Dear Coverage Pointers Subscribers:

 

Thanks for the Southwestern Hospitality and Welcome to New Subscribers

 

A special welcome to the new friends I made during my trip to Scottsdale, Arizona, last week, along with those who were compelled to watch and/or listen via video or audio conference. For those of you who are receiving this publication for the first time, I implore you NOT to hit the print button without first recognizing that the issue attached is over 80 pages in length. If all of our 2288 subscribers printed out the issue, we'd be using 190,000 sheets of paper, which, if laid from end to end, would cover a distance of 33 miles.  I thought you'd like to know. 

 

PLRB

 

I do hope to see some of you at the PLRB Claim Conference in Nashville.  Hope you can come and enjoy (or heckle) my presentation.

 

April Fools' Day (or is it April Fool's Day or April Fools Day?)

 

Of course, we wish a Happy April Fools' Day to one and all. We (well some of us) have been celebrating it since 1582, it is said.

 

Some has suggested that the Court of Appeals was undoubtedly aware of the upcoming holiday when, it handed down its decision in State Farm v. Mangan this past week.

 

This is a very significant Court of Appeals decision on Uninsured and No Fault coverage.  The high court held that an innocent auto accident victim who files a claim under a policy for uninsured motorist benefits and/or no fault benefits as a result of an intentional act by another - is murder "intentional" enough?  -- may still receive No Fault and Uninsured Motorists benefits.  The Court rationalized that from the victim/insured's perspective the injuries (and in this case, death) were still unexpected.  Read the State Farm v. Mangan summary and decision in the attached issue.

 

Cassie's Capital Connection

Our Albany office is operational and Cassandra (Cassie) Kazukenus is our Capital District attorney with offices established on Corporate Woods Boulevard.  A new lawyer means (sometimes) a new column in Coverage PointersCassie's Capital Connection will cover the Albany "scene" and will include insurance regulatory matters, reviews of New York State Insurance Department Circular Letters, Office of General Counsel Opinions, state legislation and anything else that will help keep our readers advised on state government as it relates to Insurance.  Cassie introduces herself in this week's issue.

 

For those of you with a scorecard, our here's a list of our regular columns:

Kohane's Coverage Corner
Margo's Musings on "Serious Injury"
Audrey's Angles on No Fault
Peiper on Property and Potpourri
Cassie's Capital Connection
Fijal's Federal Focus
Liening Tower of Perley
Jen's Gems
Earl's Pearls
Across Borders
Earl's Pearls

 

Note from Audrey Seeley

Greetings from Chicago and DRI's Insurance Coverage and Claims Institute!  The program this year, as usual, is great.

 

We have another must read decision this edition from the Appellate Division, First Department which held that an insurer can retroactively deny back to date of loss based upon failure to appear for scheduled IMEs.  Further, the denial need not be timely; can be referencing a blanket denial of the breach of the policy condition; and need not be related to the particular medical specialty who submitted the current claim.  This decision is one to ensure you are aware of if you adjust New York No-Fault claims or advise insurers or providers on No-Fault claims.

 

Audrey
[email protected]

 

One Hundred Years Ago Today - Where's Waldo?:


On April 1, 1911, the nation's papers were abuzz about the kidnaping of two-year old Waldo Rogers, son and grandson of New Mexico territory lawyers. 

 

Syracuse Herald

April 1, 2011

 

SWIFT PURSUIT OF

BABY'S KIDNAPERS

Armed Men in Autos and Bands of

Cowboys Chase Men Who Extorted

$12,000 From Parents.

$10,000 REWARD FOR CAPTURE

 

Spurred by Indignation and the Big Reward, Citizens Scour Plains and Hills of New Mexico for Successful Blackmailers Who Returned Child Unharmed After Getting

Their Blood-money: Terrified Parents Said Nothing of Crime Until Little Boy Was Restored to Them

 

East Las Vegas, N. M., April 1.--A dozen parties of  armed men in automobiles, troops of cowboys and posses of deputy sheriffs are scouring the country for miles around in a search for the kidnapers who got $12,0000 for the return of little Waldo Rogers. A victim of one of the most daring and cunningly planned kidnaping in history, "Waldo Rogers, 2 years old son of Mr. and Mrs. A. T. Rogers and a grandson of Judge H. L. Wald, a wealthy resident of Kansas City, was stolen from his mother's arms at midnight Wednesday and at some moment just twenty-four hours later he was returned, a ransom, of $12,000 having been paid.


Absolute silence was maintained by the parents until after the return of the child, as they had been told the boy would be murdered if they uttered a single word. After Waldo was safely restored to his nursery the alarm was given, and posses, under the, direction of the sheriff and Santa Fe railroad detectives are tonight searching the city and country.

 

Waldo was taken by a masked man who entered the Rogers house, where Mrs. Rogers, her brother-in-law William Rogers, who was staying in the house during the absence of her husband, and the child were sleeping...

 

Two weeks later, the crime was solved, when it turned out that the crime was masterminded by an uncle, aided by a paroled convict:

 

UNCLES ARE NABBED

TWO ARE HELD FOR STEALING

ROGERS BOY

Life Convict Implicates Child's Relatives

in Kidnaping Plot - Las

Vegas People Furious

 

Las Vegas, N. M., April 12.-Implicated by the confession of Joe Wiggins, a former life convict. Will and John Rogers, uncles of Waldo Rogers, aged two, the, son of Mr. and Mrs. A.T. Rogers, were arrested for complicity in the lad's abduction. For his return $12,000 ransom was paid, Will Rogers acting as agent for Mrs. Rogers.

 

The disclosures have again aroused the city. The accused are in the county jail, which is guarded by a large force of deputies. Wiggins' confession completely cleared up the mystery that for more than ten days has surrounded the kidnaping.

 

One of the uncles, along with Wiggins plead guilty and each received 12 year sentences.  Wiggins escaped from jail but was shot to death by a posse.

 

The Rest of the Story:

 

The kidnaped baby Waldo grew up to become a lawyer, a state court judge and a United States District Judge Waldo Henry Rogers, District of New MexicoHe was appointed by President Eisenhower in 1954 held that position until his death ten years later. Because of his life experiences, he refused to handle federal kidnapping cases while on the bench.  

 

Headlines of the Cases Reviewed in This Week's Issue:

 

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

 

Court of Appeals

  •          Victim of Intentional or Criminal Act Still Permitted to Recover under No Fault and Uninsured Motorist Portion of His or Her Policy
  •          High Court Denies Review of Cirone Decision on Bad-Faith Standing

 

Appellate Division

  •          Another "Late Reporting" Victory for Tower.  Once Again, a Failure on the Part of an Insured to Investigate an Accident of which It is Aware, Leads to a Determination that It Could Not Rely on Belief that It Would Not be Sued
  •          No Need to Disclaim Timely if Claim Does Not Fall Within Grant of Coverage
  •          Retracting Ground for Disclaimer and Adding Other Grounds in Second, Timely Letter Is AOK
  •          Where There Were Allegations That Triggered Possibility of Additional Insured ("AI") Coverage, AI Carrier Had Obligation to Defend
  •          Insured's Knowledge of Accident, Complaint of Pain and Continuing Injuries Required Inquiry into Possibility That Claim Would Be Made
  •          Issue of Fact on Employment Status of Insurance Agent Precludes Summary Judgment
  •          Ignorance That Policy Excluded Off-Premises Accidents Was Sufficient to Raise Question of Fact About Excuse for Late Reporting

 

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

 

  • Resolution of Issue of Liability Requires Determination That Plaintiff Sustained a Serious Injury
  • Once Again, Deposition Testimony Defeats 90/180-Day Claim
  • Plaintiff's Affidavit, Which Appears "Tailored to Avoid the Consequences of Her Deposition Testimony," Fails to Raise an Issue of Fact
  • Complaint Dismissed Where Plaintiff Fails to Rebut Findings of Pre-Existing Conditions
  • Where Defendant Establishes Pre-Existing Condition, Plaintiff's Expert Must Address Causation
  • Defendants' Expert's Finding of No Neurological Disability Fails Where No Range-of-Motion Testing Was Performed
  • Reports Finding Limitations Due to Trauma Rather Than Degenerative Disease Raise Issue of Fact
  • Plaintiff Is Required to Plead and Prove Serious Injury to Be Entitled to Recover Damages Despite Proof of Common-Law Liability
  • Once Again, Permanent Loss, Permanent Consequential Limitation and Significant Limitation of Use Categories Require Contemporaneous Findings
  • Subjective Complaints Chronicled by Pain Management Physician Are Insufficient to Raise Issue of Fact
  • Plaintiff's Cross Motion for Leave to Amend Bill of Particulars Denied
  • Significant Limitation of Use Claim Is Dismissed for Failure to Submit Evidence of Recent Examination
  • Dislocation, Standing Alone, Is Not Evidence of Serious Injury
  • Failure to Address Similar Injury Sustained in Prior Accident Renders Opinion Regarding Causation Speculative; 9-10% Range-of Motion Restrictions Are Not "Significant"
  • Difference of Opinion as to Whether Symptoms Are Caused by Accident or Pre-Existing Condition Raises Issue of Fact
  • Failure to Refute Evidence of Pre-Existing Degenerative Condition Dooms Plaintiff's Case
  • Fact That Plaintiff Was Involved in Prior Accident Will Not, in of Itself, Shift the Burden 

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

 

ARBITRATION

  •          Surgery Denial Not Upheld As Treating Records and EIP Testimony More Persuasive
  •          Insurer Raising Interesting Argument As To Whether  Chiropractor Can Order Anesthesia for MUA
  •          Peer Review for Second MRI Unpersuasive

 

LITIGATION

  • Denial of Permanent Stay Of Arbitration Was Properly Granted
  • Insurer Does Not Waive Policy Exhaustion Defense
  • Yikes, Judgment of Over $400K Upheld Despite Policy Limits Exhaustion
  • Case Dismissed Due to Outstanding Verification
  • MUST READ! - Breach of Policy Condition To Appear For IME Permits Insurer To Properly Retroactively Deny Back To Date of Loss  

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

 

  • Copyright Infringement Via the Internet Triggers New York's Long Arm Jurisdiction
  • Replacement Cost Not Available Where the Insured Cannot Establish an Intent to Rebuild; Two-Year Suit Limitation Clause Upheld, AGAIN
  • Dispute of the Incorporation of Riders to a Contract Results in a Question of Fact on Indemnity Claims
  • Police Officer's Claims for Injuries Caused by a Hit and Run Vehicle Not Exempted Under MVAIC Where the Police Vehicle was not Operated in a Negligent Manner
  • Lack of Objective Evidence of Notice of Accident Within Twenty-Four Hours Results in a Question of Fact, and Framed Issue Hearing
  • Dismissal Based on Forum Non-Conveniens Granted Where There is No Connection to New York 

CASSIE'S CAPITAL CONNECTION
Cassandra A. Kazukenus
[email protected]

 

Introduction to the Column

 

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

  • State Regulatory Order Requiring Environmental Cleanup Not Property Damage
  • Insurer has Right of Subrogation against Another Insurer 
     

JEN'S GEMS
Jennifer A. Ehman

[email protected]

 

  • Defendant Required to Provide General Contractor A Defense, But Court Orders a Determination On Liability Prior to Granting Indemnity
  • Motion to Vacate Judgment Denied Where Defendant Failed to Establish that Allegedly "New" Evidence Was Unknown At Time Of First Summary Judgment Motion 
  • All Causes of Action, Except Breach of Contract, Dismissed Against Insurer
  • Hearing Ordered To Resolve Issue of Whether Respondent Made Physical Contact with Uninsured/Unidentifiable Vehicle

EARL'S PEARLS

Earl K. Cantwell

[email protected]

 

What is "Advertising Injury" and Coverage? 

or 

How the "Santa Clause" Denied Coverage

 

Well, that's all from now.  If all goes as expected, the next issue will come to you from the beach house in Ontario.  We can only hope.

 

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

LinkedIn: www.linkedin.com/in/kohane

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
Cassandra Kazukenus
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]
Margo M. Lagueras
Cassandra Kazukenus
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
Cassie’s Capital Connection

Fijal’s Federal Focus
Jen’s Gems
Earl’s Pearls
Across Borders


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


Court of Appeals
03/29/11            State Farm Mut. Auto. Ins. Co. v. Langan
New York State Court of Appeals
Victim of Intentional or Criminal Act Still Permitted to Recover Under No Fault and Uninsured Motorist Portion of His or Her Policy
In Volume 10, No. 7 of Coverage Pointers, (10/03/08), we reported on the Second Department’s decision in this case.  In a 5-2 decision, the Court of Appeals has now modified the Appellate Division order and determined that the victim of an intentional, criminal act is still entitled to recover under the uninsured motorists provisions of its policy.  Note the highlighted portion of our Appellate Division summary below and the discussion that follows:
9/16/08            State Farm Mut. Auto. Ins. Co. v. Langan
Insured Murdered and Estate Entitled to Death Benefit Under No-Fault
On February 12, 2002, Mr. Spicehandler was involved in a fatal hit-and-run incident (NOTE: the decision does not say “accident.”)  Mr. Popadich was the driver of the motor vehicle that struck Mr. Spicehandler.  Mr. Langan was the administrator of Mr. Spicehandler’s estate and sought uninsured motorist benefits as well as a death benefit under no-fault under Mr. Langan’s insurance policy with State Farm.  Mr. Langan took the position that Mr. Spicehandler was an insured under his policy at the time of this incident.
On September 28, 2005, Mr. Popadich pleads guilty to second degree murder in this fatal incident with Mr. Spicehandler.
State Farm had already denied insurance coverage under Mr. Langan’s policy on the ground that Mr. Spicehandler’s injuries were not caused by an “accident” as they were the result of Mr. Popadich’s intentional criminal conduct.
State Farm commenced a declaratory judgment action against Mr. Langan and its summary judgment motion was granted.  On appeal the Appellate Division modified the decision.
The [Appellate Division held that the coverage was unavailable under the]  uninsured motorist endorsement …  The Court reasoned that the purpose of UM coverage was to ensure that an injured person who suffers injury or death because of a financially irresponsible motorist is provided with coverage.  UM coverage is supposed to provide that injured person with the same type of coverage they would have had the tortfeasor been identifiable and insured at the time of the accident.  Accordingly, if Mr. Popadich had been identified and insured at the time of the incident the inquiry turns to whether there would be coverage under Mr. Popadich’s insurance policy for the wrongful death action commenced by Mr. Spicehandler’s estate.  The Court concluded there would not be insurance coverage because Mr. Popadich’s insurance policy would exclude insurance coverage for intentional injuries inflicted on Mr. Spicehandler.  It logically follows that there would not be any coverage under the UM endorsement for the same reasons.
The Court turned to whether State Farm must pay the death benefit under the no-fault portion of Mr. Langan’s policy.  The Court reversed the lower court’s determination and held that Mr. Langan was entitled to the death benefit. 
The Court reasoned that in determining whether there was coverage under the no-fault portion of the insurance policy, an analysis of whether Mr. Spicehandler’s death, from his own perspective, was unexpected or unforeseen, thereby rendering it an accident.  The Court further reasoned that in the context of insurance, other than the uninsured context, the fact that the tortfeasor acted intentionally, i.e., committed murder, has no effect on whether the insured has insurance coverage for the incident.  The caveat is that coverage will be affected if from the insured’s viewpoint the event was not unexpected or unusual and was not brought about by the insured’s own misconduct.
The Court then states that from Mr. Spicehandler’s perspective the incident causing his death was unforeseen and was not attributed to his own misconduct (my question is how do we know what Mr. Spicehandler’s perspective was as, respectfully, he is deceased).  Therefore, there is insurance coverage under the no-fault portion of the State Farm policy.
There were two concurring justices and only one of them dissented in part.  The one justice, who dissented, dissented on the decision regarding coverage under the no-fault portion of the policy.  The reasoning is that the determination is inconsistent with the Court’s previous order in the same case which provided that there was no insurance coverage available under the entire policy for Mr. Spicehandler’s death if it resulted from intentional conduct.  The Court’s prior order is binding and constitutes the law of the case which cannot be disregarded.  Finally, the lone dissenter on this issued further reasoned that the determination provides an inconsistent interpretation of the phrase “caused by an accident” which is contained in the no-fault portion of the policy and the uninsured motorist endorsement.
The Court of Appeals found that the Second Department’s denial of UM benefits was in error, while finding, in addition, that the No Fault death benefit was indeed payable.  Consistent with the “reasonable expectations of the insured under the policy and the purposes of the UM endorsement, to provide coverage against damage caused by uninsured motorists, the intentional assault of an innocent insured is an accident within the meaning of his or her own policy.

The Court held that this “result is also in keeping with the national trend toward allowing innocent insureds to recover uninsured motorist benefits under their own policies when they have been injured through the intentional conduct of another.”
Editor’s Note:  The Court went through great pains to emphasize that the holding is not intended to transform an intentional act by an insured into an accident from the perspective of the victim (even though it may be unintended).  The Court of Appeals emphasized that its ruling was based on the particular goal of UM benefits, that is, to compensate policyholders, because of the premium paid, for the acts of uninsured motorists.  Interesting, the Court distinguished one of its previously holdings that held to the contrary in a case involving the MVAIC endorsement, on the ground that the “UM coverage, although required by statute, is part of the insured's own policy — a policy that the insured selected and for which he pays premiums. Benefits received through coverage under the UM endorsement do not come out of a State fund. Second, the insured is the victim in this case, not the tortfeasor, and the public policy against providing coverage for an insured's criminal acts is not implicated.”
03/31/11       Cirone v. Tower Insurance Co. of New York
New York State Court of Appeals
High Court Denies Review of Cirone Decision on Bad-Faith Standing
The Court of Appeals denied an application to review this fairly recent decision out of the First Department, reported in an earlier edition of Coverage Pointers
9/21/10                               Cirone v. Tower Insurance Co. of New York
Appellate Division, First Department
Injured Party That Sues as Assignee of Insured, Not Permitted to Sue for Bad Faith Where Insured Established Carrier Properly Denied Coverage on Basis of Late Notice

An employee of Navana Restaurant struck Cirone while the plaintiffs were making deliveries on a bicycle.  Cirones sued Navana.  Tower had denied coverage to Navana on the grounds of late reporting and then commenced a declaratory judgment action against Navana to confirm that denial.
In the meantime, Cirones took a personal injury judgment against Navana and brought a direct action against Tower to enforce it up to the policy limits.  Cirone argued that they, as claimants, gave proper notice of the accident to Tower.  Cirone was successful in establishing that the claimants notice was proper and that finding was affirmed on appeal.
[Editor’s Interlocutory Note:  We criticized the early appellate decision in Cirone in our May 18, 2007 issue]
Navana then assigned its rights and claims against Tower to the Cirones and Cirones, as Navana’s assignees, sued Tower claiming bad faith because of Tower’s refusal to settle the personal injury case within Tower’s policy limits. Tower moved to dismiss the bad faith claims and the lower court granted the motion.  Since the Cirones were acting only as Navana’s assignees, they could have no greater rights that Navana.  Since Navana lost its coverage case, Tower could not have been acting in bad faith to Navana in not negotiating the case within Navana’s policy limits.

Appellate Division

03/29/11       Tower Insurance Co. of New York v. Classon Heights, LLC
Appellate Division, First Department
Another “Late Reporting” Victory for Tower.  Once Again, a Failure on the Part of an Insured to Investigate an Accident of Which It Is Aware, Leads to a Determination That It Could Not Rely on Belief that It Would Not Be Sued

The first of two Tower insurance cases relating to later reporting in this issue.

Classon owned and maintained an apartment building and sidewalk.  On October 30, 2006, Gonzalez, a building resident, was injured during a sidewalk construction project which led to her falling out of her wheelchair.  She sued Classon in May 2007.

On or about March 15, 2007, Gonzalez's counsel notified the insureds about the impending claims against them, and on March 26, 2007, or about five months after the accident, defendant notified Tower Insurance about the claims. Tower Insurance disclaimed coverage in April 2007 on the ground that the insureds failed to notify it "as soon as practicable."
In support of its motion for summary judgment, Tower submitted a signed but unsworn, partially redacted statements that a porter and the manager at Gonzalez's apartment building made to a Tower.  The porter acknowledged he saw the accident, helped Gonzalez back into her wheelchair and then she was taken to the hospital by ambulance. Two days later, he saw Gonzalez with a cast on her arm and “called the office” to relate the accident.
Since the insureds admitted that their building manager knew on October 30, 2006 that Gonzalez had fallen on the premises and had been taken by ambulance to a hospital, their purported belief that no claim could possibly be filed by Gonzalez because she was not injured was unreasonable.  The building manager's knowledge triggered a duty to further investigate the accident.
03/25/11       General Star National Ins. Co. v. Niagara Frontier Transit
Appellate Division, Fourth Department
No Need to Disclaim Timely if Claim Does Not Fall Within Grant of Coverage
General Star appeals from a judgment denying its application for summary judgment seeking to recover $350,000 from Niagara Frontier.  General Star advanced that sum to settle a claim against the Niagara.
The court found that General Star was not required to timely disclaim coverage because the basis for disclaiming was that the claim fell outside of the grant of coverage rather than within an exclusion.  There is no obligation to disclaim timely under the provisions of the Insurance Law if the claim does not fall within the grant of coverage in the first place. In this case, the policy covered injuries arising of the performance of “law enforcement duties” and here the claim did not arise out of those law enforcement duties.
General Star was not estopped from disclaiming coverage based on its reservation of rights “to claim that the policy does not cover the situation at issue, while defending the action."
Editor’s Note:  A rare case in NY nodding kindly to a reservation of rights letter BUT the ROR dealt with the grant of coverage, not an exclusion or breach of policy condition.
03/24/11       Chelsea Village Associates v. U.S. Underwriters Ins. Co.
Appellate Division, First Department
Retracting Ground for Disclaimer and Adding Other Grounds in Second, Timely Letter Is AOK
Chelsea Village satisfied its notice obligations under the U.S. Underwriters policy by submitting notice of claim on April 30, 2007, via a "series of intermediaries". US Underwriters then denied coverage on the same day, indicating that the policy did not provide coverage to Chelsea Village and then again, on May 17, citing various exclusions.  The fact that the second denial retracted one of the grounds set forth in the earlier disclaimer letter, did not make the second disclaimer, timely in its own right, invalid.

03/24/11       QBE Insurance Corp. v. Hudson Specialty Insurance Co.
Appellate Division, First Department
Where There Were Allegations That Triggered Possibility of Additional Insured (“AI”) Coverage, AI Carrier Had Obligation to Defend
Bali leased premises to McDonald's Corporation under a lease that included the "rear parking lot." The lease McDonald's to keep liability coverage in place for Bali, the owner, covering the premises including the “sidewalk’s adjacent to the Premises” insured.  Under the lease, McDonalds was responsible for keeping the “sidewalk in front of the Premises” clear of snow and ice.

McDonalds secured a policy from Hudson, naming Bali, "but only with respect to liability arising out of the ownership, maintenance or use of that part of the premises leased to" McDonald's.

When a personal injury action was commenced against Bali and others for injuries sustained on a patch of ice on a sidewalk "12 feet east of the easternmost post of the rear lot" of the premises leased to McDonald's. Bali and its insurer, QBE Insurance Corporation, commenced this action seeking a declaration that, among other things, Hudson is obligated to defend and indemnify them in the underlying action.
Hudson failed to meet its burden establishing that it has no duty to defend and indemnify Bali in the underlying action. Issues of fact exist as to whether liability in the underlying action is based on the ownership, maintenance or use of that part of the premises leased to McDonald's and whether McDonald's was responsible for keeping the site of the accident free of snow and ice.
03/24/11       Tower Insurance Co. v. R & R Dental Modeling Inc.  
Appellate Division, First Department

Insured’s Knowledge of Accident, Complaint of Pain and Continuing Injuries Required Inquiry into Possibility That Claim Would Be Made
One can always count on Tower to help define late reporting obligations.  In this one, the insured’s principal heard the underlying plaintiff stumble on the steps, heard her complain of pain and saw her walking with a limp.  Despite all of this, the insured waited 17 months before notifying the insurer of the incident and possibility of the claim.  The failure of the insured to make any inquiry into to the accident leads to the inescapable conclusion that it could not claim a good faith belief that the injury person would not make a claim for injuries.  The court cites to two other appellate decisions involving Tower Insurance decided within the last year.
Editor’s Note: 
Attaboy Max (and send kudos to Jennifer as well)

03/24/11       Lewiarz v. Travco Insurance Company
Appellate Division, Third Department
Issue of Fact on Employment Status of Insurance Agent Precludes Summary Judgment

Mr. and Mrs. Lewiarz owned a home, destroyed by fire in 2001 and insured by Travco (Travelers).  After paying the claim, Travelers advised that it would not renew their policy when it expired in 2002.  The home as rebuilt and the Lewiarz’, having trouble finding new coverage, contacted an insurance agent, Kenney, for help is securing a new policy.  Kenney contacted Sils Brokerage and Sils submitted a new application to Travelers and Travelers issued a new policy in 2003.  In 2006, the new home was destroyed by fire and in 2007, Travelers sought to rescind the new policy on the ground that the application submitted in 2003 concealed the previous fire.   Lewiarz’ sued Sils and Kenney as well, asserting negligence in preparing the application for coverage.

