Coverage Pointers - Volume XII, No. 13

Dear Coverage Pointers Subscribers:

 We send you the warmest wishes for the holiday season.  Hoping that you and your families rejoice in the blessings of health,  happiness and prosperity in the days, weeks and months ahead.

 We offer you a Coverage Pointers Holiday Gift:

 

Christmas Coverage

or

A Policy for Saint Nicholas

Dan D. Kohane

With apologies to Clement Moore (or less)

T'was the night before Christmas, and all through the land.
Few coverage advisors were still in demand.
The policies still showed on both desk and on screen,
My eyes only open with thanks to caffeine.

Most company's adjusters had left for the day.
And most coverage lawyers had little to say.
It was surely the moment to turn out the light,
Shut down the computer, put work out of sight. 

Then the phone started chirping, it startled my poise,
Not the typical ring-tone, but an odd sounding noise.
It jingled like sleigh bells, instead of a "ding,"
I knew I must answer, despite everything. 

A Christmas Eve caller?  What could be the need?
But the sound of the music, would just not recede.
I was really not looking for Christmas Eve banter,
Imagine my shock when the caller was Santa! 

"I need some advice, sir" said a somber Saint Nick,
"My Christmas Eve Policy is three inches thick."
I don't mean to bother, but I'm wrought with confusion
"I don't understand this new 'Gifting Exclusion.'" 

"It carves out the nasties, the mean and the haughty.
It favors the good ones and leaves out the naughty. 
My coverage appears to have holes like Swiss Cheese,
I'm afraid if I'm sued, I will twist in the breeze."

"A products exclusion? A chimney one too?
Elf employment exception, I'm screwed through and through.
Just what is still covered? I sure am confounded,
With all of these issues, I'm fear that I'm grounded."

"With a sleigh full of sacks and reindeer at the ready,
I'm starting to feel just a tad too unsteady.
My belly has acid, my knees are a 'quiver
With millions and millions of toys to deliver."

"I want you to help me, I fear a disclaimer.
This policy's scary; I need you to tame her.
We must surely save Christmas, for good girls and boys,
And Amazon won't refund "squat" on the toys.

The holiday challenged, I sure knew my mission
We needed to craft a new ISO edition
Santa needed an ally, a comrade, a fighter,
On the opposite side was a Grinch Underwriter.

I am sure you'd imagine how hard it would be
To secure for Saint Nick a late night policy,
Without coverage gaps, so that Santa could fly,
To save Christmas Day, we were destined to try.

The person in charge of the coverage for Nick,
Had left the shop early, was feeling quite sick.
Perhaps it was sadness, or guilt or just gumption,
He thought he'd killed Christmas, a well-placed assumption.

In order to soften his hardening heart,
We had to play coy, we had to be smart.
We needed to dazzle that Grinch with our guile,
To show him the risk was sure worth his while.

Worse yet, betwixt and between stood a broker,
A bloodsucker culled from the mind of Bram Stoker.
Through him we must go, around or about,
He'd bring pressure to bear, he's really got clout.

"It's Santa," we'd say, "who'd sue him for cash?" 
"Another broker can get us a better deal in a flash.
We'll go to the market if a deal can't be made;"
The Grinch saw his bonus beginning to fade.                    

From the cream of the crop, a new team we'd assemble,
To get Santa protection, to weaken his tremble.
We'd send out the e-mail, we'd tweet and we'd twitter
We needed to find the best of the litter. 

The other apt choice, as the time slipped on by,
Was to use those fine people, to make him comply.
By plane and by car, by boat and by train.
We beckoned this family to join in refrain. 

And gather they did, first a few then a score,
Lawyers and brokers, claims folks and more
More than a choir, it was surely a throng,
Together they gave voice to a beautiful song.

And they reached that man's spirit, his heart and his soul,
And in no time at all, they'd accomplished their goal.
"Give me my pen", the Grinch yelled to his clerk.
I knew then and there that our ploy it had worked.

"Exclusions begone!  Limitations not there!
We'll provide him his coverage, no need to beware."
And so it was written, and Santa could jet,
And Christmas was saved, the best Yuletide yet.

On cold winter night, when you're hearing his jingle,
When the children are sleeping and in comes Kris Kringle,
Remember that coverage protected his flight,
Happy Christmas to all, and to all a good night.

Special Editorial Thanks to the Christmas Elves:  Tim Sullivan, John Intondi, Mike Perley and Rich Traub

 The Year in Review and the Status of New York Bad Faith
In the past 11½ years, your compulsive Coverage Pointers staff has summarized every New York appellate decision involving insurance coverage. How many is that? We haven't counted back to the beginning, but in the past four calendar years, we have brought you some 2500 NY appellate reviews. This year, in addition, we have had 71 plenary court reviews in Jen's Gems, 28 Earl's Pearls articles (from our prolific scribe, Earl Cantwell), a couple from Scott Duquin's Lead Paint series, and a few from Mike Perley in his  Leaning Tower of Perley Medicaid Secondary Payer column.

 Putting the year 2010 in perspective:

• In 2007, we reported on 651 New York appellate decisions involving insurance coverage. In only one of them, did an appellate court allow a bad faith case to proceed to trial. I summarized  276 opinions in my column, 226 "serious injury" threshold cases were reviewed and Audrey Seeley gave us angles on 123 No Fault decisions. Steve Peiper reviewed 26 first party and "potpourri" appeals.
• In 2008, we summarized 679 appellate coverage decisions.  I had an easy year, with an even 200 summaries.  Margo Laugeras and her predecessor commented on reviewed 226 "serious injury" threshold cases.  Audrey was a mite busier with 176 appellate and arbitration awards covered in Audrey's Angles.  Steve about tripled his workload reviewing 77 in Peiper's Property and Potpourri column.  Not a single bad faith determination was affirmed by an appellate court.
• In 2009, we had a mere 557 appellate decisions to review, with 173 appearing in my column, 206 in Margo's, 93 in Audrey's, 81 in Steve's and four in Kathie Fijal's offering federal cases, which was added towards the end of the year. 
• In 2010, we added Jen's Gems early in the year.  We reported on 641 appellate decisions and 71 lower court reviews, for a total of 694 summaries.  There were a paltry 137 in my column, 214 in Margo's, 159 of Audrey's Angles, Steve tackled 89 property and potpourri opinions, Kathie covered 42 federal court decisions and Jen added 76.

However, again, there wasn't a single bad-faith case - either first or third party -- affirmed by an appellate court.  Since we've been tracking this, that's our fourth year in a row without an appellate decision affirming a bad faith determination in the State of New York.

From Audrey Seeley, Undisputed Queen of No Fault:

Well this is the last edition of Coverage Pointers for 2010.  I have two predictions for the New Year.  My first prediction is that there will be legislation passed in 2011 reforming No-Fault.  I think it will be a major overhaul and legislation that levels the field.  I think that it will still have some issues but many of the concerns the insurance industry and the medical industry have will be addressed.  My second prediction is that the revised Workers' Compensation Fee Schedule, particularly the compliance with guidelines in order to qualify for reimbursement for certain CPT codes, will lead to some interesting case law and arbitration awards.  In particular, it will be interesting to see if anyone presents a creative argument on Insurance Law 5108's interpretation of what is a permissible charge under the fee schedule.

 

Thank you for continuing to follow CP over the year.  I hope that you and your family have a Merry Christmas and a Happy New Year.

             Audrey

            [email protected]

 

Ethical Claims Handling Presentation:

 Earl Cantwell recently presented on Ethical Claim Handling procedures to a national carrier  If you are seeking a continuing education program on that subject, please contact Earl at [email protected]

 

 Steve Peiper's Christmas Wishes:

 News Flash!!!! The fine Judges of the Court of Appeals are  . undoubtedly ... golfers. 

Shank-a-potomi can breathe easier this holiday season. As an aspiring mediocre golfer, I have been asked numerous times over the years whether someone can actually be held liable for striking his or her fellow duffer.  My answer was always no; there would be no liability because the person struck with an errant shot assumed the risk by showing up at the course.  Now, fortunately or unfortunately (for my playing partners), I actually have legal authority for my position.

In Anand v. Kapoor, the Court of Appeals has come to rescue of poor golfers from Riverhead to Jamestown.   So as you open that new 800 cc driver of titanium, feel free to grip it and rip it next Spring.  Other than being stuck with the tab at the end of the round, there, generally speaking, is no liability for being a bad golfer!

Hard to believe that we could have anything more useful than the golf case, but alas, we do actually try to provide some useful tips each issue.  Please take a moment to review the Third Department's decision in  Bush v Mechanicville Warehouse Corporation.  In that case, the court reminds us that indemnity agreements must be clear and concise to be enforceable.

Best wishes for a peaceful holiday, and a prosperous New Year.  See you in 2011.

 Steve Peiper

[email protected]

 

100 Years Ago:

A Writ of Habeas Corpus - in a Civil Case?

We all know the need to hold down the cost of civil litigation:  Let's hold off on that extra deposition.  Do we really need that expert?  Is that discovery motion really important?

A century ago, we suppose, cost wasn't so important.  In a car accident case, defendant sought to exhume and dissect the plaintiff's body:

 Wheeler, J. This action was brought by the plaintiff as the representative of the next of kin of Matthew Danahy, deceased, to recover damages for his death, alleged to have been caused by injuries received in a collision with an automobile claimed to have been owned by the defendant. The certificate of death signed and filed by the attending physician stated the cause of death to have been malignant endocarditis.

The petition on this motion states that the disease known as malignant endocarditis is a disease affecting the interior of the heart; and is caused by a germ, or septic condition of the blood, and usually results  from causes which are in no way attributable to injuries received in an accident; and that the precise cause of the said disease may be determined by an examination of the heart and its conditions after death . After some further allegations, the petition closes with a prayer that an order may be made giving the defendant a discovery and inspection, and permission to take cultures of the dead body, and to examine the contents thereof by microscope and other aids to scientific men . .

The plaintiff, by her counsel, opposes, and strenuously objects to the granting of the order asked .

This is the first application of the kind ever made, so far as we are aware.

We are of the opinion the application of the defendant should be denied; but, in denying the motion, we base our decision squarely upon the absence of any right or authority in the court to grant the inspection asked.

The defendant bases his claim to the right to inspect the remains of the deceased upon the provision of [the predecessor to CPLR 3120] that permitted discovery of "documents" and "articles of property."

It is contended that the body of the deceased is an "article" or "property" within the meaning of the section quoted. We, however, do not believe that, when the Legislature passed the amendment in question, it had any intention to include the body of a dead person within the description of an "article" or "property."

Danahy v. Kellogg, 70 Misc. 25, 25-30 (N.Y. Sup. Ct. 1910)
Editor's Note:  The Defendant in the case was Spencer Kellogg, a name well-known by Buffalo historians.  His  company was once one of the largest manufacturers of linseed products in the country. Its main office was in downtown Buffalo on the site of what will be the new location of the US District Courthouse, currently under construction.  The Spencer-Kellogg Company has been sold several times and transformed into a polyester resin business.  It is now a division of Reichhold.

 

Significant Municipal Liability Case Reported

Paul Suozzi, the head of our Municipal Liability Team, reports on a Court of Appeals case in Steve's Potpourri column.  If any of your claims involve prior written notice issues with cities, towns, villages, school boards, etc. we recommend you read the Mount Kisko review.

 

A Century Ago, Discrimination Reared its Ugly Head:

 

Whacking Away at the Japanese

(Dunkirk) Evening Observer

December 24, 1919

Probability that New Legislature of

California Will Prohibit Their Owning Land

San Francisco: The anti-Japanese feeling in California promises to break out afresh with the assembling of the incoming legislature immediately after January 1.  So serious is the situation considered that it is giving Governor-elect Johnson and his advisers much concern.  It was stated, on authority today, that as soon as the Legislature meets, the labor element in the state will demand that it pass laws prohibiting the ownership of land by Asiatics and prohibiting the children of Chinese and Japanese from schools attended by white children.

Editor's Note:  The California Alien Land Law was not adopted until 1913, adopted in response to strong anti-Asian sentiment among voters. The act was amended and extended by initiative in 1920 and twice more by the legislature thereafter.  The law barred aliens, not eligible for citizenship (under the Naturalization Act of 1870 this included all persons of Asian descent born out-side of the United States), as well as corporations controlled by such aliens, from owning real property. The law was repealed in 1956 by popular vote.  Several other states followed suit.

 

Charles Dickens' "A Christmas Carol" 1910 Style:

If you haven't seen it, you ought to:  the 1910 silent version of Charles Dickens', "A Christmas Carol," Charles Ogle, who played Bob Crachit in the superb film, also played the lead role in "Frankenstein," which was another Edison production the same year.

 

In This Week's Coverage Pointers:

 

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

• Workmanship Exclusions Eliminate Duty to Defend General Contractor in Construction Defect Lawsuit
• In E&O Claim Against Insurance Broker, Questions of Fact Abound as to Broker's Duty to Report Accidents and Claims Precluding Summary Judgment
• Failure to Disclaim Coverage Does Not Create Coverage for Party That Is Not an Insured Under the Policy
• Bagel Toasted by Its Late Notice.  Carrier's Three Week Delay in Denying Coverage After Completing Investigation Not Untimely
• Extrinsic Evidence (Deposition Testimony) May Be Considered When Determining Obligation to Defend
• Denial of Coverage Based on "Livery Use Exclusion" Justified a Claim for Uninsured Motorists Benefits [But, We Suggest, Not From the Same Auto's Policy]
• While Carrier That Failed to Disclaim May Share Coverage with Other Carriers, Issue Not Properly Before the Court on Appeal
• Carrier Failed to Provide Sufficient Excuse for Late Disclaimer 

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

• Multiple Factors Combine to Defeat Claim That 37-Year Old's Knee Injuries Were Degenerative
• Causally-Related Emotional Injury, With or Without Physical Injury, May Constitute Serious Injury
• Finding of Significant ROM Limitations in Right Ankle After Foot Is Run Over Raise Triable Issues
• Unsworn MRI Is Admissible if Set Forth and Reviewed in Affirmed Report
• Plaintiff Fails to Meet Standard for Finding of "Significant Disfigurement"
• Excuse That "Unspecified Insurance Coverage Issue" Prevented Treatment Does Not Reasonably Explain a Complete Cessation of Treatment for Allegedly Permanent Injuries

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

 

ARBITRATION

• EMG Testing Extension of Examination on Complex Patient Thus Medically Necessary
• IME Report Bolsters Medical Necessity of Treatment 

LITIGATION

• Billing Company's Testimony Insufficient To Establish Plaintiff's Business Records
• Incorrect Mailing Address To CC On Verification Request Does Not Render It A Nullity
• Despite Not Being Argued On Summary Judgment, Insurer Can Seek Modification of Judgment That Exceeds The Policy Limits 

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

• Risk of Being Struck by an Errant Golf Shot is an Assumed Risk; No Liability to the Shank-A-Potomus (credit to our friends at E-Trade)
• New York High Court Speaks on Prior Written Notice Requirement for Municipal Defendants
• Where Special Verdict Sets the Value of Plaintiff's Injuries Within the Limits of the Tortfeasor's Policy, No SUM Claim Exists
• Contractual Indemnity Claim Against an Employer MUST be Expressly Agreed To in a Written Contract
• Under the Labor Law, a Tree Is Not a Structure 

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

 

• Applying Michigan Law - Meaning and Scope of Notice Provision in Excess Policy
• Applying Florida Law - Bad Faith and Handling Multiple Claims in Excess of Limits 

JEN'S GEMS
Jennifer A. Ehman

[email protected]

 

• No Coverage Where Purported Additional Insureds Failed to Provide Timely Notice of Lawsuit
• Court Awards Consequential Damages Based on the Insurer's Bad Faith in Settling the Claim
• Court Refuses to Dismiss Plaintiff's Complaint for Loss of Earnings Under a Policy Issued by Defendant
• Where Plaintiff Fails to Provide Notice of a Potential Claim Prior to Expiration of the Claims-Made Policy and the 60-Day Extended Reporting Period, there is No Coverage For the Claim
• Insured Pled Guilty to Assault in the Third Degree and Admitted that he Intentionally Caused the Injury; however, the Court Determines that the Incident was an Occurrence as the Term was Defined the Policy and the Insurer Failed to Timely Disclaim on the Intentional Acts Exclusion

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

 

When the Other Side Has No Attorney - Stop!

 

We wish you all the very best for a wonderful holiday season and healthy and prosperous new year.

 

Dan

 

Dan D. Kohane
Hurwitz & Fine, P.C.
1300 Liberty Building
Buffalo, NY 14202    
Phone: 716.849.8942
Fax:      716.855.0874
E-Mail:  [email protected]
H&F Website:  www.hurwitzfine.com

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
Diane F. Bosse

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
Diane F. Bosse

Index to Special Columns
Kohane’s Coverage Corner
Margo’s Musings on “Serious Injury”
 Audrey’s Angles on No Fault
Peiper on Property and Potpourri
Fijal’s Federal Focus
Jen’s Gems
Earl’s Pearls
Across Borders

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

 

12/17/10       Exeter Building Corp. v. Scottsdale Insurance Co.
Appellate Division, Second Department
Workmanship Exclusions Eliminate Duty to Defend General Contractor in Construction Defect Lawsuit
Exeter was the general contractor for two residential condominium developments.  Scottsdale issued several CGL policies to Exeter with classic “workmanship” exclusions located in Riverhead, removing coverage for "[t]hat particular part of real property on which you . . . are performing operations, if the property damage' arises out of those operations; or . . . [t]hat particular part of any property that must be restored, repaired, or replaced because your work' was incorrectly performed on it." The policies defined "your work," in relevant part, as "[w]ork or operations performed by you or on your behalf," including "[w]arranties or representations made at any time with respect to the fitness, quality, durability, performance or use of your work.'"
When Exeter was sued in a construction defect case, Scottsdale hired the Rosenberg Firm to defend Exeter.  Some 14 months after agreeing to provide Exeter with a defense subject to a reservation of rights, Scottsdale disclaimed coverage on several grounds, taking the position that it had no duty to defend against allegations of construction defects arising from the work product of Exeter and/or the subcontractors working on behalf of Exeter.
Exeter and the Rosenberg Firm brought this action for a judgment declaring, inter alia, that Scottsdale was obligated to defend and indemnify Exeter in the underlying action, that Scottsdale was obligated to pay the plaintiffs' reasonable attorneys' fees in the underlying action, and that Scottsdale breached its duty of good faith and fair dealing owed to the plaintiffs. Scottsdale moved, among other for summary judgment
The Second Department finds that the allegation fall within the workmanship exclusions and that the claims do not arise from an occurrence resulting in damage to property distinct from the work product of Exeter or its hired subcontractors, Scottsdale is not obligated to provide Exeter with a defense or to indemnify it in the underlying action.
Whether Scottsdale had properly compensated the Rosenberg firm for its work during the time that a defense was provided will have to be determined in a hearing.

12/16/10       International Contractors Corp. v. Illinois Union Ins. Co.
Appellate Division, Third Department
In E&O Claim Against Insurance Broker, Questions of Fact Abound as to Broker’s Duty to Report Accidents and Claims Precluding Summary Judgment
Johan and Mary established the plaintiff (“ICC”), a roofing business. They contacted CLG, an insurance broker, to secure a policy of liability insurance and umbrella policy.  CLG secured such policies with defendant Illinois Union Insurance Company (“Illinois”) and its parent company, ACE Westchester Specialty Group (“Ace”) collectively referenced as the Insurers. CLG was paid a commission.
During the period covered by the policies, plaintiff replaced a roof on a garage at the Spiro’s home.  Shortly afterwards, the Spiros and a house guest were killed by carbon monoxide poisoning, emanating from the home furnace.
A year later, the Estates of the deceased sued ICC, claiming that during the roofing work, ICC obstructed a vent and that contributed to the deaths.  CLG notified the Insurers and the insurers denied coverage.  ICC sued CLG and the Insurers.  The claims against CLG were for breach of contract, negligence and breach of fiduciary duty.
ICC claimed it gave reasonable notice to CLG of the occurrence at the Spiro residence and that CLG breached its obligations to plaintiff by failing and neglecting to timely report the occurrence to the Insurers.  CLG denied it breached the contract and argued that by the time CLG received notice, ICC had already breached it contracted with the Insurers, so whatever CLG did or didn’t do, was of no consequence.
There was conflicting evidence about the duties CLG had to ICC and whether there was a duty on the part of CLG, relied upon by ICC, to report claims on behalf of ICC.  There was also a question as to whether the delay in reporting the claim to CLG was reasonable (if CLG had a duty to report to the Insurers) so there is an issue as to whether CLG’s conduct, or lack of conduct, caused the loss of coverage.

12/14/10       York Restoration Corp. v. Solty's Construction, Inc.
Appellate Division, Second Department
Failure to Disclaim Coverage Does Not Create Coverage for Party That Is Not an Insured Under the Policy
York was hired to do construction work at a Manhattan premises and subcontracted masonry work to Solty’s.  Under a written contract, Solty's agreed to obtain CGL coverage and name York as an additional insured (“AI”) as well as to defend and indemnify York for all claims arising out of Solty’s work.

Solty’s secured a CG: policy from Sirius American Insurance Company (“Sirius”) and an employee of Solty’s was hurt at the job site on October 29, 2004. It is noted that York was not added to the policy as an AI until after the accident, in December.

