Coverage Pointers - Volume XIII, No. 10

Dear Coverage Pointers Subscribers:

A special salute to our veterans and their families, all of whom have given so much for our freedom and democracy.
 

11/11/11

Today is 11/11/11.  For those connected to the spiritualists, it may have some special meaning.  For others, it a calendar oddity. The Today Show reported that thousands of couples have traveled to Las Vegas so they can write 11/11/11 on their wedding certificate. According to Today, as of Tuesday, the Clark County clerk’s office — where would-be newlyweds send their Vegas wedding applications — said they had already received 3,500 pre-applications for Nov. 11, 2011.  The office generally receives about 1,000 applications a month.  I think it will be a banner day for the Elvis preacher.

Announcing:  Labor Law Pointers – Brought to You by Dave Adams and the Labor Law Team

You love Coverage Pointers? You swoon over Health Law Pointers?  You want more? You will go gaga (not of the Lady Gaga variety) over Labor Law Pointers.

We have it for you.  Why?  So many of our readers deal with construction site accidents on a daily basis. 

Dave Adams, with the assistance of a great staff, has just published the first issue of our newest monthly newsletter.  As Dave said in his opening comments:

We are publishing this newsletter to help our clients stay updated on the most recent decisions and trends in Labor Law through a concise analysis of significant cases in this ever evolving area of law.  We hope this assists you in making educated decisions when handling Labor Law cases.

We will be reporting once a month, on the first Wednesday of each month, on four distinct areas -- New York State Labor Law Sections 240(1), 241(6) and 200, and indemnity.

Hurwitz & Fine, P.C. has a group of attorneys in the firm dedicated to handling Labor Law cases using a team approach, providing our clients and carriers the optimum defense to claims.  With our experience in litigation and insurance coverage, we are able to provide a comprehensive defense not only to the Labor Law claim, but also to the coverage and indemnification issues that commonly accompany the case.  

We approach these cases by analyzing and addressing all potential defenses to the Labor Law claim, and conducting a comprehensive and complete review of all contracts and policies to assess whether it is appropriate and possible to shift potential risk to other parties or entities based on contracts, additional insured status or common law indemnification.

Interested in subscribing?  Just let Dave know at [email protected] or contact me and I’ll make sure you are added to the mailing list.
 

A Household By Any Other Name:

When is an individual a “resident of the insured’s household” for the purpose of qualifying as an insured under a personal lines policy?  The Fourth Department, in a November 10, 2011 decision, sets out what is, for all intents and purposes, a check-list of factors in a case where we represented to successful appellant, Farm Family v. Nason, reported in this week’s edition of Coverage Pointers.

 

No Fault Primer:

Six years ago this week, I crafted a short but sassy No Fault Primer for those who are unfamiliar with our New York set-up or wanted a refresher or damages recoverable in NY auto accident cases, when liens are created or maintained, when there are subrogation claims, etc..  Someone asked me for it recently and I read through it and still thought it useful.  Click here for:
KOHANE’S “QUICK AND EASY” NEW YORK NO-FAULT GUIDE
What Damages Are Recoverable in an Auto Accident Case in New York?

It’s Nice to Be Recognized

The US News & World Report Best Lawyer - Best Law Firms Rankings were announced last week.  Congratulations to my partners and associates as the firm was designated a Tier 1 firm in 11 different practice areas and Tier 2 in five others

Buffalo Tier 1                                                                                              

• Civil Rights Law                                                                              
• Commercial Finance Law
• Employment Law – Management
• Insurance Law
• Litigation – Municipal
• Mergers & Acquisitions Law
• Municipal Law
• Personal Injury Litigation – Defendants
• Product Liability Litigation – Defendants
• Professional Malpractice Law – Defendants
• Trusts & Estates Law

Buffalo Tier 2

• Banking and Finance Law
• Commercial Litigation
• Corporate Law
• Health Care Law
• Real Estate Law

In the field of Insurance Law, across the entire State of New York, there were only 14 law firms listed as TIER 1. Of those 14, seven were in New York City (most with hundreds of lawyers) and only seven were outside NYC.

We were particularly honored to be the only Tier 1 Insurance Law firm in Buffalo.

This designation is a reflection of your individual and collective hard work, diligence and scholarship and you ought to be proud!

And Again!

Hurwitz & Fine, P.C. was selected as Top Ranked Law Firm by Martindale-Hubbell

The firm was also recognized in the first ever list of Top Ranked Law Firms in the U.S. by Martindale-Hubbell. The honor was bestowed upon firms with a minimum of one-third of the firm’s attorneys having achieved the Martindale-Hubbell AV Preeminent Rating, the highest rating available for legal ability and professional ethics. This distinguished list, comprising less than one half of 1% of law firms nationwide, will be published on December 26 in Fortune Magazine’s 2012 Investor’s Guide. Fewer than 1000 firms nationwide were selected for this honor and fewer than 60 law firms were selected in New York State.

Audrey’s Angles:

Happy Veterans’ Day.  Thank you to our readers who have serviced in the military or have a family member that has served in the military.  I appreciate the sacrifice that you have made and that your service has kept us safe.

The resounding theme in arbitration still is the medical necessity of durable medical equipment and the sufficiency of peer reviews to deny it.  Again, in reviewing the peer review report the arbitrator is looking at the relevancy and current medical journal articles to support the conclusion that the equipment is contrary to the accepted medical practice.  Also, ensuring that the opinion actually discusses and addresses the particular medical facts before the expert is also necessary to establish lack of medical necessity. 

For those interested in the DRI Insurance Coverage and Practice Symposium but have not signed up yet, early registration ends November 25th.  The conference runs from December 15-16th in New York and it is a great time of year to be in the City.  Aside from being a high quality educational seminar you will be in one of the best cities to complete your holiday shopping.  Also, the professional liability committee is holding its seminar in the same hotel during the same timeframe.  While you are technically required to register for each program there will not be guards at the doors checking to ensure you are attending the program you actually registered for.  

Audrey Seeley

 

One Hundred Years Ago Today

The Great Blue Norther of 11/11/11 was a cold snap that affected the central United States.  Many cities broke record highs early that afternoon and by nightfall, cities were down to single digit temperatures.  For many cities, it is the only day when record highs and lows were set the same day The main cause of such a dramatic cold snap was an extremely strong storm system separating warm, humid air from frigid, arctic air. Dramatic cold snaps tend to occur mostly in the month of November, though they can also come in February or March.
For example, Kansas City reached a record high of 76° F by late morning and by midnight, the temperature had dropped to 11º.  In Springfield, MO, the temperature dropped from 80° to 13°.

Editor’s note:  The term blue norther denotes a weather phenomenon common to large areas of the world's temperate zones—a rapidly moving autumnal cold front that causes temperatures to drop quickly and that often brings with it precipitation followed by a period of blue skies and cold weather.

 

One Hundred Years Ago Today – New York Times Front Page Articles on Women and the Courts: 

New York Times
November 11, 1911
Page 1

Women Sits as Judge in Vancouver for First Time

Vancouver, Wash. – For the first time in the State of Washington, a women sat yesterday as a Judge.  Owing to the absence of Justice G.L. Davis, the trial of a civil suit involving a small debt would have been postponed, but by agreement of the attorneys, Mildred Henthorne sat in his stead.  After hearing the case, Justice Henthorne “took the matter under advisement.”

New York Times
November 11, 1911
Page 1

Women Jurors Disagree
Divided on Luncheon and Prisoner’s Guilt,
Hungry Judge Lets Them Go

Los Angeles – Unable to agree, the first woman jury to sit in Los Angeles was discharged late today.  The case was that of I.H. Nagor, accused of having violated the speed ordinance.  He was arraigned in Justice Forbes’ court.

After listening for three hours to testimony and argument, the jury was notified at 12:30 to get ready for luncheon.  Twelve different eating places were selected by the twelve jurors.  Then two said that they did not want to go at all.  In vain did Justice Forbes urges them to reach an agreement as to a place for luncheon.  Finally at 1:30 o’clock he ordered them locked up again.  The Justice, too, lost his luncheon.

At 5 o’clock after four and half-hours’ deliberation the jury reported it was unable to agree upon a verdict and the court ordered its discharge.

 

Peiper’s Perceptions

Greetings.  First things first, this week.  Before getting to our case updates, please allow me to say a hearty thank you to all who bravely served, or continue to actively serve, our Nation.  If I accomplish nothing else in this issue, please know that your selfless contributions are appreciated and not taken for granted.  We hope you all enjoy the day of recognition that you so clearly deserve. 

As for our cases this week, take a moment to review the case involving Met Life which introduces the doctrine of waiver into life insurance.  Candidly, we are not so sure we agree with the decision.  For now, however, it is what it is.  We would also encourage you to take a look at the decision involving Vassar College.  While some of you may have seen it in our newly minted Labor Law Pointers, for those of you who did not we think it is quite a thought provoker. 

Speaking of Labor Law Pointers, due the hard work of our own David Adams, Chris Potenza, and Jennifer Ehman (with yours truly bringing up the tail end), we have begun the ambitious process of substantively reviewing all things Labor Law in a monthly newsletter.  If you're interested in that line of work, please feel free to drop me a line.

Finally, for those of you in Western New York, we remind you of the Buffalo Claim's Association's upcoming E-Day on Thursday, November 16th.  It is a morning of varied, yet interesting, presentations on both first and third party topics.  I am gratefully able to report that I will speaking on evaluating additional insured coverage obligations.  We'd love to see you there.   That's it for now, see you on Thanksgiving. 

Steve Peiper
[email protected]

 

One Hundred Years Ago Today:

Olean Evening Times
November 11, 1911
Page 2

An Odd Date

In dating a letter this morning, the bookkeeper noticed that she wrote it 11-11-11. It suddenly occurred to her that this was something unusual. Indeed it happens but once in a century that a date may be written by using the same figure six times. Next year we may, on the twelfth of December write, 12-12-12, but even no sequence of three identical numbers will be denied us from that Lime until the first of January in the year 2001, a date, by the way, which comparatively few need to worry over. If the calendar should not be revised in the meantime, the grandchildren of the present generation may write and comment on the date 1l-11-11 on November 11th, 2011. It was also possible on one occasion to write the date using the same figure eight times in succession, but at the time, dates were not much written.  Just when it was we leave the reader to determine.

In This Week’s Coverage Pointers, Attached:

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

• Son, Who Leaves Some Belongings in Shed on the Parcel Separate From His Parents’ Home, is Not a Resident of His Parents’ Household and Therefore Not An Insured
• Additional Insured Has Separate and Distinct Obligation to Provide Notice of Occurrence, Particularly so When Its Interests Are Adverse to the Named Insured’s
• Insurer Demonstrates Prejudice in Late Reporting of Lawsuit – Under Policy Language Requiring its Demonstration – to Support Its Disclaimer
• Policy Identifies Insured and It’s Not The Party Seeking Coverage  
• Eight Months Delay in Notifying Carrier of Accident May Be Excused by Good Faith Belief in Non-Liability
• Late Disclaimer Precludes Default Judgment Against Insured in Declaratory Judgment Action
• No Damage During Policy Period, No Coverage
• Policyholder’s Claims Against Insurance Broker Fail
• While Title to Boat Creates Presumption of Ownership (of Boat and Engine), Question of Fact Created as to De Facto Ownership by Another
• Even Though Damage Did Not Take Place During Policy Period, Court Orders Defense Obligation.  Completed Operations Ignored. Thousands Flee

 

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

• Defendants’ Experts’ Conflicting Reports Fail to Establish Absence of Limitations in Range of Motion
• Defendant Fails to Meet Prima Facie Burden Where He Fails to Address the Allegations in Plaintiff’s Bill of Particulars
• Another Failure to Address the Claims Set Forth in a Bill of Particulars
• Defendants’ Evidence Submission Establishes Threshold Not Met
• Defendants’ Submissions Defeat Their Motion
• Appellate Court Finds Plaintiff Sufficiently Rebutted Defendants’ Evidence
• Failure to Meet Threshold as Against One Defendant Warrants Dismissal as to All
• Plaintiffs Are Not Required to Address Prior Accidents if Defendants Fail to Show That Claimed Injuries Were Caused by Prior Accidents
• Defendant Cannot Claim Surprise Regarding Shoulder Injury Where His Own Expert Examined Plaintiff’s Shoulder

 

AUDREY’S ANGLES ON NO-FAULT
Audrey A. Seeley
 

ARBITRATION

• Unrebutted Peer Review and Lack of Medical Necessity Letter Insufficient To Rebut Finding of Lack of Medical Necessity
  Blanket Denial Upon IMEs Upheld In Pro Se Applicant Claim
• Peer Review Rebuttal Letter Persuasive As Relied Upon Recent Medical Authority And Addressed Particular Patient’s Complaints and Treatment
  Willingness To Submit To IME After Policy Violation Not Excusable Failure To Comply With Policy Condition.

 

LITIGATION

• Insurer Established Lack of Medical Necessity Based Upon Peer Review
• Delaying Claim For Adjuster Review And Investigation Does Not Toll 30 Day Rule
• De Novo Action Renders Sufficiency of Master Arbitration Moot, Hence It’s a De Novo Action

 

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

Property

• Failure to Assert Coverage Defenses to Repudiate a Life Insurance Policy Amounts to Waiver
• Failure to Respond to a Demand for Proof of Loss is Fatal to Plaintiff’s Claim

Potpourri

• Careful What You Wish for – Motion Confirms Contractual Indemnity Claims, but Destroys the Accompanying Common Law Indemnity Claim
• Facts of the Case DO NOT Trigger Indemnity Obligations Per the Terms of the Contract

 

CASSIE’S CAPITAL CONNECTION
Cassandra A. Kazukenus

• Nothing new in the Capital District

 

FIJAL’S FEDERAL FOCUS
Katherine A. Fijal

• An Insurer’s Duty to Defend and the “Voluntary Payment” Provision

 

JEN’S GEMS
Jennifer A. Ehman

• Assault and Battery Sub-Limit in Primary Policy Is Enforced
• Pursuant to Pennsylvania Law, the Court Finds That Where a Loss Is Covered Under Multiple Policies, Each Insurer Is Jointly and Severely Liable for Defense Costs
• Insurer Cannot Reply on Untimely Notice Defense Where a Denial Was Never Issued

 

EARL’S PEARLS
Earl K. Cantwell

Loss Reserve Information Held Not Discoverable In Bad Faith Claim

That’s all for now.  We will see you the day after my favorite holiday, Thanksgiving.

 

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]

ASSOCIATE EDITOR
Audrey A. Seeley

ASSISTANT EDITOR
Margo M. Lagueras

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
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
Earl’s Pearls
Across Borders

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

11/10/11         Farm Family Insurance Company v. Nason
Appellate Division, Fourth Department
Son, Who Leaves Some Belongings in Shed on the Parcel Separate from His Parents’ Home, Is Not a Resident of His Parents’ Household and Therefore Not an Insured
This one was mine, so particularly sweet.  Winning is much better than the alternative.

A wrongful death action was commenced against Nason, Jr. (“Son”) on farm property owned by his father, Nason, Sr. (“Father”).  Dad also owned a separate parcel of property upon which he maintained his residence and a dairy business, which was covered by an insurance policy issued by Farm Family.

Under the policy, Dad’s relatives were insureds only if they were residents of his “household.”  The deceased died as the result of injuries that he sustained on the subject property while examining a hay elevator that had been offered for sale by Son. Son did not reside exclusively on the subject property but in fact also resided at times with his girlfriend at another location.

The Fourth Department held that the term “household has been characterized as ambiguous or devoid of any fixed meaning in similar contexts . . . and, as such, its interpretation requires an inquiry into the intent of the parties . . . The interpretation must reflect the reasonable expectation and purpose of the ordinary business [person] when making an insurance contract . . . and the meaning which would be given it by the average [person].”

The court concluded that Farm Family established that Dad did not consider Son to be a member of his household, nor would he have anticipated that Son would be afforded coverage under his insurance policy since Son lived separately from Dad, either in a trailer on the subject property or with a girlfriend. The trailer was not listed in the policy as an alternate residence. Furthermore, members of the Nason family testified at their respective depositions that Son did not reside with the other members of the family and, indeed, was not welcome in the family home.
 

11/10/11         The City of New York v. Investors Ins. Co. of America
Appellate Division, First Department
Additional Insured Has Separate and Distinct Obligation to Provide Notice of Occurrence, Particularly so When Its Interests Are Adverse to the Named Insured’s
An additional insured under a liability policy has an implied duty (even in the absence of an express duty) to give notice of an occurrence for which it seeks coverage.  In this case, notice given 13 months after the additional insured became aware of the claim was untimely.

Since the interests of the named insured and additional insured were adverse, notice given by the named insured will not be imputed to the additional insured.
 

11/01/11         Vernet v. Eveready Insurance Company
Appellate Division, Second Department
Insurer Demonstrates Prejudice in Late Reporting of Lawsuit – Under Policy Language Requiring its Demonstration – to Support Its Disclaimer
The Vernets were passengers in a cab and were injured when the cab was involved in an accident with a car insured by Eveready.  Ten days after the accident, Eveready was made aware of the accident and several months later, it received a letter of representation from plaintiffs’ counsel.

The next correspondence from the plaintiffs' counsel regarding the insured was received by the Eveready four years later, advising that the Eveready insureds were sued and that a default had been taken against them.  Eveready denied coverage on the ground that its insured breached the insurance policy by failing to timely notify it of the commencement of an action regarding the accident.

