Coverage Pointers - Volume XIII, No. 14

Dear Coverage Pointers Subscribers:

Happy New Year wishes to our Coverage Pointers family. We are so appreciative of the holiday and New Year’s wishes we received from many of you. We do consider our readership as family.

This week’s issue, attached, reviews 41 decisions, all rendered by courts or arbitrators within the last couple of weeks. Busy weeks for us.

Winter has finally arrived here in Western New York, although snow has so far been avoiding us. In Buffalo, we’ve had fewer than five inches of snow this winter. Generally, by this time, we’re in excess of 35”. Our average is about 95” for the winter. On October 11, Accuweather predicted that Omaha, NE, and Buffalo, NY are amongst cities that will experience above average snowfall. Likewise, the site, Weatheradvance.com predicted 100 - 125”. I’d love a job where I can constantly predict the wrong results and get paid for it.

However, since I purchased a new snow-blower in December, I have made certain that I will not have a chance to use it.

Training:

We’re traveling out west to visit our good friends in Scottsdale, AZ and provide a little coverage training. Interested in having us visit? Do let us know. Arizona in the winter isn’t a bad gig.

Labor Law Pointers:

A reminder, Dave Adams and our Labor Law team publishes a monthly newsletter covering the New York State Labor Law – Sections 200, 240(1), 241(6), indemnity agreements, etc. Contact Dave at [email protected] to be added to the subscription list.

Peiper’s Point:

Greetings and welcome back for the first issue of 2012. Unfortunately, we start this year out with more of a whimper than a bang. Of interest, however, is the Fourth Department’s review of Workers’ Compensation Liens in the PMA Management Group decision. As always, we also include a review of any relevant third-party practice decisions from the past two weeks.

The key with any contractual related case, and a constant refrain around here, is to read the actual terms of the policy/contract at issue. No, actually, read ALL of the actual terms of the contract/policy at issue. You may be surprised at what it actually says, as opposed to what it usually says.

That’s it for this week. See you on the 19th.

Steve Peiper
[email protected]

One Hundred Years Ago – A Federal Judge Undergoing Impeachment:

The Syracuse Herald
January 6, 1912
WOMAN TO TESTIFY AT
IMPEACHMENT TRIAL
Mrs. Mary Boland to Take Stand Before Senate

Washington Dec 6 — For the second time in the history of impeachment trials in the United States, a woman will be called during a course of Judge Robert W. Archbald’s case. It was learned today that Miss Mary Boland, a stenographer in the office of William Boland, will take the stand next week and from notes taken at the time, will record conversations between E. J. Williams and Boland in which the latter was quoted as saying: Archbald could do anything he wanted with the railroads.

The only other case in which a woman testified is the Swayne impeachment trial.

Today’s evidence was expected to be the most important in determining the case against Judge Archbald, as the program called for further testimony from Capt. W. A. May, general manager of the Hillside Coal and Iron Company… The Hillside Coal and Iron Company is controlled by the Erie railroad and the prosecution is seeking to show that the railroad expected judicial favors from Judge Archbald.
Robert Wodrow Archbald — Third Circuit, Commerce Court:

On 13 July 1912, Judge Archbald was impeached by the U.S. House of Representatives on 13 Articles by a vote of 223 to 1. Articles I, II, III and VI alleged that Archbald had entered into agreements with litigants at a substantial benefit to himself. Article IV alleged a wrongful communication with litigants. Articles V, VII, VIII, IX and X alleged that he had improperly solicited and accepted gifts from litigants. Article XI alleged he had improperly solicited and accepted gifts from attorneys. Article XII alleged he allowed corrupt practices during jury selection. Article XIII alleged a general charge of bringing the Judiciary into disrepute. The offenses alleged in Articles I through XI were connected with holidays in Europe and other gifts received from coal mine workers and railroad officials.

On 16 July, the U.S. Senate began Archbald's trial. The Senate convicted him of five of the thirteen Articles on 13 January 1913. The Senate then voted to remove him from office and disqualify him from further office by a vote of 39 to 35.

He was the ninth federal official on whom Articles of Impeachment were served, and only the third to be convicted and removed from office.

There have been but a total of seven who were convicted after a trial in the Senate and removed from office:

John Pickering
West Hughes Humphreys
Robert W. Archbald
Halsted L. Ritter
Harry E. Claiborne
Alcee Hastings
Walter Nixon

Audrey’s Angle:

Happy New Year! The Courts and Arbitrators were busy before the New Year issuing a number of decisions for your review. There are a few arbitration awards regarding the sufficiency of denials for surgery that are worth reviewing. The import of the decisions is to ensure that your peer reviewer or IME physician has all of the relevant medical records, reports, and films and has reviewed them before issuing the report. If you are denying a surgery bill then the peer reviewer or IME physician should be provided with the surgery records, as well as all other relevant records, to provide an opinion on why the surgery is not causally related or medically necessary.

Also, the report should be tailored to the facts of the case in front of the expert. In other words there should be some discussion as to why based upon the records presented the surgery deviated from the generally accepted practices in the case of a peer review. In addition, the reliance upon a medical journal for a general or vague proposition will not be sufficient as one arbitrator indicated. While these statements seem like common sense it always seems that these are the areas where arbitrators consistently find flaws in a peer review or IME report. This is an area that I have presented on a few times in the past due to the consistent issues that have been detected. If you are interested in a training program on this issue please feel free to email me at [email protected].

Audrey A. Seeley

One Hundred Years Ago – the Admission of the 47th State:

Santa Fe New Mexican
January 6, 1912
Statehood Proclamation Signed,
Inauguration January 15
President Taft Affixes His Signature to Document That Relieves New Mexico of Territorial Shackles -- Enthusiastic Delegation at the White House.

Washington, D. C., Jan. 6.--New Mexico, the forty seventh State to enter the Union, ceased to be a Territory at 1:35 p.m. today, when President Taft signed the Proclamation of Statehood.

Four members of the President's Cabinet, the two Congressmen-elect from New Mexico, George Curry and H. B. Ferguson, a dozen, prominent citizens from the new state, several White House employees and three photographers witnessed the ceremony which took place in the President's private office. The proclamation was signed in duplicate, one to be preserved the records of thee government, the other to go to the New Mexico Historical Society.

Glad to Give Life to State.
President Taft today signed the statehood proclamation at 1:35 p.m. The New Mexicans present were Congressman George Curry, Congressman H. B. Fergusson, W. H. Andrews, District Forester A. C. Ringland, Mr. and Mrs. A. B. McGaffey, Charles Curry and John W. Roberts. Four members of the cabinet were present. A photograph was taken. President Taft said:

"Well, it’s all over, I am glad to give you life." Then he smiled and added: "I hope you will be healthy." Governor Curry thanked him on behalf of the people of New Mexico as well as Andrews on behalf of the Republican Party, and Fergusson on behalf of the opposition.

Which gives rise to this week’s trivia question, perfectly timed for the Presidential election season: Who were the last two Republican Presidential Nominees not born in a State of the Union? Answer: click here.

In This Week’s Issue:

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

First Department Splits 3-2 on Applicability of Insured's Status Exclusion and Business Enterprise Exclusion in Professional Liability Endorsement
Sharply Divided Court Debates Whether Injury That Occurs When Removing Sound Equipment from Band Performance “Arises Out of” Performance; Court of Appeals, Here We Come
Unsigned Purchase Order to Which the Parties Agreed to Be Bound and Required Additional Insured Coverage Satisfies “Writing in a Contract or Agreement” Requirement in Blanket Additional Insured Endorsement
Exhaustion Clause in Policy Does Not Sanction End to Defense Obligations in Other Pending Cases

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

Dismissal May Be Warranted Where Pre-Existing Conditions Interrupt the Chain of Causation
Failure to Review Plaintiff’s Medical Records Does Not Necessarily Render Defendant’s Experts’ Reports Insufficient
MRIs Contradict Evidence of Degenerative Disease
Affirmed Reports Are Competent Evidence Even Though Based on Unsworn ER Records
Once Again, Motions Denied Where Defendants Fail to Address 90/180-Day Claims Set Forth in Bills of Particulars
Upon Renewal and Reargument, Defendant’s Motion Is Denied
One Serious Injury Is All It Takes
Motion Denied
Medical Records Reflecting Presence of Spasms Upon Palpation Constitute Objective Evidence of Injury
Report Based on Testing Performed Four Years Earlier Is Insufficient to Establish That Results Remain Valid
Plaintiff Fails to Raise Triable Issue of Fact as to Causal Relationship
Defendants Attempt to Show Injuries Not Causally Related but Their Submissions Raise a Triable Issue of Fact
Failure to Quantify Limitations Results in Court’s Inability to Conclude, as a Matter of Law, That Limitations are “Minor, Mild or Slight”

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

ARBITRATION

Multiple IMEs Support Lost Wage Denial And Insurer Prevails On One Year Rule
Peer Review Insufficient To Support Surgery Denial
Another Peer Review Report Not Sufficient To Deny Surgery
Confusion On IME Notice And Attempts To Clarify Reasonable Excuse For Non-Attendance; CASE LIMITED TO FACTS
IME Report Sufficient To Deny Complex History Involving Neck and Back Injury
Injury First Reported To Insurer And Treatment First Rendered Five Months After Accident Not Related

LITIGATION

Insurer’s Motion Partially Denied Properly But Should Have Been Granted On Denials Based Upon IME
Verification Outstanding And Claim Premature
IME No Show Denial Upheld
Another Case Not Ripe For Adjudication Due To Outstanding Verification
Failure To Submit Medical Evidence To Oppose Insurer’s Motion On Lack Of Necessity Lethal
Another Case Dismissed For Lack of Medical Necessity
Insurer Demonstrated Acupuncture Services Properly Paid
Lack of Meaningful Rebuttal Affirmation Fatal to Case
Insurer Properly Established Timely Payment Upon Fee Schedule
Insurer’s Peer Review Not Rebutted By Plaintiff
Plaintiff Did Not Establish Prima Face Case And Court Will Not Search Record To Award Summary Judgment To Insurer
Plaintiff Failed To Rebut Insurer’s Proof of Lack of Medical Necessity
Plaintiff’s Failure To Specify Method Of Service Delivery Fatal To Motion
Issue of Fact Regarding Injuries Arising Out of Insured Incident.

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

Workers’ Compensation Lien Asserted More Than Three Years After a Personal Injury Settlement Is Time Barred
Both a Meritorious Defense and Reasonable Excuse Are Needed to Vacate a Default
Contract Means What It Says: No Requirement of Negligence for Indemnity Purposes
Fullest Extent Permitted by Law Saves Contractual Indemnity Claim

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

December 30, 2011 DFS report to Governor and Legislature

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

Can Attorneys’ Fees Be Awarded Where There Has Been No Determination of Bad Faith?

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

No Coverage Where Insured Asked That the Vehicle Be Removed from His Policy
Court Considers Whether an Insurer Can Move to Stay a UM Arbitration Based on the Invalidity of the Tortfeasor’s Insurer’s Disclaimer

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

LIQUIDATED DAMAGES OR UNENFORCEABLE PENALTY?

Answer to the trivia question? John McCain (born in the Panama Canal Zone) and Barry Goldwater (born in the Territory of Arizona before it became the 48th State)..

OK, all for now. Stay in touch and keep those wonderful notes coming in; they do make our day.

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
[email protected]

ASSISTANT EDITOR
Margo M. Lagueras
[email protected]

INSURANCE COVERAGE TEAM
Dan D. Kohane, Team Leader
[email protected]

Michael F. Perley
Katherine A. Fijal
Audrey A. Seeley
Steven E. Peiper
Margo M. Lagueras
Cassandra Kazukenus
Jennifer A. Ehman
Diane F. Bosse

FIRE, FIRST-PARTY AND SUBROGATION TEAM
Andrea Schillaci, Team Leader
[email protected]

Jody E. Briandi
Steven E. Peiper

NO-FAULT/UM/SUM TEAM
Audrey A. Seeley, Team Leader
[email protected]

Margo M. Lagueras
Cassandra Kazukenus
Jennifer A. Ehman

APPELLATE TEAM
Jody E. Briandi, Team Leader
[email protected]

Scott M. Duquin
Diane F. Bosse

Index to Special Columns

Kohane’s Coverage Corner
Margo’s Musings on “Serious Injury”
Audrey’s Angles on No Fault
Peiper on Property and Potpourri
Cassie’s Capital Connection
Fijal’s Federal Focus
Earl’s Pearls
Across Borders

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

01/03/12 K2 Investment Group, LLC v. American Guar. & Liab. Ins. Co.
Appellate Division, First Department
First Department Splits 3-2 on Applicability of Insured's Status Exclusion and Business Enterprise Exclusion in Professional Liability Endorsement
Plaintiffs are limited liability companies that made multiple loans totaling approximately $3 million to Goldan. Daniels, an attorney, was a member of Goldan and Goldan was an American insured. Daniels was sued for legal malpractice. It was claimed that as K2’s attorney, he failed to record mortgages and obtain title insurance and thus committed malpractice.

The plaintiffs demanded $450,000 from Daniels in full settlement of their claims under the E&O policy. The carrier denied coverage on two exclusions in the policy. One based, on an exclusion insured's capacity or status as an officer, director, etc., of a business enterprise. The other exclusion was for any claim arising out of the alleged acts or omissions of the insured for any business enterprise in which he had a controlling interest.
Daniels defaulted in the malpractice action after the disclaimer and judgments totaling over $3,000,000 were entered against him. Daniels then assigned to plaintiffs all his claims against defendant, including bad faith claims.

The court found that the exclusions did not apply with respect to either the duty to defend which was demonstrated based upon the allegations of legal malpractice or the duty to indemnify for a judgment based in legal malpractice. The allegations of professional malpractice had nothing to do with his status as an officer or out of his controlling interest in the entity. These were malpractice claims, arising out of the attorney-client relationship and not his ownership of the company or status as an officer.

The bad faith case was dismissed, however, plaintiffs having failed to establish a prima facie case of bad faith based upon defendant's "gross disregard" of the insured's interests under the policy.

A two judge dissent believed, an issue of material fact remains as to whether plaintiffs' legal malpractice claims, at least in part, are based upon or arose out of Daniels's capacity or status as an officer, director, shareholder or employee of Goldan, or out of his alleged acts or omissions on behalf of Goldan, a business enterprise in which he had a controlling interest.

12/23/11 Dzielski v. Essex Insurance Company
Appellate Division, Fourth Department
Sharply Divided Court Debates Whether Injury That Occurs When Removing Sound Equipment from Band Performance “Arises Out of” Performance; Court of Appeals, Here We Come
Plaintiffs commenced this action seeking judgment declaring that Essex was obligated to indemnify its insured in an underlying personal injury action commenced by plaintiffs, in which insured had defaulted. Dzielski fell from the loading dock after exiting the rear door of a nightclub owned and operated by defendant's insured. He has provided sound equipment for a band that performed at the nightclub, and the accident occurred while plaintiff was carrying equipment from the nightclub to his truck after the concert had concluded. He claimed that defects in the loading dock led to his injuries. .

