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Coverage Pointers - Volume XII, No. 14

Dear Coverage Pointers Subscribers:

Happy New Year.  We're in full swing for 2011.  It's nice to have the holiday season behind us and we know that every day brings us one day closer to Spring.

We were delighted by the outpouring of response on our "T'was the Night Before Christmas" offering in the last issue, including the request to repost in different social media outlets.  Who would imagine insurance coverage going "viral"?

 And Introducing .. Todd Bushway

Todd Bushway, with 17 years of trial experience, joined our firm this week as the newest member of our litigation team.  In his previous employment and with us, Todd will be defending clients in municipal, auto, construction negligence, labor law and product liability matters. His municipal law experience runs the gamut from claims of civil rights and constitutional tort violations to premises and road liability concerns. Todd's extensive experience in construction related matters includes insight into industry terminology and blueprint knowledge. He has represented governmental agencies of various size and structure as well as insurance carriers and self-insured clients.

 Todd is an active community leader particularly focused on helping and mentoring youth.  He is a member of Leadership Buffalo, serving on numerous committees and as Class Chair for the Leadership Buffalo Class of 2006. He serves on the Board of Directors of Youth Audiences of WNY and is the former President of the Board of Directors for the Delaware Soccer Club where he continues to coach.

 Having earned his Juris Doctor from the State University of New York at Buffalo School of Law where he graduated magna cum laude, he is a graduate with a Bachelor's in Science from the University of Notre Dame.

 

Already Seeing a Theme .

 It's more than a coincidence, I think , that in the first three calls I received on the first business day back, the claims professional felt very confident - and should have -- about the coverage position that had been taken but was getting considerable pushback from the agent or broker or underwriting department.  It's the economy that's calling those shots, no doubt .

 

From Audrey Seeley, Our No Fault Maven:

 Happy New Year!  It has gotten off to a good start.  I think the follow block quote from Judge Peter Moulton in the Lenox Hill Radiology, PC v. Tri-State Consumer Ins. Co. decision reported this edition sums it up quite nicely:

 Before concluding, we would be remiss in failing to note that the facts and circumstances of this action do much to illustrate the disturbing reality that first-party-no-fault benefits litigation has become the antithesis of what was supposed to be an expeditious and simplified process for the payment of medical costs for injuries sustained in motor vehicle accidents.  [citation omitted]  Too often, lawsuits with a value akin to a small claims action become bogged down by an insistence by one party or another that mailing of routine forms be established with scientific precision, asking judges, already burdened to the breaking point with the veritable legion of no-fault cases overflowing from our court dockets (while very able arbitrators remain underutilized), to require multiple witnesses to be summoned to the courthouse, merely to establish a presumption of mailing, even in the absence of an express denial of receipt of the disputed correspondence.  Unfortunately, this class of cases has spawned a body of 'gotcha' jurisprudence, marked by a near manic preoccupation with form over substance.

How we have reached this sorry state is of little moment.  Perhaps all branches of government need to call a 'time out' and, working together, endeavor to construct a workable process to achieve what the framers of the No-Fault statute had in mind when they sought to establish a simplified and expeditious process to reimburse those of our citizenry injured in automobile accidents.  For sure, the system now in place is not achieving that laudable aim.

Well said!  Bravo!  I will leave it at that. 

  Audrey Seeley

[email protected]

 

One Hundred Years Ago:
 

Washington Post

January 7, 1911

Page 5, Column 3


MADE MORAL BY KNIFE

Surgical Operation on Brain

Changes Man's Nature.

CRIMES CREDITED TO INJURY

 

Blow on Skull Received in Youth Held to Have Made

Edward E. Grimmell, of Buffalo, a Menace to Society

Now That Science Has Cured Him, He Will Be Released From Prison.

Transformed by an operation on his brain from one of the most expert and remarkable criminals in the country to a man of kindest and most upright impulses his whole nature apparently changed.  Edward E. Grimmell, 34 years old, a convict in Clinton prison, at Dannemora, has been pardoned, and in a few days will be restored to his parents in Buffalo, whose fortunes and lives were .wrecked by his astonishing and unexplainable series of criminal deeds.

His case has for more than a year attracted the attention of alienists, neurologists, and surgeons. They at last came to the conclusion that his persistent infractions of the law were largely, if not entirely due to an injury to his brain, following a small fracture of the skull inflicted when he was a boy of 14.

Operation Brings Complete Change

An operation performed in Match, 1909, by Dr. DeWitt G Wilcox, of Boston University, one time president of the Homeopathic Medical Society of New York State, brought about an almost complete change in the convict, who had besought the surgeons in Clinton prison to operate on him in the hope - and to him it was only the vaguest hope, but he preferred death to a continued career of crime such as he felt he was doomed to - that he might become a normal man and of some comfort and use to his impoverished and enfeebled parents.

Editor's Note:  An "alienist" was a term used for a psychiatrist who specialized in the legal aspects of mental illness.

While Grimmell's sentence for forgery was commuted, he did was not released from prison until January 1912 because of some hesitancy on the part of prison officials.  He then walked free.  Wasn't that a wonderful story?

The joy was short-lived.  How does a year sound?

According to a piece that appeared on the front page of the Olean Times on January 7, 1913, Edward Grimmell was arrested for attempting to blow up a safe at a Woolworth's store on Main Street in Buffalo. On February 24, 1913, the New York Times carried this item:

Back to Prison for Life

Surgical Operation on Grimmel's Brain Failed to Cure Criminal

Buffalo, February 24 - Edward E. Grimmell, the forger, who obtained a pardon and release from Dannemora prison two years ago by submitting to a surgical operation on his skull, which alienists believed would cure him of criminal tendencies, and who was convicted of burglary in the third degree on Thursday was sentenced to Auburn prison for life today.

Grimmell had three previous convictions for felony against him.

 

Steve's Peipings:

Another two weeks of silence on the first party front, but as its name would imply we've got a true potpourri of decisions for your reading pleasure this week.  At a minimum, take a moment to review the Fourth Department's 3-2 decision in Bronson.  Therein, the Court upheld a broadly worded Release that was executed to resolve a property damage claim, and subsequently ruled that the Release barred the plaintiff from a future bodily injury claim which arose from the same incident.   As always, we'll keep an eye on it as it no doubt makes its way to the Court of Appeals.   Also, of particular note, please take a moment to review the Second Department's decision in DeLouise where the Court addresses the breadth of discovery available under HIPAA.

That's all for this week.  We'll keep our fingers crossed for some first party offerings in the weeks to come.  As always, we'd love to hear your thoughts and comments in the interim.   

Steve Peiper

[email protected]

 

Just a Little More Information on a Case Reported in the Last Issue:

We offer this extended discussion to demonstrate the kinds of arguments made in late disclaimer cases.

In our December 24th issue, we reported on the December 7th, Second Department decision in Progressive Northeastern Insurance Company v. Lamba. With very little factual predicate reported in the Memorandum Decision, we noted that the court found that the carrier's disclaimer was late and the excuse offered for the lateness lacked merit.

We received a note from Jonathan Dachs, the noted New York Law Journal Insurance Law commentator and partner in the Shayne Dachs firm in Mineola.  Mr. Dachs, who represented the successful respondent, offered some additional factual background and offered this supplementary information:

  •         May 15, 2008 accident
  •         Offending driver, Lamba, insured by Progressive
  •         October 21, 2008, Mr. Dachs advises Progressive that Lamba should be insured under another policy in the household, issued to husband;
  •         Progressive wishes to take statement from Lamba to see if exclusion in policy, for vehicle "furnished or available for regular use," was applicable;
  •         November 6, 2008 interview conducted, 16 days after notice received and in interview, Lamba advises Progressive that vehicle was in fact available for regular use;
  •         November 12, transcript of interview sent to Lamba for review;
  •         December 17, transcript returned to Progressive with corrections
  •         December 30, disclaimer letters drafted and sent following day

From the claimant's perspective, notice of disclaimer was not sent until 71 days after the first notice was given to Progressive (10/21) and 55 days after the interview with Lamba (11/6).  The court agreed with the claimant and found the disclaimer untimely.

We contacted Progressive to better understand that company's position on the passage of time.

From Progressive's perspective, acquiring the information from the putative insured in a tape recorded statement that the loss was subject to an exclusion was only the first step in the investigation of coverage. The next step in the continuing investigation was to have the recorded statement transcribed and sent to the putative insured to be sworn to before a notary.

The applicable exclusion was that there is no coverage for any insured driving an unlisted vehicle that is otherwise available or furnished for her regular use. In the recorded statement the putative insured described circumstances that demonstrated that she used the vehicle as if it were her own.

Progressive argued that a necessary part of the coverage investigation was having the putative insured confirm under oath that the facts supported the exclusion. This is because it has been the experience of many in the insurance defense field that if an insured has an opportunity to modify his/her position to preserve coverage, then that opportunity will be taken advantage of after the coverage disclaimer/denial and then there suddenly will surface a question of fact where none existed at the time the insured provided the original statement.

So, here the statement was transcribed and sent to the putative insured in mid-November. It was not returned signed to Progressive until December 18, despite multiple follow-up inquiries to the putative insured who, in some instances was contacted and, in others, could only be given a phone message.

Once it was returned, the denial of coverage letters were prepared and sent by 12/30. Based upon the fact that the generation, mailing, delayed return of the transcribed statement was all part of a continuing investigation, Progressive argued that the denial was timely, based on a recent Second Department decision holding that an insurer has a right to conduct a reasonable investigation into coverage, whether that lasts 30 days or more.

In this case, the court sided with the claimant and found the delay unreasonable.

 

The Power of Punctuation:

I hadn't heard this one before .

With e-mail, text messages and tweets, it is difficult to convince some people about the importance of punctuation.

An English professor wrote these words on the chalkboard and asked the students to punctuate it correctly:

"A woman without her man is nothing"

Half of the students (perhaps the men) wrote:

            "A woman, without her man, is nothing."

The other half of the students (perhaps the women) wrote:

"A woman: without her, man is nothing."

Punctuation is Powerful.

 

Headline's for This Week's Coverage Pointers (attached):

 

KOHANE'S COVERAGE CORNER
Dan D. Kohane

[email protected]

  •         "Prior Knowledge Exclusion" Serves to Eliminate Coverage When Insured Had Subjective Knowledge of Factual Predicate for Claim
  •         Summary Judgment Reinstated for Umbrella Carrier on Late Notice;  Motion to Reargue/Renew Improperly Considered Attorney's Affidavit that Should have Been Submitted First Time Around
  •         Late Reporting Leads to Loss of Coverage Under Claims Made Policy; Ignorance of Policy Coverage Does Not Excuse Later Reporting
  •         Where Injured Party Has Reasonable Excuse for Late Reporting, Notice Beyond Extended Reporting Period in Claims Made Policy Is Still Considered Timely; Treble Damage Award Not Insurable
  •         Where Insured Becomes Insolvent, Its Insurer Is Still on the Hook for Amounts in Excess of Self-Insured Retention and Within Policy Limits
  •         For Purposes of Calculating Workers Compensation's Share of Litigation Costs, Cost of Future Medical Payments Are Speculative
  •         In Yet Another Pre-Prejudice Case, Late Notice Unexcused When Insured Knew of Accident and Likelihood of Policy Involvement
  •         Auto Policy Properly Terminated Under Rules Existing at the Time, So Vehicle Uninsured at Time of Accident

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

  •         Conclusory Statement That Injuries Sustained Make Plaintiff "More Susceptible" to Future Serious Injury Does Not Support Claim
  •         Workers Compensation IME Finding of 50% Loss of Range of Motion Related to Accident Raises Issue of Fact
  •         On Appeal, the Complaint Is Reinstated with Regard to the "Fracture" Category of Serious Injury
  •         A Girlfriend Is Not an Immediate Family Member so "Zone of Danger" Allegation Is Dismissed
  •         Finding of Significant Range of Motion Limitations Three Years After Accident Defeats Defendant's Motion
  •         Plaintiff Survives Summary Judgment by Rebutting Showing That Opinion That Cause of Limitations Was "Failed" Shoulder Surgery Is Conclusory
  •         Defendants Fail to Meet Their Burden Where Their Expert Finds Significant Causally Related ROM Limitations
  •         Plaintiff Fails to Rebut Defendants' Motion Where His Submissions Are Either Not in Evidentiary Form or Not Contemporaneous with the Accident
  •         Defendant's Motion Is Denied Where Her Expert's Reports Reveal That Some of the Same Limitations Persisted Over Time
  •         Portions of Treating Physician's Affirmation Based Upon His Own Contemporaneous and Recent Examinations Are Sufficient to Raise Triable Issues of Fact
  •         Admissible Evidence That Fails to Address the Only injury on Appeal Is Insufficient
  •         Examining Orthopedic Surgeon's Finding of Significant Range of Motion Limitations Warrants Denial of Summary Judgment
  •         Maximum Medical Improvement Adequately Explains Plaintiff's Gap in Treatment

 

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

 

ARBITRATION

  •        Durable Medical Equipment Properly Denied Based Upon Chiropractic Peer Review By Robert Sohn, DC
  •        Same Peer Reviewer's Report Found Unpersuasive Due To Reliance Upon Inconclusive Studies

 

LITIGATION

  •         Mail Room Employee's Testimony Not Necessary To Establish Mailing Procedure; Judge Moulton Should Be Commended for Thoughtful Dicta Discussion On Problems With System
  •         Plaintiff's Failure To Submit Any Evidence Regarding Medical Necessity Fatal To Opposing Insurer's SJ Motion
  •         You Must Plead Standing As An Affirmative Defense Or Move Pre-Answer On The Issue
  •         Insurer Failed to Meet Burden And Compounded Interest Accrues From 30 Days After Claim Submitted
  •         Peer Reviewer Can Review Records Sent to Insurer And They Can Form The Basis For the Opinion of Lack of Medical Necessity
  •         Fee Schedule For Chiropractors Performing Acupuncture Appropriately Relied Upon In Reimbursement to Licensed Acupuncturist

 

PEIPER ON PROPERTY (and POTPOURRI)
Steven E. Peiper

[email protected]

 

  • In a 3-2 Split, Court Dismisses Plaintiff's Complaint Based on a "Release of All Claims" Executed by Plaintiff Prior to Commencement of the Lawsuit
  • Plaintiff's Broad Allegations of Physical Injury and Mental Anguish Waived the Physician-Patient Privilege 
  • Court Finds A Question of Fact Regarding Whether Insurer Wrongfully Refused to Pay Agreed Settlement After Statute of Limitations Expires
  • Plaintiff Permitted to Prove Losses and Expenses at Trial Against Tortfeasor Irrespective of Whether Payments Received by Plaintiff's Insurance Carrier Will Have to be Deducted from the Recovery 

FIJAL'S FEDERAL FOCUS
Katherine A. Fijal

[email protected]

 

  • ·        No Coverage If Underlying Trade Contract is Not Signed Prior to Loss - Applying NY Law
  • ·        The Faulty Workmanship Exclusion - Applying Arkansas Law

 

JEN'S GEMS
Jennifer A. Ehman

[email protected]

 

  • ·        Court finds Employee's Fall From Ladder After Electrical Shock Triggered Electrical Subcontractor's Duty to Defend Owner and General Constructor Pursuant to Additional Insured Endorsement

EARL'S PEARLS
Earl K. Cantwell

[email protected]

 

Stealth Arbitration Clauses

 

That is all for now.  Welcome new subscribers.  See you in a couple of weeks.

 

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]


01/04/11       CPA Mutual Insurance Company, etc. v. Weiss & Company
Appellate Division, First Department
“Prior Knowledge Exclusion” Serves to Eliminate Coverage When Insured Had Subjective Knowledge of Factual Predicate for Claim

A “prior knowledge exclusion” entitled the insurer to deny coverage for "any Interrelated Acts or Omissions" which, before the effective date of the policy, defendants "believed or had a basis to believe might result in a "Claim." Here, the record established that the insureds had subjective knowledge of numerous facts pertaining to a fraudulent scheme undertaken by their clients, which involved or implicated defendants as well. The insureds, therefore, should have foreseen that these facts might form the basis of a claim against them.

Like in the Garland case, below, new materials were offered to the court in an application to renew, including defendants' subjective belief they were not facing a claim in connection with the fraud committed by their clients.  The materials should have been provided to the court in the first go-round and therefore should not be considered by the court.

12/30/10       Garland v. RLI Insurance Company
Appellate Division, Fourth Department
Summary Judgment Reinstated for Umbrella Carrier on Late Notice;  Motion to Reargue/Renew Improperly Considered Attorney’s Affidavit That Should Have Been Submitted First Time Around
This case is near and dear to our hearts. 

Garland was the adminstratrix of the estate of a husband and wife who drowned in Florida.  The young woman fell off a boat and her husband jumped in after her, with neither surviving.  The owner of the boat was the husband’s father.
Immediately after the accident, notice was given by the husband to his liability carrier, Travelers and it processed a first party claim for boat damage as well as investigated the liability claims arising out of the wrongful death.  It wasn’t until many months later when notice was given to RLI, the carrier that provided a $2 million umbrella policy for the boat owner.  RLI denied on late reporting.  An attorney was retained by the estates but did not give notice to RLI for many months thereafter.
When RLI disclaimed, the wrongful death case was settled, with the primary carrier paying its policy limits and the estate and the boat owner entering into an agreement that provided, basically, that funds would be paid to the estates if the RLI disclaimer could be overturned.
When a declaratory judgment action was commenced, cross motions for summary judgment were made. The boat owner conceded that it did not give notice to RLI, arguing that for a time, it didn’t believe it could be held liable because of maritime law limitations.  The estates attorney argued basically the same thing as well as asserting that they had no obligation to give notice.
The court below granted RLI’s motion for summary judgment.  The court found that both the boat owner and the estates failed to offer an acceptable excuse for the late reporting. 
Then the estates’ lawyer filed a motion to renew/reargue asserting for the first time that in fact, in an affidavit, that he tried to identify the existence of an excess carrier but was stymied by counsel for the boat owner who told him that no such policy existed.  RLI argued that the court should not consider the affidavit from the attorney, which should have been submitted in response to RLI’s motion and was not a proper submission in an application to renew/reargue.  The lower court accepted the affidavit and vacated its prior order in favor of summary judgment and found a question of fact existed on whether the estate’s late notice should be excused.
In a 4-1 decision, the Fourth Department reversed, reinstating the original grant of summary judgment in favor or RLI finding that the court should not have considered the “new” proof, the attorney’s affidavit, as it could have been submitted in response to the original motion for summary judgment.    
Editor’s Note:  Hurwitz & Fine, PC on behalf of RLI, Dan D. Kohane and Steven E. Peiper, of counsel

12/30/10       The Penn Traffic Co. v. National Union Fire Ins. Co., et al
Appellate Division, Fourth Department
Late Reporting Leads to Loss of Coverage Under Claims Made Policy; Ignorance of Policy Coverage Does Not Excuse Later Reporting
Penn commenced an action seeking to recover costs in connection with two investigations conducted by the federal government against several employees.  National issued an "Executive and Organization Liability Insurance Policy." Penn operates supermarkets in several states, including New York. The policy covered defense of “wrongful acts,” as defined in the policy. This was a two year claims made and reported policy, was effective as of June 29, 2002 with a 60-day extended reporting period. Thus, coverage was limited to claims made and reported during the policy period, with a 60-day extension for a "Discovery Period," extending the coverage period to the end of August 2004.
The first investigation involved an employee working at a subsidiary known as Penny Curtiss.  In August 2002, plaintiff learned that an employee at Penny Curtiss, was being investigated by federal authorities for making false accounting entries. By letter dated October 7, 2002, plaintiff provided defendant with notice of "circumstances which may reasonably be expected to give rise to a claim being made against" plaintiff and its named insureds but did not request coverage – at that time – for defense and investigation costs.
Two years later, federal authorities began investigating the misuse of promotional allowances by two high-level executives. In August 2004, several months after the Securities and Exchange Commission had issued subpoenas to two of plaintiff's employees in connection with the promotional allowances investigation, Penn advised National of the investigation but indicated that it was unaware of any claims  Two years after the policy expired, Penn sought reimbursement for the two investigations. National claimed that the requests were outside the extended reporting period.
The Fourth Department sided with the insurer. Since no claim was made for any defense costs within the two-year policy period, the only way the claims would be timely is if the “relation-back provision” of the policy applies. Under that provision a claim made after the policy period expired would be honored if the insured provided written notice during the policy period of circumstances that could "reasonably be expected to give rise to a Claim being made against an Insured.”  The court found that the October 7, 2002 letter in question did provide defendant with notice of the Penny Curtiss investigation only, and, not the promotional allowances investigation. The two investigations involved different employees, different accounting irregularities, and different time periods, and it therefore could not be said that notice of the Penny Curtiss investigation constituted notice of promotional allowances investigation as well.
However, the coverage was lost for the Penny Curtis investigation as well as the insured failed to comply with the requirement that notice be given of the claim as soon as practicable.  It waited two years to give that notice and thus breached the policy terms.  The claim that the insured didn’t understand that the breadth of the policy covered the subpoenas is not an acceptable excuse.

