address the plaintiff's claim, clearly set forth in her bill of particulars, that she sustained a medically-determined injury or impairment of a nonpermanent nature which prevented her from performing substantially all of the material acts which constituted her usual and customary daily activities for not less than 90 days during the 180 days immediately following the subject accident (see Smith v Quicci, 62 AD3d 858; Alexandre v Dweck, 44 AD3d 597; Sayers v Hot, 23 AD3d 453, 454). The subject accident occurred on March 25, 2006. In her bill of particulars, the plaintiff alleged that she was confined to her home as a result of the accident for one year thereafter. The medical reports of Dr. S.W. Bleifer and Dr. Robert Costello, submitted in support of the defendant's motion, established that approximately seven months after the accident, the plaintiff had not returned to work. Also submitted on the motion was the medical report of Dr. Martin Barschi, the defendant's examining orthopedic surgeon, who examined the plaintiff one year and five months after the accident, and who noted that the plaintiff was unable to return to work after the accident. In addition, in the reports, the doctors also failed to relate their findings to this category of serious injury for the period of time immediately following the accident. Moreover, in his report, Dr. Barschi clearly set forth significant limitations in the range of motion of the plaintiff's cervical spine (see Landman v Sarcona, 63 AD3d 690; Bagot v Singh, 59 AD3d 368; Hurtte v Budget Roadside Care, 54 AD3d 362; Jenkins v Miled Hacking Corp., 43 AD3d 393; Bentivegna v Stein, 42 AD3d 555, 556; Zamaniyan v Vrabeck, 41 AD3d 472, 472-473). Accordingly, the Supreme Court should have denied the defendant's motion for summary judgment regardless of the sufficiency of the plaintiff's opposing papers (Landman v Sarcona, 63 AD3d 690; see Smith v Quicci, 62 AD3d 858).
In light of our determination that the defendant's motion for summary judgment should have been denied, we remit the matter to the Supreme Court, Westchester County, to determine the plaintiff's cross motion on the merits (see Busljeta v Plandome Leasing, Inc., 57 AD3d 469, 470).
The defendant's remaining contention is without merit.

Knox v. Lennihan


Rand P. Schwartz (Sweetbaum & Sweetbaum, Lake Success, N.Y.
[Marshall D. Sweetbaum], of counsel), for appellant.
Russo, Apoznanski & Tambasco, Westbury, N.Y. (Susan J.
Mitola 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 (Adams, J.), dated February 17, 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 established her prima facie entitlement to judgment as a matter of law by showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In opposition, the plaintiff failed to raise a triable issue of fact. The plaintiff's essential argument on appeal is that her submissions in opposition were sufficient to raise a triable issue of fact as to whether she sustained a serious injury to her cervical spine under the permanent consequential limitation of use and the significant limitation of use categories of Insurance Law § 5102(d). The plaintiff, in opposition to the defendant's motion, principally relied on the affirmations of Dr. Bradley J. Cohen and Dr. Bruce R. Ross. However, those affirmations failed to raise a triable issue of fact as to whether the plaintiff sustained either a permanent consequential limitation of use or a significant limitation of use of her cervical spine as a result of the subject accident because neither affirmation contained any competent medical evidence which revealed the existence of range-of-motion limitations in the plaintiff's cervical spine that were contemporaneous with the subject accident (see Niles v Lam Pakie Ho, 61 AD3d 657, 658; Garcia v Lopez, 59 AD3d 593; Leeber v Ward, 55 AD3d 563; Ferraro v Ridge Car Serv., 49 AD3d 498; D'Onofrio v Floton, Inc., 45 AD3d 525).
The affirmed magnetic resonance imaging report of Dr. Elizabeth P. Maltin, the plaintiff's radiologist, merely established that as of June 13, 2005, the plaintiff showed evidence of degenerative cervical spondylosis at C5-6 and C6-7, with a herniated disc at C6-7. Initially, the mere existence of a herniated 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 Casco v Cocchiola, 62 AD3d 640; Sealy v Riteway-1, Inc., 54 AD3d 1018; Kilakos v Mascera, 53 AD3d 527; Cerisier v Thibiu, 29 AD3d 507; Bravo v Rehman, 28 AD3d 694; Kearse v New York City Tr. Auth., 16 AD3d 45, 49-50). Furthermore, Dr. Maltin never set forth her opinion on the cause of findings she made in her report, especially her finding of a disc herniation at C6-7 (see Collins v Stone, 8 AD3d 321, 322).
The plaintiff also failed to submit any competent medical evidence that the injuries she allegedly sustained in 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 subsequent to the subject accident (see Roman v Fast Lane Car Serv., Inc., 46 AD3d 535; Sainte-Aime v Ho, 274 AD2d 569). She admitted in her deposition testimony that she returned to work full-time on July 25, 2005, approximately 1½ months after the accident (see Kin Chong Ku v Baldwin-Bell, 61 AD3d 938; Camacho v Dwelle, 54 AD3d 706).