Essex denied coverage based on a "stage hand" exclusion in the policy's "Restaurant, Bar, Tavern, Night Clubs, Fraternal and Social Clubs Endorsement." That exclusion provided “the coverage under this policy does not apply to bodily injury,' . . . or any injury, loss or damage arising out of . . . [i]njury to any entertainer, stage hand, crew, independent contractor, or spectator, patron or customer who participates in or is a part of any athletic event, demonstration, show, competition or contest..”

A three judge majority agreed with the lower court and the plaintiff that the language "participates in or is a part of any . . . show" is ambiguous” because it could be read two different ways. Essex argued, and the court acknowledged, that the language could encompass all persons who performed any tasks in connection with the show, including loading and unloading sound equipment. However, the majority found that it could be read narrowly to encompass only those persons who actually performed in the show or were injured as a result of activities occurring during the show.

The court did reduce the amount recovered to the monetary limitations contained in the policy and not the entire judgment.

A strong dissent found no ambiguity in the endorsement, agreeing with Essex that the exclusionary language is clear, subject to no other reasonable interpretation, and applies in this particular case.
The exclusion thus applies where two conditions are met: (1) the injured party is an entertainer, stage hand, crew member, independent contractor, spectator, patron or customer who "participates in or is a part of" an athletic event, demonstration, show, competition or contest; and (2) the injury "arises out of" such participation.

If the exclusion was intended to apply only to those persons who "actually performed" in a show, then the language "spectator, patron or customer" in the exclusion would be superfluous. Second, such an interpretation imposes a temporal limitation on the exclusion where no such limitation appears therein. Other exclusions are more limiting. For example, the medical payments coverage provision specifically excludes expenses for bodily injury "[t]o a person injured while taking part in athletics." Here, by contrast, the absence of such limiting language in the exclusion in question reflects an intent to provide a broad exclusion for all injuries arising from participation in shows or other special events . Moreover the term “arising out of” language is broadly read to mean “originating from, incident to, or having connection with".
Editor’s Note: Your editor represents Essex in this appeal and, with the two dissenting votes, has a free ride to the Court of Appeals. We’ve booked the trip.

12/23/11 LMIII Realty, LLC v. Gemini Insurance Company
Appellate Division, Fourth Department
Unsigned Purchase Order to Which the Parties Agreed to Be Bound and Required Additional Insured Coverage Satisfies “Writing in a Contract or Agreement” Requirement in Blanket Additional Insured Endorsement
LMIII brought this action asserted that Gemini Insurance Company is obligated to defend LMIII as an additional insured in an underlying personal injury action.
In the underlying action, a roofer employed by Shaffer Building Services, Inc. (Shaffer) sought damages for injuries he sustained during the course of his employment. LMIII hired Shaffer to replace a roof on its property, and Shaffer was insured under a commercial general liability policy issued by Gemini. The policy's additional insured endorsement provided that a third party may constitute an additional insured "when you and such person or organization have agreed in writing in a contract or agreement that such person or organization be added as an additional insured on your policy."

The term "in writing" refers to the entire phrase "in a contract or agreement." Here, there was an enforceable purchase order that required Shaffer to add LMIII to its policy. Although unsigned, it was in writing, and the parties agreed that they were bound by it. It was therefore a writing that required AI status.

12/20/11 Liberty Mutual Fire Ins. Co.v. National Cas. Co.
Appellate Division, Second Department
Exhaustion Clause in Policy Does Not Sanction End to Defense Obligations in Other Pending Cases
Liberty commenced this action seeking a determination that National Casualty was required to defend ADESA and Amelia in several underlying personal injury actions. On July 22, 2005, Amelia, an employee of Adesa, lost control of a motor vehicle, causing injury to several individuals. Earlier, the court had affirmed a finding that National was required to defend both parties in these actions being the primary carrier before a Liberty policy. The National insurance policy provided primary coverage and the policy of the plaintiff Liberty Mutual Fire Insurance Company provided excess coverage. We criticized that holding in our January 25, 2008 edition .

Anyway, National settled several of the underlying personal injury actions, which allegedly exhausted its $1 million policy limit as of May 14, 2008, and refused to reimburse the plaintiffs for any defense costs incurred after that date.
Liberty stepped in and paid defense costs of another $50,000 and National refused to reimburse Liberty.

Accordingly, the conflicting language in the National policy which purports to terminate National's duty to defend upon the exhaustion of its policy limits is unenforceable, and the Supreme Court properly relied upon Insurance Department Regulation (11 NYCRR) § 60-1.1(b) to determine that National's duty to defend and pay defense costs continued until all of the underlying personal injury actions are fully resolved.

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

01/05/12 Mitrotti v. Elia
Appellate Division, First Department
Dismissal May Be Warranted Where Pre-Existing Conditions Interrupt the Chain of Causation
The 64-year-old plaintiff was involved in a prior accident in 2002. As a result of the accident at issue, he claimed injuries to his cervical and lumbar spine and left knee.

In support of his motion, defendant submitted an orthopedist’s report finding normal range-of-motion in all three areas of alleged injury. Defendant also submitted the report of a radiologist who opined that plaintiff’s MRIs revealed degenerative changes and that the condition of plaintiff’s spine had not changed since the MRIs taken following the 2002 accident.

Plaintiff failed to rebut defendant’s evidence because his doctor’s reports did not provide an opinion as to causation and they ignored the effects the prior accident may have had on the alleged injuries from the accident at issue. Plaintiff also failed to submit any proof of current range-of-motion restriction. The court reiterated that even where there is objective medical evidence, summary dismissal may be warranted then additional contributory factors, such as pre-existing conditions, interrupt the chain of causation between the accident and the alleged injury.

01/03/12 Fuentes v. Sanchez
Appellate Division, First Department
Failure to Review Plaintiff’s Medical Records Does Not Necessarily Render Defendant’s Experts’ Reports Insufficient
Defendants’ car allegedly ran a red light and struck the 81-year old plaintiff’s car. Plaintiff had a prior accident in 2003, but at the time of this accident, she had been working as a home attendant without difficulty for five years. She alleged injuries to her cervical and lumbar spine and left knee under the permanent consequential and/or significant limitation of use categories, and the 90/180-day category.

In support of their motion, defendants submitted affirmed reports from their examining orthopedist and neurologist, both of whom found normal ranges-of-motion and concluded the injuries had resolved. In addition, defendants’ neuroradiologist concluded that the MRI films revealed degenerative changes but no evidence of traumatic injury. Although defendants’ experts did not review plaintiff’s medical records, their reports were not insufficient because they detailed the specific objective tests used in their examinations, and which revealed full range-of-motion, and because the neuroradiologist found no evidence to traumatic injury.

In opposition, plaintiff submitted affirmations from her neurologist and orthopedist who examined her after the accident and 1½ years later and found range-of-motion limitations of the cervical and lumbar spine. She also submitted MRI reports from her radiologist which found disc bulges and herniation in the cervical and lumbar spine. Although range-of-motion limitations of the left knee were not quantified, the MRI finding of a meniscus tear and the orthopedist’s findings of a progressively worsening condition and his conclusion that she would be unable to return to her work, were sufficient to raise a triable issue of fact.

Plaintiff’s radiologist also causally related all the injuries to the accident and her treating physicians noted that although there was evidence of degenerative conditions and a pre-existing neck condition from the 2003 accident, plaintiff had been asymptomatic prior to the current accident. It was also noted that age-related stenosis is usually asymptomatic in the cervical spine and, although lumbar stenosis could produce pain, the onset of such pain would not be sudden, as was the case here. These submissions were sufficient to rebut defendants’ assertion that her injuries were solely caused by her degenerative and pre-existing conditions.

In addition, plaintiff raised a triable issue of fact with regard to her claim under the 90/180-day category because, although her bill of particulars stated she was only confined to bed and home for three days, she submitted disability notes for the period from December 2008 to May 2009. As such, on appeal the trial court’s dismissal of defendants’ motion was affirmed.

12/27/11 Jang Hwan An v. Parra
Appellate Division, First Department
MRIs Contradict Evidence of Degenerative Disease
In opposition to defendants’ motion, plaintiffs submitted the affidavit of their treating chiropractor who found that both had specified deceased ranges of motion in their cervical and lumbar spines. He also averred that Jang Hwan had decreased range of motion in his right knee and Jung Sook in her right shoulder, and that the injuries were the result of the accident and not degenerative disease.

Jang additionally submitted an MRI of his right knee which revealed multiple meniscal tears, joint effusion and a bone cyst or avascular neurosis which contradicted defendants’ evidence of degenerative disease. Jung Sook submitted an MRI showing tears of the supraspinatus and subcapularis tendons in her right shoulder, which similarly contradicted defendants’ evidence.

The appellate court therefore reversed the trial court and reinstated plaintiffs’ claims under the permanent loss of use, permanent consequential limitation and significant limitation of use categories.

12/27/11 Mitchell v. Calle
Appellate Division, First Department
Affirmed Reports Are Competent Evidence Even Though Based on Unsworn ER Records
The affirmed reports submitted by defendants in support of their contention that plaintiff did not sustain a permanent consequential limitation of use of the left knee were deemed competent evidence even though the experts relied on unsworn ER and other medical records. As a result, plaintiff’s submission of an unsworn MRI report was also admissible because defendants submitted it in support of their motion.

On appeal, the court agreed with the trial court, finding the report of defendants’ radiologist too equivocal to support, prima facie, that the meniscal tear in plaintiff’s left knee was not caused by the accident, particularly in light of plaintiff’s young age. However, the court granted defendants’ motion with respect to plaintiff’s 90/180-day claim as her own testimony was that she was only confined to bed for three days, and to her house for one week. In addition, her claimed restrictions were not supported by objective medical evidence.

12/27/11 Che Hong Kim v. Kossoff
Trivedi v. Vural
Appellate Division, Second Department
Once Again, Motions Denied Where Defendants Fail to Address 90/180-Day Claims Set Forth in Bills of Particulars
In both cases, plaintiffs’ bills of particulars clearly set forth a claim under the 90/180-day category and defendants’ motion papers did not adequately address that claim. Therefore, defendants’ motions were properly denied without need to consider plaintiffs’ opposing papers.

12/27/11 Muniz v. Singh
Appellate Division, Second Department
Upon Renewal and Reargument, Defendant’s Motion Is Denied
Plaintiff claimed injuries to her cervical and lumbosacral spine and left knee under the permanent consequential and/or significant limitation of use and 90/180-day categories and, upon renewal and reargument, submitted sufficient competent medical evidence to raise a triable issue of fact.

12/27/11 Shields v. New York Livery Leasing, Inc.
One Serious Injury Is All It Takes
Here, plaintiff claimed serious injury to her lumbosacral spine and shoulders and, in opposition to defendants’ motion, raised a triable issue of fact with regard to the spine under the permanent consequential and/or significant limitation of use categories. Defendants’ motion was therefore properly denied.

12/27/11 Wright v. Simpson
Appellate Division, Second Department
Motion Denied
In a reversal without details, defendants’ motion is denied as the appellate court determines that plaintiff submitted sufficient competent medical evidence to raise an issue of fact under the permanent consequential and/or significant limitation of use categories with regard to alleged injuries to her cervical spine.

12/23/11 Austin v. Rent A Center East, Inc.
Appellate Division, Fourth Department
Medical Records Reflecting Presence of Spasms Upon Palpation Constitute Objective Evidence of Injury
In support of their motion, defendants submitted the affirmation of their examining orthopedic surgeon who opined that the degenerative changes seen in plaintiff’s cervical and thoracic spine pre-existed the accident and that there was no objective evidence of serious injury caused by the accident.

In opposition, plaintiff submitted the affirmation of his treating orthopedic surgeon who diagnosed a cervical whiplash injury, a cervical sprain and a thoracic sprain, as well as an aggravation of plaintiff’s previously asymptomatic degenerative disease, including disc protrusions as C5-6, C6-7 and T4-5. He opined that this aggravation was the cause of plaintiff’s chronic pain, range-of-motion restrictions and muscle spasms. He also opined that the limitations were permanent and prevented plaintiff from continuing with his job as a mail carrier.

Plaintiff also submitted the deposition testimony of his primary care doctors which established that plaintiff did not have neck or back complaints prior to the accident. In addition, he submitted his medical records which reflected the presence of spasms upon palpation of the thoracic spine and which constitute objective evidence of injury. Plaintiff also submitted reports from numerous other medical providers, all of which quantified the cervical and thoracic limitations.

Finally, plaintiff’s claim under the 90/180-day category was supported by the fact that, on his treating physician’s orders, he did not return to work following the accident. On appeal, therefore, the court affirmed the trial court’s denial of defendants’ motion.

12/22/11 Henry v. Sorge
Appellate Division, Third Department
Report Based on Testing Performed Four Years Earlier Is Insufficient to Establish That Results Remain Valid
In April 2005, while a senior in high school, plaintiff was involved in an accident and claimed injury to her cervical spine under the permanent consequential and significant limitation of use categories, as well as under the 90/180-day category.

In support of their motion, defendants submitted the IME report of their orthopedic surgeon, who concluded plaintiff’s injuries had resolved, and the report of their radiologist who reviewed a cervical MRI from August 2005 which showed no abnormalities.

In opposition, plaintiff submitted her chiropractor’s report which was based on the MRI and various testing from four years earlier. The chiropractor found disc dehydration at C5-6, “significant destabilization” of the cervical spine due to “disco/ligamentous complex failure at C1-2, C5-6 and C6-7”, as well as “angular motion segment integrity change at C6 with a ratable whole body impairment of 25%.”

In affirming the trial court, the Appellate Court held that the disc dehydration and alleged ligament injury were not serious injuries in the absence of evidence of current limitations and no recent range-of-motion testing or other evidence of recent limitations was submitted. In addition, the chiropractor’s conclusion of 25% “whole body impairment” did not specify any cervical impairment and therefore was meaningless and plaintiff failed to proffer any objective medical evidence to show that the results from four years earlier remained valid. Finally, plaintiff’s 90/180-day claim failed because she had missed only one week of school and two weeks of work. She attended her senior prom and a school trip to an amusement park and there was no evidence that she was prevented from performing substantially all her usual activities for 90 of the 180 days following the accident.

12/22/11 Wiles v. Gray
Appellate Division, Third Department
Plaintiff Fails to Raise Triable Issue of Fact as to Causal Relationship
Defendant submitted plaintiff’s EBT testimony, medical records and the affirmed report of an orthopedic surgeon who examined plaintiff and determined that the accident only caused a temporary exacerbation of plaintiff’s significant pre-existing neck and back pain caused by incidents in 1994, 1998, two in 2004 and two more in 2005. Plaintiff was also diagnosed in 2004 with cervical degenerative disc disease.

Plaintiff submitted the report of the orthopedic surgeon who examined her for workers’ compensation, but that report did not address her history of pre-existing conditions, and she did not submit any other affidavit or other evidence to raise an issue of fact with regard to causation. As a result, on appeal the trial court was affirmed as plaintiff did not rebut defendant’s evidence that she neither sustain a serious injury in any category nor that she sustained any causally related injury.

12/20/11 Rampino v. Shaffren
Appellate Division, Second Department
Defendants Attempt to Show Injuries Not Causally Related but Their Submissions Raise a Triable Issue of Fact
Plaintiff alleged injuries to his cervical and lumbosacral regions of the spine under the permanent consequential and/or significant limitation categories of serious injury and submitted sufficient medical evidence to rebut defendants’ prima facie showing. In addition, defendants’ submission attempting to establish that the injuries were not caused by the accident actually raised triable issues of fact. The trial court was correct in denying their motion.

