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Coverage Pointers - Volume XII, No. 24

Dear Coverage Pointers Subscribers:

Greetings this week comes from the PLRB/LIRB planning committee meeting in Orlando. It is 93 degrees here today. I have no complaints.

For those following the Medicare set-aside issues, I strongly recommend reading Mike Perley's column in this week's issue. You will also find a disturbing late notice case involving Tower Insurance and very, very interesting SUM case, both highlighted below.

It's already a very busy summer here; there seems to be no slowdown.

History of Memorial Day: (Source: www.usmemorialday.org):

Memorial Day, originally called Decoration Day, is a day of remembrance for those who have died in our nation's service. There are many stories as to its actual beginnings, with over two dozen cities and towns laying claim to being the birthplace of Memorial Day. There is also evidence that organized women's groups in the South were decorating graves before the end of the Civil War: a hymn published in 1867, "Kneel Where Our Loves are Sleeping" by Nella L. Sweet carried the dedication "To The Ladies of the South who are Decorating the Graves of the Confederate Dead" .While Waterloo N.Y. was officially declared the birthplace of Memorial Day by President Lyndon Johnson in May 1966, it's difficult to prove conclusively the origins of the day. It is more likely that it had many separate beginnings; each of those towns and every planned or spontaneous gathering of people to honor the war dead in the 1860's tapped into the general human need to honor our dead, each contributed honorably to the growing movement that culminated in Gen Logan giving his official proclamation in 1868. It is not important who was the very first, what is important is that Memorial Day was established. Memorial Day is not about division. It is about reconciliation; it is about coming together to honor those who gave their all.

Peiper's Perspective:

As all of you who have been reading our bi-monthly missives for the past several years already know, we take great pride in our case reviews and commentary. Understand, of course, that our writes ups are often limited to the facts presented by the Appellate Division's published decision. Where a decision may not provide a complete review of the facts, we may be left without a complete picture. Fortunately, a great deal of our readership are the practitioners involved in the cases we review. Where we do not have the whole story, we invite (and often reach out for) commentary and/or feedback on a particular case that we review.

Recall last issue where we reviewed the curious case of Berger v. 292 Pater. In that case, it appeared that a landlord's motion for summary judgment was denied because co-defendant tenant pointed out that evidence was not submitted as to the sophistication of the parties to a commercial lease. I am advised that, in fact, tenant made no such assertion. Rather, the Court, sua sponte, decided that evidence related to the execution of the lease agreement was necessary in order to establish a contractual indemnity claim.

As we referenced last week, we try to review every contractual indemnity claim that has a bearing on insurance law. In doing so, over the past few years we do not recall a court ever dismissing a motion for contractual indemnification due to a lack of evidence related to the sophistication of the parties to that transaction. Indeed, one would presume that a commercial space with a large retail tenant would be, by their nature, sophisticated entities. We sympathize with defendant's plight in trying to prove that two parties were sophisticated entities engaging in an arm's length transaction. Indeed, as suggested in last week's responses, can a self-serving affidavit of the opposing party feigning ignorance of the terms and conditions of the lease be sufficient to create a question of fact as to "sophistication." We shall see.

In any event, the standard, as they say, "is what it is" at this time. As such, we again remind all practitioners to be cognitive of potential challenges to your position by an opponent, or such as in the case of Berger v. 292 Pater, from the Court.

Shifting directions, I'd like to thank all of you that came out for the NY Bar Associations Annual Spring Insurance Coverage Review. This program, as those of you know who have attended in the past, always attracts a fantastic faculty of presenters (despite your's truly's inclusion), and I am sure was of great use again this year.

I was fortunate enough to have been permitted an opportunity to speak on Emerging Risks in the Insurance Industry. This included the ever increasing introduction of foreign materials into US markets (eg., Chinese Drywall), as well as other developing areas such as green construction. As part of that program, our office developed what I believe to be an excellent power point presentation on green construction risks to the domestic insurance markets. If you're interested getting your hands on a copy, please feel free to drop me a line. Better yet, give us a call and we'd be happy to deliver a copy directly your office (along with smiling faces and a lively discussion). As always, we work for free coffee and the understanding that we will be lavished with compliments. Coffee is negotiable, compliments are not!

Finally, one last note on the training front. Our good friends Lane Finch, Jim Bryan and Lloyd Bernstein have developed a program for DRI focusing on business interruption in the wake of the nuclear disaster in Japan. Specifically, the program entitled "Business Interruption Insurance Coverage and Lessons Applicable to the Japanese Disaster and Other Catastrophes" is set for June 8th, and will be offered through the webinar format. If you are a DRI member, we'd encourage all of you to tune in for that discussion. Lane, Lloyd, and Jim are excellent first party coverage lawyers (from Alabama, North Carolina and Oregon, respectively), and I am certain will provide insightful analysis on emerging trends in business interruption coverage. If you would like more information, again, please do not hesitate to drop me a line or check out the DRI website.

That's it for this week. Oh, one last thing, we review a couple cases below too. Enjoy!

Steve
[email protected]

One Hundred Years Ago today:

As reported in the Lowell (MA) Sun, on May 27, 1911:

$3,000,000 Loss

Most Disastrous Loss in
History of Coney Island Occurred Today

Dreamland Was Completely Wiped Out

Lion Escaped from Attendants and Was Killed by Police
60 Animals Perished in the Fire
The Fire Started in "Hell Gate"


New York - May 27: Coney Island suffered its worst fire disaster in its history earlier today. Dreamland, the largest of its amusement parks, was wiped out, and about four blocks adjoining, covered with booths, restaurants, hotels, moving picture theatres and resorts of various types, were destroyed. The fire broke out at 2:00 AM and was not under control until three hours and a half later. The loss will amount to between $2,000,000 and $4,000,000. In all, about 200 buildings were burned and 2000 persons - concessionaires were turned into the streets homeless and penniless. No lives were lost.

Started in Hell Gate

The fire was discovered in the tarred scaffoldings of "Hell Gate," a scenic railroad, close to the entrance of Dreamland.
Editor's Note: Dreamland was never rebuilt. The Coney Island Museum in Brooklyn has created
Cosmorama of the Great Dreamland Fire, a 360-degree immersive cyclorama commemorating the 100th anniversary of the burning of Dreamland on May 27, 1911. It debuts today. The Brooklyn Eagle website has more information about the fire and commemorative events. Visit at www.brooklyneagle.com and search for Dreamland.

From Audrey Seeley, Queen of No Fault:

It seems this edition that some arbitrators are raising a potential concern over what medical professional is signing the claim form versus who is actually treating the patient. There were no accusations made or adverse finding on that issue against anyone as neither party raised this issue. Instead the issue was properly, independently raised by the arbitrator for discussion but did not appear to be a factor in the decision since the parties were not raising it. Ultimately, the decisions do provide some food for thought....

Also, there is a well-reasoned lost wage decision that is worth a close review when ascertaining whether an applicant is entitled to lost wages due to inability to work from injuries related to the accident vs. job abandonment/voluntary retirement.

DRI's Insurance Law Committee has a webinar scheduled for June 8th titled Business Interruption Insurance Coverage and Lessons Applicable to the Japanese Disaster and Other Catastrophes. A great way to obtain education on an interesting, emerging coverage issue without leaving your desk!! See Steve Peiper's section for more information on how to sign up.

I hope you and your family have a safe and happy Memorial Day Weekend.

Audrey
[email protected]

One Hundred Years ago Today:

Hubert Humphrey was born. For those too young to remember, he served as LBJ's Vice President after serving as a United States Senator from Minnesota. He also lost to Richard Nixon in the 1972 Presidential election.

One Hundred Fifty Years Ago Today:

The United State Supreme Court Justices served as federal circuit court judges as well. On May 27, 1861, Chief Justice Roger Taney, sitting as a circuit court judge, rules that the President did not have the authority to suspend the "privilege of the writ of habeas corpus, even during rebellion. President Lincoln ignored that order, as did his military leadership, under his orders.

This Week's Issue Includes:

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

  • Malpractice Claim Against Law Firm Stands, When it Represented Carrier in Declaratory Judgment Action
  • "Assault and Battery" Exclusion Effective to Deny Coverage to Bar for Assault and Battery Committed by Its Employee on Patron
  • Court Determines Priority of Coverage Between and Among Excess and Umbrella Policies
  • Where Policyholder Receives from All Tortfeasors, a Combined Amount in Excess of Its SUM Limits, It Is Not Entitled to Underinsured Motorist Benefits, Even if One of the Tortfeasors Was Underinsured
  • Second Department Flips: Decides That Term "Resides" Is Ambiguous and Someone Who Doesn't Reside Might in Fact Reside in Residence Premises. Thousands Flee
  • Question of Fact on Insured's Good Faith Belief That It Would Not Be Sued
    Conspiring Against Additional Insured's Carrier May Invoke Anti-Subrogation Rule
  • Late Notice Excused When Neither Pleadings Nor Investigation Revealed Reason to Be Concerned About Liability. "Any Capacity" Exclusion Deemed Ambiguous

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

  • Attending School Encompasses "Substantially All" a School-Age Child's Usual and Customary Activities
  • Unavailability of No-Fault Benefits Adequately Explains Cessation of Physical Therapy Treatment
  • Contemporaneous MRI and Examination, Together with Recent Examination, Defeat Defendant's Motion
  • Affirmation that Further Treatment Would Be Merely Palliative Adequately Explains Cessation of Treatment
  • Plaintiff Fails to Establish Alleged Injuries to Left Knee and Shoulder Are Serious and Causally Related to Accident
  • IME Noting "Subjective" Limitations, but Failing to Explain Basis for That Conclusion, Is Insufficient to Support Motion
  • Plaintiff Defeats Motion Where Defendants Rely on Photographs of Injuries Not in Admissible Form

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

ARBITRATION

  • Unsigned Peer Review Deemed Nullity
  • Chiropractic Care Necessary But Cautionary Word To Applicant On Bills
  • Durable Medical Equipment Denial Upheld As No Rebuttal to Contemporaneous Conclusion That Assignor's Injuries Resolved
  • MRI Denials Upheld Based Upon Peer Review
  • Again, MRI Denials Upheld Based Upon Peer Review
  • Chiropractic Care No Longer Necessary and Related to Maintenance of Weight Lifter's Lifestyle
  • Cervical Injury Resulting In Two Level Fusion Not Causally Related To Accident
  • Walking Off Job and Taking Retirement Does Not Entitle the Applicant To Lost Wages
  • Chiropractic Care Not Necessary But Arbitrator Faced With Troubling Issues From Both Sides

LITIGATION

  • Incorrectly Listing EIP Instead of Plaintiff As Applicant Is a Defective Denial.

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

Property

  • Where the Insured is Placed in a Responsive Position, It May Be Entitled to Counsel Regardless of Where Its Name Appears on the Caption of a Lawsuit

Potpourri

  • Movant Must Establish Lease Was Negotiated at Arm's Length Between Two Sophisticated Entities to Avoid the Application of GOL § 5-321
  • A Contractual Right to Oversee Operations Does Not, Standing Alone, Create Liability Under Labor Law § 200

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

Confirmation of the First Superintendent of the Department of Financial Services

Legislative and Regulatory Review.

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

  • Advertising Injury - Violation of a Person or Organization's Right to Privacy

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

  • Architect's Notice of Large Scale Problems at Construction Site Considered Sufficient Notice of "Circumstance" to Result in Coverage Under "Claims Made" Policy

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

"Red Flags" of Bodily Injury/Personal Injury Fraud

Liening Tower of Perley
Michael F. Perley
[email protected]

DEVELOPMENTS

(Strategies for Effective Defense Handling of Medicare Issues)

AN ONCOMING TRAIN?

Hope you have an enjoyable weekend. Keep our heroes in mind.

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
Liening Tower of Perley
Across Borders


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


05/10/11         Burgund v. ESP Café, Inc
Appellate Division, Second Department
“Assault and Battery” Exclusion Effective to Deny Coverage to Bar for Assault and Battery Committed by Its Employee on Patron
ESP Café (“ESP”), a bar owner, sought defense and indemnity from Hermitage Insurance Company under a CGL policy in connection with a lawsuit commenced against it by one of its patrons.  The policy contained an exclusion for "bodily injury" arising out of an assault and battery.  The patron alleged that he was injured when individuals employed by ESP Café attacked him inside the bar.
Here, Hermitage demonstrated that none of the three causes of action alleged in the personal injury action would exist but for the alleged assault and battery and therefore established an absence of coverage.  Citing to Mount Vernon Fire Ins. Co. v Creative Hous., 88 NY2d 347, the court held that that the assault and battery exclusion was applicable to deny coverage.
Editor’s Note:  Attention underwriters:  “Assault and Battery” exclusions work because they focus on the act rather than the intended result.

05/10/11         Vassar College v. Diamond State Insurance Company
Appellate Division, Second Department
Court Determines Priority of Coverage Between and Among Excess and Umbrella Policies
Vassar College hired the defendant Kirchhoff Construction to perform construction on Vassar-owned property.  Vassar was insured by the United Educators Insurance (“UE”), under both a Primary General Liability Insurance Policy, as well as an Umbrella Liability Insurance Policy.  Kirchhoff had a CGL policy issued by ACE, an umbrella policy issued by Diamond State and an Excess policy issued by Scottsdale.
The trade contract between Vassar and Kirchhoff required Kirchhoff to have Vassar named as an additional insured on its policies.
A Kirchhoff employee, injured on the job, then sued Vassar.  ACE as did UE, under its primary policy.  Diamond and Scottsdale disclaimed coverage on late-notice grounds.
Vassar and UE sought a determination that any coverage issued to Vassar under the UE Umbrella policy was excess to the policies issued by Diamond and Scottsdale.  All other parties cross-moved for determinations on priority.
The Insuring Agreement of the UE umbrella policy provides that coverage under that policy is triggered only after exhaustion of the UE primary policy and "any other insurance available to the Insured."  The policy issued by Diamond provides that Diamond will pay the excess of the "retained limit," which is defined, in pertinent part, as the sum of the underlying insurance provided by the ACE policy (which is primary insurance) and "[o]ther collectible primary insurance".  The UE umbrella policy is not a policy of primary insurance and, in contrast to the language of the Diamond policy, provides that it is not triggered until exhaustion of the UE primary policy and "any other insurance available to the insured" (emphasis added), be it primary or otherwise.
Here, the UE umbrella policy is clearly intended to be excess over the Diamond policy, whereas the Diamond policy contemplated contribution with other excess policies.  Accordingly, the Diamond policy must be exhausted before the UE umbrella policy is triggered.
Because the indemnity obligation under the Scottsdale policy accrues immediately after the Diamond policy is exhausted, the Scottsdale policy must also be exhausted before the UE umbrella policy is triggered.
Editor’s Note:  We were OK with the decision, until the discussion of the Scottsdale policy which, from the little provided here, appears to have been written in excess of any other umbrella or excess policies and perhaps should have been last in line.