The Vernets then commenced a direct action against Eveready, pursuant to Insurance Law §3420, seeking to enforce the judgment it secured against the Eveready insureds against the carrier.

As this was a policy issued before January 17, 2009, the insurer could disclaim coverage when the insured failed to satisfy the notice condition, without regard to whether the insurer was prejudiced by the insured's failure to satisfy the condition. However, this policy, by specific language, provided that a failure to comply with notice provisions would relieve the carrier of its duties "if the failure to comply [with the policy] is prejudicial to [the insurer]."

Here, the insurer offered proof of the late notice as well as the entry of the default judgment against its insured.  As to prejudice, the insurer demonstrated that since the judgment had been entered, it lost its right to appear and interpose an answer, thus requiring it to shoulder the burden of moving to vacate the default judgment.

Editor’s Note:  We still haven’t seen a single appellate case interpreting the 2008 statutory changes imposing a prejudice standard in late notice cases.  Readers will be reminded that under the statute, prejudice can be established only if the insurer demonstrates a material impairment in its ability to investigate or defend the claim.  This case involves prejudice, not under the statute, but under policy provisions.  Theoretically, the insurer can demonstrate other kinds of prejudice to support its disclaimer since the statutory prejudice standard is inapplicable.  In this case, with a default against the insured, prejudice would have been established under the statute, in any event, because of the irrebutable presumption of prejudice if a judgment is entered against the insured before notice is given to the carrier.
 

11/01/11         South Hylan, LLC v. CNA Insurance Company
Appellate Division, Second Department
Policy Identifies Insured and It’s Not the Party Seeking Coverage
Carrier was successful in demonstrating the party seeking coverage was not an insured under the policy.  In opposition, there was insufficient proof of a mutual mistake between the parties to justify reforming the policy to add the plaintiff.
 

11/01/11         Columbia University Press, Inc. v. Travelers Ind. Co.
Appellate Division, Second Department         
Eight Months Delay in Notifying Carrier of Accident May Be Excused by Good Faith Belief in Non-Liability
Liability policies require notice of an occurrence be given "as soon as practicable.”  This was a policy issued or renewed before the statutory changes that require a demonstration of prejudice before a late notice disclaimer can be effective.

Here, Travelers established that the insured delayed eight months before it notified the insurer of the accident.  Columbia raised a triable issue of fact as to whether the delay was reasonably based on a good-faith belief of nonliability.  Accordingly, this case was not one to be resolved on summary judgment.

11/01/11         Atlantic Casualty Ins. Co. v. RJNJ Services
Appellate Division, Second Department
Late Disclaimer Precludes Default Judgment Against Insured in Declaratory Judgment Action
Atlantic sought a determination that it had no obligation to defend or indemnify RJNJ in an action commenced by Lala.  Lala fell from a roof while working for Painting & Home Design (“Design”).  Design was a subcontractor to RJNJ and RJNJ had been hired by Fairfield to perform the roofing work.

Lala sued Fairfield and Fairfield sued RJNJ in August 2006.  When RJNJ did not appear in the action, Fairfield was granted a default.  

Atlantic had issued a commercial general liability policy to RJNJ but RJNJ did not give Atlantic notice of the accident or the underlying lawsuit or the application for the default judgment.  Atlantic sent a written notice of disclaimer of coverage to RJNJ, but it was not until three months or so after it first received notice of the accident and lawsuit. The disclaimer was based on the grounds that RJNJ had never notified Atlantic about the accident or the default judgment entered against RJNJ, and that the policy precluded coverage since Lala was an employee of RJNJ's subcontractor.

Atlantic then commenced this DJ action seeking to confirm its disclaimer.  Again, RJNJ failed to appear or answer the complaint in the instant action.  Atlantic moved for leave to enter a default judgment against RJNJ, declaring that it is not obligated to defend or indemnify RJNJ as a third-party defendant in the underlying action, and to sever the action against RJNJ.  Fairfield, named as a defendant so it would be bound by the outcome, opposed the application for default and asked for summary judgment declaring that Atlantic is obligated to defend and indemnify RJNJ as a third-party defendant in the underlying action.

Atlantic established that RJNJ defaulted and that RJNJ failed to provide timely notice of the occurrence.  Atlantic also submitted proof that coverage for Lala's injuries was specifically excluded under the Atlantic policy.  However, it could not prove that it timely disclaimed.  Accordingly, the court would not allow it to enter a default, since it could not prove its disclaimer was meritorious.  Questions of fact exist on timeliness of disclaimer that preclude ruling on Fairfield’s summary judgment motion.
 

11/01/11         Empire State Shipping Service, Ltd. v. Hanover Ins. Co.
Appellate Division, First Department
No Damage During Policy Period, No Coverage
The Businessowners Policy provides coverage for "bodily injury" but "only if" it is caused by an "occurrence" and the bodily injury "occurs during the policy period."  

Two causes of action alleging negligent and intentional infliction of emotional distress do not fall within the scope of "bodily injury" because the earliest that harm is alleged to have occurred is in the fall of 2005, when the plaintiff in the underlying action learned of the alleged mishandling of her son's remains.  This was over two years after plaintiff Empire cancelled its policies.

There were also claims for negligence and negligent misrepresentation.  It is alleged that the plaintiff in the underlying action "was caused, and shall in the future be caused, to suffer severe pain and suffering, severe emotional distress and harm, financial or economic loss, including but not limited to, present and future lost wages, and other damages."  While these causes of action may contain allegations that Empire was negligent during the policy period, there is no allegation that the plaintiff in the underlying action suffered "bodily injury" during the policy period.
Editor’s Note:  Makes sense to me, compare to the492 Realty case, below, which does not.
 

10/27/11         Golub v. Tanenbaum-Harber Co., Inc.
Appellate Division, First Department
Policyholder’s Claims Against Insurance Broker Fail
Plaintiff claims for fraudulent business practices on the part of a broker, under §349 of the General Business Law, based on the agent’s failure to provide plaintiff with certain information relating to the insurance policies it was offering.  

However, an omission does not constitute fraud unless there is a fiduciary or "special" relationship between the parties and such fiduciary relationship or special relationship which would give rise to a duty to disclose.  In any event, "an insurance agent has a common-law duty to obtain requested coverage, but generally not a continuing duty to advise.

Here, there was documentary evidence establishing that plaintiff affirmatively requested wind coverage in his homeowners' insurance applications from 2005 through 2008, and did not decide to forego such coverage until 2009, at which time defendant had him complete an application declining such coverage despite the proximity of his LI property to the water.  At that time, he was given a policy without wind coverage.  Plaintiff is "presumed to have read and understood his policy

The court dismissed the GBL § 349 claim since he failed to allege in the complaint the type of conduct that would have a broad impact on consumers at large.  Other claims were likewise dismissed.
 

10/25/11         RLI Insurance Company v. Steely
Appellate Division, Second Department
While Title to Boat Creates Presumption of Ownership (of Boat and Engine), Question of Fact Created as to De Facto Ownership by Another
Steely sought coverage for a boating accident under a homeowners policy issued by New York Central Mutual (NYCM) and an umbrella policy issued by RLI. NYCM denied coverage based on an exclusion that removed coverage if the policyholder owned the "outboard engine" on the date of the accident and RLI challenged that decision.

RLI claimed that Steely did not own the outboard engine but rather alleged that nonparty James Banford, Steely's former brother-in-law and friend, owned the outboard engine.  Thus, according to the plaintiff, its coverage obligation was excess to the coverage obligation of NY Mutual.

A certificate of title is prima facie evidence of ownership and the certificate of title for the boat was in Bandford’s name.  NYCM contended that the certificate of title only applied to the boat and not the outboard engine, but there is nothing in the record to suggest that the boat was purchased apart from the outboard engine, or that the ownership of one was ever separate from the other.

However, NYCM submitted evidence to raise an issue of fact to rebut the presumption of ownership created by the certificate of title as to whether Steely had "dominion and control" over the outboard engine such that he should be considered a de facto owner.  Steely testified during his deposition that he paid for the maintenance costs of the boat, and he used it as much as Banford did prior to the accident.  Steely further testified that he provided Banford with $15,500 to help him pay off the loan he used to purchase the boat, for which Steely did not expect to be repaid, and that when he subsequently purchased the boat from Banford after the accident, he paid only half of its estimated value. Nevertheless, this evidence, while sufficient to raise an issue of fact as to whether Steely was a de facto owner of the outboard engine, did not establish, as a matter of law, that he was a de facto owner and not merely a permissive user of the boat and its outboard engine.
 

10/25/11         492 Kings Realty, LLC v. 506 Kings, LLC
Appellate Division, Second Department
Even Though Damage Did Not Take Place During Policy Period, Court Orders Defense Obligation.  Completed Operations Ignored. Thousands Flee
506 Kings, LLC (“506”) was involved in the construction of a condo building and hired Metrotech.to perform underpinning work on adjacent properties.  Metrotech obtained commercial general liability insurance coverage from Scottsdale Insurance for a one-year period ending June 16, 2007, and named 506 Kings, care of Midtown Equities, LLC (“Midtown”), as an additional insured.  On September 14, 2006, an adjacent building owned by the plaintiff 492 Kings Realty, LLC (“492 Kings”), and leased to the Kosher Corner Supermarket, Inc. (“Supermarket”), suffered a partial collapse.
Investigation suggested that Metrotech failed to use appropriate underpinnings. 

When sued by 492 Kings and Supermarket, both sought coverage under the Scottsdale policy.

Here, documentary proof tendered by the defendants in the form of the contract agreement with Metrotech, the summons and complaint in the main action, and the insurance policy Scottsdale issued to Metrotech, was sufficient to demonstrate, prima facie, that the defendants were additional insureds under the policy, and that the allegations in the underlying complaint fell within the scope of the risks undertaken by the insurer.  Scottsdale argued that under the terms of an endorsement to the insurance policy, the defendants' status as additional insureds terminated on July 29, 2006, the date Metrotech completed its operations on the subject construction project.  Inasmuch as the date of completion predated the collapse, Scottsdale maintained that the defendants no longer qualified as additional insureds.

Here, Scottsdale failed to meet its burden of demonstrating that the allegations of the complaint cast the pleadings wholly within a policy exclusion.  The allegation by 492 Kings that the property damage arose out of the defendants' negligence in "conducting" the construction project was broad enough to encompass a claim under the policy that an act or omission of Metrotech performed for 506 Kings may be a proximate cause of the injuries, thus triggering a duty to defend.
Editor’s Note:  Without damage during the policy period, how could there by an occurrence?

 

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

11/10/11         Eteng v. Dajos Transportation
Appellate Division, First Department
Defendants’ Experts’ Conflicting Reports Fail to Establish Absence of Limitations in Range of Motion
Plaintiffs Eteng and Allen, 25 and 27 respectively at the time of the accident, both asserted injuries under the significant limitation of use category.  Eteng alleged injuries to her cervical and lumbar spine, right shoulder and right knee.  Allen alleged injuries to his shoulders, right knee and cervical spine.  The claims under the 90/180-day category were dismissed as plaintiffs’ bills of particulars established they were confined to bed for two weeks and to home only one month.

Defendants met their initial burden as to both.  Their medical experts found normal range of motion and their radiologist opined that the changes shown in Eteng’s cervical MRI were degenerative.  In opposition, Eteng submitted the report of a radiologist who found disc herniations, and reports of her treating physician who examined her within a week of the accident and causally related her injuries to the accident.

With regard to Allen, defendants’ radiologist again opined that the changes seen in Allen’s right knee were degenerative.  However, defendants’ experts’ conflicting reports concerning Allen’s spine did not serve to establish the absence of range of motion limitations.  In addition, their radiologist’s report regarding the lumbar MRI was not in the record.  Allen submitted sufficient evidence to raise a question of fact with respect to his right knee as his physician found limitations and causally related the injury, and his radiologist confirmed that the MRI revealed a medial meniscus tear.  His physician also submitted contemporaneous and recent evidence of limitations of his spine and his radiologist reported herniations.

The court made specific reference to the rule that if plaintiffs’ recover for any one of their injuries, then they are also entitled to recover for all the non-serious injuries caused by the accident.
 

11/01/11         Brourman v. Gorokhovsky
Appellate Division, Second Department
Defendant Fails to Meet Prima Facie Burden Where He Fails to Address the Allegations in Plaintiff’s Bill of Particulars
In her bill of particulars, plaintiff claimed she sustained a fracture of a bone in her left foot and also under the 90/180-day category.  Defendant failed, however, to address either in his motion papers.  As a result, the trial court’s denial of defendant’s motion for summary judgment was affirmed without the need to consider plaintiff’s opposing papers.
 

11/01/11         Johnson v. Sarwar Hacking Corp.
Appellate Division, Second Department
Another Failure to Address the Claims Set Forth in a Bill of Particulars
Yet another case where a plaintiff’s bill of particulars sets forth a claim under the 90/180-day category, and the defendants’ motion papers and proofs fail to address that specific claim.  Defendants’ failure to address the allegations in the bill of particulars results in the court’s determination that they have not met their prima facie burden.
Note:  Defendants’ medical experts should be alerted to pay special attention to 90/180-day claims set forth in bills of particulars as this category appears to be the one that most often slips through the cracks.
 

11/01/11         Byrnes v. Wojtowicz
Appellate Division, Second Department
Defendants’ Evidence Submission Establishes Threshold Not Met
Plaintiff claimed she sustained a serious injury to her cervical and lumbar regions and also that she was prevented from performing substantially all her usual daily activities for at least 90 of the 180 days immediately following the accident.  Defendants’ motion for summary judgment, however, contained sufficient competent medical evidence that plaintiff did not sustain any serious injury as claimed and plaintiff failed to submit rebuttal evidence to raise a triable issue of fact, resulting in the Appellate Court affirming the trial court’s dismissal of her complaint.
 

11/01/11         Luby v. Tsybulevskiy
Appellate Division, Second Department
Defendants’ Submissions Defeat Their Motion
Plaintiff alleged he sustained serious injuries to his cervical and lumbosacral regions, as well as to his left shoulder.  Although defendants argued that the injuries were not causally related to the accident, their own submissions revealed triable issues of fact.  In addition, defendants did not sufficiently address plaintiff’s 90/180-day claim so, on appeal, the trial court’s grant of summary judgment is reversed.
 

11/01/11         McKenna v. Williams
Appellate Division, Second Department
Appellate Court Finds Plaintiff Sufficiently Rebutted Defendants’ Evidence
Defendants submitted competent medical evidence showing that plaintiff did not sustain a serious injury to her cervical and lumbar regions under the permanent consequential and/or significant limitation of use categories.  However, on appeal the Court found that the trial court erred in not deeming plaintiff’s rebuttal evidence sufficient to raise a triable issue of fact and defeat defendants’ motion.
 

11/01/11         Hernandez v. Adelango Trucking
Appellate Division, First Department
Failure to Meet Threshold as Against One Defendant Warrants Dismissal as to All
Defendants established that the ankle sprain sustained by the infant plaintiff had resolved and that plaintiff had normal range of motion. Defendants also presented plaintiff’s bill of particulars and deposition testimony which established plaintiff missed less than six days of school, this defeating his 90/180-day claim.  Therefore, the trial court properly granted the motion for summary judgment brought by one defendant and dismissed the complaint against all defendants as plaintiff’s failure to meet the serious injury threshold against one defendant means plaintiff cannot meet it against any other defendants.
 

10/25/11         Jean-Baptiste v. Tobias
Appellate Division, Second Department
Plaintiffs Are Not Required to Address Prior Accidents if Defendants Fail to Show That Claimed Injuries Were Caused by Prior Accidents
On appeal, defendants’ cross-motion for summary judgment is denied as plaintiffs did raise triable issues of fact in opposition.  Specifically, plaintiffs adequately explained that the lengthy gap in their treatment was due to the fact that their benefits were denied and because their physician advised that their injuries were permanent and any further treatment would be merely palliative.  In addition, and although defendants presented evidence that plaintiffs were involved in prior accidents in which they supposedly sustained similar injuries, defendants did not make a prima facie showing that the injuries now claimed were caused by the prior accidents.  Because they failed to make that showing, the burden did not shift to plaintiffs and it was not necessary for their treating physician to address the prior accident history.
 

10/25/11         Young Chool Yoo v. Rui Dong Wang
Appellate Division, Second Department
Defendant Cannot Claim Surprise Regarding Shoulder Injury Where His Own Expert Examined Plaintiff’s Shoulder
Plaintiff alleged injuries to the lumbar spine and left shoulder under the permanent consequential and/or significant limitation of use categories and supported those claims with the affirmation of his treating physician based upon contemporaneous and recent examinations.  This was sufficient to raise a triable issue of fact.  Plaintiff’s physician also concluded that the lumbar injuries were caused by the accident and not by degenerative disease.  This was sufficient to rebut the allegations of defendant’s radiologist.  In addition, and contrary to the trial court, the appellate court found that plaintiff did plead injury to the left shoulder in his bill of particulars and that defendant’s examining orthopedic surgeon reviewed plaintiff’s MRI report of the AC joint and specifically examined the left shoulder.  Defendant could not, therefore, claim surprise with regard to plaintiff’s claim of left shoulder injury.