12/20/11 Williams v. Fava Cab Corp.
Appellate Division, Second Department
Failure to Quantify Limitations Results in Court’s Inability to Conclude, as a Matter of Law, That Limitations are “Minor, Mild or Slight”
The examining orthopedic surgeon for one group of defendants found range-of-motion limitations in plaintiff’s right and left shoulders and acknowledged they represented a diminished range-of-motion. He did not, however, quantify the restrictions and compare to what is normal and the court, therefore, could not conclude that, as a matter of law, the decrease was so “minor, mild or slight” so as to be insignificant. In addition, while the examiner also opined that plaintiff’s limitations were subjective, he did not explain or substantiate his conclusion that the restrictions were self-imposed with any objective medical evidence.

As regards the other defendants, while they did not rely on the same deficient report, plaintiff raised a triable issue of fact with respect to his alleged cervical and/or lumbar injuries through the affirmation of his treating physician whose contemporaneous and recent examinations revealed significant limitations. The MRIs of plaintiff’s spine also revealed herniations at C2-3, C3-4, C4-5, C5-6 and C6-7, as well as numerous bulges. Plaintiff’s physician concluded the injuries were permanent and causally related to the accident. In addition, plaintiff’s submissions raised triable questions of fact as to both the issues of degeneration and gap in his treatment.

The appellate court determined that the trial court should have denied all the defendants’ motions and cross motions and it remitted the case for a decision regarding the allegation of one group of defendants that they were not at fault as that issue was never determined by the trial court.

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

ARBITRATION

12/29/11 Applicant v. Allstate Ins. Co.
Arbitrator Mary Anne Theiss, Onongaga County
Multiple IMEs Support Lost Wage Denial and Insurer Prevails on One Year Rule
[Our own Cassandra Kazukenus, Esq. handled this one.]
The Applicant sought reimbursement of over $30,000.00 for lost wages and psychotherapy treatment allegedly as a result of a November 19, 2009, motor vehicle accident. With regard to the lost wages the insurer denied them based upon independent medical examinations. Dr. Paarlberg examined the Applicant and opined that the Applicant aggravated her cervical spondylosis but was capable of returning to work without restrictions. After the Applicant’s treating physician recommended additional injections, Dr. Paarlberg opined that she should be permitted to receive the additional injections. However, he opined that the Applicant’s problems bending, gripping, and lifting were attributed to her age and pre-existing high blood pressure.

The Applicant was also examined by Dr. Hughes wherein the Applicant complained of blurred vision and pain behind her eyes. Dr. Hughes determined the Applicant could sit and stand for 30 minutes, drive for 50 minutes, and lift 10 pounds with her right hand. Further, she had no trouble lifting with her left hand. Dr. Hughes opined that the Applicant could work.

The Applicant underwent an examination with Dr. Putcha who had to perform several blood pressure tests during the exam due to dizziness. Dr. Putcha opined that Applicant’s Lisinopril, Cymbalta and Vicodin were making her blood pressure drop and that she should discuss with her treating physician changing her medications. Dr. Putcha opined that the Applicant could work at a sedentary level.

The assigned arbitrator determined that based upon the evidence at to Applicant’s position it was a sedentary position and that the IME opinions were persuasive.

Turning to the psychotherapy treatment, the insurer denied that treatment upon the one year rule. The assigned arbitrator upheld the denial as it was not ascertainable within one year of the accident that the Applicant would need cognitive rehabilitation.

12/29/11 Kaleida Health v. Liberty Mut. Fire Ins. Co.
Arbitrator Veronica K. O’Connor, Erie County
Peer Review Insufficient to Support Surgery Denial
The Applicant sought reimbursement for a lumbar discectomy with fusion performed on the assignor allegedly as a result of a December 31, 2008, motor vehicle accident. The insurer denied the surgery upon a peer review conducted by Dr. Louis Nunez. Dr. Nunez opined that there was a lack of any objective neurological deficits and indication for spinal fusion and that the surgery was not indicated and not causally related to the accident. The assignor was also examined by Dr. John Giardino as well as Dr. Nunez. Dr. Nunez’s reports indicated that the assignor did not require surgical intervention but she should have injections. Also, while the assignor complained of radicular pain there was no supporting EMG study. Further, the MRI did not reveal any pathology at the L4/5 level warranting surgery.

The treating surgeon, Dr. Cameron Huckell, opined that the MRI did reveal objective findings at the L4/5 level that correlated to the assignor’s subjective pain. He also reviewed another lumbar spine MRI which confirmed an L4/5 disc bulge and L5/S1 central disc herniation which explained the assignor’s current symptoms. Further, there was no finding of significant central stenosis. Since the assignor described her pain as intractable and intolerable Dr. Huckell recommended the surgery as it was thought that it would reduce her pain symptoms.

The assigned arbitrator determined that the peer review was insufficient to support the denial after reviewing the evidence and hearing the assignor testify.

12/27/11 Kaleida Health v. GEICO Ins. Co.
Arbitrator Kent L. Benziger, Erie County
Another Peer Review Report Not Sufficient to Deny Surgery
The Applicant sought reimbursement for a lumbar spine fusion and lateral discectomy with cage placement performed by Dr. Zair Fishkin allegedly as a result of a March 4, 2009. The insurer denied the surgery upon the peer review of Dr. Marvin Winell. Dr. Winell opined that the most common reason for lumbar spine surgery was due to sciatica and spinal stenosis. He also cited to medical journal articles which determined radiculopathy can be treated through activity modification. Dr. Winell also indicated he did not have anything indicating any problems in the months before surgery and there was no explanation of the surgery.

The assigned arbitrator determined the peer review was not persuasive as the peer reviewer was not provided with records documenting conservative treatment or the surgery’s reason. This was despite those records being exchanged as part of the arbitration. Also, the assigned arbitrator did not find the cited medical journal persuasive. Instead, he determined that the statements made relying upon the journal were vague and were not constructively applied to this case’s facts. Rather, the report may have been more persuasive if the MRI study and operative report were reviewed and analyzed.

12/27/11 Albany Multi Medicine Grp. v. GEICO Ins. Co.
Arbitrator Kent L. Benziger, Erie County
Confusion on IME Notice and Attempts to Clarify Reasonable Excuse for Non-Attendance; CASE LIMITED TO FACTS
The insurer denied the entire no-fault claim based upon the assignor’s failure to attend two scheduled independent medical examinations (“IME”). The assignor testified at the hearing that while he received notices from an IME scheduling company, she did not recognize the name or the physicians’ name. Also, there was nothing on the notice that indicated it was related to his no-fault claim with the insurer. She Googled the physicians’ name and contacted their office to ascertain the purpose of the notice. No one from the office returned her messages. She also contacted the IME scheduling company via fax to ascertain the purpose of the letter. She also advised that she was in sales and could not attend on the dates set for the IME. The assignor contended no one from the company responded. Also, the assignor was not represented by counsel at the time she received the notices.

The assigned arbitrator determined that the insurer complied with the no-fault regulations on scheduling IMEs. Also, the letters from the IME company complied with the regulations. However, the assigned arbitrator found that, based upon the specific facts in this case, the assignor’s excuse was reasonable. The assigned arbitrator indicated that the “ruling is limited to the specific facts of this case, and a similar excuse may not justify non-attendance in a future proceeding.”

12/27/11 Buffalo Neurosurgery Grp. v. Encompass Home and Auto Ins. Co.
Arbitrator Kent L. Benziger, Erie County
IME Report Sufficient to Deny Complex History Involving Neck and Back Injury
The Applicant sought reimbursement for neurological evaluations and MRI studies allegedly as a result of a January 6, 2009, motor vehicle accident. The insurer denied the treatment based upon the IME of Dr. Ronald Naumann. The assignor’s medical history was a bit complex in that she had a July 23, 2003, lumbar spine injury. As a result she underwent a number of MRIs. She was previously diagnosed, among other things, with lumbar spondylosis without myelopathy, lumbosacral neuritis, lumbago, and cervical spondylolisthesis.

The day after the accident the assignor was treated in the emergency room. She was diagnosed with limb pain, lumbar interveterbral disc degeneration, lumbago, and cervical disc with myelopathy. The assignor underwent additional MRIs due to a known cervical and thoracic syrinx. The MRIs revealed no change in the syrinx. It was recommended that additional MRI studies were needed. The additional MRI studies revealed no disc herniation in the lumbar spine was present. The assignor’s diagnosis remained unchanged.

Dr. Naumann’s IME indicated that upon examination the assignor had cervical and lumbar strains due to the accident together with occipital neuralgia, bilateral thoracic outlet syndrome and a high anxiety level with low pain tolerance. He recommended massage therapy if the therapist could perform biofeedback. He did not recommend further diagnostic testing. Dr. Naumann also issued another report after reviewing additional reports and the MRIs. He concluded that after comparing the pre and post-accident studies there was no interval change.

The assigned arbitrator found the IME report persuasive as it reviewed the complex history of the case and compared pre and post-accident MRI studies to support the conclusion. The assigned arbitrator determined that the treating physician’s reports did not discuss in any detail the causal relationship or whether there was an aggravation of a pre-existing injury.

12/27/11 Applicant v. Farm Family Cas. Ins. Co.
Arbitrator Kent L. Benziger, Erie County
Injury First Reported to Insurer and Treatment First Rendered Five Months After Accident Not Causally Related
The Applicant sought reimbursement for medical treatment first received five months after a September 30, 2009, accident. The insurer denied the treatment upon the peer review report of Dr. Marc Appel who opined that the injury was not related to the accident. The Applicant claimed that he was a self-employed logger who injured his groin area while climbing off the truck’s ladder. The Applicant first treated for this condition five months later and reported it to the insurer five months later. It is noted that the insurer had documented that the Applicant slipped on the truck bed but did not report the incident to the insurer because he did not think it was serious. The assigned arbitrator found the denial justified after reviewing the documents submitted.

LITIGATION

12/29/11 MIA Acupuncture, PC a/a/o Fidel Williams v. Praetorian Ins. Co.
Appellate Term, Second Department
Insurer’s Motion Properly Partially Denied but Should Have Been Granted on Denials Based Upon IME
An issue of fact precluded summary judgment in the insurer’s favor on the issue that the plaintiff violated the 45 day rule as the plaintiff submitted an affidavit form the billing manager who averred that he personally mailed the claim form. Further, the insurer was not entitled to summary judgment with regard to certain claims based upon an adjuster’s affidavit attesting that a fee schedule review revealed the amount charged exceeded the workers’ compensation fee schedule. However, the insurer’s summary judgment motion with regard to certain additional claims denied upon an IME report should have been granted. The plaintiff failed to rebut the conclusions set forth in the IME report.

12/29/11 Wellness Physical Therapy, PC a/a/o Lorenzo Ramos v. Praetorian Ins. Co.
Appellate Term, First Department
Verification Outstanding and Claim Premature
The complaint was properly dismissed as the insurer established that verification letters were timely and properly mailed without receipt of any response. The plaintiff did not raise a triable issue of fact through its conclusory denial of receipt of the verification letters.

12/28/11 Shore Med. Diag., PC a/a/o Gregory McClymont v. Praetorian Ins. Co.
Appellate Term, First Department
IME No-Show Denial Upheld
The complaint was properly dismissed as the insurer demonstrated a breach of policy condition to appear for scheduled IMEs by establishing mailing of the IME notices to the assignor and the assignor’s failure to appear for the IME.

12/23/11 Heights Med. Care, PC a/a/o Marvin Edmonds v. New York Cent. Mut. Fire Ins. Co.
Appellate Term, First Department
Another Case Not Ripe for Adjudication Due to Outstanding Verification
The insurer’s summary judgment motion should have been granted as it established that verification letters were timely and properly mailed without receipt of any response.

12/23/11 Hilltop Med. Diag. & Treatment Ctr. a/a/o Frantz Guillame v. Clarendon Nat’l Ins. Co.
Appellate Term, Second Department
Failure to Submit Medical Evidence to Oppose Insurer’s Motion on Lack of Medical Necessity Lethal
The complaint should have been dismissed as the insurer established lack of medical necessity based upon a peer review. The plaintiff did not submit any medical evidence to raise a triable issue of fact after the burden shifted to plaintiff to establish medical necessity.

12/23/11 Right Aid Diag. Med., PC a/a/o Jordan Brown v. GEICO Ins. Co.
Appellate Term, Second Department
Another Case Dismissed for Lack of Medical Necessity
The complaint was properly dismissed as the insurer established lack of medical necessity based upon a peer review. The plaintiff failed to raise a triable issue of fact as it did not submit an affidavit from a health care practitioner rebutting the conclusions in the peer review.

12/23/11 W.H.O. Acupuncture, PC a/a/o Joseph Melinda v. National Cont. Ins. Co.
Appellate Term, Second Department
Insurer Demonstrated Acupuncture Services Properly Paid
The insurer established that it fully paid plaintiff for certain service dates under codes 97810 and 97811 using the fee schedule for acupuncture services performed by chiropractors. The plaintiff raised no triable issue of fact and could not raise on appeal for the first time an issue of fact over medical necessity.

12/23/11 ALROF, Inc. a/a/o Cyril Luke v. Praetorian Ins. Co.
Appellate Term, Second Department
Lack of Meaningful Rebuttal Affirmation Fatal to Case
The insurer’s cross-motion for summary judgment should have been granted on the issue of lack of medical necessity. The plaintiff failed to proffer an affirmation from a doctor that meaningfully referred to or rebut the conclusions in the peer review to raise a triable issue of fact.

12/23/11 Liu Yong a/a/o Angela Garcia v. Metropolitan Prop. and Cas. Ins. Co.
Appellate Term, Second Department
Insurer Properly Established Timely Payment Upon Fee Schedule
The insurer’s summary judgment motion as to certain claims being paid at the workers’ compensation fee schedule as properly granted. The insurer demonstrated timely payment and at the workers’ compensation fee schedule. However, the insurer’s motion as to one claim should have been denied as the insurer did not demonstrate timely mailing of the denial.

12/23/11 Biobalance Med., PC a/a/o Julian Alvarez v. Clarendon Nat’l Ins. Co.
Appellate Term, Second Department
Insurer’s Peer Review Not Rebutted by Plaintiff
The insurer’s summary judgment motion dismissing the third cause of action should have been granted. The insurer demonstrated that a timely denial was issued upon a peer review. The plaintiff failed to raise a triable issue of fact as it offered no affidavit from a health care practitioner that meaningfully referred to or rebutted the peer review’s conclusions.

12/23/11 Jae Ook Park, MD a/a/o Hao Cheng Piao v. GEICO Gen. Ins. Co.
Appellate Term, Second Department
Plaintiff Did Not Establish Prima Face Case and Court Will Not Search Record to Award Summary Judgment to Insurer
Plaintiff’s motion for summary judgment was properly denied as it failed to establish the bill in dispute was not timely denied or that the denial was conclusory, vague or without merit as a matter of law. The court declined to search the record to grant the insurer summary judgment.