05/10/11         Matter of Liberty Mutual Insurance Company v. Walker Appellate Division, Second Department
Where Policyholder Receives from All Tortfeasors, a Combined Amount in Excess of Its SUM Limits, It Is Not Entitled to Underinsured Motorist Benefits, Even if One of the Tortfeasors Was Underinsured
Walker, had an auto policy with Liberty that carrier supplementary uninsured/underinsured motorist (“SUM”) coverage of $100,000.  On August 12, 2005, Walker was a pedestrian when she was struck by a motor vehicle driven by Boris Volodarksy (“Boris”) the driver of the other car.  She notified Liberty of her intention to file a SUM claim.  Walker sued Boris and Verizon Communications, which had trucks parked at the intersection where the accident occurred.
Boris’ carrier agreed to pay Walker the sum of $25,000, and Verizon agreed to pay Walker the sum of $650,000.
When Walker sought permission from the Liberty to settle, Liberty agreed but indicated that since Walker was receiving $100,000 in SUM limits, she no longer had a valid SUM claim.  Walker filed a demand for arbitration and Liberty moved to stay arbitration, claiming that there was no entitlement to SUM benefits.
Boris was an underinsured motorist, and that the appellant was not required to exhaust the coverage limits of all tortfeasors before her entitlement to submit a SUM claim was triggered, provided that she exhausted the full liability limits of at least one tortfeasor.  However, the pertinent issue here is not whether Walker may submit a SUM claim as an initial matter, but whether any additional recovery is possible.  Condition six of the SUM endorsement sets forth the petitioner's maximum payment under that endorsement as the difference between the SUM coverage limit, here $100,000, and the amounts "received by the insured or the insured's legal representative, from or on behalf of all persons that may be legally liable for the bodily injury sustained by the insured."  Here, it is undisputed that Walker received a cumulative total of $675,000 "from or on behalf of all persons that may be legally liable for the bodily injury sustained by the insured," well in excess of her $100,000 SUM coverage limit.  Thus, no further recovery was possible, and arbitration was rendered academic, as there was nothing to arbitrate 

05/10/11         Dean v. Tower Insurance Company
Appellate Division, Second Department
Second Department Flips:  Decides That Term “Resides” Is Ambiguous and Someone Who Doesn’t Reside Might in Fact Reside in Residence Premises.  Thousands Flee
Policyholder insured premises but never moved in, because of termite infestation and necessary remediation.  Was the property a “residence premises” in which he “resides?”  Can someone “reside” in property in which he or she doesn’t live?
“Resides” is ambiguous, sayeth the court.  The term is undefined.  Accordingly summary judgment is denied to the carrier and there has to be a trial on the issue.
Editor’s Note:  Was this the same Second Department who, on April 26th decided the Vela v. Tower case (reported on in the May 15, 2011 edition of Coverage Pointers: 
When Insureds Kept Their Premises Unoccupied, It Does Not Qualify as Their Residence Premises for Homeowners Insurance Claim

05/03/11         Courduff's Oakwood, etc. v. Merchants Mut. Ins. Co.
Appellate Division, Second Department
Question of Fact on Insured’s Good Faith Belief That It Would Not Be Sued
Merchants established that the insured had immediate notice of the accident on the premises but failed to notify it of the accident for 19 months.  Under the circumstances the policyholder raised a question as to whether it had a good faith belief that no lawsuit would be commenced against it.
Editor’s Note:  Poorly reasoned.  If there was an accident on the premises and the insured knew that a claim COULD be brought against it, notice should be given.

05/03/11         Homeland Insurance Company v. National Grange
Appellate Division, Second Department
Conspiring Against Additional Insured’s Carrier May Invoke Anti-Subrogation Rule
Olde Post Mall Apartments, (“Olde”) owned an apartment complex.  It entered into a contract with Asset Property (“Asset”) to manage it.  Olde agreed to indemnify Asset Property against personal injury claims in connection with the property unless the injury was caused by Asset's negligence, in which case Asset Property would indemnify Olde.  Olde was also required to carry liability insurance and include Asset Property as an insured under its policy.
Olde obtained a liability insurance policy from Homeland which provides that Asset, as a real estate manager, is an insured under the policy. Asset Property obtained its own liability insurance policy from the defendant National Grange.
Coon was injured and sued Olde and Asset when he slipped on a ramp on the premises.  Homeland picked up the defense of both. Later, Homeland sought an determination that Nation Grange was a primary co-insurer of Asset.  Grange denied, Homeland settled and then brought this action seeking half of the defense and indemnity payments.
The court found that National Grange established that the anti-subrogation rules preclude the claim against it.  The antisubrogation rule provides that "[a]n insurer . . . has no right of subrogation against its own insured for a claim arising from the very risk for which the insured was covered.  "Public policy requires this exception to the general rule [of subrogation] both to prevent the insurer from passing the incidence of loss to its own insured and to guard against the potential for conflict of interest that may affect the insurer's incentive to provide a vigorous defense for its insured."
Here, National Grange established that Homeland handled the defense of its insureds in the underlying action in a way to favor its own insured, Olde Post, at the expense of its other insured, Asset Property, by not vigorously pursuing a defense on behalf of Asset Property.  By doing so, Homeland created a conflict between its interests and the interests of its insured, and attempted to shift the loss of its insured to another insurer, National Grange.

05/03/11         Merchants Mutual Ins. Co. v. Rutgers Casualty Ins. Co.
Appellate Division, Second Department
Late Notice Excused When Neither Pleadings Nor Investigation Revealed Reason to Be Concerned About Liability. “Any Capacity” Exclusion Deemed Ambiguous
Tanachion, an electrical subcontractor, was an additional insured under a policy issued by Rutgers.  By submitting the summons and complaint in the underlying action, which did not contain any facts to suggest Tanachion might be held liable for the injuries sustained by Alan Andrade, the plaintiff in the underlying action, and the affidavit of Tanachion's vice-president, Fred Tanachion, who averred that Tanachion was not aware of any potential liability for Andrade's alleged injuries until March 2007, Tanachion demonstrated that it had a good faith belief in nonliability which was reasonable under the circumstances and, therefore, excused its delay in notifying Rutgers Casualty of the underlying accident.
The phrase contained in the exclusion—"for which any insured may become liable in any capacity"—may reasonably be interpreted to refer to either the "bodily injury" Andrade allegedly sustained, as urged by Rutgers Casualty, or to the services Andrade was rendering at the time of the accident, as maintained by Tanachion.  Thus, insofar as the exclusionary language is applied to one subcontractor's potential liability for injuries sustained by an employee of another subcontractor working independently at the same job site, it is not susceptible of only one meaning and, therefore, the exclusion is ambiguous as a matter of law.  As such, the disputed exclusionary clause must be construed against the insurer, Rutgers Casualty.


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


05/24/11         Torres v. Dwyer
Appellate Division, First Department
Attending School Encompasses “Substantially All” a School-Age Child’s Usual and Customary Activities

And here, young Steven’s 90/180-day claim fails because he missed only one week of school following the accident.  Even though it was alleged that post-accident headaches impacted his ability to concentrate and made it more difficult for him to do his homework, there was no evidence that his grades were adversely impacted. 

His claim under the fracture or permanent injury category also fails because his bill of particulars never made any mention of a lost tooth or loosened/fractured teeth.  That claim, therefore, was not before the court.  However, if the claim had been properly before the court, injury to a tooth only meets the threshold if it requires treatment.  Here, Steven’s lost tooth was a “baby-tooth” which was replaced by an adult tooth.  In addition, there was no evidence that the dental implants he later received were causally related to the two teeth allegedly loosened and/or fractured in the accident.

05/17/11         Dennis v. New York City Transit Authority
Appellate Division, First Department
Unavailability of No-Fault Benefits Adequately Explains Cessation of Physical Therapy Treatment

In support of their motion, defendants submitted affirmed reports of an orthopedist and a neurologist that provided the requisite information, including the tests performed, and concluded that plaintiff’s range-of-motion was normal and that any injuries had resolved. 
In opposition, plaintiff submitted affirmed reports of a radiologist who found bulging and herniated discs in the cervical and lumbar spine, and contemporaneous and recent findings revealing significant range-of-motion limitations.  Plaintiff also adequately explained that he ceased physical therapy treatment when no-fault benefits were no longer available to pay for the treatment.  However, his deposition testimony and bill of particulars defeated his 90/180-day claim.  As a result, the trial court’s grant of summary judgment to defendants was modified to deny the motion except with regard to the 90/180-day claim.

05/10/11         Park v. He Jung Lee
Appellate Division, Second Department
Contemporaneous MRI and Examination, Together with Recent Examination, Defeat Defendant’s Motion
While defendant submitted competent medical evidence establishing that plaintiff’s alleged injuries to her cervical and lumbar spine were neither serious nor causally related to the accident, plaintiff raised a triable issue of fact by submitting affirmed reports from her radiologist who performed MRIs soon after the accident and observed herniated discs at multiple levels.  Plaintiff also submitted the affirmation of her treating physician who read the radiologist’s reports, examined plaintiff’s cervical and lumbar spine both contemporaneously and recently, performing range-of-motion testing each time, and noting significant limitations each time.  The physician concluded that plaintiff sustained certain permanent injuries caused by the accident.  Her physician also explained that plaintiff ceased treatment because further treatment would have been only palliative.  Therefore, on appeal, the trial court’s grant of summary judgment to defendant was reversed.

05/10/11         Mazil v. Quinones
Appellate Division, Second Department
Affirmation that Further Treatment Would Be Merely Palliative Adequately Explains Cessation of Treatment
In opposition to defendants’ motion, plaintiffs submitted an affirmation of the treating physician who affirmed the truth of his “initial examination report,” which was also submitted.  He examined the injured plaintiff numerous times and each time noted significant range-of-motion limitations.  He also explained that plaintiff ceased treatment because it would have been merely palliative.  This was sufficient to raise triable issues of fact under the permanent consequential and/or significant limitation of use categories and defendants’ motion should not have been granted.

05/10/11         Dunbar v. Prahovo Taxi, Inc.
Appellate Division, Second Department
Plaintiff Fails to Establish Alleged Injuries to Left Knee and Shoulder Are Serious and Causally Related to Accident
In a decision with no details as to the evidence submitted, the court found Defendants meet their burden by submitting competent medical evidence showing that plaintiff did not suffer a serious injury to his left knee, and that the injury to the left shoulder was not causally related to the accident.  They also established that plaintiff did not sustain a serious injury under the 90/180-day category.  As plaintiff failed to rebut, the trial court is reversed and summary judgment granted to defendants.

05/10/11         Artis v. Lucas
Appellate Division, Second Department
IME Noting “Subjective” Limitations, but Failing to Explain Basis for That Conclusion, Is Insufficient to Support Motion
In support of his motion, defendant relied on an IME in which the examining doctor noted significant range-of-motion limitations of plaintiff’s lumbar spine, but opined that the limitations were subjective.  He failed, however, to explain or substantiate the basis for his conclusion with any objective medical evidence which rendered the IME report insufficient to support defendant’s motion and should have resulted in the denial of defendant’s motion.

05/10/11         Azevedo v. Platform Taxi Service, Inc.
Appellate Division, Second Department
Plaintiff Defeats Motion Where Defendants Rely on Photographs of Injuries Not in Admissible Form
Defendants submitted photographs of plaintiff’s alleged injuries in support of their motion which were not in admissible form.  Without the photographs, defendants’ remaining submissions were insufficient to support their motion and the trial court’s denial was affirmed without need to consider plaintiff’s opposing papers.

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


ARBITRATION
05/23/11         Elite Medical Supply of NY, LLC v. GEICO Ins. Co.
Arbitrator Thomas J. McCorry, Erie County
Unsigned Peer Review Deemed Nullity

The Applicant sought reimbursement for a cervical traction unit which was denied by an unsigned peer review.  The assigned arbitrator determined the denial was not proper as an unsigned peer review was a nullity and lacked probative value to meet the insurer’s burden of persuasion on lack of medical necessity. 

05/23/11         Dudzik Chiropractic PC v. State Farm Mut. Auto. Ins. Co.
Arbitrator Thomas J. McCorry, Erie County
Chiropractic Care Necessary But Cautionary Word to Applicant on Bills

The Applicant sought reimbursement of chiropractic treatment rendered to the assignor from an October 24, 2002, accident.  It was noted that the assignor had a prior accident and work injury which complicated her treatment and diagnosis from the October 2002, accident.

The insurer denied the treatment based upon an IME conducted by Chiropractor Ribakove.  The assigned arbitrator did uphold the denials as Chiropractor Ribakove’s opinion was that chiropractic care was not helping the assignor.  The assigned arbitrator determined that this fell short of the requirement that the treatment not be medically necessary.

Finally, the assigned arbitrator also issued a cautionary word to the Applicant:

The S.O.A.P. notes submitted in support of the claim were somewhat confusing.  They are all on the stationery of Dudzik Chiropractic P.C., but the signature is illegible on all copies.  The reason I raise that issue is, that Dr. Ribakove, the IME chiropractor, refers to the treating chiropractor as Dr. Braun.  Since this was not raised as an issue by the Respondent, I will move on.  I do caution the Applicant however, that the treating chiropractor is the individual who should be signing the submitted bills and not the employer, if that be the case.

[NOTE:  It is proper for an arbitrator to independently raise any issue that he or she deems relevant to making an award that is consistent with the Insurance Law and department regulations under 11 NYCRR §65-4.5(o)(1).]

05/20/11         RS Medical v. Allstate Property and Cas. Ins. Co.
Arbitrator Thomas J. McCorry, Erie County
Durable Medical Equipment Denial Upheld as No Rebuttal to Contemporaneous Conclusion That Assignor’s Injuries Resolved

The Applicant sought reimbursement for a dispensed inferential unit and muscle stimulator with conductive garment prescribed by Dr. Boris Tsatkis.  The insurer denied the claim based upon the IME of Dr. Marvin Winell.

Dr. Winell’s examination revealed full range of motion in the cervical and lumbar spine despite the assignor’s complaints of neck and back pain.  The neurological examination was normal.  The impression was resolved strain.  Thus, orthopedic and durable medical equipment were not necessary.

The assigned arbitrator upheld the denial.  He reasoned that the Applicant did not submit any medical record except Dr. Winell’s report.  Also, Dr. Winell’s report was roughly contemporaneous with the prescription for the durable medical equipment.  The Applicant did not rebut Dr. Winell’s conclusions as required by some courts and arbitrators.