Sirius denied coverage on late notice and after motions were made on the notice question, Sirius argued that York was not an insured on the day of the accident, in any event.
A party is not entitled to coverage if it is not named as an insured or additional insured on the face of the policy as of the date of the accident for which coverage is sought.  The fact that Sirius did not disclaim on that ground cannot create coverage where none exists.

12/14/10       Magistro v. Buttered Bagel, Inc.
Appellate Division, Second Department
Bagel Toasted by Its Late Notice.  Carrier’s Three Week Delay in Denying Coverage After Completing Investigation Not Untimely
In 2006, Buttered Bagel, Inc. (“Bagel”), was insured under a Special Businessowners Policy (hereinafter the policy), issued by Seneca Insurance Company.  It had the usual reporting requirements for notification of accident and loss. Here was the timetable:

• On June 29, 2006, while the policy was in effect, the infant plaintiff, Magistro  was hurt on Bagel’s premises when a table on which he was seated tipped over and landed on top of him;
• A personal injury action was commenced on his behalf in February 20, 2008, over 18 months later; 
• Bagel immediately notified its broker and the broker promptly notified Seneca and Seneca, commenced an investigation, this being its first notice of the accident;
• On February 27, Seneca hired a firm to investigate the claim;
• On March 4, 2008, Bagel's President, Fleischman, gave a written statement disclosing that an employee of Buttered Bagel had informed him of the incident within one week after it occurred, including that Magistro and his mother had left the scene in an ambulance. Fleischman said that he had not notified his insurance broker because the employee was unaware of the mother’s name;
• On March 8, Seneca received the investigator's report and forwarded it to "coverage counsel," and
• On March 27, Seneca denied coverage based on late reporting.

Bagel claimed that the denial was untimely.
The court found that Bagel, knowing of the accident and knowing that someone was taken away in an ambulance, had a duty to notify its carrier, even if it didn’t know of the injured party’s name.  The insurer had a duty to deny coverage promptly or lose its right to complain about the late report. 
Seneca did not have a readily apparent basis for disclaimer until it conducted an investigation into the underlying incident and Fleischman's awareness of the circumstances surrounding it.  Here, Seneca’s three week delay in denying coverage from the time it concluded its investigation (from March 8 to March 27), during which time it consulted with coverage counsel, was timely as a matter of law

12/14/10       City of New York v. First National Ins. Co. of America
Appellate Division, Second Department
Extrinsic Evidence (Deposition Testimony) May Be Considered When Determining Obligation to Defend
The City of New York established that the allegations of the underlying complaint triggered First National’s duty to defend.  Likewise, First National failed to establish that the policy exclusions brought the claims completely outside of coverage.
Extrinsic evidence in the form of deposition testimony from the personal injury action could be used to help establish the obligation to defend.

12/14/10       In the Matter of Progressive Preferred Ins. Co. v. Townsend
Appellate Division, Second Department
Denial of Coverage Based on “Livery Use Exclusion” Justified a Claim for Uninsured Motorists Benefits [But, We Suggest, Not From the Same Auto’s Policy]
Once a carrier denied coverage under the livery use exclusion provision of the insurance policy, the vehicle was rendered an uninsured motor vehicle under the policy, as required by Insurance Law § 3420(f)(1), and policyholder was entitled to seek uninsured motorist benefits.  That’s the short and sweet holding.
Editor’s Note:  The Court missed the boat on this one.  Thanks to our friend Joel Appelbaum for filling in the blanks.  Here’s the story behind the story:

• Karen Townsend was a passenger in a taxi;
• The taxi was owned and operated by Abdul Sheikh, the Progressive insured. Abdul;
• Abdul lost control of his car and hit another;
• Karen was hurt and made a bodily injury claim against Sheikh;
• Progressive denied coverage based on the “livery exclusion”;
• Karen made a claim under Sheikh's Uninsured Motorists Endorsement claiming that the cab was not insured;
• Progressive then moves for a permanent stay of arbitration, alleging that one cannot secure UM benefits from the same policy that was to insure the car that was not insured because of an exclusion;
• MVAIC contests the denial, asserting, based on Court of Appeals case law, that a “livery exclusion” cannot be used to deny UM coverage.
• The Appellate Division sides with MVAIC

 

It is submitted that the court did not get this one right.  First of all, Progressive was not using the livery exclusion to avoid its UM obligations, it relied on the livery exclusion to avoid its liability insurance obligations, as it was so entitled.  Secondly, and equally as importantly, the Appellate Division missed an “oh so clear” exclusion in the policy:

The term "uninsured motor vehicle" does not include a motor vehicle that
is:
(1) insured under the liability coverage of this policy; or
(2) owned by you, as the named insured, or your spouse residing in your
Household.

Since Sheikh owned the car, it cannot be considered an “uninsured motor vehicle” from which one can get benefits.  Moreover it was insured “under the liability coverage of this policy”.

“It’s as apparent as bedbugs in long underwear”, reflected Joel.  Who can argue?

12/7/10         Valley Forge Insurance Co. v. ACE American Insurance Co.
Appellate Division, Second Department
While Carrier That Failed to Disclaim May Share Coverage with Other Carriers, Issue Not Properly Before the Court on Appeal
The issue before the court below was whether or not ACE had an obligation to defend or indemnify Haks Engineers (“Haks”) in a personal injury action. ACE conceded that it did not timely disclaim coverage under Insurance Law § 3420(d) and was therefore obligated to defend and indemnify Haks in the underlying action. ACE argued here that its failure to timely disclaim with respect to Haks is irrelevant with respect to its dispute with the Valley Forge Insurance Company and other carriers over their responsibilities to Haks.  While that may or may not be true, that issue was not before the court below so it is not ripe for appellate review or declaration.

12/7/10         Progressive Northeastern Ins. Co. v. Lamba
Appellate Division, Second Department
Carrier Failed to Provide Sufficient Excuse for Late Disclaimer
Not much here to go on.  All we can tell is that the court found that the carrier’s disclaimer was late and the excuse offered for the lateness lacked merit.
Editor’s Note: For those less familiar with New York practice on disclaimers, the courts expect insurers to deny coverage quickly when the claim involves bodily injury or wrongful death.  Insurance Law Section 3420(d)(2) requires that disclaimers must be made as “soon as practicable” and common law tells us to strive to complete one’s investigation promptly and render a coverage opinion within 30 days.

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

12/21/10       Malloy v. Matute
Appellate Division, First Department
Multiple Factors Combine to Defeat Claim That 37-Year Old’s Knee Injuries Were Degenerative
Among the injuries the 37-year old plaintiff alleged he sustained in the accident were injuries to the right knee which defendant’s experts claimed were degenerative and not related to the accident.  However, plaintiff’s doctors concluded that the right knee injury was caused solely by the accident.  In addition to their examinations and reviews of MRIs, the fact that plaintiff underwent surgery just four months post-accident to repair, among other things, a tear of the medial meniscus and a partial tear of the anterior cruciate ligament, and that he had no prior knee problems, resulted in the Appellate Court reversing the trial court and denying defendant’s motion with respect to the right knee injury.

12/16/10       Krivit v. Pitula
Appellate Division, Third Department
Causally-Related Emotional Injury, With or Without Physical Injury, May Constitute Serious Injury
Defendant was driving a truck when he rear-ended plaintiff, who claimed neck injuries and post-traumatic stress disorder (“PTSD”).  On appeal, the trial court is reversed and the appellate court reiterates that PTSD may be a serious injury under the permanent loss of use of a body function or system, or a significant limitation of use categories, provided it is causally related to the accident and supported by objective medical evidence. 

This is a particularly interesting decision.  Plaintiff is a nurse practitioner who has the professional authority to diagnose and prescribed.  Defendants’ psychiatrist, who examined plaintiff and reviewed her medical records, opined that she had a “long and troubled history” suggesting depression, and noted that she had self-medicated with drugs including Prozac for years before the accident.  He opined that there was no objective evidence that her psychological condition was related to the accident.  His conclusions regarding plaintiff’s pre-accident history were not, however, based on medical records as few if any existed precisely because plaintiff admitted that much of her care prior to the accident was obtained from relatives in the medical field and thus informal and undocumented.  Therefore, experts for both parties had to base their opinions on the history that plaintiff herself gave to her post-accident providers and her deposition testimony.  Defendants met their burden, however, based on plaintiff’s admissions regarding her pre-existing conditions.

Plaintiff submitted reports and an affidavit from her treating psychiatrist, Panzarino, who opined that she suffers from PTSD, that she developed the condition as a result of the accident, and that the condition was permanent and significantly limited her ability to function both professionally and in her daily activities.  He described her initial symptoms to include panic attacks, agoraphobia, depression, nightmares, anorexia, and stated that her depression progressively worsened, requiring two hospitalizations (one from an attempted suicide), and an inability to work.  He stated that these are classic symptoms of PTSD.

The trial court found Panzarino’s opinion insufficient to raise triable issue of fact because it was based only on plaintiff’s subjective complaints.  However, Panzarino stated that objective diagnostic tests are not used to diagnose PTSD, that they would not be useful, and that the condition was instead diagnosed by a professional clinician’s assessment.  Defendants’ expert did not opine one way or the other.  The court noted that plaintiff’s symptoms were similar to those of the plaintiff in Chapman v. Capoccia, where the court held that PTSD may be demonstrated by symptoms objectively observed by treating physicians and the testimony of the injured plaintiff, without the need for diagnostic testing. 

As regards the issue of causality, Panzarino stated that plaintiff’s symptoms began immediately after the occurrence and he opined that the accident was precisely the type of traumatic event that would cause PTSD.  Moreover, he stated that before the accident plaintiff did not have problems functioning either professionally or in her daily living.  The fact that plaintiff may have had symptoms of depression and self-medicated before the accident was not indicative that she suffered from PTSD prior to the accident, even if this might have made her more susceptible.  He further noted that there was no evidence in the record that she had ever been diagnosed with depression and plaintiff testified that she was prescribed Prozac years before to assist with rehabilitation after she completed alcohol abuse treatment, but that had not had any other psychological or psychiatric treatment until after the accident.

The court found that there was a lack of evidence and/or conflicting evidence regarding pre-existing limitations and that the battle of the experts was for a jury to decide.  As such, the trial court was reversed and defendants’ motion denied.

12/14/10       Smiley v. Johnson
Appellate Division, Second Department
Finding of Significant ROM Limitations in Right Ankle After Foot Is Run Over Raise Triable Issues
While driving through a parking lot, defendant ran over 10-year old plaintiff’s right foot.  Defendant claimed she was not at fault and that plaintiff did not sustain a serious injury.  However, defendant’s submissions did not eliminate all triable issues with regard to liability, and plaintiff’s treating physician found significant range-of-motion limitations in plaintiff’s right ankle, both in contemporaneous and recent examinations.  As such, the decision of the trial court was affirmed and defendant’s motion was denied.

12/14/10       Bernier v. Torres
Appellate Division, Second Department
Unsworn MRI Is Admissible if Set Forth and Reviewed in Affirmed Report
The trial court granted defendant’s cross-motion for summary judgment and dismissed, as academic, plaintiff’s motion on this issue of liability.  On appeal, the trial court is reversed.

Plaintiff submitted sufficient evidence in admissible form, including the report of her orthopedic surgeon who reported decreased range-of-motion of the right shoulder post-surgery; a contemporaneous examination which reviewed MRIs of the cervical and lumbar spine revealing bulges and herniations, and of the shoulder revealing a rotator cuff tear, and opined the injuries were permanent and causally related; and the MRI reports which, although unsworn, were admissible because they had been reviewed in the affirmed report of plaintiff’s examining surgeon, to raise a triable issue and defeat defendant’s cross-motion.

On the issue of liability, defendant did not offer any non-negligent explanation as to why he rear-ended her vehicle while she was stopped at a stop sign.  Such a rear-end collision creates a prima facie case of negligence against the rear-ending driver so plaintiff was entitled to summary judgment on the issue of liability.

12/14/10       Sidibe v. Cordero
Appellate Division, First Department
Plaintiff Fails to Meet Standard for Finding of “Significant Disfigurement”
Defendants submitted the affirmed report of a plastic surgeon and photographs to show that the minor skin discoloration of the left check, left temple and near the right antihelical rim sustained by the infant plaintiff did not constitute a significant disfigurement.  In opposition, the plaintiff submitted recent photographs which did not meet the reasonable person standard for significant disfigurement (a reasonable person would view it as unattractive, objectionable or the subject of pity or scorn).  As such, the trial court was unanimously affirmed and summary judgment was granted to defendants.

12/14/10       Hospedales v. “John Doe”
Appellate Division, First Department
Excuse That “Unspecified Insurance Coverage Issue” Prevented Treatment Does Not Reasonably Explain a Complete Cessation of Treatment for Allegedly Permanent Injuries
On appeal, the trial court’s grant of summary judgment to defendants is unanimously affirmed as plaintiff failed to show that injuries were permanent or significant or causally related to the accident.

Defendants’ orthopedic surgeon examined plaintiff in October 2007 and diagnosed various strain/sprains, all resolved.  In opposition, plaintiff’s treating physician, who last saw plaintiff in March 2006, diagnosed cervical and lower back pain and herniations which he stated were all permanent.  However, the only explanation given for the complete cessation of treatment for these allegedly permanent injuries just eight months after the accident was the physician’s statement that it was due to unspecified insurance coverage issues.  This statement was conclusory and did not respond to defendants’ evidence that, 1½ years after plaintiff’s doctor last saw him, his injuries had resolved.

Plaintiff also failed to rebut defendants’ radiologist who determined that plaintiff’s disc herniations were the result of a degenerative condition and not the accident.  Plaintiff failed to offer any evidence to the contrary and, at best, only showed that eight months after the accident he still had cervical and low back pain.

Finally, plaintiff’s 90/180-day claim was refuted by his own bill of particulars which stated he was only confined one week to bed and one month to home.  Moreover, plaintiff’s physician’s report made no mention of not working or engaging in certain activities and therefore also failed to raise an issue of fact.

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

ARBITRATION
12/17/10       Applicant v. Respondent
Arbitrator Thomas J. McCorry, Erie County
EMG Testing Extension of Examination on Complex Patient Thus Medically Necessary
The Applicant sought reimbursement for upper EMG testing he performed on the eligible injured person as a result of a June 12, 2010, accident.  The testing was denied based upon a peer review conducted by Dr. Ray Shannon who opined that the testing was not medically necessary.  The basis for the opinion was that there was no documentation of any severe and progressive neurological deficits.  Also there was no documentation that results of the studies justified the test’s performance.

The Applicant testified and the assigned Arbitrator found his testimony more credible.  Specifically the Applicant testified that his patient’s case was complex and that the testing was not exotic or unusual.  Rather, it was merely an extension of his examination.

12/14/10       Applicant v. Respondent
Arbitrator Kent L. Benziger, Erie County
IME Report Bolsters Medical Necessity of Treatment
The Applicant sought reimbursement of chiropractic care rendered to the eligible injured person as a result of a November 6, 2007, accident.  The insurer denied treatment based upon an independent examination conducted by Brian Freindlich, D.C.  Mr. Freindlich recommended continued chiropractic care after the first examination.  The insurer then had the eligible injured person examined by Christopher Ferrante, D.C.  The assigned Arbitrator would not consider the report as pages from it were missing.  The insurer then had the eligible injured person examined by a third chiropractor, Sean Higgins, D.C. 

Mr. Higgins examined the eligible injured person a little over a year and a half post accident.  Mr. Higgins opined that while the eligible injured person received one to three days of relief after a chiropractic session, further care was no longer necessary.  This is because the care was not progressing as would be expected with chiropractic care.

The assigned Arbitrator set forth a lengthy discussion on maximum medical improvement and whether the conclusion Mr. Higgins reached was really that care was no longer necessary since it was not providing any curative or palliative benefit.  The issue was what degree of palliative care is necessary warranting reimbursement.  In this case, Mr. Higgins quantified that the eligible injured person received up to three days of relief after chiropractic care.  This was sufficient to establish medical necessity for the treatment.

LITIGATION

12/14/10       In the Matter of Andrew Carothers, MD, PC v. GEICO Indemnity Co.
Appellate Division, Second Department
Billing Company’s Testimony Insufficient To Establish Plaintiff’s Business Records
A company employee’s testimony that handled the plaintiff’s medical billing was insufficient to lay the foundation for the business record exception to the hearsay rule.  This is because the billing company did not create the records and there was no showing that the billing company’s employee had any understanding of plaintiff’s record keeping procedures.  Further, there was no showing that the billing company incorporated plaintiff’s records into its own relied or relied upon the records in its day to day operations.

The following are four decisions from the Appellate Term, Second Department, reversing the lower court and granting the insurer’s summary judgment motion as the plaintiff failed to rebut the presumption of lack of medical necessity by presenting medical evidence to address the IME or Peer Reviewer’s findings and conclusions:

12/10/10       IAV Medical Supply, Inc. a/a/o Julia Caldas v. Progressive Ins. Co.
Appellate Term, Second Department

12/10/10       Urban Radiology, PC a/a/o Andre Murat v. GEICO Gen. Ins. Co.
Appellate Term, Second Department
 
12/10/10       Complete Radiology, PC a/a/o Jeanene McGregor v. GEICO Ins. Co.
Appellate Term, Second Department

12/10/10       Vincent Med. Services, PC a/a/o Bailey Nimal v. GEICO Ins. Co.
Appellate Term, Second Department

12/10/10       Triangle R, Inc. a/a/o Godfrey Livermore v. Clarendon Ins. Co.
Appellate Term, Second Department
Incorrect Mailing Address to CC on Verification Request Does Not Render It a Nullity
The insurer demonstrated that it requested verification from plaintiff which remained outstanding thus rendering the action premature.  The court specifically rejected the plaintiff’s argument that the fact the insurer sent a copy of the verification request to the plaintiff’s assignor to the wrong address rendered the request a nullity.  This is because the verification was requested of the plaintiff which was sent to the proper address in a timely fashion.  Furthermore, the court rejected a mere denial of receipt of the verification request from plaintiff’s billing manager was sufficient to overcome a presumption of proper mailing and receipt of the request.

12/7/10         St. Barnabas Hosp. a/a/o Mariana Gonell v. Country Wide Ins. Co.
Appellate Division, Second Department
Despite Not Being Argued On Summary Judgment, Insurer Can Seek Modification of Judgment That Exceeds the Policy Limits
An insurer is not collaterally estopped from seeking to modify a judgment rendered on summary judgment on the basis that the judgment exceeds the policy limits.

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

12/21/10       Anand v Kapoor    
Court of Appeals
Risk of Being Struck by an Errant Golf Shot is an Assumed Risk; No Liability to the Shank-A-Potomus (credit to our friends at E-Trade)
In this case, Mr. Kapoor was playing a nine-hole golf course with his (then?) “friend” Mr. Anand.  As the Court of Appeals tells the story, Kapoor “shanked” -Court of Appeals description; not mine - his second shot, on the first hole, into the rough.  While retrieving it, Mr. Anand approached his ball which was uncannily located on the fairway.  In a true unexpected and unanticipated act, Mr. Kapoor actually struck his ball back toward the fairway.  Unfortunately, he hit it directly where Mr. Anand was standing.  As a result, Anand was struck in the eye and sustained permanent loss of vision.

To cheers of wildly inconsistent golfers everywhere, the Court of Appeals ruled that participants in recreational activities consent to risks that are “inherent in and arise out of the nature of the sport generally.”  While the Court of Appeals noted that assumption of the risk will not bar claims that arise from reckless or intentional conduct, Mr. Kapoor’s decision to hit the ball was not intentional or reckless.  Accordingly, Mr. Anand’s suit was dismissed

In a tip of the cap to all hackers, the Court of Appeals noted “being hit without warning by a ‘shanked’ shot while one searches for one’s own ball – reflects a commonly appreciated risk of golf.”  Indeed, the High Court has taken judicial notice of what those of us who have suffered through a six hour round at municipal course have known for years…there are far more bad golfers than there are good ones!

12/16/10       San Marco v. Village/Town of Mount Kisco
New York State Court of Appeals
New York High Court Speaks on Prior Written Notice Requirement for Municipal Defendants
Guest Columnist:  Paul J. Suozzi
The recent New York Court of Appeals decision in San Marco v. Village/Town of Mount Kisco, 2010 NY Slip Op 09197, issued December 16, 2010, has caused a buzz among lawyers who sue and defend municipalities in prior written notice cases.  Prior written notice statutes and ordinances have long been an absolute bar to recovery against a municipality where a plaintiff has tripped or slipped and fallen on a defective condition on some municipal property.  The usual rule, that an owner must have actual or constructive notice of a defective condition, does not apply when prior written notice is required.  There is no prior written notice defense if the municipality has created the dangerous condition by an affirmative act.  The 4-3 decision limits the defense and opens the door for more litigation.

In San Marco, the Court considered whether the prior written notice rule applied where the plaintiff slipped and fell on black ice that formed in a municipal parking area adjacent to a snow pile.  The snow was removed and salt applied early on Friday morning.  No further work was done before the following Saturday morning when the plaintiff fell on her way to work.  The temperature had risen above freezing for nineteen hours and then dropped between the snow removal and the fall.