12/23/11 Jesa Med. Supply, Inc. v. Progressive Ins. Co.
Appellate Term, Second Department
Plaintiff Failed to Rebut Insurer’s Proof of Lack of Medical Necessity
The insurer’s cross-motion for summary judgment should have been granted as it established lack of medical necessity based upon a peer review which the plaintiff failed to rebut.

12/21/11 Comfort Supply, Inc. v. GEICO Gen. Ins. Co.
Appellate Term, Second Department
Plaintiff’s Failure to Specify Method of Service Delivery Fatal to Motion
The plaintiff’s summary judgment motion was properly denied as the affidavit submitted by the plaintiff attested to its general practice directly delivering supplies to the plaintiff or delivering them to the prescribing healthcare provider for delivery to the assignor. The court held that plaintiff had not established its prima facie case as it did not specify which method of delivery was used in this case.

12/21/11 Friendly Physician, PC a/a/o Lloy Welds v. GEICO Ins. Co.
Appellate Term, Second Department
Issue of Fact Regarding Injuries Arising Out of Insured Incident
The plaintiff’s summary judgment motion should have been denied. The plaintiff established its prima facie case but the insurer’s sworn statements raised a question of fact as to whether the alleged injuries arose out of an insured incident.

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

12/30/11 In re PMA Management Corp. v. White
Appellate Division, Fourth Department
Workers’ Compensation Lien Asserted More Than Three Years After a Personal Injury Settlement Is Time Barred
PMA served as the third-party administrator for the NY Liquidation Bureau. In this capacity, they were charged with handling claims for insolvent carriers. This included workers’ compensation claims accruing under policies issued by Legion Insurance Company who was long ago placed into liquidation. As part of its duties, PMA was also required to recover post-liquidation liens asserted against potential personal injury recovers.

In March of 2007, White, a Legion insured, resolved a long-standing personal injury action. At that time, White reached an agreement with a separate administrator that was handling pre-liquidation liens on behalf of the now defunct Legion. No such settlement agreement was reached with PMA. The instant action occurred when PMA sought assert its lien against White.

In denying PMA’s claim, the Fourth Department noted that the statute of limitations for asserting a workers’ compensation lien is three (3) years. Where, as here, PMA’s claim was not commenced until the expiration of the statute of limitations, there was no longer a viable claim.

In opposition, PMA argued that the statute of limitations did not begin to run until White settled his lien with Legion’s third-party administrator. Of course the settlement was not effectuated until two-years and nine months before PMA commenced the instant action. The Appellate Division was not swayed, simply stating that Legion’s lien was entirely separate and distinct from a lien asserted by PMA on behalf of the Liquidation Bureau.

12/27/11 Miller v. Mack
Appellate Division, Second Department
Both a Meritorious Defense and Reasonable Excuse Are Needed to Vacate a Default
After the commencement of the above-captioned matter, plaintiff determined that defendants did not possess insurance. At that time, plaintiff appears to have made a motion to the Trial Court requesting that MVAIC be compelled to appear on behalf of the insolvent, non-insured, defendants. We understand that MVAIC was never served with the motion to compel, and as such default.

Thereafter, upon learning of the action (and the Order compelling their involvement) MVAIC moved to vacate the Order. In restoring the matter to the trial calendar, the Second Department noted that (a) MVAIC had provided a reasonable basis for the default (no mention of what it was) and (b) demonstrated a potentially meritorious defense due to the alleged non-compliance with the various requirements promulgated Insurance Law § 5208.

Peiper’s Point – Unfortunately, the Second Department does not give us much to work with here. However, we wanted to point out a couple of interesting things:

Practitioners are reminded that when pursuing a claim where MVAIC is potentially involved, litigants must comply with various procedural requirements set up under Article 52 of the Insurance Law. One such section, Section 5208, has very specific details about the substantive and temporal requirements of commencing a claim.
The Court references plaintiff’s “motion to compel” a defense on behalf of the defendants. We are advised by Scott Dow (handling attorney for MVAIC) that when it is determined that the named defendants are uninsured, the proper response is to move the trial court to compel MVAIC’s involvement. In doing this, however, one must comply with the procedural requirements of Article 52 (see point 1, supra).
Finally, this decision underscores the need to present a “reasonable excuse” for the default. Simply presenting a meritorious defense (as we’ve seen time and time again) does not cure a default.

12/27/11 Simone v. Liebherr Cranes, Inc.
Appellate Division, Second Department
Contract Means What It Says: No Requirement of Negligence for Indemnity Purposes
In this action, Beys Contracting (“Beys”) sought an award of contractual indemnification from third-party defendant Resun Leasing, Inc. (“Resun”). Resun appears to have opposed the demand by arguing that neither it, nor its subcontractors, were negligent.

In affirming the trial court, the Second Department started by reviewing the language of the indemnity clause at issue. Upon review, the Court noted that Resun was obligated to indemnify Beys so long as the loss was “caused in whole or in part by any act or omission of the Subcontract.” Where there was no obligation in the contract that the acts or omissions be negligent, any argument that Resun (or its subcontractors) was free of negligence was irrelevant. Accordingly, because the incident arose from the work of Resun’s contractors, the protections of the indemnity clause were triggered.

12/23/11 Charney v. LeChase Construction
Appellate Division, Fourth Department
Fullest Extent Permitted by Law Saves Contractual Indemnity Claim
This incident arose from the collapse of a steel canopy, and resulted in a claim under Labor Law 240(1). As part of that litigation, defendants moved for Summary Judgment against third-party defendant Contour Erection (“Contour”) pursuant to an indemnity clause found within the Contour contract.
In modifying the trial court’s decision, the Fourth Department notes that any provision that purports to provide indemnification for a negligent party is void by operation of General Obligations Law § 5-322.1. The Court also notes, however, that an indemnity clause can be saved from the reaches of the GOL by simply inserting the term of art “to the fullest extent permitted by law.” The inclusion of such language then requires the Court (or the jury) to make a determination as to the active negligence of the purported indemnitee. If negligence is found, then no indemnity right will exist for that portion of liability attributable to the negligent conduct of the party seeking indemnification.

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

December 30, 2011 DFS report to Governor and Legislature

Per Financial Services Law §205-a, the DFS is required to submit a report to the Governor and Legislature regarding the Department’s efficiency, effectiveness and integration. The report summarizes the change from two separate departments, Banking and Insurance, to the creation of one department, DFS. Initially, the report also highlights some of the initiative and actions it has already undertaken and achieved. Highlighted within this section is the fact that FEMA has recognized a state’s right to regulate claims from floods such as those caused by Tropical Storm Irene, deregulation of insurance business for large, sophisticated companies or public entities, and the Department’s activities taken in response to Tropical Storm Irene.

Also included are initiatives that are of importance to the Department in the upcoming year. While there are numerous initiatives, there are only a few which are relevant to the property and casualty industry. A key priority of the Department is to make the examination process less complex and more modern and efficient. An internal working group was formed to identify issues and make recommendations. Some of the areas that are being reviewed are:

The training of examiners;
Enhancing IT components of exams
Improving timeliness of report issuance
Increasing financial analysis’ involvement in risk-focused surveillance
Improving administrative aspects of the exam process, such as vendor management, contacts, billing, hours and invoices.

The Department also recognizes the need for the Department to respond to filings more quickly. Specifically, the report states “It is essential that the industry receive prompt responses to those filings to be able to conduct business. A timely rejection is often preferable to long delays with no decision because it allows a business to make adjustments and go forward.” The Department will be using an internal list to monitor departmental responsiveness. Any pending matters without a decision for more than 45 days will be on the list.

As someone who has been involved in both the exam and filing process, I couldn’t agree more that changes need to occur. Hopefully the changes will be positive and not additionally burdensome.

Superintendent Lawsky also formed a working group to examine whether existing banking and insurance laws need to be updated in order to provide additional tools to the Department so that it may regulate more effectively. The working group will also review whether some of the laws should be eliminated because the burdensome requirements for the industry to do not result in increased protections for consumers.

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

12/29/11 Bjornestad v. Progressive Northern Insurance Company
Eighth Circuit Court of Appeals – South Dakota
Can Attorneys’ Fees Be Awarded Where There Has Been No Determination of Bad Faith?
On December 7, 2004, Andrea Bjornestad was driving her vehicle and stopped at a red light when she was rear-ended by a vehicle driven by Nycole Hansen. Hansen was insured under a policy with limits of $25,000 – the minimum amount allowed under South Dakota law. Bjornestad was insured by Progressive under a policy which provided $100,000 in UIM coverage.

Bjornestad settled her claim against Hansen for the full $25,000 available under Hansen’s policy. Because of complications with her injury Bjornestad also sought payment from Progressive under her UIM coverage. Although Bjornestad demanded full payment of the $100,000, the amount available under her policy was actually limited to $75,000 because Progressive was entitled to offset the $25,000 Bjornestad received from Hansen, the at-fault driver.

Approximately two months after the demand Progressive offered to pay Bjornestad $25,000 in exchange for a full and final release as to all claims. At that time Bjornestad’s medical expenses alone totaled $24,300, without considering her future medical expenses, past and future economic loss, pain, suffering, impairment, and loss of enjoyment of life. Bjornestad rejected the offer.

Progressive then hired an Independent Medical Examiner [“IME”] to conduct a review of Bjornestad’s medical records. The IME opined that Bjornestad had suffered only mild neck strain in the accident, and that the accident did not contribute to, or aggravate, the congenital low back condition. Progressive once again offered to settle for $25,000, and Bjornestad rejected the offer.

Bjornestad then filed suit against Progressive in state court alleging claims for breach of contract and bad faith, and seeking punitive damages and attorney’s fees. Progressive removed the action to federal district court.

The case proceeded to trial and by that time Bjornestad’s medical expenses had increased to $50,027. The jury returned a verdict in Bjornestad’s favor on the breach of contract claim and awarded $75,000 in compensatory damages. The jury rejected Bjornestad’s bad faith claim.

Following the trial Bjornestad moved for an award of attorney’s fees pursuant to S.D. Codified Laws §58-12-3 arguing Progressive’s failure to pay the full amount of her loss was vexatious or without reasonable cause. Progressive opposed the motion arguing that a defense verdict on the bad faith claim should preclude an award of fees. The district court rejected Progressive’s argument stating, “although whether Progressive acted in bad faith and whether Bjornestad is entitled to attorney’s fees under §58-12-3 raise similar issues, they are considered under different standards.”

The district court found an award of fees was appropriate, focusing on the following facts: (1) at the time Progressive offered to settle Bjornestad’s claim for $25,000, Progressive itself had valued the UIM claim at a range above that amount ($25,300 to $50,350); (2) the Progressive claim specialist handling the file communicated to Bjornestad’s attorney that Progressive had valued the claim at even less than $25,000 which conflicted with Progressive’s actual evaluation range; (3) Progressive inaccurately told its IME that Bjornestad’s low back pain did not begin until February 14, 2006, even though Progressive knew the low back pain and treatment began the date after the December 2005 car accident; and (4) Progressive demanded a full and final release of all claims as a condition of its $25,000 offer.

The district court concluded that at the time Progressive should have paid under its contract with Bjornestad, the facts did not justify Progressive’s repeated attempts to force its insured to settle for less than the value of the claim in exchange for a full waiver of all claims by making false representations during settlement negotiations. The district court awarded Bjornestad attorney’s fees in the amount of $45,718.60.

Progressive filed an appeal and argues that the jury’s rejection of Bjornestad’s bad faith claim should preclude an award of attorney’s fees under §58-12-3 as a matter of law.

The Eighth Circuit Court of Appeals [“Court”] affirmed the district court’s decision. First, the Court addressed Progressive’s argument that the defense verdict on plaintiff’s bad faith claim necessarily precludes a trial court from finding the insurer’s conduct was “vexatious or without reasonable cause” under §58-12-3. On the same date the court decided the issue in another case, Tripp v. W. National Mut. Ins. Co., where the Court examined the South Dakota Supreme Court’s decision in Brooks v. Milbank Ins. Co., 605 N.W.2d 173 (S.D. 2000), and decided that Brooks foreclosed the argument that a verdict for the insurer on a bad faith claim precludes a finding of vexatiousness or unreasonableness under §58-12-3. In summarizing its decision the Court concluded, “a jury’s adverse finding on a bad faith claim does not, as a matter of law, preclude a trial court from awarding attorney’s fees under §58-12-3. Rather, just like those cases where a jury finds an insurer acted in bad faith, a trial court should undertake a separate analysis to determine whether the insurer’s refusal to pay as vexatious or without reasonable cause in those cases where a jury finds an insurer did not act in bad faith.”

The Court then addressed the issue of whether the district court clearly erred when it found Progressive’s refusal to pay Bjornestad’s contract claim was vexatious or without reasonable cause under the facts of this particular case. After reviewing the record, the Court did not find that a mistake was made and therefore, concluded the district court did not clearly err in finding Progressive’s refusal to pay was vexatious or without reasonable cause.

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

12/23/11 American Transit Ins. Co. v. Hanover Ins. Co.
Supreme Court, New York County
No Coverage Where Insured Asked That the Vehicle Be Removed from His Policy
Wilson Encalada had a car insurance policy in place for a 95 Lincoln. On January 3, 2006, Mr. Encalada contacted his agent to notify it of a change of vehicles, from a 95 Lincoln to a 98 Lincoln. That same day, Mr. Encalada’s agent faxed the request to the broker who, in turn, forwarded it to American Transit.

On January 4, 2006, the 95 Lincoln was removed from the policy. The following day, before the license plates were transferred, the 95 Lincoln was involved in an accident with a Hanover insured vehicle. After being placed on notice of the accident, American Transit denied coverage.

To obtain standing to bring this suit, Hanover as subrogee of its insured brought an action against Mr. Encalada. Hanover then obtained a judgment against Mr. Encalada after he defaulted.

The issue here is whether Mr. Encalada’s request to have the 95 Lincoln removed from the policy relieved American Transit of any contractual obligation to provide a defense or indemnity to Mr. Encalada in connection with the accident. Hanover argued that Mr. Encalada believed the vehicle was insured and was uncertain as to when the transfer would take place. However, the court disagreed and granted summary judgment in favor of American Transit. According to the court, Hanover’s argument was belied by Mr. Encalada’s own admissions that he requested the insurance be cancelled prior to the accident. Further, American Transit established that the transfer was in fact perfected prior to the accident.

Take Away: In considering this decision, I could not help but wonder whether Mr. Encalada was driving the vehicle at the time of the accident. If he was driving, an auto policy’s grant of coverage includes, as an insured, “you” for any auto; however, coverage is then removed if you are using an auto you own, other than “your covered auto.” Comparatively, if Mr. Encalada was not driving the vehicle, and it had already been sold, it would make a lot more sense that there was no coverage for the accident.

12/21/11 Matter of GEICO General Ins. Co. v. Cruz
Supreme Court, Erie County
Court Considers Whether an Insurer Can Move to Stay a UM Arbitration Based on the Invalidity of the Tortfeasor’s Insurer’s Disclaimer
This is a decision that comes out of our local courts. The question considered is whether it is appropriate for an insurer to move to stay arbitration of a UM claim made against it on the ground of the invalidity of the tortfeasor’s insurer’s disclaimer of coverage. Here, Geico’s insured was involved in a two-car, rear-end motor vehicle accident. The tortfeasor fled the scene, but, unfortunately, left her license plate.