05/20/11         Proscan Radiology Buffalo v. GEICO Ins. Co.
Arbitrator Kent L. Benziger, Erie County
MRI Denials Upheld Based Upon Peer Review

The Applicant sought reimbursement for a cervical and lumbar spine MRI conducted less than two months post accident.  The insurer denied the diagnostic study based upon the peer review of Dr. Robert Sohn. 

Dr. Sohn concluded that the assignor’s complaints of numbness and paresthesia was attributed to a vertebral subluxation and not disc pathology.  Dr. Sohn relied upon sources which indicated that such testing should be limited to individuals with symptomatic radiculopathy for no less than four to six weeks.  Also, another source determined no basis to conduct an cervical MRI until at least three months unless there was a serious injury or ongoing neurological abnormality.

With regard to the lumbar spine, Dr. Sohn relied upon an article that stated an MRI is recommended for an individual with persistent low back pain who is a surgical candidate.

The assigned arbitrator determined that denials were proper as Dr. Sohn’s opinion was more persuasive.  He noted that the treating chiropractor, Daniel Cox, D.C.’s, notes did not document any thorough exam with objective findings of persistent neurological deficits.

05/20/11         Proscan Radiology Buffalo v. GEICO Ins. Co.
Arbitrator Kent L. Benziger, Erie County
Again, MRI Denials Upheld Based Upon Peer Review

The Applicant sought reimbursement for a cervical and lumbar spine MRI conducted a little over a month post accident.  The insurer denied the diagnostic study based upon the peer review of Kevin Portnoy, DC.  Mr. Portnoy opined that based upon multiple authoritative sources the MRIs were not medically necessary.  Further, Mr. Portnoy opined that there were no records to indicate any positive neurological or orthopedic findings indicative of disc pathology.

The assigned arbitrator found the peer review to be persuasive, noting that the treating chiropractor, John Ward, D.C.’s, notes were deficient.  Specifically, the reports did not document a thorough examination with objective findings.

05/19/11         Dudzik Chiropractic PC v. State Farm Mut. Auto. Ins. Co.
Arbitrator Thomas J. McCorry, Erie County
Chiropractic Care no Longer Necessary and Related to Maintenance of Weight Lifter’s Lifestyle

The Applicant’s assignor was involved in a motor vehicle accident and admitted he lost one day of work.  The assignor had received chiropractic care since grade school.  This is because the assignor was a life long weight lifter. 

The insurer denied chiropractic care based upon the IME of Louis Marconi, D.C.  Mr. Marconi opined that the assignor was a life long weight lifter in excellent shape.  He had resolved cervical and upper thoracic strain as well as asymptomatic cervical disc herniations.  Mr. Marconi concluded that no chiropractic treatment was necessary as his current treatment was attributed to his lifestyle activities and not injuries from the accident.  The assigned arbitrator upheld the denial and found the IME report to be persuasive.

05/18/11         Applicant v. Travelers Prop. Cas. Ins. Co.
Arbitrator Mary Anne Theiss, Onondaga County
Cervical Injury Resulting in Two Level Fusion not Causally Related to Accident

The Applicant was involved in a February 14, 2008, accident wherein she hit her head, chest and neck.  She claimed to have numbness and tingling in her arms.  The Applicant believed the numbness and tingling was related to her shoulder lipoma, which pre-existed the accident. 

The Applicant treated at the emergency room post accident for low back pain.  She never reported neck injuries after the accident.  Later, the Applicant complained to a treating physician that her arm and shoulder were painful to which the physician advised was attributed to a neck problem and not her lipoma.

By October 2008, the Applicant treated with Dr. Bilicki who felt she had a recurring lipoma but her current shoulder and neck pain with radiation into the arms was attributed to her neck and not the lipoma.  The Applicant was referred for an orthopedic consultation and in January 2009 underwent a two level cervical decompression with fusion.

The insurer denied that the Applicant’s treatment to her neck was causally related to the accident.  The insurer pointed to the absence of the Applicant indicating any neck injury after the accident.  The Applicant advised she was treating for her back.  The Applicant had not made a lost wage claim and had resigned from her job at a pharmacy.  The treating records indicate a diagnosis of lumbosacral degeneration.  Further, the initial treatment for the Applicant’s neck pain appeared to be paid by her private health insurer.

The assigned arbitrator indicated that the insurer’s denial was justified based upon the evidence and testimony.

05/18/11         Applicant v. Peerless Ins. Co.
Arbitrator Mary Anne Theiss, Onondaga County
Walking Off Job and Taking Retirement Does not Entitle the Applicant to Lost Wages

The Applicant sought a little over one year of lost wages from a December 16, 2009, accident.  The Applicant returned to work post accident but was only able to perform light duty work.  The Applicant’s job required him to move heavy equipment.  His employer was not able to honor the light duty work recommendations by the Applicant’s physician.

On March 1, 2010, the Applicant was attempting to perform his work when he was in too much pain and told his employer that he was done.  He never told his employer he walked off the job because of injuries from the accident.  The Applicant never applied for unemployment benefits.  The Applicant began receiving Social Security retirement in June 2010, which he applied for three days after he walked off the job.

The assigned arbitrator upheld the insurer’s denial of lost wages as she determined that the Applicant voluntarily placed himself into retirement and quit his job.

05/13/11         Daniel Cox DC PC v. GEICO Ins. Co.
Arbitrator Thomas J. McCorry, Erie County
Chiropractic Care not Necessary But Arbitrator Faced with Troubling Issues from Both Sides

The Applicant’s assignor was involved in a July 14, 2008, accident and came under the care of Mr. Cox’s practice.  At the arbitration, Thomas Skraitz, DC testified that he was employed by the practice as an associate chiropractor.  Mr. Skraitz testified that he treated the assignor.  The assigned arbitrator found troubling that while Mr. Skraitz testified he treated the assignor the health insurance claims forms were not signed by him.  Rather, they were electronically signed by Mr. Cox as the treating chiropractor.  Further, the S.O.A.P. notes bore illegible signatures.  However, two re-evaluation forms also contained the electronic signature of Mr. Cox.  The assigned arbitrator seemed to be the only one to raise the concern, which gets addressed later in the decision.

The actual issue raised by the insurer was a “misleading” IME performed by Maria Zalone, DC that was included in Applicant’s evidence.  The assigned arbitrator concluded that the Applicant or its counsel requested the exam.  The insurer’s issue with the exam was that it was a deliberate attempt to mislead the claims handler to continuing payments.

The response from the Applicant’s counsel was a complaint about the entire IME system and the insurer’s alleged routine practice of flying in examiners from the City for a quick exam to inevitably deny further treatment.

[We surmise the assigned arbitrator stepped in at this point.]

The assigned arbitrator addressed the issue by stating:

…it demeans the No-Fault system, when Applicants for there (sic) own expediency, have the services performed by one health care professional and signed off by another. I can only guess at how many rules and regulations are violated by that practice.

As to the industry practice of having New York City health professionals perform purportedly Independent Examinations in Buffalo, I can only say that is a factor I give weight to in assessing and evaluating a report.

Then the assigned arbitrator returned to the actual dispute – was the insurer’s denial based upon two IMEs sufficient.  It was noted that both were performed by New York City or New Jersey health professionals.  Despite their home base, the assigned arbitrator thought that their reports and opinions were more persuasive.  It seems that while Mr. Skraitz was straight forward with the assigned arbitrator it was troubling that he was not listed on any of the insurance claim forms as a treating chiropractor.

LITIGATION

05/17/11         NYU Hosp. for Joint Diseases a/a/o Racquel Uviles v. Country Wide Ins. Co. 
Appellate Division, Second Department
Incorrectly Listing EIP Instead of Plaintiff As Applicant Is A Defective Denial

The plaintiff established it’s prima facie case entitlement to summary judgment through the submission of its billing forms and an affidavit of its third-party biller.  The insurer did not properly oppose the motion or establish its entitlement to judgment in its cross-motion as the denials incorrectly listed the EIP as the applicant for the benefits instead of Plaintiff.  Thus the denial was defective.


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


05/19/11         Tower Risk Management v Ni Chunp Hu
Appellate Division, First Department
Waiver of Subrogation Means What It Says
Defendant Hu entered into a lease agreement with non-party Gila Bitchatcho which contained a subrogation clause that, by its terms, was only triggered where both parties’ insurance policies contained a waiver of subrogation provision.  In seeking to proceed with a subrogation action, Tower argued that defendant Hu’s policy contained a limited waiver of subrogation provision.  As such, Tower maintained that the waiver of subrogation clause found within the Hu/Bitchatcho lease was unenforceable.  Accordingly, Tower argued that it was entitled to proceed. 

The First Department, on the other hand, held that Hu’s policy did not limit the waiver of subrogation.  Accordingly, the instant case was barred by operation of the Hu/Bitchatcho lease.

---Although it may not have worked, we applaud the creativity

 

05/12/11         Georgia v. Urbanski
Appellate Division, Third Department
Question of Fact as to Plaintiff Being the Sole Proximate Cause of His Injuries
Mr. Georgia was injured when, during the course of his employment, he fell after the ladder he was standing on “kicked out.”  Plaintiff thereafter commenced the instant action seeking judgment under Labor Law § 240(1).  The instant appeal resulted from plaintiff’s motion for partial summary judgment seeking to establish Labor Law § 240(1) liability. 

Plaintiff wins, right?  Not so fast sayeth the Trial Court.  To that end, the Trial Court, and later affirmed by the Third Department, found that question of fact existed as to whether the plaintiff was provided with an adequate safety device and that he, for no good reason, chose not to use it. 

In so holding the court noted that plaintiff fell after he placed a ladder on an icy surface outside of the structure being constructed. However, non-party witnesses testified that no work was to be performed outside of the structure upon which plaintiff was working.  Indeed, plaintiff was seen just prior to the accident working on the inside of the structure.  As such, the Court reasoned that the finder of fact could have determined that plaintiff’s unilateral decision to take the ladder outside of a proper work area was the sole proximate cause of his injuries.

-While we applaud the decision, pardon us as we remove our jaw from the floor!

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


Confirmation of the First Superintendent of the Department of Financial Services
On May 24, 2011, Benjamin M. Lawsky was unanimously confirmed by the Senate to be the first Superintendent of the Department of Financial Services.  The Department of Financial Services was created as part of the 2011-12 Budget.  The Department of Insurance and the Banking Department will be merged together as the new Department of Financial Services (DFS) with the goal of reducing costs and remaining a leader in the regulation of the banking and insurance industries. 
            Last week I was fortunate to attend the Senate Insurance Committee meeting during which Superintendent Lawsky answered questions regarding his past experience and his plans and visions for the new DFS.  Superintendent Lawsky is currently Governor Cuomo’s Chief of Staff and had previously worked as a Deputy Counselor and Special Assistant in the New York Attorney General’s Office and as an Assistant United States Attorney in the Southern District of New York.  During his time in these positions, Superintendent Lawsky was involved in the prosecution of securities fraud, organized crime and terrorism cases and was also involved in the probes into the student loan industry and Wall Street bonuses.
            During the committee meeting, Superintendent Lawsky indicated that one of the goals and priorities of the new DFS will be to try to reduce the fraud that occurs within the no-fault system.  As we all know, this is a serious issue for the industry and Superintendent Lawsky has indicated that this will remain a priority for the new Department.
            And speaking of no-fault reform…The last section of the proposed changes to the no-fault regulation are below.
Legislative and Regulatory Review.
Regulation 68-D Arbitration
Procedures for Arbitration

  • The methods of transmitting the documents to AAA must also be used in transmitting the documents to the insurer, unless the insurer requires documents via an alternate method.
  • All items on the no-fault arbitration request form must be completed in full, including itemization of bills and other attachments.  Failure to complete the form fully may result in administrative closure of the case by the designated organization.
  • Previously the draft stated the date the insurer provides the documents will be the date the documents are mailed, delivered or electronically transmitted.  This was DELETED.
  • The provision requiring an additional $100 fee during conciliation of case that is resolved 20 days prior to filing for arbitration has been added back in.

65-4.3 No-Fault Arbitration Procedure

  • The designated organization must notify the parties in writing that a dispute has been transmitted to arbitration.
  • An adjournment fee of $100 is payable to the designated organization by the party causing any adjournment within four calendar days prior to the scheduled hearing.
  • Any party shall either represent itself or be represented by an attorney.  Deleted was the provision that an insurer may be represented by an employee but a designated employee of the assignee may only present evidence in lieu of and on behalf of the assignee.

65-4.4 Limitation on Attorney’s Fees

  • The maximum fee is now $2,000.
  • The minimum fee is $60 but cannot exceed the total amount of first-party benefits and any additional first-party benefits for each applicant or assignee per arbitration or court proceeding.

65-4.9 Mandatory Arbitration Under Section 5105 of the Insurance Law

  • An assertion by an insurer of a defense of lack of coverage of an alleged covered person on any grounds is subject to mandatory arbitration to determine if a coverage issue applies.  However, any controversy between insurers involving the responsibility or obligation to pay first-party benefits (i.e. priority) is not considered a coverage question and is required to be submitted to mandatory arbitration.

MVAIC was DELETED.


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


05/12/11         Cynosure, Inc. v. St. Paul Fire and Marine Ins. Co.
United States Court of Appeals for the First Circuit – Massachusetts
Advertising Injury – Violation of a Person or Organization’s Right to Privacy
Plaintiff, Cynosure is the defendant in an underlying civil action charging it with the responsibility for sending commercial fax messages “without consent from the recipients” in violation of the Telephone Consumer Protection Act, 47 U.S.C. §227(b)(1)(C) [the “Act”].   The question to be answered is whether Cynosure committed an advertising injury as that term is defined in the St. Paul policies.  St. Paul denied coverage for “making known to any person or organization covered material that violates a person’s right of privacy”.  St. Paul issued a coverage position letter which explained that the policy language applies “where an insured makes known to others covered material that violates some other person’s right of privacy”, but not in the circumstances of the underlying action which alleges that the recipient of a fax had thereby suffered injury to privacy of his own.

The issue which the court was charged with resolving was whether an the invasion of privacy covered under a commercial general policy as an advertising injury means an individual or organization has a right to go undisturbed by commercial intrusion – and therefore, liability under the Act; or, privacy as free from disclosure to a third-party recipient of information that the subject of the disclosure claims an interest in not having divulged.

The district court relying on the case of Terra Nova Ins. Co. v. Fray-Witzer, 449 Mass. 406 (2007), found in favor of coverage.  The policy issued in Terra Nova covered advertising liability for “publication of material that violates a person’s right of privacy.”  The court applied the common rule that ordinary, plain meaning governs the analysis of insurance contract terms, along with the corollary that ambiguity in the language as it would be understood by an ordinary insured is construed in favor of coverage.  Because the court found the term “right of privacy” to be ambiguous (as to the alternatives of intrusion and disclosure) in the insurers’ policies, it held that liability for violating the Act was covered.