Sutton v. Yener


Rivkin Radler LLP, Uniondale, N.Y. (Melissa M. Murphy, Evan
H. Krinick, and Cheryl F. Korman of counsel), for appellants.

DECISION & ORDER
In an action to recover damages for personal injuries, etc., the defendants appeal from an order of the Supreme Court, Kings County (Schack, J.), dated November 21, 2008, which denied their motion for summary judgment dismissing the complaint on the ground that neither the plaintiff Dennis Sutton nor the plaintiff Lacy Ann Small sustained a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed, on the law, with costs, and the defendants' motion for summary judgment dismissing the complaint is granted.
The defendants met their prima facie burden of showing that the plaintiffs Dennis Sutton and Lacy Ann Small (hereinafter together the injured plaintiffs) did not sustain serious injuries 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; see also Kearse v New York City Tr. Auth., 16 AD3d 45). In opposition, the plaintiffs failed to raise a triable issue of fact. Initially, Dennis' hospital records, submitted by the plaintiffs, were not in admissible form because they were unsworn (see McNeil v New York City Tr. Auth., 60 AD3d 1018; Sapienza v Ruggiero, 57 AD3d 643; Choi Ping Wong v Innocent, 54 AD3d 384).
The affirmed medical reports of the injured plaintiffs' treating physician, Dr. Jorge Rivero, failed to raise a triable issue of fact. While he noted range-of-motion limitations in the cervical and lumbar regions of the injured plaintiffs' respective spines, neither he nor the plaintiffs proffered any competent objective medical evidence that revealed the existence of range-of-motion limitations in those areas that were contemporaneous with the subject accident (see Jules v Calderon, 62 AD3d 958; Garcia v Lopez, 59 AD3d 593; Leeber v Ward, 55 AD3d 563; Ferraro v Ridge Car Serv., 49 AD3d 498; D'Onofrio v Floton, Inc., 45 AD3d 525).
While the plaintiffs properly relied upon the unsworn magnetic resonance imaging (hereinafter MRI) reports concerning the injured plaintiffs (see Thompson v Saunders, 57 AD3d 971; Williams v Clark, 54 AD3d 942; Zarate v McDonald, 31 AD3d 632; Ayzen v Melendez, 299 AD2d 381), those reports failed to raise a triable issue of fact on their own. The MRI reports merely revealed the existence of bulging discs at L4-5, L5-S1, and C5-6 in Dennis's spine, and bulging discs at C5-6 and C6-7 in Lacy Ann's cervical spine. The mere existence of a bulging disc is not evidence of a serious injury in the absence of objective evidence of the extent of the alleged physical limitations resulting from the disc injury and its duration (see Sealy v Riteway-1, Inc., 54 AD3d 1018; Kilakos v Mascera, 53 AD3d 527; Cerisier v Thibiu, 29 AD3d 507; Bravo v Rehman, 28 AD3d 694; Kearse v New York City Tr. Auth., 16 AD3d 45). The plaintiffs failed to supply such objective medical evidence.
The plaintiffs failed to submit competent medical evidence demonstrating that the injuries the injured plaintiffs allegedly sustained in the subject accident rendered them unable to perform substantially all of their usual and customary daily activities for not less than 90 days of the first 180 days subsequent to the subject accident (see Roman v Fast Lane Car Serv., Inc., 46 AD3d 535; Sainte-Aime v Ho, 274 AD2d 569).