First of all, the court finds that the statute of limitations against the agent and broker could not have accrued until after Travelers rejected the claim.

At the time of the accident, Kenney was employed by the Buonocore Agency, and now SIls.  Kenney would procure information from policyholders, send it along to Sils and Sils would try to identify carriers to issue policies.  Accordingly, there was a question raised as to whether Sils was responsible for Kenney’s conduct.  Because there was testimony that Lewiarz’ may have contacted Kenney at the Sils office (since Kenney was later employed by Sils) there was a question of fact to be resolved by a jury as to whether Sils was vicariously liable for Kenney’s actions.

Kenney cannot be personally liable, because whatever she did, she did as an agent of either Buonocore or Sils.

03/22/11       Sitnick v. Travelers Insurance Co.
Appellate Division, First Department
Ignorance That Policy Excluded Off-Premises Accidents Was Sufficient to Raise Question of Fact About Excuse for Late Reporting
The question before the court was the reasonableness of homeowner's excuse for providing late notice of claim, i.e., that he was unaware that the policies covering his New York home also provided coverage for an incident that occurred at a restaurant in New Jersey.  In that incident, the injured plaintiff contends that the insured’s minor son caused him injury.
The Court relied on two cases from other departments, Seemann v Sterling Ins. Co., 267 AD2d 677 [1999] and  Padavan v Clemente, 43 AD2d 729 [1973]) and found that the homeowner acted with due diligence by immediately providing notice upon receipt of a letter from the injured party's attorney advising him to contact his insurance carrier.
Editor’s Note:  Generally, ignorance of policy provisions does not justify failure to promptly report.  However, there are the occasional oddball decisions involving off-premises accidents, where the courts have sympathized with insureds who acted promptly once they were notified of potential claims under policy and acted diligently thereafter.  The court had to reach back to precedent from 12 and 28 years back to support its position.


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


03/25/11       Barrow v. Dubois
Appellate Division, Fourth Department
Resolution of Issue of Liability Requires Determination That Plaintiff Sustained a Serious Injury
Plaintiff sustained injuries when he was forced off the road and struck a tree.  Only the 90/180-day category remained before the jury and, at the close of plaintiffs’ proof, defendants moved for judgment as a matter of law on the ground that plaintiffs failed to establish serious injury under that category.  The motion was denied and the jury returned an award of $115,000.

The appellate court affirmed, determining that the trial court did not err in denying defendants’ motion as there was abundant evidence to support that plaintiff’s activities were curtailed to a great degree, including the diagnosis of a nurse practitioner based on observations that plaintiff sustained a cervical strain producing limited range-of-motion in his neck and objective evidence of crepitus, chronic neck pain and headaches and difficulty sleeping and walking.  Plaintiff was additionally out of work for several months and unable to engage in many of his customary activities such as hunting, shooting and attending his son’s sporting activities.

03/24/11       Pisani v. First Class Car & Limousine Serv. Corp.
Appellate Division, First Department
Once Again, Deposition Testimony Defeats 90/180-Day Claim
During her deposition, plaintiff admitted she only missed three days of work thus defeating her 90/180-day claim.  However, on appeal her claims under the permanent consequential and/or significant limitation of use categories are re-instated.  In opposition to the report of defendant’s orthopedic surgeon which found normal range-of-motion in the cervical and lumbar spine, and the radiologist, who opined that the bulges and hypertrophic changes were degenerative and pre-existing, plaintiff submitted the reports of her treating chiropractor and orthopedist.  The chiropractor examined plaintiff the day after the accident as well as a year and a half later.  Her orthopedist performed tests eight months after the accident and at least four more time over the following year.  Both performed objective, quantitative tests and concluded plaintiff had significant range-of-motion limitations in the cervical and lumbar spine and that the restrictions were causally related to the accident.  These conflicting findings were sufficient to raise an issue of fact.

03/24/11       McCree v. Sam Trans Corp.
Appellate Division, First Department
Plaintiff’s Affidavit, Which Appears “Tailored to Avoid the Consequences of Her Deposition Testimony,” Fails to Raise an Issue of Fact
Plaintiff’s claims under the permanent consequential and significant limitation of use categories survive as defendants’ expert’s opinion that plaintiff’s range-of-motion limitations were due to degenerative and/or pre-existing changes was conclusory and lacked a factual basis.  However, plaintiff’s 90/180-day claim was dismissed as plaintiff testified during her deposition that she was only confined to her home for about one week, whereas in her affidavit she claimed she was housebound for five months.  Therefore, her affidavit failed to raise an issue of fact as it appeared “tailored to avoid the consequences of her deposition testimony.”

03/24/11       Lemos v. Giacomo Mgt., Inc.
Appellate Division, First Department
Complaint Dismissed Where Plaintiff Fails to Rebut Findings of Pre-Existing Conditions
The trial court is reversed as the appellate court determines that defendants submitted sufficient evidence of pre-existing degenerative bone disease in plaintiff’s left knee.  The evidence included the affirmed report of defendants’ radiologist with findings from the MRI film, as well as plaintiff’s own physician’s findings of degenerative disease.  Plaintiff failed to rebut defendants’ lack of causation showing.

03/24/11       Spencer v. Golden Eagle, Inc.
Appellate Division, First Department
Where Defendant Establishes Pre-Existing Condition, Plaintiff’s Expert Must Address Causation
And here plaintiffs’ treating physician did by acknowledging some pre-existing injuries but attributing other specific injuries to the accident.  The treating physician concluded that plaintiffs’ suffered a permanent partial disability and based his conclusions on medical records which documented continued treatment since the date of the accident, including the objective tests performed and the reduced ranges-of-motion which he related to their limitations.  In addition, the contemporaneous MRI reports did not characterize plaintiffs’ injuries as degenerative in nature as asserted in the reports of defendants’ experts.  Therefore, denial of defendants’ motion was affirmed even though, contrary to the trial court’s finding, defendants’ orthopedic expert’s report did properly set forth the objective tests performed in reaching the conclusion that plaintiffs’ ranges-of-motion were normal.

03/22/11       Reed v. Righton Limo, Inc.
Appellate Division, Second Department
Defendants’ Expert’s Finding of No Neurological Disability Fails Where No Range-of-Motion Testing Was Performed
Defendants’ examining neurologist did not perform any range-of-motion tests of plaintiff’s cervical or lumbar spine despite the claims set forth in her bill of particulars.  As a result, the neurologist’s conclusion that plaintiff had a “normal neurological exam” with no evidence of neurological disability or permanency failed to establish defendants’ prima facie entitlement to summary judgment.

03/22/11       Park v. Shaikh
Appellate Division, Second Department
Reports Finding Limitations Due to Trauma Rather Than Degenerative Disease Raise Issue of Fact
Although defendants met their burden through the affirmed reports of an orthopedic surgeon, among others, who attributed the range-of-motion restrictions to degenerative disc disease not causally related to the accident, plaintiff rebutted those findings with the reports of her treating physician who concluded her restrictions were the result of accident-related trauma rather than degenerative disease.  As such, the trial court properly denied defendants’ motion.

03/22/11       Manuel v. New York City Transit Auth.
Appellate Division, Second Department
Plaintiff Is Required to Plead and Prove Serious Injury to Be Entitled to Recover Damages Despite Proof of Common-Law Liability
Plaintiff claimed she was injured when she stepped into a hole next to the curb and fell as she alighted from the rear door of a bus.  She alleged the bus driver was negligent in parking at an angle such that the rear exit of the bus was several feet from the curb.  The jury found the driver negligent and no negligence on plaintiff’s part.

On the issue of damages, plaintiff’s physician testified that she sustained injury to her left knee that would require total knee replacement in five to ten years, whereas defendants’ expert testified that the alleged knee injuries were degenerative and age-related.  Defendants’ counsel requested the jury be required to determine whether or not plaintiff had sustained a serious injury.  Plaintiff’s counsel argued that the accident was not the result of the use or operation of a motor vehicle so no-fault did not apply and that plaintiff’s no-fault benefits had been denied.  Defendants explained that plaintiff’s no-fault benefits had been denied because they had no record of the accident.  The trial court denied defendants’ request to charge the jury on the issue of threshold and the jury awarded $508,000.

On appeal, the judgment was reversed and remitted for a new trial on the issue of damages as the trial court erred in not charging the jury as requested.  The accident arose out of the use or operation of a motor vehicle as the plaintiff’s theory of liability was that the negligent operation of the bus caused her injury.  In addition, she was not completely out of the bus when the accident occurred.  Therefore, “as a threshold matter”, the plaintiff is required to plead and prove serious injury and failure to sustain that burden results in no entitlement to damages despite proof of common-law liability.  It is up to the jury to resolve issues of credibility raised by conflicting medical opinions and it must first determine whether the serious injury threshold was met before damages may be awarded.

03/22/11       Heumann v. JACO Transportation, Inc.
Appellate Division, Second Department
Once Again, Permanent Loss, Permanent Consequential Limitation and Significant Limitation of Use Categories Require Contemporaneous Findings
Defendants’ examining physician unequivocally found that plaintiff’s alleged injuries to her right hand were not causally related to the accident.  In opposition, plaintiff submitted the affirmation of her hand surgeon who opined that her condition might have been caused or exacerbated by the accident.  Such speculative language is not sufficient to raise an issue of fact.  In addition, although her hand surgeon noted range-of-motion limited by pain, he did not set forth any contemporaneous quantitative or qualitative findings as required for claims under the permanent loss, permanent consequential limitation and/or significant limitation of use categories.

03/22/11       Calabro v. Petersen
Appellate Division, Second Department
Subjective Complaints Chronicled by Pain Management Physician Are Insufficient to Raise Issue of Fact
Plaintiff moved for summary judgment on the issue of liability arguing that his pain management physician’s chronicle of his lumbar back pain constituted evidence of serious injury.  The trial court, which had granted plaintiff’s motion and denied defendant’s cross-motion to dismiss the complaint, is reversed on appeal.  Plaintiff’s subjective complaints are insufficient and, even though his pain management physician noted numeric range-of-motion limitations in one report, he failed to compare those limitations to the norms and, in any event, those findings were not based on a contemporaneous examination.  As such, defendant’s cross motion should have been granted.

03/22/11       Al-Khilewi v. Turman
Appellate Division, Second Department
Plaintiff’s Cross Motion for Leave to Amend Bill of Particulars Denied
Plaintiff brought a cross motion seeking to amend his bill of particulars to add a claim of exacerbation of pre-existing disc herniations.  The trial court properly denied the cross motion because it would require defendant to “reorient his defense strategy” and plaintiff failed to offer an excuse for his delay of over two years in seeking to amend.  As defendant met his prima facie burden, and plaintiff did not raise a triable issue in opposition, defendant’s motion was properly granted.

03/22/11       Townes v. Harlem Group, Inc.
Appellate Division, First Department
Significant Limitation of Use Claim Is Dismissed for Failure to Submit Evidence of Recent Examination
On appeal, defendants’ motion is granted with respect to plaintiff’s significant limitation of use claims with regards to the cervical and lumbar spine and right knee as defendants submitted objective medical evidence that plaintiff suffered no loss of range-of-motion as a result of the accident and that his conditions were age-related or degenerative.  Even though plaintiff submitted his treating physician’s contemporaneous reports that set forth the tests performed and explained the findings for all three body parts, plaintiff failed to submit any evidence of recent examination. 

However, plaintiff’s 90/180-day claim survives because his treating physician’s affirmation incorporated by reference the reports of her examinations conducted two weeks after the accident, and again over two months after the accident, and which supported the claim.  These contrasted with defendants’ radiologist’s reports which concluded that injuries were “age-related degenerative changes,” and were sufficient to raise an issue of fact.

03/22/11       Jno-Baptiste v. Buckley
Appellate Division, First Department
Dislocation, Standing Alone, Is Not Evidence of Serious Injury
The trial court is reversed and summary judgment is granted to defendant who made a prima facie showing of entitlement through the submission of the affirmed report of an orthopedist and plaintiff’s deposition testimony.  In opposition, plaintiff submitted an MRI report which was “suggestive of transient patellar dislocation.”  However, the report did not contain any evidence of permanent or significant limitation so the dislocation, standing alone, does not meet the threshold.

In addition, plaintiff’s physiatrist and her physical therapist did not agree on plaintiff’s knee injury.  The physiatrist found an 18% loss of flexion while the physical therapist had reported full range of motion 18 months earlier and the physiatrist failed to provide any explanation for the conflicting reports.  This was sufficient reason to find in defendant’s favor.

03/22/11       Canelo v. Gnolg Transit, Inc.
Appellate Division, First Department
Failure to Address Similar Injury Sustained in Prior Accident Renders Opinion Regarding Causation Speculative; 9-10% Range-of Motion Restrictions Are Not “Significant”
On appeal, defendants’ motion is granted in its entirety.  First, plaintiff’s 90/180-day claim is dismissed based on his own deposition testimony that he was neither confined to bed nor missed work.  Plaintiff’s claim of permanent injury failed because, even though defendants’ experts did not review plaintiff’s medical records, their neurologist detailed the tests performed which revealed full range-of-motion, and their radiologist found no evidence of bulge or herniation.  Although plaintiff’s radiologist provided quantifications for range-of-motion loss and opined that the injury was permanent, he did not address the findings of defendants’ radiologist that the spinal condition was due to pre-existing degenerative changes.  He also made no mention of a prior accident in which plaintiff similarly injured his cervical and lumbar spine.  This rendered his opinion as to causation speculative.  Additionally, plaintiff’s treating physician did not quantify any cervical range-of-motion restrictions at the last examination and disability findings of 9% cervical and 10% lumbar do not qualify as “significant” or “important” limitations.

03/17/11       Johnson v. Garcia
Appellate Division, First Department
Difference of Opinion as to Whether Symptoms Are Caused by Accident or Pre-Existing Condition Raises Issue of Fact
On appeal, defendant’s motion is granted, but only with respect to the 90/180-day and the permanent loss of use categories.  However, plaintiff raised triable issues in opposition to defendant’s motion with regard to the permanent consequential and significant limitation of use categories. 

The accident occurred in March 2003.  In support of his motion, defendant submitted the reports of two doctors that found that plaintiff had normal range-of-motion in the lumbar spine and that any sprain had resolved.  In addition, two other doctors concluded that plaintiff’s condition was due to a pre-existing degenerative condition rather than the accident.  Plaintiff, however, submitted the report of a doctor who examined him two days after the accident and found lumbar limitations, an MRI taken two months later showing bulges at L5-S1, the surgical report of the doctor who performed a discectomy at L5-S1 in 2007, and another report from an examination in 2009, which found lumbar restrictions.  This was sufficient objective medical evidence as to the extent of limitation and its duration to defeat defendant’s motion.  In addition, the conflicting opinions between plaintiff’s and defendant’s experts regarding whether plaintiff’s symptoms were the result of the accident or pre-existing conditions also raised issues of fact sufficient to defeat summary judgment.

03/17/11       Riviello v. Kambasi
Appellate Division, First Department
Failure to Refute Evidence of Pre-Existing Degenerative Condition Dooms Plaintiff’s Case
Defendants submitted the affirmed MRI report which revealed degenerative disc disease but no evidence of port-traumatic injury to the discs.  Plaintiff not only did not refute the evidence, but some of his experts also identified the degenerative condition.  Moreover, while one of plaintiff’s experts opined that the accident aggravated the pre-existing condition, he did not explain why he ruled out the degenerative condition as being the cause of plaintiff’s symptoms.  This failure rendered his opinion regarding causation speculative.

03/15/11       Hightower v. Ghio
Appellate Division, Second Department
Fact That Plaintiff Was Involved in Prior Accident Will Not, in of Itself, Shift the Burden
Although plaintiff was involved in an accident some five years prior to the accident at issue, because defendant did not present evidence that plaintiff’s injuries were caused by that prior accident, the burden did not shift to plaintiff to raise a triable issue of fact regarding which accident caused the injuries.  The trial court’s order was reversed and defendant’s motion denied.


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


ARBITRATION
03/25/11       Buffalo Neurosurgery, PC v. Liberty Mut. Fire Ins. Co.
Arbitrator Veronica K. O’Connor, Erie County
Surgery Denial Not Upheld as Treating Records and EIP Testimony Are More Persuasive

The eligible injured person (“EIP”) was involved in an August 27, 2009, motor vehicle accident and subsequently underwent cervical spine surgery with Dr. Egnatchik.  The insurer denied the surgery based upon the December 10, 2009, IME performed by Dr. Hughes.

Dr. Hughes concluded that the EIP had acute cervical strain related to the accident.  The EIP’s altered range of motion was not an objective finding as it was not substantiated by any abnormal neurological finding.  Further, the abnormal cervical spine MRI was the result of age related changes and not traumatically related to an accident.

The assigned arbitrator declined to uphold the denial as the treating medical records and the EIP’s testimony established causal relationship and medical necessity for the surgery.  Further, there was no evidence that the EIP had a pre-existing cervical spine condition.

03/23/11       Buffalo Anesthesia Assoc. PC v. GEICO Ins. Co.
Arbitrator Kent L. Benziger, Erie County
Insurer Raises Interesting Argument as to Whether Chiropractor Can Order Anesthesia for MUA

The Applicant sought reimbursement for the anesthesia for chiropractic manipulation under anesthesia (“MUA”) performed by John Ward, DC on the thoracic and lumbar spine from September 23-25, 2009.  The insurer denied the claim because Mr. Ward was listed as the “surgeon” on the bill and allegedly was not able to order anesthesia and thus ineligible for reimbursement due to unauthorized practice of medicine.

The insurer’s argument was that two arbitration decisions supported this contention of unauthorized practice of medicine.  However, a letter from the Executive Director of the State Board of Chiropractic, Douglas Lentivech, opined that Education Law §6551(3) does not specifically prohibit a chiropractor from performing MUA, but the chiropractor is not authorized to order or administer anesthesia.  Also, it was of little difference whether the chiropractor followed the practices and protocols of the National Academy of MUA as a chiropractor is not a physician and is not controlled or licensed to practice that profession.

Unfortunately, the assigned arbitrator never made a finding on the facts of this argument of unauthorized practice of medicine as there was outstanding verification rendering the case not ripe for determination.

03/23/11       Proscan Radiology Buffalo v. Erie Ins. Co. of NY
Arbitrator Kent L. Benziger, Erie County
Peer Review for Second MRI Unpersuasive

The Applicant sought reimbursement for a left shoulder MRI taken after a July 18, 2009, motor vehicle accident.  The EIP complained after the accident of pain in her arms, upper chest, the right side of her neck, as well as her left shoulder from the seat belt.  On July 20, 2009, the EIP was evaluated by Scott Syracuse, DC and complained of head, neck, and low back pain.  On July 23, 2009, the EIP underwent MRIs of her cervical, thoracic, and lumbar spine as well as her left shoulder.  The MRI of the left shoulder without contrast revealed rotator cuff peritendonitis without a tendon tear or internal joint derangement.

On October 8, 2009, the EIP was evaluated by an orthopedic surgeon, Dr. Donald Douglas, with left shoulder complaints.   On October 20, 2009, the EIP underwent a second left shoulder MRI but with contrast.  This study revealed no change from the July 23, 2009, MRI.

The insurer denied the MRI based upon the peer review of Dr. Howard Levin who opined the test was not medically necessary.  Dr. Levin’s review was found by the assigned arbitrator to be unpersuasive.  The review failed to discuss Dr. Douglas’ positive objective findings or the lack of difference between the two types of MRIs.  Also, Dr. Levin’s reliance upon a prior peer review for the first MRI, not an IME as he claimed in his report, had no bearing on the necessity for the second MRI. 

Rather, Dr. Douglas provided additional findings that supported medical necessity for a second MRI study.  The arbitrator noted that the peer review for the first MRI was more thorough and effective as the first MRI that was denied upon that peer review was upheld.  However, the peer review to support denying the second MRI was too conclusory.

LITIGATION

03/25/11       In the Matter of New York Schools Ins. Reciprocal v. Armitage
Appellate Division, Fourth Department
Denial of Permanent Stay of Arbitration Was Properly Granted

The trial court properly denied the insurer’s permanent stay of arbitration as the propriety of a denial is a dispute regarding the insurer’s liability for No-Fault benefits.  Also, the insurer’s argument that the issue whether the offset for workers’ compensation benefits exceeds the monthly limit of first party benefits was not a matter for arbitration was rejected.  Finally, the insurer’s argument that by refusing the grant a permanent stay of the arbitration denied the insurer the right to seek loss-transfer from additional proposed respondents was equally rejected. 

03/24/11       Allstate Ins. Co. v. Alexandre DeMoura a/a/o Miriam Cruceta
Appellate Term, First Department
Insurer Does Not Waive Policy Exhaustion Defense

A framed issue hearing was mandated on the issue of whether the $50,000 policy limits was exhausted extinguishing the insurer’s obligation to pay further claims under the policy.  The court reiterated the generally recognized law that the insurer can assert policy exhaustion as a defense irrespective of issuance of a timely denial.

03/22/11       Westchester Med. Ctr. v. Lincoln Gen. Ins. Co.
Appellate Division, Second Department
Yikes, Judgment of Over $400K Upheld Despite Policy Limits Exhaustion

Plaintiff was awarded judgment against the insurer in the amount of $416,039.42 to which the insurer sought to modify under CPLR §5015(a) belated claiming that the judgment exceeded the policy limits due to payment made under the policy to other health care providers.  The trial court denied the motion and the Court affirmed.

The insurer failed to specify which of the five subdivisions of CPLR §5015(a) its motion was based upon.  Also, the insurer failed to establish entitlement to relief .  There was no evidence submitted to establish that there was newly discovered evidence not available at the time of the prejudgment proceedings.  Further, the Court would not exercise its discretion to grant relief as the did not seem to be any effort made to bring the policy exhaustion to the court’s attention until after judgment was entered.

03/17/11       Pomona Med. Diag., PC a/a/o Francisco Kelly v. Travelers Ins. Co.
Appellate Term, Second Department
Case Dismissed Due to Outstanding Verification

The insurer was properly granted summary judgment as the insurer’s litigation claims examiner’s affidavit established timely mailing and follow up on a verification request which was outstanding.  Thus, the claim was not ripe for adjudication.

03/17/11       Unitrin Advantage Ins. Co. v. Bayshore Physical Therapy 
Appellate Division, First Department
MUST READ! – Breach of Policy Condition to Appear for IME Permits Insurer to Properly Retroactively Deny Back to Date of Loss

The insurer can retroactively deny claims to date of loss, irrespective of whether the denials were timely issued, based upon the eligible injured person’s breach of the policy condition to appear for scheduled independent medical examinations (“IME”). 

Importantly, it does not matter that the retroactive denial recites to a blanket denial form or that the denial is issued based upon failure to appear for an IME within a different medical specialty from that which the current claim emanates.  A breach of the policy condition precedent to coverage voids the policy ab initio and the insurer cannot be precluded from asserting a defense premised upon no coverage.


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

Of Property

03/29/11       Il Cambio, Inc. v US Fid. & Guar. Co.
Appellate Division, First Department.
Replacement Cost Not Available Where the Insured Cannot Establish an Intent to Rebuild; Two-Year Suit Limitation Clause Upheld, AGAIN
Plaintiff insured’s claims for replacement costs are denied where, as here, the insured cannot establish that the insured property was “rebuilt.”  In so holding, the court noted that the plaintiff has the burden of establishing the insured parcel will be restored, and any failure to reach this threshold will be fatal to an attempt to recover replacement cost. 

In addition, the Court also noted that plaintiff insured’s action was also time-barred pursuant to the two year suit limitations clause located within the policy.  With regard to this issue, the Court noted that partial payment of a loss, and continued negotiation, is not a waiver of the two year suit limitation clause.

Finally, plaintiff’s claims against its broker were dismissed as time barred under the CPLR’s three year statute of limitations for negligence.  The Record submitted to the First Department established that the date of loss was September 11, 2001 and that the insured received payments in December of 2001 and September.  Regardless of when the statute of limitations was triggered, it is clear that plaintiff’s potential negligence cause of action against its broker expired well before the instant matter was commenced on April 12, 2006. 