The First Circuit, however, after analyzing the Terra Nova decision opined that the Terra Nova Court did not mean that the “making known” policies here would be treated as similar to “publication” policies, with the consequence that Massachusetts law was a clean slate on the issue to be determined.  The First Circuit went on to make its best guess about the issue based on the familiar principles of insurance contract interpretation that the Commonwealth follows.

Initially, the Court looked at the policy language.  In doing so the Court found significant differences between the clause at issue in Terra Nova and the one in the St. Paul policies.  The St. Paul policies include not only its description of advertising injury as occurring by making certain material known, but its identification of the recipient of such material as a “person or organization”.  The Court determined that by distinguishing “person” and “organization” and providing that a covered advertising injury occurs when an insured makes known to an “organization” some material that violates a “person’s” right of privacy, the policy provision describes a communication to a recipient (organization) that violates the right of a non-recipient third party (person).  The Court went on to state that since a mere intrusion does not violate any right of a non-recipient, in practical terms this means that the communication to the recipient violates the non-recipient’s right of privacy only if it is a communication about the non-recipient.   Therefore, in order to give rise to tort liability for violating the third party’s right of privacy, the material communicated must therefore reveal some fact the third party reasonably wished to keep others from being told.  Simply stated, the content of the material communicated (revealing something about a third party) is necessary for a covered violation of a right of privacy.  Such is not the basis for liability incurred by sending faxes in violation of §227(b)(1)(C) of the Telephone Consumer Protection Act.


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


5/16/11           Praetorian Ins. Co. v. DMHZ Corp.
Supreme Court, New York County
Court Grants Plaintiff’s Interpleader Motion AQnd Discharges It From All Liability 
On February 24, 2009, a fired occurred at a premises owned by defendant resulting in multiple deaths and personal injuries.  Thereafter, three lawsuits were brought against defendant.  Upon receipt of each suit, defendant tendered its defense to plaintiff, its liability insurer. 

Plaintiff, understanding that its $1 million insurance policy would not cover all of the claims against defendant, brought an interpleader action.  It sought an order permitting it to pay into the court, or a designated person, or to retain to the credit of this action, the $1 million proceeds of the subject policy along with a discharge of liability and payment of its costs, disbursements, and expenses, including attorneys’ fees, charged against the amount deposited. 

Defendant’s primary opposition in this action was that plaintiff’s duty to defend cannot be discharged until judgment or settlement.  However, the court reasoned that plaintiff’s obligations end when it has used up the applicable limit of insurance in the payment of judgments or settlements.  Further, defendant argued, pursuant to CPLR 1006(f), that plaintiff could not be discharged until “the time for all parties to plead has expired.”  In other words, since the three year statute of limitations had not expired, the time to plead had not expired.  Again, the court disagreed and read this requirement to mean only that discharge was conditioned upon plaintiff notifying all tenants of the subject premises of this action.  This interpretation was consistent with the public policy of distributing insurance proceeds in an equitable manner, rather than simply paying judgment creditors in the order that the judgments were entered until exhaustion. 

Lastly, and in the most interesting part of the decision, the court granted costs, disbursements and attorneys’ fees for bringing and prosecuting this interpleader action.  The court stated that the commencement of this action “comports with the spirit and intendment of CPLR 1006 that an interpleader action by a stakeholder is to be encouraged in order to protect such a party from multiple adverse claims to the fund[s]” at issue.  

5/10/11           Brother Jimmy’s BBQ, Inc. v. American Intl. Group, Inc.
Supreme Court, New York County
Where Grounds for Disclaimer Are Readily Apparent, 38-Day Delay In Denying Coverage Is Late
On March 29, 2008, Lauren Sclafani was severely injured at a Brother Jimmy’s restaurant when a bartender poured Bacardi 151 onto the surface of the bar and lit it on fire, at which point the alcohol combusted and exploded and engulfed her in flames.  Ms. Sclafani spent four weeks in the Cornell burn center.  

Four days after the accident, Brother Jimmy’s placed its primary commercial general liability carrier on notice of the accident.  The primary carrier began investigating and, by June 9, 2008, it discovered the severity of the assault charges against the bartender and the extent of Ms. Sclafani’s injuries. 
Thereafter, on November 21, 2008, Ms. Sclanfani commenced an action.  Approximately 11 days later, the primary carrier placed defendant, the excess carrier, on notice of the loss.  Upon receipt of the claim, the excess carrier conducted further investigation to determine when Brother’s Jimmy’s became aware of the accident and/or the alleged seriousness of the injuries.   On January 9, 2009, it disclaimed coverage based on late notice. 

In this motion for summary judgment, the excess carrier contended that coverage was vitiated by Brother Jimmy’s failure to provide timely notice of the accident.   In response, Brother Jimmy’s asserted that the excess carrier’s 38-day delay in disclaiming coverage was untimely as a matter of law.

In considering this motion, the court did not even discuss when Brother Jimmy’s learned about the nature and extent of Ms. Sclafani’s injuries; rather, it determined, as an initial matter, that the grounds for the disclaimer were readily apparent upon receipt of first notice.  According to the court, in dismissing the excess carrier’s argument, there was no merit to the excess carrier’s claim that “[o]nly after [it] undertook an investigation of the seriousness of the claim did the facts forming the basis for its late notice defense become apparent.”   

4/29/11           MTA Bus Co. v. Zurich Am. Ins. Co.
Supreme Court, New York County
Court Determines that MTA Bus Qualifies As An Additional Insured Where the Contract Required that MTA Including its Subsidiaries And Affiliates be Named
This matter arises out of a collision between a bus, operated by an employee of MTA Bus, and equipment and workers.  Prior to the collision, Triborough Bridge and Tunnel Authority entered into a contract with American Bridge to perform repairs on the Martin Parkway Bridge.  The contract required American Bridge to procure and maintain insurance naming “Triborough Bridge and Tunnel Authority and the Metropolitan Transportation Authority including its subsidiaries and affiliates” as additional insureds. 

American Bridge obtained a primary from Zurich Am. Ins. Co. and an excess insurance policy from American Home Assurance.  The Zurich policy included as an insured “any person or organization whom you are required to add as an additional insured on this policy under a written contract or written agreement.” 

The first issue that arose was whether MTA Bus qualified as an additional insured.  The court reasoned that by the contract’s terms American Bridge agreed to provide insurance for MTA as a whole, “including its subsidiaries.”  Thus, as MTA Bus was a subsidiary of the MTA, they were entitled to additional insured coverage.

The next issue was that liability coverage to the additional insured was limited to “bodily injury” resulting from American Bridge’s negligence or American Bridge’s ongoing operations or “work” performed for MTA Bus.  According to the court, as the underlying accident involved injuries and damages resulting from a collision involving workers and equipment at the American Bridget work site, it injuries resulted in part from American Bridge’s “ongoing operations.”  Further, American Bridge performed its work for MTA when it performed work for MTA’s subsidiary, Triborough Bridge and Tunnel Authority.  Moreover, according to the court, while American Bridge did not perform its work at MTA Bus’s request, it did perform the work for MTA Bus insofar as MTA Bus regularly operated its vehicles over the bridge and thus would benefit from American Bridge’s work.

Lastly, since Zurich was required to provide MTA Bus liability coverage, and the American Home policy included as an insured, anyone covered under the underlying policy, so too was American Home Assurance.

3/30/11           Matter of Progressive Ins. Co. v. Herschberg
Supreme Court, Nassau County
Court Grants Temporary Stay Of Arbitration And Orders Framed Hearing To Consider Whether Respondent Breached His Policy In Light Of Photographs and Statements Contained On His Facebook Page That Were Inconsistent with His EUO Testimony
Progressive moved to stay arbitration of an uninsured motorist claim brought by respondent, March Herschberg, pending the competition of discovery.  The court granted the petition, and Mr. Herschberg submitted to an examination under oath.  During this examination, Mr. Herschberg asserted that as a result of the motor vehicle accident and resulting knee injury he was unable to work, had difficulty walking and was unable to lift heavy object.   

After Mr. Herschberg’s EUO, Progressive then moved to permanently stay arbitration asserting that coverage for the subject UIM claim was vitiated by Mr. Herschberg’s breach of the insurance contract.  Specifically, Progressive stated that he misrepresented material facts at his EUO in violation of the “Fraud or Misrepresentation” portion of his policy.  Progressive further asserted that his testimony was belied by photographs posted on the publicly available portions of his facebook account.  The photographs showed him engaged in various activities, including, standing on top of a pool slide, climbing a ladder and bending over a boat trailer.  In fact, one of the photographs was entitled “Another day of play…I gotta get a job!”  In addition, Progressive further included text statements from Mr. Herschberg’s account that further called his claims into question. 

As an initial matter, the court determined that this was an issue for it to decide, not an arbitrator.  It then reasoned that coverage issues, including the question of whether or not Mr. Herschberg breached the policy, were for the court to resolve.  While the court refused to grant a permanent stay of arbitration, based on the discrepancy between Mr. Herschberg’s EUO testimony and the postings found in his Facebook account, the court found an issue of fact warranting a framed issue hearing.  Thus, the court granted a temporary stay of arbitration pending the outcome of the hearing.  In addition, while staying arbitration, it refused to grant further discovery, including an additional EUO and “unlimited access” to Mr. Herschberg’s private Facebook account.  That court indicated that this discovery was unwarranted at this time, insofar as the demand was overly broad, and there was no showing that the material sought was necessary and not cumulative. 

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

“Red Flags” of Bodily Injury/Personal Injury Fraud

  • No police report (or minimal police report) of the accident.
  • Police report lists and mentions no personal injuries.
  • No claim is made for automobile repairs, even though injury claims are filed.
  •  The accident is a rear-end-collision caused by a sudden, unjustified stop by claimant’s vehicle or a third vehicle.
  • Claimant refuses or delays diagnostic procedures to verify injuries.
  • Claimant skips appointments with medical providers and therapists.
  • Many claimants submit medical bills from the same doctor or medical mill.
  • Medical bills are only photocopies of originals.  Examine for forgeries or alterations.
  • Claims are made by passengers, but the accident report lists no or fewer passengers.
  • The attorney involved is frequently involved in questionable cases and insurance claims.
  • Medical provider is referred by attorney or vice versa.
  • Medical reports contain inconsistent accounts of the accident, impacts or injuries.
  • Medical reports indicate no history of prior conditions, but preexistence of medical conditions and other injuries is obvious (i.e., scoliosis, arthritis, neuropathy, carpal tunnel, prior trauma injury, etc.).
  • Psychiatric claim is submitted after original claim involved only trauma.
  • Treatment for soft tissue injuries begins within one week of the accident.
  • Claimant cannot recall names of medical providers, clinic, clinic location, or treatment received.
  • Extensive medical treatment associated with minor collision based on poorly diagnosed and/or subjective soft tissue injuries.  [Low Impact Soft Tissue (“LIST”) case].
  • Summary medical bills are submitted without the dates and details of visits and treatments.
  • Does medical care and treatment extend for lengthy periods with no interim reports or billings?
  • Claimant wants to provide wage and medical verifications, but not direct authorizations.  Injury, wage and expense information is funneled through claimant’s attorney.

 

Liening Tower of Perley
Michael F. Perley
[email protected]

DEVELOPMENTS

(Strategies for Effective Defense Handling of Medicare Issues)

AN ONCOMING TRAIN?

                        In our last issue I noted that there may have been a light at the end of the tunnel, however, the light may have been an oncoming train.  Unfortunately, it appears that the light I saw was in fact a freight train heading directly at liability insurance carriers.  Of course I refer to the recent decision by Judge David C. Bury (USDJ - District of Arizona) in Haro v. Sebelius, and just as I was writing my article, I received an alert.  Rights and Responsibilities (RAR) and Demand Letters have been temporarily suspended while the letters are under review – presumably because of the Haro decision.

 

District of Arizona court holds that attorneys are not responsible under the Medicare Secondary Payer Act to reimburse Medicare creating a direct pathway to the liability insurers.

 

CMS SUSPENDS RAR AND DEMAND LETTERS

Haro v. Sebelius involves a suit by Medicare beneficiaries that essentially raised two issues: first, whether the government can require repayment under the Medicare Secondary Payer Act before the correct amount has been administratively determined based upon a beneficiary appeal or application for waiver; and two, whether the government can hold plaintiffs’ attorneys financially responsible.  The court answered both questions no. 

While it is understandable that the court would not allow interest to be charged on Medicare reimbursement where there is a dispute over the amount to which Medicare is entitled, the remaining aspects of the court’s decision are troubling.  The court precluded collection of interest where there is an application for a waiver; essentially, an equitable request to the government to reduce the amount of reimbursement based upon issues of liability or other factors. 

Far more troubling is the court’s decision that plaintiffs’ attorneys are not responsible for repayment if they transmit the money to their clients and their clients spend it before making any reimbursement.  In so holding the court noted that “Congress never expressly made attorneys responsible for reimbursement” even though that section refers to “an entity that receives payment from a primary plan.”  Clearly, attorneys receive payments from a primary plan; however, the court’s reasoning is that when the predecessor statute listed examples it did not list attorneys.  Further, the court noted that the attorneys’ fees amount to procurement costs for the proceeds and, therefore, this differentiates attorneys from other entities that would have received payment, such as doctors (who may have actually received a double recovery).  Rather, the court points directly at insurance carriers stating, “Importantly, the regulation expressly provides the appropriate course of action for the Secretary: if the beneficiary or other party receives a third-party payment and does not reimburse Medicare, the third-party payer must reimburse Medicare even though it has already reimbursed the beneficiary…Congress expressly allocated this burden to the third-party liability payer that makes its payment to a party other than Medicare when it is, or should be aware that Medicare has made a conditional payment.”

In the end, the court did find that under the disciplinary rules in the State of Arizona attorneys had an ethical obligation to maintain funds where there was a dispute to whom the funds should be paid; however, the important note is that under the Medicare statute this court conveniently excluded plaintiffs’ attorneys from collection efforts by the government.

The decision highlights what we have mentioned in previous articles, that issues regarding reimbursement of Medicare must be brought up early and often in the course of litigation.  Since the reimbursement obligation applies to settlements and judgments, Medicare plays an important role in the discussion either during settlement negotiations or during the trial.

We also caution our friends who practice in states that have prompt payment statutes.  Unless Medicare is an integral part of the discussion, the plaintiff may be able to enforce payment of interest on a settlement when there is a dispute over Medicare.  The protection of insurance carriers’ interests in these cases is becoming increasingly more difficult and requires careful attention to detail.

Apparently, as a result of the Haro decision, CMS has temporarily suspended the issuance of Rights and Responsibility letters and Demand Letters.  It is unclear how much time will pass before these letters are resumed.  It is our understanding that the conditional payment process is suspended in cases where no RAR letter was issued.  That process will continue in cases where an RAR letter has been issued but a final demand letter will not be provided until further notice.