In the majority opinion, written by Chief Judge Lippman, the Court distinguished two of its own prior decisions that held that the "affirmative creation" exception to prior written notice applies only where the action immediately results in the existence of a dangerous condition.  It held here that "the immediacy requirement for "pothole cases" should not be extended to cases involving hazards related to negligent snow removal."  It reasoned that "these statutes were never intended to and ought not to exempt a municipality from liability as a matter of law where a municipality's negligence in the maintenance of a municipally owned parking facility triggers the foreseeable development of black ice as soon as the temperature shifts."

The well reasoned dissent, authored by Judge Smith, starts by stating that "the whole point of written notice legislation is to protect municipalities from liability, even where they are negligent, unless they have received written notice of the hazard in question."  He criticizes the majority's analysis in distinguishing the prior cases involving negligent street repairs that later deteriorate, because that deterioration "may escape detection."  Judge Smith reasons that if the risk of deterioration isn't forseeable or known, there would be no liability even without a written notice defense.

One question now raised is how long after the snow is removed does the black ice have to form for it to be forseeable?  We just experienced a stretch of several overcast days when the temperature did not go above freezing, so melting and re-freeaing would not occur.  As a practical matter, municipalities may now have to either remove snow, so that melting and refreezing can't occur, or apply salt even on days when there is no further precipitation, when melting and re-freezing may occur.  This will likely burden already stretched municipal budgets.
Editor’s Note:  Paul J. Suozzi chairs our Municipal Liability Team and has been handling claims on behalf of cities, towns, villages, school districts, Sheriff’s offices and other public entities for 30 years.  We’re delighted to offer his insight into this significant Court of Appeals decision.

12/14/10       Dana v. Allstate New Jersey Insurance Corporation
Appellate Division, Second Department
Where Special Verdict Sets the Value of Plaintiff’s Injuries Within the Limits of the Tortfeasor’s Policy, No SUM Claim Exists.
This one seems relatively self explanatory.  Plaintiff sustained injuries in a rear-end collision that occurred in Kings County, New York.  Plaintiff eventually resolved his claim against the tortfeasor for $50,000; which was the limit of the tortfeasor’s auto policy. 

The instant SUM claim was then commenced, and the matter set down for a damages only trial which was held before any determination of liability.  At that time, the jury returned a verdict of $45,000 in damages for the plaintiff ($20,000 for past pain and suffering and $25,000 for future pain and suffering).  Upon receipt of the verdict, defendant immediately moved to dismiss the SUM claim holding that the damages sustained by plaintiff did not exceed the amount of available insurance under the tortfeasor’s policy. 

The Supreme Court agreed, and the Second Department affirmed, the dismissal of plaintiff’s SUM claim on the basis that he did not sustain injuries in excess of the amount of underlying insurance.  In so holding, the Second Department also noted (while applying New Jersey law) that Allstate’s decision to withhold SUM benefits was not in bad faith.  Clearly, where the claim did not even qualify for SUM coverage, the carrier had a valid reason for resisting the claim.

12/09/10       Bush v. Mechanicville Warehouse Corporation
Appellate Division, Third Department
Contractual Indemnity Claim Against an Employer MUST be Expressly Agreed To in a Written Contract
Plaintiff, Bush, sustained a serious head injury when he fell from a ladder while at a warehouse location owned by defendant Mechanicville.  At the time of the incident, Mr. Bush was acting within the scope of his employment with Yankee One Dollar Stores (“Yankee”).  Yankee, as explained herein, used the premises as a storage facility.

Well prior to the incident, Mechanicville leased the premises to Yankee’s sister corporation KR Flike Sales, Inc. (“Flike”).  As part of the one year lease agreement, Flike agreed to indemnify Mechanicville for any loss arising out of the use of the premises.   At the conclusion of the lease term, Flike continued to remain in possession of the premises, and continued to use the premises for business purposes.  At approximately the same time, Yankee began to likewise use the same space for its storage needs.  Notably, however, Mechanicville never renewed the lease with Flike, nor entered into a new lease with Yankee.

Now, Mechanicville seeks contractual indemnification from Yankee pursuant to the lease agreement originally executed between Mechanicville and Flike.  Yankee opposes the request on the basis that because Yankee never explicitly agreed to indemnify Mechanicville the request is barred by Section 11 of the Workers’ Compensation law. 

Initially, the Third Department concluded that the lease agreement would have automatically continued after the first year term expired due to Flike’s “holdover tenancy” status.  Moreover, where there was a continuation of occupancy of the premises and payment of rent under the lease, it could likewise be concluded that the terms of the original lease were assigned Yankee. 

Nevertheless, the Third Department stated that Section 11 of the Workers’ Compensation Law only permits contractual indemnification against an employer where the employer expressly agrees to provide indemnity in a written contract.  Here, because there was no evidence that Yankee ever expressly agreed to provide indemnity, no such right existed for the owner Mechanicville.  In so holding, the Third Department relied on the legislative history of Section 11 which was meant to “abrogate employer’s liability to third parties…except in the most limited circumstances.”  Accordingly, Mechanicville’s contractual indemnity claim against Yankee was dismissed. 

12/09/10       Rossett v. Wing Farm, Inc.
Appellate Division, Third Department
Under the Labor Law, a Tree Is Not a Structure
Plaintiff was injured when he was struck by falling tree limbs.  At the time of the incident, plaintiff was in the process of removing a tree in the course of his employment with the St. Lawrence County Highway Department.  The tree was being removed due to a perceived sight obstruction at a newly constructed driveway. 

In dismissing plaintiff’s Labor Law §§ 240(1) and 241(6) claims, respectively, the Third Department noted that a tree “is clearly not a building or structure” as is required by the Labor Law.  Rather, as the Court explained, it is a “product of nature.”  Moreover, because the removal of the tree could not be construed as “construction, or any other protected activity,” no such liability under Labor Law could attach.

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

12/09/10  Lumbermens Mutual Casualty Co. v. RGIS Specialists, LLC.
United States Court of Appeals for the Second Circuit
Applying Michigan Law – Meaning and Scope of Notice Provision in Excess Policy
This dispute arises out of an April 2003 accident in which non-party Robert Shore was struck and injured by a minivan owned by Camrac, doing business as Enterprise Rent-A-Car and driven by Robert Birardi in the course of his employment with RGIS Inventory Specialists, LLC [“RGIS”].

All three defendants, RGIS, Camrac and Birardi, were covered by a $2 million primary policy issued by USF & G, a non-party, and a $25 million excess liability policy issued by Lumbermens [“the excess policy”].  Birardi immediately reported the accident to his employer, RGIS, and RGIS immediately notified its third-party claims administrator, Gallagher Bassett.  Gallagher Basset then timely notified USF & G, the primary insurer.

Investigation into the accident indicated that the primary responsibility for the accident was the injured plaintiff, Robert Shore.  The accident took place in Middlebury, Connecticut in the early morning of April 8, 2003.  The travel portion of the roadway had been restricted due to ongoing snow removal operations and Birardi was driving well below the posted speed limit.  The police report indicated that after cresting a hill, the Birardi vehicle suddenly encountered Shore who was dressed in dark clothing and, in violation on of Connecticut law, was walking westbound in the narrow plowed portion of the eastbound travel lane of the highway. Birardi had no opportunity to brake or avoid a collision, and his vehicle immediately struck Shore and threw him to the side of the road.

Based on its investigation Gallagher Bassett assessed liability of the insureds at 0%.  In addition, defense counsel reported that it estimated that the full value of Shore’s claim, without regard to comparative fault, as being between $1.25 million and $4 million, noting that if the plaintiff was found to be more than 50% at fault, his comparative fault would act as a bar to recovery.  Counsel also estimated that the likelihood of the insureds prevailing at trial was 90%.

In June, 2006 a litigation report prepared by defense counsel reported that the evidence now showed that the accident occurred halfway down the hill, rather than halfway up the hill as initially thought.  At that point counsel opined that the chances or securing a defense verdict was now reduced to 70%.  Plaintiff’s expert had valued the claim at $3.7 million.

The parties participated in mediation in June 2007.  At that time defense counsel maintained his position that there remained a strong chance of securing defense verdict. Plaintiff’s counsel stated at that time that he was confident that the jury would return a verdict for plaintiff, and estimated only a 20-25% reduction in damages for comparative fault. Plaintiff’s demand at the mediation was $9.5 million and later lowered to $7.5 million. Defense counsel made two settlement offers of $50,000 and $100,000.

Nearly five years after the accident, and on the eve of trial, RGIS through its primary insurer and Gallagher Bassett notified Lumbermens of the Shore action. On the same day Lumbermens issued a reservation of rights letter stating that Lumbermens had no obligation to respond to this matter until such time as all underlying limits are properly exhausted. Lumbermens thereafter issued a disclaimer based on late notice denying defense and indemnification to the insureds.

The Shore action proceeded to trial and a jury returned a verdict in favor of plaintiff assessing 100% of liability to the insureds and awarding approximately $11 million in damages.  Shortly thereafter Lumbermens commenced its declaratory judgment action asserting its position that the insureds are not entitled to defense or indemnification as a result of their failure to provide timely notice.

The Lumbermens excess policy requires notice of an occurrence or an offense whenever it appears likely it will result in a claim involving excess coverage, and notice of a claim or suit whenever it appears likely that such claim or suit will involve excess coverage.  The excess policy also requires copies of demands, notices, summonses, or legal papers received in connection to a claim or suit to be furnished only whenever it appears likely that the claim will involve excess coverage or where Lumbermens has assumed the duty to defend the insured.

The district court granted judgment for defendants and denied summary judgment for Lumbermens, finding that under Michigan law defendants provided timely notice within the meaning of the excess policy.  The district court based its decision on the reports stating that liability against the defendant was unlikely.  The court concluded that defendants had no obligation to notify Lumbermens until the accident claim or suit “appeared probable, or more likely than not, to exceed more than $2 million.”  The court also rejected Lumbermens claims of prejudice as unsupported and speculative. Lumbermens appealed the decision and the underlying action settled for $6 million prior to appeal.

On appeal, since the policy was issued to RGIS in Michigan, the Second Circuit also applied Michigan law to address the late notice issue.  In affirming the district courts decision, the court noted that the answer to the notice issue turns on the language of the notice provision itself and the reasonableness of defendants’ belief that it was highly unlikely that the primary insurance policy limits would be exhausted. 

In analyzing the notice provision of the excess policy the court noted that the language, on its face, does not require notice of all claims for amounts that exceed the primary policy limits of $2 million. Rather, the court said, the notice provision plainly refers to the likelihood of the excess policy actually being implicated through liability once the primary coverage is exhausted. The court also noted that the excess policy further limits notification duties to those specific circumstances in which it “appears likely” that a claim “will” involve the excess policy. 

The court concluded that under the express terms of the excess policy’s notice provision defendants were required to provide notice to Lumbermens only when a claim or occurrence appeared probable – as in more likely than not – to exceed the primary policy’s $2 million limits.

Judge Kearse dissented opining that the majority reaches its conclusion principally by emphasizing the word “will,” stating that the policy only requires notice when it “appears likely” that a claim “will” involve excess coverage. The dissent argues that the majority’s rational both ignores the normal breadth of the word “involve[s]” and confuses the concepts of claims and liability.  The dissenting opinion points out that  the policy does not say that notice is to be given when it appears likely that the insured will be ‘liable’ for an amount involving excess coverage.  Rather, it requires notice when it appears likely that an occurrence “will result in a claim involving” the excess coverage, and requires notice when a claim is made or a suit is brought and it appears likely that such claim or suit will involve the excess coverage.

Interpreting Michigan law the dissenting justice was of the opinion that some focus must be on the magnitude of the claim, not solely on the likelihood of finding liability. Further stating that although the majority views it as unnecessary to address the question of whether Lumbermens was prejudiced by the lack of notice, ‘prejudice to the rights of the insurer is a necessary element to be considered in determining whether there has been an unreasonable delay in giving notice of an accident to the insurer as soon as practicable.  The dissent believed that due to the seriousness of the injuries Lumbermens would have had an incentive to attempt to secure a settlement and that there was no basis for the district court to reject a claim of prejudice as a matter of law.

Editor’s Note:  The following is a case from the Eleventh Circuit which was brought to our attention by John Intondi of AXIS Insurance.  Thank you, John.

08/24/10  Vallee v. State Farm Automobile Insurance Company
United States Court of Appeals for the Eleventh Circuit
Applying Florida Law – Bad Faith and Handling Multiple Claims in Excess of Limits
Maria Vallee was fatally injured as the result of an automobile accident caused by Marvin Hood.  As a result of the accident seven others were also injured.  State Farm insured Mr. Hood at the time of the accident and the policy had minimum limits of $10,000/$20,000.

After being put on notice of the accident State Farm contacted all the potential parties in an effort to settle the claims.  All parties responded except the representing Maria Vallee and State Farm indicated that it was willing to settle the claim for the policy limits.

Ms. Vallee’s estate never made a formal demand to State Farm and State Farm never made a formal offer prior to attendance at a settlement conference.  In addition there was no indication of any urgency by Vallee to settle the claim. 

A settlement conference was scheduled approximately four and half months after State Farm received notice of the accident. During the conference it was agreed that Vallee should received the per-person limit of $10,000 from State Farm and the other parties would split the remainder.  Vallee’s counsel advised the estate to reject the policy limits settlement offer because she may wish to reserve any bad faith claim against State Farm because of the delay in paying her claim.

After rejecting the settlement offer, Vallee sued Hood directly in state court and received a judgment of nearly $4 million.  Thereafter, Hood assigned his right in any bad faith insurance claim to Vallee.  Vallee then filed a declaratory judgment action asserting Hood’s rights in an attempt to recover the excess of the judgment over the insurance coverage. 

Applying Florida law the Eleventh Circuit noted that the burden of proof was with Valle to produce evidence from which a jury could infer that State Farm’s conduct in this case unreasonably exposed Hood to excess liability.  Vallee maintained that State Farm should have resolved Hood’s liability to Vallee prior to the settlement conference.

The court acknowledged that in limited circumstances an insurer’s delay in settling claim on behalf of an insured can contribute to a bad faith claim; however, noted that any willful and unreasonable delay must also increase the risk of the insured’s exposure to excess liability and the unreasonableness must be from the perspective of the insured, not unreasonable from the perspective of the third-party claimant.

In rendering its decision the court noted that Vallee had offered no evidence to demonstrate that State Farm knew of should have known that its four and a half month resolution of a policy proceeds distribution in a fatal car accident case involving eight potential claimants increased Hood’s exposure to excess liability.

The court pointed out that Vallee made neither a formal settlement demand to State Farm nor indicated in any way a unique urgency to the resolution of her claim. In fact, Vallee’s conduct indicated the opposite, she agreed to participate and did participate in the collective settlement negotiations right up until the moment she rejected State Farm’s policy limits offer.

The court found no decisional law in Florida permitting a third-party claimant to participate in settlement negotiations, reject a policy-limits settlement offer, claim post-hoc that the offer was untimely, and prevail in a bad faith action against the insurer

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

12/13/10       Illinois Natl. Ins. Co. v. Everest Natl. Ins. Co.
Supreme Court, New York County
No Coverage Where Purported Additional Insureds Failed to Provide Timely Notice of Lawsuit
This case arises out of a request for coverage made by plaintiff’s insureds, Broadway Management Co., Inc. (“Broadway”) and HRH Construction Co., Inc. (“HRH”), under a policy issued by defendant to C&M Interiors. 

Defendant disclaimed coverage to Broadway and HRH asserting that it never received a document evidencing C&M Interiors’ agreement to procure insurance coverage for them and, even if it had, the notice provided by Broadway and HRH was late.  Notably, this is a pre-prejudice rule case. 

In reply, plaintiff asserted that defendant’s policy provided that “you must see to it that we are notified as soon as practicable of an ‘occurrence’ or an offense which may result in a claim.”  Thus, as Broadway and HRH were additional insureds, and not “you,” as the term was used in the policy, they were under no obligation to notify defendant.  In the alternative, even if Broadway and HRH were under an obligation to provide notice, they complied with this obligation via a letter sent by certified mail on July 27, 2007.

The court concluded that irrespective of whether Broadway and HRH could establish additional insured status under defendant’s policy, defendant was entitled to summary judgment as their notice was late.  The court reasoned that the notice requirement in the policy applied equally to both primary and additional insureds, and notice by one would not ordinarily be imputed to the other.  Thus, as Broadway and HRH, by their own admission, sent notice to defendant no earlier than July 27, 2007, some twelve months after the commencement of the underlying action, the notice was late.  Moreover, neither Broadway nor HRH offered any explanation or justification for the delay.     

12/10/10       Carden v. Allstate Ins. Co.
Supreme Court, Westchester County
Court Awards Consequential Damages Based on the Insurer’s Bad Faith in Settling the Claim
Plaintiffs’ home in Pelham, New York was substantially damaged by fire.  At the time of the loss, plaintiffs were insured under a policy issued by defendant.  Due to the damage, plaintiffs could no longer reside in their home and were required to rent another residence.    

After being notified of the fire, defendant offered to settle the loss for $265,000.  This offer was rejected.  In the meantime, due to damage to the roof, mold became an additional concern.  Plaintiffs hired an environmental company to assess the problem.  Based on the company’s assessment, the entire home had to be gutted to repair the mold issue.  Accordingly, in June 2007, defendant revised its estimate and offered plaintiffs $575,000, which again they rejected. 

Plaintiffs then demanded that the loss be determined by an appraiser pursuant to the policy (plaintiff’s appraiser estimated the cost to repair to be $1,069,849 while defendant’s appraiser estimated it at $750,320).  In December 2007, an Umpire was appointed determine the cost to repair.  He estimated it at $832,982. 

In the spring of 2008, defendant agreed to pay the Umpire’s amount and the house was reconstructed.  During reconstruction, the plaintiffs’ driveway and landscaping were damaged, which defendant refused to reimburse.  Further, as a result of the delays in reconstruction, plaintiffs were forced to rent another residence for 18 months (the policy only covered 12 months). 

Thereafter, plaintiffs commenced this action asserting Four Causes of Action.  The First and Fourth sought reimbursement of expenses plaintiffs assert were covered under the policy and the second and third sought consequential damages based on defendant’s delay in settling the claim.  The court addressed the covered claims first.    

The First Cause of Action sought reimbursement for the expense of removal of debris and for damage to plaintiffs’ driveway and landscaping during reconstruction.  The court granted plaintiffs summary judgment as to liability on this claim stating that the policy provides “Property We Cover Under Coverage A: 1. Your dwelling including attached structures.”  As the term structure was not defined in the policy, and a driveway requires a building permit, the court construed the ambiguity against the insurer.  Notably, the court indicated that defendant conceded the debris removal and damage to landscaping was covered. 

The Fourth Cause of Action sought reimbursement of rental charges plaintiff incurred during the first 12 months to store their possessions.  The court denied defendants’ motion for summary judgment dismissing this claim noting that the reasonableness of these expenses was a question of fact.

The Second Cause of Action sought damages in excess of the 12 month ALE (additional living expenses) provided for in the policy.  Likewise, the Third Cause of Action sought recovery of expenses related to the mold inspection and appraisal.  Both damages admittedly were not covered under the policy.  The court noted that were an insurer breaches its duty to investigate, bargain and settle claims in good faith, consequential damages for breach of contract may be covered not limited by the amount specified in the insurance policy.  It then held that plaintiffs suffered damage due to delay in reconstruction of their home due to defendant’s bad faith in settling the claim.  As defendant failed to submit evidence that raised a question of fact, the court granted summary judgment on these claims for plaintiffs. 

Peiper’s Point  Thanks to Jen Ehman for reporting on this issue, but I couldn’t stop myself from tossing my two cents into the discussion. What we see in this case is exactly what we feared from the Bi-Economy decision from February of 2008.  Where there is a delay, of any kind, that is related to a good faith effort to adjust a loss, the insured will raise Bi-Economy in an attempt to cover the losses that naturally accrue as an adjustment is challenged. 

In this case, notice that the consequential damages had absolutely nothing to do with a coverage issue.  Rather, they arose from delays as the two sides argued over the value of the loss.  This is exactly what the appraisal provision of the policy is meant to resolve –and, in fact, in this case did resolve.

For more than a hundred years, the appraisal provision is a built in “dispute-ender” so that arguments over value can be efficiently and cheaply resolved.  Where there was no issue as to the coverage, there likewise should have been no violation of the good faith and fair dealing obligation that is at the hallmark of any extra-contractual claim.  Again, the matter was resolved exactly as it should have been under the clear terms of the policy and the Insurance Law.

However, despite that the fact the carrier negotiated the matter in good faith, never erroneously asserted coverage defenses, and availed itself of the protections of the appraisal provision which is required to be in all policies by the Insurance Law, the Trial Court has ruled that Allstate breached its duty of good faith and fair dealing.  As such, the court held that Allstate ought to be required to pay for extra-contractual expenses that accrued because of the good faith delay.  If upheld, not only does this decision have the potential to expand the reaches of Bi-Economy, but more importantly, holds hostage the carrier’s ability to disagree (in good faith) on the valuation of a loss.      