12/30/10       McCabe v. St. Paul Fire and Marine Ins. Co.
Appellate Division, Fourth Department
Where Injured Party Has Reasonable Excuse for Late Reporting, Notice Beyond Extended Reporting Period in Claims Made Policy Is Still Considered Timely; Treble Damage Award Not Insurable
The underlying case was a legal malpractice action against Attorney Fretz.  St. Paul insured him under a claims made professional liability policy for claims made within the policy and extended reporting period, which expired March 15, 2007. St. Paul learned of the malpractice claim in June of 2007 and promptly denied coverage on the ground that the notice was untimely. A default judgment was entered against Fretz for $226,000 in compensatory damages which was trebled to over $700,000 pursuant to Judiciary Law Section 487.fendant within the policy period and extended reporting period, which expired on March 15, 2007. Defendant first learned of plaintiffs' claim against Fretz on June 22, 2007, and it promptly disclaimed coverage on the ground that the notification was untimely. Plaintiffs thereafter obtained a default judgment against Fretz in the underlying action and, following an inquest on damages, Supreme Court awarded $226,000 to plaintiffs in compensatory damages, which the court then trebled to $700,180.72 pursuant to Judiciary Law § 487:

§ 487  Misconduct by attorneys. An attorney or counselor who: Is guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party; or, Willfully delays his client's suit with a view to his own gain;  or, willfully   receives any money or allowance for or on account of any money which he has not laid out, or becomes answerable for, is guilty  of  a misdemeanor,  and  in  addition  to  the  punishment prescribed  therefor  by the penal law, he forfeits to the party injured treble damages, to be recovered in a civil action.

The plaintiffs first argued that the insurer waived its right to contend that Fretz notified it after the extended reporting period because the insurer did not raised that point in its initial disclaimer letter.  The Fourth Department rejected that argument because IF the notice was given outside the reporting period, the claim would not fall within the grant of coverage.  This was not a “late notice disclaimer” but a fundamental part of the coverage grant, not subject to waiver.
However, the court found that nevertheless, the plaintiffs did in fact make claim against Fretz within the policy period by a January 2, 2007 letter.  Although they did not specifically make claim for money damages, they demand that Fretz “rectify their problem” and alleged he was negligent. .
In what might the most interesting part of the decision, the court went on to hold that the plaintiffs gave notice of their claim against Fretz to the insurer as soon as was reasonably possible, and thus that their failure to give notice to defendant during the policy period or extended reporting period did not invalidate their claim. The insurer argued that the section of the Insurance Law – Section 3420(a)(4), that excused a delay in giving notice when it was not reasonably possible to do so – applied to claims made policies as well as occurrence policies..
The court went on to hold that the carrier was not obligated to pay the treble damage penalty under Judiciary Law § 487 as they are in the nature of uninsurable punitive damages.

12/30/10       Rollo v. Servico New York, Inc.
Appellate Division, Fourth Department
Where Insured Becomes Insolvent, Its Insurer Is Still on the Hook for Amounts in Excess of Self-Insured Retention and Within Policy Limits
In December 2000, plaintiff fell and was injured on Servico’s property. Within a year of the accident, Servico filed for bankruptcy protection and all personal injury claims were discharged.  Plaintiff did not file a proof of claim in the bankruptcy proceedings and filed a lawsuit in 2007 for her injuries.

The defendants moved to dismiss the complaint on the ground that the action was precluded because the claims were discharged in bankruptcy.  The lower court denied the motion to the extent there was applicable insurance coverage.   There was then an application to renew, based on the claim that there was no insurance coverage and therefore the entire matter should be dismissed. The defendant argued that there was no insurance coverage because the policy contained a self-insured retention and, it was argued, unless the self-insured retention was satisfied by the insured, the policy obligations did not attach.

The appellate court found that the unambiguous provisions of the endorsement to the policy provide that the insurer is obligated to provide coverage in excess of the SIR irrespective of whether the SIR is satisfied.  Even if the provisions said otherwise, under Insurance Law Section 3420(a) (1), the insolvency of the insured does not relieve an insurer of its obligations under a policy.

12/30/10       Bissell v. Town of Amherst and State Insurance Fund
Appellate Division, Fourth Department
For Purposes of Calculating Workers Compensation’s Share of Litigation Costs, Cost of Future Medical Payments Are Speculative
Bissell sustained grave injuries while working for a roofing company on property owned by the Town of Amherst (“Town”).  He sued the Town, the case went to verdict and after being modified on appeal, a judgment was entered for $23,400,000.

The State Insurance Fund (SIF) entered asserted a lien to recover back $219,000 for past payment of compensation and medical benefits. It recognized its obligation to contribute towards the litigation costs and also realized that it was achieving a savings for future compensation benefits it did not need to pay because of the judgment.  The State Fund calculated that its equitable apportionment percentage (EAP), representing the percentage that the litigation costs bore to the third-party recovery, was 33.5% and calculated that its share of litigation costs was about $172,000 and thus it sought to recover the difference of about $48,000 Bissell.  With respect to future medicals, the SIF could not calculate them as they were considered "purely speculative" and proposed to use the same 33.5%.
The Fourth Department held that value of foregone future medical payments should not be considered in calculating its share of litigation costs unless and until those payments are made because they are, in fact, speculative.

12/21/10       McGovern-Barbash Associates, LLC, v. Everest Nat. Ins. Co.
Appellate Division, Second Department
In Yet Another Pre-Prejudice Case, Late Notice Unexcused When Insured Knew of Accident and Likelihood of Policy Involvement

On August 22, 2007, Wehrheim was injured while working at a construction site owned by McGovern-Barash Associates (MBA).  MBA was insured by Everest under a CGL policy requiring notice as “soon as practicable.”  MBA did not notify Everest about the accident until December 10, 2007, almost four months later and Everest denied coverage based on late notice.
MBA argued that it had a good-faith belief in non-liability but little was offered in terms of an excuse.  MBA knew of the accident within four days of its occurrence and received a letter from plaintiff’s counsel in September, warming of the claim.  Notice was not given until one month after a suit was brought by the plaintiff against MBA.
At the very least, the plaintiffs should have realized that there was a reasonable possibility of the subject policy's involvement as early as August 2007, and the proffered excuse was unreasonable as a matter of law.

12/21/10       In the Matter of Eveready Insurance Company v. Smith
Appellate Division, Second Department
Auto Policy Properly Terminated Under Rules Existing at the Time, So Vehicle Uninsured at Time of Accident
On July 18, 2006, Smith and others were hurt in a car accident.  They served a demand for Uninsured Motorist Arbitration.  Eveready sought to stay arbitration, arguing that the offending motor vehicle was insured by New York Marine because New York Marine did not file a notice of termination regarding its policy with the New York State Department of Motor Vehicles (DMV).


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

1/06/11         Rodriguez v. Freight Masters, Inc.
Appellate Division, First Department
Conclusory Statement That Injuries Sustained Make Plaintiff “More Susceptible” to Future Serious Injury Does Not Support Claim

The affirmed medical reports of defendants’ examining neurologist, MRI studies, other treatment records, and examinations all supported that plaintiff had no limitations in his spinal range-of-motion and that, in addition, the herniation at L5-S1 was not causally related to the accident.  In fact, plaintiff’s expert only conclusorily averred that the injuries sustained made plaintiff “more susceptible” to serious injury in the future.  In addition, plaintiff failed to support his 90/180-day claim with medical proof.  While in his first supplemental bill of particulars he alleged being confined to his cell and bed at the Eastern Correction Facility for five months, he offered no medical substantiation.  Furthermore, his expert examined him four years after the accident and addressed a surgically repaired herniated disc which did not appear in the MRI performed within a year of the accident.  The Appellate Court found no issues of fact, affirmed the trial court’s grant of defendant’s motion, and additionally awarded summary judgment to the non-moving other defendant.

12/30/10       Malburg v. Keller
Appellate Division, Fourth Department
Workers Compensation IME Finding of 50% Loss of Range of Motion Related to Accident Raises Issue of Fact

On appeal, the court reinstates the amended complaint alleging significant limitation of use with regard to the cervical spine, determining that plaintiff raised a triable issue of fact through the submission of the affirmed IME performed in the workers’ compensation case.  The IME doctor opined that plaintiff suffered a 50% loss in ROM of the cervical spine resulting in a temporary moderate partial disability causally related to the motor vehicle accident.  This was sufficient to warrant denial of defendant’s motion.

12/30/10       Caldwell v. Ward
Appellate Division, Fourth Department
On Appeal, the Complaint Is Reinstated with Regard to the “Fracture” Category of Serious Injury

Plaintiff only appealed his claim under the “fracture” category.  The court reinstated the amended complaint, denying the motion with respect to that category, finding that the affirmed reports of plaintiff’s primary care physician, stating that plaintiff sustained causally related compression fracture, and of his orthopedic surgeon, who reviewed x-rays from 2006 and 2008, and opined that plaintiff sustained T12 and L1 compression fractures related to the accident, were sufficient to warrant denial of defendants’ motion.

12/28/10       Santana v. Salmeron
Appellate Division, Second Department
Girlfriend Is Not an Immediate Family Member so “Zone of Danger” Allegation Is Dismissed

Defendant appealed the trial court’s denial of her motion with regard to the first and third causes of action of plaintiff Santana’s complaint.  With respect to Santana’s first cause of action alleging his own serious injury, the trial court should have granted defendant’s motion because plaintiff himself conceded that he did not sustain a serious injury as a result of the accident.  With respect to his third cause of action alleging his serious injury as a result of being in the “zone of danger when an immediate family member” sustained a serious injury, his girlfriend was not an immediate family member and, therefore, the trial court should also have dismissed that cause of action and the complaint insofar as asserted by Santana.

12/28/10       Torres v. Torrano
Appellate Division, Second Department
Finding of Significant Range of Motion Limitations Three Years After Accident Defeats Defendant’s Motion

Yet again, a defendant relies on a medical report that defeats her case.  This time the affirmed report was from a neurologist who examined plaintiff almost three years after the accident and found significant ROM limitations in plaintiff’s cervical spine.  Defendant thus fails to meet her prima facie burden and, on appeal, the trial court is affirmed without the need to consider plaintiff’s opposing papers.

12/28/10       Compass v. GAE Transportation, Inc.
Appellate Division, Second Department
Plaintiff Survives Summary Judgment by Rebutting Showing That Herniated or Bulging Discs Are Degenerative in Nature

On appeal, the trial court is affirmed and defendants’ motion is denied.  Plaintiffs claimed permanent consequential and/or significant limitation of use of their respective cervical and lumbar spines.  The affirmed medical reports of their doctor, based on contemporaneous and recent examinations and his review of MRI films, noted herniated and bulging discs and ROM limitations which he opined were permanent consequential and significant limitations of use.  He additionally stated that, upon review of plaintiff Compass’ MRI, he disagreed that her herniated or bulging discs were degenerative in nature as alleged by defendants, but rather were recent and caused by the subject accident.

12/28/10       Borras v. Lewis
Appellate Division, Second Department
Opinion That Cause of Limitations Was “Failed” Shoulder Surgery Is Conclusory

Plaintiff was allegedly injured when an oncoming car crossed the double yellow line and collided with the bus he was driving.  A year later he had shoulder surgery.  He moved for summary judgment and defendants cross-moved based on the affirmed report of their examining orthopedist who examined plaintiff three months after the surgery and, while noting significant limitations in the left shoulder, opined that the limitations were due to a “failed” surgery that was not medically necessary.  On appeal, the court affirmed the dismissal of defendants’ cross-motion finding that the opinion was conclusory and lacked probative value. 

12/28/10       Rocourt v. Alvelo
Appellate Division, Second Department
Defendants Fail to Meet Their Burden Where Their Expert Finds Significant Causally Related ROM Limitations

Here is another example of defendants attempting to support their motion with an affirmed medical report, in this case from an orthopedic surgeon, stating that the plaintiff has significant ROM limitations related to the subject accident.  The motion fails without the need to consider plaintiff’s opposing papers.

12/28/10       Husbands v. Levine
Appellate Division, Second Department
Plaintiff Fails to Rebut Defendants’ Motion Where His Submissions Are Either Not in Evidentiary Form or Not Contemporaneous with the Accident

Plaintiff limited his appeal to his claims of injury to his right shoulder.  However, in opposition to defendants’ motion, he relied on uncertified hospital records and unaffirmed MRI reports, all of which were inadmissible.  In addition, even the affirmed reports submitted failed to raise a triable issue of fact because there was no evidence showing significant right shoulder ROM limitations that was contemporaneous with the accident.  As such, the dismissal of the complaint was affirmed.

12/28/10       Goldman v. Tilitz
Appellate Division, Second Department
Defendant’s Motion Is Denied Where Her Expert’s Reports Reveal That Some of the Same Limitations Persisted Over Time

Defendant relied on two affirmed medical reports by the same doctor.  This first report noted significant ROM limitations of plaintiff’s cervical spine.  Upon re-examination, the doctor again noted some of the same limitations which resulted in defendant’s failure to meet her prima facie burden.

12/28/10       Dixon v. Fuller
Appellate Division, Second Department
Portions of Treating Physician’s Affirmation Based Upon His Own Contemporaneous and Recent Examinations Are Sufficient to Raise Triable Issues of Fact

Although portions of plaintiffs’ treating physician’s affirmation were not admissible because they repeated the unsworn findings of other doctors, those portions based on his own contemporaneous and recent examinations were sufficient to defeat defendants’ motion.  His examinations revealed significant ROM limitations in plaintiff Stone’s lumbar spine and right knee, and in plaintiff Dixon’s cervical and lumbar spine.  He further opined that in both cases the injuries were permanent, significant and causally related.

12/21/10       Rush v. Kwan Chiu
Appellate Division, Second Department
Admissible Evidence That Fails to Address the Only injury on Appeal Is Insufficient

Plaintiff only appealed the alleged injury to his right knee.  However, the medical reports, operative report and MRI report were all unaffirmed and therefore, inadmissible.  The only evidence that was in proper evidentiary form did not address the right knee injury and thus did not rebut defendants’ showing.  In addition, one of the admissible reports did not provide any findings of significant limitations that were contemporaneous with the accident, resulting in the affirmation of the trial court’s dismissal of the complaint.

12/21/10       Rhodes v. Stoddard
Appellate Division, Second Department
Examining Orthopedic Surgeon’s Finding of Significant Range of Motion Limitations Warrants Denial of Summary Judgment

Here, defendant failed to meet her prima facie burden because the examining orthopedic surgeon she retained found significant range of motion limitations in plaintiff’s cervical spine and also failed to compare the left shoulder range of motion findings with what is normal.  The trial court’s denial of her motion was affirmed on appeal without consideration of plaintiff’s opposing papers.

12/21/10       Austin v. Dominguez
Appellate Division, Second Department
Maximum Medical Improvement Adequately Explains Plaintiff’s Gap in Treatment

Although on appeal the court found that portions of plaintiff’s chiropractor’s affidavit had to be disregarded because he relied on unsworn findings of other doctors, the affidavit nevertheless raised a triable issue of fact based on the chiropractor’s contemporaneous and recent examinations of plaintiff where he noted significant limitations in her cervical spine which he concluded were permanent.  In addition, plaintiff’s chiropractor explained that after several months of conservative care, plaintiff had reached her maximum medical improvement and further care was not necessary.  This was sufficient to explain the gap in treatment.



AUDREY’S ANGLES ON NO-FAULT

Audrey A. Seeley
[email protected]

ARBITRATION
12/30/10       Elite Medical Supply of NY v. Respondent
Arbitrator Thomas J. McCorry, Erie County
Durable Medical Equipment Properly Denied Based Upon Chiropractic Peer Review by Robert Sohn, DC

The Applicant sought reimbursement for an LSO brace, cervical traction unit, and TENS unit supplied to the eligible injured person (“EIP”) allegedly as a result of an April 26, 2010, accident.  The medical necessity letter from Applicant indicated that the durable equipment was needed to “decrease pain, increase function and to increase stability” to the cervical and lumbar spine.

The insurer denied payment based upon the peer review of Robert Sohn, DC.  Mr. Sohn opined that the Applicant’s treatment notes no where mention that the EIP was wearing a custom fitted lumbosacral support that need to be removed to perform treatment.  Further, Mr. Sohn indicated that generally the support is used on a patient with an unstable spine so weak that the patient cannot support himself in an erect position.  Also, the support is used for a patient with a neurological abnormality that prohibits the patient from ambulating, sitting, or unable to mobilize himself to or from the chiropractor’s office.  The Applicant’s treatment records never indicated any spine instability.  Mr. Sohn concluded that based upon the accepted standards within the chiropractic area, the initial exam, and office notes the durable medical equipment did not meet the acceptable chiropractic standards, policies, protocols, or procedures.

The assigned arbitrator determined Mr. Sohn’s report was persuasive and denied Applicant’s claim.

12/28/10       Elite Medical Supply v. Respondent
Arbitrator Kent L. Benziger, Erie County
Same Peer Reviewer’s Report Found Unpersuasive Due to Reliance Upon Inconclusive Studies

As with the previously reported decision, the Applicant sought reimbursement for a lumbosacral brace, cervical traction unit, and TENS unit dispensed to the EIP allegedly as a result of an October 27, 2009, accident.  The EIP complained of neck and back pain with associated left leg and arm numbness.  The Applicant’s medical necessity letter stated the EIP had a diagnosis of cervical and lumbar disc herniations, cervical and lumbar sprain/strain, and spinal instability.  The basis for prescribing the durable medical equipment was for disc instability and difficulties with daily living activities.