 

AUDREY’S ANGLES ON NO-FAULT
Audrey A. Seeley

ARBITRATION
11/07/11         RS Medical v. Allstate Insurance Company
Arbitrator Kent L. Benziger, Erie County
Unrebutted Peer Review and Lack of Medical Necessity Letter Insufficient to Rebut Finding of Lack of Medical Necessity
The Applicant’s assignor was involved in a July 20, 2010, motor vehicle accident and complained of neck pain with severe spasms radiating down to his lower back.  The assignor was diagnosed with neck pain cervicalgia, neck spasm, lumbago and lower back pain.  Approximately three months after the accident the assignor was prescribed an RS 4-channel interferential and muscle stimulator and a cervical traction device for neck pain.

The insurer paid for the rental of this durable medical equipment but denied it upon a peer review after it was prescribed for lifetime use.  The peer review was conducted by Dr. Uriel Davis.  Dr. Davis questioned the equipment as the assignor was undergoing physical therapy.  Further, Dr. Davis opined that there was no medical evidence to support using a TENS Unit as it did not provide any objective benefit over exercise.  Further, there were no controlled studies on the effect of TENS on acute low back pain.  Thus there was not sufficient evidence that TENS was more effective compare to exercises and massage.

The assigned arbitrator determined that the peer reviewer’s opinion was persuasive on lack of medical necessity.  The assigned arbitrator found it significant that the Applicant had not submitted any thorough medical necessity letter or rebuttal letter to the peer review.  Further, while Applicant’s counsel indicated there were medical deficiencies in the peer review the assigned arbitrator indicated that his decision was based upon the evidence submitted by qualified experts.
 

11/04/11         Applicant v. Liberty Mut. Fire Ins. Co.
Arbitrator Thomas J. McCorry, Erie County
Blanket Denial Upon IMEs Upheld in Pro Se Applicant Claim
The eligible injured person sought this arbitration as a pro se Applicant against the insurer seeking reinstatement of benefits that were denied upon an independent medical examination (“IME”).  There were no bills in dispute.  The insurer argued that there was no justiciable issue as no bills were in dispute.

The assigned arbitrator noted pro se Applicant’s claims are at best confusing and are difficult to sort out what the issues are in the arbitration.  Despite the Applicant’s continued effort to attempt to prove her claim and the claim representative’s cooperation in framing the issues, the denials based upon two IMEs were appropriate as there was no evidence from the Applicant’s treating physicians disputing the IME report findings.  Further, the Applicant’s testimony alone on the issue of needing continuing treatment was insufficient.
 

11/03/11         Elite Med. Supply of NY, LLC v. St. Paul Travelers Ins.
Arbitrator Kent L. Benziger, Erie County
Peer Review Rebuttal Letter Persuasive as It Relied Upon Recent Medical Authority and Addressed Particular Patient’s Complaints and Treatment
The Applicant sought reimbursement for an LSO brace prescribed to the assignor for back pain arising out of a January 13, 2011, accident.  The treating chiropractor prescribed the brace for strength and support.  Further, the treating chiropractor indicated that the LSO brace was successful in eliminating radiating pain and lower extremity weakness. 

The insurer denied the durable medical equipment based upon a peer review conducted by Albert Claps, DC.  Mr. Claps indicated that there was no notation in the medical records of spinal instability.  Further, relying upon a 1995 article, he concluded that chiropractic care is meant to mobilize the vertebra and using a brace, which immobilizes the spine, is antithetical to chiropractic care.

The treating chiropractor submitted a rebuttal letter indicating that her patient was prescribed the brace after a trial of use in the office with reduced symptoms.  She further relied upon a medical journal that found the brace to be therapeutic for lumbar fusion and effective for treating low back pain.

The assigned arbitrator did not find the peer review persuasive.  The reviewer did not cite to an authoritative source that established the brace, upon these facts, was inconsistent with generally accepted medical practices.  The assigned arbitrator did not find the reliance upon a 17 year old study to be persuasive in light of the treating chiropractor providing a more recent, authoritative source.
 

10/31/11         Applicant v. GEICO Ins. Co.
Arbitrator Thomas J. McCorry, Erie County
Willingness to Submit to IME After Policy Violation Not Excusable Failure to Comply with Policy Condition
The insurer denied medical services rendered to the eligible injured person (“EIP”) based upon his failure to appear for two scheduled IMEs in violation of a condition to coverage under the policy.  The insurer properly scheduled and noticed the IMEs and no excuse was offered by the EIP.  The assigned arbitrator upheld the denial even though the EIP indicated after the fact he was willing to appear for an IME.
 

LITIGATION

11/02/11         Dov Phil Anesthesiology Group, PLLC a/a/o John Grady v. New York Central Mut. Fire Ins. Co.
Appellate Term, First Department
Insurer Established Lack of Medical Necessity Based Upon Peer Review
The insurer’s summary judgment motion should have been granted as the insurer submitted sufficient evidence that it mailed IME notices to the EIP and her counsel and the EIP failed to appear. 

11/01/11         NYU – Hospital for Joint Diseases a/a/o Francisco Romero v. American Int’l Group., Inc.
Appellate Division, Second Department
Delaying Claim for Adjuster Review and Investigation Does Not Toll 30 Day Rule
An insurer did not properly delay a pending medical bill based upon “pending adjuster’s review” and “investigation.”  Accordingly, the insurer was precluded from relying upon the intoxication exclusion and the plaintiff was entitled to summary judgment.

11/01/11         Allstate Ins. Co. v. Matthew Nalbandian a/a/o Darlene Torchi
Appellate Division, Second Department
De Novo Action Renders Sufficiency of Master Arbitration Moot:  It’s a De Novo Action!
The defendant’s cross-motion for summary judgment dismissing the de novo action on the ground that the master arbitrator’s award should be upheld because it was not arbitrary or capricious should have been denied.  The issue as to whether the master arbitrator’s award should be vacated was moot since the insurer commenced a de novo action under Insurance Law §5106(c) as the amount sought in arbitration, exclusive of interest and attorney’s fees, exceeded $5,000.00.  The case was remanded to the lower court to determine the merits of the summary judgment motion.

 

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

Property

11/10/11         Agrawal v Metropolitan Life Ins. Co.
Appellate Division, Fist Department
Failure to Assert Coverage Defenses to Repudiate a Life Insurance Policy Amounts to Waiver
Decedent applied for, and procured, a life insurance from Met Life.  In the application process, however, decedent indicated that (a) she did not have diabetes and (b) that she had no other “in-force” insurance.  In addition, Met Life alleges that decedent overstated her net worth.

After a lengthy investigation, Met Life allegedly established that decedent did, in fact, suffer from diabetes.  Met Life, also appears to have established that decedent had other insurance that was not disclosed in the application process.  Finally, Met Life allegedly discovered that decedent’s net worth was nowhere near where she stated. 

Upon completion of the investigation, Met Life denied plaintiff’s claim, as the benefactor under the policy, for recovery.  Although it appears to have uncovered misrepresentations in the policy, Met Life’s denial letter was only based on decedent’s alleged misrepresentation of her net worth.  No reference in the denial letter was made to the fact that decedent was stricken with diabetes when she had denied the condition in the underwriting/application process.  In addition, the denial letter likewise made no reference to decedent’s statements regarding other “in-force” insurance. 

In reversing the trial court, and granting summary judgment to plaintiff, the First Department first noted that Met Life’s reliance upon the net worth issue was misplaced.  The Court noted that the alleged misrepresentation was not made on the application for coverage.  Secondly, the Court also noted that although decedent’s net worth was not the $5 to $6 million alleged, it was far in excess of the $500,000 threshold established by Met Life’s guidelines.  Finally, the Court stated that Met Life’s failure to raise the diabetes issue (or the “in-force” insurance issue, for that matter) in the initial denial amounted to a waiver of those grounds.   

Peiper’s Point – A couple of quick points here.  Although we are aware of limited authority which seems to imply that the doctrine of common law waiver can apply to bar a carrier from asserting the breach of a condition at a later date, I do not recall a case where that standard applied to a fundamental issue of coverage or the application of an exclusion.  While statutory waiver (ie., Insurance Law 3420[d][2]) has barred untimely coverage defenses in bodily injury cases for years, it is troubling to see waiver references in first party cases.  Assuming, presumably, the diabetes defense was raised in Met Life’s answer.   

In addition, here the Court is barring Met Life from asserting a possible coverage defense on the basis that it was not asserted in the denial.  In doing so, the Court cites to 2009 decision where the carrier was deemed to have waived a late notice defense in an environmental claim.  In that case (Estee Lauder v. One Beacon), the Court cited the duty to specifically and timely disclaim coverage as soon as reasonably practicable as support for its decision that the defense had been waived.  However, the aptly named “specificity” requirement and timeliness standard are both derived from Insurance Law 3420(d).  If, however, the claim at issue is not a bodily injury claim, then we wonder aloud how Insurance Law 3420(d) and related case law would be applicable. 

10/25/11         Meserole Factory, LLC v Arch Ins. Group
Appellate Division, Second Department
Failure to Respond to a Demand for Proof of Loss is Fatal to Plaintiff’s Claim
In yet another decision of well-established area, plaintiff failed to respond to Arch’s demand for proof of loss, with accompanying forms, until more than sixty days had expired.  Pursuant to the direct language of the Insurance Law, failure to provide a proof of loss is fatal to plaintiff’s ability to present a first party claim.  Accordingly, the instant action was dismissed.  

Potpourri

10/27/11         McGlinchey v Vassar College
Appellate Division, First Department
Careful What You Wish for – Motion Confirms Contractual Indemnity Claims, but Destroys the Accompanying Common Law Indemnity Claim
Plaintiff commenced the instant action after being injured in the course of his employment with Kirchhoff Construction Management.  As a result, McGlinchey filed suit against Vassar College, presumably, as the owner of the project where he was working at the time of the incident.  Vassar responded by filing a third-party action against Kirchhoff alleging both common-law and contractual indemnity.  Vassar then moved for summary judgment against Kirchoff on both theories. 

Kirchhoff opposed the motion, and was successful in defeating Vassar’s common law indemnity claim.  Because the Vassar/plaintiff had not proven the injury to be “grave,” under Workers’ Comp Section 11, the action against Kirchhoff was barred.  However, because Vassar had no common law liability (read Labor Law 200 liability) to plaintiff, its claim for contractual indemnity was entitled to contractual indemnity.  This is because the Court of Appeals has long held that General Obligations Law 5-322.1 does not void an otherwise invalid contractual indemnity provision where the proposed indemnitee is free from negligence (see, e.g., the Judlau Contracting case). 

Peiper’s Point – May we humbly suggest that sometimes two in the bush is worth more than a bird in hand!  So often litigation decisions are made without actually looking at the bigger picture.  We would suggest “Be Careful What Ye’ Wish For”

Let us take a moment to think about what was happening here, what the motion’s intended purpose was, and what its actual result was.  By asserting common law and contractual indemnity claims against Kirchhoff, Vassar triggered Kichhoff’s coverage under both its CGL (covering contractual indemnity provisions) and its Workers’ Comp. Employer’s Liability Coverage 1(b) covering the common law indemnity claim).  This means that so long as both claims were pending, Kirchhoff was being defended by both the CGL and Workers’ Compensation policies.  It also meant that if liability was established, Kirchhoff would be entitled to co-primary coverage under both policies.  When the CGL was exhausted, the 1(b) would then have applied to provide unlimited coverage. 

By moving, and subsequently losing, on the common law indemnity claim, Vassar destroyed (or weakened) its argument for protection under Kirchhoff’s 1(b).  While Vassar won, and got the security it likely desired (the contractual indemnity claim), it ended up with less coverage.  Think of it this way, with both actions pending, the possibility, if not likelihood, of contribution from the 1(b) was very much a possibility.  With the decision as it is, Vassar limited its potential recovery from Kirchhoff to the limit of the CGL (plus Kirchhoff’s assets, if any).  By opposing the common law indemnity claim (as counsel had to do, lest they roll over on a valid defense), Kirchhoff ends up with a limited amount of coverage (i.e., the CGL only), loses its unlimited coverage, and now faces personal exposure. 

Perhaps, Kirchhoff had ample coverage under its CGL and Umbrella (if one existed) so that it is still not facing personal exposure, and Vassar knew this at the time of the motion.  Perhaps, the Workers’ Compensation Carrier was not involved.  This is in no way a criticism of the decisions in the case.  Indeed, there are several factors which I am sure were weighed by counsel on both sides of this case which would impact the litigation strategy.  Rather, we only remind everyone else to pay close, close, attention to all possible outcomes before setting into motion a course of events which ultimately may result in unintended consequences. 

10/27/11         Perales v First Columbia 1200 NSR, LLC
Appellate Division, Third Department 
Facts of the Case DO NOT Trigger Indemnity Obligations Per the Terms of the Contract
Plaintiff slipped and fell in the parking lot of a premises owned and operated by defendant First Columbia.  The instant lawsuit against First Columbia and co-defendant Gallivan Corporation (the snow plow contractor) resulted.  Upon answering, First Columbia asserted cross-claims for contractual and common law indemnification against Gallivan. 

At some point in the litigation, Gallivan moved to dismiss First Columbia’s cross-claims.  Gallivan argued, first, that it only owed contractual indemnification to the extent the incident was “caused by or sustained in connection with the performance of this Service Agreement or conditions created thereby.”  In support of its motion, Gallivan argued that it had performed all required duties under the contract, including the removal of snow as required by the timeframe established in the contract and by placing the snow piles in the areas designated by the contract.  Where the contract was not breached, and First Columbia could not establish that the incident occurred due to Gallivan’s failure to adhere to its duties under the contract, the contractual indemnity claim was dismissed. 

Further, First Columbia’s common law indemnity claim was dismissed.  The claims against First Columbia were that (a) it failed to properly configure the parking lot and walkways and (b) that the snow piles were negligently created.  Where, as here, Gallivan had no role in configuring the property and where, as here, Gallivan placed the snow piles exactly where it was directed under the contract, Gallivan had no negligence in this case.  As such, the only liability facing First Columbia was its own, active, negligence.  As a party cannot be indemnified under common principles for its own negligence, the cross-claim was dismissed.

Peiper’s Point – Read the Contract, Read the Contract, Read the Contract!!!  Indemnity provisions are strictly construed.  If the facts of the situation do not fit neatly into the terms of the indemnity clause, DO NOT assume that an award is a foregone conclusion! 

Read the Complaint, Read the Complaint, Read the Complaint!!!  If you’re looking at a Labor Law 200/Common Law Negligence Claim, pay attention to what is actually being alleged.  If, as here, the only negligence being alleged is actual conduct of the defendant seeking indemnity, no such claim exists.   

CASSIE’S CAPITAL CONNECTION
Cassandra A. Kazukenus

Nothing new in the Capital District.

 

FIJAL’S FEDERAL FOCUS
Katherine A. Fijal

10/31/11         Vermont Mutual Ins. Co. v. Maguire
Fifth Circuit Court of Appeals – Massachusetts
An Insurer’s Duty to Defend and the “Voluntary Payment” Provision
This action arises from a bar fight which occurred when Boris Maguire was home on Thanksgiving vacation in November, 2007.  The parties agreed that what began as a bar fight between two other people, abruptly ended when Maguire hit one of the fighters in the face with a glass beer mug.  The glass shattered cutting the side of the individual’s face and the muscle, tissue and saliva duct below.

Within weeks, Maguire received notice of a criminal hearing at the Boston Municipal Court which was scheduled for January 4, 2008, to address whether there was probable cause to charge Maguire.  As the result of a potential settlement of any civil claims, the hearing was postponed to February 29, 2008.

On January 9, 2008, the attorney representing the injured party advised the attorney representing Maguire that they would be seeking legal remedies against Maguire.  A more detailed letter was sent to Maguire’s attorney on January 16, 2008.  At that time a demand was made for $800,000, and stipulated that the offer expired on February 1.

In order to avoid participating in any criminal proceedings, the injured party lowered his demand to $475,000 in exchange for a release of all civil and criminal liability.  A new attorney was retained by Maguire and a settlement agreement was reached on February 12, contingent upon Vermont Mutual waiving the “voluntary payment” provision in a homeowner’s policy issued to Maguire’s parents.  Vermont Mutual refused to waive the provision and the parties continued to negotiate.  On February 26, they signed an agreement obligating Maguire to pay $425,000 and the injured party agreed not to pursue criminal or civil claims.

Vermont Mutual became aware of the incident on January 10, 2008, when it received the January 9, 2008, correspondence forwarded to Maguire’s attorney.  A claim file was opened and assigned to Mark McGreevy, a claims investigator.  McGreevy immediately acknowledged the claim; and, several days later after receiving the January 16th demand letter from counsel responded within minutes requesting an interview with Maguire.  At that point Maguire had returned to school and was not readily available.  In addition, Maguire’s attorney stated that because of the possibility of criminal proceedings he would need that any statement taken be attorney-client privileged.  At that point McGreevy advised that Vermont Mutual did not know enough about the claim, and was not in a position to make an offer by the February 1, 2008, deadline.

McGreevy thereafter diligently continued with his investigation by visiting the bar where the accident took place and calling the witnesses listed in the police report.  McGreevy also attended a Boston Licensing Board hearing concerning the incident.

On February 4, 2008, McGreevy sent Maguire’s attorney a reservation of rights letter stating that Vermont Mutual might not pay the claim because the injury might have been intentional, and because Maguire’s attorney refused to allow him to interview Maguire.  McGreevy further explained that Vermont mutual was “currently investigating the claim” and that the company would “continue to handle the claim even though a coverage question exists.”