If you have any questions regarding these issues, feel free to give me a call or drop me an e-mail at [email protected]. I would be happy to discuss them with you.

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

04/26/11         Schmitz v. Great American Assurance Company
Missouri Supreme Court

Excess Insurer’s Policy Did Not Require Primary Policy to be Exhausted in the Form of Cash Payment Where the Primary Insurer Settled for Less Than Its Limits
Wrongful death action brought against owner of portable rock wall and owner of minor league baseball team. Parents of decedent settled with owner of portable rock wall for $700,000. Suit against baseball team continued on theory that baseball team was vicariously liable for the actions of the rock wall owner, because baseball team exclusively possessed and controlled the premises where the rock wall was operated. The primary carrier provided coverage of $1.0 million and the excess carrier’s policy provided excess coverage of $4.0 million. The primary and excess insurers denied they had a duty to defend or indemnify based on exclusion for injuries sustained in the use of an amusement device.

The parents entered into a Section 537.065 agreement with the baseball team stipulating that if judgment was entered against the baseball team, they would limit their recovery to the insurance policies. The issues of the baseball team’s liability and damages were submitted to the trial court for determination. The parents introduced evidence of damages and the liability of the baseball team, who did not object nor did it offer any defense. The court entered judgment in the amount of $4,508,076. The parents then filed an equitable garnishment action against the insurers to recover the judgment from the insurance policies. The equitable garnishment judge found that the exclusion in the primary policy did not apply because the rock climbing wall was not an amusement device. The primary insurer settled with the parents for $700,000 and the parents agreed to release their claims against the primary insurer to the full extent of the policy limits of $1.0 million. In the equitable garnishment action against the excess carrier, the equitable garnishment court concluded the underlying judgment was not reasonable and reduced the damages to $2.2 million. The garnishment court further found that the excess policy did not cover the $2.2 million judgment because the primary policy was not exhausted to its $1.0 million limit. Missouri has long recognized that parties to an insurance contract are free to define when an underlying insurance policy is exhausted so that the excess insurer’s obligation to pay is triggered. The parties disputed whether the excess carrier’s duty to indemnify arose when the primary carrier actually paid the full amount of its policy limits. Excess carrier argued that language in its policy- “exhausted solely by payment of “loss”- mandates that the underlying limits of insurance must be fully exhausted by cash payment before it is obligated to pay.

The Missouri Supreme Court disagreed because the language cited by the excess carrier was preceded by the phrase, “if the ‘Underlying Limits of Insurance’…are either reduced or exhausted solely by payment of ‘loss.’” This contemplates that the underlying limits may be reduced rather than exhausted. The limits of insurance clause further refers to “’loss that is within the “Underlying Limits of Insurance” which the insured has agreed to fund by self-insurance or means other than insurance.” The Court held this language indicates the policy recognizes that the limits of the underlying insurance may be fulfilled by something other than insurance, and expressly contemplates a settlement by the primary insurer consisting of a $700,000 payment and a $300,000 release, totaling $1.0 million. There is no ambiguity in the policy and the excess policy contains no requirement that the underlying limits of insurance must be exhausted. The Missouri Supreme Court further held that the garnishment court erred in determining the reasonableness of the underlying judgment. The Section 537.065 agreement was not a settlement between plaintiff and the baseball team and did not determine the issue of liability and damages. It simply limited the collection of any judgment to the insurance policies. The issues of liability and damages were determined by the trial court at a hearing after receiving evidence. Thus, there was no basis for the garnishment court to determine the reasonableness of the judgment. Had the Section 537.065 agreement incorporated terms of a settlement which admitted liability and the amount of damages, then the excess carrier would have the right to question the reasonableness of the settlement in the garnishment action.
Submitted by: Ted L. Perryman, Roberts Perryman P.C., St. Louis, MO
REPORTED DECISIONS
Courduff's Oakwood, etc. v. Merchants Mut. Ins. Co.


Milber Makris Plousadis & Seiden, LLP, Woodbury, N.Y. (Lorin
A. Donnelly of counsel), for appellant.
Curtis, Vasile P.C., Merrick, N.Y. (Roy W. Vasile of counsel),
for respondent.

DECISION & ORDER
In an action for a judgment declaring that the defendant is obligated to defend and indemnify the plaintiff in an underlying action entitled Molion v Courduff's Oakwood Road Gardens & Landscape Company, pending in the United States District Court for the Eastern District of New York under civil index number 07-01168, the defendant appeals, as limited by its brief, from so much of an order of the Supreme Court, Suffolk County (Baisley Jr., J.), dated August 18, 2010, as denied its cross motion for summary judgment declaring that it is not obligated to defend or indemnify the plaintiff in the underlying action.
ORDERED that the order is affirmed insofar as appealed from, with costs.
Where an insurance policy requires that notice of an occurrence be given "as soon as practicable," notice must be given within a reasonable time in view of all of the circumstances (Great Canal Realty Corp. v Seneca Ins. Co., Inc., 5 NY3d 742, 743 [internal quotation marks omitted]; see Ponok Realty Corp. v United Natl. Specialty Ins. Co., 69 AD3d 596, 597; 120 Whitehall Realty Assoc., LLC v Hermitage Ins. Co., 40 AD3d 719, 721; Genova v Regal Mar. Indus., 309 AD2d 733, 734). "The insured's failure to satisfy the notice requirement constitutes a failure to comply with a condition precedent which, as a matter of law, vitiates the contract'" (Great Canal Realty Corp. v Seneca Ins. Co., Inc., 5 NY3d at 743, quoting Argo Corp. v Greater N.Y. Mut. Ins. Co., 4 NY3d 332, 339; see Ponok Realty Corp. v United Natl. Specialty Ins. Co., 69 AD3d at 597; Sputnik Rest. Corp. v United Natl. Ins. Co., 62 AD3d 689). "[C]ircumstances may exist that will excuse or explain the insured's delay in giving notice, such as a reasonable belief in nonliability" (Genova v Regal Mar. Indus., 309 AD2d at 734; see Great Canal Realty Corp. v Seneca Ins. Co., Inc., 5 NY3d at 743-744; Ponok Realty Corp. v United Natl. Specialty Ins. Co., 69 AD3d at 597; C.C.R. Realty of Dutchess v New York Cent. Mut. Fire Ins. Co., 1 AD3d 304, 305). The burden of demonstrating the reasonableness of the excuse lies with the insured (see Ponok Realty Corp. v United Natl. Specialty Ins. Co., 69 AD3d at 597; Genova v Regal Mar. Indus., 309 AD2d at 734).
In general, the existence of a good faith belief that the injured party would not seek to hold the insured liable, and the reasonableness of such belief, are questions of fact for the fact-finder (see Ponok Realty Corp. v United Natl. Specialty Ins. Co., 69 AD3d at 597; Genova v Regal Mar. Indus., 309 AD2d at 734; C.C.R. Realty of Dutchess v New York Cent. Mut. Fire Ins. Co., 1 AD3d at 305). Nevertheless, summary judgment may be awarded to the insurer if, construing all inferences in favor of the insured, the evidence establishes, as a matter of law, that the insured's belief in nonliability was unreasonable or in bad faith (see Ponok Realty Corp. v United Natl. Specialty Ins. Co., 69 AD3d at 597; 120 Whitehall Realty Assoc., LLC v Hermitage Ins. Co., 40 AD3d at 721; Genova v Regal Mar. Indus., 309 AD2d at 734).
Here, the defendant established its prima facie entitlement to judgment as a matter of law by demonstrating that the plaintiff had immediate notice of the accident and resulting injury that occurred on its premises but failed to notify the defendant of this occurrence until 19 months later (see Ponok Realty Corp. v United Natl. Specialty Ins. Co., 69 AD3d at 597; St. james Mech., Inc. v Royal Sun Alliance, 44 AD3d 1030). Consequently, the burden shifted to the plaintiff to raise a triable issue of fact as to whether there existed a reasonable excuse for its delay in notifying the defendant (see Ponok Realty Corp. v United Natl. Specialty Ins. Co., 69 AD3d at 597). Under the circumstances here, construing all inferences in favor of the plaintiff, the plaintiff raised a triable issue of fact as to whether its delay in giving notice of the occurrence to the defendant was reasonably founded upon a good faith belief that no lawsuit would be commenced against it (see Klersy Bldg. Corp. v Harleysville Worcester Ins. Co., 36 AD3d 1117; Jordan Constr. Prods. Corp. v Travelers Indem. Co. of Am., 14 AD3d 655; see also Merchants Mut. Ins. Co. v Hoffman, 56 NY2d 799; Sphere v Drake Ins. Co. v Aspen Tree Specialists, 234 AD2d 358, 359). Accordingly, the Supreme Court properly denied the defendant's cross motion for summary judgment declaring that it was not obligated to defend or indemnify the plaintiff in the underlying action.
Homeland Insurance Company v. National Grange

Costello, Cooney & Fearon, PLLC, Syracuse, N.Y. (Christina F.
DeJoseph and James Gascon of counsel), for appellant.
Curtis, Vasile, P.C., Merrick, N.Y. (Patricia M. D'Antone of
counsel), for respondent.

DECISION & ORDER
In an action for a judgment declaring that the defendant is obligated to pay a proportionate share of the defense and settlement costs incurred by the plaintiff in an underlying action entitled Coon v Olde Post Mall Apartments, pending in the Supreme Court, Dutchess County, under Index No. 234/04, the defendant appeals, as limited by its brief, from so much of an order of the Supreme Court, Suffolk County (Costello, J.), entered January 12, 2010, as denied, as untimely, its cross motion for summary judgment.
ORDERED that the order is reversed insofar as appealed from, on the law and in the exercise of discretion, with costs, the defendant's cross motion for summary judgment is granted, and the matter is remitted to the Supreme Court, Suffolk County, for the entry of a judgment declaring that the defendant is not obligated to pay a proportionate share of the defense and settlement costs incurred by the plaintiff in the underlying action.
The owner of an apartment complex, Olde Post Mall Apartments (hereinafter Olde Post), entered into a contract with Asset Property Services, Inc. (hereinafter Asset Property), to manage the apartment complex. Pursuant to the contract, Olde Post agreed to indemnify Asset Property against personal injury claims in connection with the property unless the injury was caused by Asset Property's negligence, in which case Asset Property would indemnify Olde Post. Olde Post was also required to carry liability insurance and include Asset Property as an insured under its policy. Olde Post obtained a liability insurance policy from the plaintiff Homeland Insurance Company of New York (hereinafter Homeland), which provides that Asset Property, as a real estate manager, is an insured under the policy. Asset Property obtained its own liability insurance policy from the defendant National Grange Mutual Insurance Company (hereinafter National Grange).
In August 2004 Vernon Coon commenced a personal injury action against Olde Post and Asset Property alleging that he sustained injuries when he slipped and fell on a wooden ramp while delivering an appliance at the apartment complex. Homeland assigned counsel to represent both Olde Post and Asset Property as its insureds under its policy. National Grange, notified by Asset Property of the claim, communicated with Homeland and assigned counsel, and was assured that Homeland's policy was primary and National Grange's policy was excess. In April 2005, near the completion of discovery in the underlying action, Homeland determined that National Grange was a primary co-insurer of Asset Property and requested National Grange to contribute to the defense and potential settlement on behalf of Asset Property. National Grange refused to contribute as a primary insurer. Homeland then settled the underlying action on behalf of both Olde Post and Asset Property to the limits of its policy and commenced this action seeking a declaration that National Grange is obligated to pay one half of the defense and settlement costs made on behalf of Asset Property. Homeland moved for summary judgment, and National Grange cross-moved for summary judgment. The Supreme Court denied the motion, concluding that Homeland failed to establish its prima facie entitlement to judgment as a matter of law, and denied the cross motion as untimely.
The Supreme Court improvidently exercised its discretion in denying, as untimely, National Grange's cross motion for summary judgment. While the cross motion was made more than 120 days after the note of issue was filed and, therefore, was untimely (see Brill v City of New York, 2 NY3d 648), "an untimely motion or cross motion for summary judgment may be considered by the court where, as here, a timely motion for summary judgment was made on nearly identical grounds" (Grande v Peteroy, 39 AD3d 590, 591-592; see Whitehead v City of New York, 79 AD3d 858, 860; Lennard v Khan, 69 AD3d 812, 814; Bressingham v Jamaica Hosp. Med. Ctr., 17 AD3d 496, 497). In such circumstances, the issues raised by the untimely cross motion are already properly before the motion court and, thus, the nearly identical nature of the grounds may provide the requisite good cause (see CPLR 3212[a]) to review the merits of the untimely cross motion (see Grande v Peteroy, 39 AD3d at 592). Notably, a court, in deciding the timely motion, may search the record and award summary judgment to a nonmoving party (see CPLR 3212[b]).
The Supreme Court, therefore, should have entertained National Grange's cross motion for summary judgment and, upon addressing the merits of that cross motion, should have granted it. The antisubrogation rule provides that "[a]n insurer . . . has no right of subrogation against its own insured for a claim arising from the very risk for which the insured was covered" (North Star Reins. Corp. v Continental Ins. Co., 82 NY2d 281, 294; see Pennsylvania Gen. Ins. Co. v Austin Powder Co., 68 NY2d 465, 471; Romano v Whitehall Props., LLC, 59 AD3d 697, 698). "Public policy requires this exception to the general rule [of subrogation] both to prevent the insurer from passing the incidence of loss to its own insured and to guard against the potential for conflict of interest that may affect the insurer's incentive to provide a vigorous defense for its insured" (North Star Reins. Corp. v Continental Ins. Co., 82 NY2d at 294-295).
Here, National Grange established its entitlement to judgment as a matter of law by demonstrating that the policies underlying the antisubrogation rule are implicated by Homeland's handling of the defense of its insureds in the underlying action. Homeland fashioned the litigation to favor its insured, Olde Post, at the expense of its other insured, Asset Property, by not vigorously pursuing a defense on behalf of Asset Property and having the same attorney represent both Olde Post and Asset Property. By doing so, Homeland created a conflict between its interests and the interests of its insured, and attempted to shift the loss of its insured to another insurer, National Grange (see North Star Reins. Corp. v Continental Ins. Co., 82 NY2d at 295-296; Alinkofsky v Country-wide Ins. Co., 257 AD2d 70, 73-74; National Cas. Co. v State Ins. Fund, 227 AD2d 115, 116-117; National Union Fire Ins. Co. of Pittsburgh, Pa. v State Ins. Fund, 213 AD2d 164, 165-166). Accordingly, pursuant to the antisubrogation rule, Homeland cannot recover from its insured, Asset Property, through Asset Property's insurer, National Grange, for any potential liability on the part of Asset Property in connection with the underlying action (see Insurance Co. of Evanston v. Mid-Hudson Co-op. Ins. Co., 271 AD2d 651, 652; Maryland Cas. Co. v Nationwide Ins. Co., 262 AD2d 458, 459; cf. National Union Fire Ins. Co. of Pittsburgh, Pa. v Hartford Ins. Co. of Midwest, 248 AD2d 78, 85-86, affd 93 NY2d 983).
Since this is a declaratory judgment action, the matter must be remitted to the Supreme Court, Suffolk County, for the entry of a judgment declaring that National Grange is not obligated to pay a proportionate share of the defense and settlement costs incurred by Homeland in the underlying action (see Lanza v Wagner, 11 NY2d 317, appeal dismissed 371 US 74, cert denied 371 US 901).
Merchants Mutual Ins. Co. v. Rutgers Casualty Ins. Co.