The insurer denied the durable medical equipment based upon the peer reviews of Robert Sohn, DC and Christopher Ferranti, DC.  Mr. Sohn opined that a cervical traction unit should be used during a treatment session prior to prescribing a home device.  Relying upon medical journal articles, Mr. Sohn concluded that there was no evidence that such a unit was effective.  Rather, Mr. Sohn suggested that a specific set of exercises could have been prescribed.  Mr. Sohn also opined that the TENS unit was not medically necessary based upon a multitude of journal articles that determined the unit as inconclusive on treatment effectiveness when used alone.  Finally, Mr. Ferranti opined that the lumbosacral brace was not medically necessary based upon a number of journal articles which opined the brace was not effective or should only be used after a course of treatment which the EIP had not yet undergone.

The Applicant submitted a rebuttal letter to Mr. Sohn’s peer reviews.  In the letter, Applicant noted that he was “thoroughly entertained” by Mr. Sohn’s denial.  Mr. Sohn interposed a response which essentially indicated he stood behind his initial opinion.

The assigned arbitrator indicated that he found a fact perplexing – the Applicant only on rebuttal mentions that his patient underwent a prior laminectomy.  This prior procedure was not significant enough to mention in any of the treatments records and was a complaint Applicant lodged against Mr. Sohn in failing to recognize.  Yet, Mr. Sohn’s response letter appeared to concede the prior laminectomy.

The assigned arbitrator found the peer reviews unpersuasive since they relied upon medical journal articles that had inconclusive findings.  The assigned arbitrator while acknowledging he was ruling in Applicant’s favor also threw some cautionary words to him, “…the less than professional language and tone in Dr. Dudzik’s rebuttal/letter of medical necessity does little to advance his contentions.”

LITIGATION
12/30/10       Lenox Hill Radiology, PC a/a/o Edward Bredy v. Tri-State Consumer Ins. Co.
Appellate Term, First Department
Mail Room Employee’s Testimony Not Necessary to Establish Mailing Procedure; Judge Moulton Should Be Commended for Thoughtful Dicta Discussion On Problems With System

The insurer’s defense at trial was that the action was premature due to outstanding verification requests.  On appeal, the court reversed and held that the insurer presented sufficient evidence at trial of its office mailing practice to establish that a verification request was mailed and presumed received by plaintiff.  This testimony came from the claims examiner that handled the claim with no testimony from a mail room employee.  It is important to note that the examiner testified consistently and credibly to how the mail was systematically picked up during the work day; when the mail would “go out”; and what occurred if a verification letter was returned as undeliverable.

Since the insurer established its routine and reasonable office practice it met the burden of demonstrating that the verification request letters were mailed and presumed received by plaintiff.  The court further indicated that the plaintiff never rebutted the presumption of receipt and never affirmatively denied receiving the verification letters.

So here is the best part, which is a dictum:

Before concluding, we would be remiss in failing to note that the facts and circumstances of this action do much to illustrate the disturbing reality that first-party-no-fault benefits litigation has become the antithesis of what was supposed to be an expeditious and simplified process for the payment of medical costs for injuries sustained in motor vehicle accidents.  [Citation omitted]  Too often, lawsuits with a value akin to a small claims action become bogged down by an insistence by one party or another that mailing of routine forms be established with scientific precision, asking judges, already burdened to the breaking point with the veritable legion of no-fault cases overflowing from our court dockets (while very able arbitrators remain underutilized), to require multiple witnesses to be summoned to the courthouse, merely to establish a presumption of mailing, even in the absence of an express denial of receipt of the disputed correspondence.  Unfortunately, this class of cases has spawned a body of ‘gotcha’ jurisprudence, marked by a near manic preoccupation with form over substance.

How we have reached this sorry state is of little moment.  Perhaps all branches of government need to call a ‘time out’ and, working together, endeavor to construct a workable process to achieve what the framers of the No-Fault statute had in mind when they sought to establish a simplified and expeditious process to reimburse those of our citizenry injured in automobile accidents.  For sure, the system now in place is not achieving that laudable aim.

Editor’s Note: [BRAVO Judge Peter Moulton; exuberant standing applause.]

12/30/10       Enko Enterprises Int’l, Inc. a/a/o Pena Felix v. Clarendon Nat. Ins. Co.
Appellate Term, First Department
Plaintiff’s Failure to Submit Any Evidence Regarding Medical Necessity Fatal to Opposing Insurer’s SJ Motion

The insurer’s summary judgment motion should have been granted as the affirmed peer review report demonstrated that the medical supplies were not medically necessary.  Further, the court noted that peer reviewer opined that the supplies were not necessary as the chiropractic and physical therapies being received were sufficient under the circumstances.  The plaintiff failed to submit any evidence regarding the medical necessity of the supplies thus not raising any triable issue of fact.

12/30/10       Kruger v. State Farm Mut. Auto. Ins. Co.
Appellate Division, Third Department
You Must Plead Standing as an Affirmative Defense or Move Pre-Answer on the Issue

The insurer’s omission to either move pre-answer or assert as an affirmative defense in its answer, lack of standing due to the existence of an assignment of benefits, deemed the defense waived.  Accordingly, the insurer’s motion for summary judgment based upon lack of standing was granted in error.  The court further noted that the issue of plaintiff being the proper party to assert the claim was separate from the court having subject matter jurisdiction.

12/20/10       Belt Parkway Imaging, PC a/a/o Denise Arrindell v. State Wide Ins. Co.
Appellate Term, Second Department
Insurer Failed to Meet Burden and Compounded Interest Accrues From 30 Days After Claim Submitted

At trial, the insurer did not submit sufficient evidence to establish by even a preponderance of the evidence that the plaintiff was operating in violation of state licensing requirements in that the professional corporation was actually controlled by a management company owned by unlicensed professionals.  On appeal, the court declined to address whether the burden of persuasion was by clear and convincing evidence or by preponderance of the evidence.  Rather, the court held that even the least heavy burden was not met.  To make it worse, the insurer had not established that a denial had ever been issued thus interest began accruing, under the old regulations (interest compounded!), 30 days after the claim was submitted.

12/16/10       Elmont Open MRI & Diagnostic Radiology, PC a/a/o Yong Ki Ma v. Travelers Indemnity Co.
Appellate Term, Second Department
Peer Reviewer Can Review Records Sent to Insurer and They Can Form the Basis for the Opinion of Lack of Medical Necessity

The insurer’s summary judgment motion should have been granted.  The affirmed peer review established lack of medical necessity for the services.  The peer reviewer’s consideration of plaintiff’s medical records and those of other providers was not improper.  The plaintiff cannot challenge the reliability of its own medical records.  Further, as the plaintiff stands in the shoes of its assignor it acquires no greater rights of its assignor with regard to other medical providers’ records.  Therefore, the peer reviewer is not required to review the plaintiff’s bill in a vacuum and ignore other medical records that either plaintiff submitted to the insurer or other providers submitted to the insurer on behalf of the assignor.  Likewise, the medical records reviewed are not hearsay as they were not relied upon to establish the existence of an injury or the treatment set forth in the records.

12/16/10       Gentle Care Acupuncture a/a/o Barbara Wiggins v. Geico Ins. Co.
Appellate Term, Second Department
Fee Schedule for Chiropractors Performing Acupuncture Appropriately Relied Upon in Reimbursement to Licensed Acupuncturist

The court held as a matter of law that an insurer can rely upon the workers’ compensation fee schedule for acupuncture services rendered by chiropractors to determine compensation for a licensed acupuncturist.


PEIPER ON PROPERTY (and POTPOURRI)
Steven E. Peiper

[email protected]


12/30/10       Bronson v. Hansel
Appellate Division, Fourth Department
In a 3-2 Split, Court Dismisses Plaintiff’s Complaint Based on a “Release of All Claims” Executed by Plaintiff Prior to Commencement of the Lawsuit
Following a motor vehicle accident, plaintiff signed a “Release of All Claims” in consideration of $1,039.82, releasing all claims “growing out of any and all known, foreseen and unforeseen bodily and personal injuries and property damage and the consequences thereof resulting from the accident…”  The release further provided that plaintiff “declare(s) and represent(s) that there may be unknown or unanticipated injuries resulting from the…accident…and[,] in making the [the r]elease[,] it is understood and agree that [it] is intended to include such injuries.  Thereafter, an MRI revealed a herniated disc in plaintiff’s cervical spine. 

The Supreme Court granted defendant’s summary judgment motion based on the release, and the Appellate Division affirmed.  The court held that it was undisputed that plaintiff knew of her neck injury before signing the release, and that the discovery of the herniated disc was a consequence of that known injury.  Further, the court noted that plaintiff could not avoid the release by arguing that she did not understand its terms.  It reasoned that a party is under an obligation to read a document before executing it and cannot avoid its effect by asserting that he or she did not read it or know its contents. 

In the dissent, by Justices Green and Gorski, it was asserted that a triable issue of fact existed as to whether the release was unenforceable because plaintiff was under a mistaken belief that it was intended to settle only her claim for property damage.  The dissent pointed to evidence that defendant initially offered plaintiff $960 for the damage to the vehicle.  When she expressed dissatisfaction, inasmuch as the vehicle was valued at $2,000, the $1,039.82 was offered.  In addition, the dissent noted that the check contained no notation with respected to the claim for which it was issued. 

12/30/10       Nichols v. BDS Landscape Design
Appellate Division, Fourth Department
Court Finds A Question of Fact Regarding Whether Insurer Wrongfully Refused to Pay Agreed Settlement After Statute of Limitations Expires
In this case, the timeline is as follows:

  • In November 2005, Plaintiff was injured in a slip and fall on ice in an area maintained by defendants, BDS Landscape Design (“BDS”) and William Dobson, III;
  • Plaintiff successfully filed a workers’ compensation claim;
  • In February 2007, Plaintiff entered into settlement negotiations with BDS and Dobson’s insurance carrier, National Grange Mutual Ins., and eventually reached an oral settlement of the negligence claim;
  • In May 2008, plaintiff sent a confirming letter which provided that the settlement was “subject to the consent and waiver of the lien” by the comp. carrier;
  • Plaintiff did not receive the comp. carrier’s consent to settle until April 2009, and which time, she executed the general release that had been provided to her by National Grange; 
  • By letter dated May 29, 2009, National Grange advised plaintiff that it was taking the position that the matter was not settled and that the claim was now time-barred. 

 

Plaintiff then commenced a special proceeding by order to show cause and petition, seeking a judgment against National Grange, a toll of the statue, and an order compelling payment.  The Supreme Court granted the relief requested. 

On appeal, the Appellate Division initially noted that a special proceeding was not the proper vehicle to bring this claim.  Accordingly, it converted that special proceeding into an action.  It then reversed the grant of summary judgment, holding that plaintiff failed to establish the existence and terms of the settlement agreement. 

12/28/10       DeLouise v. S.K.I. Beer Corp.
Appellate Division, Second Department
Plaintiff’s Broad Allegations of Physical Injury and Mental Anguish Waived the Physician-Patient Privilege 
The Supreme Court denied portions of defendant’s motion to compel plaintiff to provide compliant authorizations pursuant to the Health Insurance Portability and Accountability Act of 1996 for certain medical and hospital records relating to his medical condition. 

The Appellate Division reversed reciting the established rule that a party must provide duly executed and acknowledged written authorizations for the release of pertinent medical records when that party has waived the physician-patient privilege by affirmatively placing his or her physical or mental condition in issue.  In this case, the court noted that plaintiff affirmatively placed his entire medical condition in controversy through the broad allegations of physical injury and mental anguish contained in the complaint and bill of particulars.

12/28/10       Blanche, Verte & Blanche, Ltd. v. Joseph Mauro & Sons
Appellate Division, Second Department
Plaintiff Permitted to Prove Losses and Expenses at Trial Against Tortfeasor Irrespective of Whether Payments Received by Plaintiff’s Insurance Carrier Will Have to be Deducted from the Recovery
Plaintiff owned real property in Bay Shore, which was destroyed by a fire in October 2002.  Plaintiff’s tenant on the first floor of the premises hired defendant Joseph Mauro & Sons to perform electrical work. 

The Supreme Court rejected defendants’ contention that plaintiff could not maintain an action to recover damages after having been fully compensated for its losses under its own insurance policy. The Appellate Division affirmed, relying on CPLR § 4545 and holding that in the event plaintiff is awarded damages for its loss, any such award would be reduced by the amount paid by its insurer; however, any collateral source deduction required by CPLR § 4545 would be made by the trial court after the rending of the jury’s verdict.  Plaintiff may prove his or her losses and expenses at the trial irrespective of whether such sums will later have to be deducted from the recovery.  Accordingly, there was a triable issue of fact as to whether plaintiff sustained losses greater than the funds received from its insurer. 


FIJAL’S FEDERAL FOCUS
Katherine A. Fijal

[email protected]

 

12/23/10       10 Ellicott Square Court Corp. v. Mountain Valley Indem. Co.
United States Court of Appeals for the Second Circuit
No Coverage If Underlying Trade Contract is Not Signed Prior to Loss – Applying NY Law
The central issue of this appeal was whether coverage was triggered under the Mountain Valley Indemnity Company [“MVIC”] primary policy issued to non-party, Ellicott Maintenance.  The MVIC policy was amended by an additional insured endorsement, the primary policy would cover Ellicott Maintenance and “any person or organization with whom Ellicott Maintenance agreed because of a written contract . . .to provide insurance such as is afforded under this Coverage Form, but only with respect to liability arising out of” Ellicott Maintenance’s operation, work or facilities owned or used by Ellicott Maintenance.  However, pursuant to the terms of the additional insured endorsement additional insured coverage would only be provided “if the written contract or agreement has been executed . . . prior to the bodily injury”.

On or about August 14, 2003, Ellicott Maintenance entered into a contract with plaintiffs to perform interior demolition work at a project identified as the Graystone Building. The Agreement obligated Ellicott Maintenance to procure insurance coverage and to name plaintiffs as additional insureds.  Ellicott Maintenance procured two policies from MVIC:  a CGL policy with liability limits of $1,000,000/$2,000,000; and, an umbrella with liability limits of $2,000,000.  A certificate of insurance was issued by MVIC’s agent, LRMP, Inc., on August 19, 2003, providing evidence of the coverage procured and identifying plaintiffs as additional insureds.

Ellicott Maintenance began work on the project and on September 9, 2003, a worker employed by non-party S & A Rubbish and Debris Removal was injured during the course of his employment.  The Agreement between Ellicott Maintenance and plaintiffs was not signed until September 12, 2003.  After MVIC was given notice of the loss it disclaimed liability and denied coverage.

The district court agreed with plaintiffs’ argument that partial performance under the contract was an indication that the contract was “executed” for purposes of triggering coverage and granted plaintiffs motion for summary judgment.  Plaintiffs’ also argued that although the Agreement between plaintiffs and Ellicott Maintenance was not signed the underlying contract to procure insurance had been fully performed and as a result the contract was fully performed and coverage was triggered.

The Second Circuit disagreed with plaintiffs’ position on both arguments.  First, the Court noted that it is common practice for the courts of this state to refer to the dictionary to determine the plain and ordinary meaning of the words of a contract. The Court cited to, and relied on Burlington Ins. Co. v. Utica First Ins. Co., 71 A.D.3d 712 (2nd Dept. 2010), a decision rendered by the New York Appellate Division, Second Department.  In Burlington, the court used Black’s Law Dictionary to define the term executed and concluded that the term was not ambiguous and that when addressing the issue of whether a contract was “executed”, execution required that the contract be signed or fully performed.  Neither was done in this case.

As to the second argument the court pointed out that contrary to plaintiffs’ argument that the contract had been fully performed because the insurance procurement provision had been completed, the construction agreement was not comprised of many individual agreements.  Consistent with longstanding precedent the court held that the construction agreement must be looked at as a whole and fulfilling the insurance procurement provision constituted only partial performance.

In conclusion, the Court reversed the district court decision holding that because New York law unambiguously requires either the signing of a contract or its full performance is required for the agreement to be “executed” within the meaning of the insurance policy; and, because neither occurred here, the construction agreement was not executed as of the date of injury, and coverage was not triggered under the MVIC CGL policy.

Unfortunately, this was not the end of the case. Although the Court decided that the contract was not executed as required by the terms of the MVIC additional insured endorsement the court, based on a perceived division of authority among the New York Appellate Divisions, considered whether the certificate of insurance issued by MVIC’s agent could create coverage by estoppel and certified the following question to the New York Court of Appeals:

In a case brought against an insurer in which a plaintiff seeks a declaration that it is covered under an insurance policy issued by that insurer, does a certificate of insurance issued by an agent of the insurer that states that the policy but also bears language that the certificate is not evidence of coverage, is for in formational purposes only, or other similar disclaimers, estop the insurer from denying coverage under the policy?

It is expected that the Court of Appeals will accept the certification. 

The final question addressed by the court was whether the MVIC Umbrella policy issued to Ellicott Maintenance provided coverage to plaintiffs. The MVIC Umbrella policy provides that coverage would be triggered for “Any person or organization with whom or with which you have agreed in writing prior to the loss to provide insurance such as is afforded by this policy.” The agreement between plaintiffs and Ellicott Maintenance required only that Ellicott Maintenance procure a policy with a combined single limit, i.e., a single policy providing the required coverage and further specified that the coverage shall be primary.  There was no requirement for umbrella coverage.

MVIC argued that the policy language controls and that the agreement did not require the type of coverage as was afforded under the Umbrella policy.  Citing no authority for its position the court disagreed and affirmed the district courts decision granting plaintiffs’ motion for summary judgment with respect to the umbrella policy.

12/28/10       Lexicon, Inc. v. Ace American Ins. Co.
United States Court of Appeals for the Eighth Circuit
The Faulty Workmanship Exclusion – Applying Arkansas Law
Lexicon, Inc. built a battery of silos for Nu-Iron Unlimited in the West Indies. Months after completion, one of the silos collapsed because of faulty welding by Lexicon’s subcontractor, Damus Limited. Lexicon’s insurers disclaimed coverage and Lexicon filed suit. 

Pursuant to its agreement with Nu-Iron, Lexicon warranted all goods delivered would be free from defects in workmanship, including latent defects.  Lexicon agreed that its warranty survived inspection, delivery and payment and promised to reimburse Nu-Iron for “all incidental and consequential damages incurred as a result of defective goods”.

The district court dismissed Lexicon’s suit, holding that under governing Arkansas law, property damage resulting from the faulty work of a subcontractor is not an “occurrence” for purposes of a CGL policy. Essex Ins. Co. v. Holder, 261 S.W.3d 456 (Ark 2008).  In Holder the court certified the following question to the Arkansas Supreme Court:  “Does defective construction or workmanship constitute an accident and, therefore, an occurrence within the meaning for CGL insurance policies.”  The court answered the certified question holding that “defective workmanship standing alone – resulting in damages only to the work product itself – is not an occurrence under a CGL policy such as the one at issue here.”