12/9/10         Massacor, Inc. v. Associated Mut. Ins. Coop.
Supreme Court, Queens County
Court Refuses to Dismiss Plaintiff’s Complaint for Loss of Earnings Under a Policy Issued by Defendant
Plaintiff, the operator of a restaurant in Flushing, New York, suffered a fire loss.  The policy issued by defendant stated that it would provide coverage for “Loss of Earnings.”  As there was no dispute that coverage was triggered, the sole issue in this case was the amount of the indemnification defendant owed under the Loss of Earning Endorsement. 

The relevant Endorsement provided:  “We [defendant] pay for Loss of Earnings when your earnings are interrupted by a covered cause of loss…”  “We [defendant] pay for:  Your actual loss of earnings resulting directly from necessary interruption of business.  This loss will not be more than the reduction in earnings less charges and expenses that do not necessarily continue.”  The Policy went on to define “Earnings” to be “the total of net profit, payroll expenses, taxes, interest, rents and all other operating expenses earned by the business.”

After considering defendant’s motion to dismiss the complaint, the court denied the motion in its entirety.  First, defendant argued that it had no obligation to indemnify the plaintiff for lost profits since plaintiff operated the restaurant at a loss in 2005 and 2006 (the two years prior to the fire) due to major start-up costs.  The court held, based on its interpretation of the policy, that plaintiff did not have to show a profit before charges and expenses were recoverable.  According to the court, the policy protected “earnings” of which net profit formed just a part.

Second, defendant denied payment for sums pursuant to a $200,000 promissory note and a bank loan based on plaintiff’s failure to provide proof of payment.  The court held that there was no requirement that proof of payment be supplied.   

Third, the court found an issue of fact as to whether defendant breached the policy by failing to indemnify the plaintiff for rent owed pursuant to its lease.  The court reasoned that although the lease agreement provided that plaintiff was under no obligation to pay rent after the fire, the plaintiff had reached an agreement with the landlord wherein she would continue to pay rent in exchange for his agreement not to terminate the lease. 

Lastly, the count found an issue of fact regarding whether defendant breached the policy by refusing to cover payroll expenses after the fire.  The court reasoned that merely because defendant’s accountant did not find proof that the salaries were actually paid after the fire did not mean that plaintiff could not recover.  The court pointed to plaintiff’s testimony that it needed the insurance money to pay the salaries. 

12/7/10         Vlachos v. Zurich N. Am.
Supreme Court, Suffolk County
Where Plaintiff Fails to Provide Notice of a Potential Claim Prior to Expiration of the Claims-Made Policy and the 60-Day Extended Reporting Period, there is No Coverage For the Claim
Darin Gioeli contacted plaintiff concerning representation in a wrongful conviction action against the State of New York.  Plaintiff agreed to represent Mr. Gioeli and, on his behalf, commenced an action on or about August 5, 2003.  On December 11, 2003, the State served an answer which included the affirmative defense that Mr. Gioeli failed to comply with the pleading requirements of Court of Claims Act § 8-b, which required the inclusion of certain enumerated documents.  On September 9, 2005, the State moved for summary judgment dismissing the complaint based on this affirmative defense.  On March 20, 2006, the court granted the motion and, on April 24, 2007, the Appellate Division affirmed the decision. 

On May 14, 2007, plaintiff finally placed defendant, its malpractice insurance carrier, on notice of a potential claim.  Defendant disclaimed coverage on the ground that coverage terminated before notice of a potential claim was given or an actual claim was reported.  Apparently, defendant issued plaintiff a claims-made policy which was effective from March 20, 2006 through March 20, 2007; however, it was cancelled effective July 19, 2006 for non-payment of premiums. 

The court held that as a general rule claims-made coverage may not be provided in any policy issued or renewed in New York, with the exception of specific enumerated risks, including professional liability insurance.  The court then went on to hold that defendant established its entitlement to summary judgment.  According to the court, it was undisputed that the Gioeli action was commenced after the claims-made policy expired and beyond the automatic 60-day extended reporting period.  Thus, the only way plaintiff could have obtained coverage in this matter would have been to provide the insurer with notice of a potential claim prior to expiration; however, there was no evidence that such notice was provided during the policy period.

11/23/10       Encompass Ins. Co. v. Adelis
Supreme Court, Nassau County
Insured Pled Guilty to Assault in the Third Degree and Admitted that he Intentionally Caused the Injury; however, the Court Determines that the Incident was an Occurrence as the Term was Defined the Policy and the Insurer Failed to Timely Disclaim on the Intentional Acts Exclusion
In a very interesting case, defendant James Adelis was involved in an altercation with Kevin Smith, Jr. at a premises being operated by co-defendant A-Leet Enterprises d/b/a Bogarts.  As a result of the altercation, Mr. Adelis pled guilty to Assault in the Second Degree.  When asked to describe what happed while allocating his plea, Mr. Adelis testified “well…we got into a little argument with some other guys at a bar and things turned around.  We were outside, I saw my friend get knocked to the floor.  I turned around and one of guys was coming at me and I hit him.”  The Court then inquired, “[w]hen you hit him, was it your intention to cause him to have an injury?” to which Mr. Adelis responded, “Yes, your Honor.” 

Thereafter, Mr. Smith commenced an action against Mr. Adelis and Bogarts alleging intentional torts and negligence.  Plaintiff, Mr. Adelis’ Homeowners Insurer, reserved its rights citing the policy’s exclusion for “bodily injury caused by intentional and criminal acts.” 

In considering plaintiff’s motion for summary judgment, the court held that “[h]aving pled guilty to assault in the third degree, the defendant James Adelis is estopped from relitigating his intent in the personal injury action.”  Nevertheless, the court held plaintiff never disclaimed coverage for James Adelis and, even assuming the declaratory judgment complaint constituted a disclaimer, it was untimely as a matter of law.  Plaintiff defended Mr. Adelis in the underlying action for over two years and that action was commenced over one year after the defendant pled guilty to assault in the third degree.  Thus, the court went on to hold the pivotal question here was whether coverage existed under the policy but for the exclusion relied upon by plaintiff.  

It held the subject policy covers a claim or suit for “personal injury” or “bodily injury” caused by an “occurrence.”  An “occurrence” is defined as, inter alia, “[a]n offense, including a series of related offenses, committed during the policy period which results in personal injuries.”  According to the court, Mr. Adelis’ alleged acts for which coverage is sought under the policy fit the description of an “occurrence.”  Thus, coverage existed for Mr. Adelis’ acts. 

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

  WHEN THE OTHER SIDE HAS NO ATTORNEY – STOP!

Counsel and adjusters periodically run into situations where a claimant’s counsel is discharged, ill, disabled or otherwise unable to continue the representation.  A recent case that went all the way up to the New York State Court of Appeals suggests that the best advice in such situations is to comply with local civil procedure rules and stop proceedings until the representation issue is clarified.  In Moray v. Koven & Krause, Esqs., 2010 N.Y. LEXIS 3025 (October 26, 2010), the Court of Appeals reviewed the law and concepts applicable in such situations where a party’s attorney dies, becomes physically or mentally disabled, suspended or otherwise unable to continue the representation.

The plaintiff, Moray, commenced an action for legal malpractice against the defendant law firm by filing a summons with notice which identified a certain attorney as plaintiff’s counsel.  The defendant served that attorney with a notice of appearance and demand for a complaint and, when the complaint was not forthcoming, moved to dismiss the action pursuant to CPLR 3012(b) in April 2008.  On the return date of the motion, defendant’s counsel had a conversation with the erstwhile plaintiff attorney who advised that the attorney had been suspended from the practice of law several months earlier.  Defense counsel agreed to adjourn the motion to dismiss for a few weeks.  The designated plaintiff attorney further alleged that he understood that the plaintiff had diligently been pursuing new counsel, had not yet retained a new attorney, and was “continuing to look for a new lawyer”. 

In June 2008, the trial court granted the motion and dismissed the action for non-service of the complaint observing that the plaintiff had neither demonstrated a meritorious cause of action nor offered a reasonable excuse for the default as was required to prevent a dismissal under CPLR 3012(b).  The trial court declined to give the plaintiff additional time to retain new counsel, correctly noting that the plaintiff had already enjoyed a grace period of approximately five months after first being advised by the original counsel of the need to select and retain new counsel. 

On the appeal, the plaintiff was represented by counsel who invoked CPLR 321(c) which requires that if an attorney dies, becomes physically or mentally incapacitated, or is removed, suspended or otherwise becomes disabled at any time before a judgment, no further proceedings shall be taken in the action against the party for whom he appeared without leave of court until 30 days after notice to appoint another attorney has been served upon that party either personally or in such manner as the court may direct.  The Appellate Division had affirmed the trial court, but the New York Court of Appeals granted permission to appeal and reversed the outcome.

The Court of Appeals noted that CPLR 321(c) is straightforward and indicates that, if an attorney becomes disabled, no further proceedings can be taken against that party without leave of court until 30 days after notice to appoint another attorney has been served.  In effect, it grants an “automatic stay” of the action which goes into effect with respect to the party for whom the attorney appeared.  During the “stay” imposed by CPLR 321(c), no proceedings against the party can have any adverse effect.  The statute is meant to afford a litigant who, through no act or fault of his own, has been deprived of the services of counsel a reasonable opportunity to obtain new counsel before further proceedings occur.

The lawsuit was therefore “automatically stayed” as of January 2008, the date when plaintiff’s attorney was suspended from the practice of law.  Critically,  defendant had never acted to “lift the stay” by serving a notice upon the plaintiff to appoint new counsel within 30 days.  Thus, the original trial court order dismissing the action was vacated.

Defendant asserted two primary grounds on appeal.  First, CPLR 321(c) does permit further proceedings against a non-represented party “by leave of court” and that the trial court inherently exercised this discretion to grant the motion even though plaintiff’s counsel was suspended from the practice of law.  The Court of Appeals, however, went to the legislative notes on CPLR 321(c) and concluded that the words “without leave of court” were designed to allow the court to vary the 30-day rule in cases where a stay of proceedings would produce undue hardship to the opposing party, as where the time to take an appeal or other action would run or where a provisional remedy is sought and speed is essential.  Moreover, the trial court in its decision never mentioned CPLR 321(c) or articulated any reason for exercising discretion to loosen the 30-day notice requirement.

Defendant also argued that the plaintiff was foreclosed from asserting CPLR 321(c) for the first time on appeal, which was one of the bases for the Appellate Division affirmance.  The Court of Appeals candidly noted that they do not as a general rule resolve cases on grounds not raised in the courts below, but bypassed that rule in the “unusual context” presented.  They noted that the Court was dealing with a statute intended to protect litigants faced with an unexpected loss of legal representation.  Furthermore, all it took to end the “automatic stay” would have been service by the defendant of a 30-day notice on the affected party to eventually proceed with the motion to dismiss in some fashion.

The lessons of Moray are, first, do not proceed further in court if for some reason opposing counsel is rendered disabled or incapacitated.  Second, comply with the CPLR or other local statutes and serve appropriate notices and motions to start the process and time countdown allowing a party any additional time to retain new counsel before going forward with substantive proceedings.  

It should also be recognized that courts may be sympathetic to a party left without counsel ostensibly through “no fault of its own”, a position essentially adopted by no less than the New York State Court of Appeals.  In this case, acting precipitously to take the default dismissing the action ultimately failed, and resulted in two rounds of extensive (and presumably expensive) appeal proceedings. 

It is also incumbent upon counsel to investigate and get the real facts if question arises as to whether opposing counsel is incapacitated, medically disabled or not able to continue for some reason and then act upon that information to obtain a definitive response and proceed accordingly.  That is essentially what the 30 day notice in the CPLR is intended to accomplish. 

ACROSS BORDERS
Courtesy of the FDCC Website
www.thefederation.org
12/09/10          Wycoff v. Grace Community Church
Court of Appeals of Colorado, Division Six
Church Wavier Form was Legally Insufficient to Release Plaintiff’s Personal Injury Claims
Plaintiff was seventeen years old at the time of the accident. Though not a church member, she was one of sixty youths to attend an overnight event at Grace Community Church called “Winterama 2005.” Her father paid for her to attend, and plaintiff and her mother signed a one-page “registration and information” form which stated, in part: “I will not hold Grace Community Church or it’s [sic] participants responsible for any liability which may result from participation.” Once Winterama activity involved riding an inner tube tied to an ATV driving around a frozen lake. On plaintiff’s second loop, her inner tube crashed into the boulder, and plaintiff broke her back. At trial, the court instructed the jury to disregard this alleged release. After the jury found in favor of the plaintiff, the church appealed. In 2003, Colorado passed a statute allowing parents to release or waive their children’s prospective claims for negligence, provided that the statute does not permit a parent to waive a child’s prospective claim for willful and wonton, reckless, or grossly negligent acts or omissions. The court of appeals found that the parties had ample opportunity to present evidence to the jury regarding plaintiff’s mother’s “voluntary and informed” consent. The church could have called plaintiff’s mother to testify, but chose not to. Further, there is no information in the church’s registration form describing the event activities or their associated risks. In every Colorado Supreme Court case upholding an exculpatory clause, the clause contained some reference to waiving personal injury claims based on the activity being engaged in. The church’s form did not do so, and it did not provide parents with information allowing them to assess the degree of risk and the extent of possible injuries from any activity. The form was legally insufficient to release plaintiff’s personal injury claims.
Submitted by: Christie Law Group, PLLC

12/07/10          Lane v. Metropolitan Property & Casualty Ins. Co,
Connecticut Appellate Court
An Insured with Two Separate Uninsured Motorist Insurance Policies Covering the Same Vehicle is Not Barred from Collecting the Policy Limits of Both Policies Combined
The plaintiff was injured while driving on the highway when a piece of an unidentified vehicle entered his pickup truck through the windshield. The plaintiff had recently purchased an insurance policy in order to consolidate his previous vehicle insurance with that of his new wife. The plaintiff did not cancel his old insurance policy, and there was a 30-day window under which his truck was covered by both polices. Both policies included uninsured and underinsured motorist coverage with a per person limit of $100,000. The plaintiff’s damages exceed $200,000, and he sought the $100,000 coverage from each insurance company. The court first held that the related Connecticut statute did not prohibit the plaintiff from recovering the $100,000 policy limits from each insurance company. Plaintiff paid for each separate policy, and the insurance companies were separately compensated for assuming the risk of his injury. Therefore, a total of $200,000 in recovery would not result in a windfall to the plaintiff or prejudice to either defendant. Further, because of the state’s statutes and regulations, the court held that “other insurance” clauses attempting to limit total liability to the single coverage with the highest limit of liability were invalid.
Submitted by: Christie Law Group, PLLC
Editor’s Note  In NY, there is a non-stacking provision which would lead to a different result.
REPORTED DECISIONS

Valley Forge Insurance Co. v. ACE American Insurance Co.

London Fischer LLP, New York, N.Y. (Daniel Zemann, Jr., and
Russell J. McBrearty of counsel), for appellant.
Carroll, McNulty & Kull, LLC, New York, N.Y. (Ann Odelson
of counsel), for plaintiffs-respondents.
Goetz Fitzpatrick, LLP, New York, N.Y. (Ellen August of
counsel), for defendant-respondent Haks
Engineers, P.C.

DECISION & ORDER
In an action, inter alia, for a judgment declaring that the defendant ACE American Insurance Company is obligated to defend and indemnify the defendant Haks Engineers, P.C., in an underlying personal injury action entitled Cunha v City of New York, commenced in the Supreme Court, Kings County, under Index No. 49367/02, the defendant ACE American Insurance Company appeals from an order of the Supreme Court, Kings County (Ambrosio, J.), dated April 27, 2009, which granted the separate motions of the defendant Haks Engineers, P.C., and the plaintiffs for summary judgment declaring that it is obligated to defend and indemnify Haks Engineers, P.C., in the underlying personal injury action, and denied its cross motion for summary judgment declaring that it is not required to defend and indemnify Haks Engineers, P.C., in the underlying personal injury action.
ORDERED that the order is affirmed, with one bill of costs to the plaintiffs and to the defendant Haks Engineers, P.C., appearing separately and filing separate briefs, and the matter is remitted to the Supreme Court, Kings County, for the entry of an appropriate declaratory judgment.
The motions and cross motion for summary judgment in the Supreme Court related solely to whether the defendant ACE American Insurance Company (hereinafter ACE) was required to defend and indemnify its insured, the defendant Haks Engineers, P.C. (hereinafter Haks), in the underlying personal injury action, and the order appealed from determined only ACE's obligations to Haks. On appeal, ACE concedes that it did not timely disclaim coverage under Insurance Law § 3420(d) and was therefore obligated to defend and indemnify Haks in the underlying action. Nonetheless, ACE argues that its failure to timely disclaim with respect to Haks is irrelevant with respect to its dispute with the plaintiffs over their respective responsibilities to Haks (see Bovis Lend Lease LMB, Inc. v Royal Surplus Lines Ins. Co., 27 AD3d 84, 90-92).
The relief ACE seeks on this appeal, essentially a declaration of its rights with respect to the plaintiffs, rather than with respect to Haks, was not the subject of the motions in the Supreme Court. Consequently, ACE's current contentions are not properly before this Court.
We remit the matter to the Supreme Court, Kings County, for the entry of an appropriate declaratory judgment (see Lanza v Wagner, 11 NY2d 317, 334, appeal dismissed 371 US 74, cert denied 371 US 901).

Progressive Northeastern Ins. Co. v. Lamba

Carman, Callahan & Ingham, LLP, Farmingdale, N.Y. (Michael
F. Ingham of counsel), for appellant.
Shayne, Dachs, Corker, Sauer & Dachs, LLP, Mineola, N.Y.
(Jonathan A. Dachs of counsel), for
respondents.

DECISION & ORDER
In an action for a judgment declaring that the plaintiff is not obligated to provide coverage to the defendants Rekha Lamba and The Reba Group, Inc., in an underlying personal injury action entitled Lee v The Reba Group, Inc., pending in the Supreme Court, Suffolk County, under Index No. 24204/08, under a policy of insurance numbered 18003460-6 issued to the defendant Mohinder Lamba, the plaintiff appeals, as limited by its brief, from so much of an order of the Supreme Court, Suffolk County (Costello, J.), dated September 24, 2009, as granted that branch of the motion of the defendants Daniel Lee and Kelly Lee which was for summary judgment declaring that it is obligated to provide coverage, and denied its cross motion for summary judgment on the complaint.
ORDERED that the order is affirmed insofar as appealed from, with costs, and the matter is remitted to the Supreme Court, Suffolk County, for the entry of a judgment declaring that the plaintiff is required to provide coverage to Rekha Lamba and The Reba Group, Inc., in an underlying personal injury action entitled Lee v The Reba Group, Inc., pending in the Supreme Court, Suffolk County, under Index No. 24204/08 under a policy of insurance numbered 18003460-6 issued to the defendant Mohinder Lamba.
The Supreme Court properly determined that the plaintiff failed to provide notice of disclaimer of coverage "as soon as is reasonably possible" (Insurance Law § 3420[d][2]; see First Fin. Ins. Co. v Jetco Contr. Corp., 1 NY3d 64, 68-69; New York City Hous. Auth. v Underwriters at Lloyd's, London, 61 AD3d 726, 727) and, therefore, was estopped from disclaiming coverage.
Since this is a declaratory judgment action, we remit the matter to the Supreme Court, Suffolk County, for the entry of a judgment declaring that the plaintiff is required to provide coverage to Rekha Lamba and The Reba Group in the underlying action under the policy of insurance in question issued to the defendant Mohinder Lamba (see Lanza v Wagner, 11 NY2d 317, 334, appeal dismissed 371 US 74, cert denied 371 US 901).

Sidibe v. Cordero

Raymond Schwartzberg & Associates, PLLC, New York
(Raymond B. Schwartzberg of counsel), for appellants.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York
(Stacy R. Seldin of counsel), for respondents.
Order, Supreme Court, Bronx County (Patricia Anne Williams, J.), entered September 9, 2009, which granted defendants' motion for summary judgment dismissing the complaint on the grounds that infant plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d), unanimously affirmed, without costs.
Defendants established their prima facie entitlement to judgment as a matter of law by demonstrating, through an affirmed report of a plastic surgeon and photographs, that the infant plaintiff did not sustain a "significant disfigurement" within the meaning of Insurance Law § 5102(d). Rather, the photographs reflect minor skin discoloration on the infant plaintiff's left cheek, left temple and near the right antihelical rim. In opposition, plaintiff failed to raise a triable issue of fact. The "recent" photographs of the infant plaintiff fail to support a finding that "a reasonable person would view [the facial discoloration] as unattractive, objectionable, or as the subject of pity or scorn" (Hutchinson v Beth Cab Corp., 207 AD2d 283, 283 [1994] [internal quotation marks and citation omitted]; see Santos v Taveras, 55 AD3d 405, 406 [2008]).
We have considered plaintiffs' remaining arguments and find them unavailing.