On February 11, the new attorney representing Maguire sent McGreevy a letter explaining a proposed settlement that required Vermont Mutual to either pay $450,000 or to waive the “voluntary payment” provision and allow the Maguires to settle directly with the claimant.

On February 15, coverage counsel for Vermont Mutual sent a letter to Maguire’s new attorney stating that Vermont Mutual refused to pay the $450,000 and refused to waive the “voluntary payment” clause.  Coverage counsel raised several of Vermont Mutual’s objections, including that the proposed settlement might violate public policy and that the settlement might not be reasonable.

On March 5, Vermont Mutual was told of the February 26th settlement.  In May, 2008, the Maguire’s attorney demanded that Vermont Mutual reimburse the Maguires for the settlement, as well as for their attorneys’ fees and costs.  Coverage counsel reiterated Vermont Mutual’s coverage position and simultaneously filed a declaratory judgment action against the Maguires.

In its complaint, Vermont Mutual sought a declaratory judgment that it owed no duty to defend or indemnity the Maguires against the subject claim.  The Maguires counterclaimed that Vermont Mutual had breached the insurance contract, and that the breach had been in bad faith. 

The parties agreed to the district court’s suggestion to bifurcate the trial by submitting some questions to the jury and then proceeding to a bench trial on the remaining questions.  The jury was asked to determine three issues:  (1) whether the injury was accidental; (2) whether $425,000 was a reasonable settlement amount; and, (3) whether Vermont Mutual was prejudiced by the Maguires’ settlement of the claims without Vermont Mutual’s consent.  On the first two questions the jury found for the Maguires; however, on the third question the jury found that the settlement prejudiced Vermont Mutual’s ability to protect its interests.

The district court then addressed Vermont Mutual’s duty to defend.  After examining the policy the district court found that the relevant provision created a duty to defend only after suit had been filed.  It also held that Vermont Mutual “did all it was obligated to do under the policy” because it “took all reasonable investigatory steps in the limited, seven-week timeframe between notice of the claim and the settlement.  The court also held that, for a number of reasons, Vermont Mutual had not exhibited bad faith in failing to defend the Maguires.  The Court entered judgment for Vermont Mutual and the Maguires timely appealed.

On appeal, the Maguires argued that, under the terms of their homeowners’ policy, Vermont Mutual had a duty to provide a defense to the asserted claims, and that the Company breached that duty by failing to protect the Maguires when counsel was needed.  Vermont Mutual contends that its duty to defend was never triggered, both because no lawsuit was ever filed, and because the Maguires never formally tendered the defense.        

The First Circuit Court of Appeals [“Court’”] held that even considered de novo, the district court’s determination of no breach must be upheld.  The Court pointed out that throughout this unusually condensed timeline, Vermont Mutual took no action that signaled a rejection or abandonment of its responsibility to defend Maguire.  To the contrary, McGreevy actively investigated the incident and told the Maguires that Vermont Mutual would continue to handle the claim.  Despite that the Maguires went ahead to negotiations and authorized their attorneys to reach settlement with the claimant.  The Court stated that given this background the Maguires assertion that they felt “unprotected” could be based only on Vermont Mutual’s communication that it needed more information before it would enter into a settlement.  The Court pointed out that pursuant to Massachusetts law, such investigation of the nature and value of the claim was not only permissible, but required.  Mass Gen. Laws Ch. 176D, §3(9) (c), (d), (f).

The Court held that because Vermont Mutual did not breach its duty to defend [assuming such duty existed here] it is not obligated to reimburse the Maguires for the amounts they paid to negotiate the subject claim.  The Court also found that Vermont Mutual was relieved of any obligation to reimburse the Maguires $425,000 for the settlement because that settlement was a “voluntary payment” that was expressly forbidden by the policy.

JEN’S GEMS
Jennifer A. Ehman

11/1/11           Santa v Capitol Specialty Ins., Ltd.
Supreme Court, New York County
Assault and Battery Sub-Limit in Primary Policy Is Enforced
No this decision has nothing to do with Christmas; rather, it arises out of an alleged assault on the underlying plaintiffs in a Manhattan nightclub.  The nightclub was insured on a primary basis by Capitol Specialty Insurance (“Capitol”) and excess coverage was provided by Redland Insurance Ltd. (“Redland”).

The dispute in this case was whether Capitol could rely on an assault and battery sub-limit of $50,000, which would replace the $1,000,000 per occurrence limit.  The second issue in this case was whether the entire $1,000,000 had to be paid in order to trigger the excess policy.  The court found that Capitol could impose the $50,000 sub-limit.  It rejected any argument by the underlying plaintiffs that notice of this sub-limit was untimely.  Insurance Law § 3420(d)(2) only applies when an insurer is denying coverage based on an exclusion or breach of condition.  

With regard to Redland’s argument, the court found no language in the excess policy indicating that full payment under Capitol’s policy was a condition for payment of excess coverage.  Rather, the policy simply provided that Redland would not be liable until the underlying insurer “paid the amount of underlying insurance stated in Declaration 5.”  Thus, the payment of the $50,000 sub-limit would trigger coverage.  Further, there was no assault/battery exclusion in the Redland policy or any type of sub-limit.  Thus, it was obligated to provide excess coverage.

10/26/11         QBE Ins. Corp. v. ADJO Contr. Corp.
Supreme Court, Nassau County
Pursuant to Pennsylvania Law, the Court Finds That Where a Loss Is Covered Under Multiple Policies, Each Insurer Is Jointly and Severely Liable for Defense Costs
This is a decision that addresses who is required to pay defense costs when multiple insurers have an obligation to defend.  In April 2011, we reported on a case involving massive water intrusion at an apartment complex owned by Archstone-Smith Operating Trust (“Archstone”).  Specifically, the decision we reported on found that that Archstone qualified as an additional insured under multiple policies issued by various insurers, including a policy issued by Erie Insurance Exchange (“Erie”).  The decision did not address any allocation of defense costs between the insurers. 

Now, jump forward seven months, Archstone brings a motion against Erie only seeking an Order that pursuant to the April 2011 decision it is required to pay all defense cost incurred by Archstone in connection with the underlying tenant lawsuits (approximately $7 million) based on the concept of joint and several liability.  Erie opposed the motion asserting that Archstone is not permitted to have unfettered choice as to which of multiple carriers is to be totally responsible for defense costs.   

The court applied Pennsylvania law to the issue and found that a case out of its highest court was controlling.  In J.H. France v. Refractories Co. v. Allstate Insur. Co., the court found that an insurer contracts to pay all sums which the insured becomes legally obligated to pay, not some pro rata portion of them.  There is no provision for a reduction in the insurer’s liability if an injury is covered under multiple policies.  With that said, the court in J.H. France did note that this determination did not affect the rules of contribution or “other insurance” provisions.

The court in this decision then considered whether to apply the “joint and several liability” theory put forth by J.H. France was against New York public policy.   While there are cases in New York that apply a pro-rata allocation for damages, the court felt that those decisions did not constitute a statement of public policy in New York that would obviate the application of Pennsylvania law.  Thus, the court granted Archstone’s motion.   

10/13/11         Strauss Painting, Inc. v. Mt. Hawley Ins. Co.
Supreme Court, New York County
Insurer Cannot Reply on Untimely Notice Defense Where a Denial Was Never Issued
Metropolitan Opera Association (“the Met”) contracted with Strauss Painting to perform scraping and repainting of steel carriage rails.  Strauss then subcontracted the work to Creative Finishes Limited. 

On September 16, 2008, an employee of Creative’s was injured when he fell from a 15-foot tall ladder.  Two months later, he commenced an action against the Met.  In December 2008, the Met tendered to Strauss and, in January, tendered its defense to Strauss’ CGL carrier, Mt. Hawley. 

On February 3 and again on March 4, 2009, Mt. Hawley wrote to Travelers, the Met’s insurer, to request additional information to help it determine whether the Met was an additional insured under the Mt. Hawley policy, and when the Met first had notice of the accident.  The facts of the case do not address if/when the Met replied. 

In this decision, the Met asserted that it qualified as an additional insured under the policy issued to Strauss based on their contract.  The contract contained the following insurance requirements, in relevant part:

b.         Owners and Contractors Protective Liability Insurance with a combined single limit of $5,000,000.  Liability should add [the Met] as an additional insured and should include contractual liability and completed operations coverage.
c.         Comprehensive General Liability.  Combined coverage for property and bodily injury with a minimum single limit of $5,000,000 (limits may be met with an “Umbrella Policy.”).          

In reply, Mt. Hawley argued that this portion of the Strauss contract’s “insurance requirements,” obligated Strauss to “add [the Met] as an additional insured and should include contractual liability and completed operations coverage” applied only to the “owners and contractors protective liability insurance” policy that Strauss was required to obtain (and failed to), and not to the “comprehensive general liability insurance” that it actually obtained.  The court rejected this argument finding no precedent that would support Mt. Hawley’s interpretation. 

Mt. Hawley also argued that the notice provided by the Met was untimely.  On this point, the court agreed finding that there was no argument that the Met reasonably believed that it bore no responsibility for the accident.  Thus, the Met’s three/four month delay in notifying Mt. Hawley was unreasonable. However, as Mt. Hawley only requested additional information, but never denied coverage based on late notice, this defense was waived and Mt. Hawley was obligated to defend the Met. 

 

EARL’S PEARLS
Earl K. Cantwell

LOSS RESERVE INFORMATION HELD NOT DISCOVERABLE
IN BAD FAITH CLAIM

A federal judge recently rejected a film studio’s request to compel one of its insurers to produce loss reserve information with respect to claims made to cover losses on production of “The Expendables” a 2010 action movie starring Sylvester Stallone, et al.  The case was Alta Vista Productions, LLC v. St. Paul Fire and Marine Insurance Co., 2011 WL 3290395 (E.D. La. August 1, 2011). 

Alta Vista Productions filed the lawsuit against two of its insurers who issued policies to protect Alta Vista from losses on production of the movie.  The studio made three claims on the policies related to medical issues experienced by Sylvester Stallone and Jason Statham, two of the lead actors.  The studio alleged that the insurers underpaid certain claims and denied coverage on a third, and (of course) accused the insurance companies of “bad faith”. 

Eventually, Alta Vista moved to compel St. Paul to produce loss reserve information withheld during discovery.  The Magistrate Judge denied the motion to compel.  On the one hand, loss reserve information is often discoverable in bad faith cases.  However, the judge said in this case that the loss reserve information was not relevant to St. Paul’s investigation of Alta Vista’s claims.  Generally, the court held that a loss reserve, being simply an estimate of potential loss, has no effect on investigation of claims, and sheds no light on the extent of the investigation or investigation methods. 

Alta Vista appealed to the District Court Judge arguing that loss reserve numbers may show an insurer’s “state of mind” when it processed a coverage claim or conducted its investigation.  The District Court Judge agreed with the Magistrate Judge that the requested information was not relevant to the studio’s bad faith claims.  Accordingly, she denied Alta Vista’s motion to compel. 

The lesson to be learned from Alta Vista is not to routinely turn over loss reserve information in bad faith litigation.  Rather, the argument should be made that reserve information is highly technical and often has little or no relation to claims investigation or handling.  Loss reserve information is also so specialized that the numbers can easily be misunderstood and manipulated.  Alta Vista provides some reasoning to support withholding loss reserve information in bad faith litigation as not being relevant to the investigation or claims handling process even though the insured will argue that it is indicative of the insurance company’s “state of mind” with respect to the financial parameters of a claim.   

 

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

10/31/11         State Farm Mutual Automobile Ins. Co. v. Reyher
Colorado Supreme Court
Predominance Requirement for Class Certification Was Not Satisfied by Potential Class-Wide Theory of Defendant’s Liability
Pauline Reyher and her doctor filed suit against State Farm, her insurer, for failure to pay the full amount of medical expenses in violation of Colorado's Automobile No-Fault Act.  The plaintiffs moved to certify all insureds and all providers who were reimbursed less than the full amount from State Farm.  The trial court held that proving State Farm's liability required an analysis of individual facts regarding State Farm's calculation of reasonable medical expenses. Therefore, the individual issues predominated over common issues, which barred class certification.  The appellate court reversed, because State Farm's liability could potentially be proven under a class-wide theory of liability.  The Supreme Court of Colorado reversed and held that the class could not be certified because it failed to meet Colorado Rule of Civil Procedure 23(b)(3)'s predominance requirement.
Submitted by: James Gulotta and Anne-Marie Mitchell of Stone Pigman Walther Wittmann L.L.C

10/21/11         Town & Country Property LLC v. Amerisure Ins. Co.
Alabama Supreme Court
Claim of Faulty Workmanship, Standing Alone, Is Not an “Occurrence” under CGL Insurance Policy
T & C sued Amerisure pursuant to Alabama’s direct action statute, alleging that Amerisure was obligated to pay a $650,100 judgment entered in favor of T &C and against Amerisure’s insured (Jones-Williams) in a separate action pursuant to a CGL policy.  The trial court entered summary judgment in favor of Amerisure, based on its finding that there had been no “occurrence” invoking coverage under the policy.  The Alabama Supreme Court affirmed, holding that Amerisure was not required to indemnify Jones-Williams for the judgment entered against it insofar as the damages represented the costs of repairing or replacing the faulty work.  “[W]e may conclude that faulty workmanship itself is not an occurrence but that faulty workmanship may lead to an occurrence if it subjects personal property or other parts of the structure to ‘continuous or repeated exposure’ to some other ‘general harmful condition’ (e.g., the rain in Moss) and, as a result of that exposure, personal property or other parts of the structure are damaged.”
Submitted by: W. Steven Nichols of Christian & Small, LLP, Birmingham, AL.

 

Reported Decisions

492 Kings Realty, LLC v. 506 Kings, LLC

Cascone & Kluepfel, LLP, Garden City, N.Y. (Gary Austin Manso and Michael Reagan of counsel), for third-party defendant-appellant.
McMahon, Martine & Gallagher, LLP, Brooklyn, N.Y. (Patrick W. Brophy of counsel), for defendant third-party plaintiff-respondent.
Charles J. Siegel, New York, N.Y. (Peter E. Vairo of counsel), for defendant-respondent.

DECISION & ORDER
In an action, inter alia, to recover damages for injury to real property, and a third-party action, among other things, for a judgment declaring that the third-party defendant Scottsdale Insurance Company is obligated to defend and indemnify the defendant third-party plaintiff, 506 Kings, LLC, in the main action, the third-party defendant Scottsdale Insurance Company appeals from an order of the Supreme Court, Kings County (Ambrosio, J.), dated September 17, 2009, which granted the separate motions of the defendant third-party plaintiff, 506 Kings, LLC, and the defendant Midtown Equities, LLC, in effect, for summary judgment declaring that it is obligated to defend each of them in the main action, and denied its cross motion, inter alia, for summary judgment declaring that it is not obligated to defend or indemnify the defendant third-party plaintiff, 506 Kings, LLC, or any other party in the main action.

ORDERED that the order is affirmed, with one bill of costs, and the matter is remitted to the Supreme Court, Kings County, for the entry of a judgment, inter alia, declaring that the third-party defendant Scottsdale Insurance Company is obligated to defend the defendant third-party plaintiff, 506 Kings, LLC, and the defendant Midtown Equities, LLC, in the main action.

In May 2006 the defendant 506 Kings, LLC (hereinafter 506 Kings), in connection with the construction of a six-story condominium, entered into an agreement with the third-party defendant Metrotech Construction of New York Corp. (hereinafter Metrotech) to perform underpinning work on adjacent properties. Metrotech obtained commercial general liability insurance coverage from the third-party defendant Scottsdale Insurance Company (hereinafter Scottsdale) for a one-year period ending June 16, 2007, and named 506 Kings, care of Midtown Equities, LLC (hereinafter Midtown Equities), as an additional insured. On September 14, 2006, an adjacent building owned by the plaintiff 492 Kings Realty, LLC (hereinafter 492 Kings), and leased to the plaintiff Kosher Corner Supermarket, Inc. (hereinafter Kosher Corner), suffered a partial collapse. An investigative report suggested that the collapse was caused by Metrotech's failure to use 24-inch thick underpinnings. 492 Kings and Kosher Corner commenced this action against, among others, 506 Kings and Midtown Equities (hereinafter together the defendants), seeking, inter alia, to recover damages for injury to their property. 506 Kings, in turn, commenced a third-party action against Metrotech and Scottsdale seeking, among other things, a declaration that Scottsdale is obligated to defend and indemnify 506 Kings in the main action.

The defendants separately moved, in effect, for summary judgment declaring that Scottsdale is obligated to defend them in the main action, and Scottsdale cross-moved, inter alia, for summary judgment declaring that it is not obligated to defend or indemnify 506 Kings or any other party in the main action. The Supreme Court granted the motions and denied the cross motion. We affirm.

"A duty to defend is triggered by the allegations contained in the underlying complaint. The inquiry is whether the allegations fall within the risk of loss undertaken by the insured and, it is immaterial that the complaint against the insured asserts additional claims which fall outside the policy's general coverage or within its exclusory provisions" (BP A.C. Corp. v One Beacon Ins. Group, 8 NY3d 708, 714 [internal quotation marks omitted]; see Town of Oyster Bay v Employers Ins. of Wausau, 269 AD2d 387, 388).