The Eight Circuit determined that the district court overstated Holder’s reasoning and holding when it held that the faulty work of a subcontractor does not constitute an “occurrence” for purposes of a CGL policy.   The Court noted that Holder expressly and solely held that “defective workmanship standing alone – resulting in damages only to the work product itself – is not an occurrence under the CGL policy.  The Court stated that properly understood Holder justifies the Insurer’s decisions to deny Lexicon’s claims for damage to “the work product itself” -- the silo, and in that respect the Court affirmed the decision of the district court.  However, as to the rest of the damages the court reversed holding that absent some applicable exclusion in the policies, the insurers were obligated to reimburse Lexicon for all property damage other than the silo itself. The Court held that under Arkansas law, it was foreseeable that faulty subcontractor work would damage the silo, but not foreseeable that faulty subcontractor work would cause millions of dollars in collateral damage.

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

12/22/10       United Nations Fed. Credit Union v. Arch Ins. Co.
Supreme Court, New York County
Court finds Employee’s Fall From Ladder After Electrical Shock Triggered Electrical Subcontractor’s Duty to Defend Owner and General Constructor Pursuant to Additional Insured Endorsement
While performing construction/renovation work in the scope of his employment, Sandy Delrosario fell from a ladder as a result of an electrical shock.  He then commenced an action against the owner, general contractor and electrical subcontractor. 

Upon receiving the complaint, the owner and general contractor tendered their defense to Arch Insurance Company (“Arch”), the electrical subcontractor’s insurer.  The policy Arch issued to the subcontractor provided that the owner and general contractor were additional insureds “only with respect to liability arising out of:  ‘your [i.e., the electrical subcontractor’s] work’ at the location designated; or the ‘products-completed operations hazard.’”  Arch denied the tendered asserting that Mr. Delrosario’s injury did not arise out of its insured’s work and, even if it did, the owner and general contractor’s notice was late.

In considering both parties motions for summary judgment, and relying on the Court of Appeals case BP Air Condition Corp., the court held that Arch had a duty to defend the owner and general contractor because the four corners of the Delrosario Complaint “potentially [gave] rise” to a claim by the owner and general contractor as additional insureds under Arch’s policy.  The court further held that Arch’s disclaimer based on late notice was waived as it failed to timely disclaim coverage. 

EARL’S PEARLS
Earl K. Cantwell

[email protected]

STEALTH ARBITRATION CLAUSES

As commercial, trading and construction transactions become more complicated, with many different layers or contracts between parties, one issue to consider is whether and to what extent an arbitration clause in one contract may affect claims by upstream or downstream parties.  In First Sealord Surety, Inc. v. TLT Construction Corp., 2010 U.S. Dist. LEXIS 101627 (D. Mass. Sept. 27, 2010), a court sent a surety’s fraud suit against a general contractor into arbitration because the suit “involved” a subcontractor, even though that subcontractor was not a party or even a necessary party to the litigation at hand.

Sealord Surety, Inc. sued TLT Construction Corp., the general contractor on a school construction project, for fraud.  Sealord tried to avoid arbitration, but TLT invoked an arbitration clause “incorporated into” the surety bond which required that any claim “involving a subcontractor” was subject to arbitration at TLT’s election.  The essential holding of the court was that, although the alleged fraud arose from TLT’s actions, that claim “involved” the subcontractor’s work status and scope of work, therefore “involved” the sub and the arbitration provision applied. 

The sub in question had submitted a bid of $1.7 Million.  TLT split the work into two phases, each valued at less than $1 Million.  TLT then entered into two subcontracts for a total of $1.6 Million, even though it independently estimated the cost of the work to be $3 Million, a discrepancy and shortfall which was kept secret.  The bonding company did not conduct an engineering review of the scope and value of the work because its review was only triggered when the value of the subcontract was more than (guess what) $1 Million.  Sealord issued the bond listing the subcontractor as the principal and TLT as the obligee. 

When the subcontractor was not able to fully perform, TLT supplemented the subcontractor’s work force, “back-charged” the subcontractor for additional labor and the surety ultimately incurred costs of $1.2 Million. 

The surety company alleged that the contractor failed to disclose material information about the risk of issuing the bond, including TLT’s own estimate of the cost of the work.  The surety company also alleged that TLT purposely divided the work into the two subcontracts to avoid an engineering review which might have uncovered the discrepancies in the value of the work. 

Sealord Surety argued that its fraud claim did not “involve” the subcontractor, and that the subcontractor was not a necessary party to the litigation.  The court disagreed.  It read the arbitration clause broadly, and the subcontractor was in fact the principal on the bond and its performance was a “factual predicate” of the surety’s claim.  The court stayed the litigation so the parties could proceed to arbitration.  The court ruled that any claim the surety might pursue was subject to arbitration, and these claims could be pursued independently against the contractor, TLT, even without the sub, but were nonetheless subject to the arbitration clause because the claims “involved” the sub.


The lessons of this case are, first, courts will construe arbitration clauses broadly in terms of their scope, claims involved, and even parties who might be subject to the reach of arbitration. 

The second lesson is that arbitration clauses and various contracts, bonds, and insurance policies may interact with one another and essentially become “incorporated” and intertwined with one another in unexpected and perhaps unintended ways.  In this case, an arbitration provision which clearly was intended to apply to any claim involving the subcontractor and its work was deemed applicable to an overriding plenary lawsuit between the contractor and the surety over the contractor’s conduct which, to some extent, happened to “involve the subcontractor”.  It is therefore important to watch out for the interaction and interplay of arbitration and other forum and remedy clauses that may exist in the various bonds, primary contracts and subcontracts to make sure that they are limited to and appropriate to their purpose. 

It is also not too fanciful to suggest that, in the event various arbitration/forum/ remedy clauses may differ or even be inconsistent, a court may well seize upon the broadest form of the clauses and apply them in a particular case.

A lesson for insurance companies and sureties is to make sure that the bond and contract with the principal contains the desired arbitration/ forum/remedy clauses, and make sure that the underlying project contracts and subcontracts are in conformity with or not inconsistent with that preferred bond or contract language.     

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

12/29/10       National Union Fire Ins. v. Standards Fusee Corp.
Indiana Supreme Court
Indiana Supreme Court Held That “Uniform-Contract-Interpretation” Approach Should Be Applied in Choice of Law Dispute Involving Multi-Site, Multi-State Policies
Indiana Supreme Court

Standard Fusee Corporation (SFC), a manufacturer of emergency signaling flares, sued its insurers for coverage for environmental liabilities arising from its Indiana and California operations. The trial court ruled in SFC’s favor, finding that Indiana law governed the interpretation of the policies and, under that law, the insurers had a duty to defend. The insurers sought, and were granted, an interlocutory appeal on the choice of law issue. The appellate court reversed the trial court’s decision and adopted the “site-specific” approach, holding that Indiana law governed with respect to the Indiana site and California law governed with respect to the California site. On further appeal, the Indiana Supreme Court held that the “uniform-contract-interpretation” approach was more consistent with Indiana’s choice-of-law jurisprudence and should apply in cases involving multi-site, multi-state insurance policies. The court further held that the law of the state with the most intimate contacts should be applied where there is no principal location of the insured risk. The court thus reversed and remanded ruling that Maryland law should apply because SFC was headquartered in Maryland and the policies were procured, retained and paid for through Maryland brokers.
Submitted by: Thomas K. Hanekamp and Devin C. Maddox (Tressler LLP)
12/28/10       Fed Ins Co v. Executive Coach Luxury Travel, Inc.
Ohio Supreme Court
Ohio Supreme Court Declined to Adopt “Control and Possession” Test When Determining Whether Driver of Bus Service Was “Hired” by College and Therefore Insured Under College’s Auto Policy

An employee driver of a chartered bus company was killed, along with five Bluffton University baseball team players, while transporting the team to a baseball game. The Federal Insurance Company auto policy at issue contained an Omnibus Clause which defined an insured as “[a]nyone else while using with your permission a covered ‘auto’ you own, hire or borrow.” The trial court and appellate court agreed with Federal that the driver was not an insured under the policy, reasoning that the bus was not “hired” by Bluffton because it did not exert control over and possess the bus. The Ohio Supreme Court rejected the line of cases relied on by Federal that defined the term “hired” in terms of control and possession. The court reasoned that the terms “hire” and “permission”, which were undefined in the policy, must be given their common and ordinary meanings. The driver was thus an insured under the policy because Bluffton hired the bus when its baseball coach procured the use of the bus in exchange for payment. The court opined, however, that, even under the “control and possession” test, the court would have reached the same conclusion as the team coach that requested the bus: (1) requested a certain size and leisure requirements; (2) gave his express permission to the bus company to allow the driver to drive the bus; and (3) had authority to direct the driver to stop driving if he was driving dangerously. The court therefore reversed and remanded the lower court’s decision.
Submitted by: Thomas K. Hanekamp and Kathryn Formeller (Tressler LLP) 
REPORTED DECISIONS
McGovern-Barbash Associates, LLC, v. Everest Nat. Ins. Co.


Carroll, McNulty & Kull, LLC, New York, N.Y. (Denise M.
Marra and Ann Odelson of counsel), for appellant.
Darrell J. Conway, P.C., Babylon, N.Y., for respondents.

DECISION & ORDER
In an action, inter alia, for a judgment declaring that the defendant Everest National Insurance Company is obligated to defend and indemnify the plaintiffs in an underlying action entitled Wehrheim v McGovern-Barbash Associates, LLC, pending in the Supreme Court, Suffolk County, under Index No. 35912/07, the defendant Everest National Insurance Company appeals from an order of the Supreme Court, Suffolk County (Tanenbaum, J.), entered February 4, 2010, which denied that branch of its motion which was to dismiss the complaint pursuant to CPLR 3211(a)(1) and (7) insofar as asserted against it and, in effect, denied that branch of its motion which was, in effect, for summary judgment declaring that it is not obligated to defend or indemnify the plaintiffs in the underlying action.
ORDERED that the order is modified, on the law, by deleting the provision thereof, in effect, denying that branch of the motion of the defendant Everest National Insurance Company which was, in effect, for summary judgment declaring that it is not obligated to defend and indemnify the plaintiffs in the underlying action, and substituting therefor a provision granting that branch of the motion; as so modified, the order is affirmed, with costs, and the matter is remitted to the Supreme Court, Suffolk County, for the entry of a judgment declaring that the defendant Everest National Insurance Company is not obligated to defend or indemnify the plaintiffs in an underlying action entitled Wehrheim v McGovern-Barbash Associates, LLC, pending in the Supreme Court, Suffolk County, under Index No. 35912/07.
On August 22, 2007, nonparty John Wehrheim allegedly was injured while working at a construction project on premises owned by the plaintiffs. On November 17, 2007, Wehrheim commenced an underlying action to recover damages for personal injuries entitled Wehrheim v McGovern-Barbash Associates, LLC, in the Supreme Court, Suffolk County, under Index No. 35912/07 (hereinafter the underlying action). At the time of the accident, the plaintiffs were insured by the defendant Everest National Insurance Company (hereinafter the appellant) under a commercial general liability insurance policy which, inter alia, required notice of any "occurrence" that might result in a claim "as soon as practicable." However, the plaintiffs did not notify the appellant of the accident until December 10, 2007, almost four months after the "occurrence," and one month after receiving service of process. Following an investigation, the appellant disclaimed coverage upon the ground of late notice. The plaintiffs then commenced the instant action, among other things, for a judgment declaring that the appellant is obligated to defend or indemnify them in the underlying personal injury action. The Supreme Court denied that branch of the appellant's motion which was to dismiss the complaint pursuant to CPLR 3211(a)(1) and (7) insofar as asserted against it, and, in effect, denied that branch of its motion which was, in effect, for summary judgment declaring that it is not obligated to defend and indemnify the plaintiffs in the underlying action. We modify.
Where an insurance policy requires that notice of an occurrence be given "as soon as practicable," notice must be "given within a reasonable [period of] time under all the circumstances" (Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp., 31 NY2d 436, 441; see Great Canal Realty Corp. v Seneca Ins. Co., Inc., 5 NY3d 742, 743; Sputnik Rest. Corp. v United Natl. Ins. Co., 62 AD3d 689; Zeldin v Interboro Mut. Indem. Ins. Co., 44 AD3d 652, 652-653; Morris Park Contr. Corp. v National Union Fire Ins. Co. of Pittsburgh, Pa., 33 AD3d 763). An insured's failure to satisfy the notice requirement constitutes "a failure to comply with a condition precedent which, as a matter of law, vitiates the contract" (Argo Corp. v Greater N.Y. Mut. Ins. Co., 4 NY3d 332, 339; see Security Mutual Ins. Co. v Acker-Fitzsimons Corp., 31 NY2d at 440; 120 Whitehall Realty Assoc., LLC v Hermitage Ins. Co., 40 AD3d 719, 721; Eagle Ins. Co. v Zuckerman, 301 AD2d 493). The insurer need not establish that it was prejudiced by the late notice, except in certain situations not applicable here (see Argo Corp. v Greater N.Y. Mut. Ins. Co., 4 NY3d at 332; Blue Ridge Ins. Co. v Biegelman, 36 AD3d 736, 737).
Here, the appellant established its prima facie entitlement to judgment as a matter of law by demonstrating that the plaintiffs had knowledge of the accident within days, but failed to notify it of the occurrence until almost four months thereafter (see White v City of New York, 81 NY2d 955, 957; Jordan Constr. Prods. Corp. v Travelers Indem. Co. of Am., 14 AD3d 655, 656). Under the law as it existed at the time the subject insurance policy was issued, the plaintiffs had the burden of raising a triable issue of fact as to the existence of a reasonable excuse for the delay in opposition to the appellant's prima facie showing (see Argentina v Otsego Mut. Fire Ins. Co., 86 NY2d 748, 750), but they failed to do so.
While the reasonableness of an insured's good faith belief in nonliability is a matter ordinarily left for a trial (id.; see Deso v London & Lancashire Indem. Co. of Am., 3 NY2d 127, 129; St. James Mech., Inc. v Royal & Sunalliance, 44 AD3d 1030, 1031), it may be determined as a matter of law where the evidence, construing all inferences in favor of the insured, establishes that the belief was unreasonable or in bad faith (see Tower Ins. Co. of N.Y. v Lin Hsin Long Co., 50 AD3d 305, 307; Sorbara Constr. Corp. v AIU Ins. Co., 41 AD3d 245, 246; Genova v Regal Mar. Indus., 309 AD2d 733; Eagle Ins. Co. v Zuckerman, 301 AD2d 493, 495; Travelers Ins. Co. v Volmar Constr. Co., 300 AD2d 40, 43). Here, the evidence established, as a matter of law, that the plaintiffs' representative learned of the accident "several days after it occurred." It is undisputed that, despite having this knowledge, the plaintiffs failed to provide notice of the "occurrence" to the appellant as required by the policy at that time.
Nor did the plaintiffs provide notice after a letter dated September 11, 2007, from the injured person's counsel warning them of the claim and specifically advising them to "refer this letter to your insurance carrier immediately for further attention." Rather, it was not until December 10, 2007, one month after the November 2007 filing of the underlying action against the plaintiffs, and approximately four months after the occurrence, that the plaintiffs finally notified the appellant of the accident.
Therefore, at the very least, the plaintiffs "should have realized that there was a reasonable possibility of the subject policy's involvement" as early as August 2007, and the proffered excuse was unreasonable as a matter of law (C.C.R Realty of Dutchess v New York Cent. Mut. Fire Ins. Co., 1 AD3d 304, 305; see Hanson v Turner Constr. Co., 70 AD3d 641, 643; Sorbara Constr. Corp. v AIU Ins. Co., 41 AD3d at 246; Rondale Bldg. Corp. v Nationwide Prop. & Cas. Ins. Co., 1 AD3d 584). Since the plaintiffs failed to offer a valid excuse for their delay in providing notice of the occurrence to the appellant, the Supreme Court should have granted that branch of the appellant's motion which was, in effect, for summary judgment declaring that it is not obligated to defend and indemnify the plaintiffs in the underlying action (see Deso v London & Lancashire Indem. Co. of Am., 3 NY2d at 129-130).
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 Everest National Insurance Company is not obligated to defend or indemnify the plaintiffs in the underlying action (see Lanza v Wagner, 11 NY2d 317, app dismissed 371 US 74, cert denied 371 US 901; Hanson v Turner Const. Co., 70 AD3d at 643).
In the Matter of Eveready Insurance Company v. Smith


Teresa Girolamo (Sweetbaum & Sweetbaum, Lake Success, N.Y.
[Marshall D. Sweetbaum], of counsel), for appellant.
Vincent D. McNamara, East Norwich, N.Y. (Michael S. Seltzer of
counsel), for respondent New York
Marine and General Casualty Company.