Bivona & Cohen, P.C., New York, N.Y. (Elio M. DiBerardino,
Anthony J. McNulty, and Michael C. Modansky of counsel), for appellant.
Russo, Scamardella & D'Amato, P.C., Staten Island, N.Y.
(Michael V. Gervasi of counsel), for
respondent.

DECISION & ORDER
In an action, inter alia, for a judgment declaring that the defendant Rutgers Casualty Insurance Co. is obligated to defend and indemnify the defendant Tanachion Electrical Contracting, Inc., as a third-party defendant in an underlying personal injury action entitled Andrade v American Parkinson Disease Assoc., Inc., commenced in the Supreme Court, Richmond County, under Index No. 103640/05, the defendant Rutgers Casualty Insurance Co. appeals, as limited by its brief, from so much of an order and judgment (one paper) of the Supreme Court, Richmond County (Minardo, J.), dated March 11, 2010, as granted that branch of the motion of the defendant Tanachion Electrical Contracting, Inc., which was for summary judgment declaring that it is obligated to defend and indemnify the defendant Tanachion Electrical Contracting, Inc., as a third-party defendant in the underlying action, denied its cross motion for summary judgment declaring that it was not so obligated, and declared that the defendant Rutgers Casualty Insurance Co. is obligated to defend and indemnify the defendant Tanachion Electrical Contracting, Inc., as a third-party defendant in the underlying action.
ORDERED that the order and judgment is affirmed insofar as appealed from, with costs.
The insured, Tanachion Electrical Contracting, Inc. (hereinafter Tanachion), an electrical subcontractor, established, prima facie, that the insurer, Rutgers Casualty Insurance Co. (hereinafter Rutgers Casualty), was obligated to defend and indemnify Tanachion in an underlying personal injury action, pursuant to the terms of a commercial general liability insurance contract. By submitting, inter alia, the summons and complaint in the underlying action, which did not contain any facts to suggest Tanachion might be held liable for the injuries sustained by Alan Andrade, the plaintiff in the underlying action, and the affidavit of Tanachion's vice-president, Fred Tanachion, who averred that Tanachion was not aware of any potential liability for Andrade's alleged injuries until March 2007, Tanachion demonstrated that it had a good faith belief in nonliability which was reasonable under the circumstances and, therefore, excused its delay in notifying Rutgers Casualty of the underlying accident (see White v City of New York, 81 NY2d 955, 957; Merchants Mut. Ins. Co. v Hoffman, 56 NY2d 799, 802). In response, Rutgers Casualty failed to raise a triable issue of fact as to whether Tanachion failed to notify it as soon as was practicable (see Merchants Mut. Ins. Co. v Hoffman, 56 NY2d 799).
Rutgers Casualty also failed to raise a triable issue of fact as to whether the policy's "Exclusion of Injury to Employees, Contractors and Employees of Contractors" (hereinafter the exclusion) excluded coverage for Andrade's accident, which occurred at a work site in the course of Andrade's employment for a glazing subcontractor. The phrase contained in the exclusion—"for which any insured may become liable in any capacity"—may reasonably be interpreted to refer to either the "bodily injury" Andrade allegedly sustained, as urged by Rutgers Casualty, or the services Andrade was rendering at the time of the accident, as maintained by Tanachion. Thus, insofar as the exclusionary language is applied to one subcontractor's potential liability for injuries sustained by an employee of another subcontractor working independently at the same job site (cf. U.S. Underwriters Ins. Co. v Affordable Housing Foundation, Inc., 256 F Supp 2d 176, affd 88 Fed Appx 441[2d Cir]), it is not susceptible of only one meaning and, therefore, the exclusion is ambiguous as a matter of law (see Computer Assoc. Intl., Inc. v U.S. Balloon Mfg. Co., Inc., 10 AD3d 699). As such, the disputed exclusionary clause must be construed against the insurer, Rutgers Casualty (see Ace Wire & Cable Co. v Aetna Cas. & Sur. Co., 60 NY2d 390, 398).
The parties' remaining contentions are without merit.
Accordingly, that branch of Tanachion's motion which was for summary judgment was properly granted, Rutgers Casualty's cross motion for summary judgment was properly denied, and the Supreme Court properly declared that Rutgers Casualty is obligated to defend and indemnify Tanachion as a third-party defendant in the underlying action.
Artis v. Lucas


Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y.
(Robert D. Grace of counsel), for appellant.
Louis Grandelli, P.C., New York, N.Y. (Leigh D. Eskenasi 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, Kings County (Jacobson, J.), dated November 9, 2010, which denied his 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 defendant failed to meet his prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In support of his motion, the defendant relied upon, inter alia, the affirmed medical report of Dr. Alan M. Crystal. When this doctor examined the plaintiff in February 2010, he noted significant limitations in the range of motion of the lumbar region of the plaintiff's spine (see Ortiz v Orlov, 76 AD3d 1000, 1001; Cheour v Pete & Sals Harborview Transp., Inc., 76 AD3d 989; Smith v Hartman, 73 AD3d 736; Leopold v New York City Tr. Auth., 72 AD3d 906). Although Dr. Crystal indicated that the limitations noted were subjective in nature, he failed to explain or substantiate the basis for his conclusion that the noted limitations were self-imposed with any objective medical evidence (see Iannello v Vazquez, 78 AD3d 1121; Granovskiy v Zarbaliyev, 78 AD3d 656; cf. Perl v Meher, 74 AD3d 930; Bengaly v Singh, 68 AD3d 1030, 1031; Moriera v Durango, 65 AD3d 1024, 1024-1025; Torres v Garcia, 59 AD3d 705, 706; Busljeta v Plandome Leasing, Inc., 57 AD3d 469).
Since the defendant failed to meet his prima facie burden, it is unnecessary to determine whether the plaintiff's papers submitted in opposition were sufficient to raise a triable issue of fact (see Iannello v Vazquez, 78 AD3d at 1121; Ortiz v Orlov, 76 AD3d at 1001; Bengaly v Singh, 68 AD3d at 1031; Coscia v 938 Trading Corp., 283 AD2d 538).
Azevedo v. Platform Taxi Service, Inc.

Skenderis & Cornacchia, P.C., Long Island City, N.Y. (Louis T.
Cornacchia and Louis Thomas Cornacchia III of counsel), for
appellants.
Mitchel H. Ashley, New York, N.Y., for respondents.

DECISION & ORDER
In an action to recover damages for personal injuries, etc., the defendants appeal from an order of the Supreme Court, Kings County (Battaglia, J.), dated June 23, 2010, which denied their motion for summary judgment dismissing the complaint on the ground that the plaintiff Sheryl Azevedo did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is affirmed, with costs.
The defendants failed to meet their prima facie burden of showing that the injured plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In support of their motion, the defendants submitted certain photographs depicting the injured plaintiff's alleged injuries. However, the photographs were not in admissible form (cf. Lewis v General Elec. Co., 145 AD2d 728, 729). Without the photographs, the defendants' other submissions in support of their motion for summary judgment were insufficient to establish, prima facie, the defendants' entitlement to judgment as a matter of law (see Rulison v Zanella, 119 AD2d 957, 957-958; Prieston v Massaro, 107 AD2d 742, 743; Savage v Delacruz, 100 AD2d 707, 707-708; see also Slater v Town of Rochester, 31 AD2d 590; cf. Sidibe v Cordero, 79 AD3d 536, 536; Baker v Thorpe, 43 AD3d 535, 537; Hutchinson v Beth Cab Corp., 207 AD2d 283, 283-284; Edwards v DeHaven, 155 AD2d 757, 758; Koppelmann v Lepler, 135 AD2d 507).
Since the defendants failed to meet their prima facie burden, it is unnecessary to consider whether the plaintiffs' papers in opposition to the defendants' motion were sufficient to raise a triable issue of fact (see Coscia v 938 Trading Corp., 283 AD2d 538).
Dunbar v. Prahovo Taxi, Inc.


Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y.
(Stacy R. Seldin of counsel), for appellants.
Bamundo, Zwal & Schermerhorn, LLP, New York, N.Y. (Ben
Bartolotta 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 (Rosengarten, J.), entered November 19, 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, who allegedly sustained certain injuries to his left knee and left shoulder as a result of the subject motor vehicle accident, 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 defendants submitted competent medical evidence establishing that the alleged injuries to the plaintiff's left knee did not constitute a serious injury within the meaning of Insurance Law § 5102(d) (see Staff v Yshua, 59 AD3d 614) and, in any event, were not caused by the subject accident (see Pamphile v Bastien, 61 AD3d 659, 660; Mohamed v Siffrain, 19 AD3d 561, 562). The defendants also submitted competent medical evidence establishing that the alleged injuries to the plaintiff's left shoulder were not caused by the subject accident (see Singh v City of New York, 71 AD3d 1121, 1122). Finally, the defendants established that the plaintiff's alleged injuries did not prevent the plaintiff from performing substantially all of the material acts constituting his customary daily activities during at least 90 of the first 180 days following the accident (see Ranford v Tim's Tree & Lawn Serv., Inc., 71 AD3d 973).
In opposition, the plaintiff failed to raise a triable issue of fact as to whether the alleged injuries to his left knee constituted a serious injury within the meaning of Insurance Law § 5102(d) (see McLoud v Reyes, 82 AD3d 848) and as to whether the alleged injuries to his left shoulder were caused by the subject accident (see Singh v City of New York, 71 AD3d at 1122). Finally, he failed to raise a triable issue of fact as to whether he sustained a serious injury under the 90/180-day category of Insurance Law § 5102(d) as a result of the subject accident (see Jean v Labin-Natochenny, 77 AD3d 623, 624).
Accordingly, the Supreme Court should have granted the defendants' motion for summary judgment dismissing the complaint.
Mazil v. Quinones


Carey S. Bernstein, P.C. (James M. Sheridan, Jr., Garden City, N.Y.,
of counsel), for appellants.
James G. Bilello & Associates, Westbury, N.Y. (Patricia
McDonagh of counsel), for respondent Israel
Quinones.
Cheven, Keely & Hatzis, New York, N.Y. (William B. Stock of
counsel), for respondent Marsene
Collington.

DECISION & ORDER
In an action to recover damages for personal injuries, etc., the plaintiffs appeal from an order of the Supreme Court, Kings County (Jacobson, J.), dated June 28, 2010, which granted the defendants' separate motions for summary judgment dismissing the complaint on the ground that the plaintiff Nakeisha Mazil did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed, on the law, with one bill of costs, and the defendants' separate motions for summary judgment dismissing the complaint are denied.
The defendants met their prima facie burdens of showing that the plaintiff Nakeisha Mazil (hereinafter the injured plaintiff), who allegedly sustained certain injuries to the lumbar region of her spine as a result of the subject accident, 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 plaintiffs submitted an affirmation from the injured plaintiff's treating physician, Dr. Benjamin Cortijo, inter alia, affirming the truth of his "initial examination report" also submitted in opposition. Dr. Cortijo conducted contemporaneous and recent examinations of the lumbar region of the injured plaintiff's spine. During each examination, he performed certain testing, including range-of-motion testing, which, each time, revealed certain significant range-of-motion limitations of the lumbar region of the injured plaintiff's spine. Based on his findings, he concluded that the injured plaintiff sustained a permanent injury to the lumbar region of her spine as a result of the accident.
The plaintiffs also provided an adequate explanation for the cessation of the injured plaintiff's treatment (see Pommells v Perez, 4 NY3d 566, 574). Dr. Cortijo affirmed that any further treatment would have been merely palliative in nature (id. at 577).
The plaintiffs' submissions raised a triable issue of fact as to whether the injured plaintiff sustained a serious injury to the lumbar region of her spine under the permanent consequential limitation of use and/or significant limitation of use categories of Insurance Law § 5102(d) (see Dixon v Fuller, 79 AD3d 1094, 1094-1095). Accordingly, the Supreme Court should have denied the defendants' separate motions for summary judgment dismissing the complaint.
Park v. He Jung Lee


Sim & Park, LLP, New York, N.Y. (Sang J. Sim of counsel), for
appellant.
Mendolia & Stenz, Westbury, N.Y. (Tracy Morgan of counsel),
for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Queens County (Rosengarten, J.), entered July 14, 2010, which granted the defendant's motion for summary judgment dismissing the complaint on the ground that she did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed, on the law, with costs, and the defendant's motion for summary judgment dismissing the complaint is denied.
The defendant met her prima facie burden of showing that the plaintiff, who allegedly sustained certain injuries to the cervical and lumbar regions of her spine as a result of the subject motor vehicle accident, 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). The defendants submitted competent medical evidence establishing that the alleged injuries to the cervical and lumbar regions of the plaintiff's spine did not constitute serious injuries within the meaning of Insurance Law § 5102(d) (see Rodriguez v Huerfano, 46 AD3d 794, 795) and, in any event, were not caused by the subject accident (see Pommells v Perez, 4 NY3d 566, 579).
In opposition, the plaintiff submitted affirmed reports from her radiologist, Dr. Mary Hu. Soon after the subject accident, magnetic resonance imaging studies were performed on the cervical and lumbar regions of the plaintiff's spine, and Dr. Hu examined the resultant films. She observed, inter alia, herniated discs at C3-4, C5-6, L3-4, L4-5, and L5-S1.
The plaintiff also submitted an affirmation from her treating physician, Dr. Sea Hyun Chung, who read Dr. Hu's reports. Dr. Chung also conducted contemporaneous and recent examinations of the cervical and lumbar regions of the plaintiff's spine. During each examination, he performed certain testing, including range-of-motion testing, which, each time, revealed certain significant range-of-motion limitations of the cervical and lumbar regions of the plaintiff's spine. Based on Dr. Hu's reports and his findings, Dr. Chung concluded that the plaintiff sustained certain permanent injuries to the cervical and lumbar regions of her spine as a result of the subject accident.
The plaintiff also provided an adequate explanation for a gap in her treatment (id. at 574). Dr. Chung affirmed that any further treatment would have been merely palliative in nature (id. at 577).
The plaintiff's submissions raised a triable issue of fact as to whether the plaintiff sustained a serious injury to the cervical and/or lumbar regions of her spine under the permanent consequential limitation of use and/or the significant limitation of use categories of Insurance Law § 5102(d) as a result of the subject accident (see Khavosov v Castillo, 81 AD3d 903, 904; Evans v Pitt, 77 AD3d 611; Tai Ho Kang v Young Sun Cho, 74 AD3d 1328, 1329). Accordingly, the Supreme Court should have denied the defendant's motion for summary judgment dismissing the complaint.
Dean v. Tower Insurance Company.