And Potpourri

Court of Appeals

03/24/11       Penguin Group v American Buddha
New York State Court of Appeals
Copyright Infringement Via the Internet Triggers New York’s Long Arm Jurisdiction
Penguin commenced the instant action seeking damages due to the alleged copy right violations committed by American Buddha.  The dispute occurred when American Buddha reproduced copies of four books to which Penguin held the sole copyright.  American Buddha then placed the books onto its website for members review. 

When distilled down to its essential elements, this case asks a relatively simple question:  “In copyright infringement cases involving the uploading of a copyrighted printed literary work onto the internet, is the situs of injury for purposes of determining long-arm jurisdiction…the location of the infringing action or the residence of the location of the principal place of business of the copy right holder?

In addressing this certified question from the Second Department, the Court of Appeals first looked at the test for determining the applicability New York’s long arm statute.  To trigger the statute, the plaintiff must establish five distinct factors.  The factors are:

  • Defendant committed a tortious act outside of New York
  • The Cause of Action arose from such act
  • The act resulted in injury to person or property in New York
  • The defendant derived substantial revenue from interstate or

          International commerce.

  • The defendant expected or should have expected the act to have

          consequences in New York.

In this case, the Court ruled that it was clear the first two prongs of the test had been established.  Moreover, the Court likewise seemed convinced that the plaintiff, Penguin, had established prongs four and five, respectively.  The remaining question to be answered, however, was whether Penguin sustained injury in New York.

In answering that Penguin had been damaged in New York, the Court of Appeals noted the fact that the injury would be sustained wherever Penguin’s copyrighted material was accessed.  As this was available on the internet, the Court reasoned that the damage would be world-wide, and certainly in New York. 

In addition, the Court distinguished its previous holding in an analogous case which provided that pure derivative economic loss is not enough, standing alone, to trigger long arm jurisdiction.  The Court noted all of the protections that copyright laws provide to the producer of original work, and held that in addition economic protections a producer had a “overarching ‘right to exclude others from using his property’.” 

Appellate Division

03/29/11       Ruane v. The Allen-Stevenson School, et al.
Appellate Division, First Department
Dispute Over the Incorporation of Riders to a Contract Results in a Question of Fact on Indemnity Claims
Plaintiff, Ruane, was employed by Met Sales as a sheet metal worker.  He allegedly sustained injury when he slipped and fell in the course of his employment with Met.  As a result of the injury, plaintiff commenced the instant lawsuit against Allen-Stevenson (as owner), FJ Sciame Construction Company and Sciame Development (as GC’s).  Sciame, thereafter, commenced a third-party action seeking contractual indemnification against Met.

Sciame’s claim was that the purchase order between Met and Sciame.  The purchase order allegedly incorporated terms of a rider which, apparently, provided Sciame with a contractual indemnity right.  In finding a question of fact, the Court noted that it was impossible to determine whether the insurance/indemnity rider was incorporated with the knowledge and consent of Met.

03/22/11       In re. Jermaine Williams v. MVAIC
Appellate Division, Second Department
Police Officer’s Claims for Injuries Caused by a Hit and Run Vehicle Not Exempted Under MVAIC Where the Police Vehicle Was Not Operated in a Negligent Manner
Plaintiff, a New York City police officer, was injured by an unidentified hit and run driver.  At the time of the incident, Mr. Williams was operating his police car in the course of his job duties.  As an otherwise uninsured driver, Mr. Williams sought leave to proceed an in action against MVAIC.  MVAIC oppose on the basis that police vehicles are exempt from protection under MVAIC where the subject injuries arise from the negligent operation of a police vehicle. 

In the instant case, however, the Second Department noted that there was no evidence that Officer Williams operated his police vehicle in a negligent manner.  Rather, the evidence establishes that the vehicle was struck by a negligent hit and run driver.  Relying on Court of Appeals’ precedent, the Second Department held that an uninsured occupant of a police vehicle may proceed against MVAIC where the incident was caused by the acts and/or omissions of the unidentified vehicle. 

03/22/11       In re. Pedro Pagan v MVAIC
Appellate Division, Second Department
Lack of Objective Evidence of Notice of Accident Within Twenty-Four Hours Results in a Question of Fact, and Framed Issue Hearing 
Petitioner, Pedro Pagan, commenced this matter seeking leave to proceed against MVAIC where he is otherwise insured and he was allegedly struck by an unidentified driver.  MVAIC opposed petitioner’s application on the basis that he had failed to comply with the requirement that notice of the accident be provided to law enforcement with twenty-four hours of the incident.   In response, Mr. Pagan alleges that he advised law enforcement officers of the accident on July 27, 2007. It is uncontroverted that Mr. Pagan was in the presence of law enforcement on July 27/28, 2007 as he was arrested and incarcerated at that time.

However, the Second Department noted that there was no evidence of when the actual incident occurred on July 27, 2007, and likewise no evidence that petitioner informed law enforcement of the alleged accident.  Moreover, the initial claim documents submitted by petitioner identify July 25, 2007 as the accident date. 

In light of all of the aforementioned factors, the Second Department found a question of fact existed as to the credibility of the statements provided by Mr. Pagan.  Accordingly, the matter was remanded for a framed issue hearing on whether the petitioner satisfied the twenty-four hour notice requirement.

03/17/11       OneBeacon America Ins. Co. v Newmont Mining Corp.  
Appellate Division, First Department
Dismissal Based on Forum Non-Conveniens Granted Where There Is No Connection to New York
OneBeacon commenced this action against, among others, Dawn Mining Company and Newmont Mining Company relative to an environmental claim that arose in the State of Washington.  Upon receipt of the suit papers, Dawn appears to have immediately moved for a dismissal therein alleging that the Court did not possess personal jurisdiction.  In opposition, OneBeacon argued that Dawn was a “department” of Newmont.  Thus, OneBeacon reasoned because personal jurisdiction could be obtained over Newmont, jurisdiction of Dawn as a department of Newmont would follow.  In finding that the Court did not possess personal jurisdiction over Dawn, the Court noted that only 51% of Dawn is owned/controlled by Newmont.  Under these circumstances, it was clear that Dawn was not a department in order for jurisdiction to attach.  Likewise, it was also clear that Newmont was not acting as an agent of Dawn when the OneBeacon policy was procured.     

Newmont also moved to dismiss based upon a forum non conveniens argument.  Principally, Newmont argued that the instant matter had no connection to New York or New York law.  Of the eleven insurers involved in this suit, only three maintain their principal places of business in New York.  Newmont, on the other hand, is a Delaware Corporation that maintains its principal office in Colorado. 

In addition, the parties were already engaged in a related matter that was venued in the State of Washington.  Further, the mine giving rise to the claim is also located in Washington. 

In light of all of this information, the Second Department concluded that Washington was the appropriate forum for the instant dispute.  Accordingly, the Second Department overruled the trial court’s decision, and ruled that the matter pending against Newmont be dismissed.

 
CASSIE’S CAPITAL CONNECTION
Cassandra A. Kazukenus
[email protected]


As many of you have heard, Hurwitz & Fine is opening a new office in the Capital District!  I will have the great pleasure of not only contributing to Coverage Pointers via Cassie’s Capital Connection, but will also be responsible for handling insurance coverage, defense and no-fault files from Lake George down to White Plains and out west to Utica.  In my column, I will be reviewing bills and regulations before the New York State Legislature and Insurance Department as well as opinions from the Attorney General’s Office that pertain to primarily property and casualty insurance matters.  The goal of my column will be to help keep you informed of the proposed statutes and regulations affecting your business and compliance matters.  Plus, I hope that my prior experience working for a carrier in the Capital District brings a unique perspective to Coverage Pointers and the firm as well.


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


03/18/11       Industrial Enterprises, Inc. v. Penn America Ins. Co.
United States Court of Appeals for the Fourth Circuit - Maryland
State Regulatory Order Requiring Environmental Cleanup Is Not Property Damage
In January 1999, the EPA issued a proposal to include Industrial Enterprises’ property in a Superfund Site for cleanup. Six months later the EPA sent Industrial Enterprises and several owners of neighboring properties a letter formally notifying them that they were potentially liable for environmental damage at the Site and that there may be “potential response activities at the site, which they may be asked to perform.”

Industrial Enterprises forwarded the EPA’s letter to Penn America, asking Penn America to approve Industrial Enterprises’ retention of defense counsel and to reimburse it for the costs of defense. 

Penn America denied coverage based on the pollution exclusion, further advising that the claim is excluded under the “owned property” exclusion.

Negotiating through its own retained counsel, Industrial Enterprises thereafter entered into a settlement agreement in 2004 with the other potentially responsible parties to form a “Coalition” to respond to the EPA.  Under the Coalition settlement agreement, each member of the Coalition agreed to contribute to a Coalition Fund, and Industrial Enterprises contributed $750,000.  Each member also released every other member from liability.

Industrial Enterprises then commenced its declaratory judgment action seeking a declaration that Penn America’s CGL policy provides coverage for Industrial Enterprises’ response costs, including its attorneys’ fees and its $750,000 contribution to the Coalition Fund.

In response to Industrial Enterprises’ motion for partial summary judgment, the district court found that Penn America’s CGL policy potentially covered Industrial Enterprises’ liability to the EPA and as a result Penn America had a duty to provide a defense.   The district court focused only on the pollution exclusion clause which excluded coverage for losses occasioned by pollution unless the pollution was “sudden and accidental”. 

At a bench trial, the district court later held that no portion of the $750,000 paid to the Coalition fund was a defense costs because Industrial Enterprises paid the money to settle potential liability to the other potentially responsible parties and not to defend itself against the EPA’s demands.  Penn America filed its appeal challenging the district court’s ruling on coverage and Industrial Enterprises cross-appealed challenging the district courts finding that the $750,000 payment to the Coalition Fund was not a cost of defense.

For the first time on appeal Penn America raised the issue that indemnity for costs incurred by Industrial Enterprises in response to EPA’s regulatory actions under CERCLA are not damages because of “property damage” to a third-party, as required under the CGL policy.  Penn American relied on Bausch & Lomb, Inc. v. Utica Mutual Ins. Co., 625 A.D.2d 1021 (Md. 1993) – a holding which addressed whether regulatory response costs are property damage. Although Industrial Enterprises argued that Penn America did not preserve this issue for appeal, the Fourth Circuit concluded that notwithstanding the fact that the district court denied Penn America’s motion to file a surreply memorandum on the Bausch & Lomb issue, Penn American developed its Bausch & Lomb argument extensively at oral argument and counsel to Industrial Enterprises argued its merits. The Court concluded that this was sufficient to preserve the issue for appeal.

In addressing the merits of whether Industrial Enterprises’ liability for response costs under CERCLA was covered by the Penn America CGL policy the Fourth Circuit analyzed Bausch & Lomb, where the Maryland Court of Appeals held that a standard CGL policy did not provide coverage for the cost of meeting the state government’s demand to remove contaminated soil because in making its demand the government was acting as a regulator, not as an injured property owner.  The court reasoned that “[a] hallmark of the comprehensive general liability policy is that it insures against injury done to a third party’s property.”  This is in contrast to an ‘all-risks’ policy also covering losses sustained by the policy holder.

The Court in Bausch & Lomb held that the State’s interest in groundwater rests on its power to preserve and regulate.  That power does not constitute a property interest within the contemplation of the insurance policy in dispute.  Because the state was acting as a regulator, not a property owner, and the CGL policy insured only against the insured’s liability for damages to a third party’s property, the court concluded that the insurance company had no obligations arising from its CGL policy.

The Fourth Circuit in this case determined that as in Bausch & Lomb, the EPA was not attempting to vindicate the government’s duty to regulate and remediate hazardous substances on private property.  The Court held that just as Bausch & Lomb held that the government’s demand for pollution cleanup was not liability because of damage to the government’s property, we hold that the EPA’s demand to Industrial Enterprises did not create potential liability for damage to the federal government’s property, but rather created regulatory liability for response costs.

Accordingly, the Fourth Circuit held that Penn America’s standard CGL policy, which provides indemnity to Industrial Enterprises for sums that it becomes legally obligated to pay as damages because of property damage, does not provide indemnity to Industrial Enterprises for regulatory liability (including remediation costs) under CERCLA.  And because the standard CGL policy in this case does not provide coverage for CERCLA liability, Penn America had no duty to provide a defense or to pay the costs of a defense with respect to such liability.

03/24/11       Maryland Casualty Co. v. Acceptance Indemnity Ins. Co.
United States Court of Appeals for the Fifth Circuit - Texas
Insurer Has Right of Subrogation Against Another Insurer
In 2002, Hugh McGee hired Russell Guidry d/b/a Olympic Pools [“Guidry”] to build a “negative edge” swimming pool at his home in Lakeway, Texas.  The pool underwent several repairs over the next few years as four leaks and a large crack developed.

In December 2006, McGee filed suit against Guidry in Texas state court alleging that Guidry and his subcontractors had failed to exercise ordinary care in designing and building the pool, resulting in physical damage to and loss of use of the pool and other damage due to leaks.

Guidry tendered McGee’s claim to two insurers, Maryland Casualty Company [“Maryland”] and Acceptance Indemnity Insurance Company [“Acceptance”], which issued four separate CGL policies to Guidry. Maryland agreed to defend Guidry, but Acceptance denied coverage.  Maryland eventually paid $590,000 to settle the lawsuit in exchange for a full and final release of McGee’s claims. 

Maryland then brought its declaratory judgment action in the district court seeking a declaration that Acceptance owed a duty to defend Guidry, and seeking under theories of contribution, contractual subrogation and equitable subrogation, Acceptance’s pro-rata share of costs that Maryland incurred to defend and settle McGee’s claims.

Acceptance moved for summary judgment argument that it had no duty to defend and that the Texas Supreme Court holding in Mid-Continent Ins. Co. v. Liberty Mut. Ins. Co., 236 S.W.3d 765 (Tex. 2007), barred Maryland’s claims for subrogation and contribution.

The district court denied Acceptance’s motion holding that Acceptance had a duty to defend, and that Maryland was therefore entitled to recover a pro rata portion of its defense costs. The court granted Acceptance summary judgment on the contribution claim but denied summary judgment on the subrogation claim, distinguishing Mid-continent on the grounds that Acceptance completely refused to defend its insured, and that Maryland and Acceptance were not co-insurers because they issued separate, consecutive policies that did not provide overlapping coverage for the same claim.

The surviving subrogation claim went to trial.  The jury found that the property damage that was the basis of McGee’s underlying lawsuit was an “occurrence” covered by Acceptance’s policy, and that 75% of the $590,000 paid by Maryland to settle McGee’s claims was paid to resolve claims for property damage that first occurred during one of Acceptance’s policy periods.  The jury also found that the damage to the pool had not been caused by the subsidence of the land, and that none of the $590,000 paid to settle the claim was paid to resolve punitive or exemplary damages, thereby rejecting two of Acceptance’s policy exclusions. Acceptance appealed.

Acceptance argued that the Texas Supreme Court’s decision in Mid-Continent bars Maryland from recovering from Acceptance under a theory of subrogation because Guidry, their common insured, has already been fully indemnified.   In Mid-Continent the Texas Supreme Court held that Liberty Mutual could not recover under theories of contractual to equitable subrogation against Mid-Continent.  Under either theory the insurer stands in the shoes of the insured, obtaining only those rights held by the insured against a third party, subject to any defenses held by the third party against the insured.  The court held that the insured had been fully indemnified against his loss, and therefore had no contractual right to recover an additional pro rata portion of the settlement from Mid-Continent.  The court also held that Liberty Mutual, standing in the shoes of the insured, likewise had no contractual rights against Mid-Continent that it could assert in subrogation.

In rendering its decision the Fifth Circuit pointed out that in Amerisure Ins. Co. v. Navigators Ins. Co., 611 F.3d 299 (5th Cir. 2010) it had recently rejected the overly broad view of Mid-Continent’s subrogation exclusion, holding that Mid-Continent does not bar contractual subrogation simply because the insured has been fully indemnified. Further holding in Amerisure that Mid-Continent does not bar contractual subrogation where, as here, an insurer has denied coverage.

As to Maryland’s recovery of Acceptance’s share of the defense costs the court referenced Trinity Univ. Ins. Co. v Emp’rs Mut. Cas. Co., 592 F.3d 687 (5th Cir. 2010) which noted that Mid-Continent does not address the recovery of defense costs from a co-insurer who violates a duty to defend a common insured.

Accordingly, the Fifth Circuit affirmed the district court’s judgment as to Maryland’s subrogation claim.


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

03/23/11       Plaza Constr. Corp. v. Zurich Am. Ins. Co.
Supreme Court, New York County
Defendant Required to Provide General Contractor a Defense, But Court Orders a Determination on Liability Prior to Granting Indemnity
In an interesting case, a pedestrian tripped and fell on mesh netting attached to construction site scaffolding.  Plaza Constr. Corp. (“Plaza”), the general contractor on the project, subcontracted all the scaffolding and sidewalk bridges to O’Farrell Scaffolding & Equipment Corp. (“O’Farrell”).  Zurich Am. Ins. Co. (“Zurich”) issued a general liability policy to O’Farrell that named both Plaza and non-party Trump Village Section 3 (“Trump”), the owner, as additional insureds. 

Thereafter, Plaza tendered the action on behalf of itself and Trump to Zurich, who denied coverage.  Plaza then brought his action seeking defense and indemnify. 

In considering the facts of this case, the court made multiple rulings.  First, it determined that Plaza was entitled to defense in the underlying action.   The insurance policy provided that an insured is “amended to include as an insured the person or organization shown in the schedule, but only with respect to liability arising out of your work for that insured by or for you.”  In the underlying action, it was alleged that the injured party tripped and fell on netting that was erected around the scaffold pedestrian bridge at the project site and was injured because the safety scaffold nets were carelessly and improperly placed in the middle of the walking passage.  Since the netting was installed by O’Farrell’s subcontractor, the allegations in the complaint were within the scope of O’Farrell’s work at the premises.  Thus, Zurich owned Plaza a defense.

Next, the court considered whether Zurich had a duty to defend non-party Trump.  Zurich argued that as Trump was not a party to this action, any ruling in this action would not bind Trump.  The court disagreed and held that Plaza was not seeking to bind Trump, but rather to bind Zurich.  Likewise, any decision would not adversely affect Trump as Plaza’s insurance company ultimately defended Trump in the underlying action.  Zurich further contended that there was no written contract between Trump and O’Farrell.  In considering the language of the policy, which provided merely that the named insured party agreed in a written contract to provide coverage for any person or organization, the court determined that it was no requirement that the addition insured party have a physical written contract with the named insured.  Hence, the requirement that Trump be named as in additional insured in the contract between O’Farrell and Plaza was sufficient. 

Lastly, the court determined that although it agreed that Zurich had an obligation to defend Plaza and Trump, it could not issue a decision with regard to indemnify.  According to the court, an insurance company’s duty to indemnify requires a determination that the insured is liable for a loss covered by the policy.  In this case, a determination of liability is required prior to a determination that an insurance company owes a duty to indemnify Plaza.  Thus, as this matter was settled prior to trial, the court ordered a determination of liability. 

03/22/11       George Campbell Painting v. National Union Fire Ins. Co. of Pittsburgh, Pa.
Supreme Court, New York County
Motion to Vacate Judgment Denied Where Defendant Failed to Establish That Allegedly “New” Evidence Was Unknown at Time of First Summary Judgment Motion 
In order to fully understand this decision, it is necessary to first provide some background information.  This decision arises out of an injury to James Conklin, an employee of non-party subcontractor Safespan Construction Services.  Following the accident, the injured party commenced an action against the owner and general contractor (plaintiffs in this matter).  Eventually, the matter was settled for $5.5 million.  The way the settlement was broken down, Safespan’s primary carrier paid its $1 million limit, the general contractor’s primary insurer paid its $1 million dollar limit, and the general contractor’s excess insurer (non-party Westchester Fire Insurance Company) contributed $3.5 million.  Since, defendant, Safespan’s excess insurer, refused to participate in the settlement, it was agreed that payment of $1 million of the total settlement amount to the injured party would be deferred and the owner and general contractor expressly reserved their rights to commence this coverage action against defendant. 

Now, here is the decision.  The court was presented a motion to vacate the judgment it previously entered in favor of plaintiffs rejecting defendant’s disclaimer of coverage under Insurance Law §3420(d) and declaring that defendant was obligated to make the last remaining pro rata payment under the above settlement.  Defendant brought this motion on the grounds that it discovered new evidence that Westchester was the “real part in interest” in this action, not its insureds.  Specifically, it alleged that it was unaware, in the prior motion for summary judgment, that Westchester had actually made the required $1 million final payment.  Defendant argued that as the real party in interest in this action was the insurer, and not the insured, an Insurance Law §3420(d) defense to late disclaimer could not be asserted against another insurance company. 

In considering this motion to vacate the judgment, the court held that defendant failed to establish sufficient justification for omitting the argument of inapplicability of Insurance Law §3420(d) in its opposition on prior summary judgment motion.  According to the court, during the pendency of this action, defendant had full knowledge that the terms of the underlying settlement agreement required Westchester to make the final payment by July 1, 2009.  In fact, defendant admitted that it periodically checked to see whether the payment had been made.  Thus, the court stated that it was not a surprise that Westchester made the payment.  Defendant’s motion to vacate the judgment was denied. 

Editor’s Note:  Special thanks to Meryl Lieberman, Esq. and Lisa Black, Esq. of Traub Lieberman Straus & Shrewberry, LLP, counsel to George Campbell Painting and Triborough Bridge and Tunnel, for providing us some background on this decision. Attalawyer!     

03/21/11       Palmeri v. New York Prop. Ins. Underwriting Assn.
Supreme Court, Suffolk County
All Causes of Action, Except Breach of Contract, Dismissed Against Insurer
In the underlying case, plaintiff sought to recover under a fire insurance policy issued by defendant for damages caused by vandalism.  Presumably, although not explicitly stated in the decision, defendant denied coverage for some or all of the damage.  As a result, plaintiff brought this action against the insurer, the independent adjusting firm hired to investigate and adjust the claim, and his brokers. 

In considering this motion to dismiss, the court dismissed all claims against the adjusting firm.  The court reasoned that there was no contract between the adjusting firm and plaintiff.  Thus, there was no privity between the adjusting firm and plaintiff.  Also, the adjusting firm had no duty towards an insured who claimed it was not paid by the insurer. 

Next, the court considered the nine causes of action against the insurer. 

  • Breach of contract.  This was the only claim the court refused to dismiss.
  • Unjust enrichment.  The court reasoned that it was duplicative of the first cause of action as both causes of action sought damages for events arising from the same subject matter that was governed by an enforceable contract.
  • Tortious negligence.  Courts do not recognize causes of action for tort claims alleging the negligent handling of a claim.  
  • Detrimental reliance.  Duplicative of the first cause of action.
  • Fraud.  Duplicative of the first cause of action
  • Violation of General Business Law §349.  The court reasoned that the claims did not involve consumer oriented conduct.  The complaint essentially alleged a private policy coverage dispute unique to these parties. 
  • Fraudulent inducement.  A cause of action for fraud does not arise when the only alleged fraud is the breach of contract. 
  • Breach of good faith and fair dealing.  Duplicative of the first cause of action.        
  • Loss of profits.  The court determined that plaintiff failed to state a claim as a matter of law.  The policy did not provide for loss of profits, except for loss of rents incurred by a covered loss. 

 

Accordingly, the only surviving claim was breach of contract.  Lastly, the court noted that the complaint failed to meet the strict pleading requirements necessary to sustain a cause of action for punitive and/or other extra-contractual damages against a first party insurer. 

03/16/11       Matter of Government Empls. Ins. v. Figueroa
Supreme Court, New York County
Hearing Ordered to Resolve Issue of Whether Respondent Made Physical Contact With Uninsured/Unidentifiable Vehicle
This decision arises from a petition seeking an order to permanently stay arbitration or, in the alternative, temporarily stay arbitration and order a hearing on the issue of whether a vehicle made contact with respondent.  On March 22, 2010, respondent was crossing the street when a vehicle cut in front of her causing her to jump back.  She then experienced pain in her back and ribs.  Thereafter, she filed a demand for arbitration claiming that she was the victim of a hit and run. 

During an EBT examination, the respondent testified that she was in the middle of a crosswalk when a vehicle turned into her.  Immediately after testifying that she “guess[ed]” she was hit by the vehicle, she maintained that she “was sure [she] was pushed by the car.” 

Petitioner argued, in his petition, that the arbitration must be permanently stayed as there was no “physical contact” with an uninsured or unidentifiable vehicle.  In response, respondent asserted that her medical records and EBT established “physical contact.”

In considering this petition, the court determined that from the evidence submitted it could not determine whether physical contact was made.  Specially, it noted that respondent’s EBT was contradictory and vague as to physical contact; thus, the court ordered a hearing to resolve the issue of physical contact.   