Hospedales v. "John Doe"

Rosenbaum & Rosenbaum, P.C., New York (Andrew B. Roth
of counsel), for appellant.
Abrams, Gorelick, Friedman & Jacobson, P.C., New York
(Dennis J. Monaco of counsel), for respondents.
Order, Supreme Court, Bronx County (Patricia Anne Williams, J.), entered August 10, 2009, which granted defendants' motion for summary judgment dismissing the complaint on the ground that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d), unanimously affirmed, without costs.
Plaintiff failed to raise an issue of fact in response to defendants' prima facie showing that plaintiff's alleged injuries are neither permanent nor significant and, moreover, not the result of the July 2005 automobile accident in question. More particularly, in support of the motion, defendants' orthopedic surgeon stated that he examined plaintiff in October 2007 and diagnosed him with a resolved sprain/strain of the cervical and lumbar spine, a resolved sprain of the bilateral shoulders, and a resolved sprain of the bilateral elbows. In response, plaintiff's treating physician stated that he last saw plaintiff in March 2006, at which time he diagnosed plaintiff with cervical pain secondary to cervical disc herniations, cervical radiculopathy, and lower back pain, all permanent. The only explanation offered for this cessation of treatment eight months after the accident is plaintiff's physician's statement that unspecified "insurance coverage issues" prevented plaintiff from complying with a recommendation to see an orthopedic surgeon. Such statement does not reasonably explain a complete cessation of treatment for allegedly permanent injuries (see Pommells v Perez, 4 NY3d 566, 574 [2005]). Thus, other than plaintiff's physician's conclusory statement that plaintiff's injuries are permanent, there is no response to defendant's medical evidence that, a year and a half after plaintiff was last seen by his physician, plaintiff's injuries had resolved.
In addition, plaintiff simply did not address the affidavit of defendant's radiologist stating that the disc herniations revealed on an MRI taken in November 2005 were the result of a degenerative condition unrelated to the accident (see Pommells, 4 NY3d at 579-580). In any event, even if plaintiff's alleged limitations were attributable to disc herniations that are not degenerative in nature, "bulging or herniated discs are not, in and of themselves, evidence of serious injury without competent objective evidence of the limitations and duration of the disc injury" (DeJesus v Paulino, 61 AD3d 605, 608 [2009], citing Pommells, 4 NY3d at 574). Plaintiff offered no such objective evidence. At most, plaintiff showed that he was, about eight months after the accident, still experiencing some cervical pain, cervical radiculopathy, and low back pain.
Plaintiff's alleged 90/180-day injury was sufficiently refuted, prima facie, by his bill of particulars alleging that he was confined to bed for one week and to home for one month (see DeJesus, 61 AD3d at 607). The report of plaintiff's treating physician, which does not indicate that plaintiff was advised not to work or engage in any particular activities after the accident, failed to raise an issue of fact in this regard (see Nieves v Castillo, 74 AD3d 535 [2010]; Weinberg v Okapi Taxi, Inc., 73 AD3d 439 [2010]).

City of New York v. First National Insurance Company of America

Michael A. Cardozo, Corporation Counsel, New York, N.Y.
(Kristin M. Helmers, Deborah A. Brenner, and Ari Biernoff of counsel),
for respondent.

DECISION & ORDER
In an action, inter alia, for a judgment declaring that the defendant is obligated to defend the plaintiff as an additional insured in an underlying action entitled Guzman v City of New York, pending in the Supreme Court, Kings County, under Index No. 35271/05, the defendant appeals from an order of the Supreme Court, Kings County (Miller, J.), dated October 28, 2009, which granted the plaintiff's motion for summary judgment and denied its cross motion, among other things, for summary judgment.
ORDERED that the order is affirmed, with costs, and the matter is remitted to the Supreme Court, Kings County, for the entry of a judgment declaring that the defendant is obligated to defend the City of New York in the personal injury action entitled Guzman v City of New York, pending in the Supreme Court, Kings County, under Index No. 35271/05.
Contrary to the contentions of the defendant, First National Insurance Company of America (hereinafter First National), the plaintiff, City of New York, satisfied its burden of demonstrating its prima facie entitlement to judgment as a matter of law by establishing that the allegations of the complaint in the underlying personal injury action suggested a reasonable possibility of coverage which triggered First National's duty to defend under the terms of the subject policy (see Regal Constr. Corp. v National Union Fire Ins. Co. of Pittsburgh, PA, 15 NY3d 34, 37; City of New York v Philadelphia Indem. Ins. Co., 54 AD3d 709). In this regard, First National failed to demonstrate that the allegations fell completely outside the coverage afforded by the policy, and thus neither raised a triable issue of fact in opposition to the City's motion nor made a prima facie showing on its own cross motion.
Contrary to First National's contention, the City's submissions in support of its motion "constituted sufficient evidentiary proof in admissible form" (Olan v Farrell Lines, 64 NY2d 1092, 1093; see Enriquez v B & D Dev., Inc., 63 AD3d 780, 781), and the Supreme Court did not err in considering the proffered deposition testimony from the underlying personal injury action in determining the issue of First National's duty to defend (see One Beacon Ins. v Travelers Prop. Cas. Co. of Am., 51 AD3d 1198, 1200).

International Contractors Corp. v. Illinois Union Ins. Co.

Calendar Date: October 12, 2010
Before: Cardona, P.J., Mercure, Lahtinen, Stein and Garry, JJ.

Eisenberg & Kirsch, Liberty (Jeffrey L. Kirsch of
counsel), for appellant-respondent.
L'Abbate, Balkan, Colavita & Contini, L.L.P., Garden
City (Maureen E. O'Connor of counsel), for respondent-
appellant.
MEMORANDUM AND ORDER

Stein, J.
Cross appeals from an order of the Supreme Court (Meddaugh, J.), entered April 9, 2010 in Sullivan County, which denied plaintiff's motion for summary judgment and denied a motion by defendant CLG Financial for, among other things, summary judgment dismissing the complaint against it.
Plaintiff is a corporation established by Johan Adriaans and his wife, Mary Adriaans, who are the sole corporate officers. The business conducted by the corporation is primarily the installation of roofs on commercial and residential buildings. In connection therewith, plaintiff contacted defendant CLG Financial, an insurance broker, to procure a policy of liability insurance and an umbrella policy. CLG secured such policies with defendant Illinois Union Insurance Company and its parent company, defendant ACE Westchester Specialty Group (hereinafter collectively referred to as defendants), for which CLG was paid a commission. In June 2005, during the period covered by the policies, plaintiff replaced a roof on a garage at the home of Laurence Spiro and Heather Spiro. Shortly thereafter, the Spiros and their guest, Judith Warren, were found dead in the Spiro home. The cause of their deaths was ultimately determined to be carbon monoxide poisoning, which apparently emanated from the home's furnace.
Approximately one year later, wrongful death actions were commenced against plaintiff on behalf of the Spiros and Warren, alleging that plaintiff negligently permitted or allowed obstruction of a rooftop vent for the furnace, thereby contributing to the deaths. Upon receiving notice of such actions from plaintiff, CLG notified defendants thereof. After defendants disclaimed coverage, plaintiff commenced this declaratory judgment action against defendants and CLG alleging, among other things, negligence, breach of contract and breach of fiduciary duty on the part of CLG. Plaintiff thereafter moved for summary judgment, seeking a declaration that CLG is obligated to defend and indemnify it and to reimburse plaintiff for all defense costs incurred prior to the date of judgment or settlement of the underlying actions. CLG opposed the motion and cross-moved for summary judgment dismissing the complaint. Plaintiff opposed the cross motion with regard to the first (breach of contract), second (negligence and misrepresentation), tenth (detrimental reliance) and eleventh (breach of fiduciary duty) causes of action [FN1] . Supreme Court denied both motions and these appeals by plaintiff and CLG ensued.
We affirm. Plaintiff's action is premised on its contention that it gave reasonable notice to CLG of the occurrence at the Spiro residence in accordance with directions given by CLG to plaintiff for reporting potential or actual claims, and that CLG breached its obligations to plaintiff by failing and neglecting to timely report the occurrence to defendants and/or to monitor a potential claim. CLG primarily asserts that it breached no duty to plaintiff. CLG further asserts that, inasmuch as plaintiff failed to provide it with timely notice of the occurrence, even if it did breach a duty to plaintiff by failing to promptly report the occurrence to defendants, such failure would have been irrelevant, as defendants would have disclaimed coverage in any event. Therefore, CLG argues that its acts or omissions cannot be the proximate cause of plaintiff's damages.
According to the uncontroverted testimony of Mary Adriaans, she met with Donald Scott Leibert, CLG's representative, in 2004 to discuss plaintiff's insurance needs. Subsequent to that meeting, CLG presented plaintiff with an insurance package that included a document entitled "Business Insurance Summary for International Contractors Corp." That document described, among other things, the duties and responsibilities of CLG's "service team," which listed Barbara Walker as an account manager responsible for the coordination of all client services and Nancy Calvario as the claims coordinator. Calvario's duties included "[c]ontact person for claims reporting/involved in initial submission of claims/follow up with insurance company claims personnel. Monitors claim status/investigation and management." Leibert also testified that he advised the Adriaanses to call Calvario "[i]f you have a claim or possible occurrence that you think may be a claim . . . [and] she will report it on your behalf to the insurance carrier so they have knowledge of the claim and coordinate contact with the carrier thereafter during the claim process."
The insurance policy ultimately procured by CLG on plaintiff's behalf included both general liability and umbrella coverage. Under the general liability policy, the insured was required to notify the carrier of an occurrence, claim or suit "as soon as practicable." The umbrella portion of the policy contained a similar provision, but required notice to the carrier "as soon as possible." It is well settled that, when notice of an occurrence is required to be given as soon as practicable pursuant to a policy of liability insurance, such notice must be given within a reasonable period of time (see Great Canal Realty Corp. v Seneca Ins. Co., Inc., 5 NY3d 742, 743 [2005]; Klersy Bldg. Corp. v Harleysville Worcester Ins. Co., 36 AD3d 1117, 1118 [2007]). However, failure to provide notice may be excused when the insured has a reasonable good faith belief of nonliability (see Klersy Bldg. Corp. v Harleysville Worcester Ins. Co., 36 AD3d at 1118). The question of reasonableness is generally a question of fact for a jury (see id. at 1119).
Here, the record is replete with conflicting testimony and documents regarding when, and to what extent, plaintiff informed CLG of the Spiro occurrence prior to commencement of the wrongful death actions against it (with plaintiff alleging that such notice first took place in August 2005 and CLG alleging that it first received a "vague" notice in November 2005, with insufficient detail to enable it to notify defendants of a potential claim). Moreover, Mary Adriaans testified that when she and her husband first received correspondence regarding investigations into the deaths at the Spiro residence and inspections of the furnace, they believed that, since plaintiff had performed only roofing work, the accident did not involve them. Based on our review of the entire record, including the Business Insurance Summary, the deposition testimony of the Adriaanses, Calverio and Liebert,[FN2] we agree with Supreme Court's determination that, although plaintiff has sufficiently alleged facts and offered evidence to support its causes of action for breach of contract, breach of a fiduciary duty and negligence, questions of fact exist as to whether CLG owed a special duty to plaintiff upon which plaintiff justifiably relied (compare Hoffend & Sons, Inc. v Rose & Kiernan, Inc., 7 NY3d 152, 158 [2006]; Bruckmann, Rosser, Sherrill & Co., L.P. v Marsh USA, Inc., 65 AD3d 865, 867 [2009]; Sutton Park Dev. Corp. Trading Co. v Guerin & Guerin Agency, 297 AD2d 430, 431-432 [2002]) and as to whether any duty owed by CLG to plaintiff was breached. The record also reflects the existence of issues of fact concerning whether any delay by plaintiff in reporting the occurrence to CLG was reasonable and, thus, whether any breach by CLG caused plaintiff's damages. Accordingly, Supreme Court properly determined that neither party was entitled to summary judgment (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]; Wojcik v Empire Forklift, Inc., 14 AD3d 63, 65 [2004]).
The parties' remaining contentions have been reviewed and, to the extent they are properly before us, are either academic or without merit.
Cardona, P.J., Mercure, Lahtinen and Garry, JJ., concur.
ORDERED that the order is affirmed, without costs.
Footnotes

Footnote 1: Plaintiff discontinued its action (which included the ninth cause of action) against defendants and withdrew the motion as to defendants prior to Supreme Court issuing its decision and order. In addition, plaintiff consented to the dismissal of the third through eighth causes of action.

Footnote 2: Notably, the record is bereft of any testimony by Walker pertaining to Mary Adriaans' alleged telephone conversation with her in August 2005.

Magistro v. Buttered Bagel, Inc.

Tese & Milner, New York, N.Y. (Michael M. Milner of counsel),
for third-party defendant-appellant.
Jules A. Epstein, P.C., Garden City, N.Y., for defendant third-
party plaintiff-respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, and a third-party action for a judgment declaring that the third-party defendant, Seneca Insurance Company, is obligated to defend and indemnify the defendant third-party plaintiff, Buttered Bagel, Inc., in the personal injury action, Seneca Insurance Company appeals from an order of the Supreme Court, Nassau County (LaMarca, J.), dated December 8, 2009, which granted the motion of Buttered Bagel, Inc., for summary judgment on the third-party complaint for a declaratory judgment in its favor, and denied its cross motion for summary judgment for a declaratory judgment in its favor.
ORDERED that the order is reversed, on the law, with costs, the motion of Buttered Bagel, Inc., for summary judgment on the third-party complaint for a declaratory judgment in its favor is denied, the cross motion of Seneca Insurance Company for a declaratory judgment in its favor is granted, and the matter is remitted to the Supreme Court, Nassau County, for entry of a judgment declaring that Seneca Insurance Company is not obligated to defend or indemnify Buttered Bagel, Inc., in the personal injury action.
In 2006, the defendant-third-party plaintiff, Buttered Bagel, Inc. (hereinafter Buttered Bagel), was insured under a Special Businessowners Policy (hereinafter the policy), issued by the third-party defendant, Seneca Insurance Company (hereinafter Seneca). The policy provided that "[i]n the event of an occurrence, the insured shall give to the Company or its authorized agents, as soon as practicable, written notice containing: (1) particulars sufficient to identify the insured; (2) reasonably obtainable information with respect to the time, place and circumstances; and (3) names and addresses of the injured and of available witnesses." On June 29, 2006, while the policy was in effect, the infant plaintiff, Dylen Magistro (hereinafter Magistro), allegedly was injured on Buttered Bagel's premises when a table on which he was seated tipped over and landed on top of him. One and one-half years later, Magistro, by his mother, and his mother, individually, commenced this action and, on February 20, 2008, Buttered Bagel was served with the summons and complaint. The next day, Buttered Bagel's insurance broker gave notice of the action to Seneca, which had never before received any notice of the incident involving Magistro. By letter dated February 27, 2008, Seneca informed Buttered Bagel that it had received a copy of the summons and complaint and would investigate and defend the claim under a reservation of rights, "as you may or may not have reported this occurrence in a timely manner." On February 27, 2008, Seneca hired a firm to investigate the claim, and, on March 4, 2008, Buttered Bagel's President, Daniel Fleischman, gave a written statement disclosing that an employee of Buttered Bagel had informed him of the incident within one week after it occurred, including that Magistro and his mother had left the scene in an ambulance. Fleischman said that he had not notified his insurance broker of the incident because the employee had not known Magistro's, or his mother's, name. Fleischman had heard nothing further about the incident until he was served with the summons and complaint. On March 8, 2008, Seneca received the investigator's report and forwarded it to "coverage counsel." By letter dated March 27, 2008, Seneca notified Buttered Bagel that it was disclaiming coverage because it had not been timely notified of the occurrence. Buttered Bagel commenced the third-party action seeking, inter alia, a judgment declaring that Seneca was obligated to defend and indemnify Buttered Bagel, inter alia, because Seneca's disclaimer was untimely. Buttered Bagel moved, and Seneca cross-moved, for summary judgment. The Supreme Court granted Buttered Bagel's motion and denied Seneca's cross motion. We reverse.
An insured has the burden of explaining a delay in giving notice of an accident to its insurer by showing that certain circumstances existed, such as lack of knowledge that an accident has occurred, so as to demonstrate that the delay was reasonable (see Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp., 31 NY2d 436, 441—442). Here, the only ground Fleischman proffered for not notifying Seneca of the incident was that he did not know the identity of Magistro or his mother. We find that Fleischman's knowledge of the facts of the underlying incident, including that an infant was removed from the premises in an ambulance, gave rise to an obligation to notify Seneca, without regard to whether he knew the name of the persons involved in the accident (see id. at 440).
Notwithstanding a delay in notice from its insured, however, "[a]n insurer must give written notice of a disclaimer of coverage as soon as is reasonably possible' . . . after it first learns of the accident or of grounds for disclaimer of liability or denial of coverage'" (Matter of Allstate Ins. Co. v Cruz, 30 AD3d 511, 512, quoting Insurance Law § 3420[d][2]; Hartford Ins. Co. v County of Nassau, 46 NY2d 1028, 1029). Failure to do so precludes an effective disclaimer, even when the insured has failed in the first instance to provide timely notice of the claim (see Matter of Temple Constr. Corp. v Sirius Am. Ins. Co., 40 AD3d 1109, 1112; Matter of Allstate Ins. Co. v Cruz, 30 AD3d at 512). Moreover, the burden is on the insurer to explain the delay in disclaiming (see Tully Constr. Co., Inc. v TIG Ins. Co., 43 AD3d 1150, 1152). An explanation will be insufficient as a matter of law when the basis for denial of coverage was or should have been readily apparent before the onset of the delay, unless the delay is excused by the insurer's showing that its delay was reasonably related to its completion of a thorough and diligent investigation into issues affecting its decision whether to disclaim coverage (see First Fin. Ins. Co. v Jetco Contr. Corp., 1 NY3d 64, 69; Tully Constr. Co., Inc. v TIG Ins. Co., 43 AD3d at 1152-1153).
Here, contrary to the finding of the Supreme Court, Seneca did not have a readily apparent basis for disclaimer until it conducted an investigation into the underlying incident and Fleischman's awareness of the circumstances surrounding it (see First Fin. Ins. Co. v Jetco Contr. Corp., 1 NY3d at 69; Tully Constr. Co., Inc. v TIG Ins. Co., 43 AD3d at 1152). Moreover, under the circumstances, Seneca's denial of coverage only three weeks after receiving the investigator's report and becoming aware that Fleischman had known that Magistro was removed from the scene in an ambulance, during which time it consulted with coverage counsel, was timely as a matter of law (see Hermitage Ins. Co. v Arm-ing, Inc., 46 AD3d 620, 621; McGinley v Odyssey Re [London], 15 AD3d 218, 219; New York Cent. Mut. Fire Ins. Co. v Majid, 5 AD3d 447, 448; State Farm Mut. Auto. Ins. Co. v Daniels, 269 AD2d 860, 861; Silk v City of New York, 203 AD2d 103, 104).
Therefore, the order must be reversed, Buttered Bagel's motion for summary judgment denied, Seneca's cross motion for summary judgment granted, and the matter remitted to the Supreme Court, Nassau County, for the entry of a judgment declaring that Seneca is not obligated to defend or indemnify Buttered Bagel in the personal injury action.

In the Matter of Progressive Preferred Ins. Co. v. Townsend

Kaplan, Hanson, McCarthy, Adams, Finder & Fishbein, Yonkers,
N.Y. (Michael A. Zarkower of counsel), for appellant.
Polanco & Associates, PLLC, Queens Village, N.Y. (Jose C.
Planco of counsel), for respondent-
respondent Karen Townsend.
Cruz & Gangi (Goldman & Grossman, New York, N.Y. [Jay
S. Grossman], of counsel), for
respondent-respondent Motor Vehicle
Accident Indemnification Corporation.

DECISION & ORDER
In a proceeding pursuant to CPLR article 75 to permanently stay arbitration of a claim for uninsured motorist benefits, the petitioner appeals from an order of the Supreme Court, Queens County (Rios, J.), dated April 21, 2010, which denied the petition and directed the parties to proceed to arbitration.
ORDERED that the order is affirmed, with one bill of costs.
Once the petitioner disclaimed liability coverage of the subject vehicle under the livery use exclusion provision of the subject insurance policy, the vehicle was rendered an uninsured motor vehicle under the policy, as required by Insurance Law § 3420(f)(1), and the respondent Karen Townsend was entitled to seek uninsured motorist benefits (see Matter of Liberty Mut. Ins. Co. v Saravia, 271 AD2d 534; see generally Matter of Liberty Mut. Ins. Co. [Hogan], 82 NY2d 57). Accordingly, the Supreme Court properly denied the petition and directed the parties to proceed to arbitration.

York Restoration Corp. v. Solty's Construction, Inc.

Maroney O'Connor, LLP, New York, N.Y. (James P. O'Connor and
Ross T. Herman of counsel), for appellant.
Barry, McTiernan & Moore, New York, N.Y. (Laura A.
Wedinger of counsel), for respondent.