Bleakley Platt & Schmidt, LLP, White Plains (Robert D.
Meade of counsel), for appellants.
Law Office of Max W. Gershweir, New York (Joseph S. Wiener
of counsel), for respondent.
Order, Supreme Court, New York County (Joan A. Madden, J.), entered May 7, 2010, which granted defendant's motion for summary judgment dismissing the complaint and denied plaintiffs' cross motion for summary judgment on liability, unanimously modified, on the law, defendant's motion denied, the complaint reinstated, and otherwise affirmed, without costs.
Defendant failed to satisfy its prima facie burden on its motion for summary judgment. Because the "residence premises" insurance policy fails to define what qualifies as "resides" for the purposes of attaching coverage, the policy is ambiguous in the circumstances of this case, where the plaintiffs-insureds purchased the policy in advance of closing but were then unable to fulfill their intention of establishing residency at the subject premises due to their discovery and remediation of termite damage that required major renovations. "[B]efore an insurance company is permitted to avoid policy coverage, it must satisfy the burden which it bears of establishing that the exclusions or exemptions apply in the particular case, and that they are subject to no other reasonable interpretation" (Seaboard Sur. Co. v Gillette Co., 64 NY2d 304, 311 [1984]). Accordingly, the ambiguity in the policy must be construed against defendant under the facts of this case, and precludes the grant of summary judgment in its favor (see Ace Wire & Cable Co. v Aetna Cas. & Sur. Co., 60 NY2d 390, 398 [1983]). Marshall v Tower Ins. Co. of N.Y. (44 AD3d 1014 [2007] is inapposite because it did not address whether the term "residence premises" is ambiguous in light of the policy's failure to define "resides." Moreover, unlike here, the plaintiff in Marshall had no intention of living at the premises (see Marshall v Tower Ins. Co. of N.Y., 12 Misc 3d 117OA [Sup Ct 2006]).
An issue of fact as to whether plaintiffs misrepresented their intention to reside in the [*2]subject premises as contemplated by the policy precludes a grant of summary judgment to both parties.
We have considered the parties' remaining contentions and find them to be without merit.
Matter of Liberty Mutual Insurance Company v. Walker


Martin Rubenstein, Staten Island, N.Y. (Howard M. File of counsel),
for appellant.
Harris, King & Fodera, New York, N.Y. (Kevin J. McGinnis of
counsel), for respondent.

DECISION & ORDER
In a proceeding pursuant to CPLR article 75 to permanently stay arbitration of a claim for supplemental underinsured motorist benefits, the appeal is from an order of the Supreme Court, Richmond County (Ajello, J.), dated May 18, 2010, which, after a hearing, granted the petition.
ORDERED that the order is affirmed, with costs.
The appellant, Suzanne Walker, had an automobile insurance policy with the petitioner, Liberty Mutual Insurance Company. Her supplementary uninsured/underinsured motorist (hereinafter SUM) coverage limit was $100,000. On August 12, 2005, Walker was a pedestrian when she was struck by a motor vehicle in Staten Island. She notified the petitioner of her intent to pursue a SUM claim. Walter then commenced a personal injury action against alleged tortfeasor Boris D. Volodarsky, the driver of the vehicle that struck her, and alleged tortfeasor Verizon Communications, Inc., and Verizon New York, Inc. (hereinafter together Verizon), which had trucks parked at the intersection where the accident occurred. In a settlement agreement, Volodarsky agreed to pay Walker the sum of $25,000, and Verizon agreed to pay Walker the sum of $650,000. Walker sought permission from the petitioner to settle with the alleged tortfeasors. The petitioner granted Walker permission, but further stated that, pursuant to the express terms of the SUM endorsement, because Walker received the sum of $675,000, well in excess of her $100,000 SUM coverage limit, she no longer had a valid SUM claim. Walker demanded arbitration. The petitioner then commenced this proceeding pursuant to CPLR article 75 to permanently stay arbitration. In the order appealed from, the Supreme Court granted the petition. We affirm.
The petitioner correctly concedes that Volodarsky was an underinsured motorist, and that the appellant was not required to exhaust the coverage limits of all tortfeasors before her entitlement to submit a SUM claim was triggered, provided that she exhausted the full liability limits of at least one tortfeasor (see e.g. S'Dao v National Grange Mut. Ins. Co., 87 NY2d 853). However, the pertinent issue here is not whether Walker may submit a SUM claim as an initial matter, but whether any additional recovery is possible. As the petitioner observes, paragraph six of the applicable SUM endorsement sets forth the petitioner's maximum payment under that endorsement as the difference between the SUM coverage limit, here $100,000, and the amounts "received by the insured or the insured's legal representative, from or on behalf of all persons that may be legally liable for the bodily injury sustained by the insured." Here, it is undisputed that Walker received a cumulative total of $675,000 "from or on behalf of all persons that may be legally liable for the bodily injury sustained by the insured," well in excess of her $100,000 SUM coverage limit. Thus, no further recovery was possible, and arbitration was rendered academic, as there was nothing to arbitrate (see Matter of General Acc. Ins. Co. v Brown, 263 AD2d 542; Matter of Commerce & Indus. Ins. Co. v Weber, 240 AD2d 742; Matter of Government Empls. Ins. Co. v Abbensett, 240 AD2d 578; Matter of Nationwide Ins. Co. v Kuchta, 238 AD2d 510; Matter of Lotito v Metropolitan Prop. & Cas. Ins. Co., 228 AD2d 443; cf. Matter of Liberty Mut. Ins. Co. v Tetteh, 277 AD2d 239). Accordingly, the Supreme Court properly granted the petition to permanently stay arbitration.
Vassar College v. Diamond State Insurance Company

Saul Ewing LLP, New York, N.Y. (William C. Baton and Thomas S.
Schaufelberger of counsel), for appellants.
Nicoletti Gonson Spinner & Owen LLP, New York, N.Y.
(Edward S. Benson of counsel), for
respondent Diamond State Insurance
Company.
Milber Makris Plousadis & Seiden, Woodbury, N.Y. (Lorin A.
Donnelly of counsel), for respondent
Scottsdale Insurance Company.
Couch White, LLP, Albany, N.Y. (Harold D. Gordon and Donald
J. Hillmann of counsel), for respondent
Kirchhoff Construction Management,
Inc.

DECISION & ORDER
In an action, inter alia, for a judgment declaring the priority of insurance coverage obligations, the plaintiffs appeal from an order of the Supreme Court, Dutchess County (Sproat, J.), dated June 15, 2010, which granted the motion of the defendant Scottsdale Insurance Company for partial summary judgment declaring that, in an underlying personal injury action entitled McGlinchey v Vassar College, commenced in the Supreme Court, Bronx County, under Index No. 7089-2005, the coverage provided to the plaintiff Vassar College, under a certain policy of insurance issued by the defendant Scottsdale Insurance Company to the defendant Kirchhoff Construction Management, Inc., is excess to the coverage provided to the plaintiff Vassar College under a certain policy of umbrella liability insurance issued by the plaintiff United Educators Insurance, and granted the cross motion of the defendant Diamond State Insurance Company for partial summary judgment declaring that, in the same underlying personal injury action, the coverage provided to the plaintiff Vassar College, under a certain policy of insurance issued by the defendant Diamond State Insurance Company to the defendant Kirchhoff Construction Management, Inc., is excess to the coverage provided to the plaintiff Vassar College under the same policy of umbrella liability insurance issued by the plaintiff United Educators Insurance.
ORDERED that the order is reversed, on the law, with one bill of costs payable by the respondents, the motion for partial summary judgment and the cross motion for partial summary judgment are denied, upon searching the record, partial summary judgment is awarded to the plaintiffs declaring that the policy of umbrella liability insurance issued to the plaintiff Vassar College by the plaintiff United Educators Insurance is excess to any coverage provided to the plaintiff Vassar College by the defendants Diamond State Insurance Company and Scottsdale Insurance Company, and the matter is remitted to the Supreme Court, Dutchess County, for further proceedings on the remaining causes of action, and the entry thereafter of an appropriate judgment, including a declaration in accordance herewith.
In 2003, the plaintiff Vassar College (hereinafter Vassar) hired the defendant Kirchhoff Construction Management, Inc. (hereinafter Kirchhoff), to perform certain construction work on premises owned by Vassar. At all relevant times, Vassar was insured by the plaintiff United Educators Insurance (hereinafter United Educators), under a Primary General Liability Insurance Policy (hereinafter the UE primary policy), as well as an Umbrella Liability Insurance Policy (hereinafter the UE umbrella policy). Kirchhoff had a Commercial General Liability Insurance Policy issued by ACE Property and Casualty Insurance Company (hereinafter ACE), a policy denominated as a Commercial Umbrella Liability Policy issued by the defendant Diamond State Insurance Company (hereinafter Diamond), and an Excess Liability Policy issued by the defendant Scottsdale Insurance Company (hereinafter Scottsdale). The contract between Vassar and Kirchhoff required Kirchhoff to have Vassar named as an additional insured on its policies.
A Kirchhoff employee, who allegedly was injured while performing work pursuant to Kirchhoff's contract with Vassar, commenced a personal injury action against Vassar. ACE accepted coverage, as did United Educators under the UE primary policy. Diamond and Scottsdale, however, disclaimed coverage on late-notice grounds.
Vassar then commenced the instant action, eventually joining United Educators as a plaintiff. The complaint, inter alia, sought a judgment declaring that any coverage afforded to Vassar under the UE umbrella policy was excess to any coverage provided by Diamond or Scottsdale. Scottsdale then moved for partial summary judgment declaring that any coverage obligation on its part would not be triggered until the limits of all other policies, including the UE umbrella policy, had been exhausted. Diamond cross-moved for partial summary judgment declaring that any coverage obligation on its part would not be triggered until the limits of all other policies (with the exception of the Scottsdale policy), including the UE umbrella policy, had been exhausted. The Supreme Court granted the motion and the cross motion, and the plaintiffs appeal.
The Supreme Court erred in its determination of the priority of coverage. The Insuring Agreement of the UE umbrella policy provides that coverage under that policy is triggered only after exhaustion of the UE primary policy and "any other insurance available to the Insured." Contrary to the Supreme Court's determination, certain language appearing elsewhere in the Insuring Agreement does not transform that policy, for all purposes, into a policy of primary insurance. Interpreting the Insuring Agreement in that fashion would render the clause referring to "any other insurance" a nullity. "An insurance contract should not be read so that some provisions are rendered meaningless" (County of Columbia v Continental Ins. Co., 83 NY2d 618, 628; see Nautilus Ins. Co. v Matthew David Events, Ltd., 69 AD3d 457, 460; Bretton v Mutual of Omaha Ins. Co., 110 AD2d 46, 49, affd 66 NY2d 1020).
The policy issued by Diamond provides that Diamond will pay the excess of the "retained limit," which is defined, in pertinent part, as the sum of the underlying insurance provided by the ACE policy (which is primary insurance) and "[o]ther collectible primary insurance" (emphasis added). As noted above, the UE umbrella policy is not a policy of primary insurance and, in contrast to the language of the Diamond policy, provides that it is not triggered until exhaustion of the UE primary policy and "any other insurance available to the insured" (emphasis added), be it primary or otherwise. "[A]n insurance policy which purports to be excess coverage but contemplates contribution with other excess policies or does not by the language used negate that possibility must contribute ratably with a similar policy, but must be exhausted before a policy which expressly negates contribution with other carriers, or otherwise manifests that it is intended to be excess over other excess policies" (State Farm Fire & Cas. Co. v LiMauro, 65 NY2d 369, 375-376; see Jefferson Ins. Co. of N.Y. v Travelers Indem. Co., 92 NY2d 363, 372). Here, the UE umbrella policy is clearly intended to be excess over the Diamond policy, whereas the Diamond policy contemplated contribution with other excess policies. Accordingly, the Diamond policy must be exhausted before the UE umbrella policy is triggered.
Additionally, because the indemnity obligation under the Scottsdale policy accrues immediately after the Diamond policy is exhausted, the Scottsdale policy must also be exhausted before the UE umbrella policy is triggered.
In light of our determination, we need not address the parties' remaining contentions.
Accordingly, Scottsdale's motion and Diamond's cross motion should have been denied. Furthermore, since the issue of the priority of insurance coverage obligations was the subject of the motion and cross motion before the Supreme Court, and there are no triable issues of fact regarding the proper priority, we search the record and award the plaintiffs partial summary judgment declaring that the UE umbrella policy is excess to any coverage provided to Vassar by Diamond and Scottsdale (see CPLR 3212[b]; Dunham v Hilco Constr. Co., 89 NY2d 425; Merritt Hill Vineyards v Windy Hgts. Vineyard, 61 NY2d 106).
Since this is, in part, a declaratory judgment action, we remit the matter to the Supreme Court, Dutchess County, for further proceedings on the remaining causes of action, and the entry thereafter of an appropriate judgment, inter alia, declaring that the policy of umbrella liability insurance issued to Vassar by United Educators is excess to any coverage provided to Vassar by Diamond and Scottsdale (see Lanza v Wagner, 11 NY2d 317, 334, appeal dismissed 371 US 74, cert denied 371 US 901).

Burgund v. ESP Café, Inc


Gold, Stewart, Kravatz, Benes, LLP, New York, N.Y. (Gannon,
Lawrence & Rosenfarb [Lisa L. Gokhulsing], of counsel), for
appellant.