Here, documentary proof tendered by the defendants in the form of the contract agreement with Metrotech, the summons and complaint in the main action, and the insurance policy Scottsdale issued to Metrotech was sufficient to demonstrate, prima facie, that the defendants were additional insureds under the policy, and that the allegations in the underlying complaint fell within the scope of the risks undertaken by the insurer, Scottsdale (see Village of Brewster v Virginia Sur. Co., Inc., 70 AD3d 1239; City of New York v Philadelphia Indem. Ins. Co., 54 AD3d 709).

Since the defendants' submissions established their prima facie entitlement to judgment as a matter of law, the burden shifted to Scottsdale to establish the absence of coverage (see Parsippany Constr. Co., Inc. v CNA Ins. Co., 67 AD3d 658, 659), which it failed to do. Scottsdale argued that under the terms of an endorsement to the insurance policy, the defendants' status as additional insureds terminated on July 29, 2006, the date Metrotech completed its operations on the subject construction project. Inasmuch as the date of completion predated the collapse, Scottsdale maintained that the defendants no longer qualified as additional insureds and, thus, no duty to defend existed.
Insurance provisions that cover only ongoing operations or, conversely, do not cover completed operations, have routinely been treated as policy exclusions (see e.g. Liberty Mut. Fire Ins. Co. v E.E. Cruz & Co., Inc., 475 F Supp 2d 400, 409; Town of Fort Ann v Liberty Mut. Ins. Co., 69 AD3d 1261, 1262-1263; Suburban Bindery Equip. Corp. v Boston Old Colony Ins. Co., 150 AD2d 767; Kincaid v Simmons, 66 AD2d 428, 430-431). "To be relieved of its duty to defend on the basis of a policy exclusion, the insurer bears the heavy burden of demonstrating that the allegations of the complaint cast the pleadings wholly within that exclusion, that the exclusion is subject to no other reasonable interpretation, and that there is no possible factual or legal basis upon which the insurer may eventually be held obligated to indemnify the insured under any policy provision" (Frontier Insulation Contrs. v Merchants Mut. Ins. Co., 91 NY2d 169, 175; see Bovis v Crab Meadow Enters, Ltd., 67 AD3d 846, 848).

Here, Scottsdale failed to meet its burden of demonstrating that the allegations of the complaint cast the pleadings wholly within a policy exclusion. The allegation by 492 Kings that the property damage arose out of the defendants' negligence in "conducting" the construction project was broad enough to encompass a claim under the policy that an act or omission of Metrotech performed for 506 Kings may be a proximate cause of the injuries, thus triggering a duty to defend (see Kincaid v Simmons, 66 AD2d 428; Suburban Bindery Equip. Corp. v Boston Old Colony Ins. Co., 150 AD2d 767).

Scottsdale's remaining contentions are without merit.

Accordingly, the Supreme Court properly granted the separate motions of 506 Kings and Midtown Equities, in effect, for summary judgment declaring that Scottsdale is obligated to defend them in the main action, and denied Scottsdale's cross motion, inter alia, for summary judgment declaring that it is not obligated to defend or indemnify 506 Kings or any other party in the main action.

Since the third-party action is, in part, a declaratory judgment action, the matter must be remitted to the Supreme Court, Kings County, for the entry of a judgment, inter alia, declaring that Scottsdale is obligated to defend 506 Kings and Midtown Equities in the main action (see Lanza v Wagner, 11 NY2d 317, 334, appeal dismissed 371 US 74, cert denied 371 US 901).

 

Golub v. Tanenbaum-Harber Co., Inc.

David Lu, New York, for appellant.
Rubin, Fiorella & Friedman LLP, New York (Mandie R. Forman of counsel), for respondent.

Order, Supreme Court, New York County (Louis B. York, J.), entered November 16, 2010, which granted defendant's motion to dismiss the complaint, and denied plaintiff's cross motion to amend the complaint, unanimously affirmed, with costs.

Supreme Court properly granted the motion to dismiss the complaint. Affording the complaint a liberal construction and according plaintiff the benefit of every possible inference, as we must (see Leon v Martinez, 84 NY2d 83, 87-88 [1994]), we find that plaintiff failed to sufficiently plead causes of action for fraudulent inducement, unjust enrichment and violation of GBL § 349.

Plaintiff's claims for fraudulent inducement are based on defendant's alleged failure to provide plaintiff with certain information relating to the insurance policies it was offering. However, an omission does not constitute fraud unless there is a fiduciary or "special" relationship between the parties (Eurycleia Partners, LP v Seward & Kissel, LLP, 46 AD3d 400, 402 [2007], affd 12 NY3d 553 [2009]) and plaintiff did not allege in the original complaint the existence of a fiduciary relationship or special relationship which would give rise to a duty to disclose. In any event, "an insurance agent has a common-law duty to obtain requested coverage, but generally not a continuing duty to advise, guide or direct a client based on a special relationship of trust and confidence" (Chase Scientific Research v NIA Group, 96 NY2d 20, 30 [2001]; see also Murphy v Kuhn, 90 NY2d 266, 270 [1997]).

In addition, with regard to plaintiff's Long Island property, the documentary evidence established that plaintiff affirmatively requested wind coverage in his homeowners' insurance applications from 2005 through 2008, and did not decide to forego such coverage until 2009, at which time defendant had him complete an application declining such coverage despite the proximity of his LI property to the water. At that time, he was given a policy without wind coverage. Of course, plaintiff is "presumed to have read and understood his policy" (see McGarr v Guardian Life Ins. Co. of Am., 19 AD3d 254, 256 [2005]), and thus the documentary evidence defeats the claim that plaintiff did not know the policy included wind coverage or that he was fraudulently induced into agreeing to wind coverage.

As for plaintiff's claim under GBL § 349, he failed to allege in the complaint the type of conduct that would have a broad impact on consumers at large (see Oswego Laborers' Local 214 Pension Fund v Marine Midland Bank, 85 NY2d 20, 25 [1995]) and his conclusory allegations about defendant's practices with other clients are insufficient to save the claim (see Northwestern Mut. Life Ins. Co. v Wender, 940 F Supp 62, 65 [SD NY 1996]). The unjust enrichment claim was also properly dismissed, as it was merely based on the three previous claims, each of which failed to state a cause of action.

Supreme Court also properly denied the cross motion for leave to amend the complaint, as the proposed amendments were plainly lacking in merit (see Sharon Ava & Co. v Olympic Tower Assoc., 259 AD2d 315 [1999]). First, there is no merit to the proposed amendment to the unjust enrichment claim based on Insurance Law § 2123, which does not apply to the homeowners' insurance policies at issue. Nor is there any merit to plaintiff's proposed breach of fiduciary duty claims or his proposed changes to his fraudulent inducement claims, since defendant had no fiduciary duty or special relationship with plaintiff.

The proposed breach of contract claims are barred by the parol evidence rule, since the terms of the insurance contract and applications here are unambiguous (see R/S Assoc. v New York Job Dev. Auth., 98 NY2d 29, 33 [2002]). In addition, plaintiff erroneously suggests that a contract was formed when he requested that defendant procure the least expensive policies. Indeed, when plaintiff requested that defendant procure insurance quotes, he was submitting a request for an offer, which cannot be the basis for a enforceable contract since a further act was required in order for the contract to take effect (see Farago Adv., Inc. v Hollinger Intl., Inc., 157 F Supp 2d 252, 258 [SD NY 2001]).

We have considered plaintiff's remaining arguments and find them unavailing.

RLI Insurance Company v. Steely

Saretsky Katz Dranoff & Glass, LLP, New York, N.Y. (Eric Dranoff and Gary J. Levy of counsel), for appellant-respondent.
Quirk and Bakalor, P.C., New York, N.Y. (Richard H. Bakalor of counsel), for plaintiff-respondent-appellant and defendant-respondent-appellant.

DECISION & ORDER

In an action for a judgment declaring, inter alia, that the defendant New York Central Mutual Fire Insurance Company is obligated to provide primary insurance coverage to the defendant William Steely in an underlying action entitled Sanchez v Steely, pending in the Supreme Court, Westchester County, under Index No. 05349/07, the defendant New York Central Mutual Fire Insurance Company appeals (1) from so much of an order of the Supreme Court, Westchester County (DiBella, J.), dated January 6, 2010, as denied its motion for summary judgment, in effect, declaring that it was not obligated to provide said insurance coverage, and dismissing all cross claims insofar as asserted against it, and (2), as limited by its brief, from so much of an order of the same court entered October 13, 2010, as denied that branch of its motion which was for leave to reargue, and, upon renewal, adhered to so much of the prior determination as denied its motion for summary judgment, in effect, declaring that it was not obligated to provide said insurance coverage, and dismissing all cross claims insofar as asserted against it, and the plaintiff and the defendant William Steely cross-appeal, as limited by their notices of appeal and brief, from so much of the order dated January 6, 2010, as denied the cross motion of the defendant William Steely for summary judgment on his cross claim against the defendant New York Central Mutual Fire Insurance Company for a judgment declaring that it is obligated to provide him with insurance coverage in the underlying action.

ORDERED that the cross appeal by the plaintiff is dismissed, without costs or disbursements, as the plaintiff is not aggrieved by the portion of the order dated January 6, 2010, cross-appealed from (see CPLR 5511; Mixon v TBV, Inc., 76 AD3d 144); and it is further,

ORDERED that the appeal from so much of the order dated January 6, 2010, as denied the motion of the defendant New York Central Mutual Fire Insurance Company for summary judgment, in effect, declaring that it was not obligated to provide the subject insurance coverage, and dismissing all cross claims insofar as asserted against it is dismissed, without costs or disbursements, as that part of the order was superseded by so much of the order entered October 13, 2010, as was made upon renewal; and it is further,

ORDERED that the appeal from so much of the order entered October 13, 2010, as denied that branch of the motion of the defendant New York Central Mutual Fire Insurance Company which was for leave to reargue is dismissed, without costs or disbursements, as no appeal lies from an order denying reargument; and it is further,

ORDERED that the order dated January 6, 2010, is affirmed insofar as cross-appealed from by the defendant William Steely, without costs or disbursements; and it is further,.

ORDERED that the order entered October 13, 2010, is affirmed insofar as reviewed, without costs or disbursements.

The defendant William Steely sought insurance coverage for a boating accident pursuant to, inter alia, a homeowner's policy issued to him by the defendant New York Central Mutual Fire Insurance Company (hereinafter NY Mutual), and an umbrella policy issued to him by the plaintiff, RLI Insurance Company. Based on a provision in the NY Mutual policy excluding coverage if Steely owned the "outboard engine" on the date of the accident, NY Mutual denied coverage. The plaintiff commenced this action for a judgment declaring, among other things, that NY Mutual was obligated to provide primary insurance coverage to Steely, asserting that he did not, in fact, own the outboard engine on the date of the accident. Instead, the plaintiff alleged, nonparty James Banford, Steely's former brother-in-law and friend, owned the outboard engine. Thus, according to the plaintiff, its coverage obligation was excess to the coverage obligation of NY Mutual (see RLI Ins. Co. v Steely, 65 AD3d 539).

NY Mutual moved for summary judgment, in effect, declaring that it was not obligated to provide coverage, and dismissing all cross claims insofar as asserted against it. Steely cross-moved for summary judgment on his cross claim against NY Mutual for a judgment declaring that it is obligated to provide him with insurance coverage. The Supreme Court denied the motion and cross motion. NY Mutual then moved for leave to reargue and renew its prior motion. The Supreme Court denied that branch of NY Mutual's motion which was for leave to reargue, finding that it had not overlooked or misapprehended any matters of fact or law. Further, upon granting renewal, the Supreme Court adhered to so much of its prior determination as denied NY Mutual's motion.

The Supreme Court properly denied the respective parties' motion and cross motion for summary judgment. A certificate of title is prima facie evidence of ownership (see Zegarowicz v Ripatti, 77 AD3d 650, 653; Dobson v Gioia, 39 AD3d 995, 998; Corrigan v DiGuardia, 166 AD2d 408, 409). While NY Mutual contends that the certificate of title to the boat, which was issued by the State of Florida and was in the name of Banford on the date of the accident, was not prima facie proof of ownership of the outboard engine (see Vehicle & Traffic Law § 2101[n]; §§ 2104, 2108[c]; § 2250), there is nothing in the record to suggest that the boat was purchased apart from the outboard engine, or that the ownership of one was ever separate from the other. Thus, contrary to NY Mutual's contention, the certificate of title to the boat, along with the affidavits of Steely and Banford averring that Banford had merely permitted Steely the temporary use of the boat, was prima facie proof that Banford, and not Steely, owned the boat's outboard engine.

However, the evidence submitted by NY Mutual raised a triable issue of fact sufficient to rebut the presumption of ownership created by the certificate of title as to whether Steely had "dominion and control" over the outboard engine such that he should be considered a de facto owner (Dobson v Gioia, 39 AD3d at 998-999, quoting Matter of Vergari v Kraisky, 120 AD2d 739, 740; see Corrigan v DiGuardia, 166 AD2d at 409). In this regard, Steely testified during his deposition that he paid for the maintenance costs of the boat, and he used it as much as Banford did prior to the accident. Steely further testified that he provided Banford with $15,500 to help him pay off the loan he used to purchase the boat, for which Steely did not expect to be repaid, and that when he subsequently purchased the boat from Banford after the accident, he paid only half of its estimated value.

Nevertheless, this evidence, while sufficient to raise an issue of fact as to whether Steely was a de facto owner of the outboard engine, did not establish, as a matter of law, that he was a de facto owner and not merely a permissive user of the boat and its outboard engine. The new facts offered by NY Mutual upon renewal of its motion for summary judgment, in effect, declaring that it was not obligated to provide the subject insurance coverage, and dismissing cross claims insofar as asserted against it, were not sufficient to warrant changing the original determination (see CPLR 2221[e]; Weitzenberg v Nassau County Dept. of Recreation & Parks, 53 AD3d 653, 654).

Accordingly, the Supreme Court properly denied Steely's cross motion for summary judgment on his cross claim against NY Mutual for a judgment declaring that it is obligated to provide him with insurance coverage in the underlying action, and, upon renewal, properly adhered to so much of the original determination as denied NY Mutual's motion for summary judgment, in effect, declaring that it was not obligated to provide the subject insurance coverage, and dismissing all cross claims insofar as asserted against it.

Empire State Shipping Service, Ltd. v.  Hanover Insurance Company

James F. Cirrincione, Bronx, for appellants.
Callan, Koster, Brady & Brennan LLP, New York (Michael P. Kandler of counsel), for respondent.

Order, Supreme Court, Bronx County (Edgar G. Walker, J.), entered on or about August 17, 2010, which denied plaintiffs' motion for summary judgment, and granted defendant insurer's cross motion for summary judgment dismissing the complaint and a declaration that it had no duty to defend or indemnify plaintiffs with regard to the underlying action, unanimously affirmed, with costs.
We reject defendant's argument that plaintiffs failed to preserve their contentions pertaining to the "accrual dates" of the underlying complaint's causes of action. While they may not have been framed in quite the same manner, plaintiffs' arguments can fairly be construed as having been made before Supreme Court and are therefore preserved (see Howard S. v Lillian S., 62 AD3d 187, 190 [2009], affd 14 NY3d 431 [2010]).

The Businessowners Policy provides coverage for "bodily injury" but "only if" it is caused by an "occurrence" and the bodily injury "occurs during the policy period." Supreme Court properly determined that the first and second causes of action in the underlying action, which allege negligent and intentional infliction of emotional distress, do not fall within the scope of "bodily injury" because the earliest that harm is alleged to have occurred is in the fall of 2005, when the plaintiff in the underlying action learned of the alleged mishandling of her son's remains. This was over two years after plaintiff Empire cancelled its policies with defendant, effective June 20, 2003 (see Melfi v Mount Sinai Hosp., 64 AD3d 26 [2009]).

While we agree with plaintiffs that Supreme Court should not have characterized the only damages alleged in the underlying action as emotional distress, this error was harmless because coverage would not have been triggered in any event. The only causes of action for which this error could have triggered coverage are the third and fifth causes of action for negligence and negligent misrepresentation. It is alleged that the plaintiff in the underlying action "was caused, and shall in the future be caused, to suffer severe pain and suffering, severe emotional distress and harm, financial or economic loss, including but not limited to, present and future lost wages, and other damages." While these causes of action may contain allegations that Empire was negligent during the policy period, there is no allegation that the plaintiff in the underlying action suffered "bodily injury" during the policy period.

We have considered plaintiffs' remaining contentions, and find them unpersuasive.

Jean-Baptiste v. Tobias

Sim & Park, LLP, New York, N.Y. (Sang J. Sim of counsel), for appellants.
Richard T. Lau, Jericho, N.Y. (Joseph G. Gallo of counsel), for respondents.

DECISION & ORDER

In an action to recover damages for personal injuries, the plaintiffs appeal, as limited by their brief, from so much of an order of the Supreme Court, Nassau County (Adams, J.), entered May 20, 2010, as granted the defendants' cross motion for summary judgment dismissing the complaint on the ground that neither of the plaintiffs sustained a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and the defendants' cross motion for summary judgment dismissing the complaint on the ground that neither of the plaintiffs sustained a serious injury within the meaning of Insurance Law § 5102(d) is denied.