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, Suffolk County (Jones, Jr., J.), dated April 13, 2010, which, after a framed-issue hearing, denied the petition and dismissed the proceeding.
ORDERED that the order is affirmed, with costs.
On July 18, 2006, the respondents Nicole Smith, Heaven Purnell, and Brenda Rouse, allegedly sustained personal injuries as a result of a motor vehicle accident. They served a demand for arbitration on the petitioner, seeking uninsured motor vehicle benefits pursuant to a Supplementary Uninsured/Underinsured Motorists Endorsement. The petitioner filed the instant petition to permanently stay the arbitration, alleging that the "offending motor vehicle" was insured on the date of the accident, since New York Marine and General Insurance Company (hereinafter New York Marine), the insurer of the offending motor vehicle, did not file a notice of termination regarding the subject liability policy with the Commissioner of the Department of Motor Vehicles (hereinafter the Commissioner).
Contrary to the petitioner's contention, New York Marine was not required to file a notice of termination with the Commissioner. According to the version of Vehicle and Traffic Law § 313(2) which was in effect on the date of the accident and at the time of the termination of the policy, an insurer was not required to file a notice of termination with the Commissioner due to a nonrenewal of a policy of liability insurance (see Vehicle and Traffic Law former § 313[2]; see also Lloyd v Government Empls. Ins. Co., 204 AD2d 407). To the extent that regulation contained in 15 NYCRR 34.3(4) provides to the contrary, it is inconsistent with the legislative intent of the version of Vehicle and Traffic Law § 313(2) applicable to this case (see Seittelman v Sabol, 91 NY2d 618, 626-627; cf. Raffellini v State Farm Mut. Auto. Ins. Co., 9 NY3d 196).
Accordingly, the Supreme Court properly denied the petition and dismissed the proceeding to permanently stay arbitration.
Austin v. Dominguez


Goidel & Siegel, LLP, New York, N.Y. (Andrew B. Siegel of
counsel), for appellant.
DeSena & Sweeney, LLP, Hauppauge, N.Y. (Shawn P.
O'Shaughnessy of counsel), for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff Allison Connor appeals from an order of the Supreme Court, Kings County (Starkey, J.), dated December 7, 2009, which granted the defendant's motion for summary judgment dismissing the complaint insofar as asserted by her on the ground that she did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed, on the law, with costs, and the defendant's motion for summary judgment dismissing the complaint insofar as asserted by the appellant is denied.
The defendant met his prima facie burden of showing that the appellant did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In opposition, the appellant raised a triable issue of fact as to whether she sustained a serious injury to her cervical spine under the permanent consequential limitation of use or the significant limitation of use category of Insurance Law § 5102(d) as a result of the subject accident (see Casiano v Zedan, 66 AD3d 730; Ortiz v Zorbas, 62 AD3d 770). This triable issue of fact was raised by the affidavit of the appellant's treating chiropractor, Dr. Dean A. Mauro. In his affidavit, Dr. Mauro concluded, based on his contemporaneous and most recent examinations of the appellant, that there were limitations in her cervical spine range of motion, and that her cervical limitations and injuries were significant and permanent.
While portions of Dr. Mauro's affidavit must be disregarded because he admittedly relied on unsworn findings of other doctors (see Casiano v Zedan, 66 AD3d at 730; McNeil v New York City Tr. Auth., 60 AD3d 1018), Dr. Mauro found, on the basis of his physical examination of the appellant performed contemporaneously with the subject accident, and at the time of his most recent examination of the appellant, that she had a significantly decreased range of motion in her cervical spine.
Contrary to the Supreme Court's finding, the appellant adequately explained the lengthy gap in her treatment. In his affidavit, Dr. Mauro concluded that, after several months of conservative physical therapy, the appellant reached her maximum possible medical improvement and any further treatment would have been unnecessary (see Pommells v Perez, 4 NY3d 566, 577; Gaviria v Alvardo, 65 AD3d 567; Bonilla v Tortoriello, 62 AD3d 637).
Rhodes v. Stoddard


Eisenberg & Kirsch, Liberty, N.Y. (Betsy N. Abraham of counsel),
for appellant.
William Pager, Brooklyn, N.Y., for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendant appeals from an order of the Supreme Court, Nassau County (Brandveen, J.), entered May 25, 2010, which denied her motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is affirmed, with costs.
While we affirm the order appealed from, we do so on a ground other than that relied upon by the Supreme Court. The defendant failed to meet her prima facie burden of establishing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In support of her motion, the defendant relied upon, inter alia, the affirmed medical report of Dr. Jerrold M. Gorski, her retained examining orthopedic surgeon. Dr. Gorski examined the plaintiff on August 4, 2009. At that time, Dr. Gorski noted a significant limitation in the range of motion of the plaintiff's cervical spine (see Kjono v Fenning, 69 AD3d 581; Landman v Sarcona, 63 AD3d 690). Moreover, while Dr. Gorski made certain findings with respect to the range of motion of the plaintiff's left shoulder, he failed to compare all of those findings to what is normal (see Frasca-Nathans v Nugent,AD3d, 2010 NY Slip Op 07890 [2d Dept 2010]; Chiara v Dernago, 70 AD3d 746; Page v Belmonte, 45 AD3d 825, 826).
Since the defendant failed to meet her prima facie burden, it is unnecessary to consider whether the papers submitted by the plaintiff in opposition to the motion were sufficient to raise a triable issue of fact (see Kjono v Fenning, 69 AD3d at 582; Frasca-Nathans v Nugent, AD3d, 2010 NY Slip Op 07890 [2d Dept 2010]).
Rush v. Kwan Chiu


Craig L. Davidowitz, P.C., New York, N.Y. (Nolan Matz of
counsel), for appellant.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York,
N.Y. (Stacy R. Seldin of counsel), for
respondents.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Kings County (Starkey, J.), dated September 10, 2009, which granted the defendants' motion for summary judgment dismissing the complaint on the ground that he did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is affirmed, with costs.
The Supreme Court correctly determined that the defendants met their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In opposition, the plaintiff failed to raise a triable issue of fact.
On appeal, the plaintiff limits his claims of serious injury to his right knee. Initially, the medical reports of Dr. Harvey S. Bishow, including those regarding examinations on August 5, 2004, September 8, 2004, October 13, 2004, and December 22, 2004, the operative report dated December 27, 2005, and Dr. Steven Shankman's magnetic resonance imaging report of the plaintiff's right knee were all unaffirmed (see Grasso v Angerami, 79 NY2d 813; Resek v Morreale, 74 AD3d 1043; Bleszcz v Hiscock, 69 AD3d 890; Singh v Mohamed, 54 AD3d 933; Verette v Zia, 44 AD3d 747; Nociforo v Penna, 42 AD3d 514). Further, the Saint Vincent's Hospital medical records relied upon by the plaintiff were uncertified (see Lozusko v Miller, 72 AD3d 908; Mejia v DeRose, 35 AD3d 407).
In addition, the medical report of Dr. David P. Abott, the plaintiff's treating chiropractor, and the affirmed medical report of Dr. Mehran Manouel, did not address the plaintiff's right knee, the only injury at issue on appeal. Thus, they were insufficient to rebut the defendants' prima facie showing that the plaintiff did not sustain a serious injury to his right knee.
Moreover, the affirmed medical report of Dr. Manouel failed to raise a triable issue of fact as to whether the plaintiff sustained a serious injury to his right knee under the permanent loss, the permanent consequential limitation of use, or the significant limitation of use categories of Insurance Law § 5102(d), because the report failed to provide medical evidence that was contemporaneous with the subject accident which showed initial range-of-motion limitations in the plaintiff's right knee that were significant in nature (see Posa v Guerrero, 77 AD3d 898; Srebnick v Quinn, 75 AD3d 637; Catalano v Kopmann, 73 AD3d 963; Bleszcz v Hiscock, 69 AD3d 890; Taylor v Flaherty, 65 AD3d 1328; Fung v Uddin, 60 AD3d 992; Gould v Ombrellino, 57 AD3d 608; Sorto v Morales, 55 AD3d 718; Kuchero v Tabachnikov, 54 AD3d 729; Ferraro v Ridge Car Serv., 49 AD3d 498).
Garland v. RLI Insurance Company


Appeal and cross appeal from an order of the Supreme Court, Erie County (Patrick H. NeMoyer, J.), entered April 28, 2009. The order granted the motion of plaintiff for leave to renew and reargue and, upon reargument, denied the motion of plaintiff and the cross motion of defendant RLI Insurance Company for summary judgment.

Brown Chiari Llp, Lancaster (Michael R. Drumm Of Counsel), For Plaintiff-Appellant-Respondent.
Hurwitz & Fine, P.C., Buffalo (Dan D. Kohane Of Counsel), For Defendant-Respondent-Appellant.

It is hereby ORDERED that the order so appealed from is reversed on the law without costs and the motion for leave to renew and reargue is denied.
Memorandum: Supreme Court erred in granting the motion of plaintiff seeking leave to "renew and reargue" her motion for, inter alia, summary judgment on the complaint and to reargue her opposition to the cross motion of RLI Insurance Company (defendant) for summary judgment dismissing the complaint against it. With respect to that part of the motion seeking leave to renew, it "must be based upon new facts that were unavailable at the time of the original motion" (Boreanaz v Facer-Kreidler, 2 AD3d 1481, 1482; see Foxworth v Jenkins, 60 AD3d 1306). "Although a court has discretion to grant renewal, in the interest of justice, upon facts [that] were known to the movant at the time the original motion was made' . . ., it may not exercise that discretion unless the movant establishes a reasonable justification for the failure to present such facts on the prior motion' " (Robinson v Consolidated Rail Corp., 8 AD3d 1080; see Foxworth, 60 AD3d 1306). Here, the allegedly "new" evidence submitted by plaintiff consists of an affidavit of her attorney detailing his efforts to ascertain the insurance coverage in question from the time that he was retained until plaintiff notified defendant of the accident, approximately 20 months later. It is undisputed that those facts were known to plaintiff at the time of her prior motion, and the only excuse provided by plaintiff for failing to submit the affidavit of her attorney in support of that motion was her mistaken belief that such facts were not relevant to the issue whether her notice to defendant was timely. We conclude that, under the circumstances of this case, the inability of plaintiff to identify the applicable legal standard does not constitute a reasonable justification for her failure to submit the affidavit in support of the prior motion (see generally Valenti v Exxon Mobil Corp., 50 AD3d 1382, 1383; Zarecki & Assoc., LLC v Ross, 50 AD3d 679; Reshevsky v United Water N.Y., Inc., 46 AD3d 532, lv dismissed 10 NY3d 785).
With respect to those parts of the motion of plaintiff seeking leave to reargue her prior motion and her opposition to defendant's cross motion, they must be "based upon matters of fact or law allegedly overlooked or misapprehended by the court in determining the prior motion [and cross motion]" (CPLR 2221 [d] [2]). "Reargument does not provide a party an opportunity to advance arguments different from those tendered on the original application' " (Rubinstein v Goldman, 225 AD2d 328, 328, lv denied 88 NY2d 815). Here, those parts of plaintiff's motion seeking leave to reargue were premised upon a legal theory not advanced in support of the original motion or in opposition to defendant's cross motion, and thus they should have been denied (see V. Veeraswamy Realty v Yenom Corp., 71 AD3d 874).
All concur except Sconiers, J., who dissents and votes to affirm in the following Memorandum: I respectfully dissent, inasmuch as I disagree with my colleagues that Supreme Court erred in granting the motion of plaintiff seeking leave to "renew and reargue" her motion for, inter alia, summary judgment on the complaint and to reargue her opposition to the cross motion of RLI Insurance Company (defendant) for summary judgment dismissing the complaint against it. In granting that part of the motion seeking leave to renew, the court carefully considered the factors set forth in CPLR 2221 (e) and specifically addressed "[t]he critical issue . . . whether plaintiff . . . presented a reasonable justification for her failure to present such facts on the prior motion." In addition to concluding "that plaintiff . . . furnished a reasonable justification for failing to adduce the new facts on the prior motion," the court understandably was "not inclined to ignore the newly determinative fact that plaintiff . . . may . . . have exercised due diligence in attempting to ascertain the tortfeasors' insurance situation[, especially where] ignor[ing] that critical fact would be to deprive plaintiff of significant legal rights[] and to permit an unjustified evasion of defendant['s] . . . significant contractual responsibilities."
In a case such as this, where the court gave due weight and consideration to the relevant factors in granting that part of the motion seeking leave to renew, we should not second guess the court's exercise of discretion, especially where doing so would deprive a party of a determination on the merits. It is one thing to reverse an order denying a motion seeking leave to renew and thereby decide a case on the merits (see Foxworth v Jenkins, 60 AD3d 1306), but it is quite another to reverse an order granting a motion seeking leave to renew, thus depriving a party of the benefit of a determination on the merits. This Court has been, and should be, reluctant to do so. In fact, I could find only one instance since CPLR 2221 was amended in 1999 where this Court reversed an order granting a motion seeking leave to renew, and that was in a case where virtually no justification was provided for the "failure to produce the additional proof on the prior motion" (Robinson v Consolidated Rail Corp., 8 AD3d 1080). Further, this Court has not previously reversed an order granting a motion seeking leave to reargue where the motion was timely.
When CPLR 2221 was substantially amended in 1999, the Committee on Civil Practice Law and Rules of the New York State Bar Association (hereafter, Committee) approved the legislation but noted that it was divided because some members of the Committee expressed concern that the "legislation . . . might be interpreted to . . . effectively deprive courts of flexibility needed in this area" (Mem of Comm on CPLR, Bill Jacket, L 1999, ch 281). In supporting the legislation, however, the Committee concluded that "[t]he new proposal does allow for judicial discretion and flexibility" (id.). Unfortunately, it appears that those concerns were warranted (see e.g. V. Veeraswamy Realty v Yenom Corp., 71 AD3d 874). The fundamental and overriding purpose of CPLR 2221 should be to give courts and litigants every reasonable opportunity to obtain the legally correct and just result based on the merits of the case. Here, while plaintiff may have ultimately been unsuccessful in recovering the proceeds of the insurance policy in question, she should have been afforded the opportunity to resolve her claim for coverage on the merits. I therefore would affirm the order for the reasons stated at Supreme Court.
Bissell v. Town of Amherst and State Insurance Fund


Appeal from a judgment of the Supreme Court, Erie County (Paula L. Feroleto, J.), entered November 4, 2009. The judgment granted the application of petitioner to extinguish the lien of respondent New York State Insurance Fund.

Hal Friedman, New York City, For Respondent-Appellant.
Maxwell Murphy, Llc, Buffalo (Alan D. Voos Of Counsel), For Petitioner-Respondent.

It is hereby ORDERED that the judgment so appealed from is unanimously modified on the law by denying those parts of the petition seeking to extinguish a lien asserted by respondent New York State Insurance Fund against the proceeds that petitioner obtained in a third-party action and seeking to recover from that respondent its share of litigation costs related to future medical payments and as modified the judgment is affirmed without costs, and the matter is remitted to Supreme Court, Erie County, for further proceedings in accordance with the following Memorandum: Petitioner sustained grave injuries while employed by respondent McGonigle & Hilger Roofing Company and working on property owned by respondent Town of Amherst (Town). Although petitioner began receiving workers' compensation benefits, he commenced an action against his employer and the Town seeking damages for his injuries. On a prior appeal in that action, we modified the judgment in favor of petitioner and his wife (hereafter, plaintiffs) by, inter alia, setting aside the award of damages for past and future pain and suffering and granting a new trial on those elements of damages unless plaintiffs stipulated to reduced awards (Bissell v Town of Amherst, 56 AD3d 1144, lv dismissed in part and denied in part 12 NY3d 878).
After an amended judgment was entered for $23,400,000, respondent New York State Insurance Fund (NYSIF) asserted a lien against the proceeds of the judgment in the amount of $219,760.34 for past payments of compensation and medical benefits. NYSIF recognized that it was obligated to contribute toward the litigation costs incurred by petitioner "in effecting the third-party recovery based both on the lien to be recovered and on the present value of future workers' compensation [benefits] being saved as a result of its credit right." Using the equitable apportionment percentage (EAP) of 33.5%, which represents the percentage that litigation costs bore to the third-party recovery, NYSIF calculated that its share of litigation costs was $171,840.37, and thus it sought to recover the difference of $47,919.97 from petitioner. NYSIF also recognized that it was required to contribute toward litigation costs to the extent that it received a benefit from foregone future medical payments, but it refused to include the present value of those payments in calculating its share of litigation costs. According to NYSIF, the present value of those future payments was "purely speculative" pursuant to Burns v Varriale (9 NY3d 207). Rather, NYSIF proposed reimbursing petitioner "for any payment of compensable medical treatment that [he] makes from his own funds" based on the EAP of 33.5%.
Petitioner rejected that proposal and commenced this proceeding seeking to extinguish the NYSIF lien and to obtain a judgment against NYSIF in the amount of $1,399,734.80 for its share of petitioner's litigation costs. We conclude that Supreme Court erred in granting the petition in its entirety inasmuch as the benefit received by NYSIF based on foregone future medical payments should not be included in calculating its share of litigation costs.
Pursuant to Workers' Compensation Law § 29 (1), an employee who is injured "by the negligence . . . of another not in the same employ" may collect workers' compensation benefits and may also pursue his or her "remedy" against the negligent party. If the employee elects to commence an action against the negligent party, the insurance fund or other carrier liable for the workers' compensation benefits "shall have a lien on the proceeds of any recovery . . . after the deduction of the reasonable and necessary expenditures, including attorney's fees, incurred in effecting such recovery, to the extent of the total amount of compensation awarded under or provided or estimated by [the Workers' Compensation Law] for such case and the expenses for medical treatment paid or to be paid by it and to such extent such recovery shall be deemed for the benefit of such fund . . . or [other] carrier" (id.). The employee may thereafter apply "for an order apportioning the reasonable and necessary expenditures, including attorney's fees, incurred in effecting such recovery" (id.). It is well established that the apportionment is calculated "according to the relative benefit derived by each party from the recovery . . . The carrier's equitable share of the litigation costs [is] a pro rata share of the total amount of the recovery inuring to the benefit of the carrier" (Matter of Kelly v State Ins. Fund, 60 NY2d 131, 136). The purpose of such apportionment is "to stem the inequity to the [employee], arising when a carrier benefits from [the] employee's recovery while assuming none of the costs incurred in obtaining the recovery" (id. at 138). The benefit to the fund or carrier includes the past compensation paid, as well as "the value of estimated future compensation payments that, but for the employee's efforts, the carrier would have been obligated to make" (id.).
NYSIF concedes that its share of litigation costs must be based on the benefit resulting from past and future compensation benefits, as well as past medical benefits, but it contends that the value of foregone future medical payments should not be considered in calculating its share of litigation costs unless and until those payments are made. We agree. Petitioner correctly contends that the jury's award for future medical expenses cannot be deemed speculative inasmuch as we have already determined that the award was supported by the evidence (Bissell, 56 AD3d at 1148; see generally Ellis v Emerson, 57 AD3d 1435, 1437; Faas v State of New York, 249 AD2d 731, 732). That award, however, did not take into account the established rates of compensation for medical payments set by the Workers' Compensation Law (see § 13 [a]; 11 NYCRR part 68), and the only benefit received by NYSIF is the amount of foregone medical payments that would have been made under those rates. We thus conclude that the benefit received by NYSIF for foregone future medical payments has not been established and that any determination of NYSIF's share of litigation costs with respect to those payments would be speculative (see Burns, 9 NY3d at 215; Matter of McKee v Sithe Independence Power Partners, 281 AD2d 891; Matter of Briggs v Kansas City Fire & Mar. Ins. Co., 121 AD2d 810, 811-812). We therefore modify the judgment by denying those parts of the petition seeking to extinguish NYSIF's lien and seeking to recover from NYSIF its share of litigation costs insofar as the benefit received by NYSIF with respect to foregone future medical payments is included in the calculation of its share of litigation costs, and we remit the matter to Supreme Court for recalculation of NYSIF's share of litigation costs.
McCabe v. St. Paul Fire and Marine Ins. Co.


Appeal and cross appeal from a judgment (denominated order) of the Supreme Court, Erie County (Patrick H. NeMoyer, J.), entered November 9, 2009. The judgment, insofar as appealed from and cross-appealed from, granted the motion of defendant St. Paul Fire and Marine Insurance Company for leave to reargue and adhered to the court's decision that said defendant was obligated to indemnify defendant David E. Fretz, Esq. for an award of compensatory damages obtained by plaintiffs and not for an award of treble damages.

Aronberg Goldgehn Davis & Garmisa, Chicago, Illinois (Christopher J. Bannon, Of The Illinois Bar, Admitted Pro Hac Vice, Of Counsel), And Goldberg Segalla Llp, Buffalo, For Defendant-Appellant-Respondent.
Lipsitz Green Scime Cambria Llp, Buffalo (Andrew O. Miller Of Counsel), For Plaintiffs-Respondents-Appellants.