DECISION & ORDER
In an action to recover damages for personal injuries, etc. (Action No. 1), and an action for a judgment declaring that the plaintiff in Action No. 2, Hermitage Insurance Company, is not obligated to defend or indemnify the defendant ESP Café, Inc., doing business as Rhythm & Brews, in Action No. 1 (Action No. 2), which were joined for trial, the plaintiff in Action No. 2, Hermitage Insurance Company, appeals from an order of the Supreme Court, Richmond County (Fusco, J.), dated June 1, 2010, which denied its motion for summary judgment declaring that it is not obligated to defend or indemnify the defendant ESP Café, Inc., doing business as Rhythm & Brews, in Action No. 1.
ORDERED that the order is reversed, on the law, with costs, the motion of the plaintiff in Action No. 2, Hermitage Insurance Company, for summary judgment declaring that it is not obligated to defend or indemnify the defendant ESP Café, Inc., doing business as Rhythm & Brews, in Action No. 1 is granted, and the matter is remitted to the Supreme Court, Richmond County, for the entry of a judgment declaring that Hermitage Insurance Company is not obligated to defend or indemnify ESP Café, Inc., doing business as Rhythm & Brews, in Action No. 1.
The defendant ESP Café, Inc., doing business as Rhythm & Brews (hereinafter ESP Café), the owner of a bar, sought defense and indemnification from Hermitage Insurance Company (hereinafter Hermitage) under its commercial general liability policy in a personal injury action commenced against it by one of its patrons (hereinafter the patron) and the patron's wife. The policy contained an exclusion for "bodily injury" arising out of an assault and battery. The patron alleged that he was injured when individuals employed by ESP Café attacked him inside the bar.
"The duty to defend is triggered whenever the allegations of a complaint, liberally construed, suggest a reasonable possibility of coverage, or the insurer has actual knowledge of facts establishing a reasonable possibility of coverage" (Bruckner Realty, LLC v County Oil Co., Inc., 40 AD3d 898, 900; see Fitzpatrick v American Honda Motor Co., 78 NY2d 61). "[A]n insurance carrier can be relieved of its duty to defend if it establishes, as a matter of law, that there is no possible factual or legal basis on which it might eventually be obligated to indemnify its insured under any policy provision" (Matter of Transtate Ins. Co., 303 AD2d 516, 516; see Spoor-Lasher Co. v Aetna Cas. & Sur. Co., 39 NY2d 875, 876). "An insurer may also disclaim coverage on the basis of a policy exclusion by demonstrating that the allegations of the complaint cast that pleading solely and entirely within the exclusion" (Bruckner Realty, LLC v County Oil Co., Inc., 40 AD3d at 900; see Servidone Constr. Corp. v Security Ins. Co. of Hartford, 64 NY2d 419, 425).
Here, Hermitage demonstrated that none of the three causes of action alleged in the personal injury action would exist but for the alleged assault and battery (see Mount Vernon Fire Ins. Co. v Creative Hous., 88 NY2d 347, 349-352; U.S. Underwriters Ins. Co. v Val-Blue Corp., 85 NY2d 821, 822-823; Shanna Golden, Ltd. v Tower Insurance Company of New York, 1 AD3d 586, 587-588; Sphere Drake Ins. Co. v Block 7206 Corp., 265 AD2d 78, 78-80; 247 AD2d 425, 425-426). Accordingly, it established its prima facie entitlement to judgment as a matter of law by demonstrating that the allegations of the complaint cast that pleading solely and entirely within the assault and battery exclusion (see International Paper Co. v Continental Cas. Co., 35 NY2d 322, 325; Marina Grand, Inc. v Tower Ins. Co. of N.Y., 63 AD3d 1012, 1013-1014; Bruckner Realty, LLC v County Oil Co., Inc., 40 AD3d at 900; Physicians' Reciprocal Insurers v Giugliano, 37 AD3d 442, 444).
In opposition, ESP Café offered no admissible evidence sufficient to raise a triable issue of fact to defeat Hermitage's prima facie showing of entitlement to judgment as a matter of law on the issue of its duty to defend or indemnify ESP Café (see Marina Grand, Inc. v Tower Ins. Co. of N.Y., 63 AD3d at 1013-1014; Physicians' Reciprocal Insurers v Giugliano, 37 AD3d at 444; see generally Zuckerman v City of New York, 49 NY2d 557, 562; cf. M.J. Frenzy, LLC v Utica Natl. Ins. Group, 309 AD2d 566). Accordingly, the Supreme Court should have granted Hermitage's motion for summary judgment declaring that it is not obligated to defend or indemnify the defendant ESP Café in the personal injury action.
In view of the foregoing, we do not address Hermitage's remaining contention.
Since this is, in part, a declaratory judgment action, the matter must be remitted to the Supreme Court, Richmond County, for the entry of a judgment declaring that Hermitage is not obligated to defend and indemnify ESP Café in the personal injury action (see Lanza v Wagner, 11 NY2d 317, 334, appeal dismissed 371 US 74, cert denied 371 US 901).
Dennis v. New York City Transit Authority


Gregory Peck, New York (Philip J. Hoffman of counsel), for
appellant.
Wallace D. Gossett, Brooklyn (Jane Shufer of counsel), for
respondents.
Order, Supreme Court, Bronx County (Stanley Green, J.), entered January 15, 2010, which granted defendants' motion for summary judgment dismissing the complaint on the ground that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d), unanimously modified, on the law, the motion denied, except as to plaintiff's 90/180-day claim, and otherwise affirmed, without costs.
Defendants made a prima facie showing that plaintiff did not sustain a serious injury as a result of the accident. Defendants submitted affirmed reports of an orthopedist and neurologist reporting normal ranges of motion in all tested body areas, specifying the objective tests they used to arrive at the measurements, and concluding that plaintiff's injuries were
resolved (see DeJesus v Paulino, 61 AD3d 605 [2009]; Christian v Waite, 61 AD3d 581 [2009]).
In opposition, plaintiff raised a triable issue of fact. He submitted affirmed reports of a radiologist who found bulging discs in the cervical and lumbar spine and a herniated disc in the cervical spine, as well as medical findings of limitations in range of motion of the cervical and lumbar spine, both recently and contemporaneous with his accident (see Rivera v Super Star Leasing, Inc., 57 AD3d 288 [2008]; see also Simpson v Montag, 81 AD3d 547, 548 [2011]). The affirmations "under penalties of perjury" sufficiently complied with the requirements of CPLR 2106 (see generally Collins v AA Truck Renting Corp., 209 AD2d 363 [1994]). Furthermore, plaintiff adequately explained that he ceased physical therapy when his no-fault benefits were no longer available (see Jacobs v Rolon, 76 AD3d 905, 906 [2010]).
However, plaintiff's deposition and bill of particulars, in which he admitted that he was not confined to bed or home, refute his 90/180-day claim (see Williams v Baldor Specialty Foods, Inc., 70 AD3d 522 [2010]).

Torres v. Dwyer

Kaplan, Hanson, McCarthy, Adams Finder & Fishbein,
Yonkers (Jeffrey A. Domoto of counsel), for appellants.
Jaroslawicz & Jaros LLC, New York (David Tolchin of
counsel), for respondent.
Order, Supreme Court, Bronx County (Edgar G. Walker, J.), entered April 7, 2010, which denied defendants' motion for summary judgment dismissing the complaint of Nieves Torres individually and on behalf of Steven Torres, unanimously reversed, on the law, without costs, the motion granted, and that portion of the complaint dismissed.
Defendants' submissions, including the affirmation of their neurologist and the excerpt from the deposition transcript of Nieves Torres, met their prima facie burden of showing that Steven Torres did not suffer a "serious injury" under Insurance Law § 5102(d) (see Farrington v Go On Time Car Serv., 76 AD3d 818 [2010]). The evidence submitted by Nieves in opposition to the motion did not raise a triable issue of fact as to whether Steven had suffered a fracture or permanent injury. This plaintiff never made any allegation of a lost tooth, or loosened teeth, in any of the bills of particulars, and indeed made no argument relating to fracture or permanent injury below, instead focusing exclusively on a 90/180 day claim. As such, the claim that damage to Steven's teeth constituted serious injury was not cognizable by the court (see Glover v Capres Contr. Corp., 61 AD3d 549 [2009]; Marte v New York City Tr. Auth., 59 AD3d 398, 399 [2009]). In any event, an injury to a tooth can only meet the statutory threshold of "serious" where it requires dental treatment (see Newman v Datta, 72 AD3d 537 [2010]; Sanchez v Romano, 292 AD2d 202 [2002]). Here, the tooth knocked out of Steven's mouth was deciduous, replaced in time by an adult tooth, and there is no evidence he required or received any further treatment for that injury. Likewise, there is no evidence that the other two teeth loosened in the accident were fractured, and review of the record reveals no causal link between those teeth and the dental implants Steven later apparently received.
Nieves contends that the restrictions on Steven's participation in sports and after-school activities, and his need for more time to do his homework due to his post-accident headaches, raise an issue of fact on his 90/180 day claim. However, attendance at school encompasses most of a school-age child's usual and customary activities (see Lashway v Groshans, 241 AD2d 832, 834 [1997]). Steven missed only one week of school during the relevant period, and although his ability to concentrate may have been affected, there is no evidence that his academic performance was negatively impacted (id.). His headaches thus did not prevent him from performing "substantially all" of his usual activities, as required by the statute (see Jones v Norwich City School Dist., 283 AD2d 809, 812 [2001]).
GEORGIA v URBANSKI



Calendar Date: March 25, 2011
Before: Mercure, J.P., Lahtinen, Malone Jr., Kavanagh and Garry, JJ.


Conway & Kirby, L.L.P., Latham (Andrew W. Kirby
of counsel), for appellants.
Kelly & Leonard, L.L.P., Ballston Spa (Thomas E.
Kelly of counsel), for respondents.
MEMORANDUM AND ORDER


Mercure, J.P.
Appeal from an order of the Supreme Court (Catena, J.), entered September 7, 2010 in Montgomery County, which denied plaintiffs' motion for partial summary judgment on the issue of liability pursuant to Labor Law § 240 (1).
Plaintiff Thomas R. Georgia (hereinafter plaintiff) was employed to do framing work on a home under construction in the Town of Stillwater, Saratoga County. He used a ladder on ice outside of the excavated foundation while installing joists and lumber, and was injured when the ladder "kicked out" from under him as he reached over to place a joist. Plaintiff and his wife, derivatively, thereafter commenced this action against defendants, the property owner and general contractor for the project, asserting negligence and violations of Labor Law § 200 (1), § 240 (1) and § 241 (6). Following joinder of issue, plaintiffs moved for partial summary judgment on the issue of liability under Labor Law § 240 (1). Supreme Court denied the motion, finding questions of fact regarding whether plaintiff failed to use proper safety equipment and whether his own actions constituted the sole proximate cause of his injuries. Plaintiffs now appeal. Inasmuch as questions of fact preclude summary judgment, we affirm.
Labor Law § 240 (1) requires contractors and owners to provide safety devices adequate to protect workers against elevation-related hazards, and their "failure to do so results in liability for any injuries proximately caused thereby" (Silvia v Bow Tie Partners, LLC, 77 AD3d 1143, 1144 [2010]; see Sanatass v Consolidated Inv. Co., Inc,, 10 NY3d 333, 338 [2008]; Neighborhood Hous. Servs. of N.Y. City, 1 NY3d 280, 287-289 [2003]). Inasmuch as the ladder used by plaintiff "collapsed, slipped or otherwise failed to support him," he demonstrated a prima facie entitlement to partial summary judgment (Ball v Cascade Tissue Group-N.Y., Inc., 36 AD3d 1187, 1188 [2007]; see Morin v Machnick Bldrs., 4 AD3d 668, 670 [2004]). The burden accordingly shifted to defendants to "present[] some evidence that the device furnished was adequate and properly placed and that the conduct of the plaintiff may be the sole proximate cause of his . . . injuries" (Ball v Cascade Tissue Group-N.Y., Inc., 36 AD3d at 1188; see Robinson v East Med. Ctr., LP, 6 NY3d 550, 554 [2006]).
In that regard, sharp factual disputes exist regarding plaintiff's placement and use of the ladder on an icy surface outside of the foundation, but he readily admitted that the decision to do so was his alone. While a plaintiff's contributory negligence does not relieve defendants of liability under Labor Law § 240 (1) (see Morin v Machnick Builders, 4 AD3d at 670), nonparty witnesses testified that no work was to be performed outside of the foundation. Rather, plaintiff's employer expected workers to use ladders it had placed inside the foundation, and the record is devoid of evidence that ice was present or that ladders were improperly placed therein. Indeed, plaintiff was directed to join other workers inside the foundation and was observed to do so, although he later returned to the outside of the foundation, where the accident occurred.
In short, the employer produced evidence that the ladders constituted adequate safety devices within the intended work area and that plaintiff was injured only because he unilaterally chose to use a ladder outside the proper work area despite instruction to work inside the foundation. In our view, a finder of fact could determine from this evidence "that plaintiff had adequate safety devices available; that he knew both that they were available and that he was expected to use them; that he chose for no good reason not to do so; and that had he not made that choice he would not have been injured" (Cahill v Triborough Bridge & Tunnel Auth., 4 NY3d 35, 40 [2004]). Accordingly, we agree with Supreme Court that questions of fact exist warranting the denial of plaintiffs' motion for partial summary judgment (see Torres v Mazzone Admin. Group, Inc., 46 AD3d 1040, 1041 [2007], lv denied 10 NY3d 706 [2008]; Gittleson v Cool Wind Ventilation Corp., 46 AD3d 855, 856 [2007], lv denied 10 NY3d 715 [2008]; Meade v Rock-McGraw, Inc., 307 AD2d 156, 159 [2003]; cf. Gallagher v New York Post, 14 NY3d 83, 88-89 [2010]; Morin v Machnick Bldrs., 4 AD3d at 670-671).
Lahtinen, Malone Jr., Kavanagh and Garry, JJ., concur.
ORDERED that the order is affirmed, with costs.
Decided on May 19, 2011
Andrias, J.P., Friedman, Freedman, Richter, Román, JJ.

5141 107495/08
Tower Risk Management v Ni Chunp Hu


Abrams, Gorelick, Friedman & Jacobson, P.C., New York
(Steven DiSiervi of counsel), for appellant.
D'Ambrosio & D'Ambrosio, P.C., Irvington (James J.
D'Ambrosio of counsel), for respondents.
Order, Supreme Court, New York County (Marylin G. Diamond, J.), entered October 15, 2010, which denied defendant's motion for summary judgment declaring that this action is barred by the waiver of subrogation clause in defendant's lease, unanimously reversed, on the law, with costs, the motion granted, and it is so declared.
The lease agreement between defendant and Gila Bitchatcho contained a waiver of subrogation clause, conditioned solely upon there being in each of defendant's and Bitchatcho's insurance policies a clause permitting a waiver of subrogation. It is undisputed that each policy contained such a clause. Plaintiffs argue that the clause in defendant's policy permitted only a limited waiver of subrogation, which did not satisfy the lease condition. However, the Court of Appeals rejected that argument in Kaf-Kaf, Inc. v Rodless Decorations (90 NY2d 654 [1997]), construing nearly identical lease and policy language. Thus, we find that defendant's policy did not limit waiver of subrogation to the areas of the building rented by defendant, and the waiver of subrogation clause in the lease bars this action.
THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

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