In the Matter of Progressive Northeastern Insurance Company v. McBride


Buratti, Kaplan, McCarthy & McCarthy, Yonkers, N.Y. (Michael
A. Zarkower of counsel), for appellant.
Joseph B. Fruchter, Hauppauge, N.Y., for respondent.


DECISION & ORDER
In a proceeding pursuant to CPLR article 75, inter alia, to permanently stay arbitration of an underinsured motorist claim, the petitioner appeals, as limited by its brief, from so much of a judgment of the Supreme Court, Queens County (Rios, J.), dated May 20, 2008, as denied that branch of the petition which was to permanently stay the arbitration.
ORDERED that the judgment is affirmed, with costs.
In the context of supplemental uninsured/underinsured motorist (hereinafter SUM) claims, it is the claimant's burden to prove timeliness of notice, which is measured by the date the claimant knew or should have known that the tortfeasor was underinsured (see Matter of Metropolitan Prop. & Cas. Ins. Co. v Mancuso, 93 NY2d 487, 495; Matter of Assurance Co. of Am. v Delgrosso, 38 AD3d 649; Matter of State Farm Mut. Auto. Ins. Co. v Linero, 13 AD3d 546; Matter of Continental Ins. Co. v Marshall, 12 AD3d 508; State Farm Mut. Auto. Ins. Co. v Sparacio, 297 AD2d 284, 285). Timeliness of notice is an elastic concept, the resolution of which is highly dependent on the particular circumstances (see Matter of Metropolitan Property & Cas. Ins. Co. v Mancuso, 93 NY2d at 494-495; Mighty Midgets v Centennial Ins. Co., 47 NY2d 12, 19; Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp., 31 NY2d 436, 441; Morris Park Contr. Corp. v National Union Fire Ins. Co. of Pittsburgh, Pa., 33 AD3d 763, 764-765). In determining whether notice was timely, factors to consider include, inter alia, whether the claimant has offered a reasonable excuse for any delay, such as latency of his/her injuries, and evidence of the claimant's due diligence in attempting to establish the insurance status of the other vehicles involved in the accident (see Matter of Metropolitan Property & Cas. Ins. Co. v Mancuso, 93 NY2d at 492-493; Mighty Midgets v Centennial Ins. Co., 47 NY2d at 19-20; Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp., 31 NY2d at 441; Matter of Blue Ridge Ins. Co. v Cook, 301 AD2d 598, 599; Matter of Allstate Ins. Co. [White], 231 AD2d 950; cf. Matter of Nationwide Mut. Ins. Co. v Wexler, 276 AD2d 490, 491).
Here, the respondent Charles McBride established a reasonable excuse for his nearly one-year delay in notifying his insurer, the petitioner, Progressive Northeastern Insurance Company  hereinafter Progressive). McBride submitted evidence that his counsel sent several written requests to the insurers of the vehicle which struck the taxicab in which he had been a passenger at the time of the accident, and to the insurers of the taxicab, and that in the ensuing 12 months those insurers ignored his requests and/or provided erroneous information on the SUM limits of their respective policies (see Mighty Midgets v Centennial Ins. Co., 47 NY2d at 20-21; Matter of Allstate Ins. Co. [White], 231 AD2d 950; cf. Matter of Travelers Ins. Co. v Cohen, 61 AD3d 768; Matter of Continental Ins. Co. v Marshall, 12 AD3d 508; Matter of State Farm Mut. Auto. Ins. Co. v Bennett, 289 AD2d 496; Matter of Interboro Mut. Indem. Ins. Co. v Sarno, 277 AD2d 454; Matter of American Cas. Ins. Co. v Silverman, 271 AD2d 528; Matter of Nationwide Ins. Co. v Montopoli, 262 AD2d 647). Accordingly, we affirm so much of the judgment as denied that branch of the petition which was to permanently stay the arbitration.

Tully Construction Co., Inc., v. Marsh USA, Inc.


Goodman & Jacobs LLP, New York, N.Y. (Judith F. Goodman
and Lester Chanin of counsel), for appellant.
Seyfarth Shaw LLP, New York, N.Y. (Jonathan P. Wolfert of
counsel), for respondent Marsh USA,
Inc.
Brown Gavalas & Fromm LLP, New York, N.Y. (Timothy G.
Hourican of counsel), for respondent
Allied North America Insurance
Brokerage Corp. of New York.