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

WHAT IS “ADVERTISING INJURY” AND COVERAGE?

or

HOW THE “SANTA CLAUSE” DENIED COVERAGE

A common coverage in CGL policies concerns an insured’s advertising and potential liability for “advertising injury”.  It is not often that a Court has to comment on the meaning of this policy term and coverage, but when it happens it is interesting and informative.  This issue was addressed in the recent case of Santa’s Best Craft, LLC v. Zurich American Ins. Co., 2010 Ill. App. LEXIS 1383 (Ill. App. Ct., December 21, 2010).  In Santa’s Best, the plaintiff invited retailers to its show room, and the retailers then made individual appointments to visit the show room to look at Christmas products.  Ultimately, this conduct was deemed merely “solicitation of business” and not “advertising” under the commercial general liability insurance policy, primarily because there was no broadcasting or publishing to a widespread audience.  Zurich made a list and checked it twice and disclaimed coverage due to an asserted lack of “advertising” or “advertising injury”.

Santa’s Best had a CGL and umbrella policy with Zurich.  After Santa’s Best was sued for various forms of intellectual property, infringement, and deceptive trade practices, Santa consulted his lawyer at the North Pole and tendered defense of the lawsuit to Zurich.  Zurich refused to reimburse Santa for his costs of defense and for the settlement Santa entered into to resolve the underlying lawsuit. 

Zurich’s denial was based on its interpretation of “advertising” and “advertising injury” under the policies.  If the underlying lawsuit involved advertising and advertising injury, Zurich would be obligated to cover the costs of defense and settlement.  Negotiations apparently froze to a standstill at Santa’s Workshop, and the case wound up in the Illinois courts.

Santa’s Best is a manufacturer and wholesaler of Christmas lights.  Sales are made directly to retailers, and there are approximately 75-100 retailers who are potential customers.  Santa’s Best would invite retailers to their showroom about 18 months before the Christmas season, and retailers then made individual appointments to visit the showroom, view products and place orders. 

The Illinois Court had to review the facts and construe the definition of “advertising” under typical CGL policy language, lamenting that very few courts nationwide had directly interpreted and defined that policy term. 

This CGL policy defined “advertising” as “. . . a notice that is broadcast or published to the general public or specific market segments about your goods, products or services for the purpose of attracting customers and supporters.”  The Court then referred to the dictionary term of “broadcast” as “. . . to make widely known; disseminate; or distribute widely or at random.”  It also defined the word “publish” as “. . . to declare publicly; make generally known; disclose; circulate”. 

In short, putting these definitions together, the Court took as a working definition that advertising must be widely disseminated to an intended audience, regardless of whether the audience is the general public or a specific market segment or target customer base.  The Court did find instructive and generally followed a previous California Court decision which involved similar facts, Rombe Corp. v. Allied Ins. Co., 128 Cal. App. 4th 482, 27 Cal. Rptr. 3d 99 (Cal Ct. App. 2005). 

The California Court concluded that, regardless of whether the recipient of the advertising was a specific market segment, the policy language requires that an “advertisement” must be published or broadcast, meaning that it is directed to a relatively large and disparate audience.  In the absence of wide dissemination of the advertisement, the insured’s conduct would only be considered “business solicitation” and would not be defined as “advertising” under the language of the policy.  “Advertising”, therefore, should be widespread promotional activities usually directed to the public at large.  The Illinois Court, like the California Courts, concluded that the audience to whom an “advertisement” was directed was secondary to the fact that an advertisement must be “broadcast” or “published”. 

In Santa’s Best, the Illinois Court concluded that Santa’s list had not been broadcast or published, and that Santa’s conduct was akin to personal solicitation and not advertising.  Santa made his list and checked it twice, but the list was specific and not general enough, not directed to the public at large, and not widely disseminated.  This resulted in Santa’s Best getting a large lump of coal in their Christmas stocking.  The Court concluded that the target retailers, in effect, made a personal visit to Santa, as opposed to seeing Santa in public along with everyone else at the end of the parade. 

The Illinois Court did not regard Santa’s Best’s personal form of promotion and retailer communication as being “broadcast” or “published” in the manner required of an “advertisement” under the terms of the typical CGL policy.  The Court specifically declined to follow the approach of a few courts which looked at the definition of advertising on a case by case basis, in favor of a broader yet stricter interpretation designed to eliminate uncertainty given the standard language of most CGL policies. 

The insurer in this case, Zurich American, was therefore found to have no obligation to indemnify under either the primary or umbrella policy because the insured had not engaged in “advertising activity” and there was no “advertising injury”.  Santa’s Christmas wish for a more favorable outcome and a finding that the insurance company had to defend and indemnify was not granted, leading to chagrin and disappointment at the North Pole.


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


03/24/11       Maryland Casualty v. Acceptance Indemnity Ins. Co.
Fifth Circuit Court of Appeals

Two Primary Insurers Have Obligation of Pro-Rata Coverage for Pool Construction Claim
Over the course of several years, Olympic Pools had insurance coverage from both Maryland Casualty and Acceptance Indemnity. At a lakeside mansion in Texas, Olympic Pools constructed an elaborate vanishing edge pool. However, the pool was fraught with leaks, and construction problems over the course of several years.  Olympic Pools was sued by the homeowner and tendered the defense of the case to its two insurance companies. Maryland Casualty accepted coverage for the claim, but Acceptance Indemnity did not. After settling the third-party case Maryland Casualty sued Acceptance Indemnity for contribution for defense costs and indemnity. The court ruled Acceptance had a duty to defend, and Maryland could recover defense and indemnity costs in a subsequent subrogation action.
Submitted by: Peter S. Doody of Higgs, Fletcher and Mack, San Diego
REPORTED DECISIONS
Jno-Baptiste v. Buckley


Votto & Cassata, LLP, Staten Island (Christopher J. Albee of
counsel), for appellant.
Douglas & London, P.C., New York (Nicholas E. Warywoda
of counsel), for respondent.
Order, Supreme Court, Bronx County (Robert E. Torres, J.), entered July 15, 2010, which denied defendant's motion for summary judgment dismissing the complaint, unanimously reversed, on the law, without costs, and the motion granted. The Clerk is directed to enter judgment dismissing the complaint.
Defendant's submissions, including the affirmed report of an orthopedist and the transcript of plaintiff's deposition, met his prima facie burden of showing that plaintiff had not suffered a serious injury within the meaning of Insurance Law § 5102(d). In opposition, plaintiff failed to raise a triable issue with respect to whether she suffered a permanent consequential or significant limitation. The MRI report merely shows findings "suggestive of transient patellar dislocation." However, a dislocation alone, without evidence of some permanent or significant limitation, does not constitute a serious injury (see Licygiewicz v Stearns, 61 AD3d 1254 [2009]).
The assertion of plaintiff's physiatrist that plaintiff suffered from an 18% loss of flexion in her right knee, conflicts with the affidavit of her physical therapist, indicating that, 18 months earlier, plaintiff had full range of motion in her right knee, and had reached maximum medical benefit from physical therapy. The physiatrist makes no attempt to explain the conflicting findings, and defendant is thus entitled to summary judgment on this basis (see Pou v E & S Wholesale Meats, Inc., 68 AD3d 446, 447 [2009]).
The record also shows that plaintiff missed only one month of work after the accident. Although she claimed that she was unable to perform her usual and customary activities for more than 90 of the 180 days following the accident, without any substantiating medical documentation, plaintiff's testimony alone does not suffice to show a serious injury under the 90/180-day category of Insurance Law § 5102(d) (see Nelson v Distant, 308 AD2d 338, 340 [2003]).
Canelo v. Genolg Transit, Inc.


Baker, McEvoy, Morrissey & Moskovitz, P.C., New York
(Stacy R. Seldin of counsel), for appellants.
Gerard DeCapua, Rockville Centre, for respondents.
Order, Supreme Court, Bronx County (Robert E. Torres, J.), entered July 15, 2010, which denied defendants' motion for summary judgment dismissing the complaint on the ground that plaintiff Gilberto Canelo did not sustain a serious injury within the meaning of the Insurance Law, unanimously reversed, on the law, without costs, and the motion granted. The Clerk is directed to enter judgment accordingly.
Defendants established their entitlement to summary judgment dismissing the 90/180-day claim based upon, inter alia, plaintiff's deposition testimony that he had not been confined to bed and did not miss work following the accident (see Lopez v Abdul-Wahab, 67 AD3d 598 [2009]). Plaintiff failed to raise a triable issue of fact as to whether he was incapacitated from performing all of his usual and customary activities for at least 90 out of 180 days following the accident.
The failure of defendants' experts to review plaintiff's medical records does not require denial of defendants' motion with regard to the claim of permanent injury (see DeJesus v Paulino, 61 AD3d 605, 607 [2009]). The record establishes that defendants' neurologist detailed the specific objective tests he used in his personal examination of plaintiff, which revealed full range of motion, and their radiologist found, upon review of plaintiff's MRI films, no evidence of disc bulging or herniation.
In opposition, plaintiff failed to raise a triable issue of fact. Although plaintiff's radiologist opined that plaintiff suffered permanent injuries that were caused by the car accident, and provided quantifications for loss in range of motion, he failed to address the findings of defendants' radiologist that plaintiff's spinal condition was the result of pre-existing degenerative changes (see Delfino v Luzon, 60 AD3d 196, 198 [2009]). Plaintiff's expert also failed to address plaintiff's prior motor vehicle accident in which he injured his cervical and lumbar spine, which renders his conclusion as to causation speculative (see Zhijian Yang v Alston, 73 AD3d 562, 563 [2010]). Furthermore, plaintiff's treating physician failed to quantify any loss in the ranges of motion of the cervical spine at plaintiff's last examination, and the physician's finding of a 9% cervical disability and a 10% lumbar disability were not of sufficient magnitude to qualify as a "significant" or "important"
limitation of use (see Arrowood v Lowinger, 294 AD2d 315 [2002]; Bandoian v Bernstein, 254 AD2d 205 [1998]).
Riviello v. Kambasi


Alpert & Kaufman, LLP, New York (Morton Alpert of
counsel), for appellant.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York
(Stacy R. Seldin of counsel), for respondents.
Order, Supreme Court, Bronx County (Mark Friedlander, J.), entered December 18, 2009, which granted defendant's motion for summary judgment dismissing the complaint, unanimously affirmed, without costs.
Defendants established prima facie that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) by submitting a radiologist's affirmed report that plaintiff's MRI films revealed evidence of degenerative disc disease predating the accident and no evidence of post-traumatic injury to the disc structures (see Valentin v Pomilla, 59 AD3d 184, 186 [2009]).
In opposition, plaintiff failed to raise a triable issue of fact (id.; see also Jimenez v Rojas, 26 AD3d 256, 257 [2006], Diaz v Anasco, 38 AD3d 295 [2007]) by not refuting defendants' evidence of the preexisting degenerative condition of the lumbar and cervical spine. In fact, some of plaintiff's experts also identify the degenerative condition. Although one of plaintiff's experts, Dr. Shein, identifies the cervical spine degeneration as having been aggravated by the accident, his failure to explain why he ruled out degenerative changes as the cause of plaintiff's spinal injuries renders his opinion that they were caused by the accident speculative (see Valentin, 59 AD3d at 186).
Moreover, absent any objective medical evidence that her injuries were caused by the accident, plaintiff's statements that she was limited in her ability to perform the normal activities of her life were insufficient to establish her 90/180-day claim. Further, despite plaintiff's claim that she was confined to bed and home from the date of the accident until ten weeks after the accident, plaintiff fails to offer competent medical proof that she could not perform substantially all her daily activities for 90 of the first 180 days following the accident because of an injury or impairment caused by the accident (Linton v Nawaz, 62 AD3d 434 [2009], affd 14 NY3d 821 [2010]; see also Hutchinson v Beth Cab Corp., 207 AD2d 283 [1994]).
We have considered plaintiff's remaining arguments and find them without merit.
Johnson v. Garcia


Feinman & Grossbard, P.C., New York (Steven N. Feinman of
counsel), for appellant.
Mitchell Dranow, Sea Cliff, for respondents.
Order, Supreme Court, Bronx County (John A. Barone, J.), entered August 30, 2010, which, insofar as appealed from, denied defendant's motion for summary judgment dismissing the cause of action asserted by plaintiff Aileen Johnson on the threshold issue of serious injury, unanimously modified, on the law, to grant the motion as to the claim of injuries to the cervical spine and the 90/180-day claim, and otherwise affirmed, without costs.
Defendant established prima facie that plaintiff did not sustain a serious injury to her lumbar spine as a result of the March 26, 2003 accident. He submitted the reports of two doctors who concluded, based on their examinations of plaintiff, that the range of motion in her lumbar spine was normal and that any spinal strain or sprain had been resolved, and the reports of two other doctors, who concluded that the spinal condition was a pre-existing degenerative condition that was not caused by the accident (see Gaddy v Eyler, 79 NY2d 955, 956-957 [1992]; Shinn v Catanzaro, 1 AD3d 195, 197 [2003]).
In opposition, plaintiff submitted objective medical evidence sufficient to raise factual issues as to the "permanent consequential limitation" or "significant limitation" categories of serious injury (Insurance Law § 5102[d]). The affirmed report of Dr. John McGee, who examined plaintiff two days after the accident and noted a limited range of motion in plaintiff's lumbar spine, and the MRI of the spine, taken in May 2003 at Dr. McGee's request, which revealed "L5-S1 annular disc bulges with thecal sac compression," constitute objective medical evidence of a serious injury contemporaneous with the accident (see Lazarus v Perez, 73 AD3d 528 [2010]; Prestol v McKissock, 50 AD3d 600 [2008]). Dr. McGee's reports, the affirmed operative report of Dr. John Houten, who performed a discectomy on the L5-S1 area on March 29, 2007, and the affirmed report of Dr. Paul Lerner, who examined plaintiff in March 2009 and found a limited range of motion in the lumbar spine, provide objective evidence of the extent or degree of the physical limitation and its duration that is sufficient to defeat summary judgment (see Noble v Ackerman, 252 AD2d 392, 394 [1998]). The difference of opinion between Dr. Lerner and defendant's expert, Dr. David Milbauer, as to whether plaintiff's symptoms were proximately caused by the accident or result from a pre-existing degenerative condition also raises triable issues of fact (see Torain v Bah, 78 AD3d 588, 588 [2010]).
Plaintiff does not oppose the dismissal of either her claim of serious injury of a permanent nature to the cervical spine or her claim of serious injury of a nonpermanent nature. In any event, as to the latter, the record establishes that plaintiff returned to work one or two days after the accident, and submitted no evidence of a medical determination that she was unable to engage in substantially all her usual and customary daily activities for 90 of the first 180 days after the accident (see Blake v Portexit Corp., 69 AD3d 426, 426-427 [2010]).
Hightower v. Ghio


Basch & Keegan, LLP, Kingston, N.Y. (Derek J. Spada of
counsel), for appellant.
Goergen, Manson & Huenke, Middletown, N.Y. (David B.
Manson of counsel), for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Orange County (Ritter, J.), dated June 1, 2010, which granted the defendant's motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed, on the law, with costs, and the defendant's motion for summary judgment dismissing the complaint is denied.
The defendant established, prima facie, that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957; Acosta v Rubin, 2 AD3d 657, 659). In opposition, the plaintiff raised triable issues of fact as to whether he sustained serious injuries to the cervical and/or thoracolumbar 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 Compass v GAE Transp., Inc., 79 AD3d 1091; Boskey v GTWY, Inc., 78 AD3d 1095).
Although the defendant supported his initial moving papers with evidence that the plaintiff was involved in an automobile accident approximately five years prior to the subject accident, he failed to make a prima facie showing that the plaintiff's injuries were caused by the prior accident. Therefore, the burden did not shift to the plaintiff to raise a triable issue of fact as to whether his injuries were caused by the subject accident, rather than by the prior accident (see Alvarez v Prospect Hosp., 68 NY2d 320, 324; see also Stukas v Streiter,AD3d, 2011 NY Slip Op 01832 [2d Dept 2011]).
Accordingly, the Supreme Court should have denied the defendant's motion for summary judgment dismissing the complaint (see generally Zuckerman v City of New York, 49 NY2d 557, 562).
Chelsea Village Associates v. U.S. Underwriters Insurance Company


Miranda Sambursky Slone Sklarin Verveniotis LLP, Mineola
(Steven Verveniotis of counsel), for appellant-respondent.
Ahmuty, Demers & McManus, Albertson (William J. Mitchell
of counsel), for respondents-appellants.
Order, Supreme Court, New York County (Milton A. Tingling, J.), entered August 5, 2010, which denied defendant U.S. Underwriters Insurance Company's motion for summary judgment dismissing the complaint as against it and declaring that it has no duty to defend or indemnify plaintiffs (Chelsea Village) in the underlying personal injury action, and denied Chelsea Village's cross motion for summary judgment declaring in its favor, unanimously modified, on the law, to grant defendant's motion to the extent of declaring that it has no duty to defend or indemnify Chelsea Village in the underlying action, and otherwise affirmed, without costs.
Chelsea Village satisfied its notice obligations under the U.S. Underwriters policy by submitting notice of claim on April 30, 2007, via a "series of intermediaries" (see U.S. Underwriters Ins. Co. v City Club Hotel, LLC, 369 F3d 102, 105 [2d Cir 2004]; see also U.S. Underwriters Ins. Co. v Falcon Constr. Corp., 2003 WL 22019429, *5-6, 2002 US Dist LEXIS 15065, *15-16 [SD NY 2003]).
Contrary to Chelsea Village's contention, defendant's May 17, 2007 denial of coverage under the policy was not rendered "invalid" by the fact that its April 30, 2007 letter stated that the policy did not provide coverage to Chelsea Village (see State Ins. Fund v Utica First Ins. Co., 25 AD3d 388, 388 [2006]). In addition to the erroneous statement that Chelsea Village was not an insured under the policy, in the April 30, 2007 letter, defendant asserted several other grounds for denying coverage, including a policy exclusion for bodily injury to any employee of any insured. In the May 17, 2007 letter, in response to a letter from Chelsea Village's broker, defendant acknowledged that Chelsea Village was an additional insured under the policy, and reiterated the other grounds for the denial of coverage. Thus, rather than changing its position to rely on a ground not stated in the April 30, 2007 denial, in the May 17, 2007 letter, defendant merely retracted one of the grounds set forth in the April 30, 2007 letter.
We have considered Chelsea Village's remaining contentions and find them unavailing.
General Star National Ins. Co. v. Niagara Frontier Transit


Appeal from a judgment (denominated order) of the Supreme Court, Erie County (John A. Michalek, J.), entered December 18, 2009. The judgment denied the motion of plaintiff for summary judgment, granted the cross motion of defendant, declared that plaintiff is obligated to provide indemnity coverage to defendant, and awarded defendant attorney's fees and costs.

GALBO & ASSOCIATES, BUFFALO (LEO C. KELLETT OF COUNSEL), FOR PLAINTIFF-APPELLANT.
GOLDBERG SEGALLA LLP, BUFFALO (SHARON ANGELINO OF COUNSEL), FOR DEFENDANT-RESPONDENT.

It is hereby ORDERED that the judgment so appealed from is unanimously reversed on the law without costs, defendant's cross motion is denied, the declaration is vacated, and plaintiff's motion is granted.
Memorandum: Plaintiff appeals from a judgment that denied its motion for summary judgment seeking to recover the amount of $350,000 plus statutory interest, the sum advanced by plaintiff to settle a claim against defendant. In addition, Supreme Court granted defendant's cross motion seeking a declaration that plaintiff is obligated to indemnify defendant, as well as the attorney's fees and costs incurred in defending this action. We reverse. We agree with plaintiff that it was not required to provide timely disclaimer of coverage under Insurance Law § 3420 (d) inasmuch as its disclaimer was based on the fact that the underlying claim fell outside the scope of the policy's coverage, and was not based on a policy exclusion (see generally Matter of Worcester Ins. Co. v Bettenhauser, 95 NY2d 185, 188-189). The policy at issue covered defendant, as a subsidiary of Niagara Frontier Transportation Authority (NFTA), for damages due to bodily injuries arising out of "the performance of [NFTA's] law enforcement duties,"and here the underlying claim did not arise out of the performance of such duties. We further agree with plaintiff that it was not estopped from disclaiming coverage based on its timely reservation of the "right to claim that the policy does not cover the situation at issue, while defending the action" (O'Dowd v American Sur. Co. of N.Y., 3 NY2d 347, 355). Finally, inasmuch as defendant was not entitled to summary judgment in its favor on the merits, defendant was also not entitled to attorney's fees and costs incurred in defending this action (see generally U.S. Underwriters Ins. Co. v City Club Hotel, LLC, 3 NY3d 592, 597-598).
Lewiarz v. Travco Insurance Company


Calendar Date: January 11, 2011
Before: Peters, J.P., Kavanagh, Stein, Garry and Egan Jr., JJ.

Jacob Rabinowitz, New York City, for Sils Brokerage
Corporation, appellant.
Corrigan, McCoy & Bush, P.L.L.C., Rensselaer
(Scott W. Bush of counsel), for Karen Kenney, appellant.
James F. Keefe, Cairo (Nicholas E. Tishler, Niskayuna,
of counsel), for respondents.
MEMORANDUM AND ORDER