Geico traced the plate and notified the tortfeasor’s insurer, A. Central, of the accident two days later. A. Central then called its insured who denied the accident occurred; however, when the issue of the license plate was raised, she admitted her vehicle’s involvement. A. Central then sent her accident forms to be completed. She never completed the forms and, eventually, A. Central denied coverage based on non-cooperation.

Thereafter, Geico’s insured served a demand for arbitration pursuant to her UM endorsement. Geico moved to permanently stay the arbitration on the ground that A. Central’s disclaimer was invalid; thus, the vehicle was actually insured.

When presented this motion, the court initially acknowledged that case law from the Second Department endorsed the procedure Geico was taking (i.e., moving to stay arbitration based on a defect in the other disclaimer); however, the court then went on to outline why, in its opinion, the case law was wrong.

First, the Court pointed to the rule setting forth the grounds for seeking a stay of arbitration. CPLR 7503(b) provides that a stay may be sought were “a valid agreement [to arbitrate] was not made or has not been complied with or that the claim sought to be arbitrated was barred by a limitation under subdivision (b) of section 7502. Here Geico never raised any of these issues.
Second, the court noted that per the relevant regulations and the policy, an injured insured has a right to seek and prevail at arbitration of a UM claim against her own insurance company where she sustained a serious injury as a result of the negligent operation of a vehicle 1) as to which there was liability coverage on the date of the accident but 2) as to which the tortfeasor’s liability carrier subsequently denied or disclaimed coverage. Here, again, no one disputed that A. Central did in fact disclaim coverage.
Thus, according to the court, there is nothing in the rules or regulations permitting Geico to move to stay based on its challenge of the other insurer’s disclaimer. It was enough that a disclaimer was issued.

Nevertheless, while the court disagreed with the precedent in this area, it still considered the validity of the disclaimer and, ultimately, determined that A. Central had met its heavy burden of showing a lack of cooperation. Thus, the court denied the permanent stay.

Take Away: At oral argument, Geico advised the court that permitting the parties to litigate the validity of the disclaimer now, in this action, avoided needless future litigation. I agree with Geico on this point. If you accept the court’s position, an insurer would be required to wait for an adverse arbitration decision. Once it had this decision, it then would have to pay the arbitrator’s award, turn around, and bring a subrogation action against the tortfeasor. After that action was brought, it would have to get a judgment and then, with the judgment, challenge the other carrier’s disclaimer. This process would involve a significant use of judicial resources. Also, there are other potential problems. What happens if the UM arbitrator awards more in damages then a jury in the subrogation action? The tortfeasor would not have been a party to the UM arbitration; thus, the arbitrator’s award would not be binding on him or her.

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

LIQUIDATED DAMAGES OR UNENFORCEABLE PENALTY?

From time to time, courts construe contract provisions and damages claims and have to determine whether liquidated damages can be assessed, or whether the clause in the circumstances constitutes an unreasonable and unenforceable penalty. If a contract seeks to measure actual damages that might be incurred because of a breach, that is considered valid compensation. If the clause is intended to punish for breach, that may be an unenforceable penalty. The Supreme Court of South Carolina recently confronted this issue in Erie Insurance Co. v. The Winter Construction Co., 2011 S.C.App. LEXIS 163 (June 15, 2011). In the Erie Insurance case, the Court overturned a ruling that a subcontract’s liquidated damages provision constituted an unenforceable penalty.

The subcontract provision allowed the contractor to charge all reasonable costs incurred due to the subcontractor’s failure to perform or cure a default, plus an allowance for an administrative burden equal to 15% to the account of the subcontractor. The court ruled that this provision was reasonably intended by the parties as a pre-determined measure of compensation for actual damages that might be sustained by non-performance.

Factors to be considered in this analysis are the ease or difficulty in measuring damages, and the magnitude of the stipulated sum, not only as compared with the value of the subject of the contract, but in proportion to the probable consequences of the breach. The court held the 15% administrative overhead to be a fair and reasonable liquidated damages provision since it allowed for a sliding scale which would account for the remaining work to be completed at the time of the breach.

The sub-contractor in Erie Insurance argued that the contractor’s total direct expenses incurred were just $84,000.00 and that the sum of $350,000.00 the contractor withheld for “administrative costs” amounted to a penalty. The $350,000.00 sum included expenses for overseeing and managing a total of $3.1 Million worth of electrical work completed by a replacement subcontractor. The contractor applied the 15% charge to all of the electrical completion work, not just to costs directly related to the default. South Carolina courts had previously held that a penalty sum is so large that it is disproportionate to any probable damage resulting from breach of the contract, and the subcontractor argued along this line of cases.

However, the sliding scale of the provision convinced the court that the sum here was not disproportionate, and the court found the administrative burden provision a valid and enforceable measure of liquidated damages. The court ruled that the 15% administration/overhead provision was a “fair and reasonable” estimate since it allowed for a sliding scale which would account for the remaining work to be completed at the time of the breach. To be “fair and reasonable”, a liquidated damages provision should provide a method for measuring the “harm done” by the contract breach.

It should be noted that in the Erie Insurance case, the court did permit the recovery of actual damages, presumably the direct damages from the breach in the form of costs to complete or cure the default of the sub-contractor. With the decision, it also allowed further liquidated damages as a combination of actual supervision costs and overhead markup, whereas liquidated damages are intended to compensate for all the actual costs.

However, the sliding scale involved here and the fact that the liquidated damages were really limited to the administrative burden was held to be reasonable. In fact, in many construction contexts such as bidding, awards, and other markups, the 15% allowance for overhead and general administrative expense is a fairly standard computation. However, in Erie Insurance this resulted in a further award of $350,000.00 for the 15% overhead markup measured against total direct expenses/damages of just $84,000.00 which, obviously, was an allocation resisted by the sub-contractor. Perhaps the sub-contractor could also have contended that the administrative burden allowance of 15% could only be charged against the reasonable expenses and costs incurred due to the sub-contractor’s failure to cure the default, which costs were only $84,000.00, as opposed to applying the 15% to the additional $3.1 Million worth of electrical work completed by a replacement sub-contractor.

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

12/30/11 David v. Hett
Kansas Supreme Court
Economic Loss Doctrine Does Not Bar Claims by Homeowners Seeking to Recover Economic Damages Resulting from Negligently Performed Construction
The parties’ dispute questioned whether the economic loss doctrine extended to tort claims brought by homeowners against residential construction contractors for faulty workmanship. Plaintiffs acted as their own general contractor in order to build a home. They performed some work themselves and hired David Hett d/b/a/ Hett Construction (“Hett”) for other aspects. Years later, plaintiffs began experiencing structural issues with their home and subsequently filed suit against Hett for breach of contract, negligence, fraud, fraudulent concealment, and violation of the Kansas Consumer Protection Act. The district court and Court of Appeals applied the economic loss doctrine and dismissed the homeowners' claims for negligence. The Kansas Supreme Court reversed and remanded holding that the lower courts erred in applying the economic loss doctrine to bar negligence claims brought by homeowners arising from the performance of residential construction services. The Court noted that the economic loss doctrine is a judicially created doctrine that sets forth the circumstances under which a tort action is prohibited if the only damages suffered are economic losses. The Court reasoned the economic loss doctrine is not well suited for service contracts because they are not subject to the well-developed law under the U.C.C. Additionally, the Court pointed out that contracts governing residential construction rarely involve the sophisticated parties with equal bargaining positions present in commercial products cases. Thus, the doctrine's application in this context would unequally benefit the contractor and should not be applied.
Submitted by: Thomas K. Hanekamp and Kathryn A. Formeller (Tressler LLP)

Reported Decisions

Henry v. Sorge

Calendar Date: October 13, 2011
Before: Mercure, Acting P.J., Peters, Spain, Rose and Kavanagh, JJ.

Mark Lewis Schulman, Monticello, for appellant.
Kaplan, Hanson, McCarthy, Adams, Finder & Fishbein, Albany (Paul G. Hanson of counsel), for respondents.
MEMORANDUM AND ORDER
Rose, J.
Appeal from an order of the Supreme Court (Meddaugh, J.), entered July 23, 2010 in Sullivan County, which granted defendants' motion for summary judgment dismissing the complaint.
Plaintiff commenced this action alleging that, as the result of an April 2005 motor vehicle accident, she suffered a serious injury to her cervical spine within the meaning of Insurance Law § 5102 (d). After joinder of issue and discovery, defendants moved for summary judgment dismissing the complaint. Supreme Court granted the motion and this appeal ensued.
Initially, defendants presented plaintiff's medical records and examination before trial testimony, the report of an orthopedic surgeon who performed an independent medical examination and concluded that plaintiff's injuries had resolved, and the report of a radiologist who reviewed an MRI of plaintiff's cervical spine conducted in August 2005 and concluded that there was no obvious abnormality. Plaintiff does not dispute that defendants thereby sustained their burden on the motion for summary judgment. To then raise an issue of fact with respect to the permanent consequential limitation or significant limitation of use categories, plaintiff opposed the motion with her chiropractor's report of September 2009. Based on an MRI, clinical evaluation and digital motion X-ray test, all of which had been performed four years earlier in 2005, the chiropractor opined that plaintiff sustained a serious injury because of a finding of disc dehydration at C5-6, "significant destabilization of her cervical spine as a result of disco/ligamentous complex failure at C1-2, C5-6 and C6-7" and "angular motion segment integrity change at C6 with a ratable whole body impairment of 25%." Plaintiff contends that this evidence rebutted defendants' prima facie case. We cannot agree.
The finding of disc dehydration and the alleged injury to plaintiff's ligaments are insufficient to establish serious injury in the absence of any objective evidence of any current, corresponding limitations (see Toure v Avis Rent A Car Sys., 98 NY2d 345, 350-351 [2002]; John v Engel, 2 AD3d 1027, 1029 [2003]; June v Gonet, 298 AD2d 811, 813 [2002]). Also, plaintiff offered no objective medical evidence of any present limitation in her range of motion, as the range of motion testing relied on by her chiropractor was performed in 2005, only days after the accident. Although the chiropractor's report is replete with diagnostic images, there is nothing in it to objectively indicate that the results remained valid four years later (see Blanchard v Wilcox, 283 AD2d 821, 823 [2001]). Further, the conclusion of 25% "whole body impairment" is meaningless in the absence of any specification of the impairment as related to the cervical spine (see Beaubrun v New York City Tr. Auth., 9 AD3d 258, 259 [2004]). In short, plaintiff failed to provide any current, objective medical evidence of a permanent or significant injury (see Dean v Ahn Ja Jin, 78 AD3d 1297, 1299 [2010]; Wolff v Schweitzer, 56 AD3d 859, 861-682 [2008]; Pugh v DeSantis, 37 AD3d 1026, 1029 [2007]).
Finally, the record reveals that this accident occurred in April of plaintiff's senior year of high school. She missed one week of school and two weeks of work, medical providers placed no significant restrictions on her activities during the first 180 days after the accident and she was able to go to school, attend her senior prom and participate in a senior trip to an amusement park. Given the evidence that plaintiff was not prevented from performing substantially all of her usual activities for 90 out of the first 180 days immediately following the accident, she has failed to raise a triable issue of fact with respect to that category of serious injury as well (see Houston v Hofmann, 75 AD3d 1046, 1049 [2010]; Parks v Miclette, 41 AD3d 1107, 1111 [2007]; John v Engel, 2 AD3d at 1029-1030).
Wiles v. Gray

Calendar Date: October 13, 2011
Before: Mercure, Acting P.J., Peters, Spain, Rose and Kavanagh, JJ.

Grasso, Rodriguez & Grasso, Schenectady (Christopher R. Burke of counsel), for appellant.
Adams, Hanson, Finder, Hughes, Rego, Kaplan & Fishbein, Albany (Richard J. Fishbein of counsel), for respondent.
MEMORANDUM AND ORDER
Rose, J.
Appeal from an order of the Supreme Court (Kramer, J.), entered October 1, 2010 in Schenectady County, which granted defendant's motion for summary judgment dismissing the complaint.
Plaintiff commenced this action claiming that, as the result of a March 2008 motor vehicle accident, she sustained a serious injury within the meaning of Insurance Law § 5102 (d). After joinder of issue and discovery, defendant moved for summary judgment dismissing the complaint alleging, among other things, that plaintiff had a preexisting injury to her spine and, as a result, she was unable to establish that she sustained a causally-related serious injury in any category. Supreme Court granted the motion and plaintiff appeals.
Plaintiff's contention that defendant's submissions were insufficient to sustain his burden of establishing entitlement to dismissal of the complaint with respect to the 90/180-day category of serious injury is unavailing. In support of the motion, defendant submitted plaintiff's examination before trial testimony, medical records and an affirmed report of Jeffrey Gundel, an orthopedic surgeon who reviewed the pertinent medical records and conducted an independent medical examination of plaintiff. Plaintiff's deposition testimony and preaccident medical records revealed a history of neck and back pain caused by incidents occurring in 1994 and 1998, two incidents in 2004 and two incidents in 2005. Plaintiff was also diagnosed with degenerative disc disease of the cervical spine in 2004. Based on Gundel's review of the records and examination of plaintiff, he opined that the accident of March 2008 caused a temporary exacerbation of her pain, but that she did not sustain a medically determined injury. These submissions shifted the burden to plaintiff to come forward with proof of causation in opposition to the motion (see Pommells v Perez, 4 NY3d 566, 579 [2005]; Howard v Espinosa, 70 AD3d 1091, 1093 [2010]; Tracy v Tracy, 69 AD3d 1218, 1219 [2010]).
Plaintiff relied on an affirmed report prepared by Charles Reina, an orthopedic surgeon who had examined plaintiff for workers' compensation purposes. Reina did not address plaintiff's long-standing preexisting condition, however, and plaintiff otherwise offered no affidavit from a treating physician or other evidence raising a triable question of fact as to causal relationship (see Foley v Cunzio, 74 AD3d 1603, 1605 [2010]; Anderson v Capital Dist. Transp. Auth., 74 AD3d 1616, 1617 [2010], lv denied 15 NY3d 709 [2010]; Sferra v McGregor, 69 AD3d 1200, 1202 [2010]). As plaintiff failed to rebut defendant's prima facie showing that she neither sustained a medically determined injury nor suffered a causally related serious injury in any other category, the motion for summary judgment dismissing the complaint was properly granted (see Pommells v Perez, 4 NY3d at 579; Clark v Basco, 83 AD3d 1136, 1139-1140 [2011]; Howard v Espinosa, 70 AD3d at 1094).