DECISION & ORDER
In an action for a judgment declaring that the defendant Sirius America Insurance Co. is obligated to defend and indemnify the plaintiff in an underlying action entitled Samborski v Chesapeake Owners Corp., pending in the Supreme Court, Kings County, under Index No. 23424/05, the defendant Sirius America Insurance Co. appeals from an order of the Supreme Court, Kings County (Schneier, J.), dated September 8, 2009, which granted the plaintiff's motion for summary judgment and denied its cross motion for summary judgment.
ORDERED that the order is reversed, on the law, with costs, the plaintiff's motion for summary judgment is denied, the cross motion of the defendant Sirius America Insurance Co. for summary judgment is granted, and the matter is remitted to the Supreme Court, Kings County, for the entry of a judgment declaring that the defendant Sirius America Insurance Co. is not obligated to defend and indemnify the plaintiff in the underlying action.
The plaintiff, York Restoration Corp. (hereinafter York), was hired to perform certain construction work at 201 East 28th Street in Manhattan. York subcontracted masonry work to the defendant Solty's Construction, Inc. (hereinafter Solty's). Solty's and York entered into a written agreement whereby Solty's agreed to obtain commercial general liability insurance naming York as an additional insured. Solty's also agreed to indemnify and hold harmless York against all claims arising from the performance of Solty's work, including claims relating to bodily injury.
The defendant Sirius American Insurance Co. (hereinafter Sirius) issued a general liability policy to Solty's. An employee of Solty's allegedly was injured at the job site on October 29, 2004, and he commenced an action to recover damages for personal injuries against, among others, York. York was named as an additional insured on the Sirius/Solty's policy on December 6, 2004.
Sirius disclaimed coverage on the ground of late notice. York then commenced this action for a judgment declaring that Sirius was required to defend and indemnify it in the underlying personal injury action.
York moved for summary judgment and Sirius cross-moved for summary judgment. Sirius argued that because York was not an insured on the date of the accident, Sirius was not obligated to provide coverage to York. The Supreme Court granted York's motion for summary judgment and denied Sirius's cross motion.
Sirius correctly contends that York is not entitled to defense and indemnification because it was not a named insured on the date of the accident. The party claiming insurance coverage bears the burden of proving entitlement (see National Abatement Corp. v National Union Fire Ins. Co. of Pittsburgh, Pa., 33 AD3d 570; Tribeca Broadway Assoc. v Mount Vernon Fire Ins. Co., 5 AD3d 198). A party is not entitled to coverage if it is not named as an insured or additional insured on the face of the policy as of the date of the accident for which coverage is sought (see Essex Ins. Co. v Michael Cunningham Carpentry, 74 AD3d 733; Majawalla v Utica First Ins. Co., 71 AD3d 958; National Abatement Corp. v National Union Fire Ins. Co. of Pittsburgh, Pa., 33 AD3d at 571; Tribeca Broadway Assoc. v Mount Vernon Fire Ins. Co., 5 AD3d at 200).
Here, York was not named as an additional insured under the policy until approximately five weeks after the underlying accident. The accident occurred on October 29, 2004, but the subsequently issued policy change endorsement, naming York as an additional insured, was not effective until December 6, 2004. Therefore, Sirius had no duty to defend and indemnify York (see ADF Constr. Corp. v Home Insulation & Supply, 237 AD2d 915, 916; Tower Ins. Co. of N.Y. v Joselyn Grocery Corp., 2008 NY Slip Op 31745[U]; see also Travelers Ins. Co. v Utica Mut. Ins. Co., 27 AD3d 456).
York's contention that Sirius may not assert that York is not an insured under the policy because Sirius failed to disclaim on that ground is without merit. A disclaimer pursuant to Insurance Law 3420(d) is unnecessary when a claim does not fall within the coverage terms of an insurance policy (see Markevics v Liberty Mut. Ins. Co., 97 NY2d 646, 648; Matter of Worcester Ins. Co. v Bettenhauser, 95 NY2d 185, 188; Siragusa v Granite State Ins. Co., 65 AD3d 1216, 1217). An insurer is not required to deny coverage where none exists (see Hargob Realty Assoc., Inc. v Fireman's Fund Ins. Co., 73 AD3d 856, 858). Therefore, when a claim is denied because the claimant is not an insured under the policy, there is no statutory obligation to provide prompt notice of the disclaimer (see Hargob Realty Assoc., Inc. v Fireman's Fund Ins. Co., 73 AD3d at 858; Siragusa v Granite State Ins. Co., 65 AD3d at 1217; Matter of Nationwide Ins. Co. v Smaller, 271 AD2d 537, 537-538; Matter of Fireman's Fund Ins. Co. v Freda, 156 AD2d 364, 366). Under the circumstances, the Sirius policy did not provide coverage to York as of the date of the accident. Requiring payment of a claim upon a failure to timely disclaim would create coverage where it never existed (see Matter of Worcester Ins. Co. v Bettenhauser, 95 NY2d at 188).
In light of our determination, we need not reach Sirius's remaining contentions.
Since this is a declaratory judgment action, we remit the matter to the Supreme Court, Kings County, for the entry of a judgment declaring that Sirius is not obligated to defend and indemnify the plaintiff in the underlying action (see Lanza v Wagner, 11 NY2d 317, appeal dismissed 371 US 74, cert denied 371 US 901).

Bernier v. Torres

Latos Latos & Di Pippo, P.C., Astoria, N.Y. (Peter Latos of
counsel), for appellant.
Martyn Toher & Martyn, Mineola, N.Y. (Christine J. Hill 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 (Satterfield, J.), entered February 17, 2010, which granted 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) and, in effect, denied, as academic, her motion for summary judgment on the issue of liability.
ORDERED that the order is reversed, on the law, with costs, the defendant's cross motion for summary judgment dismissing the complaint is denied, and the plaintiff's motion for summary judgment on the issue of liability is granted.
On his cross motion to dismiss the complaint, 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, based upon the affirmed medical report of orthopedic surgeon Dr. Leon Sultan (see Toure v Avis Rent A Car Sys., 98 NY2d 345, 351-352; Gaddy v Eyler, 79 NY2d 955, 956-957).
In opposition to the cross motion, the plaintiff submitted several medical reports, some of which were unaffirmed and, thus, were not in admissible form (see Grasso v Angerami, 79 NY2d 813; Lozusko v Miller, 72 AD3d 908; Singh v Mohamed, 54 AD3d 933). The admissible evidence submitted by the plaintiff, however, raised a triable issue of fact. The affirmed medical report of the plaintiff's orthopedic surgeon Dr. Dov J. Berkowitz dated April 8, 2008, notes decreased motion "in all planes" upon examination of the right shoulder post-surgery. The affirmed medical report of Dr. Jean-Marie L. Francois dated October 26, 2009, is based on a contemporaneous examination of the plaintiff and his review of the magnetic resonance imaging (hereinafter MRI) reports of Dr. Sasan Azar dated November 16, 2007, and December 28, 2007, which revealed, inter alia, bulging and herniated discs in the cervical and lumbar regions of the plaintiff's spine and a rotator cuff tear in the right shoulder, which occasioned the surgery by Dr. Berkowitz. Dr. Francois opined that the plaintiff's neck, back, and right arm injuries, pain, and limitation of motion were permanent and causally related to the subject accident. The plaintiff also properly submitted the MRI reports of Dr. Azar which, although unsworn, had been set forth and reviewed in the affirmed medical report of the defendant's examining surgeon Dr. Sultan (see Lozusko v Miller, 72 AD3d at 908; Zarate v McDonald, 31 AD3d 632; Perry v Pagano, 267 AD2d 290). The totality of the admissible evidence submitted by the plaintiff was sufficient to raise triable issues of fact as to whether she sustained a serious injury to her right shoulder or the cervical and/or lumbar regions of her spine under the permanent consequential and/or the significant limitation of use categories of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d at 352-353; Harris v Boudart, 70 AD3d 643, 644; Yoon Taek Im v Park, 69 AD3d 926, 927; Sinfelt v Helm's Bros., Inc., 62 AD3d 983, 984). Accordingly, the Supreme Court should have denied the defendant's cross motion for summary judgment dismissing the complaint.
A rear-end collision with a stopped or stopping vehicle creates a prima facie case of negligence against the operator of the rear vehicle, thereby requiring that operator to rebut the inference of negligence by providing a nonnegligent explanation for the collision (see Lampkin v Chan, 68 AD3d 727; Ramirez v Konstanzer, 61 AD3d 837). Here, the plaintiff made a prima facie showing of entitlement to judgment as a matter of law by submitting evidence that, after stopping at a stop sign, her vehicle was struck in the rear by the defendant's vehicle (see Ramirez v Konstanzer, 61 AD3d 837). The defendant did not oppose the plaintiff's motion by offering a nonnegligent explanation for the collision and, thus, failed to raise a triable issue of fact (see Eybers v Silverman, 37 AD3d 403, 405; McCauley v Vandina, 21 AD3d 938, 939). Accordingly, the plaintiff is entitled to summary judgment on the issue of liability (see Ditrapani v Marciante, 10 AD3d 628).

Smiley v. Johnson

Richard T. Lau, Jericho, N.Y. (Gene W. Wiggins of counsel), for appellant.
Friedman, Khafif & Sanchez, LLP, Brooklyn, N.Y. (Fabian A. Robley of counsel), for respondents.

DECISION & ORDER
In an action to recover damages for personal injuries, etc., the defendant appeals from an order of the Supreme Court, Kings County (Schmidt, J.), dated March 11, 2010, which denied her motion for summary judgment dismissing the complaint on the grounds that she was not at fault in the happening of the accident and that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is affirmed, with costs.
The 10-year-old plaintiff (hereinafter the plaintiff) was walking through the parking lot of the Five Towns Shopping Center when a motor vehicle owned and operated by the defendant ran over his right foot, causing him to be thrown to the ground. After issue was joined, the defendant moved for summary judgment dismissing the complaint, on the ground that she did not bear any liability for the happening of the occurrence and that, in any event, the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
With regard to the issue of liability, the evidence submitted by the defendant failed to eliminate all triable issues of fact (see Alvarez v Prospect Hosp., 68 NY2d 320, 324) as to whether she was negligent in violating Vehicle and Traffic Law § 1146, which requires the driver of a vehicle to exercise due care to avoid colliding with a pedestrian, and whether such negligence was a proximate cause of the accident. Under these circumstances, it is not necessary to consider the plaintiff's opposition to this branch of the defendant's motion for summary judgment (see Tchjevskaia v Chase, 15 AD3d 389).
While the defendant met her prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Gaddy v Eyler, 79 NY2d 955, 956-957), in opposition, the plaintiffs raised a triable issue of fact, based on the affirmed medical report of Dr. Gideon Hedrych, the plaintiff's treating physician. Dr. Hedrych found significant limitations of motion in the plaintiff's right ankle both on an examination contemporaneous with the accident, and on recent examinations as well (see Tai Ho Kang v Young Sun Cho, 74 AD3d 1328).
Accordingly, the Supreme Court properly denied the defendant's motion for summary judgment dismissing the complaint.

Krivit v. Pitula

Calendar Date: October 21, 2010
Before: Rose, J.P., Lahtinen, Stein, McCarthy and Garry, JJ.

Andrew Bersin, Newburgh, for appellants.
Goldberg Segalla, L.L.P., Albany (Latha Raghavan of
counsel), for respondents.
MEMORANDUM AND ORDER
Garry, J.
Appeal from an order of the Supreme Court (Sackett, J.), entered September 15, 2009 in Sullivan County, which granted defendants' motion for summary judgment dismissing the complaint.
Plaintiff Alicia L. Krivit (hereinafter plaintiff) and her husband, derivatively, commenced this action following a motor vehicle accident in May 2004 in which a truck driven by defendant Gregg M. Pitula rear-ended plaintiff's automobile. Plaintiff allegedly sustained neck injuries and posttraumatic stress disorder (hereinafter PTSD) as a result of the accident. Defendants moved for summary judgment dismissing the complaint on the ground that plaintiff did not sustain a serious injury as defined by Insurance Law § 5102 (d). Supreme Court granted the motion, and plaintiffs appeal.
It is well established that "a causally-related emotional injury, alone or in combination with a physical injury, can constitute a serious injury under the Insurance Law" (Bissonette v Compo, 307 AD2d 673, 674 [2003]; accord Brandt-Miller v McArdle, 21 AD3d 1152, 1153 [2005])[FN1]. We have previously held that PTSD may constitute such an injury when it is causally related to a motor vehicle accident and demonstrated by objective medical evidence (see Chapman v Capoccia, 283 AD2d 798, 799-800 [2001]). Here, we find that plaintiffs established the existence of triable issues of fact as to whether the 2004 accident caused plaintiff to suffer PTSD constituting a permanent loss of use of a body function or system or a significant limitation of use (see Insurance Law § 5102 [d]). Accordingly, we reverse.
Defendants supported their summary judgment motion with the affidavit and report of psychiatrist Melvin Steinhardt, who opined, based upon his examination and review of records, that there was no objective evidence that plaintiff suffered a permanent consequential limitation or significant limitation of use. He further opined that plaintiff's psychological condition was not causally related to her accident. Instead, Steinhardt stated that plaintiff's condition was caused by stressors unrelated to her accident and by her "long and troubled history" before the accident, as manifested by a history of self-medication, symptoms suggesting depression, and the fact that she took the medication Prozac for many years before the accident and temporarily discontinued it after the accident.
Steinhardt's assessment of plaintiff's preaccident medical history was not based on medical records; apparently, few or no pertinent records exist. Plaintiff, a nurse practitioner with the professional authority to diagnose and prescribe, testified that she obtained much of her preaccident care on an informal, undocumented basis from relatives in the medical field. Thus, medical experts for both sides based their understanding of plaintiff's preaccident medical condition on the history she gave her postaccident medical providers and her deposition testimony. Despite the lack of records, however, admissions regarding preexisting injuries or medical conditions made during a deposition may be sufficient to shift the burden "to plaintiffs to 'com[e] forward with evidence indicating a serious injury causally related to the [subject] accident[]'" (Coston v McGray, 49 AD3d 934, 935 [2008], quoting Pommells v Perez, 4 NY3d 566, 579 [2005]). Accordingly, defendants met their burden of presenting evidence that plaintiff did not sustain a causally-related serious injury, shifting the burden to plaintiffs to establish the existence of triable issues of fact (see Villeda v Cassas, 56 AD3d 762, 762 [2008]; Taranto v McCaffrey, 40 AD3d 626, 627 [2007]; compare Brandt-Miller v McArdle, 21 AD3d at 1154).
In opposition to defendants' motion, plaintiffs submitted the medical reports and affidavit of Peter Panzarino, plaintiff's treating psychiatrist. Based on his treatment of plaintiff and review of her postaccident medical records,[FN2] Panzarino opined that she suffers from PTSD, that she did not have the condition before the 2004 motor vehicle accident and would not have developed it but for the accident, and that the disorder is permanent in nature and has significantly limited her ability to function in her professional capacity as well as in activities of daily living. As described by Panzarino, plaintiff's initial symptoms included panic attacks, agoraphobia, depression, weight loss, anhedonia, anorexia, poor sleep and nightmares, and later included progressive depression sufficiently severe to require two hospitalizations, one of which resulted from a suicide attempt, and the inability to work in her profession. According to Panzarino, plaintiff's symptoms are "a classic example" of those typically experienced by persons suffering from PTSD.
Supreme Court found Panzarino's opinion insufficient to raise triable issues of fact as to serious injury as his diagnosis was based solely on plaintiff's subjective complaints. However, defendants' expert neither opined that diagnostic tests are relied upon in diagnosing PTSD nor indicated that any such testing would be useful in doing so. In contrast, Panzarino affirmatively stated that tests are not used to diagnose PTSD and that the disorder is identified, instead, "by the professional clinician's assessment of the presentation of the patient's condition." Further, we have previously held that PTSD may be demonstrated without diagnostic testing for purposes of Insurance Law § 5102 (d) by symptoms objectively observed by treating physicians and established by the testimony of the injured plaintiff and others who observe the plaintiff (see Chapman v Capoccia, 283 AD2d at 799-800). We note the similarity between plaintiff's symptoms and those experienced by the plaintiff in Chapman; in that case, we found that the plaintiff's PTSD diagnosis was not based solely on his subjective complaints and that a sufficient medical foundation was presented to submit the question whether he sustained a serious injury to the jury (see id. at 800).
With regard to causality, Panzarino referenced plaintiff's report that her symptoms began immediately after the accident, opined that the accident was representative of the type of traumatic event that causes PTSD, and further observed that there was no evidence that, before the accident, plaintiff experienced problems with functioning in her home life or her professional capacity as a nurse practitioner comparable to the difficulties she experienced thereafter. As to Steinhardt's opinion that plaintiff's condition was caused by her preexisting condition and other stressors, Panzarino opined that plaintiff's history of self-medication, symptoms suggesting depression, and taking Prozac did not indicate that she suffered from PTSD before the accident, while acknowledging that these factors might have made her more susceptible to the onset of the condition following a traumatic occurrence. Notably, there is no proof in the record that plaintiff was ever diagnosed with depression or another psychological disorder before the 2004 accident. Plaintiff testified that the Prozac was prescribed in approximately 1988 by a psychiatrist whom she consulted on a single occasion after she successfully completed alcohol abuse treatment, apparently to assist in her rehabilitation. The prescription was regularly renewed thereafter because, as she stated, it is "a long-term medicine" and she felt well while taking it. Other than psychological counseling in 1987 and 1988 related to the alcohol treatment, plaintiff testified that she received no further psychological or psychiatric evaluations or treatment of any kind until after the accident.
Particularly in light of the lack of evidence of any prior existing relevant limitations, the parties' conflicting proof "gives rise to a dispute among experts for the jury to decide" (Haddadnia v Saville, 29 AD3d 1211, 1212 [2006]). Viewing the evidence in the light most favorable to plaintiffs (see Toure v Avis Rent A Car Sys., 98 NY2d 345, 353 [2002]), issues of fact are posed as to whether plaintiff suffered a causally-related serious injury within the meaning of the Insurance Law (see Pommels v Perez, 4 NY3d at 577; Armstrong v Morris, 301 AD2d 931, 933 [2003]).
Rose, J.P., Lahtinen, Stein and McCarthy, JJ., concur.
ORDERED that the order is reversed, with costs, and motion denied.
Footnotes

Footnote 1:Plaintiffs confine their arguments on appeal to plaintiff's alleged psychological injury, conceding that her neck condition did not constitute a causally-related serious injury.

Footnote 2:Plaintiff was initially diagnosed with PTSD in 2005 by another psychiatrist whom she consulted after the accident for symptoms such as anxiety, weight loss, tearfulness, and daily thoughts of suicide. Panzarino took over her care in 2006.

San Marco v/ Village/Town of Mount Kisco

Michael Fuller Sirignano, for appellants.
Kathleen D. Foley, for respondent.
Defense Association of New York, amicus curiae.