It is hereby ORDERED that the judgment so appealed from is unanimously affirmed without costs.
Memorandum: Plaintiffs commenced this action seeking, inter alia, a declaration that St. Paul Fire and Marine Insurance Company (defendant) is obligated to indemnify defendant David E. Fretz, Esq. in the underlying legal malpractice action brought by plaintiffs against Fretz. The "claims made" professional liability insurance policy issued to Fretz by defendant provided coverage for any claims made against Fretz that were reported to defendant within the policy period and extended reporting period, which expired on March 15, 2007. Defendant first learned of plaintiffs' claim against Fretz on June 22, 2007, and it promptly disclaimed coverage on the ground that the notification was untimely. Plaintiffs thereafter obtained a default judgment against Fretz in the underlying action and, following an inquest on damages, Supreme Court awarded $226,000 to plaintiffs in compensatory damages, which the court then trebled to $700,180.72 pursuant to Judiciary Law § 487.
Plaintiffs commenced the instant action after unsuccessfully attempting to collect on the judgment against Fretz in the underlying action. Plaintiffs thereafter moved for summary judgment on the complaint, and defendant cross-moved for summary judgment. In appeal No. 1, Supreme Court granted plaintiffs' motion in part and denied defendant's cross motion, declaring that defendant must indemnify Fretz "to the extent called for" in the insurance policy. Defendant moved for leave to reargue its cross motion and for clarification of the court's decision with respect to the phrase "must indemnify Fretz for the underlying liability to the extent called for by the policy." By the judgment in appeal No. 2, the court granted that part of the motion for leave to reargue and upon reargument the court adhered to its prior decision. However, the court also granted that part of the motion seeking clarification, and declared that defendant must indemnify Fretz for compensatory damages but "need not indemnify [Fretz] for treble damages" awarded pursuant to Judiciary Law § 487. We dismiss the appeal by defendant from the judgment in appeal No. 1, inasmuch as the judgment in appeal No. 2 superseded the judgment in appeal No. 1 (see Loafin' Tree Rest. v Pardi [appeal No. 1], 162 AD2d 985). Thus, we address only the appeal by defendant and the cross appeal by plaintiffs from the judgment in appeal No. 2.
As a preliminary matter, we reject plaintiffs' contention that defendant waived its right to contend that plaintiffs failed to notify Fretz of their claim against him within the policy period or extended reporting period. Defendant's initial letter of disclaimer did not disclaim coverage on that ground, and an insurer generally waives any defense to coverage that is not specified in the notice of disclaimer (see Utica Mut. Ins. Co. v Gath, 265 AD2d 805). Here, however, the issue before us is whether plaintiffs' claim against Fretz is covered under the claims-made insurance policy in question, and it is well settled that such a defense is not subject to waiver (see Fogelson v Home Ins. Co., 129 AD2d 508, 510-511; see generally Charlestowne Floors, Inc. v Fidelity & Guar. Ins. Underwriters, Inc., 16 AD3d 1026, 1027). "[W]here the issue is the existence or nonexistence of coverage (e.g., the insuring clause and exclusions), the doctrine of waiver is simply inapplicable" (Albert J. Schiff Assoc. v Flack, 51 NY2d 692, 698), inasmuch as that doctrine "may not operate to create . . . coverage" where it never existed (Charlestowne Floors, Inc., 16 AD3d at 1027; see Matter of Worcester Ins. Co. v Bettenhauser, 95 NY2d 185, 188).
We nevertheless conclude that, although defendant did not waive its contention that plaintiffs failed to assert a timely claim against Fretz, the contention lacks merit. In our view, plaintiffs' January 2, 2007 letter to Fretz constitutes a claim against Fretz under the terms of the policy (see generally Evanston Ins. Co. v GAB Bus. Servs., 132 AD2d 180, 185-186). Although plaintiffs did not specifically request monetary damages in that letter, they demanded that Fretz rectify their problem. The letter also makes clear that plaintiffs were alleging that Fretz was negligent, which falls within that part of the policy defining a claim as "alleging an error, omission or negligent act in the rendering of or failure to render professional legal services' for others by you."
We further conclude that plaintiffs gave defendant notice of their claim against Fretz as soon as was reasonably possible, and thus that their failure to give notice to defendant during the policy period or extended reporting period did not invalidate their claim (see Insurance Law § 3420 [a] [4]; Wraight v Exchange Ins. Co. [appeal No. 2], 234 AD2d 916, 917, lv denied 9 NY2d 813). Contrary to defendant's contention, Insurance Law § 3420 (a) (3) and (4) do not include exceptions for claims-made insurance policies.
We agree with defendant, however, that the court properly declared that it is not required to indemnify Fretz with respect to the award of treble damages under Judiciary Law § 487. Such an award of treble damages under section 487 is punitive in nature (see Amalfitano v Rosenberg, 12 NY3d 8, 12-15; Jorgenson v Silverman, 224 AD2d 665; see generally Cox v Microsoft Corp., 290 AD2d 206, 207, lv dismissed 98 NY2d 728), and "New York public policy precludes insurance indemnification for punitive damage awards" (Home Ins. Co. v American Home Prods. Corp., 75 NY2d 196, 200), including awards of statutory treble damages (see Rental & Mgt. Assoc. v Hartford Ins. Co., 206 AD2d 288). Moreover, under the terms of the insurance policy, defendant agreed to indemnify Fretz with respect to compensatory damages only, and treble damages awarded under section 487 "are not designed to compensate a plaintiff for injury to property or pecuniary interests" (Jorgensen, 224 AD2d at 666).
The Penn Traffic Co. v. National Union Fire Ins. Co. of Pittsburgh


Appeal and cross appeal from an order of the Supreme Court, Onondaga County (Deborah H. Karalunas, J.), entered March 4, 2010 in a breach of contract action. The order denied the motion of plaintiff for partial summary judgment and granted in part and denied in part the cross motion of defendant for partial summary judgment.

Mccarter & English, Llp, New York City (Anthony Bartell, Of The New Jersey Bar, Admitted Pro Hac Vice, Of Counsel), For Plaintiff-Appellant-Respondent.
Brown & Palumbo, Pllc, Syracuse (Gregory M. Brown Of Counsel), For Defendant-Respondent-Appellant.

It is hereby ORDERED that the order so appealed from is unanimously modified on the law by granting the cross motion in its entirety and dismissing the complaint and as modified the order is affirmed without costs.
Memorandum: Plaintiff commenced this breach of contract action seeking, inter alia, all costs incurred by it in connection with two investigations conducted by the federal government against several of its employees, pursuant to an "Executive and Organization Liability Insurance Policy" issued to plaintiff by defendant. Plaintiff is a Delaware corporation that operates a chain of supermarkets in three states, including New York, and it is undisputed that the policy at issue provided coverage to plaintiff for, inter alia, the costs associated with defending certain of its employees who commit wrongful acts, as defined in the policy. The policy was a two-year claims made policy, effective June 29, 2002. Thus, coverage was limited to claims made and reported during the policy period, with a 60-day extension for a "Discovery Period," extending the coverage period to the end of August 2004. In August 2002, plaintiff learned that an employee at Penny Curtiss, its wholly-owned subsidiary, was being investigated by federal authorities for making false accounting entries (hereafter, Penny Curtiss investigation). The employee had overstated inventory and, as a result, plaintiff was required to issue revised financial statements for the years 1999 to 2002. By letter dated October 7, 2002, plaintiff provided defendant with notice of "circumstances which may reasonably be expected to give rise to a claim being made against" plaintiff and its named insureds. Plaintiff did not, however, request coverage at that time for the costs relating to the defense and investigation of the employee in question or Penny Curtiss.
Approximately two years later, federal authorities began investigating the misuse of promotional allowances by two high-level executives employed by plaintiff, based on allegations they submitted false financial statements that prematurely recognized the promotional allowances and thereby inflated stated earnings (hereafter, promotional allowances investigation). The executives in question worked directly for plaintiff but not Penny Curtiss. In August 2004, several months after the Securities and Exchange Commission (SEC) had issued subpoenas to two of plaintiff's employees in connection with the promotional allowances investigation, plaintiff sent a letter to defendant advising that it was cooperating with the investigation, "which [t]he Company believes . . . is currently focused on gathering information involving industry-wide accounting practices." The letter further stated that "[a]t this time [plaintiff] is not aware of any claims against the Company as a result of this matter." The SEC thereafter issued subpoenas to several other of plaintiff's employees. On April 27, 2006, almost two years after the policy expired, plaintiff for the first time requested reimbursement for the defense costs associated with the two investigations, and defendant disclaimed coverage on the ground that plaintiff failed to make a claim within the policy period, as extended by the 60-day discovery period. This action by plaintiff ensued. Prior to discovery, Supreme Court denied plaintiff's motion for summary judgment and granted in part defendant's cross motion for partial summary judgment, dismissing the complaint with respect to the defense costs incurred in connection with the promotional allowances investigation. All that remained of the complaint thus concerned the defense costs associated with the Penny Curtiss investigation. Upon this appeal by plaintiff and cross appeal by defendant, we agree with defendant that the court should have granted its cross motion in its entirety and dismissed the complaint.
As plaintiff acknowledges, it did not make a claim for any defense costs within the two-year policy period, and thus the issue of coverage turns on whether the relation-back provision of the policy applies. Pursuant to that provision, a claim made after the policy period will be honored if the insured provided written notice during the policy period of circumstances that could "reasonably be expected to give rise to a Claim being made against an Insured, . . . with full particulars as to dates, person and entities involved." We reject the contention of plaintiff in support of its appeal that its letter of October 7, 2002 provided sufficient notice of the circumstances relating to the promotional allowances investigation, inasmuch as that investigation did not commence until approximately two years later. The letter in question provided defendant with notice of the Penny Curtiss investigation only, and, as the court properly determined, that investigation was separate and distinct from the promotional allowances investigation. The two investigations involved different employees, different accounting irregularities, and different time periods, and it therefore cannot be said that notice of the Penny Curtiss investigation constitutes notice of promotional allowances investigation as well. Thus, contrary to the contention of plaintiff on its appeal, the court properly granted those parts of defendant's cross motion with respect to the promotional allowances investigation.
We agree with defendant on its cross appeal, however, that the court erred in failing to grant its cross motion in its entirety, and we therefore modify the order accordingly. Although the SEC subpoenas of March 31, 2004 concerning the Penny Curtiss investigation were issued to plaintiff's employees within the policy period, it is undisputed that plaintiff failed to provide notice of the claim to defendant with respect to the two subpoenas until late April 2006, almost two years after the policy expired. Indeed, as previously noted, by letter to defendant in August 2004 plaintiff affirmatively represented that it had no claims to date. "The insured's failure to satisfy the notice requirement constitutes a failure to comply with a condition precedent which, as a matter of law, vitiates the
contract' " (Great Canal Realty Corp. v Seneca Ins. Co., Inc., 5 NY3d 742, 743, quoting Argo Corp. v Greater N.Y. Mut. Ins. Co., 4 NY3d 332, 339). In determining that an issue of fact exists whether plaintiff provided timely notice of the March 2004 subpoenas to defendant, the court erred in relying on cases involving policies that required the insured to provide notice of claims "as soon as practicable" (see e.g. Matter of Allstate Ins. Co. [Earl], 284 AD2d 1002, 1003-1004). Here, the policy contains different notice requirements. It provides that notice must be given "as soon as practicable . . ., but in no event later than . . . the end of the Policy Period or Discovery Period," which, as noted, ended in August 2004, well before plaintiff notified defendant of the subpoenas. We thus conclude that plaintiff's failure to comply with that requirement vitiates the contract with respect to the subpoenas issued by the SEC on March 31, 2004 (see generally Rochwarger v National Union Fire Ins. Co. of Pittsburgh, Pa., 192 AD2d 305).
Finally, we reject the contention of plaintiff that its failure to give timely notice of the claim arising out of the March 2004 subpoenas should be excused because it did not realize that the subpoenas were covered under the policy until after the deadline date. The policy unambiguously includes the subject subpoenas within the definition of potential claims, and plaintiff's unilateral mistake in reading the policy cannot serve as a basis for expanding coverage. "[O]ne who executes a plain and unambiguous [contract] cannot avoid its effect by merely stating that [he or] she misinterpreted its terms" (Koster v Ketchum Communications, 204 AD2d 280, lv dismissed 85 NY2d 857).
Rollo v. Servico New York, Inc.


Appeal from an order of the Supreme Court, Erie County (John A. Michalek, J.), entered December 23, 2009 in a personal injury action. The order granted the motion of defendants for leave to renew their motion for summary judgment and, upon renewal, dismissed the complaint.

Spadafora & Verrastro, Llp, Buffalo (Richard E. Updegrove Of Counsel), For Plaintiff-Appellant.
Morenus, Conway, Goren & Brandman, Buffalo (Phyliss A. Hafner Of Counsel), For Defendants-Respondents.

It is hereby ORDERED that the order so appealed from is unanimously modified on the law by denying the motion to dismiss the complaint and reinstating the complaint and as modified the order is affirmed without costs.
Memorandum: In December 2000 plaintiff allegedly fell and sustained injuries on defendants' property. Defendants filed for bankruptcy under chapter 11 of the Bankruptcy Code less than one year after the accident, and they were discharged from liability for, inter alia, personal injury claims. Plaintiff did not file a proof of claim in the bankruptcy proceedings. In May 2007, however, plaintiff commenced this action seeking damages for the injuries that she sustained in the December 2000 accident on defendants' property.
Defendants moved to dismiss the complaint on the ground that the action was precluded by the discharge in bankruptcy. Supreme Court denied the motion, concluding that plaintiff was permitted to maintain the action "only to the extent [that defendants have] insurance coverage that is applicable . . . ." Defendants thereafter moved for leave to renew their motion on the ground that no insurance coverage was applicable and thus that the complaint should be dismissed. We conclude that the court properly granted that part of the motion for leave to renew. "Although[,] as a general rule[,] a motion for renewal should be based on newly[ ]discovered facts, [that] requirement is not an inflexible one, and the court has the discretion to grant renewal even upon facts known to the movant at the time of the original motion" (Argento v Wal-Mart Stores, Inc., 66 AD3d 930, 933; see Foxworth v Jenkins, 60 AD3d 1306). Inasmuch as the original motion focused on defendants' discharge in bankruptcy and did not address the amount and extent of available insurance, the court properly exercised its discretion in granting the motion, despite defendants' failure to allege newly discovered facts (see Foxworth, 60 AD3d 1306).
Upon granting leave to renew, however, the court erred in granting defendants' motion to dismiss the complaint on the ground that no insurance coverage was applicable, and we therefore modify the order accordingly. It is well established that a bankruptcy discharge "does not bar a plaintiff in a personal injury action from obtaining a judgment against the bankrupt defendant[s] for the limited purpose of pursuing payment from defendant[s'] insurance carrier" (Lang v Hanover Ins. Co., 3 NY3d 350, 355; see Pomerantz v In-Stride, Inc., 39 AD3d 522, 523-524; Roman v Hudson Tel. Assoc., 11 AD3d 346). Defendants contend that no insurance is available because their insurer's obligations under the applicable general liability policy (policy) are not triggered until the self-insured retention (SIR) amount is satisfied, and the SIR will never be satisfied because defendants' obligations to pay thereunder were discharged in bankruptcy. We reject that contention. "[A]s with the construction of contracts generally, unambiguous provisions of an insurance contract must be given their plain and ordinary meaning, and the interpretation of such provisions is a question of law for the court' " (Vigilant Ins. Co. v Bear Stearns Cos., Inc., 10 NY3d 170, 177; see Lattimore Rd. Surgicenter, Inc. v Merchants Group, Inc., 71 AD3d 1379, 1380). Here, the unambiguous provisions of the endorsement to the policy provide that the insurer is obligated to provide coverage in excess of the SIR irrespective of whether the SIR is satisfied (see generally Admiral Ins. Co. v Grace Indus., Inc., 409 BR 275, 279-280).
Even assuming, arguendo, that the policy endorsement is ambiguous or that it expressly conditions the insurer's coverage obligation on satisfaction of the SIR, we conclude that Insurance Law § 3420 (a) (1) "makes clear that bankruptcy does not relieve the insurance company of its obligation to pay damages for injuries or losses covered under an existing policy" (Lang, 3 NY3d at 355). Thus, defendants' insurer remains obligated to pay damages for injuries or losses covered under the policy, despite the fact that defendants' obligation to satisfy the SIR was discharged through the bankruptcy proceedings (see generally Lang, 3 NY3d at 355-356; Roman, 11 AD3d 346; Admiral Ins. Co., 409 BR at 281-282), and plaintiff is permitted to prosecute the action to "obtain[ ] a judgment against the bankrupt defendant[s] for the limited purpose of pursuing payment from defendant[s]' insurance carrier" (Lang, 3 NY3d at 355).
Borras v. Lewis


Eisenberg & Kirsch, Liberty, N.Y. (Michael D. Wolff of counsel),
for appellants.
Hoffmaier & Hoffmaier, P.C., New York, N.Y. (Neva
Hoffmaier of counsel), for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendants appeal, as limited by their brief, from so much of an order of the Supreme Court, Westchester County (Giacomo, J.), entered March 11, 2010, as denied their cross motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is affirmed insofar as appealed from, with costs.
The plaintiff alleged that he was injured as a result of a motor vehicle accident that occurred on May 9, 2008, in which the bus he was driving was struck by a car driven by the defendant Roderick Lewis, who crossed a double yellow line into oncoming traffic. The defendants cross-moved for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury pursuant to Insurance Law § 5102(d) as a result of the subject accident. The Supreme Court, inter alia, denied the defendants' cross motion.
Contrary to the defendants' contention, they failed to meet their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In support of their cross motion, the defendants relied upon the affirmed medical report of Menachem Y. Epstein, their examining orthopedist, who noted significant limitations in the plaintiff's left shoulder when Dr. Epstein examined him on August 4, 2009, more than one year after the accident (see Landman v Sarcona, 63 AD3d 690; Bagot v Singh, 59 AD3d 368; Hurtte v Budget Roadside Care, 54 AD3d 362; Bentivegna v Stein, 42 AD3d 555; Cassandra v Dumond, 31 AD3d 476, 477). Although Dr. Epstein opined that such limitations resulted from a "failed" shoulder surgery on May 1, 2009, that was not medically necessary, this opinion was conclusory, and thus, without probative value (see Landman v Sarcona, 63 AD3d 690; Powell v Prego, 59 AD3d 417).
Since the defendants failed to establish their prima facie entitlement to judgment as a matter of law, it is unnecessary to consider the sufficiency of the plaintiff's opposition papers (see Tchjevskaia v Chase, 15 AD3d 389; Coscia v 938 Trading Corp., 283 AD2d 538).
Accordingly, the Supreme Court correctly denied the defendants' cross motion for summary judgment dismissing the complaint.
Compass v. GAE Transportation, Inc.