Rampino v. Shaffren

Curtis Vasile, P.C., Merrick, N.Y. (Michael J. Dorry of counsel), for appellant Steven J. Shaffren.
Richard T. Lau, Jericho, N.Y. (Gene W. Wiggins of counsel), for appellants Bernard S. Davis and Pentagon Plumbing and Mechanical Corp.
Baron Associates P.C., Brooklyn, N.Y. (Daniel Davidovic of counsel), for respondents.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendants Bernard S. Davis and Pentagon Plumbing and Mechanical Corp. appeal, and the defendant Steven J. Shaffren separately appeals, from an order of the Supreme Court, Kings County (Schmidt, J.), dated March 22, 2011, which denied their motion for summary judgment dismissing the complaint insofar as asserted by the plaintiff Robert S. Rampino on the ground that that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is affirmed, with costs payable by the appellants appealing separately and filing separate briefs.
The defendants met their prima facie burden of showing that the plaintiff Robert S. Rampino 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). Rampino alleged, inter alia, that as a result of the subject accident, he sustained injuries to the cervical and lumbosacral regions of his spine. On the motion for summary judgment, the defendants submitted evidence establishing, among other things, prima facie, that the alleged injuries to the cervical and lumbosacral regions of Rampino's spine did not constitute serious injuries within the meaning of Insurance Law § 5102(d) (see Rodriguez v Huerfano, 46 AD3d 794, 795). Although the defendants also attempted to establish, prima facie, that those alleged injuries were, in any event, not caused by the accident, they failed to do so, as their evidentiary submissions actually demonstrated the existence of a triable issue of fact as to causation (see Luby v Tsybulevskiy, 89 AD3d 689; Kelly v Ghee, 87 AD3d 1054, 1055; see also Hightower v Ghio, 82 AD3d 934, 935).
In opposition, Rampino submitted evidence raising a triable issue of fact as to whether the alleged injuries to the cervical and lumbosacral regions of his spine constituted serious injuries under the permanent consequential limitation of use and/or significant limitation of use categories of Insurance Law § 5102(d) (see Perl v Meher,NY3d, 2011 NY Slip Op 08452, * 4-5 [2011]). Accordingly, the Supreme Court properly denied the defendants' motion for summary judgment dismissing the complaint insofar as asserted by Rampino.
MASTRO, A.P.J., BALKIN, CHAMBERS and SGROI, JJ., concur.

2011-04009 DECISION & ORDER ON MOTION
Robert S. Rampino, et al., respondents, v Steven J. Shaffren, et al., appellants.
(Index No. 17645/09)
Motion by the respondents on appeals from an order of the Supreme Court, Kings County, dated March 22, 2011, to dismiss the appeal of the defendant Steven J. Shaffren. By decision and order on motion of this Court dated July 8, 2011, the motion was held in abeyance and referred to the panel of Justices hearing the appeals for determination upon the argument or submission thereof.
Upon the papers filed in support of the motion, upon the papers filed in opposition thereto, and upon the submission of the appeals, it is
ORDERED that the motion is denied.

Williams v. Fava Cab Corp.

Sim & Park, LLP, New York, N.Y. (Sang J. Sim of counsel), for appellant.
Wilson, Elser, Moskowitz, Edelman & Dicker LLP, White Plains, N.Y. (Stuart A. Miller and Kaitlin M. Rogan of counsel), for respondents Fava Cab Corp. and Nadeem A. Awan.
Scott R. Housenbold, New York, N.Y., for respondents Staff Cab Corp. and Balandea N. Tripathi.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y. (Stacy R. Seldin of counsel), for respondents Adam Alhaji U. Farook and Young-Hyuk Park.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff appeals, as limited by his brief, from so much of an order of the Supreme Court, Queens County (Lane, J.), entered September 13, 2010, as granted the respective branches of the motion of the defendants Fava Cab Corp. and Nadeem A. Awan and cross motion of the defendants Adam Alhaji U. Farook and Young-Hyuk Park which were for summary judgment dismissing the complaint insofar as asserted against each of them on the ground that he did not sustain a serious injury within the meaning of Insurance Law § 5102(d), and granted the cross motion of the defendants Staff Cab Corp. and Balandea N. Tripathi for summary judgment dismissing the complaint insofar as asserted against them on that ground.
ORDERED that the order is reversed insofar as appealed from, on the law, with one bill of costs, the respective branches of the motion of the defendants Fava Cab Corp. and Nadeem A. Awan and cross motion of the defendants Adam Alhaji U. Farook and Young-Hyuk Park which were for summary judgment dismissing the complaint insofar as asserted against each of them on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) are denied, the cross motion of the defendants Staff Cab Corp. and Balandea N. Tripathi for summary judgment dismissing the complaint insofar as asserted against them on that ground is denied, and the matter is remitted to the Supreme Court, Queens County, for a determination of the respective branches of the motion of the defendants Fava Cab Corp. and Nadeem A. Awan and cross motion of the defendants Adam Alhaji U. Farook and Young-Hyuk Park which were for summary judgment dismissing the complaint and all cross claims insofar as asserted against each of them on the ground that they were not at fault in the happening of the subject accident.
The Supreme Court erred in concluding that the defendants Adam Alhaji U. Farook and Young-Hyuk Park (hereinafter the Farook defendants) made a prima facie showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In support of that branch of their cross motion which was for summary judgment dismissing the complaint insofar as asserted against them on that ground, they relied upon, among other things, the affirmed medical report of Dr. Gregory Montalbano, their examining orthopedic surgeon. Dr. Montalbano noted in his affirmed medical report that, during his examination of the plaintiff on May 1, 2009, the plaintiff showed limitations in his right and left shoulder ranges of motion. Specifically, Dr. Montalbano found, with respect to both shoulders, that the plaintiff could internally rotate to "T12," when to "T7" was normal. He acknowledged in his report that these findings amounted to a diminished range of motion, but since the limitations were not quantified for the purpose of comparing those findings to what was normal, we cannot conclude, as a matter of law, that this decreased range of motion "is minor, mild or slight" so as to be considered insignificant within the meaning of the no-fault statute (Licari v Elliott, 57 NY2d 230, 236; see Sainnoval v Sallick, 78 AD3d 922). Moreover, while Dr. Montalbano opined that the range-of-motion limitations noted in the plaintiff's shoulders were "subjective" in nature, he failed to explain or substantiate the basis for his conclusion that the noted limitations were self-imposed with any objective medical evidence (see Artis v Lucas, 84 AD3d 845; Iannello v Vazquez, 78 AD3d 1121; Granovskiy v Zarbaliyev, 78 AD3d 656; cf. Bengaly v Singh, 68 AD3d 1030, 1031; Moriera v Durango, 65 AD3d 1024, 1024-1025; Torres v Garcia, 59 AD3d 705, 706; Busljeta v Plandome Leasing, Inc., 57 AD3d 469).
The Supreme Court properly concluded that in support of their respective motion and cross motion, the defendants Fava Cab Corp. and Nadeem A. Awan (hereinafter together the Fava Cab defendants), and the defendants Staff Cab Corp. and Balandea N. Tripathi (hereinafter together the Staff Cab defendants), made a prima facie 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 at 956-957). With respect to the issue of serious injury, those defendants did not rely on the same evidence relied upon by the Farook defendants in support of their cross motion. In opposition, however, the plaintiff raised a triable issue of fact as to whether he sustained a serious injury to the cervical and/or lumbar regions of his spine under the permanent consequential limitation of use and/or the significant limitation of use categories of Insurance Law § 5102(d) as a result of the subject accident.

The plaintiff raised this triable issue of fact by the affirmation of his treating physician, Dr. David Mun. Based on Dr. Mun's contemporaneous and recent examinations of the plaintiff, which revealed significant limitations in the cervical and lumbar regions of the plaintiff's spine, and his review of the affirmed reports describing the results of magnetic resonance imaging scans of those regions of the plaintiff's spine, which revealed herniated discs at C2-3, C3-4, C4-5, C5-6, and C6-7, as well as disc bulges at C4-5, L4-5, and L5-S1, Dr. Mun concluded that the injuries to the cervical and lumbar regions of the plaintiff's spine were permanent and causally related to the subject accident. He opined that the plaintiff, as a result of the subject accident, sustained a permanent consequential limitation of use of, inter alia, the cervical and lumbar regions of his spine, and sustained a significant limitation of use of those regions as well. Thus, Dr. Mun's affirmation was sufficient to raise a triable issue of fact as to whether the plaintiff sustained a serious injury 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 Tai Ho Kang v Young Sun Cho, 74 AD3d 1328; Barry v Valerio, 72 AD3d 996; Williams v Clark, 54 AD3d 942; Casey v Mas Transp., Inc., 48 AD3d 610; Green v Nara Car & Limo, Inc., 42 AD3d 430; Francovig v Senekis Cab Corp., 41 AD3d 643, 644-645; Acosta v Rubin, 2 AD3d 657).
Contrary to the defendants' contentions, the plaintiff's submissions adequately explained the lengthy gap in his treatment (see Black v Robinson, 305 AD2d 438, 439-440; see also Pommells v Perez, 4 NY3d 566, 577; Gaviria v Alvardo, 65 AD3d 567; Bonilla v Tortoriello, 62 AD3d 637). The plaintiff's submissions also adequately addressed the issue of degeneration (see Tai Ho Kang v Young Sun Cho, 74 AD3d 1328; Whitehead v Olsen, 70 AD3d 678; Modeste v Mercier, 67 AD3d 871).
Accordingly, the Supreme Court should have denied the respective branches of the motion of the Fava Cab defendants and cross motion of the Farook defendants which were for summary judgment dismissing the complaint insofar as asserted against each of them on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d), and should have denied the cross motion of the Staff Cab defendants for summary judgment dismissing the complaint insofar as asserted against them on that ground. In light of our determination, we must remit the matter to the Supreme Court, Queens County, for a determination of the respective branches of the motion of the Fava Cab defendants and cross motion of the Farook defendants which were for summary judgment dismissing the complaint and all cross claims insofar as asserted against each of them on the ground that they were not at fault in the happening of the subject accident, since those branches were never decided by the Supreme Court in light of its determination on the issue of serious injury.

Dzielski v. Essex Insurance Company
Appeal from a judgment (denominated order and judgment) of the Supreme Court, Erie County (Diane Y. Devlin, J.), entered November 17, 2010. The judgment, among other things, awarded plaintiffs the sum of $950,000 against defendant Essex Insurance Company.

Hurwitz & Fine, P.C., Buffalo (Dan D. Kohane Of Counsel), For Defendant-Appellant.
Damon Morey LLP, Buffalo (Kathleen M. Reilly Of Counsel), For Plaintiffs-Respondents.

It is hereby ORDERED that the judgment so appealed from is modified on the law by reducing the award of $950,000 to $499,500, plus interest, and as modified the judgment is affirmed without costs.
Memorandum: Plaintiffs commenced this action seeking judgment declaring that defendant is obligated to indemnify its insured in the underlying personal injury action commenced by plaintiffs, in which defendant's insured had defaulted. The underlying action arose from injuries sustained by Mark Dzielski (plaintiff) when he fell from the loading dock after exiting the rear door of a nightclub owned and operated by defendant's insured. On the evening in question, plaintiff had provided sound equipment for a band that performed at the nightclub, and the accident occurred while plaintiff was carrying equipment from the nightclub to his truck after the concert had concluded. According to plaintiffs, the accident was caused by defects in the loading dock. In this action, Supreme Court granted plaintiffs' motion for summary judgment and denied defendant's cross motion for summary judgment, awarding judgment to plaintiffs in the amount of the default judgment entered against defendant's insured in the underlying action, i.e., $950,000, together with interest and costs.

Defendant disclaimed coverage to its insured based on a "stage hand" exclusion in the policy's "Restaurant, Bar, Tavern, Night Clubs, Fraternal and Social Clubs Endorsement." That exclusion provides in relevant part that "[t]he coverage under this policy does not apply to bodily injury,' . . . or any injury, loss or damage arising out of . . . [i]njury to any entertainer, stage hand, crew, independent contractor, or spectator, patron or customer who participates in or is a part of any athletic event, demonstration, show, competition or contest . . . ." It is axiomatic that, "to negate coverage by virtue of an exclusion, an insurer must establish that the exclusion is stated in clear and unmistakable language, is subject to no other reasonable interpretation, and ]applies in the particular case' " (Belt Painting Corp. v TIG Ins. Co., 100 NY2d 377, 383). We agree with plaintiffs that the language "participates in or is a part of any . . . show" is ambiguous, and that the court properly resolved that ambiguity against the insurer, "particularly [because it is] an exclusionary clause" (Ace Wire & Cable Co. v Aetna Cas. & Sur. Co., 60 NY2d 390, 398). Although, as defendant suggests, the policy language may be read broadly to encompass all persons who performed any tasks in connection with the show, including loading and unloading sound equipment, it may also reasonably be read narrowly to encompass only those persons who actually performed in the show or were injured as a result of activities occurring during the show. It is undisputed that the accident occurred after the show had ended, and we note in particular that the accident was caused by a defect in the premises that was wholly unrelated to the show itself. We thus conclude that the court properly determined that the exclusion does not apply in this case.
We reject defendant's contention that the inclusion of the phrase "arising out of" in the exclusion mandates the broader interpretation espoused by defendant. Even assuming, arguendo, that the phrase "arising out of" is interpreted as "originating from, incident to, or having connection with" (Maroney v New York Cent. Mut. Fire Ins. Co., 5 NY3d 467, 470 [internal quotation marks omitted]), we note that coverage is excluded only if an accident originates from, is incident to or has connection with a person's "participat[ion]" in a "show." Here, it cannot be said that there is no ambiguity concerning whether the accident arose out of plaintiff's participation in a show, which in fact had ended before the accident occurred.

We further conclude, however, that, pursuant to the insurance policy in question, coverage for plaintiff's accident is limited to $500,000 per occurrence, with a $500 deductible. We therefore modify the judgment by reducing the award from $950,000 to $499,500, plus interest and costs.

All concur except Fahey and Peradotto, JJ., who dissent and vote to reverse in accordance with the following Memorandum: We respectfully dissent because, in our view, the exclusionary language in the applicable insurance policy is " clear and unmistakable . . ., is subject to no other reasonable interpretation, and applies in th[is] particular case' " (Belt Painting Corp. v TIG Ins. Co., 100 NY2d 377, 383). We would therefore deny plaintiffs' motion for summary judgment, grant defendant's cross motion for summary judgment, and declare that defendant has no obligation to indemnify its insured in the underlying personal injury action commenced by plaintiffs.

As noted by the majority, the underlying personal injury action arose from injuries sustained by Mark Dzielski (plaintiff) when he fell from a loading dock after exiting the rear door of a nightclub owned and operated by defendant's insured. On the night in question, plaintiff, an independent contractor, had provided sound reinforcement services, which included setting up sound equipment, for a band that had performed at the nightclub. The accident occurred while plaintiff was in the process of removing his sound equipment from the nightclub at the conclusion of the show. According to plaintiffs, the accident was caused by the defective nature of the loading dock. Plaintiffs commenced the underlying personal injury action against defendant's insured, and the insured defaulted. Thereafter, plaintiffs commenced this action seeking judgment declaring that defendant is obligated to indemnify its insured in the underlying action. Supreme Court granted plaintiffs' motion for summary judgment and denied defendant's cross motion for summary judgment, awarding judgment to plaintiffs in the amount of the default judgment entered against defendant's insured in the underlying action, i.e., $950,000, together with interest and costs.