LIPPMAN, Chief Judge:
This appeal presents the question of whether a prior written notice statute acts as an absolute bar to recovery against a municipality where a plaintiff slipped and fell on black ice that formed on the municipality's property. Since the ice hazard at issue may have been created by the municipality's negligent snow removal efforts, and, if so, the municipality may have known of the hazard, we conclude that Supreme Court properly denied defendant's motion for summary judgment.
Plaintiff Dale San Marco slipped and fell in a parking lot owned by defendant Village/Town of Mount Kisco (the Village) while on her way to work on Saturday, February 5, 2005 at approximately 8:15 a.m. At 4:45 a.m. on the previous morning, the Village had treated the parking lot for ice conditions. However, the Village did not employ a work crew on Saturdays and Sundays to monitor the parking lot for dangerous conditions. It is undisputed that in the interim between the Village's last inspection and salting of the lot early on Friday morning and San Marco's fall on Saturday morning, the air temperature had risen above freezing for approximately nineteen hours and then dropped. As a result of her fall, San Marco suffered a concussion, fractured her sacrum and herniated several cervical discs. Her injuries required a bone graft and surgical installation of a titanium plate affixed to her spine and secured by thirteen screws. In May 2005, San Marco and her husband, suing derivatively, commenced this action, seeking to recover damages for her personal injuries. San Marco alleged that she fell on a patch of black ice that was caused by the melting and refreezing of a pile of snow that the Village had plowed into a row of meters adjacent to the parking spaces. San Marco further alleged both that the Village was negligent in plowing the snow so near the parking spaces and negligent in failing to take measures to remedy any dangerous ice conditions that developed.
In response, the Village asserted that Village Law § 6-628 and Village of Mount Kisco Code § 93-47 shielded it from liability in the absence of prior written notice. Pursuant to Village Law § 6-628, a municipality cannot be liable as a matter of law "unless written notice of the defective, unsafe, dangerous or obstructed condition or of the existence of the snow or ice, relating to the particular place, was actually given to the village clerk" (Village Law § 6-628). The Village consequently established before the motion court that its clerk had not received written notice regarding a defective condition in the parking lot where San Marco fell.
Supreme Court, however, rejected the Village's argument that the action should be dismissed because no one had given written notice of a black ice condition. The court reasoned that the Village's snow removal procedure triggered an exception to the written notice statute, finding a question of fact as to whether the Village might have created the hazardous ice condition. Under Amabile v City of Buffalo (93 NY2d 471 [1999]), a prior written notice statute does not protect a municipality from liability if it can be proven that the "locality created the defect or hazard through an affirmative act of negligence" (id. at 474).
The Appellate Division reversed and granted the Village summary judgment, concluding that this Court's holdings in Yarborough v City of New York (10 NY3d 726 [2008]) and Oboler v City of New York (8 NY3d 888 [2007]) controlled in cases of melting and freezing snow. Yarborough and Oboler, which respectively dealt with hazards caused by a pothole and an uneven manhole cover, held that the "affirmative creation" exception to prior written notice statutes applies only where the action of the municipality "immediately results in the existence of a dangerous condition" (Yarborough, 10 NY3d at 728, quoting Oboler, 8 NY3d at 889). Reasoning that this "immediacy test" extends to snow melting cases, the Second Department found that the Village's action of snow plowing did not amount to "immediate creation" of the hazard that San Marco allegedly encountered (57 AD3d 874, 877 [2d Dept 2008]). Rather, the Court found, "the environmental factors of time and temperature fluctuations . . . caused the allegedly hazardous condition" (id.).
The Appellate Division granted plaintiff leave to appeal. We reverse and deny summary judgment.
Reviewing the public policy rationale for prior written notice statutes, as well as the factual distinctions between each category of case, we conclude that the immediacy requirement for "pothole cases" should not be extended to cases involving hazards related to negligent snow removal. In reaching the conclusion that the Village should not be shielded from liability as a matter of law in the present case, we uphold the general underlying purpose of prior written notice statutes. Although it can be harsh for plaintiffs in many cases, it is sensible that the municipality is exempt from liability for injuries on public property unless the municipality knew of the problem. Prior written notice statutes were designed precisely to release municipalities from the "vexing problem of municipal street and sidewalk liability" (Barry v Niagara Frontier Tr. Sys., 35 NY2d 629, 633 [1974]) when they have no reasonable opportunity to remedy the problem (see e.g. Jagoda v City of Dunkirk, 43 AD2d 795, 796 [4th Dept 1973] ["Notice provisions . . . are intended to insure that a municipality be given reasonable opportunity to cure defective conditions, the existence of which it could not be expected to know absent some sort of positive apprisal"]).
We recognized the importance of actual notice in Doremus v Incorporated Vil. of Lynbrook (18 NY2d 362 [1966]), stating that prior written notice statutes represent "an effort to exempt the villages from liability for holes and breaks of a kind which do not immediately come to the attention of the village officers unless they are given actual notice thereof" (id. at 378). In keeping with this emphasis, we developed in Amabile the exception for the municipality's affirmative creation of the hazardous condition that caused injury.
Then, in Yarborough and Oboler, we held that a municipality could only be liable for its actions that immediately produced a hazardous condition. These holdings merely reinforced the object of prior written notice statutes to protect municipalities from liability for a road construction or repair, recognizing the difficulty in determining, after the passage of time, whether the initial repair was negligent. At the same time, the affirmative creation exception addressed situations where a hazard was foreseeable, insofar as the municipality created it, by, for example, digging an unmarked ditch in a road or neglecting to cover a street drain.
Considering the present facts in light of the underlying purpose of prior written notice statutes, we find these statutes were never intended to and ought not to exempt a municipality from liability as a matter of law where a municipality's negligence in the maintenance of a municipally owned parking facility triggers the foreseeable development of black ice as soon as the temperature shifts. Unlike a pothole, which ordinarily is a product of wear and tear of traffic or long-term melting and freezing on pavement that at one time was safe and served an important purpose, a pile of plowed snow in a parking lot is a cost-saving, pragmatic solution to the problem of an accumulation of snow that presents the foreseeable, indeed known, risk of melting and refreezing.
Moreover, a patch of pavement may gradually and unpredictably deteriorate, making the point at which the efficacy of the initial repair ceases unknown to the municipality. It is therefore understandable that the hazard may escape detection until the municipality receives written notice of the problem. However, in the case of black ice that forms from plowing snow in a municipally owned parking facility, a municipality should require no additional notice of the possible danger arising from its method of snow clearance apart from widely available local temperature data. Indeed, there is evidence that in the case at bar, the Village treated the same parking lot with salt and sand the day before the accident, in order to limit the hazards of black ice. Thus, the determinative factor in this case should be whether the Village's snow removal efforts created the ice condition on which San Marco fell.
We have recognized the problem of negligent snow removal going back to 1948 in Zahn v City of New York (299 NY 581 [1949]), where judgment for the injured plaintiff was affirmed upon similar facts — that a plaintiff fell on black ice that had accumulated as a result of melting and refreezing of snow that the property owner had shoveled on the sidewalk in front of her home. Although this case involved a private defendant, since that time there have been Appellate Division cases holding that a municipal defendant may be liable for a negligent ice condition without prior written notice. For example, on almost identical facts to the present case, in Smith v County of Orange (51 AD3d 1006 [2d Dept 2008]), the Second Department held that there was a triable issue of fact "regarding whether the ice upon which the plaintiff slipped was formed when snow piles created by the County's snow removal efforts melted and froze" (id. at 1006; see also Brownell v City of New York, 277 AD2d 31 [1st Dept 2000], lv denied 96 NY2d 712 [2001]; Rector v City of New York, 259 AD2d 319 [1st Dept 1999]; Glick v City of New York, 139 AD2d 402 [1st Dept 1988]). 
We do not hereby create a new burden on municipalities to remove all snow off-premises in order to avoid liability (see e.g. Zweilich v Incorporated Vil. of Freeport, 208 AD2d 920 [2d Dept 1994]). Nor do we seek to render the municipality an insurer of pedestrians. However, at this juncture, plaintiff raises triable issues of fact that compel denial of summary judgment. Primarily, a jury must decide whether San Marco fell on ice created by the Village's snow clearance operation. And relatedly, there are factual issues concerning whether the Village exercised its duty of care to maintain the parking lot in a reasonably safe condition by plowing snow high alongside active parking spaces, and in failing to salt or sand the lot on weekends, despite the fact that it remained open seven days a week.
Accordingly, the order of the Appellate Division should be reversed, with costs, and defendant's motion for summary judgment denied. The certified question need not be answered upon the ground that it is unnecessary.


SMITH, J.(dissenting):
The majority opinion seems to say that no written notice requirement applies in this case because the Village should have foreseen that its method of removing snow would create a hazard. This amounts to saying that no written notice is required because the municipality was negligent. But the whole point of written notice legislation is to protect municipalities from liability, even where they are negligent, unless they have received written notice of the hazard in question. The majority decision frustrates this legislative aim, contradicting both the text of the written notice requirements and our recent holdings in Oboler v City of New York (8 NY3d 888 [2007]) and Yarborough v City of New York (10 NY3d 726 [2008]). I therefore dissent.
Village Law § 6-628 says:
"No civil action shall be maintained against the village for damages or injuries to person or property sustained in consequence of any street, highway, bridge, culvert, sidewalk or crosswalk being defective, out of repair, unsafe, dangerous or obstructed or for damages or injuries to person or property sustained solely in consequence of the existence of snow or ice upon any sidewalk, crosswalk, street, highway, bridge or culvert unless written notice of the defective, unsafe, dangerous or obstructed condition or of the existence of the snow or ice, relating to the particular place, was actually given to the village clerk and there was a failure or neglect within a reasonable time after the receipt of such notice to repair or remove the defect, danger or obstruction complained of, or to cause the snow or ice to be removed, or the place otherwise made reasonably safe."
Village of Mount Kisco Code § 93-47 is very similar:
"No civil action shall be brought or maintained against the Village of Mount Kisco for damages or injuries to person or property sustained in consequence of any street, highway, bridge, culvert, sidewalk or crosswalk being defective, out of repair, unsafe, dangerous or obstructed or in consequence of the existence or accumulation of snow or ice upon any street, highway, bridge, culvert, sidewalk or crosswalk, unless written notice of the existence of such condition, relating to the particular place, had theretofore actually been given to the Board of Trustees of the Village of Mount Kisco and there had been a failure or neglect on the part of said village to cause such condition to be corrected or such snow or ice to be removed or the place otherwise made reasonably safe within a reasonable time after the receipt of such notice."
Written notice requirements of this kind are common in New York. Ordinarily they do not, as these provisions do not, include in their text an exception for hazards the municipalities created. We have nevertheless recognized such an exception — not, as the majority implies, to nullify the requirement in every case in which a municipality negligently fails to foresee the consequence of its actions, but to take account of cases in which a prior written notice requirement would be anomalous. Thus, if a city construction crew digs a hole in the street, it would seem absurd to immunize the city from lawsuits by pedestrians who fall in the hole on the ground that no one gave the city written notice of the hole's existence (see Doremus v Vil. of Lynbrook, 18 NY2d 362, 366 [1966] [written notice requirements were designed to exempt municipalities from roadway defects "which do not immediately come to the attention of village officers"]). Kiernan v Thompson (73 NY2d 840 [1988]) was a case of this type. Where the City of Ithaca, in removing a tree stump, had left a crack in the sidewalk, we held that "since the City created the crack in the pavement, plaintiff was not required to provide it with prior written notice of the unsafe condition" (id. at 842).
Our cases also recognize, however, that the rationale of the exception does not apply where a condition that the municipality creates is not immediately dangerous, but becomes so with the passage of time. In such cases the municipality may be at fault for not foreseeing the danger, but that is irrelevant; there is, by hypothesis, fault by the municipality in every case to which a prior written notice requirement applies. Where the danger is not the immediate result of the municipality's negligent act, it cannot be said with certainty — as it can in the case of the hole the city itself dug — that the municipality actually knew of the danger. In such cases, therefore, the municipality is entitled to prior written notice.
As the Appellate Division explained in Bielecki v City of New York (14 AD3d 301, 301-302 [1st Dept 2005]):
"We understand the affirmative negligence exception to the notice requirement to be limited to work by the City that immediately results in the existence of a dangerous condition.
. . . .
"If we were to extend the affirmative negligence exception to cases like this one, where it is alleged that a dangerous condition developed over time from an allegedly negligent municipal repair, the exception to the notice requirement would swallow up the requirement itself, thereby defeating the purpose of the Pothole Law."
We adopted the reasoning of Bielecki in two recent cases, Oboler (8 NY3d at 889 [2007] [case dismissed where plaintiff failed to show that a height differential between a manhole cover and the adjoining asphalt existed immediately after the City's resurfacing of the roadway]) and Yarborough (10 NY3d at 728 [2008] [case dismissed where City was allegedly negligent in repairing a pothole, causing deterioration "over time with environmental wear and tear"]). These cases effectively overruled our affirmance several decades ago of the Appellate Division's decision in Muszynski v City of Buffalo (33 AD2d 648 [4th Dept 1969], affd on opinion below 29 NY2d 810 [1971]). Oboler and Yarborough essentially adopt the view of Judge Scileppi, dissenting in Muszynski, that written notice is required where "the dangerous condition was not created immediately and consequently" upon a municipality's action (29 NY2d at 813).
The majority here distinguishes Oboler and Yarborough on the ground that those cases involved defects in the pavement itself, not ice that formed on the pavement. The majority's reasoning is that, while it is "understandable" that deterioration of the pavement resulting from negligent street repair "may escape detection" (majority op at 7), a negligently created pile of snow "presents the foreseeable, indeed known, risk of melting and refreezing" (id. at 6-7). But this confuses the issue of written notice with the issue of negligence. If a risk is [*8]neither foreseeable nor known, the municipality is not liable for it at all — the written notice statute is unnecessary. The premise of the plaintiff's case, in a case like Oboler or Yarborough, is that the municipality should have foreseen, but negligently failed to foresee, that its way of repairing the streets would cause the pavement to deteriorate. There is, in other words, no logical distinction between pavement-defect cases like Oboler and Yarborough and snow-and-ice cases like this one. The written notice requirements here apply by their terms to the "accumulation of snow and ice."
Of course it can be said in a case like this — as it could be said in Oboler, Yarborough, Bielecki and similar cases — that it is unfair to leave plaintiffs uncompensated for an injury that a municipality negligently caused, but that is what prior written notice requirements do. Such requirements may be harsh, but they are "a valid exercise of legislative authority" (Amabile v City of Buffalo, 93 NY2d 471, 473 [1999]). The State, which has created municipalities and has, by abrogating the old rule of sovereign immunity, permitted citizens to bring actions against them, has chosen to limit those lawsuits to cases in which a municipality has received written notice of the hazard complained of. Because the Village here received no such notice, this case should be dismissed.
* * * * * * * * * * * * * * * * *
Order reversed, with costs, defendant's motion for summary judgment denied, and certified question not answered upon the ground that it is unnecessary. Opinion by Chief Judge Lippman. Judges Ciparick, Pigott and Jones concur. Judge Smith dissents in an opinion in which Judges Graffeo and Read concur.
Decided December 16, 2010

Exeter Building Corp. v. Scottsdale Insurance Company

Faust Goetz Schenker & Blee LLP, New York, N.Y. (Lisa L.
Gokhulsingh and Peter Kreymer of counsel), for appellant.
Rosenberg Fortuna & Laitman, LLP, Garden City, N.Y.
(Arthur S. Laitman and Seth L. Berman of
counsel), respondent pro se, and for
respondent Exeter Building Corp.


DECISION & ORDER
In an action for a judgment declaring, inter alia, that pursuant to several insurance policies issued by the defendant to the plaintiff Exeter Building Corp., the defendant is obligated to defend and indemnify Exeter Building Corp. in an underlying action entitled Board of Directors of Maidstone Landing Home Owners Association, Inc. v Maidstone Landing, LLC, pending in the Supreme Court, New York County, under Index No. 600438/07, the defendant appeals from an order of the Supreme Court, Nassau County (Feinman, J.), entered November 19, 2009, which denied that branch of its motion which was for summary judgment declaring that it is not obligated to defend and indemnify the plaintiff Exeter Building Corp. in the underlying action.
ORDERED that the order is reversed, on the law, with costs, that branch of the defendant's motion which was for summary judgment declaring that it is not obligated to defend and indemnify the plaintiff Exeter Building Corp. in the underlying action is granted, and the matter is remitted to the Supreme Court, Nassau County, for further proceedings, and the entry thereafter of a judgment which shall include a declaration that the defendant is not obligated to defend or indemnify the plaintiff Exeter Building Corp. in the underlying action entitled Board of Directors of Maidstone Landing Home Owners Association, Inc. v Maidstone Landing, LLC, pending in the Supreme Court, New York County, under Index No. 600438/07.
The plaintiff Exeter Building Corp. (hereinafter Exeter) was the general contractor for two residential condominium developments located in Riverhead. The defendant Scottsdale Insurance Company (hereinafter Scottsdale), issued several commercial general liability (hereinafter CGL) insurance policies to Exeter before the commencement of the underlying action. It is undisputed, however, that Scottsdale's CGL policies expressly excluded damage to, inter alia, "[t]hat particular part of real property on which you . . . are performing operations, if the property damage' arises out of those operations; or . . . [t]hat particular part of any property that must be restored, repaired, or replaced because your work' was incorrectly performed on it." The policies defined "your work," in relevant part, as "[w]ork or operations performed by you or on your behalf," including "[w]arranties or representations made at any time with respect to the fitness, quality, durability, performance or use of your work.'"
On or about July 31, 2007, the underlying action was commenced against, among others, Exeter, alleging, in pertinent part, "substantial defects in the design and construction" of the condominiums. Sometime thereafter in 2007, Scottsdale hired the plaintiff law firm, Rosenberg Fortuna & Laitman, LLP (hereinafter the Rosenberg Firm), to defend Exeter.
Approximately 14 months after agreeing "to provide [Exeter] with a defense," subject to a reservation of rights, Scottsdale disclaimed coverage on several grounds. One of the grounds was that the underlying policies did not apply to, nor was there a duty to defend against, allegations of construction defects arising from the work product of Exeter and/or the subcontractors working on behalf of Exeter. Exeter and the Rosenberg Firm brought this action for a judgment declaring, inter alia, that Scottsdale was obligated to defend and indemnify Exeter in the underlying action, that Scottsdale was obligated to pay the plaintiffs' reasonable attorneys' fees in the underlying action, and that Scottsdale breached its duty of good faith and fair dealing owed to the plaintiffs. Scottsdale moved, among other things, for summary judgment, contending that the property damage alleged was excluded under the CGL policies. In the order appealed from, the Supreme Court addressed only that branch of Scottsdale's motion which was for summary judgment and denied that branch of the motion. We reverse.
An insurer's duty to defend its insured is broader than its duty to indemnify (see Nationwide Insulation & Sales, Inc. v Nova, 74 AD3d 1297; Automobile Ins. Co. of Hartford v Cook, 7 NY3d 131, 137), and such duty "is triggered whenever the allegations in a complaint, liberally construed, suggest a reasonable possibility of coverage, or when the insurer has actual knowledge of facts establishing such a reasonable possibility" (City of New York v Insurance Corp. of N.Y., York, 305 AD2d 443). However, "[t]o be relieved of [this] duty to defend on the basis of a policy exclusion, the insurer bears the burden of demonstrating that the allegations of the complaint in the underlying claim cast the pleadings wholly within that exclusion, that the exclusion is not subject to any other reasonable interpretation, and that there is no possible factual or legal basis upon which the insurer might be eventually obligated to indemnify its insured" (Utica First Ins. Co. v Star-Brite Painting & Paperhanging, 36 AD3d 794, 796). "The nature of [the] claims asserted in [the] complaint [are] to be determined based upon the facts alleged and not the conclusions which the pleader draws therefrom or upon the characterization applied to a claim by a party" (J. Lucarelli & Sons, Inc. v Mountain Val. Indem. Co., 64 AD3d 856, 858 [internal quotation marks and citations omitted]).
Insofar as pertinent, the complaint in the underlying action alleges that Exeter was responsible for various substantial interior and exterior construction defects. Specifically, the allegations principally arise out of construction work allegedly performed by Exeter or subcontractors hired by Exeter in connection with the building of condominiums and seek damages for faulty workmanship. CGL policies like the one in this case are not intended to provide indemnification to contractors for claims that their work product is defective (see J. Lucarelli & Sons, Inc. v Mountain Val. Indem. Co., 64 AD3d 856; Baker Residential Ltd. Partnership v Travelers Ins. Co., 10 AD3d 586). Thus, because the complaint seeks relief for conduct that falls solely and exclusively under the work product exclusions of the CGL policies, and the damages sought therein do not arise from an occurrence resulting in damage to property distinct from the work product of Exeter or its hired subcontractors, Scottsdale is not obligated to provide Exeter with a defense or to indemnify it in the underlying action.
Lastly, because the Supreme Court did not decide that branch of Scottsdale's motion which was to direct a hearing on the issue of whether it had sufficiently compensated the Rosenberg Firm for its services to Exeter "during the defense under a reservation of right," that part of Scottsdale's motion remains pending and undecided. Accordingly, arguments with respect to that issue are not properly before this Court (see Katz v Katz, 68 AD2d 536). Since this is, in part, a declaratory judgment action, we remit the matter to the Supreme Court, Nassau County, for a determination of that part of the complaint which seeks remuneration for past attorneys' fees, and the entry thereafter of a judgment which shall include a declaration that Scottsdale is not obligated to provide Exeter with a defense or to indemnify it in the aforementioned underlying action.
Malloy v. Matute

Raskin & Kremins L.L.P., New York (Andrew J. Metzar of
counsel), for appellant.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York
(Stacy R. Seldin of counsel), for respondent.
Order, Supreme Court, Bronx County (Howard R. Silver, J.), entered on or about October 6, 2009, which granted defendant's motion for summary judgment dismissing the complaint on the ground that plaintiff did not suffer a serious injury within the meaning of Insurance Law § 5102(d), unanimously modified, on the law, to deny the motion as to plaintiff's claim of serious injury to his right knee, and otherwise affirmed, without costs.
Plaintiff's submissions were sufficient to raise a triable issue of fact as to whether he suffered a "serious injury" to his right knee. While defendant's experts found that plaintiff's injuries were degenerative, plaintiff's doctors were unanimous in concluding that the subject accident was the sole competent producing cause of plaintiff's knee injuries, based upon (1) their individual examinations; (2) MRI results; and (3) the necessity of surgery to repair a tear in the medial meniscus, a partial tear of the anterior cruciate ligament, chondromalacia, synovitis, and fibrosis (see Pommells v Perez, 4 NY3d 566 [2005]; Colon v Bernabe, 65 AD3d 969, 970 [2009]). It also bears noting that plaintiff was 37 years old when he was hit on his right side by defendant's taxi, he had no prior knee problems or injuries to his right leg, and his right knee surgery took place within four months of the accident.
Dana v Allstate New Jersey Insurance Company

Lester B. Herzog, Brooklyn, N.Y., for appellants.
Leahey & Johnson, P.C., New York, N.Y. (Peter James
Johnson, Jr., of counsel), for respondent.