The Supreme Court properly concluded that the defendants met their prima facie burden of showing, on their cross motion, that neither of the plaintiffs sustained a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345, 351; Gaddy v Eyler, 79 NY2d 955, 956-957). However, the Supreme Court erred in failing to find that the plaintiffs, in opposition, raised a triable issue of fact.

The plaintiffs raised a triable issue of fact as to whether the plaintiff Gamaliel Jean-Baptiste sustained a serious injury to the lumbar region of his spine under the permanent consequential limitation of use and/or the significant limitation of use categories of Insurance Law § 5102(d), and whether the plaintiff Marieange Moise sustained a serious injury to the cervical region 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 Tavares v Eyl, 84 AD3d 1218, 1218-1219; Mazil v Quinones, 84 AD3d 893, 894; Dixon v Fuller, 79 AD3d 1094; Gussack v McCoy, 72 AD3d 644).

In averring that no-fault benefits were denied to both plaintiffs, and that both plaintiffs were advised by their physician that their injuries were permanent and any treatment received would be merely palliative in nature, the plaintiffs also provided an adequate explanation for their lengthy gaps in treatment (see Park v He Jung Lee, 84 AD3d 904, 905; Black v Robinson, 305 AD2d 438, 439-440; see also Pommells v Perez, 4 NY3d 566, 574).

Contrary to the defendants' contention on appeal, the plaintiffs' treating physician, Dr. David Mun, did not have to address the plaintiffs' prior accident history (see Messiana v Drivas, 85 AD3d 744, 745; Hightower v Ghio, 82 AD3d 934, 935). Although the defendants supported their initial moving papers with evidence that the plaintiffs were involved in prior accidents where they previously injured some of the same regions of their respective bodies that they claim to have injured in the subject accident, the defendants failed to make a prima facie showing that the plaintiffs' injuries claimed in the subject accident were actually caused by the prior accidents (see Messiana v Drivas, 85 AD3d at 744-745; Hightower v Ghio, 82 AD3d at 935). Therefore, the burden did not shift to the plaintiffs to raise a triable issue of fact as to whether the injuries alleged by them to have been sustained in the subject accident were caused by the subject accident, rather than by the prior accidents (see Messiana v Drivas, 85 AD3d at 744-745; Hightower v Ghio, 82 AD3d at 935; see also Stukas v Streiter, 83 AD3d 18, 24—25).

Accordingly, the Supreme Court should have denied the defendants' cross motion for summary judgment.

Young Chool Yoo v. Rui Dong Wang

Sim & Park, LLP, New York, N.Y. (Sang J. Sim of counsel), for appellant.
Mendolia & Stenz, P.C. (Montfort, Healy, McGuire & Salley, Garden City, N.Y.
[Donald S. Neumann, Jr.], 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 (Lebowitz, J.), dated August 2, 2010, which granted that branch of the defendant's motion which was for summary judgment dismissing the complaint on the ground that he did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is reversed, on the law, with costs, and that branch of the defendant's motion which was for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) is denied.

The Supreme Court erred in determining that the plaintiff did not plead any injuries with respect to his left shoulder in his bill of particulars. The plaintiff clearly alleged in his bill of particulars that he sustained hypertrophic acromioclavicular joint changes with encroachment upon the supraspinatus tendon, which is found in the shoulder. Moreover, the plaintiff testified at his deposition that he injured his left shoulder as a result of the subject accident, and the defendant's examining orthopedic surgeon examined this region of the plaintiff's body when he examined the plaintiff on December 17, 2009, and reviewed the magnetic resonance imaging (hereinafter MRI) report of the plaintiff's "AC joint" as part of his preparation to examine the plaintiff. Therefore, the defendant cannot claim surprise in this case concerning the alleged injury to the plaintiff's left shoulder, since the defendant's own expert examined that region of the plaintiff's body.

The Supreme Court properly determined that the defendant met his prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957; see also Giraldo v Mandanici, 24 AD3d 419).

In opposition, however, the plaintiff raised a triable issue of fact through the affirmation of Dr. Benjamin Chang, the plaintiff's treating physician. In his affirmation, Dr. Chang concluded, based on his contemporaneous and most recent examinations of the plaintiff, which revealed significant limitations in the lumbar regions of the plaintiff's spine and left shoulder, that the plaintiff's injuries were permanent. Dr. Chang opined that the plaintiff sustained a permanent consequential limitation of use and/or a significant limitation of use of those areas as a result of the subject accident. Thus, Dr. Chang's findings concerning the plaintiff were sufficient to raise a triable issue of fact as to whether, as a result of the subject accident, the plaintiff sustained a serious injury to the lumbar region of his spine and/or left shoulder under the permanent consequential limitation of use and/or the significant limitation of use categories of Insurance Law § 5102(d) (see Dixon v Fuller, 79 AD3d 1094; Gussack v McCoy, 72 AD3d 644).

Contrary to the defendant's contention, the plaintiff adequately explained the cessation in his treatment in this case through his affidavit and the affirmation of Dr. Chang (see Pommells v Perez, 4 NY3d 566, 574; Khaimov v Jing Fan, 87 AD3d 1055).

The defendant's contention that the plaintiff failed to address the issue of degeneration in the lumbar region of his spine raised by the defendant's radiology expert, Dr. Sondra Pfeffer, also is without merit. Dr. Chang concluded in his affirmation, based upon his review of the MRI of the lumbar region of the plaintiff's spine, as well as his examinations of the plaintiff, that the plaintiff's injuries were caused by the subject accident, and were not caused by degenerative disease. This was sufficient to address the issue of degeneration raised by the defendant's expert (see Tai Ho Kang v Young Sun Cho, 74 AD3d 1328, 1330; Whitehead v Olsen, 70 AD3d 678; Modeste v Mercier, 67 AD3d 871). Accordingly, that branch of the defendant's motion which was 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) should have been denied.

The plaintiff's contention concerning that branch of the defendant's motion which was for summary judgment dismissing the complaint on the ground that the defendant did not breach any duty to the plaintiff is not properly before this Court. That branch of the motion was not addressed by the Supreme Court and, thus, remains pending and undecided (see Katz v Katz, 68 AD2d 536, 542-543).

McGlinchey v Vassar College

Kenney Shelton Liptak Nowak LLP, Buffalo (Nancy A. Long of counsel), for appellant.
Wilson, Elser, Moskowitz, Edelman & Dicker LLP, New York (Christine Bernstock of counsel), for respondent.

Order, Supreme Court, Bronx County (Diane A. Lebedeff, J.), entered March 22, 2011, which, to the extent appealed from as limited by the briefs, granted defendant/third-party plaintiff Vassar College's motion for summary judgment on its causes of action against third-party defendant Kirchhoff Construction Management for contractual and common-law indemnification, unanimously modified, on the law, to deny the motion as to the cause of action for common-law indemnification, and otherwise affirmed, without costs.

The injured plaintiff's testimony and the two unsworn medical reports submitted on the motion are insufficient to demonstrate that plaintiff sustained permanent and total loss of use of his left arm or foot, i.e., a "grave injury" within the meaning of Workers' Compensation Law § 11 (see Castro v United Container Mach. Group, 96 NY2d 398, 401-402 [2001]; Vincenty v Cincinnati Inc., 14 AD3d 392 [2005]). Thus, Vassar has no cause of action for common-law indemnification against Kirchhoff, plaintiff's employer.

The record demonstrates conclusively that Vassar was free from active negligence in connection with plaintiff's injuries. Thus, General Obligations Law § 5-322.1 does not bar its cause of action for contractual indemnification (see Colozzo v National Ctr. Found., Inc., 30 AD3d 251 [2006]).

PERALES v FIRST COLUMBIA 1200 NSR, LLC

Calendar Date: September 7, 2011
Before: Peters, J.P., Rose, Lahtinen, McCarthy and Garry, JJ.

Law Offices of Theresa J. Puleo, Syracuse (Michael G. Donnelly of counsel), for appellant.
Stockton, Barker & Mead, L.L.P., Albany (Robert S. Stockton of counsel), for respondent.
MEMORANDUM AND ORDER

Peters, J.P.

Appeal from an order of the Supreme Court (O'Connor, J.), entered November 1, 2010 in Albany County, which granted a motion by defendant Gallivan Corporation for summary judgment dismissing, among other things, the cross claims against it.

After leaving work at approximately 5:30 P.M. on January 16, 2007, plaintiff slipped and fell on ice in the parking lot of premises owned by defendant First Columbia 1200 NSR, LLC. In this personal injury action against both First Columbia and defendant Gallivan Corporation, which supplied snow and ice removal services to First Columbia pursuant to a written agreement, plaintiff claims that they negligently maintained the property. In its answer, First Columbia interposed cross claims against Gallivan for contribution and indemnification. Following joinder of issue and the completion of discovery, Gallivan moved for summary judgment dismissing the complaint against it and First Columbia's cross claims. Supreme Court granted the motion in its entirety, prompting this appeal by First Columbia.[FN1]

Supreme Court properly dismissed First Columbia's claim for contractual indemnification. The parties' contract required that Gallivan indemnify First Columbia for "all liability and loss . . . caused by or sustained in connection with the performance of this Service Agreement or by conditions created thereby." Here, Gallivan made a prima facie showing of entitlement to summary judgment dismissing the contractual indemnification claim by demonstrating that it fulfilled its duties under the contract (see Kearsey v Vestal Park, LLC, 71 AD3d 1363, 1366 [2010]) and that plaintiff's accident was not "caused by or sustained in connection with the performance of [the contract] or by conditions created thereby," such that the indemnification provision was not triggered (see Kogan v North St. Community, LLC, 81 AD3d 429, 430 [2011]; see generally Brown v Two Exch. Plaza Partners, 76 NY2d 172, 178 [1990]; O'Connor v Serge El. Co., 58 NY2d 655, 657 [1982]).

The contract obligated Gallivan to plow all parking lots and walkways after the accumulation of one inch of snow, and required salting and sanding "when conditions dictate." It also provided that snow, when cleared, would be piled in locations designated by First Columbia. It is undisputed that there was an ice storm on the day prior to plaintiff's accident and that Gallivan cleared the property of ice and performed salting several times on that date. Gallivan's service logs reveal that its employees returned to the property the following morning at 5:00 A.M. and applied salt. Upon an inspection of the property at approximately 7:00 A.M., an employee of Gallivan found the parking lot and walkways to be free of snow and ice. Gallivan also proffered plaintiff's deposition testimony that she observed no ice or snow in the parking lot or walkways when she arrived at work, as well as meteorological evidence demonstrating that no precipitation had fallen on the day of the accident. Furthermore, the two employees of Gallivan who inspected the property on the morning of the accident averred that when they plowed snow they always did so in the areas specified by First Columbia in the contract, that they never encountered a snow melt/refreeze issue at the subject parking lot and that there was no snow or ice accumulation present at the property on the morning of the accident.

In opposition, First Columbia failed to raise an issue of fact. Plaintiff's theory of the case is that she slipped on ice that formed from water that had melted from a pile of snow that was placed by Gallivan, and then subsequently froze. However, the record is devoid of any competent proof that Gallivan piled any snow in an area proximate to the location of plaintiff's fall. Notably, the evidence established that plowing and salting was also performed by First Columbia's property technician. Nor did First Columbia offer any evidence addressing the origin of the ice on which plaintiff fell (see Castro v Maple Run Condominium Assn., 41 AD3d 412, 414 [2007]; Reagan v Hartsdale Tenants Corp., 27 AD3d 716, 718 [2006]). As such, any argument that Gallivan created the condition that caused plaintiff's fall is based upon speculation. Although First Columbia also argues that Gallivan should have inspected the parking lot in the afternoon or early evening of the date of the accident, there is no proof that Gallivan "either knew about a condition that occurred after it left the premises or had any obligation to constantly monitor the property for such a condition" (Kearsey v Vestal Park, LLC, 71 AD3d at 1367; see Tamhane v Citibank, N.A., 61 AD3d 571, 573-574 [2009]). Accordingly, First Columbia's cross claim for contractual indemnification was properly dismissed.

We reach a similar conclusion with respect to First Columbia's cross claim for common-law indemnification. "One is entitled to implied indemnification where he or she has committed no wrong but is held vicariously liable for the wrongdoing of another" (Kozerski v Deer Run Homeowners Assn., 217 AD2d 841, 843 [1995] [citation omitted]; see Kearsey v Vestal Park, LLC, 71 AD3d at 1367; Westbank Contr., Inc. v Rondout Val. Cent. School Dist., 46 AD3d 1187, 1189 [2007]). Here, plaintiff's allegations charged First Columbia with liability in negligence for failing to properly configure the parking lot and pedestrian pathways, and vicarious liability for Gallivan's alleged negligent placement of snow piles. However, as previously noted, the contract required Gallivan to place plowed snow at the specified locations designated by First Columbia, and there is no evidence that Gallivan failed to follow those instructions. Where, as here, a contract's specifications are not so patently defective so as to put a contractor of ordinary prudence on notice that the work is dangerous and likely to cause injury, reliance on such contractual specifications is justified (see Hartofil v McCourt & Trudden Funeral Home, Inc., 57 AD3d 943, 945 [2008]; West v City of Troy, 231 AD2d 825, 826 [1996]; Morriseau v Rifenburg Constr., 223 AD2d 981, 982 [1996]; Pioli v Town of Kirkwood, 117 AD2d 954, 955 [1986], lv denied 68 NY2d 601 [1986]). Thus, since any liability on behalf of First Columbia for placement of the snow piles would involve its own active fault, a viable claim for common-law indemnification against Gallivan cannot lie (see Atkinson v Safety Kleen Corp., 240 AD2d 1003, 1005 [1997]).

Footnotes

Footnote 1: Although the notice of appeal states that First Columbia challenges "each and every part" of Supreme Court's order, its brief addresses only the dismissal of its cross claims for contractual and common-law indemnification. Accordingly, First Columbia has abandoned any argument that the court improperly dismissed its cross claim for contribution and plaintiff's complaint against Gallivan (see Ostuni v Town of Inlet, 64 AD3d 854, 855 n [2009]).

Hernandez v. Adelango Trucking

Stefano A. Filippazzo, P.C., Brooklyn (Stefano A. Filippazzo of
counsel), for appellants-respondents.
White Fleischner & Fino, LLP, New York (Deanna E. Hazen
of counsel), for respondents-appellants.
Law Office of Mary A. Bjork, Tarrytown (David Holmes of
counsel), for respondents.

Order, Supreme Court, Bronx County (Geoffrey D. Wright, J.), entered on or about June 18, 2010, which, to the extent appealed from as limited by the briefs, granted the motion of defendants Royal Coach Lines, Inc. and Olfemi John Osiyemi (Coach Lines defendants) for summary judgment dismissing the complaint based on the failure to establish a serious injury within the meaning of Insurance Law § 5102(d), unanimously affirmed, without costs, and the complaint dismissed as against all defendants. The Clerk is directed to enter judgment accordingly. Appeal from aforesaid order to the extent it denied the motion of the Coach Lines defendants for summary judgment on the issue of liability, unanimously dismissed, without costs, as academic in light of the foregoing.

Defendants established, prima facie, that the infant plaintiff did not sustain a serious injury as a result of the 2006 vehicular accident, through the submission of affirmed reports of medical experts, who, upon examination, found that plaintiff had normal ranges of ankle motion and had recovered from an ankle sprain without any disability (see Canelo v Genolg Tr., Inc., 82 AD3d 584 [2011]). Moreover, other submissions, including the bill of particulars and plaintiff's deposition, which stated that he missed less than six days of school, sufficiently refuted his 90/180-day claim (see Williams v Baldor Specialty Foods, Inc., 70 AD3d 522 [2010]; see also Torres v Dwyer, 84 AD3d 626, 626-627 [2011]). In opposition, plaintiffs failed to raise a triable issue of fact.

Dismissal of the complaint as against defendants Adelango Trucking and Jose F. Veloso is warranted because, " if plaintiff[s] cannot meet the threshold for serious injury against one [set of] defendant[s, they] cannot meet it against the other'" (DeJesus v Paulino, 61 AD3d 605, 608 [2009], quoting Lopez v Simpson, 39 AD3d 420, 421 [2007]).

In light of the foregoing, the issue of liability is rendered academic with respect to all defendants (see Williams, 70 AD3d at 523).

Atlantic Casualty Ins. Co. v. RJNJ Services

Keidel, Weldon & Cunningham, LLP, White Plains, N.Y. (Debra M. Krebs of counsel), for appellant.
Rubin Fiorella & Friedman LLP, New York, N.Y. (James M. Haddad and Mandie R. Forman of counsel), for respondents.

DECISION & ORDER

In an action, inter alia, for a judgment declaring that the plaintiff is not obligated to defend or indemnify the defendant RJNJ Services, Inc., doing business as Classic Construction, as a third-party defendant in an underlying personal injury action entitled Lala v Fairfield Ronkonkoma, LLC, pending in the Supreme Court, Bronx County, under Index No. 14880/05, the plaintiff appeals, as limited by its brief, from so much of an order of the Supreme Court, Suffolk County (Pastoressa, J.), entered March 30, 2010, as denied its motion for leave to enter a default judgment against the defendant RJNJ Services, Inc., doing business as Classic Construction, declaring that it is not obligated to defend or indemnify that defendant as a third-party defendant in the underlying action, and to sever the action against that defendant.

ORDERED that the order is affirmed insofar as appealed from, with costs.