Stein, J.
Appeal from an order of the Supreme Court (Devine, J.), entered January 11, 2010 in Schoharie County, which denied a motion by defendants Sils Brokerage Corporation and Karen Kenney for summary judgment dismissing the complaint against them.
Plaintiffs, who are husband and wife, owned a home that was destroyed by fire in July 2001. At that time, the home was insured by defendant Travco Insurance Company (hereinafter Travelers), which paid plaintiffs' claim, but thereafter gave plaintiffs notice that it would not renew their homeowner's insurance policy when it expired in August 2002. Plaintiffs subsequently rebuilt the home. In June 2003, after having been unsuccessful for an extended period of time in obtaining insurance for the rebuilt home, plaintiff Peter Lewiarz (hereinafter plaintiff) called defendant Karen Kenney, with whom he claims to have conducted prior business, to see if she could assist him. Although a number of facts are in dispute, it is uncontroverted that plaintiff spoke to Kenney over the telephone and gave her information about his insurance needs; Kenney then relayed the information to defendant Sils Brokerage Corporation, which submitted an application to Travelers for a homeowner's insurance policy on plaintiff's behalf. Travelers issued a new homeowner's insurance policy to plaintiff, effective June 11, 2003. On September 29, 2006, plaintiffs' rebuilt residence was destroyed by a fire. In July 2007, Travelers rejected plaintiff's claim against the insurance policy on the ground that the policy was void ab initio because, among other things, plaintiff had concealed in his application the fact that he had previously suffered a fire loss at his residence.[FN1]
In December 2007, plaintiffs commenced this action alleging that Sils and Kenney (hereinafter collectively referred to as defendants) were negligent in preparing the application to Travelers for insurance coverage. Following substantial discovery, defendants moved for summary judgment dismissing the complaint on the grounds that the claim is barred by the statute of limitations, Sils is not vicariously liable for the actions of Kenney because she was not employed by Sils at the time the insurance application was made, there is no privity between Sils and plaintiffs, and Kenney is not individually liable to plaintiffs because she acted solely in the course of her employment with Dolores Buonocore Agency (hereinafter Buonocore). Supreme Court's denial of their motion prompted this appeal by defendants.
Preliminarily, we conclude that Supreme Court properly entertained defendants' statute of limitations argument set forth for the first time in their motion for summary judgment. Plaintiffs correctly note that defendants had neither raised the statute of limitations defense in their answer nor moved to dismiss the complaint on that ground pursuant to CPLR 3211 (a) prior to their summary judgment motion. However, "'the waiver that would otherwise have resulted from [the failure to plead the defense or move to dismiss the complaint premised on such defense] was retracted by assertion of the defense in connection with the summary judgment motion[]'" (Allen v Matthews, 266 AD2d 782, 784 [1999], quoting Adsit v Quantam Chem. Corp., 199 AD2d 899, 900 [1993] [citation omitted]; see Sullivan v American Airlines, Inc., 80 AD3d 600, 602 [2011]).
We must, therefore, determine the propriety of Supreme Court's holding that plaintiffs' negligence action accrued on the date their claim was rejected by Travelers — resulting in timely commencement of this action — as opposed to the date the policy was issued, as defendants argue, which would render the action time-barred. "The [s]tatute of [l]imitations does not run until there is a legal right to relief. Stated another way, accrual occurs when the claim becomes enforceable, i.e., when all elements of the tort can be truthfully alleged in a complaint" (Kronos, Inc. v AVX Corp., 81 NY2d 90, 94 [1993] [citation omitted]). Inasmuch as "[d]amages are a necessary element of a negligence claim which must be pleaded and proven" (Siler v Lutheran Social Servs. of Metro. N.Y., 10 AD3d 646, 648 [2004]), plaintiffs could not have established any harm until their claim was denied by Travelers. Thus, where, as here, a claim against an insurance agent or broker relating to the failure of insurance coverage sounds in tort, the injury occurred and the plaintiffs were damaged when coverage was denied (see Bond v Progressive Ins. Co., ___ AD3d ___, ___, 2011 NY Slip Op 01552, *3 [2011]; see also Venditti v Liberty Mut. Ins. Co., 6 AD3d 961, 962 [2004]; compare Lieberthal v Agency Ins. Brokers, 216 AD2d 816, 817 [1995]). Accordingly, Supreme Court properly determined that plaintiffs' action was timely.
Turning to the merits, as the movants for summary judgment, defendants bore the initial burden of "mak[ing] a prima facie showing of entitlement to judgment as a matter of law" (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]). In support of their motion, defendants submitted four affidavits which alleged, among other things, that on June 5, 2003, plaintiff called Buonocore, a corporation solely owned and operated by Delores Buonocore, from whom plaintiff had previously procured insurance. Although Buonocore was primarily devoted to real estate, it would occasionally obtain insurance for customers by submitting their information to other insurance agencies, including Sils, who would obtain quotes from carriers and procure the insurance policy, with Buonocore receiving a share of the commissions paid on the policy and any subsequent renewals. Buonocore permitted Kenney, an independent licenced real estate agent, to use office space for her real estate activities, in exchange for which she performed "basic secretarial/clerical office work." Buonocore's owner instructed Kenney how to perform certain tasks, including how to take basic information if someone called looking for an insurance policy. When plaintiff called Buonocore in June 2003, Kenney handled the call. After taking information from plaintiff, Kenney allegedly faxed her notes to Margaret Lamonaca, the office manager at Sils. Lamonaca subsequently called Kenney with a quote for plaintiff from Travelers, which Kenney relayed to plaintiff. When plaintiff indicated that he wished to purchase the policy, Kenney provided Sils with "basic information" for the policy. Sils thereafter submitted the information and an application to Travelers, which issued the policy to plaintiff.
According to the affidavits of Lamonaca and Sils' owner, Sils relied solely on the information provided by Kenney and Buonocore in procuring the subject policy. The affidavits of Lamonaca, Dolores Buonocore and Kenney further indicated that Sils assumed Buonocore's insurance portfolio in late July 2003 and that Kenney was hired as an employee of Sils in September 2003. However, Kenney was allegedly not employed by Sils at the time the insurance policy was issued to plaintiff. This evidence was sufficient to meet Sils' initial burden of establishing that no employment relationship existed between Kenney and Sils at the time plaintiff's insurance policy was procured (see Cietek v Bountiful Bread of Stuyvesant Plaza, Inc., 74 AD3d 1628, 1629 [2010]) and, therefore, that no privity existed between plaintiff and Sils. Accordingly, the burden shifted to plaintiffs to raise a triable question of fact as to Sils' liability (see CPLR 3212 [b]; Zuckerman v City of New York, 49 NY2d 557, 560 [1980]; Friends of Animals v Associated Fur Mfrs., 46 NY2d 1065, 1067 [1979]).
In his deposition testimony, plaintiff first indicated his belief that he had initially called Kenney at Buonocore, but then testified that he was not certain whether he spoke to Kenney at her old location at Buonocore or at her "new location" with Sils. However, in his affidavit opposing the motion for summary judgment, plaintiff alleged unequivocally that, when he called Kenney, he "was informed that she had moved to a new business and was given a telephone number to call her at Sils." This evidence creates a classic question of credibility — to be resolved by a trier of fact — as to whether Kenney was employed by Sils or, at the very least, whether a principal-agent relationship existed between Kenney and Sils at the time the insurance policy was procured, such that Sils may be vicariously liable for Kenney's actions (see e.g. Pyramid Champlain Co. v Brosseau & Co., 267 AD2d 539, 544 [1999], lv denied 94 NY2d 760 [2000]; see also Fils-Aime v Ryder TRS, Inc., 40 AD3d 917, 917-918 [2007]).[FN2]
Turning to the denial of Kenney's motion for summary judgment, Supreme Court held, in part, that "material issues of fact remain in relation to whether . . . Kenney and Sils failed to exercise due care in handling plaintiff's insurance transaction." With respect to Kenney, the complaint alleges that she was negligent in taking down information pertaining to plaintiff's application and in submitting that information to Sils. The affidavits of Kenney and Dolores Buonocore allege that Buonocore instructed Kenney on what information to elicit for homeowner's insurance applications and to then contact various brokers to obtain quotes. If proven, the evidence establishes, at a minimum, the existence of a principal-agent relationship between Buonocore and Kenney (see Fils-Aime v Ryder TRS, Inc., 40 AD3d at 918). Inasmuch as the tasks of obtaining information from plaintiff and submitting such information to Sils were within the scope of Kenney's employment/principal-agent relationship with either Buonocore or — as asserted by plaintiffs — with Sils, she cannot be held personally liable therefor (see Ali v Pacheco, 19 AD3d 439, 440 [2005]). Thus, Kenney's motion for summary judgment should have been granted.
The parties' remaining contentions have been considered and, to the extent they are properly before us, are either academic or without merit.
Peters, J.P., Kavanagh, Garry and Egan Jr., JJ., concur.
ORDERED that the order is modified, on the law, without costs, by reversing so much thereof as denied defendant Karen Kenney's motion for summary judgment; motion granted to that extent and complaint dismissed against said defendant; and, as so modified, affirmed.
Footnotes

Footnote 1: Travelers also relies on additional errors and/or misrepresentations in the application which it claims were misleading, including, among others, the misspelling of plaintiff's surname, the omission of his wife's name from the policy, a change in the street address of the property since plaintiffs' previous coverage as a result of a new 911 numbering system and the location of a fire hydrant.

Footnote 2: Notably, plaintiffs argue that their claim against Sils is not based on a theory of vicarious liability but, rather, upon Sils' direct negligence in handling the insurance application. Regardless of whether there is an issue of fact as to Sils' relationship with Kenney, issues of fact clearly exist as to whether Sils was negligent in relying on the information provided by Kenney in submitting the insurance application to Travelers, providing an alternative ground for the denial of summary judgment to Sils.

QBE Insurance Corp. v. Hudson Specialty Insurance Co.


Melito & Adolfsen P.C., New York (S. Dwight Stephens of
counsel), for appellants.
Wilson, Bave, Conboy, Cozza & Couzens, P.C., White Plains
(Donna L. Cook of counsel), for respondents.
Order, Supreme Court, Bronx County (Cynthia S. Kern, J.), entered July 15, 2010, which granted plaintiffs' motion to renew and, upon renewal, denied defendant Hudson Specialty Insurance Company's motion for summary judgment declaring that plaintiff Bali 9 Building Associates is not entitled to additional insured coverage under an insurance policy issued to defendant Peter Samaha for claims against Bali in an underlying personal injury action, unanimously affirmed, with costs.
Bali leased premises to defendant McDonald's Corporation under a lease that included as part of the leased premises the "rear parking lot." The lease further provided, in pertinent part, that McDonald's "shall maintain and keep in force . . . general public liability insurance against claims for personal injury . . . occurring in, on or about the Premises or sidewalks or premises adjacent to the Premises." Under the heading "Sidewalks," the lease provided that "[Bali] shall maintain the sidewalks. [McDonald's] shall keep the sidewalk in front of the Premises free and clear of snow and ice at all times." Samaha, McDonald's franchisee, purchased an insurance policy from Hudson, naming Bali as an additional insured, "but only with respect to liability arising out of the ownership, maintenance or use of that part of the premises leased to" McDonald's.
Thereafter, a personal injury action was commenced against Bali and others for injuries allegedly sustained when the underlying plaintiff slipped on a patch of ice on a sidewalk "12 feet east of the easternmost post of the rear lot" of the premises leased to McDonald's. Bali and its insurer, QBE Insurance Corporation, commenced this action seeking a declaration that, among other things, Hudson is obligated to defend and indemnify them in the underlying action.
Although plaintiffs failed to present a reasonable excuse for their delay in obtaining the evidence they presented upon renewal, the IAS court providently exercised its discretion in granting the motion to renew in the interest of justice (see Garner v Latimer, 306 AD2d 209, 209-210 [2003]). The initial order granting Hudson's motion for summary judgment depended on the motion court's erroneous belief that the premises leased to McDonald's did not include the rear parking lot.
Upon renewal, the court properly determined that Hudson failed to meet its initial burden of establishing that it has no duty to defend and indemnify Bali in the underlying action. Issues of fact exist as to whether liability in the underlying action is based on the ownership, maintenance or use of that part of the premises leased to McDonald's and whether McDonald's was responsible for keeping the site of the accident free of snow and ice.
Sitnick v. Travelers Insurance Co.


Feder Kaszovitz LLP, New York (Alvin M. Feder of counsel),
for appellants-respondents.
Lazare Potter & Giacovas, LLP, New York (Marci Goldstein
Kokalas and Andrew M. Premisler of counsel), for respondent-
appellant.
Order, Supreme Court, New York County (Richard F. Braun, J.), entered on or about June 18, 2009, which granted defendant Travelers Insurance Co.'s motion for summary judgment declaring that it has no obligation under the homeowner's insurance policies to defend or indemnify plaintiffs in the underlying personal injury action, unanimously reversed, on the law, without costs, and the motion denied.
Issues of fact exist as to the reasonableness of plaintiff homeowner's proffered excuse for providing late notice of claim, i.e., that he was unaware that the policies covering his New York home also provided coverage for an incident that occurred at a restaurant in New Jersey in which a third party claims to have suffered personal injury at the hands of plaintiff homeowner's minor son. Two other Departments have reached the same conclusion in similar circumstances (see Seemann v Sterling Ins. Co., 267 AD2d 677 [1999]; Padavan v Clemente, 43 AD2d 729 [1973]). Here, as in Seemann, plaintiff homeowner acted with due diligence by immediately providing notice upon receipt of a letter from the injured party's attorney advising him to contact his insurance carrier.
Tower Insurance Company of New York v. R & R Dental Modeling Inc. 


Law Office of Max W. Gershweir, New York (Jennifer
Kotlyarsky of counsel), for appellant.
Portela Law Firm, P.C., New York (Bradley D. Shaw of
counsel), for respondent.
Order, Supreme Court, New York County (Milton A. Tingling, J.), entered March 9, 2010, which, to the extent appealed from, denied plaintiff's motion for summary judgment seeking a declaration that it had no duty to defend and indemnify defendant R & R Dental Modeling Inc. in the underlying personal injury action, unanimously reversed, on the law, without costs, the motion granted, and it is declared that plaintiff has no such duty.
Defendant's principal heard the plaintiff in the underlying personal injury action stumble on the steps, heard her complain of pain, and saw her walking with a limp. A week later, defendant's principal saw that the injured woman's leg was in a new cast. Nevertheless, defendant failed to notify plaintiff of the possibility of a claim until 17 months later, after it had been served with the summons and complaint in the personal injury action. Defendant's failure, despite the observations of its principal, to make any inquiry into the incident belies its claim to a good faith belief that the injured person would not seek to hold it liable for her injuries and renders its delay in notifying plaintiff inexcusable (see e.g. Tower Ins. Co. of N.Y. v Miles, 74 AD3d 410 [2010]; Tower Ins. Co. of N.Y. v Red Rose Rest., Inc., 77 AD3d 453 [2010]).
Spencer v. Golden Eagle, Inc.


Baker, McEvoy, Morrissey & Moskovits, P.C., New York
(Stacy R. Seldin of counsel), for appellants.
Spiegel & Barbato, LLP., Bronx (Brian C. Mardon of counsel),
for respondents.
Order, Supreme Court, Bronx County (Lucindo Suarez, J.), entered March 22, 2010, which, in this action seeking damages for personal injuries suffered in a motor vehicle accident, denied defendants' motion for summary judgment dismissing the complaint, unanimously affirmed, without costs.
Plaintiffs Teresa Spencer and Lisa Spencer, her sister, allege that they sustained "serious" injuries pursuant to Insurance Law § 5102(d) when their car was struck in the rear by a vehicle owned and/or operated by defendants. Specifically, they claim "permanent consequential limitation of use of a body organ or member" and/or "significant limitation of use of a body function or system" and/or non-permanent "medically determined injury or impairment ... [preventing them] from performing substantially all of ... [their] usual and customary daily activities for not less than ninety days during the one hundred eighty days immediately following the occurrence of the injury or impairment."
By notice of motion dated February 17, 2009, defendants moved for summary judgment dismissing the complaint against them. By decision and order dated March 11, 2010, the trial court denied defendants' motion on grounds that, inter alia, defendants' orthopedic expert "failed to disclose the testing methods used to determine that plaintiffs' ranges of motion were essentially normal." We affirm the motion court's denial of summary judgment, although we do so on different grounds.
To prevail on a motion for summary judgment, the defendant has the initial burden to present competent evidence showing that the plaintiff has not suffered a "serious injury" (see Rodriguez v Goldstein, 182 AD2d 396 [1992]). Such evidence includes " affidavits or affirmations of medical experts who examined the plaintiff and conclude that no objective medical findings support the plaintiff's claim'" (Shinn v Catanzaro, 1 AD3d 195, 197 [2003], quoting Grossman v Wright, 268 AD2d 79, 84 [2000]). Where there is objective proof of injury, the defendant may meet his burden upon the submission of expert affidavits indicating that plaintiff's injury was caused by a pre-existing condition and not the accident (Farrington v Go On Time Car Serv., 76 AD3d 818 [2010], citing Pommells v Perez, 4 NY3d 566 [2005]).
Once the defendant meets his initial burden, the plaintiff must then demonstrate a triable issue of fact as to whether he or she sustained a serious injury (see Shinn, 1 AD3d at 197). A plaintiff's expert may provide a qualitative assessment that has an objective basis and compares plaintiff's limitations with normal function in the context of the limb or body system's use and purpose, or a quantitative assessment that assigns a numeric percentage to plaintiff's loss of range of motion (Toure v Avis Rent A Car Sys., 98 NY2d 345, 350-351 [2002]). Further, where the defendant has established a pre-existing condition, the plaintiff's expert must address causation (see Valentin v Pomilla, 59 AD3d 184 [2009]; Style v Joseph, 32 AD3d 212, 214 [2006]).
Here, in support of their motion, defendants submitted the affirmations of their orthopedic and radiology experts. Defendants' orthopedic expert concluded that plaintiffs suffered no permanent injury as a result of the accident. His affirmations are based on MRI reports, plaintiffs' medical records, and October 2008 examinations of the plaintiffs. Initially, we note that contrary to the motion court's finding, defendants' orthopedic expert properly provided objective bases for his conclusions that plaintiffs' ranges of motion were normal (see DeLeon v Ross, 44 AD3d 545 [2007], citing Toure, 98 NY2d at 350). The defendants' orthopedic expert's reports listed the tests he performed and recorded ranges of motion expressed in numerical degrees and the corresponding normal values. Moreover, defendants' radiology expert opined in his reports that the MRI studies were either normal, or indicative of pre-existing and/or degenerative conditions.
In opposition, plaintiffs submitted the affirmations of their treating physician who concluded that they suffer permanent partial disability as a result of the accident. His conclusions are based on medical records documenting their continued treatment since the accident including objective tests that he performed, and diminished ranges of motion that he related to plaintiffs' physical limitations. Furthermore, the treating physician's conclusions regarding causation are supported by medical records, wherein he acknowledges some pre-existing injuries but attributes specific other injuries to the accident. Additionally, plaintiffs' contemporaneous MRI reports, in contrast to defendants' expert's reports, do not characterize their injuries as degenerative (see Jacobs v Rolon, 76 AD3d 905 [2010]).
Therefore, we find that plaintiffs have raised a triable issue of fact as to serious injury and defendants' motion for summary judgment was properly denied.
Pisani v. First Class Car and Limousine Service Corp.


Sanders, Sanders, Block, Woycik, Viener & Grossman, P.C.,
Mineola (Aybike Donuk of counsel), for appellant.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York
(Stacy R. Seldin of counsel), for respondent.
Order, Supreme Court, Bronx County (Edgar G. Walker, J.), entered April 7, 2010, which granted defendant Ruben Bello's motion for summary judgment dismissing the complaint as against him for lack of serious injury, unanimously modified, on the law, to the extent of denying that part of defendant's motion to dismiss plaintiff's claims for permanent consequential and/or significant limitation of use, and otherwise affirmed, without costs.
Defendant met his initial burden of proof of establishing that plaintiff's injuries were not, as a matter of law, serious within the meaning of Insurance Law § 5102(d). Defendant submitted the report of an orthopedic surgeon who determined that plaintiff had a normal range of motion in the cervical and lumbar spine. Defendant also demonstrated that plaintiff's injuries were not causally related to the accident through the report of a radiologist, who opined that the minimal disc bulges and hypertrophic changes of the facet joints were degenerative and preexisted the accident (see Jacobs v Rolon, 76 AD3d 905, 905 [2010]). In addition, defendant demonstrated that plaintiff did not sustain a 90/180-day injury by submitting her deposition testimony wherein she admitted that she missed only three days of work following the accident (see Ortiz v Ash Leasing, Inc, 63 AD3d 556, 557 [2009]).
Plaintiff, however, raised issues of fact as to whether she sustained a serious injury under the categories of permanent consequential limitation of use of a body organ or member and/or significant limitation of use of a body function or system (see Insurance Law § 5102[d]). Plaintiff's treating chiropractor and her treating orthopedist determined, based on objective, quantitative tests, that plaintiff had significant limitations in range of motion in both her cervical and lumbar spine. The chiropractor examined plaintiff on the day after the accident. The chiropractor therefore performed tests immediately after the accident as well as a year and one-half later. Plaintiff's orthopedist performed tests eight months after the accident and on at least four other occasions over the ensuing year. Both opined that, based on plaintiff's history, her impairments were causally related to the accident. These findings conflicted with those of defendant's experts and raised an issue of credibility to be resolved by the trier of fact (see Jacobs, 76 AD3d at 905). Dismissal of plaintiff's 90/180-day claim was appropriate since plaintiff has failed to raise any issue of fact with respect to this category.
McCree v. Sam Trans Corp.


Mirman Markovits & Landau, P.C., New York (Ephrem J.
Wertenteil of counsel), for appellant.
Baker, McEvoy, Morrissey & Moskovitz, P.C., New York
(Stacy R. Seldin of counsel), for respondent.
Order, Supreme Court, Bronx County (Lucy Billings, J.), entered October 30, 2009, which granted defendant Sam Trans Corp.'s motion for summary judgment dismissing the complaint on the threshold issue of "serious injury" within the meaning of Insurance Law § 5102(d), unanimously modified, on the law, to deny the motion as to plaintiff's "permanent consequential limitation" and "significant limitation" claims, and otherwise affirmed, without costs.
Defendant failed to satisfy its burden of demonstrating prima facie that no factual issues exist whether plaintiff suffered an injury that caused "consequential limitation" and "significant limitation." While its medical expert attributed the range of motion restrictions he found in plaintiff's right shoulder and cervical spine to degenerative changes or a pre-existing condition, his opinion lacked a factual basis and was conclusory (see Frias v James, 69 AD3d 466 [2010]; Torres v Knight, 63 AD3d 450 [2009]).
However, defendant demonstrated the absence of factual issues as to plaintiff's 90/180-day claim by submitting plaintiff's deposition testimony that she was unable to leave her home for about a week following the accident. Plaintiff's affidavit testimony that she was confined to her home for the first five months following the accident appears to have been tailored to avoid the consequences of her deposition testimony and is therefore insufficient to raise an issue of fact as to the duration of her nonpermanent injuries (see Alloway v Rodriguez, 61 AD3d 591, 592 [2009]).
Lemos v. Giacomo Management, Inc.


Feinman & Grossbard, P.C., White Plains (Steven N. Feinman
of counsel), for appellants.
Dinkes & Schwitzer, P.C., New York (Naomi J. Skura of
counsel), for respondent.
Order, Supreme Court, New York County (George J. Silver, J.), entered September 24, 2010, which, insofar as appealed from, as limited by the briefs, denied defendant corporation's motion for summary judgment dismissing the complaint, unanimously reversed, on the law, without costs, the motion granted in its entirety, and the complaint dismissed as to all defendants. The Clerk is directed to enter judgment accordingly.
Defendant corporation established prima facie that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d). It submitted persuasive evidence of pre-existing degenerative bone disease in plaintiff's left knee that predated the accident, by way of a radiologist's affirmed report detailing the findings in plaintiff's MRI film, as well as plaintiff's physician's findings of degenerative disease. In opposition, plaintiff failed to meet his burden to adduce evidence rebutting the asserted lack of causation (see Ortiz v Ash Leasing, Inc., 63 AD3d 556 [2009]; Valentin v Pomilla, 59 AD3d 184, 186 [2009]).
In light of the foregoing, defendant's argument regarding plaintiff's gap in treatment need not be considered.
Townes v. Harlem Group, Inc.


Mead Hecht Conklin & Gallagher, LLP, Mamaroneck
(Elizabeth M. Hecht of counsel), for appellants.
Helen Dalton & Associates, P.C., Forest Hills (Natia
Shalolashvili of counsel), for respondent.
Order, Supreme Court, Bronx County (Robert E. Torres, J.), entered July 9, 2010, which, denied defendants-appellants' motion for summary judgment seeking to dismiss the complaint on the ground that plaintiff did not suffer a serious injury within the meaning of Insurance Law § 5102(d), unanimously modified, on the law, to grant the motion as to plaintiff's significant limitation use claims with respect to of his cervical spine, lumbar spine, and right knee, and otherwise affirmed, without costs.
Supreme Court properly determined that appellants made a prima facie showing of entitlement to summary judgment as to plaintiff's claims of "significant limitation of use" of his cervical spine, lumbar spine, and right knee (Insurance Law § 5102[d]). Appellants submitted competent and objective medical evidence that plaintiff did not suffer a loss of range of motion as to any of those organs or systems (see Toure v Avis Rent a Car Systems, 98 NY2d 345, 350 [2002]). Appellants also submitted sufficient evidence that plaintiff's conditions were degenerative or age-related, which shifted the burden of refuting the same to plaintiff (see Carrasco v Mendez, 4 NY3d 566, 580 [2005]; Rodriguez v Abdallah, 858 NYS2d 169, 171 [2008]).
Supreme Court also properly determined that appellants met their initial burden as to plaintiff's 90/180-day claim by offering the affirmed reports of a radiologist who, after examining MRI images of plaintiff's alleged injuries taken during the relevant period, concluded that the injuries were "only age-related degenerative changes" (Reyes v Esquilin, 54 AD3d 625, 615 [2008]). In any event, plaintiff submitted competent evidence that sufficiently raises a question of fact as to his 90/180-day claim. The affirmation of plaintiff's treating physician specifically incorporates by reference her reports of her examination conducted on September 25, 2006, two weeks after the accident, and December 21, 2006, over 2 months after the accident, both which tend to support this claim.
With respect to his alleged significant limitation of use claims, plaintiff failed to raise an issue of fact (see Wadford v Gruz, 35 AD3d 258, 258 [2006]). While plaintiff's treating physician thoroughly conducted and aptly explained the objective testing methods employed for each of plaintiff's three injured body parts in properly affirmed reports based on examination conducted within weeks of the accident (see Dufel v Green, 84 NY2d 795, 798 [1995]; Engles v Claude, 39 AD3d 357 [2007]), plaintiff has failed to submit any proof of a recent medical examination showing a loss of range of motion in his cervical spine, lumbar spine, and right knee (see Antonio v Gear Trans Corp., 65 AD3d 869 [2009]; Thompson v Abbasi, 15 AD3d 95, 97 [2005]).
We have considered appellants' remaining contentions, and find them unpersuasive.
Al-Khilewi v. Turman


Law Offices of Alvin M. Bernstone, LLP, New York, N.Y.
(Matthew A. Schroeder of counsel), for appellant.
Morris Duffy Alonso & Faley, New York, N.Y. (Iryna S.
Krauchanka and Andrea M. Alonso of
counsel), for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Richmond County (Fusco, J.), dated March 17, 2010, which denied his cross motion for leave to amend the bill of particulars and granted the defendant's motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is affirmed, with costs.
The Supreme Court providently exercised its discretion in denying the plaintiff's cross motion for leave to amend the bill of particulars. The amendment added a claim of exacerbation of preexisting disc herniations, and would require the defendant to reorient his defense strategy (see Barrera v City of New York, 265 AD2d 516, 518; Markarian v Hundert, 262 AD2d 369, 370). Moreover, the plaintiff failed to offer a reasonable excuse for his delay in seeking to amend the bill of particulars until over two years after the accident and after the note of issue was filed (see Barrera v City of New York, 265 AD2d at 518; Orros v Yick Ming Yip Realty, 258 AD2d 387; Kyong Hi Wohn v County of Suffolk, 237 AD2d 412).
The defendant established, prima facie, that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345, 352; Gaddy v Eyler, 79 NY2d 955, 956-957). In opposition, the plaintiff failed to raise a triable issue of fact. Accordingly, the Supreme Court properly granted the defendant's motion for summary judgment dismissing the complaint.
Calabro v. Petersen


Richard T. Lau & Associates, Jericho, N.Y. (Keith E. Ford of
counsel), for appellant.
Siben and Siben, LLP, Bay Shore, N.Y. (Alan G. Faber 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, Suffolk County (Tanenbaum, J.), entered November 1, 2010, which granted the plaintiff's motion for summary judgment on the issue of liability and denied her cross motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed, on the law, with costs, the defendant's cross motion for summary judgment dismissing the complaint is granted, and the plaintiff's motion for summary judgment on the issue of liability is denied as academic.
The defendant met her prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see 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 argues that the chronicling by his treating pain management physician, Dr. Steven J. Litman, of his lumbar back pain constituted evidence of serious injury. However, a plaintiff's complaints of subjective pain are insufficient to raise a triable issue of fact regarding serious injury (see Scheer v Koubek, 70 NY2d 678, 679; Catalano v Kopmann, 73 AD3d 963, 964). Moreover, although in a report dated December 17, 2008, Dr. Litman noted numeric limitations of range of motion of the plaintiff's lumbar spine, he failed to compare these limitations to the norms (see Perl v Meher, 74 AD3d 930, 931). In any event, this quantification of the plaintiff's alleged limitation of range of motion was not based upon findings made contemporaneous to the accident or upon recent findings (see Toure v Avis Rent A Car Sys., 98 NY2d at 350; Perl v Meher, 74 AD3d at 931). Accordingly, the defendant's cross motion for summary judgment dismissing the complaint should have been granted, and the plaintiff's motion for summary judgment on the issue of liability should have been denied as academic.
Heumann v. JACO Transportation, Inc.