DECISION & ORDER
In an action, inter alia, to recover damages pursuant to the supplementary underinsured motorist provision of an insurance policy, the plaintiffs appeal from (1) stated portions of an order of the Supreme Court, Kings County (Partnow, J.), dated May 13, 2009, which, among other things, granted the defendant's motion pursuant to CPLR 4404(a), in effect, to set aside a judgment of the same court entered April 16, 2008, which, upon a special jury verdict, was in favor of the plaintiff Morris Dana and against the defendant in the principal sum of $45,000 and in favor of the plaintiff Susan Dana and against the defendant in the principal sum of $5,000, and for judgment as a matter of law in favor of the defendant, and (2) an amended judgment of the same court entered August 19, 2009, which, upon the order dated May 13, 2009, is in favor of the defendant and against them dismissing the complaint.
ORDERED that the appeal from the order is dismissed, and it is further,
ORDERED that the amended judgment is affirmed; and it is further,
ORDERED that one bill of costs is awarded to the defendant.
The appeal from the intermediate order dated May 13, 2009, must be dismissed because the right of direct appeal therefrom terminated with the entry of the amended judgment on August 19, 2009 (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 amended judgment (see CPLR 5501[a][1]).
The plaintiff Morris Dana (hereinafter the plaintiff-driver), a resident of New Jersey, was involved in an accident in Brooklyn when another motorist's vehicle came into contact with the rear end of his vehicle. The plaintiff-driver sued the other motorist for personal injuries and the parties settled for $50,000, an amount which constituted the policy limit of the other motorist's insurance policy.
The plaintiffs thereafter commenced this action to recover damages pursuant to the supplementary underinsured motorist provision of the plaintiff-driver's insurance policy. The Supreme Court, prior to a determination of liability, conducted a trial on the issue of damages sustained by the plaintiffs as a result of the subject accident. The jury, in effect, returned a special verdict (see CPLR 4111[a]), finding that the plaintiff-driver sustained damages in the sums of $25,000 for past pain and suffering and $20,000 for future pain and suffering, and that the plaintiff Susan Dana sustained damages in the sum of $5,000 for loss of services. Judgment in favor of the plaintiffs and against the defendant in the principal sum of $50,000 was subsequently entered on April 16, 2008.
The defendant, inter alia, moved pursuant to CPLR 4404(a) to set aside the special jury verdict and the judgment entered April 16, 2008, and for judgment as a matter of law in its favor, on the ground that the full value of the plaintiffs' damages had already been satisfied by a $50,000 payment received under the settlement with the other motorist and, thus, the plaintiffs could not recover under the underinsured motorist provision of the plaintiff-driver's insurance policy. By order dated May 13, 2009, the Supreme Court, among other things, granted the motion. An amended judgment in favor of the defendant and against the plaintiffs dismissing the complaint was entered on August 19, 2009.
The Supreme Court, which properly applied substantive New Jersey law to this action (see Matter of Allstate Ins. Co. [Stolarz—New Jersey Mfrs. Ins. Co.], 81 NY2d 219, 226; Matter of State Farm Mut. Auto. Ins. Co. v Thomas, 75 AD3d 644, 646), did not err when it concluded that the plaintiffs were not entitled to recover under the terms of the underinsured motorist provision of the plaintiff-driver's policy since the special verdict, which established the value of the plaintiffs' damages, did not exceed the policy limit of the other motorist's policy (see NJ Stat Ann § 17:28-1.1[d], [e][1]; see also Selective Ins. Co. of Am. v Thomas, 179 NJ 616, 620, 847 A2d 578; Vassiliu v Daimler Chrysler Corp., 356 NJ Super 447, 457, 813 A2d 547; accord Calabrese v Selective Ins. Co. of Am., 297 NJ Super 423, 434, 688 A2d 606; Gold v Aetna Life & Cas. Ins. Co., 233 NJ Super 271, 278 n 3, 558 A2d 854, 858 n 3). Contrary to the plaintiffs' contention, under the circumstances, the special jury verdict finding that the plaintiff-driver sustained damages in the sums of $25,000 for past pain and suffering and $20,000 for future pain and suffering was not inadequate (see Handwerker v Dominick L. Cervi, Inc., 57 AD3d 615, 615-616; Batts v Rutrick, 298 AD2d 417, 418; accord Obdulio v Fabian, 33 AD3d 418, 418-419). Furthermore, since the defendant established that the plaintiffs were not entitled to receive benefits under the underinsured motorist provision of the plaintiff-driver's policy, the Supreme Court properly determined that the plaintiffs could not establish that the defendant acted in bad faith on the ground that "no debatable reasons existed for denial of [those] benefits" (Pickett v Lloyd's [A Syndicate of Underwriting Members], 131 NJ 457, 481, 621 A2d 445, 457; see American Wrecking Corp. v Burlington Ins. Co., 400 NJ Super 276, 285 n 2, 946 A2d 1084, 1090 n 2; M & B Apts., Inc. v Teltser, 328 NJ Super 265, 273-274, 745 A2d 586).
The plaintiffs' remaining contentions are without merit or need not be reached in light of our determination.
FLORIO, J.P., DICKERSON, BELEN and AUSTIN, JJ., concur.

BUSH v MECHANICVILLE WAREHOUSE CORPORATION

Calendar Date: October 14, 2010
Before: Mercure, J.P., Peters, Rose, Malone Jr. and Egan Jr., JJ.


Wilson, Elser, Moskowitz, Edelman & Dicker,
L.L.P., Albany (F. Douglas Novotny of counsel) and Kelly &
Leonard, L.L.P., Ballston Spa (Thomas E. Kelly of counsel), for third-
party defendant-appellant.
Corrigan, McCoy & Bush, P.L.L.C., Rensselaer
(Scott W. Bush of counsel), for defendant and third-party plaintiff-
respondent.
DeGraff, Foy & Kunz, L.L.P., Albany (David F.
Kunz of counsel), for respondent.
MEMORANDUM AND ORDER


Peters, J.
Appeal from an order of the Supreme Court (Williams, J.), entered October 21, 2009 in Saratoga County, which denied third-party defendant's motions for summary judgment dismissing the third-party complaint.
The underlying facts are more fully set forth in a prior appeal in this matter (69 AD3d 1207 [2010]). Briefly stated, on March 4, 2005, plaintiff sustained severe injuries during the course of his employment when he fell from a ladder in a warehouse owned by defendant. He thereafter commenced this action alleging negligence and violations of Labor Law § 200, among other things. Defendant brought a third-party action against plaintiff's employer, Yankee One Dollar Stores, Inc., seeking common-law and contractual indemnification. In two separate motions, Yankee moved for summary judgment dismissing the third-party complaint. Supreme Court denied both motions, finding issues of fact as to whether, under Workers' Compensation Law § 11, plaintiff sustained a grave injury and whether Yankee had contractually agreed to indemnify defendant. This appeal by Yankee ensued.
"Workers' Compensation Law § 11 permits an owner to bring a third-party claim against an injured worker's employer in only two circumstances: where the injured worker has suffered a 'grave injury' or the employer has entered into a written contract to indemnify the owner" (Flores v Lower E. Side Serv. Ctr., Inc., 4 NY3d 363, 365 [2005]; see Rodrigues v N & S Bldg. Contrs., Inc., 5 NY3d 427, 429-430 [2005]; Auchampaugh v Syracuse Univ., 67 AD3d 1164, 1164 [2009]). Yankee asserts that defendant failed to raise an issue of fact as to the applicability of either exception to the prohibition against third-party claims against employers. We address these exceptions in turn.
A "grave injury" is defined, in relevant part, as "an acquired injury to the brain caused by an external physical force resulting in permanent total disability" (Workers' Compensation Law § 11). Although the statute does not define "permanent total disability," the Court of Appeals has determined that "a brain injury results in 'permanent total disability' under [Workers' Compensation Law § ] 11 when the evidence establishes that the injured worker is no longer employable in any capacity" (Rubeis v Aqua Club, Inc., 3 NY3d 408, 413 [2004] [emphasis omitted]). Here, even assuming that Yankee sustained its initial burden of establishing as a matter of law that plaintiff did not sustain a grave injury (see Way v Grantling, 289 AD2d 790, 793 [2001]), the evidence submitted in opposition to the motion was sufficient to raise a triable question of fact.
The medical evidence reveals that, as a result of the fall, plaintiff suffered a traumatic brain injury which included, among other things, a posterior temporal contusion and a left frontal epidural hematoma. Melvin Steinhart, a psychiatrist who had performed an independent medical examination of plaintiff, reported that as a result of the brain injury plaintiff suffers from an inability to concentrate for long periods, significant loss of short-term memory, fatigue and psychomotor slowing, as well as depression symptoms directly resulting from the catastrophic injuries sustained in the accident. George Forrest, the physician with whom plaintiff has been treating since the accident, similarly averred that plaintiff continues to suffer from cognitive difficulties, such as poor concentration and memory deficits, as a consequence of his brain injury. Both Steinhart and Forrest agreed that, given that plaintiff's cognitive deficits persist more than four years after the accident, these symptoms will not improve with time or rehabilitation and, therefore, are permanent in nature. They also unequivocally opined that the symptoms and residual effects caused by the brain injuries suffered as a result of the accident, particularly plaintiff's poor cognitive functioning, render him permanently and totally disabled and unable to maintain any type of gainful employment either on a full or part time basis. This evidence, coupled with the fact that plaintiff has been awarded Social Security disability benefits, is sufficient to raise a material question of fact (see Way v Grantling, 289 AD2d at 793; see also Mendez v Union Theol. Seminary in City of N.Y., 26 AD3d 260, 261 [2006]).
We reach a different conclusion, however, with respect to defendant's contractual indemnification claim. The proof submitted on the motion established that K.R. Flike Sales, Inc. entered into a one-year written lease with defendant commencing on August 1, 1998, which contained an indemnification clause requiring K.R. Flike Sales, as tenant, to indemnify defendant for any liability, damages and claims resulting from injury to any person caused solely by K.R. Flike Sales' negligence. Following the expiration of the lease on July 31, 1999, K.R. Flike Sales continued to occupy the warehouse as a holdover tenant. According to Keith Flike, who was the owner of both Yankee and K.R. Flike Sales, Yankee began using the warehouse to store products at some point during that time and, after dissolution of K.R. Flike Sales in 2002, continued to occupy the warehouse. Flike testified further that, although Yankee had no written lease agreement for all these years, it continued to pay rent to defendant.
We fully agree with defendant that when a tenant, such as K.R. Flike Sales, remains in possession upon the expiration of a lease, "it is a holdover and, pursuant to common law, there is implied a continuance of the tenancy on the same terms and subject to the same covenants as those contained in the original instrument" (City of New York v Pennsylvania R.R. Co., 37 NY2d 298, 300 [1975]; accord Levy v Carol Mgt. Corp., 260 AD2d 27, 33 [1999]; see Del Giacco v Noteworthy Co., 175 AD2d 516, 517 [1991]). Nor do we quarrel with the general proposition that, where a party other than the lessee is shown to be in possession of the leased premises and is paying rent, a presumption arises that the lease has been assigned to that party (see Mann v Munch Brewery, 225 NY 189, 193 [1919]; Gateway I Group, Inc. v Park Ave. Physicians, P.C., 62 AD3d 141, 147 [2009]; Salvatore R. Beltrone Marital Trust II v Lavelle & Finn, LLP, 13 AD3d 869, 870 [2004]). Nevertheless, Workers' Compensation Law § 11 permits a third-party indemnification claim against the employer only where such claim is "based upon a provision in a written contract entered into prior to the accident or occurrence by which the employer had expressly agreed to . . . indemnification of the claimant or person asserting the cause of action for the type of loss suffered" (emphasis added). Here, there is clearly no such written agreement between Yankee and defendant whereby Yankee expressly agreed to indemnify defendant. Rather, the only express agreement to indemnify is contained in a long expired lease between defendant and K.R. Flike Sales. Whether an assignment of that expired lease to Yankee could be presumed as a consequence of its possession of the premises and payment of rent is simply irrelevant to our analysis under Workers' Compensation Law § 11. Had the Legislature intended that an implied agreement — or anything less than the employer's express written agreement — to indemnify would suffice, it could have easily done so by omitting the word "expressly" prior to the word "agreed." The Legislature chose to use that language, however, and we must adhere to the literal terms of the statute in so interpreting it (see Flores v Lower E. Side Serv. Ctr., 4 NY3d at 367; Majewski v Broadalbin-Perth Cent. School Dist., 91 NY2d 577, 583 [1998]). Indeed, as the relevant portions of Workers' Compensation Law § 11 were enacted to abrogate employers' liability to third parties for injury to their employees except in the most limited circumstances, the exception "[r]equiring the indemnification contract to be clear and express furthers the spirit of the legislation" (Tonking v Port Auth. of N.Y. & N.J., 3 NY3d 486, 490 [2004] [emphasis added]). Thus, inasmuch as there is no writing whereby Yankee expressly agreed to indemnify defendant, summary judgment dismissing defendant's contractual indemnification claim should have been awarded (see O'Berg v MacManus Group, Inc., 33 AD3d 599, 599-600 [2006]; Lipshultz v K & G Indus., 294 AD2d 338, 338-339 [2002]; see also Vicente v RJR Mech., Inc., 2010 NY Slip Op 31922[U], *5-6 [2010]).
Mercure, J.P., Rose, Malone Jr. and Egan Jr., JJ., concur.
ORDERED that the order is modified, on the law, without costs, by reversing so much thereof as denied third-party defendant's motion for summary judgment dismissing the contractual indemnification cause of action; motion granted to that extent and said cause of action dismissed; and, as so modified, affirmed

ROSSETT v. WING FARM, INC.

Calendar Date: October 13, 2010
Before: Peters, J.P., Spain, Lahtinen, Kavanagh and Garry, JJ.


Smith, Sovik, Kendrick & Sugnet, P.C., Syracuse
(Gabrielle Mardany Hope of counsel), for appellant.
Ernest D. Santoro, P.C., Rochester (Ernest D. Santoro
of counsel), for respondents.
MEMORANDUM AND ORDER


Spain, J.
Appeal from an order of the Supreme Court (Demarest, J.), entered August 31, 2009 in St. Lawrence County, which granted defendants' motion for summary judgment dismissing the complaint.
Plaintiff was injured on August 30, 2005 when a tree limb fell on him while he was working with coworkers on a tree removal project undertaken by the St. Lawrence County Highway Department. The tree removal accident occurred on land owned by defendant Wing Farm, Inc., whose treasurer, defendant Stephen Wing (hereinafter Wing), had granted the request of the highway department to remove a tree on Wing Farm's property. The County told Wing that a beauty salon was being built on adjacent land and that the tree obstructed the view from the future salon's new driveway (or roadway) for those exiting onto the highway. At the time of the accident, plaintiff was standing at the base of a tree retrieving branches and running them through a chipper shredder when a limb fell and struck his head and neck.
Plaintiff commenced this action against defendants asserting causes of action for common-law negligence and violations of Labor Law §§ 200, 240 and 241. Supreme Court granted defendants' motion for summary judgment dismissing the complaint. Plaintiff appeals, challenging only the dismissal of his Labor Law § 240 (1) and § 241 (6) claims. We affirm.
Initially, notwithstanding defendants' failure to annex the pleadings to their motion as required by CPLR 3212 (b), which ordinarily necessitates denial of the motion without prejudice (see Bonded Concrete v Town of Saugerties, 3 AD3d 729, 730 [2004], lv dismissed 2 NY3d 793 [2004]), the failure to do so will be excused in this case given plaintiff's submission of the pleadings in opposition. As such, "the record on appeal is sufficiently complete to address the merits" (Sanacore v Sanacore, 74 AD3d 1468, 1469 [2010]).
On the merits as limited by plaintiff's brief, defendants established their entitlement to summary judgment dismissing plaintiff's Labor Law § 240 (1) and § 241 (6) claims (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]). As a threshold matter, we are not persuaded by defendants' argument that they qualified for the homeowner exemption from liability (see Labor Law § 240 [1]; § 241 [6]), which is inapplicable to owners who use their house solely for commercial purposes, including use as rental property (see Van Amerogen v Donnini, 78 NY2d 880, 882-883 [1991]; Nudi v Schmidt, 63 AD3d 1474, 1475 [2009]; see also Lombardi v Stout, 80 NY2d 290, 296-297 [1992]). Wing's affidavit and testimony established that there were two single-family homes on Wing Farm's 300-acre parcel, one of which, at the time of the accident, was rented to a long-term tenant and the other occupied by a nonpaying caretaker who oversaw the property. Thus, defendants did not meet their burden of establishing entitlement to this exemption (see Lombardi v Stout, 80 NY2d at 297).
With regard to Labor Law § 240 (1), plaintiff was required to establish that he was injured during "the erection, demolition, repairing, altering, painting, cleaning or pointing of a building or structure" (emphasis added). Under settled law, "[a] tree is clearly not a 'building' or a 'structure' . . .; it is a product of nature" (Lombardi v Stout, 80 NY2d at 295-296; see Lewis-Moors v Contel of N.Y., 78 NY2d 942, 943 [1991]; Lysiak v Murray Realty Co., 227 AD2d 746, 748 [1996]). Further, neither plaintiff, his employer (the County) nor defendants was engaged in any construction or any other activity covered by section 240 (1) at any time, as only tree removal was occurring on Wing Farm's property. Although construction of a beauty salon was reportedly ongoing on the adjacent property, "the record provides no basis for concluding that plaintiff or his employer were in any way involved in that work" (Rogers v C/S Assoc. Ltd. Partnership I, 273 AD2d 523, 524 [2000], lv denied 95 NY2d 769 [2000]).
Plaintiff and his counsel assert in their affidavits and moving papers that the County's removal of the tree was performed as part of the construction of the salon on the neighboring property. However, these assertions "were completely unsupported with evidence or specific factual references. Accordingly, such contentions were conclusory, [and] without probative value" (Morales v Westchester Stone Co., Inc., 63 AD3d 805, 806 [2009]; see Enos v Werlatone, Inc., 68 AD3d 713, 714 [2009]; Rivera v Santos, 35 AD3d 700, 702 [2006]; Rogers v C/S Assoc. Ltd., 273 AD2d at 524; see also Prats v Port Auth. of N.Y. & N.J., 100 NY2d 878, 881 [2003]; Martinez v City of New York, 93 NY2d 322, 326 [1999] [rejects the "integral and necessary part" of a larger project test for Labor Law § 240 (1) analysis]). There was simply no proof that the County or plaintiff had any role in the salon construction, which was "easily distinguishable" from the tree removal on Wing Farm's adjacent parcel undertaken by the County to facilitate safe ingress and egress to the highway (Prats v Port Auth. of N.Y. & N.J., 100 NY2d at 881; see Rivera v Santos, 35 AD3d at 702; cf. Lombardi v Stout, 80 NY2d at 296). "[T]he statutory language must not be strained in order to encompass what the Legislature did not intend to include" (Martinez v City of New York, 93 NY2d at 326 [internal quotation marks and citations omitted]), and extending Labor Law § 240 (1) liability under these circumstances would do exactly that. 
Likewise, Supreme Court correctly dismissed plaintiff's cause of action alleging a violation of Labor Law § 241 (6), as his accident during tree removal did not arise from "construction, excavation or demolition work" (Labor Law § 241 [6]; see Nagel v D & R Realty Corp., 99 NY2d 98, 103 [2002]; Enos v Werlatone, Inc., 68 AD3d at 715). Although "not limited to building sites" (Mosher v State of New York, 80 NY2d 286, 288 [1992]), the work in which plaintiff was engaged must have "affected the structural integrity of the building or structure [or have been] an integral part of the construction of a building or structure" (Walton v Devi Corp., 215 AD2d 60, 63 [1995], lv denied 87 NY2d 809 [1996]; accord Sajta v Latham Four Partnership, 282 AD2d 969, 971 [2001]). Plaintiff was not engaged in any activity covered by this statute and, thus, this claim was properly dismissed.
Peters, J.P., Lahtinen, Kavanagh and Garry, JJ., concur.
ORDERED that the order is affirmed, with costs.

Anand v Kapoor

Steven Cohn, for appellants.
William D. Hartlein, for respondent.


MEMORANDUM:
The order of the Appellate Division should be affirmed, with costs, and the certified question not answered upon the ground that it is unnecessary.
While playing golf with two friends at a nine-hole course in Suffolk County, defendant Anoop Kapoor "shanked" a shot, striking plaintiff Azad Anand in the left eye, with the errant ball. The accident occurred during play on the first hole. Kapoor's second shot landed in the "rough." Without waiting for Kapoor to retrieve his ball, Anand went to look for his on the fairway. Kapoor, meanwhile, found his ball and, without calling "Fore" or giving any other warning to his friends, hit the shot that went in an unintended direction and struck Anand. Anand suffered retinal detachment and permanent loss of vision in the injured eye.
Anand and his wife commenced this personal injury action against Kapoor, asserting that Kapoor's failure to warn of his shot amounted to negligence and proximately caused Anand's injury. After discovery, Supreme Court granted Kapoor's motion for summary judgment and dismissed the complaint, both for the reason that Anand was not in the foreseeable zone of danger and on assumption of risk grounds. The Appellate Division, with one Justice dissenting, affirmed. The same Court granted the Anands' motion for leave to appeal to this Court. We now affirm.
A person who chooses to participate in a sport or recreational activity consents to certain risks that "are inherent in and arise out of the nature of the sport generally and flow from such participation" (Morgan v State, 90 NY2d 471, 484 [1997]). A court evaluating the duty of care owed to a plaintiff by a coparticipant in sport must therefore consider the risks that the plaintiff assumed and "how those assumed risks qualified defendant's duty to him" (Turcotte v Fell, 68 NY2d 432, 438 [1986]). However, a plaintiff "will not be deemed to have assumed the risks of reckless or intentional conduct or concealed or unreasonably increased risks" (Morgan, 90 NY2d at 485 [citations omitted]).

Here, Kapoor's failure to warn of his intent to strike the ball did not amount to intentional or reckless conduct, and did not unreasonably increase the risks inherent in golf to which Anand consented. Rather, the manner in which Anand was injured — being hit without warning by a "shanked" shot while one searches for one's own ball — reflects a commonly appreciated risk of golf (see Rinaldo v McGovern, 78 NY2d 729, 733 [1991]).
* * * * * * * * * * * * * * * * *
Order affirmed, with costs, and certified question not answered
upon the ground that it is unnecessary, in a memorandum. Chief Judge Lippman and Judges Ciparick, Graffeo, Read, Smith, Pigott and Jones concur.