On March 16, 2005, Jose Lala fell from a roof while performing his work as an employee of Painting & Home Design, a subcontractor of the defendant RJNJ Services, Inc., doing business as Classic Construction (hereinafter RJNJ). RJNJ had been hired by the defendants Fairfield Ronkonkoma, LLC, Fairfield Properties, and Fairfield Brokerage, LLC (hereinafter collectively Fairfield), to perform the roofing work at a building project in Ronkonkoma.

In April 2005 Lala commenced an underlying personal injury action against Fairfield to recover damages for personal injuries. In June 2006 American Claims, an authorized representative of the plaintiff Atlantic Casualty Insurance Company (hereinafter Atlantic), received a copy of the complaint in the underlying personal injury action from York Claims on behalf of Fairfield. In August 2006 Fairfield commenced the underlying third-party action against RJNJ. In 2007, the Supreme Court granted Fairfield's motion for a default judgment against RJNJ in the underlying third-party action.

Atlantic had issued a commercial general liability policy to RJNJ for a coverage period including the date of the occurrence. RJNJ did not give notice to Atlantic of the occurrence, the underlying personal injury action, or the underlying third-party action. RJNJ also did not give Atlantic notice of the default judgment against it in the underlying third-party action.

On September 29, 2006, after it had completed an investigation, Atlantic sent a written notice of disclaimer of coverage to RJNJ. The disclaimer was based on the grounds that RJNJ had never notified Atlantic about the accident or the default judgment entered against RJNJ, and that the policy precluded coverage since Lala was an employee of RJNJ's subcontractor.

In July 2008 Atlantic commenced the instant declaratory judgment action against, among others, RJNJ and Fairfield. RJNJ failed to appear or answer the complaint in the instant action. Atlantic moved for leave to enter a default judgment against RJNJ, declaring that it is not obligated to defend or indemnify RJNJ as a third-party defendant in the underlying action, and to sever the action against RJNJ. Fairfield opposed Atlantic's motion and cross-moved, in effect, for summary judgment declaring that Atlantic is obligated to defend and indemnify RJNJ as a third-party defendant in the underlying action. The Supreme Court denied the motion and the cross motion, determining that there were triable issues of fact as to the timeliness of Atlantic's disclaimer.

On a motion for leave to enter a default judgment pursuant to CPLR 3215, the movant is required to submit proof of service of the summons and complaint, proof of the facts constituting its claim, and proof of the defaulting party's default in answering or appearing (see CPLR 3215[f]; Allstate Ins. Co. v Austin, 48 AD3d 720, 720). To avoid the entry of a default judgment, the defaulting party is required to demonstrate a reasonable excuse for its default and a potentially meritorious defense to the action (see Allstate Ins. Co. v Austin, 48 AD3d at 720; Matone v Sycamore Realty Corp., 50 AD3d 978, 978; Juseinoski v Board of Education, 15 AD3d 353, 355-356; Ennis v Lema, 305 AD2d 632, 633).

Here, Atlantic established that RJNJ defaulted and that RJNJ failed to provide
timely notice of the occurrence. Atlantic also submitted proof that coverage for Lala's injuries was specifically excluded under the Atlantic policy. However, in order to be entitled to a default judgment declaring that it had no obligation to defend or indemnify RJNJ, Atlantic also had to prove that it timely disclaimed, since this element is among the "facts constituting [its] claim" (CPLR 3215[f]; see Insurance Law § 3420[d]; see also Hartford Ins. Co. v County of Nassau, 46 NY2d 1028; Hunter Roberts Constr. Group, LLC v Arch Ins. Co., 75 AD3d 404). Indeed, "[t]he failure of an insured to timely notify the insurer of a claim does not excuse the insurer's failure to timely disclaim coverage" (Delphi Restoration Corp. v Sunshine Restoration Corp., 43 AD3d 851, 852). Under the circumstances of this case, the Supreme Court correctly concluded that Atlantic failed to establish that its disclaimer was timely and that it was, therefore, entitled to a default judgment (see e.g. Continental Cas. Co. v Stradford, 11 NY3d 443; Felice v Chubb & Son, Inc., 67 AD3d 861; see also Matter of Colonial Penn Ins. Co. v Pevzner, 266 AD2d 391).

Accordingly, the Supreme Court properly denied Atlantic's motion for leave to enter a default judgment against RJNJ.

In light of our determination, we need not reach the parties' remaining contentions.

Columbia University Press, Inc. v. Travelers Ind. Co.

Goldberg Segalla, LLP, Buffalo, N.Y. (Sarah J. Delaney and Joanna
Roberto of counsel), for appellant.
David S. Klausner, PLLC, White Plains, N.Y. (David S.
Klausner and Evelyn Miller of counsel), for
respondent.

DECISION & ORDER

In an action, inter alia, for a judgment declaring that the defendant is obligated to defend and indemnify the plaintiff, Columbia University Press, Inc., in an underlying action entitled George Balloutine v Columbia University Press, pending in the Supreme Court, New York County, under Index No. 11425/07, the defendant appeals, as limited by its brief, from so much of an order of the Supreme Court, Westchester County (Lefkowitz, J.), dated June 29, 2010, as denied that branch of its motion which was 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, as here, a policy of liability insurance requires that notice of an occurrence be given "as soon as practicable," such notice must be given to the carrier within a reasonable period of time (see Sorbara Constr. Corp. v AIU Ins. Co., 11 NY3d 805, 806; Great Canal Realty Corp. v Seneca Ins. Co., Inc., 5 NY3d 742, 743; Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp., 31 NY2d 436, 441). With respect to policies issued before January 17, 2009 (see Insurance Law § 3420[c][2][A]), as the subject policy was, an insurer could disclaim coverage when the insured failed to satisfy the notice condition, without regard to whether the insurer was prejudiced by the insured's failure to satisfy such condition (see Zimmerman v Peerless Ins. Co., 85 AD3d 1021, 1023; Ponok Realty Corp. v United Natl. Specialty Ins. Co., 69 AD3d 596, 596-597).

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" (Argo Corp. v Greater N.Y. Mut. Ins. Co., 4 NY3d 332, 339; see Sorbara Constr. Corp. v AIU Ins. Co., 11 NY3d at 806; Great Canal Realty Corp. v Seneca Ins. Co., Inc., 5 NY3d at 743; Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp., 31 NY2d 436, 440). However, "there may be circumstances that excuse a failure to give timely notice, such as where the insured has a good-faith belief of nonliability,' provided that belief is reasonable" (Great Canal Realty Corp. v Seneca Ins. Co., Inc., 5 NY3d at 743, quoting Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp., 31 NY2d at 441; see White v City of New York, 81 NY2d 955, 957; Zimmerman v Peerless Ins. Co., 85 AD3d at 1023-1024; Ponok Realty Corp. v United Natl. Specialty Ins. Co., 69 AD3d at 597). The insured bears the burden of establishing the reasonableness of such excuse (see Great Canal Realty Corp. v Seneca Ins. Co., Inc., 5 NY3d at 743; White v City of New York, 81 NY2d at 957; Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp., 31 NY2d at 440), which is ordinarily an issue of fact and not one of law (see Argentina v Otsego Mut. Fire Ins. Co., 86 NY2d 748, 750; Deso v London & Lancashire Indem. Co. of Am., 3 NY2d 127, 129; St. James Mech., Inc. v Royal & Sunalliance, 44 AD3d 1030, 1031).

Here, the defendant made a prima facie showing of entitlement to judgment as a matter of law based on the plaintiff's approximately eight-month delay in notifying the defendant of the underlying incident (see Great Canal Realty Corp. v Seneca Ins. Co., Inc., 5 NY3d 742; Argentina v Otsego Mut. Fire Ins. Co., 86 NY2d at 750; Zimmerman v Peerless Ins. Co., 85 AD3d 1021; McGovern-Barbash Assoc., LLC v Everest Natl. Ins. Co., 79 AD3d 981, 983; Evangelos Car Wash, Inc. v Utica First Ins. Co., 45 AD3d 727; 120 Whitehall Realty Assoc., LLC v Hermitage Ins. Co., 40 AD3d 719). However, in opposition, the plaintiff raised a triable issue of fact as to whether the delay was reasonably based on a good-faith belief of nonliability (see 25th Ave., LLC v Delos Ins. Co., 84 AD3d 781; North Country Ins. Co. v Jandreau, 50 AD3d 1429; St. James Mech., Inc. v Royal & Sunalliance, 44 AD3d at 1031-1032; Jordan Constr. Prods. Corp. v Travelers Indem. Co. of Am., 14 AD3d 655; G.L.G. Contr. Corp. v Aetna Cas. & Sur. Co., 215 AD2d 821, 822; Triantafillou v Colonial Coop. Ins. Co., 178 AD2d 925, 926). Accordingly, the Supreme Court properly denied that branch of the defendant's motion which was for summary judgment declaring that it was not obligated to defend or indemnify the plaintiff in the underlying action.

South Hylan, LLC v. CNA Insurance Company

Colliau Elenius Murphy Carluccio Keener & Morrow, New York, N.Y. (Marian S. Hertz of counsel), for appellant.
Howard M. File, Esq., P.C., Staten Island, N.Y., for respondents.

DECISION & ORDER

In an action for a judgment declaring that the defendant National Fire Insurance Company of Hartford is obligated to defend and indemnify the plaintiffs in an underlying action entitled Snyder v Getty Petroleum Marketing, Inc., pending in the Supreme Court, Richmond County, under Index No. 102382/08, the defendant National Fire Insurance Company of Hartford appeals from an order of the Supreme Court, Richmond County (Ajello, J.H.O.), dated December 14, 2010, which denied its motion for summary judgment declaring that it is not so obligated, and granted the plaintiffs' cross motion for summary judgment on the complaint declaring that it is so obligated.

ORDERED that the order is reversed, on the law, with costs, the motion of the defendant National Fire Insurance Company of Hartford for summary judgment is granted, the plaintiffs' cross motion for summary judgment is denied, and the matter is remitted to the Supreme Court, Richmond County, for the entry of a judgment declaring that the defendant National Fire Insurance Company of Hartford is not obligated to defend and indemnify the plaintiffs in the underlying action.

The defendant National Fire Insurance Company of Hartford (hereinafter National Fire) demonstrated its prima facie entitlement to judgment as a matter of law by establishing that it is not obligated to provide coverage to the plaintiffs in an underlying personal injury action, as the plaintiffs are not named insureds in the subject insurance policy (see Portnoy v Allstate Indem. Co., 82 AD3d 1196, 1197-1198). In opposition, the plaintiffs failed to raise a triable issue of fact as to whether reformation of the subject insurance policy is necessitated by mutual mistake as to the identity of the actual insureds (see Pascal v Nova Cas. Co., 226 AD2d 688, 690). Accordingly, the Supreme Court should have granted National Fire's motion for summary judgment declaring that it is not obligated to defend and indemnify the plaintiffs in the underlying action. For the same reasons, the plaintiffs' cross motion for summary judgment should have been denied.

Since this is a declaratory judgment action, we remit the matter to the Supreme Court, Richmond County, for the entry of a judgment declaring that National Fire is not obligated to defend and indemnify the plaintiffs in the underlying action (see Lanza v Wagner, 11 NY3d 317, 334, appeal dismissed 371 US 74, cert denied 371 US 901; Zimmerman v Peerless Ins. Co., 85 AD3d 1021).
 

Vernet v. Eveready Insurance Company

Sweetbaum & Sweetbaum, Lake Success, N.Y. (Marshall D.
Sweetbaum of counsel), for appellant.
Morici & Morici, LLP, Garden City, N.Y. (Carolyn M.
Canzoneri of counsel), for
respondents.

DECISION & ORDER

In an action pursuant to Insurance Law § 3420 to recover the amount of an unsatisfied judgment against the defendant's insured, the defendant appeals from an order of the Supreme Court, Kings County (Bunyan, J.), dated May 18, 2011, which denied its renewed motion, in effect, for summary judgment dismissing the complaint.

ORDERED that the order is reversed, on the law, with costs, and the defendant's renewed motion, in effect

The plaintiffs were passengers in a livery cab and allegedly sustained personal injuries when the cab was involved in an automobile accident with an individual insured by the defendant (hereinafter the insured). The accident occurred on October 15, 2000, in Brooklyn. On or about October 25, 2000, the defendant was made aware of the accident and opened a claims file. Thereafter, on May 29, 2001, and September 26, 2001, the defendant received letters from the plaintiffs' counsel informing it of counsel's representation of the plaintiffs. The next correspondence from the plaintiffs' counsel regarding the insured was received by the defendant on August 15, 2005. In this correspondence, the defendant learned that an action had been commenced against, among others, the insured, on July 9, 2003, and that a default judgment dated November 19, 2004, had been entered in that action in favor of the plaintiffs and against, among others, the insured. The defendant disclaimed coverage on the ground that the insured breached the insurance policy by failing to timely notify it of the commencement of an action regarding the accident. The plaintiffs commenced this action against the defendant and sought to recover the outstanding amount of the default judgment obtained by the plaintiffs against the insured. Following joinder of issue, the Supreme Court denied the defendant's motion for summary judgment dismissing the complaint, without prejudice to renew. In its renewed motion, the defendant sought, in effect, summary judgment dismissing the complaint. The defendant argued that it had no obligation to indemnify the insured in connection with the default judgment obtained against her in the related personal injury action because, inter alia, she breached certain conditions in the insurance policy. The Supreme Court denied the renewed motion. We reverse.

With respect to policies issued before January 17, 2009 (see Insurance Law § 3420[c][2][A]), as the subject policy was, an insurer could disclaim coverage when the insured failed to satisfy the notice condition, without regard to whether the insurer was prejudiced by the insured's failure to satisfy the condition (see Insurance Law 3420[a][1], [5], [c][2][A]; Argo Corp. v Greater N.Y. Mut. Ins. Co., 4 NY3d 332, 339; American Tr. Ins. Co. v Sartor, 3 NY3d 71; McGovern-Barbash Assoc., LLC v Everest Natl. Ins. Co., 79 AD3d 981, 983; Ponok Realty Corp. v United Natl. Specialty Ins. Co., 69 AD3d 596, 596-597; Matter of GEICO Co. v Wingo, 36 AD3d 908). Thus, the absence of timely notice of litigation is a failure to comply with a condition precedent which, as a matter of law, vitiates the contract (see American Tr. Ins. Co. v Sartor, 3 NY3d 71; Matter of GEICO Co. v Wingo, 36 AD3d 908). Where there is no excuse or mitigating factor for the failure to give notice, the question of reasonable notice is a legal determination (see Travelers Ins. Co. v Volmar Constr. Co., 300 AD2d 40, 42).

However, despite this no-prejudice rule, the insurance policy provided, inter alia, that a person seeking coverage must "send [the defendant] copies of any notices or legal papers received in connection with the accident or loss as soon as reasonably possible," and further, that the defendant had no duty to provide coverage "if the failure to comply [with the policy] is prejudicial to [the defendant]." Thus, based upon the language in this particular agreement, the defendant was required, on its renewed motion for summary judgment, to show that it was provided untimely notice and that it was prejudiced as a result of the untimely notice.

Here, in support of its renewed motion for summary judgment, the defendant presented prima facie proof of untimely notice via the deposition testimony and affidavit of its claims manager. The manager stated that it was not until August 15, 2005, that the defendant first learned that an action had been commenced and a default judgment entered against the insured. Additionally, as to prejudice, the defendant established that, since it was first informed of the commencement of an action against the insured more than two years after the commencement of the action, the delay constituted "late notice as a matter of law" (1700 Broadway Co. v Greater N.Y. Mut. Ins. Co., 54 AD3d 593, 593). The defendant further demonstrated that the failure of the insured to provide notice until after a default judgment had been entered prejudiced it because it lost its right to appear and interpose an answer, thus requiring it to shoulder the burden of moving to vacate the default judgment (see American Tr. Ins. Co. v Rechev of Brooklyn, Inc., 57 AD3d 257, 259).

In opposition, the plaintiffs failed to raise a triable issue of fact. The plaintiffs' contentions amounted to unsupported, speculative, and conclusory allegations, and lacked any probative value in determining whether the defendant received timely notification of the underlying action and default judgment (see generally Paladino v Time Warner Cable of N.Y. City, 16 AD3d 646). Further, no excuse or explanation was ever posited as to the late notice.

The plaintiffs' remaining contentions are without merit. Accordingly, based on the plaintiffs' late notice and prejudice to the defendant, the Supreme Court should have granted the defendant's renewed motion, in effect, for summary judgment dismissing the complaint.

Brourman v. Gorokhovsky

Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y. (Mead, Hecht, Conklin & Gallagher, LLP [Elizabeth M. Hecht], of counsel), for appellant.

Edelstein & Grossman, New York, N.Y. (Jonathan L. Edelstein 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 (Kramer, J.), dated December 20, 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). The papers the defendant submitted failed to adequately address the plaintiff's claim, set forth in the bills of particulars, that the plaintiff sustained a medically-determined injury or impairment of a nonpermanent nature which prevented her from performing substantially all of the material acts which constituted her usual and customary daily activities for not less than 90 days during the 180 days immediately following the subject accident (see Reynolds v Wai Sang Leung, 78 AD3d 919, 920; cf. Tinsley v Bah, 50 AD3d 1019, 1019-1020).

Moreover, the defendant failed to adequately address the plaintiff's claim that, as a result of the subject accident, a bone in her left foot sustained a fracture (see Olic v Pappas, 47 AD3d 780).