Lewis Johs Avallone Aviles, LLP, Melville, N.Y. (Michael G.
Kruzynski and Seth M. Weinberg of counsel), for appellants.
Rubin & Licatesi, P.C., Garden City, N.Y. (Joseph
Aufenanger of counsel), for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendants appeal from an order of the Supreme Court, Nassau County (Mahon, J.), dated September 23, 2010, which denied their motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed, on the law, with costs, and the defendants' motion for summary judgment dismissing the complaint is granted.
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 to the defendants' motion, the plaintiff failed to raise a triable issue of fact. The plaintiff primarily relied upon the affirmation of her treating hand surgeon, Dr. Alan M. Freedman. The defendants' examining physician, Dr. Thomas Joseph Palmieri, unequivocally found that the plaintiff's complained-of injuries to her right hand were not causally related to the subject accident. Dr. Freedman merely opined that the plaintiff's "right trigger finger condition may have been caused or exacerbated by the automobile accident in which she was involved in January 3, 2007." This speculative language was not sufficient to raise a triable issue of fact in opposition to the defendants' prima facie showing of entitlement to judgment as a matter of law (see Diaz v New York Downtown Hosp., 99 NY2d 542, 544; Gaddy v Eyler, 79 NY2d at 957-958; Nieves v Michael, 73 AD3d 716, 716).
Moreover, although Dr. Freedman noted in his "Chart Note" dated January 4, 2007, that the plaintiff's "[r]ange of motion [of her right wrist] is limited by pain," he failed to set forth any quantitative or qualitative evaluation of the extent of the reported limitation (see Toure v Avis Rent A Car Sys., 98 NY2d at 350-351; Dufel v Green, 84 NY2d 795, 798). "Without such contemporaneous findings, the plaintiff could not have raised a triable issue of fact under the permanent loss, permanent consequential limitation of use, or the significant limitation of use categories of Insurance Law § 5102(d)" (Nieves v Michael, 73 AD3d at 717).
Accordingly, the Supreme Court should have granted the defendants' motion for summary judgment dismissing the complaint.
Manuel v. New York City Transit Authority


Wallace D. Gossett, Brooklyn, N.Y. (Lawrence Heisler of
counsel), for appellant.
Steven Wildstein, P.C., Great Neck, N.Y. (Michael Maiolica
of counsel), for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendant appeals from a judgment of the Supreme Court, Kings County (Starkey, J.), dated July 14, 2009, which, upon a jury verdict, is in favor of the plaintiff and against it in the principal sum of $508,000.
ORDERED that the judgment is reversed, on the law, with costs, and the matter is remitted to the Supreme Court, Kings County, for a new trial on the issue of damages.
The plaintiff was allegedly injured when she fell in a hole in the street while alighting from a bus owned and operated by the defendant, New York City Transit Authority (hereinafter NYCTA). The hole was located at the curb line, next to the sidewalk. The plaintiff alleged that the bus driver parked the bus at an angle, so that the front of the bus was next to the sidewalk and the back of the bus was several feet from the curb. As the plaintiff descended the stairs of the rear exit of the bus, she stepped down with her left foot into a hole in the ground and fell.
The plaintiff claimed that she did not see the hole before she fell. The bus driver also claimed that he did not see the hole before the accident, because it was near the curb, and he was scanning the street in front of the bus for pedestrians. After a trial on the issue of liability, the jury found that NYCTA was negligent, and that its negligence was a substantial factor in causing the plaintiff's accident. The jury found that the plaintiff was not negligent.
At a trial on the issue of damages, the plaintiff's physician testified that she had suffered a meniscal tear and subchondral bone injury in the left knee, had an abnormal gait, and would require a total knee replacement in 5 to 10 years. NYTCA's physician testified that the plaintiff's left knee was normal, her gait was normal, and that she had no permanent injury or disability. He testified that the alleged meniscal tear was an age-related degenerative change.
Counsel for NYCTA requested at trial that the jury be required to determine whether the plaintiff had sustained a serious injury, pursuant to the no-fault insurance law (see Insurance Law § 5102[d]). The plaintiff's counsel contended that the accident was not the result of the use or operation of a motor vehicle, so that the no-fault provisions did not apply. The plaintiff's counsel noted that NYCTA had denied her claim for first-party benefits. Counsel for NYCTA stated that the reason that no-fault benefits were denied was that NYCTA had no record of the plaintiff's accident. The Supreme Court denied NYCTA's request to charge the jury as to the issue of serious injury.
The jury awarded the plaintiff $250,000 for her past pain and suffering, and $250,000 for her future pain and suffering. The jury also awarded the plaintiff $8,000 for past medical expenses. NYCTA appeals from the judgment entered against it.
Although there was a fair interpretation of the evidence by which the jury could have found that the bus driver should have seen the defect through the proper use of his senses, and was negligent in failing to do so, the judgment must be reversed. As a threshold matter, in an automobile accident personal injury case, the plaintiff is required to plead and prove that he or she sustained a serious injury as defined in the no-fault Insurance Law (see Insurance Law § 5102[d]; § 5104; Licari v Elliott, 57 NY2d 230; Zecca v Riccardelli, 293 AD2d 31, 33). If a plaintiff at a trial on the issue of damages fails to sustain the burden of establishing serious injury, the plaintiff is not entitled to any recovery despite proof of common-law liability (see Van Nostrand v Froehlich, 44 AD3d 54). Contrary to the plaintiff's contention, the no-fault Insurance Law does apply to her accident, as the accident arose out of "the use or operation of a motor vehicle" (Insurance Law § 5104[a]). Therefore, in order to recover, she was required to establish that she sustained a serious injury within the meaning of Insurance Law § 5102(d).
For the no-fault statute to apply, the vehicle must be a proximate cause of the injury (see Walton v Lumbermens Mut. Cas. Co., 88 NY2d 211, 215). To be a proximate cause of the injury, the use of the motor vehicle must be closely related to the injury (see Zaccari v Progressive Northwestern Ins. Co., 35 AD3d 597; Elite Ambulette Corp. v All City Ins. Co., 293 AD2d 643). Also, the injury must result from the intrinsic nature of the motor vehicle as such, and the use of the vehicle must do more than merely contribute to the condition which produced it (see Zaccari v Progressive Northwestern Ins. Co., 35 AD3d 597; Republic Long Is., Inc. v Andrew J. Vanacore, Inc., 29 AD3d 665; Duroseau v Town of Hempstead, 117 AD2d 579).
Here, the negligent operation of a motor vehicle was the proximate cause of the plaintiff's injuries. The plaintiff's theory of liability is that her injuries resulted from the manner in which the bus driver operated the bus, specifically his positioning of the bus next to a hole in the street when he pulled over at the bus stop. Moreover, this is not a case in which the plaintiff was completely outside of the vehicle when the accident occurred (see Walton v Lumbermens Mut. Cas. Co., 88 NY2d at 215; Santo v Government Empls. Ins. Co., 31 AD3d 525; Elite Ambulette Corp. v All City Ins. Co., 293 AD2d 643), or in which the plaintiff was the victim of an intentional tort (see Lancer Ins. Co. v Peterson, 175 AD2d 239; Locascio v Atlantic Mut. Ins. Co., 127 AD2d 746; Matter of Manhattan & Bronx Surface Tr. Operating Auth. [Gholson], 71 AD2d 1004).
This case is analogous to Hill v Metropolitan Suburban Bus Auth. (157 AD2d 93). In Hill, the plaintiff fell while descending the stairs of the rear exit of a bus, when she tripped on a nail or tile on the bus staircase and fell into a hole in the sidewalk. This Court agreed with the defendant's assertion that the no-fault law applied, because the accident arose from the use or operation of a bus (see Matter of Celona v Royal Globe Ins. Co., (85 AD2d 635).
NYCTA was not estopped from arguing that the accident arose from the use or operation of the insured vehicle, as NYCTA never did anything to lead the plaintiff to believe that it would not argue that the accident arose from the use or operation of a motor vehicle (see Walsh v Prudential Ins. Co. of Amer., 101 AD2d 988). NYCTA stated at trial that first-party benefits had been denied because it had no record of the accident.
The issue of whether the plaintiff had sustained a serious injury within the meaning of the Insurance Law should have been submitted to the jury, as set forth in PJI 2:88A and 2:88F, as requested by NYCTA. It is for a jury to resolve the issues of credibility raised by the conflicting medical opinions (see Kalpakis v County of Nassau, 289 AD2d 453; Moreno v Chemtob, 271 AD2d 585; Feger v Goldberg, 250 AD2d 727).
The matter must be remitted for a new trial on the issue of damages. Specifically, the jury should first be required to determine whether the plaintiff sustained a serious injury pursuant to Insurance Law § 5102(d).
In light of our determination, it is unnecessary to reach NYCTA's remaining contention.
Park v. Shaikh


Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y.
(Stacy R. Seldin of counsel), for appellants.
Sim & Park, LLP, New York, N.Y. (Sang J. Sim of counsel),
for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendants appeal from an order of the Supreme Court, Queens County (Kitzes, J.), dated May 6, 2010, which denied their 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 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 support of their motion, the defendants relied, inter alia, on the affirmed report of Dr. Gregory Montalbano, an orthopedic surgeon. Dr. Montalbano examined the plaintiff and, although he found that she exhibited diminished range of motion in, among other things, the lumbar region of her spine, he concluded that this symptom was caused by degenerative disc disease unrelated to the subject motor vehicle accident.
In opposition, the plaintiff raised a triable issue of fact by submitting reports from, inter alia, her treating physician, Dr. Michael Trimba, attesting that her limitations resulted from trauma causally related to the subject accident, rather than from degenerative disease (see Licari v Elliott, 57 NY2d 230, 239; Compass v GAE Transp., Inc., 79 AD3d 1091). Accordingly, the Supreme Court properly denied the defendants' motion for summary judgment dismissing the complaint (see Benitez v Lashnitz, 70 AD3d 879).
Reed v. Righton Limo, Inc.


Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y.
(Stacy R. Seldin of counsel), for appellants.
Bornstein & Emanuel, P.C. (James M. Sheridan, Jr., Garden
City, N.Y. of counsel), for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendants Righton Limo, Inc., and Angel Miguel Pacheco appeal, as limited by their brief, from so much of an order of the Supreme Court, Kings County (Schack, J.), dated April 16, 2010, as denied their motion 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 insofar as appealed from, with costs.
The appellants 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). The appellants relied on, inter alia, the affirmed medical report of Dr. Michael J. Carciente, their examining neurologist. As part of his examination of the plaintiff on April 21, 2009, Dr. Carciente failed to perform any range-of-motion testing of the cervical and lumbar regions of the plaintiff's spine, despite the plaintiff's claims of cervical and lumbar injuries, as pleaded in her bill of particulars. Consequently, Dr. Carciente's conclusion that the plaintiff had a "normal neurological exam" that revealed no evidence of any "neurologic disability or permanency" failed to establish the appellants' prima facie entitlement to judgment as a matter of law in this serious injury threshold case (see Perl v Meher, 74 AD3d 930, 931; Chiara v Dernago, 70 AD3d 746; Mannix v Lisi's Towing Serv., Inc., 67 AD3d 977, 977).
Since the defendants failed to meet their prima facie burden, it is unnecessary to consider whether the plaintiff's opposition papers were sufficient to raise a triable issue of fact (see Rabinowitz v Kahl, 78 AD3d 678; Pfeiffer v New York Cent. Mut. Fire Ins. Co., 71 AD3d 971; Washington v Asdotel Enters., Inc., 66 AD3d 880; McKenzie v Redl, 47 AD3d 775, 776).
Barrow v. Dubois


Appeal from a judgment of the Supreme Court, Oneida County (Anthony F. Shaheen, J.), entered December 11, 2009 in a personal injury action. The judgment awarded plaintiffs money damages upon a jury verdict.

HORIGAN, HORIGAN & LOMBARDO, P.C., AMSTERDAM (JAMES A. LOMBARDO OF COUNSEL), FOR DEFENDANTS-APPELLANTS.
CALLI, CALLI & CULLY, UTICA (HERBERT J. CULLY OF COUNSEL), FOR PLAINTIFFS-RESPONDENTS.

It is hereby ORDERED that the judgment so appealed from is unanimously affirmed without costs.
Memorandum: Plaintiffs commenced this action to recover damages for injuries sustained by Dewey R. Barrow (plaintiff) when the motor vehicle in which he was a passenger struck a tree after being forced off the road by a vehicle owned by defendant D.L. Gordon Dubois and driven by defendant Paul D. Dubois. The issue of liability was resolved in favor of plaintiffs, and a jury trial on the issue of damages was conducted. At the close of plaintiffs' proof, defendants moved for judgment as a matter of law pursuant to CPLR 4401 on the ground that plaintiffs failed to establish a prima facie case that plaintiff sustained a serious injury pursuant to Insurance Law § 5102 (d) within the only remaining category before the jury, i.e., the 90/180-day category of serious injury, and Supreme Court denied defendants' motion. The jury ultimately found, inter alia, that plaintiff sustained a serious injury under the 90/180-day category and awarded plaintiffs damages for pain and suffering in the amount of $115,000. The court denied defendants' post-trial motion to set aside the verdict as against the weight of the evidence. We affirm.
We note at the outset that it is well established in the Fourth Department that resolution of the issue of liability necessarily includes a determination that plaintiff sustained a serious injury (see Ruzycki v Baker, 301 AD2d 48, 51-52). We thus are constrained to conclude, based on defendants' motion pursuant to 4401 for judgment as a matter of law on the ground that plaintiff did not sustain serious injury, that only the issue of negligence had previously been decided in plaintiffs' favor, and that the case proceeded to trial on the issues of liability and damages.
We conclude that the court did not err in denying defendants' motion for judgment as a matter of law pursuant to CPLR 4401 on the issue of whether plaintiff sustained a serious injury in the motor vehicle accident. In order to grant such a motion, the trial court must find that, "upon the evidence presented, there is no rational process by which the fact trier could base a finding in favor of the nonmoving party" (Szczerbiak v Pilat, 90 NY2d 553, 556; see Cummings v Jiayan Gu, 42 AD3d 920, 921). In determining such a motion pursuant to CPLR 4401, "the trial court must afford the party opposing the motion every inference which may properly be drawn from the facts presented, and the facts must be considered in [the] light most favorable to the nonmovant" (Szczerbiak, 90 NY2d at 556). Pursuant to Insurance Law § 5102 (d), "[t]o qualify as a serious injury under the 90/180-day category, there must be objective evidence of a medically determined injury or impairment of a non-permanent nature . . . as well as evidence that plaintiff's activities were curtailed to a great extent by that injury" (Zeigler v Ramadhan, 5 AD3d 1080, 1081 [internal quotation marks omitted]; see Licari v Elliott, 57 NY2d 230, 236). Here, "there was abundant evidence that plaintiff's activities were curtailed to a great degree for the requisite period of time following the motor vehicle accident" (Cummings, 42 AD3d at 921). Contrary to defendants' contention, the record contains the requisite evidence that plaintiff sustained a serious injury that was caused by the accident. A nurse practitioner diagnosed plaintiff as having sustained a cervical strain in the accident, and that diagnosis was supported by the nurse practitioner's observations that plaintiff had a limited range of motion in his neck and by objective evidence of crepitus in plaintiff's neck (see Guerra v Fuez, 145 AD2d 873, 873-874).
We further conclude that the court properly denied defendants' motion to set aside the verdict as against the weight of the evidence, inasmuch as it cannot be said that "the evidence so preponderated in favor of the [defendants] that [the verdict] could not have been reached on any fair interpretation of the evidence" (Jaquay v Avery, 244 AD2d 730, 731; see CPLR 4404 [a]; Lolik v Big V Supermarkets, 86 NY2d 744, 746). Here, the jury's verdict in favor of plaintiffs was based on a fair interpretation of the evidence (see generally Cummings, 42 AD3d at 923).
Finally, we cannot agree with defendants that the award of $115,000 for past pain and suffering deviates materially from what would be reasonable compensation (see CPLR 5501 [c]; Ellis v Emerson, 57 AD3d 1435, 1436-1437; Gehrer v Eisner, 19 AD3d 851, 852-853; Osiecki v Olympic Regional Dev. Auth., 256 AD2d 998). The evidence, viewed in the light most favorable to plaintiffs, established that plaintiff sustained a cervical strain that resulted in, inter alia, chronic neck pain and headaches, limited range of motion in his neck, as well as difficulty in sleeping and in walking. In addition, the injury prevented plaintiff from returning to work for several months, and plaintiff was unable to enjoy many of the activities that he previously enjoyed, such as hunting, shooting, and attending his son's sporting events.
State Farm Mutual Automobile Insurance Company v. Langan.


Jennine DiSomma, for appellant-respondent.
Evan H. Krinick, for respondent-appellant.

LIPPMAN, Chief Judge: 
At issue in this appeal is whether the insured decedent, the victim of an intentional crime, was injured as the result of an accident within the meaning of the uninsured motorist endorsement and certain other provisions of the insured's policy. Since the occurrence must be viewed from the insured's perspective, we conclude that it was indeed an accident and that the insured is entitled to benefits under the policy provisions at issue.
Decedent, Neil Conrad Spicehandler, was struck by a vehicle at 7th Avenue and 32nd Street in Manhattan on February 12, 2002. He sustained a compound fracture of his left lower leg, requiring surgery, and died from complications shortly after the operation. Decedent was one of many who were injured when the driver, Ronald Popadich, intentionally drove his vehicle into pedestrians. Popadich later pleaded guilty to second degree murder and admitted that he intended to cause Spicehandler's death.
Decedent was an insured under an automobile liability policy purchased by defendant Langan through plaintiff State Farm. As the administrator of decedent's estate, Langan made a claim seeking to recover benefits under the policy's uninsured/underinsured motorist (UM) endorsement, mandatory personal injury protection endorsement (PIP endorsement) and death, dismemberment and loss of sight endorsement (Coverage S)[FN1]. The policy's UM endorsement provides that it "will pay all sums that the insured or the insured's legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle because of bodily injury sustained by the insured, caused by an accident arising out of such uninsured motor vehicle's ownership, maintenance or use" subject to relevant policy exclusions. The PIP endorsement and Coverage S likewise state that they will pay benefits for injuries sustained as the result of "an accident." These endorsements exclude coverage on several bases, but none specifically excludes coverage for an injury that results from intentional conduct. State Farm denied and disclaimed liability because it determined, as relevant here, that decedent's death was caused not by an accident, but by the intentional conduct of the operator of the vehicle.
State Farm commenced this declaratory judgment action seeking a declaration that it was not obligated to provide benefits in connection with decedent's death. Defendant answered and counterclaimed, requesting a declaration that State Farm was required to provide coverage under the policy. Plaintiff's motion and defendant's cross motion for summary judgment were denied because the parties had not, at that point, provided the court with information regarding the outcome of the criminal action against Popadich, which the court deemed "essential" to determining whether decedent's injuries were caused by an intentional act. The Appellate Division upheld the portion of the Supreme Court order that denied summary judgment on the issue of whether the incident was covered by the policy, finding that there was insufficient proof to determine whether decedent had been the victim of an intentional crime, but that, if he had, the incident would not be covered (18 AD3d 860, 862 [2d Dept 2005]).
After Popadich was convicted of second degree murder, State Farm renewed its motion for summary judgment, again seeking a declaration that it was not required to provide benefits under the policy. Langan opposed the motion and cross-moved for summary judgment, urging that whether the incident was an accident within the meaning of the policy must be determined from the perspective of the insured. Supreme Court granted State Farm's motion and denied Langan's cross motion on the basis of Popadich's conviction.
On appeal, a majority of the Appellate Division modified to declare that State Farm was required to provide benefits under the Mandatory PIP and Coverage S endorsements and, as so modified, affirmed (55 AD3d 281 [2d Dept 2008]). The Court determined that State Farm was not required to provide UM benefits because the purpose of statutorily required uninsured motorist coverage is to provide an individual with the same level of coverage he or she would be entitled to if injured in an accident with an insured motorist covered by an applicable policy. Since a standard liability policy would not have covered Popadich for his intentional criminal conduct, the Court found that Langan's UM coverage was not applicable under the circumstances presented here. However, the Court determined that in other contexts it was appropriate to determine whether a particular event was an accident from the insured's point of view, that the incident was clearly unexpected from decedent's perspective and that, as a result, State Farm was required to provide coverage under the PIP and S Coverage endorsements.
Two Justices dissented in part and would have affirmed Supreme Court's order declaring that State Farm was not required to provide coverage. The dissent agreed that Langan was not entitled to UM benefits under current law based on Popadich's intentional conduct, but observed that there had been a recent national trend to allow for coverage in similar circumstances and that strong public policy considerations weighed in favor of coverage. The dissent would have denied PIP and S Coverage benefits based on the law of the case and, in any event, disagreed that the same term should be interpreted differently within the same policy. Both parties appeal pursuant to leave granted by the Appellate Division, which certified for our review the question of whether its order was properly made. We modify and answer the certified question in the negative.
This appeal turns on whether decedent's injuries were caused by an accident within the meaning of the policy. Although the endorsements at issue do not define the term "accident," we have previously held that it is not to be "given a narrow, technical definition," but should be interpreted according to how it would be understood by the average person (Miller v Continental Ins. Co., 40 NY2d 675, 676 [1976]). We have determined that, for purposes of automobile insurance policies, the term "accident" means an event typically involving violence or the application of external force (see Michaels v City of Buffalo, 85 NY2d 754, 758 [1995]). In order to determine whether a particular event was "accidental, 'it is customary to look at the casualty from the point of view of the insured, to see whether or not . . . it was unexpected, unusual and unforeseen'" (Miller, 40 NY2d at 677 [citation omitted]). Although we have noted that the perspective of the injured victim should not be used to determine whether an accident has occurred, "'[b]ecause an injury is always fortuitous to a non-consenting victim'"
(Michaels, 85 NY2d at 759 [citation omitted]), here we have the situation where the victim is also the insured.
It is clear that, viewed from the insured's perspective, the occurrence was an unexpected or unintended event — and therefore an "accident" — even though Popadich admittedly intended to strike decedent with the vehicle. The language of the policy also suggests that this type of situation would be covered as it was an accident caused by the use of a motor vehicle that did not have an applicable insurance policy. Significantly, Insurance Department regulations require that an automobile owner's liability insurance policy contain a provision specifying "that assault and battery shall be deemed an accident unless committed by or at the direction of the insured" (11 NYCRR § 60-1.1 [f]). Although the provisions at issue here do not involve liability coverage, the regulation is relevant to the understanding of the extent of coverage provided by the endorsements.
The argument against requiring coverage, advanced by State Farm and relied upon by the Appellate Division, is based on the general principle that mandatory uninsured motorist benefits are meant to provide coverage that is coextensive with, and not greater than, that afforded by a standard liability policy. They rely on our statement that the purpose of mandatory UM benefits is "'to provide the insured with the same level of protection he or she would provide to others were the insured a tortfeasor in a bodily injury accident'" (Raffellini v State Farm Mut. Auto. Ins. Co., 9 NY3d 196, 204 [2007], quoting Matter of Prudential Prop. & Cas. Co. v Szeli, 83 NY2d 681, 687 [1994]).
In support of its position, State Farm relies on McCarthy v Motor Veh. Acc. Indem. Corp. (16 AD2d 35 [4th Dept 1962], affd 12 NY2d 922 [1963]), a case where the plaintiff-victim was injured when the insured motorist committed an intentional assault against her using his vehicle. After the insurer denied coverage because the occurrence was not an accident within the meaning of the policy, plaintiff sought to recover under the policy's MVAIC endorsement — a statutorily required endorsement intended to afford coverage to a person injured by an uninsured or unidentified motorist, equal to that available to one injured by a motorist covered by an applicable liability policy (see McCarthy, 16 AD2d at 38). MVAIC is funded by assessments levied against all of the insurance companies licensed to conduct business in the state (see McCarthy, 16 AD2d at 39). McCarthy held that since an intentional assault committed by an insured motorist was not an accident subject to coverage under the standard liability policy, such an occurrence would likewise be excluded from coverage under the MVAIC endorsement (see McCarthy, 16 AD2d at 43). The Court also determined that allowing recovery under MVAIC would be inconsistent with the purpose for which the special fund had been established (see McCarthy, 16 AD2d at 44).
This case differs from McCarthy in two important respects. First, UM coverage, although required by statute, is part of the insured's own policy — a policy that the insured selected and for which he pays premiums. Benefits received through coverage under the UM endorsement do not come out of a State fund. Second, the insured is the victim in this case, not the tortfeasor, and the public policy against providing coverage for an insured's criminal acts is not implicated.
We hold that, consistent with the reasonable expectation of the insured under the policy and the stated purpose of the UM endorsement (to provide coverage against damage caused by uninsured motorists), the intentional assault of an innocent insured is an accident within the meaning of his or her own policy. The occurrence at issue was clearly an accident from the insured's point of view and Langan is entitled to benefits under the UM endorsement.
This result is also in keeping with the national trend toward allowing innocent insureds to recover uninsured motorist benefits under their own policies when they have been injured through the intentional conduct of another (see e.g. American Family Mut. Ins. Co. v Petersen, 679 NW2d 571 [Iowa 2004]; Shaw v City of Jersey City, 174 NJ 567, 811 A2d 404 [2002]; Wendell v State Farm Mut. Auto. Ins. Co., 293 Mont 140, 974 P2d 623 [1999]). Although the above decisions are not binding on this Court, we are persuaded that the view that has been adopted by these jurisdictions is the better one.
For many of the same reasons, Langan is entitled to coverage under the PIP endorsement and Coverage S. The average insured's understanding of the term "accident" is unlikely to vary from endorsement to endorsement within the same policy. The occurrence, from the insured's perspective, was certainly unexpected and unforeseen and should be considered an accident subject to coverage. Contrary to State Farm's argument, we perceive no danger that this result will frustrate efforts to fight fraud in the no-fault insurance system. Significantly, there is [*6]no allegation whatsoever of fraud in this case and it is patent that benefits should continue to be denied to those who intentionally cause their own injuries.
The argument that Langan is entitled to attorneys' fees was not addressed by the courts below and should be remitted to Supreme Court for its determination in the first instance.
Accordingly, the order of the Appellate Division should be modified, without costs, by granting defendant judgment declaring in accordance with this opinion and remitting to Supreme Court for further proceedings in accordance with this opinion, and, as so modified, affirmed. The certified question should be answered in the negative.