"Where the provisions of an insurance contract are clear and unambiguous, the courts should not strain to superimpose an unnatural or unreasonable construction" (Maurice Goldman & Sons v Hanover Ins. Co., 80 NY2d 986, 987). Here, defendant disclaimed coverage to its insured based on an exclusion in the policy's "Restaurant, Bar, Tavern, Night Clubs, Fraternal and Social Clubs Endorsement." That exclusion provides in relevant part that "[t]he coverage under this policy does not apply to bodily injury,' . . . or any injury, loss or damage arising out of . . . [i]njury to any entertainer, stage hand, crew, independent contractor, or spectator, patron or customer who participates in or is a part of any athletic event, demonstration, show, competition or contest" (emphasis added). The exclusion thus applies where two conditions are met: (1) the injured party is an entertainer, stage hand, crew member, independent contractor, spectator, patron or customer who "participates in or is a part of" an athletic event, demonstration, show, competition or contest; and (2) the injury "arises out of" such participation.

Contrary to the conclusion of the majority, we conclude that the language "participates in or is a part of any . . . show" is not ambiguous, and that plaintiff falls squarely within that language. As noted above, plaintiff was hired by the band to provide sound reinforcement services for the show, and thus there is no question that he "participate[d] in or [wa]s a part of" the show on the night of his accident. The majority's conclusion that such clause may "reasonably be read narrowly to encompass only those persons who actually performed in the show or were injured as a result of activities occurring during the show" is not supported by the plain language of the exclusion. First, if the exclusion was intended to apply only to those persons who "actually performed" in a show, then the language "spectator, patron or customer" in the exclusion would be superfluous. Second, such an interpretation imposes a temporal limitation on the exclusion where no such limitation appears therein. Indeed, if defendant had intended to limit the exclusion in that manner, it could have done so explicitly as it did in other provisions of the policy (see Maroney v New York Cent. Mut. Fire Ins. Co., 5 NY3d 467, 473). For example, the policy's medical payments coverage provision specifically excludes expenses for bodily injury "[t]o a person injured while taking part in athletics" (emphasis added). Similarly, the policy's "combination endorsement" excludes expenses for bodily injury or personal injury to any person "while practicing for or participating in any event or function of a sporting or athletic nature" (emphasis added). Here, by contrast, the absence of such limiting language in the exclusion in question reflects an intent to provide a broad exclusion for all injuries arising from participation in shows or other special events (see Maroney, 5 NY3d at 473).

We further conclude that plaintiff's injury "ar[o]se[] out of" his participation in the show within the meaning of the exclusion. In the insurance context, the phrase "arising out of" has been broadly interpreted to mean "originating from, incident to, or having connection with" (Maroney, 5 NY3d at 472 [internal quotation marks omitted]; see Regal Constr. Corp. v National Union Fire Ins. Co. of Pittsburgh, PA, 15 NY3d 34, 38). Here, plaintiff's accident occurred while he was in the process of removing his sound equipment from the nightclub. The process of packing up and removing sound equipment at the conclusion of a show necessarily "originat[es] from, [is] incident to, or ha[s] connection with" the show (Maroney, 5 NY3d at 472 [internal quotation marks omitted]). The fact that plaintiff's accident was allegedly caused by the defective nature of the loading dock rather than any condition of the show itself does not remove plaintiff's injury from the policy exclusion. "[T]he focus of the inquiry is not on the precise cause of the accident but the general nature of the operation in the course of which the injury was sustained' " (Regal Constr. Corp., 15 NY3d at 38). Indeed, "the phrase arising out of' . . . requires only that there be some causal relationship between the injury and the risk for which coverage is provided" (Maroney, 5 NY3d at 472), and such a causal relationship clearly exists here.

LMIII Realty, LLC, v. Gemini Insurance Company

Appeal from a judgment (denominated order) of the Supreme Court, Onondaga County (John C. Cherundolo, A.J.), entered February 10, 2011. The judgment granted the motion of plaintiffs for leave to reargue and, upon reargument, granted summary judgment to plaintiffs and declared that defendant Gemini Insurance Company is obligated to defend and indemnify plaintiff LMIII Realty, LLC as an additional insured in the underlying personal injury action.

Coughlin Duffy LLP, New York City (Justin N. Kinney Of Counsel), For Defendant-Appellant.
Sugarman Law Firm, LLP, Syracuse (Timothy J. Perry Of Counsel), For Plaintiffs-Respondents.

It is hereby ORDERED that the judgment so appealed from is unanimously modified on the law by denying summary judgment to plaintiffs in part, vacating the declaration and granting judgment in favor of plaintiffs as follows: It is ADJUDGED and DECLARED that plaintiff LMIII Realty, LLC is an additional insured under the policy issued by defendant Gemini Insurance Company, and as modified the judgment is affirmed without costs.
Memorandum: Plaintiffs commenced this action seeking a declaration that Gemini Insurance Company (defendant) is obligated to defend and indemnify plaintiff LMIII Realty, LLC (LMIII) as an additional insured in the underlying personal injury action. Defendant made a pre-answer motion to dismiss the complaint and, in the alternative, sought summary judgment declaring that it has no obligation to defend or indemnify plaintiffs because they do not qualify as additional insureds under the policy. Plaintiffs opposed the motion and in addition sought a declaration that plaintiffs qualify as additional insureds under the policy. Supreme Court denied defendant's motion. Plaintiffs subsequently moved for leave to reargue defendant's motion and sought summary judgment declaring that they are entitled to coverage from defendant as additional insureds. The court granted plaintiffs' motion for leave to reargue on the ground that plaintiffs established that the court had "overlooked controlling law on this issue" and, upon reargument, searched the record pursuant to CPLR 3212 (b) notwithstanding the absence of a cross motion by plaintiffs that preceded their motion for leave to reargue defendant's motion. The court granted summary judgment to plaintiffs, i.e., relief "predicated upon a motion for the same relief" sought by defendant in its motion, by declaring that defendant is obligated to defend and indemnify LMIII as an additional insured in the underlying action.
In the underlying action, a roofer employed by defendant Shaffer Building Services, Inc. (Shaffer) seeks damages for injuries he sustained during the course of his employment. LMIII hired Shaffer to replace a roof on its property, and Shaffer was insured under a commercial general liability policy issued by defendant. The policy's additional insured endorsement provided that a third party may constitute an additional insured "when you and such person or organization have agreed in writing in a contract or agreement that such person or organization be added as an additional insured on your policy."
We agree with defendant that, contrary to the court's determination, the endorsement is not ambiguous on the issue whether an agreement to add an additional insured was required to be in writing. The term "in writing" refers to the entire phrase "in a contract or agreement," not merely to the phrase "in a contract" (see Erin Constr. & Dev. Co., Inc. v Gulf Ins. Co., 2008 NY Slip Op 32046[U]; see also Timmons v Barrett Paving Materials, Inc., 83 AD3d 1473, 1477, lv dismissed in part and denied in part 17 NY3d 843). We reject defendant's contention, however, that there was no written agreement in this case. Indeed, the purchase order constituted a written agreement obligating Shaffer to add LMIII as an additional insured to the policy (see Timmons, 83 AD3d at 1477; see generally BP A.C. Corp. v One Beacon Ins. Group, 8 NY3d 708, 712). The purchase order was an enforceable agreement despite the fact that it was unsigned because the evidence in the record establishes that the parties intended to be bound by it (see Flores v Lower E. Side Serv. Ctr., Inc., 4 NY3d 363, 369, rearg denied 5 NY3d 746; Kay-Bee Toys Corp. v Winston Sports Corp., 214 AD2d 457, 458, lv denied 86 NY2d 705).
Nevertheless, we conclude that defendant is correct that the court erred in granting summary judgment to plaintiffs on all issues and in issuing the subject declaration, i.e., that defendant is obligated to defend and indemnify LMIII as an additional insured in the underlying action. Inasmuch as the record establishes that the parties deliberately charted a summary judgment course, the court properly granted summary judgment to plaintiffs on the issue of LMIII's general status as an additional insured under the policy (see Nowacki v Becker, 71 AD3d 1496, 1497; see generally Mihlovan v Grozavu, 72 NY2d 506, 508). The court erred, however, in declaring at this stage of the litigation that defendant is obligated to defend and indemnify LMIII, before defendant answered the complaint (see City of Rochester v Chiarella, 65 NY2d 92, 101-102). We therefore modify the judgment accordingly.
Jang Hwan An v. Parra

Sim & Park, LLP, New York (Sang J. Sim of counsel), for
appellants.
Vincent P. Crisci, New York (David Weiser of counsel), for
respondents.
Order, Supreme Court, Bronx County (Lucindo Suarez, J.), entered July 21, 2010, which granted defendants' motion for summary judgment dismissing the complaint on the ground that plaintiffs did not suffer a "serious injury" within the meaning of Insurance Law § 5102(d), unanimously modified, on the law, to the extent of reinstating the claims for permanent loss of use of a body organ, member, function or systems, permanent consequential limitation of use of a body function or system, and significant limitation of use of a body function or system, and otherwise, affirmed, without costs.
Defendants failed to demonstrate their entitlement to judgment as a matter of law on plaintiffs' claim to recover for serious injury under Insurance Law § 5102. In opposition to defendant's motion, plaintiffs submitted, among other things, the affidavits of their treating chiropractor, who averred that both plaintiffs had specified decreased ranges of motion in their cervical and lumbar spines, plaintiff Jang Hwan's right knee and plaintiff Jung Sook's right shoulder. The chiropractor averred that plaintiffs' injuries were sustained as result of the subject accident, and not the result of degenerative disease.
Jang Hwan submitted an affirmed report of the MRI results of his right knee, finding that he suffered multiple meniscal tears, joint effusion and a bone cyst or avascular neurosis. Jung Sook submitted an affirmed MRI report of her right shoulder, showing tears of the supraspinatus and subcapularis tendons. Such medical evidence, which contradicts defendants' medical evidence of a degenerative disease, raises an issue of fact as to the existence and causation of plaintiffs' injuries (see Suazo v Brown, _AD2d_, 2011 NY Slip Op. 07505 [2011]; Chakrani v Beck Cab Corp., 82 AD3d 436 [2011]).
Plaintiffs, however, have failed to raise an issue of fact concerning their ability to perform substantially all of their daily activities for at least 90 of the first 180 days following the accident, inasmuch as both plaintiffs testified that they were able to return to work within 90 days following the accident (see Prestol v McKissock, 50 AD3d 600 [2008]).
Mitchell v. Calle

White Fleischner & Fino, LLP, New York (Jennifer L.
Coviello of counsel), for appellants.
Ephrem J. Wertenteil, New York, for respondent.
Order, Supreme Court, Bronx County (Robert E. Torres, J.), entered January 25, 2011, which denied defendants' motion for summary judgment dismissing the complaint, unanimously modified, on the law, to dismiss the 90/180-day claim, and otherwise affirmed, without costs.
Defendants concede that plaintiff has a meniscal tear in her left knee, and their radiologist's report is too equivocal to make a prima facie showing that the tear was not caused by the accident (see Glynn v Hopkins, 55 AD3d 498, 498 [2008]), especially given plaintiff's relatively young age at the time of the accident (see June v Akhtar, 62 AD3d 427, 428 [2009]). However, defendants made a prima facie showing that plaintiff did not sustain a "permanent consequential limitation of use" of the knee within the meaning of Insurance Law § 5102(d) by submitting the affirmed reports of medical experts who opined that she had normal range of motion in the knee and that any symptoms had fully resolved (see Dembele v Cambisaca, 59 AD3d 352, 352 [2009]; Gibbs v Hee Hong, 63 AD3d 559, 559 [2009]). The affirmed reports are competent evidence, notwithstanding that the experts relied on the uncertified emergency room records and other unsworn medical records (see Pommells v Perez, 4 NY3d 566, 577 n 5 [2005]).
In response, plaintiff submitted the affirmed reports of her treating physiatrist and the orthopedic surgeon who performed her knee surgery, who both found persisting limitations in range of motion of the left knee with discomfort, and described the qualitative nature of plaintiff's limitations based on the normal function, purpose, and use of the knee. In addition, plaintiff submitted an unsworn MRI report of the left knee stating that there was a small effusion suggesting a meniscal tear. Plaintiff's evidence raised an issue of fact as to whether she sustained a permanent consequential limitation of use of the knee (see Toure v Avis Rent A Car Sys., 98 NY2d 345 [2002]; Salman v Rosario, 87 AD3d 482 [2011]). Although the MRI report is unsworn, plaintiff could rely on it since defendants submitted it in support of their motion (Lazarus v Perez, 73 AD3d 528, 528 [2010]). Plaintiff also adequately explained the gap in treatment by testifying that she stopped treatment because her no-fault benefits terminated (see Wadford v Gruz, 35 AD3d 258, 259 [2006]).
The court, however, should have dismissed the 90/180-day claim. Defendants made a prima facie showing that plaintiff did not suffer a 90/180-day injury, and plaintiff failed to raise a triable issue of fact. Indeed, plaintiff testified that, after the accident, she was confined to bed for only three days and to home for a only week (see Salman, 87 AD3d at 484). Further, the claimed restrictions in her usual and customary activities are unsupported by objective medical evidence (see Nelson v Distant, 308 AD2d 338, 340 [2003]).
We have considered defendants' remaining contentions and find them unavailing.
Austin v. Rent A Center East, Inc.

Appeal from an order of the Supreme Court, Wayne County (Daniel G. Barrett, A.J.), entered April 7, 2011 in a personal injury action. The order denied the motion of defendants for summary judgment.

Hodgson Russ LLP, Albany (Christian J. Soller Of Counsel), For Defendants-Appellants.
Faraci Lange, LLP, Rochester (Carol A. Mckenna Of Counsel), For Plaintiff-Respondent.