DECISION & ORDER
In an action, inter alia, to recover damages for breach of contract and negligence, the plaintiff appeals, as limited by its brief, from so much of an order and judgment (one paper) of the Supreme Court, Queens County (Satterfield, J.), entered January 18, 2008, as, upon a decision of the same court dated May 1, 2007, granted those branches of the motion of the defendant Marsh USA, Inc., which were for summary judgment dismissing the complaint insofar as asserted against it and for summary judgment on its counterclaim, and granted that branch of the cross motion of the defendant Allied North America Insurance Brokerage Corp. of New York which was for summary judgment dismissing the complaint insofar as asserted against it, and is in favor of the defendants and against it dismissing the complaint, and in favor of the defendant Marsh USA, Inc., and against it in the principal sum of $250,000 on the counterclaim.
ORDERED that the order and judgment is modified, on the law, (1) by deleting the provisions thereof granting those branches of the motion of the defendant Marsh USA, Inc., which were for summary judgment dismissing the complaint insofar as asserted against it and for summary judgment on its counterclaim and substituting therefor provisions denying those branches of the motion, and (2) by deleting the third decretal paragraph thereof, inter alia, awarding Marsh USA, Inc., the principal sum of $250,000 on the counterclaim; as so modified, the order and judgment is affirmed, with one bill of costs payable to the plaintiff by the defendant Marsh USA, Inc., and one bill of costs payable to the defendant Allied North America Insurance Brokerage Corp. of New York by the plaintiff, and the action against the defendant March USA, Inc., is severed.
Tully Construction Co., Inc. (hereinafter Tully), commenced this action, inter alia, to recover damages for negligence and breach of contract against Marsh USA, Inc. (hereinafter [*2]Marsh), and Allied North America Insurance Brokerage Corp. of New York (hereinafter Allied). Marsh was Tully's insurance broker until May 24, 2002, when it was succeeded by Allied.
In November 2000, an automobile collied with a parked backhoe owned by Tully, and both the owner and the operator of the automobile died from injuries sustained in the accident. Tully alleges that on May 9, 2001, it instructed Marsh to notify TIG Insurance Co. (hereinafter TIG), Tully's excess liability carrier, of the accident, but Marsh negligently failed to do so. Tully further alleges that Allied negligently failed to notify TIG of lawsuits that were commenced against Tully in 2002 by the estates of the owner and operator of the automobile. TIG ultimately disclaimed coverage on the ground that it was not notified of the accident until June 2004. In a prior appeal in this action, this Court affirmed the Supreme Court's grant of TIG's motion for summary judgment declaring that it had no obligation to indemnify Tully in the actions commenced by the estates of the owner and operator of the vehicle because there was a timely disclaimer by TIG (see Tully Constr. Co., Inc. v TIG Ins. Co., 43 AD3d 1150).
The Supreme Court erred in granting those branches of Marsh's motion which were for summary judgment dismissing the complaint insofar as asserted against it, and for summary judgment on its counterclaim. Contrary to the Supreme Court's determination, in opposition to Marsh's prima facie showing Tully raised a triable issue of fact as to whether notice to TIG would have been timely if provided pursuant to Tully's May 9, 2001, request to Marsh that it provide such notice (see Morris Park Contr. Corp. v National Union Fire Ins. Co. of Pittsburgh, Pa., 33 AD3d 763, 765). Moreover, Tully raised triable issues of fact as to whether Marsh was negligent in failing to notify TIG of the claim in accordance with the May 9, 2001, request and as to whether, by that failure, it breached an oral agreement with Tully to notify Tully's excess carriers when necessary.
However, the Supreme Court properly granted that branch of Allied's motion which was for summary judgment dismissing the complaint insofar as asserted against it. Allied demonstrated its prima facie entitlement to judgment as a matter of law on the negligence cause of action by demonstrating that Tully never requested that it notify TIG of the underlying lawsuits. In opposition, Tully failed to raise a triable issue of fact. Tully also failed to raise a triable issue of fact in opposition to Allied's prima facie showing on the breach of contract cause of action that there was no oral agreement between Allied and Tully requiring Allied to provide notice of claims to Tully's excess insurers.

 

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