SMITH, J. (dissenting):


I would affirm the order of the Appellate Division.
As a general matter, it is true that whether a particular event is an "accident" should be viewed from the point of view of the insured. The insured here was Spicehandler, the event was an accident from his point of view, and his estate was therefore properly allowed to recover under the so-called PIP and Coverage S endorsements.
But uninsured/underinsured motorists (UM) coverage is different. Its purpose is to protect an insured who is injured by a tortfeasor without liability insurance — a purpose accomplished by putting the insured in the position that he would have been in if the tortfeasor had been insured. This requires a determination of whether the tortfeasor could have made a claim under a hypothetical policy of liability insurance — and the tortfeasor should thus be treated as the "insured" for purposes of analysis. Since Popadich drove his car into Spicehandler on purpose, the event was not an accident from Popadich's point of view; Popadich could not have obtained indemnification from a liability insurer; and Spicehandler's estate should not be permitted to recover under the UM endorsement.
This is essentially what we held when we affirmed the Appellate Division's decision in McCarthy v Motor Veh. Acc. Indem. Corp. (16 AD2d 35 [4th Dept 1962], aff'd 12 NY2d 922 [1963]). The majority tries to distinguish McCarthy on what it calls two grounds, which seem really to be one — that UM coverage is "part of the insured's own policy" and that "the insured is the victim in this case, not the tortfeasor" (majority op at 8). The distinction will not withstand analysis. The purpose of UM coverage is the same as the purpose of the MVAIC endorsement at issue in McCarthy: "to afford coverage," as the majority puts it, "to a person injured by an uninsured or unidentified motorist, equal to that available to one injured by a motorist covered by an applicable liability policy" (majority op at 7-8). The essential rationale for McCarthy is that the victim of an uninsured motorist should not be in a better position than the victim of an insured one. That rationale was sound in McCarthy, and is sound here. [*7]
I see no justification for departing from McCarthy. A more serious argument might be made — though it is not made here — for a more significant change in the law: modifying, in cases involving automobile liability policies required by statute, the general rule that liability insurance cannot cover intentional torts. As McCarthy mentions, a standard automobile liability policy provides coverage only for accidents, and thus would not cover "an assault and battery committed by the insured" (16 AD2d at 41; see also, e.g., Matter of Travelers Indem. Co. v Richards-Campbell, 73 AD3d 1076 [2d Dept 2010]; Matter of Aetna Cas. & Sur. Co. v Perry, 220 AD2d 497 [2d Dept 1995]). This limitation seems to be derived from the long-established rule, based on public policy, that insurance may not indemnify a tortfeasor for intentional wrongdoing (Messersmith v American Fid. Co., 232 NY 161, 165 [1921]; Town of Massena v Healthcare Underwriters Mut. Ins. Co., 98 NY2d 435, 445 [2002]). Courts in some jurisdictions have made compulsory liability insurance an exception to this rule, reasoning that the purpose of liability insurance, to the extent that it is required by law, is to protect injured victims, not tortfeasors, and that victims should be protected no less against intentional than against negligent torts (e.g., Speros v Fricke, 98 P3d 28, 36-38 [Utah 2004]; Dotts v Taressa, 182 W Va 586, 390 SE 2d 568 [1990]; Wheeler v O'Connell, 297 Mass 549, 9 NE 2d 544 [1937]). Whether such an exception is justified, and if so whether it should be created by judges or by legislators, are questions that we should not address until we have a case that presents them.
* * * * * * * * * * * * * * * * *
Order modified, without costs, by granting defendant judgment declaring in accordance with the opinion and remitting to Supreme Court, Nassau County, for further proceedings in accordance with the opinion herein, and, as so modified, affirmed. Certified question answered in the negative. Opinion by Chief Judge Lippman. Judges Ciparick, Graffeo, Pigott and Jones concur. Judge Smith dissents and votes to affirm in an opinion in which Judge Read concurs.
Decided March 29, 2011
Footnotes

Footnote 1: This action solely concerns claims made under Langan's own policy — not the policy of either the driver or the vehicle.

Tower Insurance Company of New York v. Classon Heights, LLC

The Feinsilver Law Group, P.C., Brooklyn (H. Jonathan
Rubinstein of counsel), for Appellants.
Mound, Cotton, Wollan & Greengrass, New York (Vanessa M.
Bakert of counsel), for respondent.
Order and judgment (one paper), Supreme Court, New York County (Eileen A. Rakower, J.), entered May 14, 2010, which, insofar as appealed from as limited by the briefs, granted plaintiff's motion for summary judgment declaring that plaintiff has no duty to defend or indemnify defendants-appellants in an underlying personal injury action, and denied appellants' cross motion to compel discovery, unanimously affirmed, without costs.
This declaratory judgment action arises from a disclaimer of insurance coverage based on late notice of a personal injury claim. Plaintiff Tower Insurance issued a liability insurance policy effective August 2006 to appellants Classon Heights and Renaissance Realty (the insureds), which owned and maintained an apartment building, along with the sidewalk in front of the premises. The policy required the insureds to notify Tower Insurance "as soon as practicable of an occurrence' or an offense which may result in a claim."
The underlying personal injury action was brought in May 2007 by Elizabeth Gonzalez, a building resident, who alleges that on October 30, 2006 a defective condition on the sidewalk on the premises, which was under construction, caused her to fall from her wheelchair and sustain serious injuries. On or about March 15, 2007, Gonzalez's counsel notified the insureds about the impending claims against them, and on March 26, 2007, or about five months after the accident, defendant notified Tower Insurance about the claims. Tower Insurance disclaimed coverage in April 2007 on the ground that the insureds failed to notify it "as soon as practicable."
In July 2007, Tower Insurance commenced this action against the insureds and Gonzalez seeking a declaration that it had no duty to defend or indemnify the insureds in the underlying lawsuit, based on late notice of claim. The complaint alleged that the insureds knew about Gonzalez's accident on the day it occurred but failed to notify Tower Insurance for five months.
After issue was joined, Tower Insurance moved for summary judgment in December 2009. Tower Insurance submitted signed but unsworn, partially redacted statements that a porter and the manager at Gonzalez's apartment building made to a Tower Insurance investigator in April 2007. The porter stated that on October 30, 2006 he saw Gonzalez, while descending a ramp leading from the premises in her wheelchair, ride off the ramp and fall forward to the ground. After he and three other workers helped Gonzalez back into her chair, an ambulance arrived and took Gonzalez to a hospital. When the porter saw Gonzalez again later that day, she was not wearing a cast, but two days later he saw her with a cast on her arm. The porter then "called the office and told them what happened." The building manager stated that the porter had called him on October 30 and told him Gonzalez had fallen out of her wheelchair. The porter allegedly told the manager that Gonzalez "did not appear injured" but informed the manager that an ambulance had taken her to the hospital.
In opposition to the summary judgment motion, the insureds argued that they had no reasonable basis to believe that the accident could give rise to a claim against them until they were so notified by Gonzalez's counsel nearly five months after the accident. The insureds submitted, among other things, an affirmed statement by the manager claiming that the Tower Insurance investigator omitted "material facts" when transcribing his statement and only told the manager he was investigating the merits of the underlying action, without disclosing that his statement would be used to deny the insureds' coverage. The manager reiterated that he first learned of Gonzalez's accident on October 30, 2006 when the porter telephoned him, but when he went to the apartment building either on that day or the next to discuss the matter, the porter advised him that "Ms. Gonzalez did not appear to be injured; that an ambulance was called solely for precautionary reasons; that he saw Ms. Gonzalez later that afternoon and after she had returned to the building; that she did not have a cast or a sling when she returned to the building; and that he did not see any evidence that she had sustained an injury when she returned to the building."
Supreme Court correctly granted summary judgment to Tower Insurance on the ground that the insureds failed to provide timely notice. "Where a liability insurance policy requires that notice of an occurrence be given as soon as practicable,' such notice must be accorded the carrier within a reasonable period of time" (Tower Ins. Co. of N.Y. v Lin Hsin Long Co., 50 AD3d 305, 307 [2008]; see Great Canal Realty Co. v Seneca Ins. Co., Inc., 5 NY3d 742, 743 [2005]). Tower Insurance met its initial burden by offering proof of the insureds' five-month delay, because an unexcused delay of that length is untimely as a matter of law (see e.g. Juvenex Ltd. v Burlington Ins. Co., 63 AD3d 554 [2009][two-month delay untimely]; Young Israel Co-Op City v Guideone Mut. Ins. Co., 52 AD3d 245 [2008] [40 days]); Heydt Contr. Corp. v American Home Assur. Co., 146 AD2d 497, 498 [1989], lv dismissed 74 NY2d 651 [1989] [four months]).
The insureds' opposition failed to raise a triable issue whether their delay may be excused because they had a good faith belief in non-liability (see Great Canal Realty Corp., 5 NY3d at 743-744). An insured bears the burden of proving, under all the circumstances, the reasonableness of the belief (see Argentina v Otsego Mut. Fire Ins. Co., 86 NY2d 748, 749-750 [1995]). Where, as here, the policy requires prompt notice of an "occurrence" that "may result in a claim," the issue is not "whether the insured believes he will ultimately be found liable for the injury, but whether he has a reasonable basis for a belief that no claim will be asserted against him" (SSBSS Realty Corp. v Public Serv. Mut. Ins. Co., 253 AD2d 583, 584 [1998]).
Since the insureds admitted that their building manager knew on October 30, 2006 that Gonzalez had fallen on the premises and had been taken by ambulance to a hospital, their purported belief that no claim could possibly be filed by Gonzalez because she was not injured was unreasonable (see Paramount Ins. Co. v Rosedale Gardens, 293 AD2d 235, 241 [2002]); see also Tower Ins. Co. of N.Y. v Lin Hsin Long Co., 50 AD3d at 307-308; SSBSS Realty Corp., 253 AD2d at 585). At the least, the building manager's knowledge triggered a duty to further investigate the accident since Gonzalez was a tenant in their own building (see Tower Ins. Co. v Christopher Ct. Hous. Co., 71 AD3d 500, 501 [2010]; York Specialty Food, Inc. v Tower Ins. Co. of N.Y., 47 AD3d 589, 590 [2008]; SSBSS Realty Corp., 253 AD2d at 585).
The insureds' additional contentions also lack merit. Their argument that the porter's knowledge of Gonzalez's accident cannot be imputed to them is unavailing because "knowledge of an occurrence obtained by an agent charged with the duty to report such matters is imputed to the principal" (Paramount Ins. Co., 293 AD2d at 240). Although the building manager stated that the porter's primary responsibility was to clean the premises, he also stated that the porter called him to report the accident on the same day and that he then went to the subject premises to discuss the incident with the porter.
The insureds' claim that further discovery could have provided them with the basis for an estoppel claim amounts to mere speculation. Finally, the insureds' reliance on Insurance Law § 3420(a)(5) is unavailing because the provision was enacted in January 2009 and does not apply retroactively to Tower Insurance's 2006 policy (see L 2008, ch 388, § 2, § 8).

Cambio, Inc. v U.S. Fidelity and Guaranty Company


Alpert & Kaufman, LLP, New York (Morton Alpert of
counsel), for appellants.
Lazare Potter & Giacovas, LLP, New York (Andrew M.
Premisler of counsel), for U.S. Fidelity and Guaranty Company and
The St. Paul Companies, respondents.
Cherny & Podolsky, PLLC, Brooklyn (Steven V. Podolsky of
counsel), for Joseph Galante, respondent.
Order, Supreme Court, New York County (Ira Gammerman, J.H.O.), entered April 12, 2010, which granted defendants' motions for summary judgment dismissing the complaint, unanimously affirmed, with costs.
Plaintiffs are precluded from obtaining reimbursement on a replacement cost claim since they "failed to satisfy the condition precedent of rebuilding" (DeLorenzo v BAC Agency, 256 AD2d 906 [1998]; see D.R. Watson Holdings, LLC v Caliber One Indem. Co., 15 AD3d 969 [2005], lv dismissed 5 NY3d 842 [2005]; Alpha Auto Brokers v Continental Ins. Co., 286 AD2d 309, 310 [2001]). Plaintiffs have the burden of proving that the alleged loss is covered under the policy (see Moleon v Kreisler Borg Florman Gen. Constr. Co., 304 AD2d 337, 339 [2003]), and the record establishes that there is no dispute that plaintiffs have never rebuilt or replaced the restaurant. Thus, their request for further discovery would not be productive (see Oates v Marino, 106 AD2d 289, 292 [1984]).
The complaint is also barred by the clear and unambiguous two-year suit limitations period in the policy (see Costello v Allstate Ins. Co., 230 AD2d 763 [1996]). Contrary to plaintiffs' contention, defendant insurer did not waive, nor or is it estopped from asserting, its contractual limitations defense based upon the fact of its payment of a portion of plaintiffs' claim before the expiration of the limitations period (see New Medico Assoc. Inc. v Empire Blue Cross & Blue Shield, 267 AD2d 757, 759 [1999]).
Claims in negligence are governed by the three-year limitations period set forth in CPLR 214(4) (see Tischler Roofing & Sheet Metal Works Co. v Sicolo Garage, 64 Misc 2d 825 [1970]). The record demonstrates that the date of the loss of the restaurant was September 11, 2001; plaintiff received payment in the sum of $3,400,000 from the insurance carrier and the claim was closed on December 19, 2001; plaintiff's representative was able to reopen the claim in March 2002; and plaintiff received an additional $181,288 on September 27, 2002. Since this action was brought on April 12, 2006, plaintiffs' claim against their adjuster was properly dismissed as time-barred.
We have considered plaintiffs' remaining contentions and find them unavailing.
Ruane v The Allen-Stevenson School


Cerussi & Spring PC, White Plains (Kevin P. Westerman of
counsel), for appellants.
Mauro Lilling Naparty LLP, Great Neck (Anthony F. DeStefano
of counsel), for Met Sales & Installations Corp., respondent.
Order, Supreme Court, New York County (Judith J. Gische, J.), entered July 7, 2010, which, insofar as appealed from, denied defendants' motion for summary judgment on defendant/third party-plaintiff F.J. Sciame Construction Co's claim for contractual indemnification against third-party defendant Met Sales & Installation Corp. and for summary judgment dismissing plaintiffs Labor Law § 200 and common law negligence causes of action, unanimously affirmed, without costs.
In August, 2005, plaintiff Edward Ruane, a sheet metal worker employed by Met Sales & Installations Corp., sustained a knee injury when he slipped and fell on construction debris in a stairwell. Ruane commenced this personal injury action against The Allen-Stevenson School, as owner of the building, and F.J. Sciame Construction Company, Inc. and Sciame Development, Inc, as general contractors. F.J. Sciame filed a third-party action against Met asserting that Met was obligated to indemnify F.J. Sciame for Ruane's injuries pursuant to an indemnification rider incorporated by reference into the purchase order for the job. Met denied that it had agreed to be bound by the rider.
In determining whether the parties entered into a contractual agreement and what its terms were, it is necessary to look to the objective manifestations of the intent of the parties, as evidenced by the totality of their expressed words and deeds. The court must look to the attendant circumstances, the situation of the parties, and the objectives they were striving to attain (Brown Bros. Elec. Contrs. v Beam Constr. Corp., 41 NY2d 397 [1977]; see also Kowalchuk v Stroup, 61 AD3d 118 [2009]; Tighe v Hennegan Const. Co., Inc., 48 AD3d 201 [2008]). F.J. Sciame failed to make a prima facie showing that the unsigned documents called "Terms and Condition of the Purchase Order" and "Vendor Insurance Indemnification Rider," were part of the purchase order contracts such as to entitle it to indemnity from Met.
As the fact-dependent nature of the Brown rule suggests, in many instances the issue of whether or when an indemnification agreement came into being, in the absence of a signed document, will present a question to be resolved by the trier of fact (Flores v Lower East Side Service Center, Inc., 4 NY3d 363 [2005]). This case is such an instance.
The motion court also properly found that questions of fact as to constructive notice of the alleged dangerous condition precluded summary judgment dismissing the common-law negligence and Labor Law § 200 claims. (see Maza v University Ave. Development Corp., 13 AD3d 65 [2004]; see also, Moser v BP/CG Center I, LLC, 56 AD3d 323 [2008]).
In the Matter of Jermaine Williams v MVAIC


Cruz & Gangi and Associates (Kornfeld, Rew, Newman &
Simeone, Suffern, N.Y. [Scott A. Dow], of counsel), for appellant.
Budin, Reisman, Kupferberg & Bernstein, LLP, New York,
N.Y. (Gregory C. McMahon of
counsel), for respondent.

DECISION & ORDER
In a proceeding pursuant to Insurance Law article 52 for leave to commence an action against the Motor Vehicle Accident Indemnification Corporation, the Motor Vehicle Accident Indemnification Corporation appeals from an order of the Supreme Court, Kings County (Lewis, J.), dated April 9, 2010, which granted the petition for leave to commence an action against it.
ORDERED that the order is affirmed, with costs.
On August 16, 2007, the petitioner, New York City Police Officer Jermaine Williams, was driving his police vehicle in Brooklyn when he was struck by a "hit and run" driver who attempted to overtake the petitioner's vehicle as it was making a right turn. The identity of the owner and/or operator of the other vehicle was never ascertained. The petitioner was not an insured under any personal motor vehicle policy at the time of this accident. Thereafter, the petitioner commenced this proceeding pursuant to Insurance Law article 52 for leave to "bring an action [for damages for bodily injury] . . . against the MOTOR VEHICLE ACCIDENT INDEMNIFICATION CORPORATION" (hereinafter MVAIC).
Under the circumstances of this case, the petition was properly granted. "[P]olice vehicles are exempted from the provisions of the MVAIC statute to the extent that otherwise eligible claimants are barred from filing a claim for injuries caused by the negligent operation of a police vehicle (Insurance Law § 5202[a], [b]; § 5208; see, Matter of Downey [MVAIC] 43 AD2d 168, 175-176; Matter of Fuscaldo [MVAIC], 24 AD2d 744)" (Matter of State Farm Mut. Auto Ins. Co. v Amato, 72 NY2d 288, 294 n 2). Here, however, there is no evidence that the petitioner's alleged injuries were caused by the negligent operation of his police vehicle. Moreover, it is undisputed that the petitioner is a "[q]ualified person" pursuant to Insurance Law § 5202(b), and an "otherwise eligible" claimant under MVAIC. Accordingly, since the Court of Appeals has already stated that "the uninsured occupant of a police vehicle may file a claim with the MVAIC for injuries sustained in an accident caused by an uninsured motor vehicle" (Matter of State Farm Mut. Auto Ins. Co. v Amato, 72 NY2d at 294 n 2; see Matter of Downey [Motor Veh. Acc. Indem. Corp.], 43 AD3d at 175-176), the Supreme Court properly granted the petition.
In the Matter of Pedro Pagan v MVAIC


Cruz & Gangi and Associates (Kornfeld, Rew, Newman &
Simeone, Suffern, N.Y. [Scott A. Dow], of counsel), for appellant.
Kaston Aberle, LLP, Mineola, N.Y. (Richard M. Aberle of
counsel), for respondent.