In light of the defendant's failure to meet his prima facie burden, it is unnecessary to review the sufficiency of the plaintiff's opposing papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853).

Accordingly, the Supreme Court properly denied the defendant's motion for summary judgment dismissing the complaint.

Byrnes v. Wojtowicz

Gruenberg & Kelly, P.C., Ronkonkoma, N.Y. (John Aviles of counsel), for appellant.
Cheven, Keely & Hatzis, New York, N.Y. (William B. Stock of counsel), for respondents.

DECISION & ORDER

In an action to recover damages for personal injuries, the plaintiff appeals, as limited by her brief, from so much of an order of the Supreme Court, Kings County (Knipel, J.), dated August 20, 2010, as granted the defendants' motion for summary judgment dismissing the complaint on the ground that she did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is affirmed insofar as appealed from, with costs.

The defendants met their prima facie burden of establishing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). The plaintiff alleged that, as a result of the subject accident, the cervical and lumbosacral regions of her spine sustained certain injuries, and the defendants provided competent medical evidence establishing, prima facie, that those injuries did not constitute serious injuries within the meaning of Insurance Law § 5102(d) (see Layne v Drouillard, 65 AD3d 1197; Rodriguez v Huerfano, 46 AD3d 794, 795). Furthermore, while the plaintiff also alleged that she sustained a serious injury under the 90/180-day category of Insurance Law § 5102(d), the defendants established, prima facie, that she did not sustain such an injury.

In opposition, the plaintiff failed to raise a triable issue of fact. Accordingly, the Supreme Court properly granted the defendants' motion for summary judgment dismissing the complaint.

Johnson v. Sarwar Hacking Corp.

Baker, McEvoy, Morrissey & Moskovits, P.C. (The Sullivan Law Firm, New York, N.Y. [Timothy M. Sullivan and James A. Domini], of counsel), for appellants.
Edward Vilinsky, Brooklyn, N.Y. (Jeffrey Stern 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, Kings County (F. Rivera, J.), dated March 4, 2011, which denied their motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is affirmed, with costs.

The defendants failed to meet their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). The papers submitted by the defendants failed to adequately address the plaintiff's claim, set forth in the bill of particulars, that the plaintiff sustained a medically-determined injury or impairment of a nonpermanent nature which prevented her from performing substantially all of the material acts which constituted her usual and customary daily activities for not less than 90 days during the 180 days immediately following the subject accident (see Reynolds v Wai Sang Leung, 78 AD3d 919, 920).

Since the defendants did not sustain their prima facie burden, it is unnecessary to determine whether the papers submitted by the plaintiff in opposition were sufficient to raise a triable issue of fact (id.).

Accordingly, the Supreme Court properly denied the defendants' motion for summary judgment dismissing the complaint.

Luby v. Tsybulevskiy

Alexander Bespechny, Brooklyn, N.Y. (Louis A. Badolato of counsel), for appellant.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y. (Stacy R. Seldin of counsel), for respondents.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Kings County (Martin, J.), dated March 10, 2011, which granted the defendants' motion for summary judgment dismissing the complaint on the ground that he did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is reversed, on the law, with costs, and the defendants' motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) is denied.

The defendants failed to meet their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). The plaintiff alleged that as a result of the subject accident, the cervical and lumbosacral regions of his spine, as well as his left shoulder, sustained certain injuries. On their motion for summary judgment dismissing the complaint, the defendants argued that those alleged injuries were not caused by the subject accident (see Pommells v Perez, 4 NY3d 566, 579). However, the defendants' submissions revealed the existence of a triable issue of fact as to causation (see Kelly v Ghee, 87 AD3d 1054, 1054; cf. Sforza v Big Guy Leasing Corp., 51 AD3d 659, 660-661; Jaramillo v Lobo, 32 AD3d 417).

Moreover, the defendants' motion papers failed to adequately address the plaintiff's claim that he sustained a medically-determined injury or impairment of a nonpermanent nature which prevented him from performing substantially all of the material acts which constituted his usual and customary daily activities for not less than 90 days during the 180 days immediately following the subject accident (see Reynolds v Wai Sang Leung, 78 AD3d 919, 920).

Accordingly, the Supreme Court should have denied the defendants' motion for summary judgment dismissing the complaint.

McKenna v. Williams

Elovich & Adell, Long Beach, N.Y. (A. Trudy Adell, Mitchel
Sommer, and Darryn Solotoff of counsel), for appellant.
Smith Mazure Director Wilkins Young & Yagerman, P.C.,
New York, N.Y. (Marcia K. Raicus of
counsel), for respondents.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Nassau County (Sher, J.), entered October 27, 2010, which granted the defendants' 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 defendants' motion for summary judgment dismissing the complaint is denied.

The defendants met their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). The plaintiff alleged, inter alia, that as a result of the subject accident, the cervical and lumbar regions of her spine sustained certain injuries. The defendants provided competent medical evidence establishing, prima facie, inter alia, that those alleged injuries did not constitute a serious injury within the meaning of Insurance Law § 5102(d) (see Rodriguez v Huerfano, 46 AD3d 794, 795). However, in opposition, the plaintiff provided competent medical evidence raising a triable issue of fact as to whether those alleged injuries constituted serious injuries 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' motion for summary judgment dismissing the complaint.

The City of New York v. Investors Ins. Co. of America

Michael A. Cardozo, Corporation Counsel, New York (Dona B.
Morris of counsel), for appellant.
Lester Schwab Katz & Dwyer, LLP, New York (Aaron Brouk
of counsel), for respondent.

Judgment, Supreme Court, New York County (Barbara Jaffe, J.), entered May 26, 2010, dismissing the complaint, unanimously modified, on the law, to strike the decretal paragraph dismissing the complaint and to substitute therefor a declaration that defendant has no duty to defend or indemnify plaintiff in the underlying action, and, as so modified, affirmed, without costs. Appeal from orders, same court and Justice, entered April 19, 2010, which denied plaintiff's motion for summary judgment and granted defendant's motion for summary judgment, dismissed without costs, as subsumed in the appeal from the aforesaid judgment.

As an additional insured under the policy issued by defendant, plaintiff had, in the absence of an express duty, an implied duty, independent of the named insured's obligation, to provide defendant with timely notice of the occurrence for which it seeks coverage (see Structure Tone v Burgess Steel Prods. Corp., 249 AD2d 144 [1998]; Thomson v Power Auth. of State of N.Y., 217 AD2d 495, 497 [1995]). The notice it served 13 months after receiving the underlying plaintiff's notice of claim was untimely as a matter of law (see 1700 Broadway Co. v Greater N.Y. Mut. Ins. Co., 54 AD3d 593, 593 [2008]).

Nor may plaintiff rely upon the named insured's timely notice of the underlying action to satisfy its duty to provide timely notice of the occurrence, since the duty under the policy to notify of an occurrence is distinct from the duty to notify of any claim or suit brought thereon (see American Tr. Ins. Co. v Sartor, 3 NY3d 71, 75 [2004]; Steadfast Ins. Co. v Sentinel Real Estate Corp., 283 AD2d 44, 54 [2001]). Moreover, plaintiff's obligation to provide timely notice was independent of the named insured's obligation because its interests were adverse to those of [*2]the named insured "from the moment the [amended] complaint was served naming them both as defendants" (1700 Broadway Co., 54 AD3d at 594; City of New York v Welsbach Elec. Corp., 49 AD3d 322, 322 [2008]).

Eteng v. Dajos Transportation

Law Offices of Stuart M. Kerner, P.C., Bronx (Stuart M. Kerner
of counsel), for Serena Eteng, appellant.
O'Connor, Redd, LLP, White Plains (John P. Gray of counsel),
for Andre Allen, appellant.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York
(Stacy R. Seldin of counsel), for respondents.

Order, Supreme Court, Bronx County (Alison Y. Tuitt, J.), entered July 26, 2010, which, to the extent appealed as limited by the briefs, granted defendants' motion for summary judgment dismissing the complaint based on the failure to establish a serious injury within the meaning of Insurance Law § 5102(d), unanimously modified, on the law, the motion denied as to plaintiff Serena Eteng's claims of significant limitation of use of her cervical and lumbar spine and plaintiff Andre Allen's claims of significant limitation of use of his lumbar spine and right knee, and otherwise affirmed, without costs.

Defendants made a prima facie showing of entitlement to summary judgment as to plaintiff Eteng's claims of "significant limitation of use" of her cervical and lumbar spine, right shoulder and right knee (Insurance Law § 5102[d]). They submitted expert medical reports finding normal ranges of motion, as well as the report of a radiologist who opined that changes shown in an MRI of the then 25-year-old plaintiff's cervical spine were degenerative. In opposition, plaintiff submitted competent medical evidence raising an issue of fact as to her cervical and lumbar spine injuries, including the report of a radiologist who found disc herniations, and of her treating physician who opined after full examination within a week of the accident that her injuries were causally related to the accident (see Linton v Nawaz, 62 AD3d 434, 439 [2009], affd on other grounds 14 NY3d 821 [2010]; see also June v Akhtar, 62 AD3d 427 [2009]).
Defendants also met their initial burden as to plaintiff Allen's claims of "significant limitation of use" of his shoulders, right knee and cervical spine.

They submitted expert medical reports finding normal ranges of motion, as well as the report of a radiologist who opined that changes shown in an MRI of the then 27-year-old plaintiff's knee were degenerative. However, defendants' experts' conflicting reports concerning their examinations of Allen's lumbar spine failed to establish the absence of limitations in range of motion, and their radiologist's report concerning the lumbar MRI is not in the record. In opposition, Allen submitted evidence sufficient to raise an issue of fact as to the injury to his right knee, since his treating physician found causation and limitations in range of motion, and his radiologist confirmed that an MRI revealed a tear of the medial meniscus, without noting any degeneration (see Jacobs v Rolon, 76 AD3d 905 [2010]). In addition, assuming defendants met their burden as to the lumbar spine injury, Allen submitted objective medical evidence of contemporaneous and continuing limitations, as well as the affirmed report of a radiologist finding disc herniations and his physician's opinion that his injury was causally related to the accident, which was sufficient to raise an issue of fact. Nevertheless, we note that if plaintiffs prevail at trial on their serious injury claims, they will be entitled to recovery also on their non-serious injuries caused by the accident (see Linton v Nawaz, 14 NY3d 821 [2010]; Rubin v SMS Taxi Corp., 71 AD3d 548 [2010]).

Plaintiffs adequately explained the gap in treatment by asserting in their affidavits that they stopped receiving treatment for their injuries when their no-fault insurance benefits were cut off (see Browne v Covington, 82 AD3d 406 [2011]).

Plaintiffs' bill of particulars refuted their 90/180-day claim, since both alleged that they were confined to bed for two weeks and to home for one month (see Williams v Baldor Specialty Foods, Inc., 70 AD3d 522 [2010]).

Farm Family Casualty Insurance Company v. Nason

HURWITZ & FINE, P.C., BUFFALO (DAN D. KOHANE OF COUNSEL), FOR PLAINTIFF-APPELLANT.
LAW OFFICES OF EUGENE C. TENNEY, BUFFALO (COURTNEY G. SCIME OF COUNSEL), FOR DEFENDANT-RESPONDENT.

Appeal from an order of the Supreme Court, Erie County (Frank A. Sedita, Jr., J.), entered November 18, 2010 in a declaratory judgment action. The order, insofar as appealed from, denied the motion of plaintiff for summary judgment.

It is hereby ORDERED that the order insofar as appealed from is unanimously reversed on the law without costs, plaintiff’s motion is granted and judgment is granted in favor of plaintiff as follows:

It is ADJUDGED and DECLARED that plaintiff is not obligated to defend or indemnify defendant Gerald R. Nason, Jr. in the underlying action.

Memorandum: This litigation arises from an accident allegedly occurring on farm property (subject property) owned by Gerald Nason, Sr. (Nason). Nason also owned a separate parcel of property upon which he maintained his residence and a dairy business, which was covered by an insurance policy issued by plaintiff. Pursuant to the terms of the policy, Nason’s relatives were insureds only if they were residents of his “household.” Eric Pommerenck (decedent) died as the result of injuries that he sustained on the subject property while examining a hay elevator that had been offered for sale by Gerald R. Nason, Jr. (defendant), Nason’s son. Defendant did not reside exclusively on the subject property but in fact also resided at times with his girlfriend at another location. The administratrix of decedent’s estate commenced a wrongful death action against, inter alia, Nason and defendant, and plaintiff commenced this action seeking a declaration that it owed no duty to defend or indemnify defendant in the underlying action on the ground that he was not an insured under its policy.

We agree with plaintiff that Supreme Court erred in denying its motion for summary judgment.

“The term household has been characterized as ambiguous or devoid of any fixed meaning in similar contexts . . . and, as such, its interpretation requires an inquiry into the intent of the parties . . . The interpretation must reflect the reasonable expectation and purpose of the ordinary business [person] when making an insurance contract . . . and the meaning which would be given it by the average [person] . . . Moreover, the circumstances particular to each case must be considered in construing the meaning of the term” (General Assur. Co. v Schmitt, 265 AD2d 299, 300 [internal quotation marks omitted]). In addition, “the term should . . . be interpreted in a manner favoring coverage, as should any ambiguous language in an insurance policy” (Rohlin v Nationwide Mut. Ins. Co., 26 AD3d 749, 750).

Here, plaintiff established that Nason did not consider defendant to be a member of his household, nor would he have anticipated that defendant would be afforded coverage under his insurance policy inasmuch as defendant lived separately from Nason, either in a trailer on the subject property or with a girlfriend. The trailer was not listed in the policy as an alternate residence. Furthermore, members of the Nason family testified at their respective depositions that defendant did not reside with the other members of the family and, indeed, was not welcome in the family home. Consequently, plaintiff
established as a matter of law that defendant was not a member of Nason’s household within the meaning of the policy (see Matter of Hartford Ins. Co. of Midwest v Casella, 278 AD2d 417, 418, lv denied 96 NY2d 710; Walburn v State Farm Fire & Cas. Co., 215 AD2d 837; cf. Korson v Preferred Mut. Ins. Co., 55 AD3d 879, 880-881), and defendants failed to raise a triable issue of fact (see generally Zuckerman v City of New York, 49 NY2d 557, 562).

Agrawal v Metropolitan Life Insurance Company

Trief & Olk, New York (Barbara E. Olk of counsel), for appellants.
D'Arcambal, Levine & Ousley, LLP, New York (Aimee P. Levine of counsel), for respondent.

Order, Supreme Court, New York County (Louis B. York, J.), entered July 15, 2010, which granted defendant's motion for summary judgment dismissing the complaint, unanimously reversed, on the law, without costs, the motion denied, and, upon a search of the record, summary judgment awarded to plaintiffs on their claims.

The decedent, plaintiffs' mother, represented in her application to obtain life insurance from defendant that she did not have diabetes or any in-force insurance other than a policy issued previously by defendant. She also made representations as to her net worth. After a lengthy investigation, defendant determined that the decedent had misrepresented her medical history, her in-force insurance and her net worth. However, in its repudiation letters, sent after the completion of its investigation, defendant based its denial of payment on the sole ground of the decedent's misrepresentation of her net worth.
To the extent defendant relies on the figure of $5-6 million in support of its assertion that the decedent misrepresented her net worth, its reliance is misplaced. The figure of $5-6 million was not included in the insurance application and therefore cannot be considered (see Insurance Law § 3204[a]; Tannenbaum v Provident Mut. Life Ins. Co. of Phila., 53 AD2d 86, 104-105 [1976], affd 41 NY2d 1087 [1977]). There is no dispute that the decedent satisfied the $500,000 net worth valuation asserted in her application.
Defendant's failure to assert the other defenses in its initial repudiation constitutes a waiver of those defenses for purposes of denying liability under the policies (Estee Lauder Inc. v OneBeacon Ins. Group, LLC, 62 AD3d 33, 35 [2009]).

Meserole Factory, LLC v Arch Insurance Group

White, Fleischner & Fino, LLP, New York, N.Y. (Jonathan S.
Chernow and Eric R. Leibowitz of counsel), for respondents.

DECISION & ORDER

In an action to recover damages for breach of an insurance contract, the plaintiff appeals from an order of the Supreme Court, Kings County (Jacobson, J.), dated August 25, 2010, which granted the defendants' motion for summary judgment dismissing the complaint.

ORDERED that the order is affirmed, with costs.
The Supreme Court properly granted the defendants' motion for summary judgment dismissing the complaint. The defendants established their prima facie entitlement to judgment as a matter of law by demonstrating that the plaintiff failed to provide the defendant Arch Specialty Insurance Company with a sworn proof-of-loss statement within 60 days after receiving a demand to do so, accompanied by proof-of-loss forms (see Insurance Law § 3407[a]; Ball v Allstate Ins. Co., 81 NY2d 22, 25-26; Anthony Marino Constr. Corp. v INA Underwriters Ins. Co., 69 NY2d 798, 800; Maleh v New York Prop. Ins. Underwriting Assn., 64 NY2d 613, 614; DeRenzis v Allstate Ins. Co., 256 AD2d 303, 304; Litter v Allstate Ins. Co., 208 AD2d 602). In opposition, the plaintiff failed to raise a triable issue of fact.

In light of this determination, the plaintiff's remaining contention need not be reached.