Robert J. Adams, Jr., Esq., LLC, Garden City, N.Y. (Maryellen
David of counsel), for appellant.
Costella & Gordon, LLP, Garden City, N.Y. (Roy C. Gordon
of counsel), for respondents.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendants appeal from an order of the Supreme Court, Nassau County (McCarty III, J.), entered June 8, 2010, which denied their motion for summary judgment dismissing the complaint on the ground that neither of the plaintiffs sustained a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is affirmed, with costs.
The defendants met their prima facie burden of showing that neither plaintiff sustained a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In opposition, the plaintiffs raised triable issues of fact as to whether they sustained serious injuries to the cervical and/or lumbar regions of their respective spines under the permanent consequential limitation of use and/or the significant limitation of use categories of Insurance Law § 5102(d) (see Evans v Pitt, 77 AD3d 611; Tai Ho Kang v Young Sun Cho, 74 AD3d 1328, 1329; Barry v Valerio, 72 AD3d 996; Williams v Clark, 54 AD3d 942, 943; Casey v Mas Transp., Inc., 48 AD3d 610, 611; Green v Nara Car & Limo, Inc., 42 AD3d 430, 431; Francovig v Senekis Cab Corp., 41 AD3d 643, 644-645; Acosta v Rubin, 2 AD3d 657, 659). These issues of fact were raised by the affirmed medical reports of Dr. Samuel Kelman. Dr. Kelman concluded, based on his contemporaneous and recent examinations of the plaintiffs, which revealed significant limitations in the cervical and lumbar regions of their respective spines, and his review of their magnetic resonance imaging films, which revealed herniated and bulging discs, that the injuries to the cervical and lumbar regions of the plaintiffs' spines and range-of-motion limitations amounted to permanent consequential limitations of use and significant limitations of use of their respective spines.
In opposition to the defendants' prima facie showing that certain injuries to the spine of the plaintiff Briston C. Compass were degenerative in nature or caused by anything other than the subject accident, a triable issue of fact was raised by the affirmed medical report of Dr. Kelman with respect to that plaintiff. In that affirmed medical report, Dr. Kelman noted that he had reviewed the magnetic resonance imaging films of the cervical and lumbar regions of Compass's spine and did not agree that any of Compass's herniated or bulging discs were degenerative in nature. He concluded, based on his review of those films, that those findings were recent and caused by the subject accident.
Dixon v. Fuller


DeAngelis & Hafiz, Mount Vernon, N.Y. (Talay Hafiz of
counsel), for appellants.
Nancy L. Isserlis, Long Island City, N.Y. (Lawrence R. Miles of
counsel), for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiffs appeal from an order of the Supreme Court, Kings County (Vaughan, J.), dated December 16, 2009, which granted the motion of the defendant Dudley E. Fuller for summary judgment dismissing the complaint insofar as asserted against him on the ground that neither plaintiff sustained a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed, on the law, with costs, and the motion of the defendant Dudley E. Fuller for summary judgment dismissing the complaint insofar as asserted against him is denied.
The defendant Dudley E. Fuller (hereinafter the defendant) met his prima facie burden of showing that neither plaintiff sustained a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). However, in opposition, the plaintiffs raised triable issues of fact through the affirmation of Dr. Leo Batash, their treating physician. As to the plaintiff Nadine M. Stone, Dr. Batash concluded, based on his contemporaneous and most recent examinations of her, which revealed significant limitations in the lumbar regions of her spine and right knee, that her injuries were permanent and her range-of-motion limitations were significant. He opined that she sustained a permanent consequential limitation of use of those areas as a result of the subject accident. His findings concerning Stone were sufficient to raise a triable issue of fact as to whether, as a result of the subject accident, she sustained a serious injury to the lumbar region of her spine and/or right knee under the permanent consequential limitation of use and/or the significant limitation of use categories of Insurance Law § 5102(d) (see Gussack v McCoy, 72 AD3d 644; Casiano v Zedan, 66 AD3d 730; Ortiz v Zorbas, 62 AD3d 770).
As to the plaintiff Ackeem A. Dixon, Dr. Batash concluded, based on his contemporaneous and most recent examinations of him, which revealed significant limitations in the cervical and lumbar regions of his spine, that his injuries were permanent and his range-of-motion limitations were significant. He opined that Dixon sustained a permanent consequential limitation of use of the cervical and lumbar regions of his spine as a result of the subject accident. His findings concerning Dixon were sufficient to raise a triable issue of fact as to whether, as a result of the subject accident, Dixon sustained a serious injury to the cervical and lumbar regions of his spine under the permanent consequential limitation of use and/or the significant limitation of use categories of Insurance Law § 5102(d) (see Gussack v McCoy, 72 AD3d 644; Casiano v Zedan, 66 AD3d 730; Ortiz v Zorbas, 62 AD3d 770).
Contrary to the defendant's contention, Dr. Batash's affirmation was sufficient to raise a triable issue of fact. While portions of Dr. Batash's affirmation had to be disregarded because they recited unsworn findings of other doctors (see Gussack v McCoy, 72 AD3d at 644-645; Casiano v Zedan, 66 AD3d 730; McNeil v New York City Tr. Auth., 60 AD3d 1018), Dr. Batash found, on the basis of his own physical examinations of the plaintiffs, made contemporaneously with the subject accident and at the time of his most recent examinations of the plaintiffs, that both plaintiffs had significantly decreased ranges of motions in the regions noted above.
Goldman v. Tilitz


Richard T. Lau, Jericho, N.Y. (Gene W. Wiggins of counsel), for
appellant.
Schoen & Strassman, LLP, Huntington, N.Y. (David I. Schoen
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, Nassau County (Woodard, J.), entered July 12, 2010, which denied her motion for summary judgment dismissing the complaint on the ground that the plaintiff Randi M. Goldman did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is affirmed, with costs.
The defendant failed to meet her prima facie burden of showing that the plaintiff Randi M. Goldman (hereinafter the injured plaintiff) did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In support of her motion, the defendant relied upon, inter alia, two affirmed medical reports of Dr. Isaac Cohen. In the first report, which was based upon testing done at that time, Dr. Cohen noted significant limitations in the injured plaintiff's cervical spine range of motion (see Ortiz v S & A Taxi Corp., 68 AD3d 734, 735; Delayhaye v Caledonia Limo & Car Serv. Inc., 61 AD3d 814, 815; Guzman v Joseph, 50 AD3d 741, 742). Some of those limitations remained when Dr. Cohen re-examined the injured plaintiff a second time, as reflected in the second report. Consequently, the defendant failed to satisfy her burden of establishing her prima facie entitlement to summary judgment, and it is therefore unnecessary to consider whether the plaintiffs' papers in opposition were sufficient to raise a triable issue of fact (see Ortiz v S & A Taxi Corp., 68 AD3d at 734; Delayhaye v Caledonia Limo & Car Serv., Inc., 61 AD3d at 815; Guzman v Joseph, 50 AD3d at 742; Coscia v 938 Trading Corp., 283 AD2d 538).
Husbands v. Levine


V.J. Longhi Associates, P.C. (Breakstone Law Firm, P.C.,
Bellmore, N.Y. [Jay T. Breakstone], of counsel), for appellant.
Bryan Rothenberg, Hicksville, N.Y. (Mitchell E. Pak of
counsel), for respondent Patrick Levine.
McCabe, Collins, McGeough & Fowler, LLP, Carle Place,
N.Y. (Patrick M. Murphy of counsel),
for respondents John R. Paul, Jr., and
Margaret Paul.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Kings County (Ruchelsman, J.), dated October 23, 2009, which granted the separate motions of the defendants John R. Paul, Jr., and Margaret Paul, and the defendant Patrick Levine, for summary judgment dismissing the complaint insofar as asserted against them on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is affirmed, with one bill of costs payable to the respondents appearing separately and filing separate briefs.
The defendants, who relied on the same submissions in support of their respective motions, met their prima facie burdens of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957).
On appeal, the plaintiff limits his claims of serious injury to his right shoulder. Initially, the plaintiff' s hospital records, which were submitted by him in opposition to the defendants' motions, were not certified (see Vasquez v John Doe #1, 73 AD3d 1033; Mejia v DeRose, 35 AD3d 407). The magnetic resonance imaging reports concerning the plaintiff's right shoulder, performed on March 9, 2006, and October 20, 2008, were unaffirmed (see Grasso v Angerami, 79 NY2d 813; Vasquez v John Doe #1, 73 AD3d at 1033; Lozusko v Miller, 72 AD3d 908).
The affirmed medical reports of Dr. Joseph P. D'Angelo and Dr. Aric Hausknecht failed to raise a triable issue of fact as to whether the plaintiff sustained a serious injury to his right shoulder under the permanent consequential limitation of use or significant limitation of use categories of Insurance Law § 5102(d) as a result of the subject accident, because the plaintiff failed to submit competent medical evidence that was contemporaneous with the subject accident which showed initial range-of-motion limitations in his right shoulder that were significant in nature (see Posa v Guerrero, 77 AD3d 898; Srebnick v Quinn, 75 AD3d 637; Catalano v Kopmann, 73 AD3d 963; Bleszcz v Hiscock, 69 AD3d 890; Taylor v Flaherty, 65 AD3d 1328; Fung v Uddin, 60 AD3d 992; Gould v Ombrellino, 57 AD3d 608; Sorto v Morales, 55 AD3d 718; Kuchero v Tabachnikov, 54 AD3d 729; Ferraro v Ridge Car Serv., 49 AD3d 498).
The plaintiff's submissions also failed to set forth competent medical evidence that the injuries he allegedly sustained as a result of the subject accident rendered him unable to perform substantially all of his daily activities for not less than 90 days of the first 180 days following the accident (see Nieves v Michael, 73 AD3d 716; Sainte-Aime v Ho, 274 AD2d 569).
Accordingly, the Supreme Court should have been granted the defendants' respective motions for summary judgment dismissing the complaint insofar as asserted against them.
Rocourt v. Alvelo


Harmon, Linder, & Rogowsky (Mitchell Dranow, Mineola, N.Y.
of counsel), for appellant.
White Fleischner & Fino, LLP, New York, N.Y. (Jennifer L.
Coviello of counsel), for respondent
Melmartis Alvelo.
Morris Duffy Alfonso & Faley, New York, N.Y. (Iryna S.
Krauchanka and Andrea M. Alonso of
counsel), for respondents Rajiu R.
Latchman and Candice Jarome-Davis.
James G. Bilello & Associates, Westbury, N.Y. (Patricia
McDonagh of counsel), for
respondents Junior A. Williams and Karen
M. Rose.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Kings County (Balter, J.), dated September 1, 2009, which granted the separate motions of the the defendant Melmartis Alvelo, the defendants Rajiu R. Latchman and Candice Jarome-Davis, and the defendants Junior A. Williams and Karen M. Rose for summary judgment dismissing the complaint insofar as asserted against each of those defendants on the ground that he did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed, on the law, with one bill of costs to the plaintiff, payable by the defendants appearing separately and filing separate briefs, and the defendants' separate motions for summary judgment dismissing the complaint insofar as asserted against each of them are denied.
Contrary to the Supreme Court's determination, the defendants failed to meet their respective prima facie burdens of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In support of their respective motions, the defendants relied on, among other things, the affirmed medical report of Dr. Alan J. Zimmerman, an orthopedic surgeon, dated October 22, 2008, who opined that the plaintiff had significant limitations in his lumbar spine range of motion resulting from the subject accident (see Mondevil v Kumar, 74 AD3d 1295; Smith v Hartman, 73 AD3d 736; Quiceno v Mendoza, 72 AD3d 669; Giacomaro v Wilson, 58 AD3d 802).
Since the defendants failed to meet their respective prima facie burdens, it is unnecessary to consider whether the papers submitted by the plaintiff in opposition were sufficient to raise a triable issue of fact (see Coscia v 938 Trading Corp., 283 AD2d 538).
Santana v. Salmeron


Martin, Fallon & MullÉ, Huntington, N.Y. (Richard C. MullÉ of
counsel), for appellant.

DECISION & ORDER
In an action, inter alia, to recover damages for personal injuries, the defendant appeals from an order of the Supreme Court, Suffolk County (Cohalan, J.), entered December 5, 2009, which denied her motion for summary judgment dismissing the complaint insofar as asserted by the plaintiff Nick Santana.
ORDERED that the order is reversed, on the law, with costs, and the defendant's motion for summary judgment dismissing the complaint insofar as asserted by the plaintiff Nick Santana is granted.
In response to the defendant's motion for summary judgment dismissing the complaint insofar as asserted by the plaintiff Nick Santana, Santana conceded that he did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident. Therefore, the Supreme Court should have granted that branch of the defendant's motion which was for summary judgment dismissing the first cause of action insofar as asserted by Santana.
Moreover, the Supreme Court should have granted that branch of the defendant's motion which was for summary judgment dismissing the third cause of action alleging that Santana sustained injuries as a result of being in the "zone of danger when his immediate family member" sustained serious injuries. The plaintiff Sonnett Shirley, Santana's girlfriend, was not an immediate family member (see Bovsun v Sanperi, 61 NY2d 219; see also Jun Chi Guan v Tuscan Dairy Farms, 24 AD3d 725).
Therefore, the Supreme Court erred in denying the defendant's motion for summary judgment dismissing the complaint insofar as asserted by Santana.
Torres v. Torrano


Nesci-Keane, PLLC, Hawthorne, N.Y. (Jason M. Bernheimer of
counsel), for appellant.
Sobo & Sobo, LLP, Middletown, N.Y. (Suzan D. Paras and
Gregory M. Sobo of counsel), for
respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendant appeals from an order of the Supreme Court, Orange County (Bartlett, J.), entered July 21, 2010, which denied her motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is affirmed, with costs.
The Supreme Court properly determined that the defendant failed to meet her prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In support of her motion, the defendant relied upon, inter alia, the affirmed medical report of a neurologist who examined the plaintiff nearly three years after the accident, and noted significant range-of-motion limitations in the cervical region of the plaintiff's spine. In view of the neurologist's findings, the defendant failed to establish her prima facie entitlement to judgment as a matter of law (see Mondevil v Kumar, 74 AD3d 1295, 1296; Smith v Hartman, 73 AD3d 736; Quiceno v Mendoza, 72 AD3d 669; Giacomaro v Wilson, 58 AD3d 802, 803; McGregor v Avellaneda, 50 AD3d 749, 750; Wright v AAA Constr. Servs., Inc., 49 AD3d 531, 532).
Since the defendant failed to meet her prima facie burden, it is unnecessary to consider whether the plaintiff's papers in opposition to the defendant's motion were sufficient to raise a triable issue of fact (see Coscia v 938 Trading Corp., 283 AD2d 538).
Malburg v. Keller


Appeal from an order of the Supreme Court, Erie County (Rose H. Sconiers, J.), entered December 7, 2009 in a personal injury action. The order granted the motion of defendant for summary judgment and dismissed the amended complaint.

Cellino & Barnes, P.C., Buffalo (Ellen B. Sturm Of Counsel), For Plaintiff-Appellant.
Rupp, Baase, Pfalzgraf, Cunningham & Coppola Llc, Buffalo (Jeffrey F. Baase Of Counsel), For Defendant-Respondent.

It is hereby ORDERED that the order so appealed from is unanimously modified on the law by denying the motion in part and reinstating the amended complaint, as amplified by the bill of particulars, with respect to the significant limitation of use of a body function or system category of serious injury within the meaning of Insurance Law § 5102 (d) as it relates to plaintiff's cervical spine injury and as modified the order is affirmed without costs.
Memorandum: Plaintiff commenced this action seeking damages for injuries he allegedly sustained in a motor vehicle accident when the vehicle he was driving was struck by a vehicle driven by defendant's decedent. Defendant thereafter moved for summary judgment dismissing the amended complaint on the ground that plaintiff did not sustain a serious injury in the accident within the meaning of Insurance Law § 5102 (d), and Supreme Court granted the motion. We agree with plaintiff that the court erred in granting that part of the motion with respect to the significant limitation of use category of serious injury, and we therefore modify the order accordingly. Although defendant met his initial burden, plaintiff raised a triable issue of fact by submitting the affirmed report of the physician who conducted an independent medical examination (IME) of plaintiff at the request of his workers' compensation carrier. According to the IME physician, plaintiff suffered from a temporary moderate partial disability, including a 50% loss of range of motion of his cervical spine in certain directions, and the disability was causally related to the
motor vehicle accident (see Casiano v Zedan, 66 AD3d 730, 730-731).
Caldwell v. Ward


Appeal from an amended order of the Supreme Court, Wayne County (John B. Nesbitt, A.J.), entered November 4, 2009 in a personal injury action. The amended order, insofar as appealed from, granted defendants' motion for summary judgment.

William K. Mattar, P.C., Williamsville (C. Daniel Mcgillicuddy Of Counsel), For Plaintiff-Appellant.
Trevett Cristo Salzer & Andolina P.C., Rochester (Lisa G. Berrittella Of Counsel), For Defendants-Respondents.

It is hereby ORDERED that the amended order insofar as appealed from is reversed on the law without costs, the motion is denied with respect to the fracture category of serious injury within the meaning of Insurance Law § 5102 (d) and the complaint, as amplified by the bill of particulars, is reinstated.
Memorandum: Plaintiff commenced this action to recover damages for injuries he sustained when a vehicle operated by defendant Rhonda D. Ward collided with the vehicle driven by plaintiff, under icy conditions. Supreme Court erred in granting 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). We note at the outset that, although plaintiff contended in his bill of particulars that he sustained a serious injury under several categories of serious injury set forth in Insurance Law § 5102 (d), on appeal he contends only that he sustained a serious injury within the meaning of the fracture category and thus is deemed to have abandoned any issues with respect to the remaining categories (see Ciesinski v Town of Aurora, 202 AD2d 984). We conclude that, although defendants met their initial burden by establishing that plaintiff did not sustain a fracture, plaintiff raised a triable issue of fact to defeat the motion with respect to the fracture category (see generally Zuckerman v City of New York, 49 NY2d 557, 562). He submitted the affirmed report of his primary care physician stating that plaintiff "did sustain an anterior compression fracture causally related" to the motor vehicle accident in question, and he also submitted the affirmed report of his orthopedic surgeon stating that, based upon X rays taken in 2006 as well as those taken in 2008, he "sustained mild compression fractures at T12 and L1 in February 2006 related to a motor vehicle crash" (see Wheeler v Laechner, 34 AD3d 1222; Boorman v Bowhers, 27 AD3d 1058).
All concur except Martoche, J.P., who dissents and votes to affirm in the following Memorandum: I respectfully dissent and would affirm the order granting defendants' motion for summary judgment dismissing the complaint for reasons stated in the decision at Supreme Court with respect to the fracture category.
CPA Mutual Insurance Company, etc. v. Weiss & Company

Orans, Elsen, Lupert & Brown LLP, New York (Leslie A.
Lupert of counsel), for appellants.
Traub Lieberman Straus & Shrewsberry LLP, Hawthorne
(Stephen D. Straus of counsel), for respondent.
Order and judgment (one paper), Supreme Court, New York County (Marylin G. Diamond, J.), entered August 25, 2009, granting plaintiff summary judgment and declaring that plaintiff does not have an obligation to defend or indemnify defendants against a professional liability claim asserted in federal court, unanimously affirmed, with costs. Order, same court and Justice, entered April 9, 2010, which, insofar as appealable, denied defendants' motion to renew, unanimously affirmed, with costs.
The court correctly found that the unambiguous prior knowledge exclusion, which entitled plaintiff to disclaim its obligation to defend or indemnify defendants for "any Interrelated Acts or Omissions" which, before the effective date of the policy, defendants "believed or had a basis to believe might result in a "Claim," applied here. The evidentiary record establishes that defendants, prior to the policy's effective date, had subjective knowledge of numerous facts pertaining to a fraudulent scheme undertaken by their clients, which involved or implicated defendants as well. Given this evidence, it was unreasonable for defendants to have failed to foresee that these facts might form the basis of a claim against them (see Executive Risk Indem. Inc. v Pepper Hamilton LLP, 13 NY3d 313, 322-323 [2009]; see also Quanta Lines Ins. Co. v Investors Capital Corp., 2009 US Dist LEXIS 117689 [SD NY 2009], affd 2010 US App LEXIS 23594 [2010]; Westport Ins. Corp. v Goldberger & Dubin, P.C., 255 Fed Appx 593, 594-595 [2d Cir 2007]).
The court properly denied defendants' motion to renew. Defendants' subjective belief they were not facing a claim in connection with the fraud committed by their clients, even if set forth in the affidavit of defendant Weiss, would not have warranted a different result. The record shows that such a belief would not have been reasonable under the circumstances. Moreover, defendants' speculation as to what their prior attorneys "apparently believed" did not excuse their failure to submit Weiss's affidavit when the original motion was heard. "Renewal is granted sparingly . . .; it is not a second chance freely given to parties who have not exercised due diligence in making their first factual presentation" (Matter of Beiny, 132 AD2d 190, 210 [1987], [*2]lv dismissed 71 NY2d 994 [1988]).
In light of the foregoing, we need not reach plaintiff's alternative grounds for disclaimer of coverage.
Rodriguez v. Freight Masters, Inc.