DECISION & ORDER
In a proceeding pursuant to Insurance Law § 5218(c) for leave to commence an action against the Motor Vehicle Accident Indemnification Corporation, the Motor Vehicle Accident Indemnification Corporation appeals from an order of the Supreme Court, Kings County (Rothenberg, J.), dated January 21, 2010, which granted the petition.
ORDERED that the order is modified, on the law and the facts, by deleting the provision thereof granting the petition in its entirety and substituting therefor a provision granting the petition only to the extent of directing an evidentiary hearing on the issue of whether the subject accident was reported to the police within 24 hours; as so modified, the order is affirmed, without costs or disbursements, and the matter is remitted to the Supreme Court, Kings County, for further proceedings in accordance herewith.
The Motor Vehicle Accident Indemnification Corporation (hereinafter MVAIC) opposed the petition for leave to commence an action against it on the ground that the petitioner failed to establish his compliance with the statutory requirement that notice to a police, peace, or judicial officer of the subject accident be given within 24 hours, the satisfaction of which is a condition precedent to qualifying for benefits from MVAIC (see Insurance Law § 5208[a][2][A], § 5218[c]). "[T]he courts have consistently afforded a very liberal interpretation to the notice requirement, accepting police contacts that fall far short of the operator's obtaining a written report'" (Gurvich v Motor Veh. Acc. Indem. Corp., 66 AD3d 677, 678, quoting Matter of Country Wide Ins. Co. [Russo], 201 AD2d 368, 370). Here, in support of his contention that the alleged hit-and-run accident occurred on July 27, 2007, and that he told the police of the accident on that date, the petitioner submitted, inter alia, an affidavit stating that he was arrested at the accident scene based on eyewitness statements that he had been involved in a crime, and setting forth the criminal identification number and docket number arising from the arrest, as well as an emergency medical services report (hereinafter EMS report), dated July 28, 2007, identifying him as a prisoner. The Supreme Court, without a hearing, granted the petition, finding such evidence sufficient proof of the petitioner's compliance with the statutory 24-hour notice requirement. However, contrary to the Supreme Court's determination, such evidence only indicated that the accident may have occurred on July 27, 2007, and that the petitioner was in police custody on July 28, 2007. The petitioner's proof contains no evidence that the police were actually told of the accident, either by the petitioner or an eyewitness, within 24 hours of its occurrence. Moreover, the petition, the petitioner's affidavit of no insurance, a Department of Motor Vehicles Accident Report form, and the proposed complaint all identify July 25, 2007, as the date of the alleged accident. Under the circumstances, there is an issue of fact as to the petitioner's compliance with the 24-hour notice requirement.
Since the issue of the petitioner's compliance with the 24-hour notice requirement cannot be resolved without considering the petitioner's credibility, we grant the petition to the extent of directing an evidentiary hearing on that issue (see Matter of Caceres v Motor Veh. Acc. Indem. Corp., 37 AD3d 215; Matter of Schmid v Motor Veh. Acc. Indem. Corp., 208 AD2d 544; Matter of Country Wide Ins. Co. [Russo], 201 AD2d at 370-371; Canty v Motor Veh. Acc. Indem. Corp., 95 AD2d 509, 512-513; Matter of Dixon v Motor Veh. Acc. Indem. Corp., 56 AD2d 650, 652).
Accordingly, we modify the order appealed from by granting the petition only to the extent of directing an evidentiary hearing on the issue of whether the petitioner complied with the statutory 24-hour notice requirement, and remit the matter to the Supreme Court, Kings County, for further proceedings in accordance herewith.
ANGIOLILLO, J.P., FLORIO, BELEN and MILLER, JJ., concur.
Penguin Group (USA) Inc. v American Buddha


Richard Dannay, for appellant.
Submitted by Charles H. Carreon, for respondent.
Michael H. Page, for Public Citizen, amicus curiae.
International Trademark Association; American
Association of Publishers et al., amici curiae.

GRAFFEO, J.:
The United States Court of Appeals for the Second Circuit has asked us a question regarding the scope of long-arm jurisdiction under CPLR 302 (a) (3) (ii) in the context of a federal copyright infringement action.
Plaintiff Penguin Group (USA) is a large trade book publisher with its principal place of business in New York City. Defendant American Buddha is an Oregon not-for-profit corporation whose principal place of business is in Arizona. It operates two Web sites - the American Buddha Online Library and the Ralph Nader Library [FN1] - that are hosted on servers located in Oregon and Arizona.
Penguin commenced this copyright infringement action against American Buddha in the United States District Court for the Southern District of New York, alleging that American Buddha infringed on Penguin's copyrights to four books: "Oil!" by Upton Sinclair; "It Can't Happen Here" by Sinclair Lewis; "The Golden Ass" by Apuleius, as translated by E.J. Kenney; and "On the Nature of the Universe" by Lucretius, as translated by R.E. Latham. The complaint alleges that American Buddha published complete copies of these works on its two Web sites, making them available free of charge to its 50,000 members and anyone with an Internet connection. The electronic copying and uploading of the works was apparently undertaken in Oregon or Arizona.
American Buddha's Web sites assure its users that its uploading of these works and the users' downloading of them do not constitute copyright infringement because they are protected under sections 107 and 108 of the Copyright Act (17 USC § 101 et seq.), which govern fair use and reproduction by libraries and archives. Penguin disputes that any exception to the Copyright Act applies to American Buddha's activities.
American Buddha moved to dismiss the complaint for lack of personal jurisdiction, arguing that its ties to New York were too insubstantial. In response, Penguin asserted that it had secured long-arm jurisdiction over American Buddha by virtue of CPLR 302 (a) (3) (ii), which provides jurisdiction over non-domiciliaries who commit tortious acts outside the state that result in injuries within New York. American Buddha countered that CPLR 302 (a) (3) (ii) was inapplicable because Penguin did not suffer an in-state injury.
The district court granted American Buddha's motion and dismissed the complaint, holding that Penguin was injured in Oregon or Arizona, where the copying and uploading of the books took place. The court determined that Penguin suffered only a "purely derivative economic injury" in New York based on its domicile here, which was insufficient to trigger CPLR 302 (a) (3) (ii). Although the court acknowledged that the Internet could be a complicating factor in analyzing personal jurisdiction, it concluded that the Internet played "no role in determining the situs of [Penguin's] alleged injury" since the claimed infringement occurred in Oregon or Arizona.
Recognizing a split of authority in the New York district courts regarding the application of CPLR 302 (a) (3) (ii) to copyright infringement cases against out-of-state defendants, the Second Circuit certified the following question to us:
"In copyright infringement cases, is the situs of injury for purposes of determining long-arm jurisdiction under N.Y. C.P.L.R. § 302 (a) (3) (ii) the location of the infringing action or the residence or location of the principal place of business of the copyright holder?" (609 F3d 30, 32 [2d Cir 2010]).  The Second Circuit invited this Court to "alter this question as it should deem appropriate" (id. at 42) and noted that, "in the context of certifying a question to the New York Court of Appeals[,] . . . the allegation of distribution over the Internet may be a factor in the Court's interpretation of the statute in question" (id. at 39).[FN2]
Because the Internet plays a significant role in this case, we narrow and reformulate the certified question to read:  In copyright infringement cases involving the uploading of a copyrighted printed literary work onto the Internet, is the situs of injury for purposes of determining long-arm jurisdiction under N.Y. C.P.L.R. § 302 (a) (3) (ii) the location of the infringing action or the residence or location of the principal place of business of the copyright holder?  In answer to this reformulated question and under the circumstances of this case, we conclude it is the location of the copyright holder.
CPLR 302 (a) (3) (ii) allows a court in New York to exercise personal jurisdiction over an out-of-state defendant when the non-domiciliary: "3. commits a tortious act without the state causing injury to person or property within the state, except as to a cause of action for defamation of character arising from the act, if he . . . "(ii) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce."
Consequently, a plaintiff relying on this statute must show that (1) the defendant committed a tortious act outside New York; (2) the cause of action arose from that act; (3) the tortious act caused an injury to a person or property in New York; (4) the defendant expected or should reasonably have expected the act to have consequences in New York; and (5) the defendant derived substantial revenue from interstate or international commerce (see LaMarca v Pak-Mor Mfg. Co., 95 NY2d 210, 214 [2000]). If these five elements are met, a court must then assess whether a finding of personal jurisdiction satisfies federal due process (see id. at 216). The only issue before us concerns the third requirement - whether an out-of-state act of copyright infringement has caused injury in New York.
Penguin, supported by amici curiae American Association of Publishers and other national publishing organizations, argues that a New York-based copyright holder sustains an injury in New York for purposes of CPLR 302 (a) (3) (ii) when its copyright is infringed through the out-of-state uploading of its protected work onto the Internet. American Buddha and amicus curiae Public Citizen respond that this case is controlled by Fantis Foods v Standard Importing Co. (49 NY2d 317 [1980]), where we held that a derivative economic injury felt in New York based solely on the domicile of the plaintiff is insufficient to establish an in-state injury within the meaning of the statute. Both parties raise compelling arguments.
Our analysis begins with Fantis Foods, where we found personal jurisdiction to be lacking in the absence of a "direct injury" within New York. In that case, Standard, a New York wholesaler of feta cheese, asserted a claim for conversion against a Greek entity that had diverted a cheese shipment - meant to be shipped to Standard in Chicago - to a competitor while the shipment was in Greece or on the high seas. We concluded that personal jurisdiction over the Greek defendant did not lie under CPLR 302 (a) (3) (ii) because:  "In final analysis the only possible connection between the claimed conversion and any injury or foreseeable consequence in New York is the fact that Standard is incorporated and maintains offices there. It has, however, long been held that the residence or domicile of the injured party within a State is not a sufficient predicate for jurisdiction, which must be based upon a more direct injury within the State and a closer expectation of consequences within the State than the indirect financial loss resulting from the fact that the injured person resides or is domiciled there" (id. at 326).
In a different commercial tort context, in Sybron Corp. v Wetzel (46 NY2d 197 [1978]), we held that an injury had occurred in New York under CPLR 302 (a) (3) (ii). The defendant in Sybron, a nondomiciliary corporation, hired a former employee of Sybron - a competitor engaged in manufacturing in New York - allegedly to obtain Sybron's protected trade secrets. Recognizing that the locus of injury in commercial cases "is not as readily identifiable as it is in torts causing physical harm" (id. at 205), we determined that Sybron sustained a sufficiently direct injury in New York to support jurisdiction under CPLR 302 (a) (3) (ii) since its claim was based on more than just its in-state domicile. Rather, Sybron had alleged that it acquired the trade secrets at issue in New York and, further, that the defendant's unfair competition threatened to pilfer Sybron's significant New York customers.
Fantis Foods and Sybron both cited favorably to American Eutectic Welding Alloys Sales Co. v Dytron Alloys Corp. (439 F2d 428 [2d Cir 1971]). There, the plaintiffs, two related New York corporations, brought an action against an out-of-state competitor alleging that it induced their employees to work for the competitor and to use confidential information to lure away plaintiffs' customers in Kentucky and Pennsylvania. The Second Circuit identified three options for determining the situs of injury under CPLR 302 (a) (3) (ii) in a commercial tort case: "(1) any place where plaintiff does business; (2) the principal place of business of the plaintiff; and (3) the place where plaintiff lost business" (id. at 433, quoting Spectacular Promotions, Inc. v Radio Station WING, 272 F Supp 734, 737 [ED NY 1967] [Weinstein, J.]). The Court determined that the third choice "seem[ed] most apt," observing that "[t]he place where the plaintiff lost business would normally be a forum reasonably foreseeable by a tortfeasor" (id. [internal quotation marks and citation omitted]). Because plaintiffs alleged a loss of business only in Kentucky and Pennsylvania, the claim against the competitor was dismissed for lack of personal jurisdiction in New York. The Court rejected plaintiffs' reliance on their New York domicile, reasoning that any "derivative commercial injury" predicated on a loss of sales in other states was too remote to establish an in-state injury within the meaning of the statute (id.).
The injury in the case before us is more difficult to identify and quantify because the alleged infringement involves the Internet, which by its nature is intangible and ubiquitous. But the convergence of two factors persuades us that a New York copyright owner alleging infringement sustains an in-state injury pursuant to CPLR 302 (a) (3) (ii) when its printed literary work is uploaded without permission onto the Internet for public access. First, it is clear that the Internet itself plays an important role in the jurisdictional analysis in the specific context of this case. It is widely recognized that "the digital environment poses a unique threat to the rights of copyright owners" and that "digital technology enables pirates to reproduce and distribute perfect copies of works - at virtually no cost at all to the pirate" (House Commerce Comm Rep on the DMCA, HR Rep 551, 105th Cong, 2d Sess, at 25, reprinted in 10 Nimmer on Copyright, Appendix 53, at 37). Indeed, the rate of e-book piracy has risen in conjunction with the increasing popularity of electronic book devices (see Trivedi, Writing the Wrong: What the E-Book Industry Can Learn from Digital Music's Mistakes with DRM, 18 JL & Poly 925, 928 [2010]).
The crux of Penguin's copyright infringement claim is not merely the unlawful electronic copying or uploading of the four copyrighted books. Rather, it is the intended consequence of those activities - the instantaneous availability of those copyrighted works on American Buddha's Web sites for anyone, in New York or elsewhere, with an Internet connection to read and download the books free of charge [FN3] . Unlike American Eutectic, where the locus of injury was clearly circumscribed to two other states, the alleged injury in this case involves online infringement that is dispersed throughout the country and perhaps the world. In cases of this nature, identifying the situs of injury is not as simple as turning to "the place where plaintiff lost business" (American Eutectic, 439 F2d at 433) because there is no singular location that fits that description.
As a result, although it may make sense in traditional commercial tort cases to equate a plaintiff's injury with the place where its business is lost or threatened, it is illogical to extend that concept to online copyright infringement cases where the place of uploading is inconsequential and it is difficult, if not impossible, to correlate lost sales to a particular geographic area. In short, the out-of-state location of the infringing conduct carries less weight in the jurisdictional inquiry in circumstances alleging digital piracy and is therefore not dispositive.
The second critical factor that tips the balance in favor of identifying New York as the situs of injury derives from the unique bundle of rights granted to copyright owners. The Copyright Act gives owners of copyrighted literary works five "exclusive rights," which include the right of reproduction; the right to prepare derivative works; the right to distribute copies by sale, rental, lease or lending; the right to perform the work publicly; and the right to display the work publicly (see 17 USC § 106). Hence, a copyright holder possesses an overarching "right to exclude others from using his property" (eBay Inc. v MercExchange, L.L.C., 547 US 388, 392 [2006] [internal quotation marks and citation omitted]).
Based on the multifaceted nature of these rights, a New York copyright holder whose copyright is infringed suffers something more than the indirect financial loss we deemed inadequate in Fantis Foods. For instance, one of the harms arising from copyright infringement is the loss or diminishment of the incentive to publish or write (see Twentieth Century Music Corp. v Aiken, 422 US 151, 156 [1975]; see also Princeton Univ. Press v Michigan Document Servs., Inc., 99 F3d 1381, 1391 [6th Cir 1996], cert denied 520 US 1156 [1997] ["[P]ublishers obviously need economic incentives to publish scholarly works . . . If publishers cannot look forward to receiving permission fees, why should they continue publishing marginally profitable books at all? And how will artistic creativity be stimulated if the diminution of economic incentives for publishers to publish academic works means that fewer academic works will be published?"]). And, the harm to a plaintiff's property interest in copyright infringement cases "has often been characterized as irreparable in light of possible market confusion" (Salinger v Colting, 607 F3d 68, 81 [2d Cir 2010]).
Moreover, the absence of any evidence of the actual downloading of Penguin's four works by users in New York is not fatal to a finding that the alleged injury occurred in New York [FN4] . In Sybron, we made clear that a tort committed outside the state that was likely to cause harm through the loss of business inside the state was sufficient to establish personal jurisdiction regardless of whether damages were likely recoverable or even ascertainable (see Sybron, 46 NY2d at 204; see also Sung Hwan Co., Ltd. v Rite Aid Corp., 7 NY3d 78, 85 [2006]). Courts often issue injunctive relief in copyright infringement cases to halt impermissible uses because "to prove the loss of sales due to infringement is . . . notoriously difficult" (Salinger, 607 F3d at 81 [internal quotation marks and citation omitted]). In any event, it is undisputed that American Buddha's Web sites are accessible by any New Yorker with an Internet connection and, as discussed, an injury allegedly inflicted by digital piracy is felt throughout the United States, which necessarily includes New York.
In sum, the role of the Internet in cases alleging the uploading of copyrighted books distinguishes them from traditional commercial tort cases where courts have generally linked the injury to the place where sales or customers are lost. The location of the infringement in online cases is of little import inasmuch as the primary aim of the infringer is to make the works available to anyone with access to an Internet connection, including computer users in New York. In addition, the injury to a New York copyright holder, while difficult to quantify, is not as remote as a purely indirect financial loss due to the broad spectrum of rights accorded by copyright law. The concurrence of these two elements - the function and nature of the Internet and the diverse ownership rights enjoyed by copyright holders situated in New York - leads us to view this case as closer to Syb ron than Fantis Foods. Thus, we conclude that the alleged injury in this case occurred in New York for purposes of CPLR 302 (a) (3) (ii).[FN5]
Finally, contrary to American Buddha's assertion, our decision today does not open a Pandora's box allowing any nondomiciliary accused of digital copyright infringement to be haled into a New York court when the plaintiff is a New York copyright owner of a printed literary work. Rather, CPLR 302 (a)
(3) (ii) incorporates built-in safeguards against such exposure by requiring a plaintiff to show that the nondomiciliary both "expects or should reasonably expect the act to have consequences in the state" and, importantly, "derives substantial revenue from interstate or international commerce." There must also be proof that the out-of-state defendant has the requisite "minimum contacts" with the forum state and that the prospect of defending a suit here comports with "traditional notions of fair play and substantial justice," as required by the Federal Due Process Clause (International Shoe Co. v Washington, 326 US 310, 316 [1945] [internal quotation marks and citation omitted]; see also World-Wide Volkswagen Corp. v Woodson, 444 US 286, 291-292 [1980]). These issues are beyond the scope of this certified question and their resolution awaits further briefing before the federal courts.
Accordingly, as reformulated, the certified question should be answered in accordance with this opinion.  * * * * * * * * * * * * * * * * * Following certification of a question by the United States Court of Appeals for the Second Circuit and acceptance of the question by this Court pursuant to section 500.27 of the Rules of Practice of the New York State Court of Appeals, and after hearing argument by counsel for the parties and consideration of the briefs and the record submitted, certified question answered in accordance with the opinion herein. Opinion by Judge Graffeo.  Chief Judge Lippman and Judges Ciparick, Read, Smith, Pigott and Jones concur.
Decided March 24, 2011
Footnotes

Footnote 1: The Ralph Nader Library is not affiliated with Ralph Nader.

Footnote 2: The Second Circuit also stated that "[t]here is a possible question at the threshold that neither the district court nor the parties have addressed and which we do not here decide: whether a copyright - in and of itself an intangible thing - has a physical location for jurisdictional purposes and, if so, what that location is" (609 F3d at 36 n 4). The Second Circuit resolved to "accept for the purposes of this appeal the district court's implicit conclusion that copyrights have a location and that their location in this case is in New York State" (id.). We, too, accept this characterization in answering the certified question.

Footnote 3: Of course, we take no position on the merits of Penguin's claims.

Footnote 4: In its brief, Penguin asserts that its claim is solely against American Buddha and that it is "loath to sue its readers," particularly where they are assured by American Buddha's Web sites that downloading the works contained therein would not constitute copyright infringement.

Footnote 5: We do not find it necessary to address whether a New York copyright holder sustains an in-state injury pursuant to CPLR 302 (a) (3) (ii) in a copyright infringement case that does not allege digital piracy and, therefore, express no opinion on that question (compare McGraw-Hill Cos. v Ingenium Tech. Corp., 375 F Supp 2d 252, 256 [SD NY 2005] ["The torts of copyright and trademark infringement cause injury in the state where the allegedly infringed intellectual property is held"] with Freeplay Music, Inc. v Cox Radio, Inc., 2005 WL 1500896 [SD NY 2005] [holding that personal jurisdiction over a nondomiciliary in a copyright infringement case did not exist because the injury occurred where the alleged out-of-state infringement took place]).

OneBeacon America Insurance Company v Newmont Mining Corporation


Shaub, Ahmuty, Citrin & Spratt, LLP, Lake Success (Timothy
R. Capowski of counsel), for American Home Assurance
Company, Granite State Insurance Company, Insurance Company of
the State of Pennsylvania and National Union Fire Insurance
Company of Pittsburgh, PA, appellants.
Christie Pabarue Mortensen & Young, Philadelphia, PA (Ralph
J. Luongo of the bar of the State of Pennsylvania, admitted pro
hac vice, of counsel), for appellants-respondents,
Clausen Miller P.C., Chicago, IL (Michael Baughman of the bar
of the State of Illinois, admitted pro hac vice of counsel), for
Insurance Company of North America and Century Indemnity
Company, respondents-appellants.
Rivkin Radler LLP, Uniondale (Frank A. Valverde of counsel),
for Allstate Insurance Company, etc., and Fireman's Fund
Insurance Company, respondents.
Tofel & Partners, LLP, New York (Robert L. Tofel and Mark
A. Lopeman of counsel), for Newmont Mining Corporation and
Dawn Mining Company, respondents.
Order, Supreme Court, New York County (Charles Edward Ramos, J.), entered May 15, 2009, which, to the extent appealed from and not hereby rendered academic, granted the motion of defendant Dawn Mining Company to dismiss the complaint as against it for lack of personal jurisdiction, unanimously affirmed, without costs. Order, same court and Justice, entered October 23, 2009, which denied defendant Newmont Mining Corporation's motion to renew its motion to dismiss the action on grounds of forum non conveniens, unanimously reversed, on the law, the motion for renewal granted, and upon renewal, the motion to dismiss on grounds of forum non conveniens granted, without costs. Appeals by OneBeacon America Insurance Company and Stonewall Insurance Company and Continental Casualty Company and the Continental Assurance Company from the order, unanimously withdrawn pursuant to the stipulations of the parties.
With regard to the first order under review, assuming arguendo that New York has general jurisdiction over Newmont, it does not have jurisdiction over Dawn as a mere department of Newmont. As stated in the case on which plaintiffs and the insurer defendants primarily rely, "New York courts regard one factor as essential to the assertion of jurisdiction over a foreign related corporation . . . Th[at] essential factor is common ownership . . . [N]early identical ownership interests must exist before one corporation can be considered a department of another corporation for jurisdictional purposes" (Volkswagenwerk A.G. v Beech Aircraft Corp., 751 F2d 117, 120 [2d Cir 1984]). It is undisputed that Newmont owns only 51% of Dawn and that the other 49% is owned by a corporation independent of Newmont. This does not constitute common ownership (see e.g. Antares Aircraft v Total C.F.P., 1991 WL 19997, *4, 1991 US Dist LEXIS 1511, *10 [SD NY 1991], affd 948 F2d 1275 [2d Cir 1991] [51.8% not enough]; Levy v Plastocks, Inc., 744 F Supp 570, 572 [SD NY 1990] [50% not enough]).
New York does not have long-arm jurisdiction over Dawn pursuant to CPLR 302(a)(1) on the theory that Newmont was acting as Dawn's agent when it purchased the insurance policies at issue (see Insurance Co. of N. Am. v EMCOR Group, Inc., 9 AD3d 319 [2004]). There is no evidence that Dawn exercised control over Newmont with respect to Newmont's purchase of insurance (see Kreutter v McFadden Oil Corp., 71 NY2d 460, 467 [1988]).
The motion court properly exercised its discretion in denying the insurers' request for jurisdictional discovery. As the court noted, the relationship between Newmont and Dawn has been thoroughly explored in a trial in another case. Furthermore, no amount of jurisdictional discovery will change the fact that Newmont owns only 51% of Dawn or that Newmont controlled Dawn, and not the other way around (see generally Putter v North Shore Univ. Hosp., 7 NY3d 548, 554 [2006]).
With regard to the second order under review, Newmont was entitled to renewal of its motion to dismiss on grounds of forum non conveniens. In support of renewal, Newmont presented the new fact that the federal court presiding over the substantially parallel action in the State of Washington had determined not to dismiss or stay that action in favor of this one. Upon consideration of the pendency of the Washington action and all other relevant circumstances, we find that the motion court improvidently exercised its discretion in retaining jurisdiction, since Newmont established that New York is an inconvenient forum (see e.g. Anagnostou v Stifel, 204 AD2d 61 [1994]).
The subject matter of both this action and the Washington action -- insurance coverage for environmental liability relating to a uranium mine (the Midnite Mine) in the State of Washington -- has no substantial connection to New York. Of the 11 insurers seeking to litigate in New York, only three excess insurers, neither of which is a plaintiff, have their principal places of business in New York and only one is a New York corporation. Newmont, the insured, is a Delaware corporation, headquartered in Colorado, which has no offices in New York and has had no presence in New York since 1989. Dawn, the Newmont subsidiary that operated the Midnite Mine, is not even subject to jurisdiction in New York, as discussed above; hence, all interested parties cannot be joined in this action. It is undisputed that, in prior coverage litigation it was held that Colorado law applies to virtually all of the policies at issue. Further, the underlying CERCLA action is being litigated in Washington State federal court, before the same judge presiding over the parallel coverage action.
The Washington federal court is a superior forum for resolution of this coverage dispute because all necessary parties are before that court; by contrast, Dawn, as noted, cannot be compelled to litigate in New York. Accordingly, our responsibility to promote judicial efficiency and to discourage duplicative and piecemeal litigation warrants our deference to the coverage action in Washington.
The superiority of the Washington forum is undiminished by the purported coverage disputes having nothing to do with the Midnite Mine raised by plaintiffs and by one defendant, Insurance Company of North America (INA), in a cross claim. The claims for declaratory relief based on these "disputes", relating to mining activities at three other mines (in California, Arizona and Peru), have no substantial connection to New York, and reduce to little more than notices sent by Newmont's broker, with perfunctory responses by some of the insurers, which then slept languidly for some 10 years before being roused by plaintiffs and INA. Even assuming these alleged disputes are justiciable, they are plainly unrelated makeweights that lend no credence to the notion that there is more to this action than a coverage dispute concerning a mine in Washington. Moreover, the insurers raising these issues have not given us any reason to conclude they could not raise their claims in their responsive pleadings in the Washington action.
In view of the foregoing, Newmont's appeal of the first order under review is rendered academic.