Miller & Miller, Brooklyn (Andrew R. Miller of counsel), for
appellant.
Law Offices of James J. Toomey, New York (Evy L. Kazansky
of counsel), for Freight Masters, Inc. and Steven S. January,
respondents.
Andrew M. Cuomo, Attorney General, Albany (Julie S. Mereson
of counsel), for Patricia A. Rydak, respondent.
Order, Supreme Court, New York County (Paul Wooten, J.), entered on or about July 21, 2009, which granted the motion by defendants Freight Masters and January for summary judgment dismissing the complaint as against them, unanimously modified, on the law, without costs, to award summary judgment to defendant Rydak dismissing the complaint as against her, and otherwise affirmed.
Defendants' examining neurologists' affirmed medical reports, together with MRI studies and other medical treatment records, established prima facie that plaintiff sustained no serious injury. The medical experts found on examination that there were no limitations in plaintiff's range of motion in his cervical, thoracic or lumbar spine (see e.g. Atkinson v Oliver, 36 AD3d 552 [2007]). They also concluded that the herniation at L5-S1, on which plaintiff's claim of serious injury is primarily based, was not causally related to the accident. This conclusion is supported by post-accident MRI studies conducted in 2003 and early 2004, as well as the experts' neurological findings. Indeed, plaintiff's own expert physician conclusorily averred only that the injuries that incurred on the date of the accident made plaintiff "more susceptible" to serious injury in the future.
As to a 90/180-day injury, plaintiff alleged in his first supplemental bill of particulars (verified by his attorney) that he was confined to his bed and cell at the Eastern Correction Facility for five months after the accident. However, he failed to substantiate his 90/180-day claim with medical proof (see DeSouza v Hamilton, 55 AD3d 352 [2008]). While his expert physician's report of his examination of plaintiff four years after the accident emphasized a surgically repaired herniated disc, MRI studies conducted in the first year after the accident indicated only a degenerative condition of the spine and no herniation.
Since the record presents no issues of fact, we modify the order to award summary judgment also to defendant Rydak (see Rodless Props., L.P. v Westchester Fire Ins. Co., 40 AD3d 253, 255 [2007], lv denied 9 NY3d 815 [2007]).
NICHOLS v BDS LANDSCAPE DESIGN


Appeal from an order of the Supreme Court, Erie County (Diane Y. Devlin, J.), entered February 4, 2010 in a personal injury action. The order granted the relief requested in plaintiff's petition.


KENNEY SHELTON LIPTAK NOWAK LLP, BUFFALO (AARON MICHAEL STREIT OF COUNSEL), FOR DEFENDANTS-APPELLANTS.
THOMAS C. PARES, BUFFALO, FOR PLAINTIFF-RESPONDENT.


It is hereby ORDERED that the order so appealed from is unanimously reversed on the law without costs and the special proceeding is converted to an action.
Memorandum: Deborah Nichols was injured in November 2005 when she slipped and fell on ice in an area maintained by BDS Landscape Design (BDS) and William Dobson, III. National Grange Mutual Insurance (National Grange) is the insurance carrier for BDS and Dobson. Nichols successfully filed a workers' compensation claim and, beginning in February 2007, she entered into settlement negotiations with National Grange with respect to her negligence claim. The parties thereafter reached an oral settlement of the negligence claim. In a confirming letter from her attorney in May 2008, Nichols stated that the settlement was "subject to the consent and waiver of the lien" by nonparty Sedgwick Claims Management Services (Sedgwick), the insurance carrier for the Workers' Compensation Board. On July 30, 2008, Nichols sent a proposed general release to National Grange that improperly named an unrelated entity as the released party and, the following day, National Grange faxed a release to Nichols containing the same terms as her proposed release but naming the correct released parties. Nichols did not receive Sedgwick's consent to the settlement until April 2009, whereupon she executed the release prepared by National Grange. By letter dated May 29, 2009, however, National Grange advised Nichols that its position was that the case was not settled and that the claim by Nichols therefore was time-barred.
Nichols thereafter commenced this "special proceeding" by order to show cause and petition, seeking a determination "that a judgment be entered against [National Grange, BDS and Dobson] . . . tolling the running of the [s]tatute of [l]imitations[] and compelling payment of the agreed settlement to [*2][Nichols] . . . ." According to Nichols, National Grange "breached its settlement agreement" and "acted in a deceptive manner that tolls the running of the [s]tatute of [l]imitations as intended by the CPLR." Supreme Court granted the relief requested by Nichols, resulting in this appeal by BDS, Dobson and National Grange.
Inasmuch as a special proceeding is not the proper procedural vehicle for Nichols' claims (see generally CPLR 103 [b]), which sound in breach of contract (see Insurance Co. of N. Am. v New York Cas. Ins. Co., 156 AD2d 1018-1019, lv denied 75 NY2d 708; see also Kowalchuk v Stroup, 61 AD3d 118, 119-121), we exercise our power to convert this "special proceeding" to an action (see CPLR 103 [c]; see generally Jones v Town of Carroll, 32 AD3d 1216, 1218, appeal dismissed 12 NY3d 880). We thus deem the order to show cause to be a summons and the petition to be a complaint (see Matter of Bart-Rich Enters., Inc. v Boyce-Canandaigua, Inc., 8 AD3d 1119), and we note that Nichols is properly denominated as a plaintiff while BDS, Dobson and National Grange are properly denominated as defendants.
With respect to the merits of this action, we conclude that the court erred in effectively granting summary judgment to plaintiff (see generally Taskiran v Murphy, 8 AD3d 360), inasmuch as plaintiff failed to establish the existence and terms of the settlement agreement as a matter of law (see generally Pyramid Brokerage Co., Inc. v Zurich Am. Ins. Co., 71 AD3d 1386, 1387; Easton Telecom Servs., LLC v Global Crossing Bandwidth, Inc., 62 AD3d 1235, 1237). We therefore reverse the order.
DeLouise v S.K.I. Wholesale Beer Corp.


Gannon, Rosenfarb & Moskowitz, New York, N.Y. (John H. Shin
of counsel), for appellants.
Everett J. Petersson, P.C., Brooklyn, N.Y. (Michael A. Serpico
of counsel), for respondent.


DECISION & ORDER
In an action to recover damages for personal injuries, the defendants appeal, as limited by their brief, from so much of an order of the Supreme Court, Kings County (Kramer, J.), dated May 7, 2010, as denied those branches of their motion which were to compel the plaintiff to provide compliant authorizations pursuant to the Health Insurance Portability and Accountability Act of 1996 (42 USC § 1320d et seq.) for certain medical and hospital records relating to his medical condition.
ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and those branches of the defendants' motion which were to compel the plaintiff to provide compliant authorizations pursuant to the Health Insurance Portability and Accountability Act of 1996 (42 USC § 1320d et seq.) for certain medical and hospital records relating to his medical condition are granted.
"[A] party must provide duly executed and acknowledged written authorizations for the release of pertinent medical records under the liberal discovery provisions of the CPLR . . . when that party has waived the physician-patient privilege by affirmatively putting his or her physical or mental condition in issue" (Cynthia B. v New Rochelle Hosp. Med. Ctr., 60 NY2d 452, 456-457; see Dillenbeck v Hess, 73 NY2d 278; Avila v 106 Corona Realty Corp., 300 AD2d 266, 267). Here, the plaintiff affirmatively placed his entire medical condition in controversy through the broad allegations of physical injury and mental anguish contained in the complaint and bill of particulars (see Avila v 106 Corona Realty Corp., 300 AD2d at 267; St. Clare v Cattani, 128 AD2d 766; Daniele v Long Is. Jewish-Hillside Med. Ctr., 74 AD2d 814). Moreover, the nature and severity of the plaintiff's previous injuries and medical conditions are material and necessary to his claims of having sustained a serious injury within the meaning of Insurance Law § 5102(d), as well as to any claims of loss of enjoyment of life (see Vanalst v City of New York, 276 AD2d 789). Thus, the [*2]Supreme Court erred in denying those branches of the defendants' motion which were to compel the plaintiff to provide complaint authorizations pursuant to the Health Insurance Portability and Accountability Act of 1996 (42 USC § 1320d et seq.) for certain medical and hospital records relating to his medical condition (see Avila v 106 Corona Realty Corp., 300 AD2d at 267; Molesi v Rubenstein, 294 AD2d 546; Schager v Durland, 286 AD2d 725).
MASTRO, J.P., FLORIO, DICKERSON, BELEN and LOTT, JJ., concur.
BRONSON v HANSEL



Appeal from an order of the Supreme Court, Orleans County (James P. Punch, A.J.), entered September 30, 2009 in a personal injury action. The order granted defendant's motion for summary judgment.


CELLINO & BARNES, P.C., ROCHESTER (BRETT L. MANSKE OF COUNSEL), FOR PLAINTIFF-APPELLANT.
BROWN & KELLY, LLP, BUFFALO (PATRICIA S. CICCARELLI OF COUNSEL), FOR DEFENDANT-RESPONDENT.


It is hereby ORDERED that the order so appealed from is affirmed without costs.
Memorandum: Plaintiff commenced this action seeking damages for injuries she sustained in a motor vehicle accident. Prior to that time, however, plaintiff signed a "Release of All Claims" (release) in consideration of $1,039.82, releasing all claims "growing out of any and all known and unknown, foreseen and unforseen[,] bodily and personal injuries and property damage and the consequences thereof resulting from the accident . . . ." The release further provided that plaintiff "declare(s) and represent(s) that there may be unknown or unanticipated injuries resulting from the . . . accident . . . and[,] in making [the r]elease[,] it is understood and agreed that [it] is intended to include such injuries." Plaintiff thereafter had an MRI that revealed a herniated disc in her cervical spine.
Supreme Court properly granted defendant's motion for summary judgment dismissing the complaint based on plaintiff's release. The record establishes that, prior to signing the release, plaintiff had complained of neck pain during an emergency room visit and to her primary care physician at a subsequent office visit. Plaintiff was thereafter referred to physical therapy for treatment of a "cervical strain." During another visit to her primary care physician five days prior to signing the release, plaintiff was scheduled to have an MRI of her cervical spine. Thus, it is undisputed that plaintiff knew of her neck injury before signing the release. It is well settled that "[t]he discovery of [a] herniated disc is a consequence, or sequela, of [that] known injury' " (Finklea v Heim, 262 AD2d 1056, 1057; see generally Mangini v McClurg, 24 NY2d 556, 564). Here, it cannot be said that "the nature of the subsequently discovered [herniated disc in the cervical spine was], as a practical or medical matter, . . . distinguishable from unanticipated consequences of [the] known injury," i.e., the cervical strain (Mangini, 24 NY2d at 567). The injury site was the same, and "ordinary medical caution . . . suggested the possibility of the associated injury[, i.e., the herniated disc], at the site" (id.).
Further, plaintiff cannot avoid the release, the language of which was unambiguous, by now claiming that she did not understand its terms (see Finklea, 262 AD2d 1056; DeQuatro v Zhen Yu Li, 211 AD2d 609). Although plaintiff admitted that she did not read the release
" word for word,' " it is well settled that "[a] party is under an obligation to read a document before executing it and cannot avoid its effect by asserting that he or she did not read it or know its contents" (Pressley v Rochester City School Dist., 234 AD2d 998, 999).
All concur except Green and Gorski, JJ., who dissent and vote to reverse in accordance with the following Memorandum: We respectfully dissent inasmuch as we conclude that Supreme Court erred in granting defendant's motion for summary judgment dismissing the complaint. Plaintiff raised a triable issue of fact whether the "Release of All Claims" (release) was unenforceable because she signed it under the mistaken belief that it was intended to settleonly her claim for property damage (see Haynes v Garez, 304 AD2d 714, 716; see generally Mangini v McClurg, 24 NY2d 556, 562). "[A] release may not be read to cover matters [that] the parties did not desire or intend to dispose of" (Cahill v Regan, 5 NY2d 292, 299).
In opposition to the motion, plaintiff submitted a transcript of her telephone conversation with a claims representative for defendant's insurance company, wherein plaintiff informed the claims representative that, although she had visited the emergency room once as a result of the accident, she could not afford to seek further medical treatment. No further detailed discussion of plaintiff's injuries occurred. That transcript belies the assertion of the claims representative in his affidavit in support of the motion that plaintiff "spoke to [him] at length regarding . . . her alleged injuries" during that telephone conversation. Thus, plaintiff submitted evidence establishing that defendant knew that she was unaware of the extent of her injuries at the time she signed the release. Further, in her affidavit in opposition to the motion, plaintiff stated that, during two subsequent telephone calls with claims representatives for defendant's insurance company, she expressed dissatisfaction with the offer of approximately $960 for the damage to her vehicle, inasmuch as the estimated value of the vehicle was approximately $2,000. According to her affidavit, plaintiff was thereafter offered an additional $1,039.82, at which time she was assured that the increased amount was unrelated to her bodily injury claim. Plaintiff also stated that she executed the release in exchange for two checks from defendant's insurance company totaling $2,000, which is the same amount as the estimated value of plaintiff's vehicle. Neither check contained any notation with respect to the claim for which it was issued, i.e., plaintiff's property damage claim or bodily injury claim. Thus, we conclude that plaintiff raiseda triable issue of fact whether the parties intended to settle only the property damage claim(see Cahill, 5 NY2d at 299-300; Haynes, 304 AD2d at 715;see generally Mangini, 24 NY2d at 562).
We therefore would reverse the order, deny the motion and reinstate the complaint.
Blanche, Verte & Blanche, Ltd. v. Joseph Mauro & Sons



White, Quinlan & Staley, LLP, Garden City, N.Y. (Christopher
M. Otton of counsel), for appellant-respondent.
Guararra & Zaitz, LLP, New York, N.Y. (Michael J. Guararra
of counsel), for respondent-appellant.
Neil H. Greenberg & Associates, P.C., Westbury, N.Y. (Justin
M. Reilly of counsel), for plaintiff-
respondent.


DECISION & ORDER
In an action to recover damages for negligence and breach of contract, the defendant Shore Drug, Inc., appeals, as limited by its brief, from so much of an order of the Supreme Court, Suffolk County (Jones, Jr., J.), dated January 13, 2010, as denied its motion for summary judgment dismissing the complaint and all cross claims insofar as asserted against it, and the defendant Joseph Mauro & Sons cross-appeals from so much of the same order as denied its motion for summary judgment dismissing the complaint and all cross claims insofar as asserted against it.
ORDERED that the order is modified, on the law, by deleting the provisions thereof denying those branches of the motion of the defendant Shore Drug, Inc., which were for summary judgment dismissing the negligence cause of action and all cross claims asserted against it, and substituting therefor provisions granting those branches of the motion; as so modified, the order is affirmed insofar as appealed and cross-appealed from, with one bill of costs to Shore Drug, Inc., and the plaintiff, payable by the defendant Joseph Mauro & Sons.
The plaintiff, Blanche, Verte & Blanche, Ltd. (hereinafter BVB), owned certain real property in Bay Shore (hereinafter the premises), which was destroyed by a fire in October 2002. The defendant Shore Drug, Inc. (hereinafter Shore), BVB's tenant on the first floor of the premises, had hired the defendant Joseph Mauro & Sons (hereinafter Mauro), an electrician, to perform work in its leased portion of the premises prior to the fire.
The defendants separately moved for summary judgment dismissing the complaint and all cross claims insofar as asserted against each of them. The Supreme Court denied both motions.
The Supreme Court properly rejected the defendants' contention that BVB could not maintain an action to recover damages after having been "fully compensated" for its losses pursuant to its insurance policy with Travelers Insurance Company (hereinafter Travelers). Pursuant to CPLR 4545, in the event BVB is awarded damages for its loss, any such award would be reduced by the amount recovered by BVB from Travelers, minus the cost of the premiums paid by BVB for such benefits for a certain period preceding the accrual of its action (see CPLR 4545[a]). However, "[a]ny collateral source deduction required by [CPLR 4545] shall be made by the trial court after the rendering of the jury's verdict. The plaintiff may prove his or her losses and expenses at the trial irrespective of whether such sums will later have to be deducted from the plaintiff's recovery" (id.) (emphasis added).
Contrary to the defendants' contention, BVB is not precluded from maintaining this action against them simply because it received payment from Travelers, and if the defendants are found liable at trial and BVB is awarded damages, then the payment to BVB by Travelers may be relevant as a possible setoff against the damages award (see Fisher v Qualico Contr. Corp., 98 NY2d 534; Hopper v McCollum, 65 AD3d 669, 670; Spectra Audio Research, Inc. v Chon, 62 AD3d 561, 563; Dweck v Bridge Transp., Inc., 12 AD3d 560, 561). There exists, at this point, a triable issue of fact as to whether BVB sustained losses greater than the funds received from Travelers (see Dweck v Bridge Transp., Inc., 12 AD3d at 561).
Moreover, there is no merit to the argument that, if BVB is permitted to maintain this action, while at the same time Travelers is litigating an action against the defendants as BVB's subrogee, then the defendants will be subjected to double recovery by an insurer and its insured for the same claim. Here, the subrogation receipt indicated that BVB subrogated Travelers to its rights only "to the extent" of the payment it received from Travelers. Accordingly, any amount the defendants might have to pay Travelers will be limited to what Travelers paid BVB, while the total liability of the defendants must be offset by that same amount (id.). Thus, there can be no "double recovery."
Since the defendants failed to sustain their initial burden of establishing their prima facie entitlement to judgment as a matter of law on this issue, we need not consider the sufficiency of the plaintiff's opposition papers (see Alvarez v Prospect Hosp., 68 NY2d 320, 324).
The Supreme Court also properly denied that branch of Shore's motion which was for summary judgment dismissing the cause of action to recover damages for breach of the lease (see Rosenberg v Equitable Life Assur. Socy. of U.S., 79 NY2d 663, 668; Brother v New York State Elec. & Gas Corp., 11 NY3d 251, 257). Since Shore failed to meet its prima facie burden of establishing that it was entitled to judgment as a matter of law on that cause of action, the burden did not shift to the plaintiff (see Alvarez v Prospect Hosp., 68 NY2d 320, 324).
However, the Supreme Court erred in denying those branches of Shore's motion which were for summary judgment dismissing the negligence cause of action and the cross claims seeking contribution and/or indemnification insofar as asserted against it, since Shore established its entitlement to judgment as a matter of law with respect to that cause of action (id.). In opposition, neither the plaintiff nor Mauro raised a triable issue of fact (id.).
SANTUCCI, J.P., BALKIN, LEVENTHAL and AUSTIN, JJ., concur.

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