It is hereby ORDERED that the order so appealed from is unanimously affirmed without costs.
Memorandum: Plaintiff commenced this action seeking damages for injuries he allegedly sustained when the vehicle he was driving collided with a vehicle owned by defendant Rent A Center East, Inc. and operated by defendant Josh R. Arnold. In his bill of particulars, plaintiff alleged that he sustained a serious injury under the permanent loss of use, permanent consequential limitation of use, significant limitation of use, and 90/180-day categories set forth in Insurance Law § 5102 (d), but plaintiff has now abandoned his contention with respect to permanent loss of use (see Ciesinski v Town of Aurora, 202 AD2d 984). We conclude that Supreme Court properly denied defendants' motion seeking summary judgment dismissing the complaint on the ground that plaintiff did not sustain a serious injury in the accident within the meaning of the three remaining categories.
Defendants met their initial burden on the motion by establishing that plaintiff's alleged injuries did not meet the serious injury threshold under any of the three categories (see Toure v Avis Rent A Car Sys., 98 NY2d 345, 351-353). Defendants submitted, inter alia, the affirmation of an orthopedic surgeon who, after reviewing plaintiff's medical records and radiological studies and conducting an examination of plaintiff, opined that there was no objective evidence of a serious injury caused by the motor vehicle accident (see Herbst v Marshall [appeal No. 2], 49 AD3d 1194, 1195; Zeigler v Ramadhan, 5 AD3d 1080, 1081; Sewell v Kaplan, 298 AD2d 840). The surgeon further opined that the degenerative changes to plaintiff's cervical and thoracic spine revealed in X rays and an MRI preexisted the motor vehicle accident.
In opposition to the motion, however, plaintiff raised triable issues of fact whether he sustained a serious injury under each of the three categories (see Herbst, 49 AD3d at 1195-1196; see generally Testa v Allen, 289 AD2d 958). Plaintiff submitted the affirmation of his treating orthopedic surgeon, who reviewed the results of X rays and an MRI and opined that plaintiff sustained a cervical whiplash injury, a cervical sprain, and a thoracic sprain in the accident. He further opined that the accident aggravated and exacerbated plaintiff's preexisting, asymptomatic degenerative disease in his cervical and thoracic spine, including disc protrusions at C5-6, C6-7 and T4-5. According to plaintiff's treating orthopedic surgeon, the aggravation of plaintiff's preexisting cervical and thoracic degenerative disease was the cause of his chronic pain, muscle spasms, and range of motion restrictions, all of which prevented plaintiff from, inter alia, working as a rural mail carrier. He opined that plaintiff's limitations were permanent in nature.
Further, plaintiff submitted his medical records and the depositions of his primary care providers establishing that, prior to the accident, he had no back or neck complaints (see Perl v Meher, ___ NY2d ___, ___ [Nov. 22, 2011]). Plaintiff's medical records also reflect the presence of spasms upon palpation of plaintiff's thoracic spine, which constitutes objective evidence of injury (see Rissew v Smith, 89 AD3d 1383; Mancuso v Collins, 32 AD3d 1325, 1325-1326; Zeigler, 5 AD3d at 1081). In addition, plaintiff submitted reports from several medical providers that quantified his loss of range of cervical and thoracic motion (see Mancuso, 32 AD3d at 1326). Indeed, a functional capacity evaluation conducted in December 2007 quantified plaintiff's range of motion restrictions and indicated that plaintiff was unable to perform bending and squatting activities without support and could lift only 10 pounds on a frequent basis or 15 pounds on an occasional basis. With respect to the 90/180-day category, plaintiff did not return to work after the accident upon the direction of his treating physicians and, thus, plaintiff's submissions raise an issue of fact whether he was prevented from performing his usual and customary activities during the requisite time period (see Zeigler, 5 AD3d at 1081; Sewell, 298 AD2d at 841-842).
Liberty Mutual Fire Ins. Co.v. National Cas. Co.

Milber, Makris, Ploisadis & Seiden, LLP, Woodbury, N.Y. (Lorin A. Donnelly and David C. Zegarelli of counsel), for appellant.
Jaffe & Asher, LLP, New York, N.Y. (Marshall T. Potashner of counsel), for respondents.

DECISION & ORDER
In an action, inter alia, for a judgment declaring that the defendant is required to defend and indemnify the plaintiffs ADESA New York, LLC, and Louis Amelia with respect to various underlying personal injury actions which arose out of a motor vehicle accident, the defendant appeals, as limited by its brief, from so much of an amended order of the Supreme Court, Westchester County (Colabella, J.), entered October 6, 2010, as, in effect, granted that branch of the plaintiffs' motion which was to direct it to pay $49,390.48 in outstanding costs incurred by the plaintiffs in defending the underlying personal injury actions to the extent of directing it to pay the plaintiffs' costs incurred in defending ADESA New York, LLC, and Louis Amelia until all of the underlying personal injury actions are fully resolved.

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

In 2006 the plaintiffs commenced this action against National Casualty Company (hereinafter National), inter alia, for a judgment declaring that National is required to defend and indemnify the plaintiffs ADESA New York, LLC (hereinafter Adesa), and Louis Amelia with respect to several underlying personal injury actions. The underlying personal injury actions arose out of an accident on July 22, 2005, in which the plaintiff Louis Amelia, an employee of Adesa, lost control of a motor vehicle, causing injury to several individuals. On a prior appeal, this Court affirmed the Supreme Court's order granting the plaintiffs' motion for summary judgment on their first cause of action seeking a judgment declaring that National is required to defend and indemnify Adesa and Amelia with respect to the underlying personal injury actions, and that the National insurance policy provided primary coverage and the policy of the plaintiff Liberty Mutual Fire Insurance Company provided excess coverage (see Liberty Mut. Fire Ins. Co. v National Cas. Co., 47 AD3d 770).

Subsequently, National settled several of the underlying personal injury actions, which allegedly exhausted its $1 million policy limit as of May 14, 2008, and refused to reimburse the plaintiffs for any defense costs incurred after that date. Consequently, the plaintiffs moved, inter alia, to direct National to pay $49,390.48 in outstanding costs incurred by them in defending the underlying personal injury actions. In the amended order appealed from, the Supreme Court, inter alia, in effect, granted that branch of the plaintiffs' motion to the extent of directing that National pay the plaintiffs' defense costs until all of the underlying personal injury actions are fully resolved. We affirm the amended order insofar as appealed from.

The National insurance policy provides that National's duty to defend or settle ends when the limits of insurance for a "covered auto" have been exhausted by payment of judgments or settlements. However, New York Insurance Department Regulation (11 NYCRR) § 60-1.1(b) sets forth certain minimum standards which automobile insurers must include in their policies. Additionally, any policy language which conflicts with the regulation or is less generous to the insured is unenforceable and superseded by the regulation (see Dingle v Prudential Prop. & Cas. Ins. Co., 85 NY2d 657, 660; Levit v Allstate Ins. Co., 308 AD2d 475, 476-477). As relevant to this appeal, New York Insurance Department Regulation (11 NYCRR) § 60-1.1(b) has been interpreted as requiring an automobile liability insurer to pay all defense costs until a case ends and not excusing it from providing a full defense by payment of its policy limit (see Matter of East 51st St. Crane Collapse Litig., 84 AD3d 512, 513; Haight v Estate of DePamphilis, 5 AD3d 547, 548; People v ELRAC, Inc., 192 Misc 2d 78, 80; Delaney v Vardine Paratransit, 132 Misc 2d 397, 398).

National's remaining contentions are without merit.

The plaintiffs' request for certain affirmative relief is not properly before this Court, as they failed to file a cross appeal (see Piquette v City of New York, 4 AD3d 402, 404; Centurion Taxi v Happy Go Lucky Cab Corp., 230 AD2d 817, 818).

Che Hong Kim v. Kossoff

Adams, Hanson, Finder, Hughes, Rego, Kaplan & Fishbein, Yonkers, N.Y. (Howard J. Kaplan of counsel), for appellants.
Kelner & Kelner, New York, N.Y. (Joshua D. Kelner of counsel), for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendants Mary Cestaro and On Site Construction, Inc., appeal, as limited by their brief, from so much of an order of the Supreme Court, Queens County (Strauss, J.), dated April 27, 2011, as denied their cross motion for summary judgment dismissing the complaint insofar as asserted against them on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is affirmed insofar as appealed from, with costs.
The appellants failed to meet their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). The appellants' motion papers failed to adequately address the plaintiff's claim, clearly set forth in the bills of particulars, 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; cf. Tinsley v Bah, 50 AD3d 1019, 1019-1020).
Since the appellants failed to meet 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 (see Reynolds v Wai Sang Leung, 78 AD3d at 920).
Muniz v. Singh

Ferro, Kuba, Mangano, Skylar, P.C., Hauppauge, N.Y. (Rebecca J. Fortney of counsel), for appellant.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y. (Stacy R. Seldin of counsel), for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff appeals (1), as limited by her notice of appeal and brief, from so much of an order of the Supreme Court, Queens County (Lane, J.), dated August 10, 2010, as granted those branches of the defendant's motion which were for summary judgment dismissing so much of the complaint as sought to recover damages based on alleged serious injuries under the permanent consequential limitation of use and significant limitation of use categories of Insurance Law § 5102(d) and (2), as limited by her brief, from so much of an order of the same court dated March 3, 2011, as, upon granting that branch of her motion which was for leave to renew her opposition to the defendant's prior motion for summary judgment, and upon granting the defendant's motion for reargument of that branch of his prior motion which was for summary judgment dismissing so much of the complaint as sought to recover damages based on an alleged serious injury under the 90/180-day category of Insurance Law § 5102(d), which had been denied in the order dated August 10, 2010, vacated the order dated August 10, 2010, and thereupon granted the defendant's motion for summary judgment dismissing the complaint in its entirety.
ORDERED that the appeal from the order dated August 10, 2010, is dismissed, as that order was vacated by the order dated March 3, 2011, made upon renewal and reargument; and it is further,
ORDERED that the order dated March 3, 2011, is reversed insofar as appealed from, on the law, and, upon renewal and reargument, the defendant's motion for summary judgment dismissing the complaint is denied in its entirety; and it is further,
ORDERED that one bill of costs is awarded to the plaintiff.
The plaintiff alleged, inter alia, that as a result of the subject accident, the cervical and lumbosacral regions of her spine, as well as her left knee, sustained certain injuries. On his motion for summary judgment dismissing the complaint, the defendant submitted competent medical evidence establishing, prima facie, that the certain of the alleged injuries were not caused by the subject accident (see Pommells v Perez, 4 NY3d 566, 579; Jilani v Palmer, 83 AD3d 786, 787). However, on her motion, inter alia, for leave to renew her opposition to the defendant's motion for summary judgment dismissing the complaint, the plaintiff submitted competent medical evidence raising a triable issue of fact as to whether those alleged injuries were caused by the accident (see Perl v Meher,NY3d , 2011 NY Slip Op 08452, *5-6; Sforza v Big Guy Leasing Corp., 51 AD3d 659, 660-661; Jaramillo v Lobo, 32 AD3d 417, 418). Accordingly, upon renewal, the Supreme Court should have denied the defendant's motion for summary judgment dismissing the complaint in its entirety, and relief upon reargument should not have been granted.
Shields v. New York Livery Leasing, Inc.

Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y. (Robert D. Grace of counsel), for appellants.
Rubenstein & Rynecki, Brooklyn, N.Y. (Kliopatra Vrontos of counsel), for respondent.

DECISION & ORDER
In an action, inter alia, to recover damages for personal injuries, the defendants appeal from an order of the Supreme Court, Kings County (Saitta, J.), dated December 2, 2010, which denied their motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is affirmed, with costs.
The plaintiff alleged, inter alia, that the lumbosacral region of her spine and her shoulders sustained certain injuries as a result of the subject accident. In support of their motion for summary judgment, the defendants submitted competent medical evidence establishing, prima facie, that the alleged injuries did not constitute serious injuries within the meaning of Insurance Law § 5102(d) (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957; Staff v Yshua, 59 AD3d 614).
In opposition, the plaintiff provided competent medical evidence raising a triable issue of fact as to whether the alleged injuries to the lumbosacral region of her spine constituted serious injuries under the permanent consequential limitation of use and significant limitation of use categories of Insurance Law § 5102(d) (see Dixon v Fuller, 79 AD3d 1094). Accordingly, the Supreme Court properly denied the defendants' motion for summary judgment dismissing the complaint.
Trivedi v. Vural

Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y. (Stacy R. Seldin of counsel), for appellants.
Lee A. Fine, Brooklyn, N.Y. (James M. Sheridan, Jr., 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 (Rothenberg, J.), dated April 21, 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.
While we affirm the order appealed from, we do so on a ground other than that relied upon by the Supreme Court. 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 defendants' motion papers failed to adequately address the plaintiff's claim, clearly set forth in her bill of particulars, that she 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).
Since the defendants failed to meet 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 (see Reynolds v Wai Sang Leung, 78 AD3d at 920).
Accordingly, the Supreme Court properly denied the defendants' motion for summary judgment dismissing the complaint.
Wright v. Simpson

Sean H. Rooney, Brooklyn, N.Y., for appellant.
James G. Bilello, Westbury, N.Y. (Patricia McDonagh 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 (Vaughan, J.), dated 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 region of her spine sustained certain injuries. The defendants submitted competent medical evidence establishing, prima facie, that the alleged injuries to that region 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 submitted competent medical evidence raising a triable issue of fact as to whether the alleged injuries to the cervical region of her spine constituted a serious injury under the permanent consequential limitation of use and/or significant limitation of use categories of Insurance Law § 5102(d) (see Perl v Meher,NY3d , 2011 Slip Op 08452 [2011]). Accordingly, the Supreme Court should have denied the defendants' motion for summary judgment dismissing the complaint.

K2 Investment Group, LLC v. American Guar. & Liab. Ins. Co.

Steinberg & Cavaliere, LLP, White Plains (Ronald W. Weiner of counsel), for appellant-respondent.
Michael A. Haskel, Mineola, for respondents-appellants.
Judgment, Supreme Court, New York County (Ira Gammerman, J.H.O.), entered June 23, 2010, in plaintiffs' favor against defendant on the causes of action to enforce a default judgment and dismissing the causes of action alleging bad faith, affirmed, with costs. Appeal from order, same court and J.H.O., entered on or about June 14, 2010, unanimously dismissed, without costs, as subsumed in the appeal from the judgment.
Plaintiffs are limited liability companies that made multiple loans totaling approximately $3 million to nonparty Goldan, LLC of which defendant's insured, Jeffrey Daniels, an attorney, was a member. In the legal malpractice action underlying this action, it was alleged that as attorney for plaintiffs, Daniels undertook to record mortgages in plaintiffs' favor to secure those loans, and to obtain title insurance, and that he failed to do so, rendering plaintiffs' investments unsecured. Goldan became insolvent and never made any payments on the loans. The legal malpractice action alleged that as a consequence of Daniels's negligent failure to record the mortgages or obtain title insurance, plaintiffs did not have security in the mortgaged properties, and the promissory notes evidencing the loans became uncollectible.
Plaintiffs demanded $450,000 from Daniels in full settlement of their claims. This amount was well within the $2 million aggregate and $2 million per-claim limits of the lawyers professional liability insurance policy issued to Daniels by defendant. However, defendant disclaimed its duty to defend or indemnify based upon two exclusions in the policy. One exclusion was for claims based upon or arising out of the insured's capacity or status as an officer, director, etc., of a business enterprise. The other exclusion was for any claim arising out of the alleged acts or omissions of the insured for any business enterprise in which he had a controlling interest.
After Daniels failed to appear in the malpractice action, a default judgment was entered against him in the amounts of $2,404,378.36 in favor of plaintiff K2 and $688,716.00 in favor of plaintiff ATAS. Daniels then assigned to plaintiffs all his claims against defendant, including bad faith claims.
Having disclaimed its duty to defend its insured in an action that culminated in a default judgment, defendant "cannot challenge the liability or damages determination underlying the judgment" (Lang v Hanover Ins. Co., 3 NY3d 350, 356 [2004]). Nor can it raise defenses to plaintiffs' claim against Daniels (Rucaj v Progressive Ins. Co., 19 AD3d 270, 273 [2005]). However, defendant is entitled, in the direct action against it, to raise defenses with respect to its obligations to cover the claims against Daniels, including the applicability of any asserted policy exclusions (Lang at 356).
"While the duty to defend is generally measured against the allegations of the pleadings in the underlying action, the duty to indemnify is distinctly different, for it is determined by the actual basis of the insured's liability to plaintiff" (Robbins v Michigan Millers Mut. Ins. Co., 236 AD2d 769, 770 [1997]). Contrary to defendant's argument here, the exclusions did not apply with respect to either the duty to defend which was demonstrated based upon the allegations of legal malpractice or the duty to indemnify for a judgment based in legal malpractice. Thus, defendant cannot at this juncture assert defenses that would have defeated the legal malpractice claims (for example, that Daniels was not performing legal services for plaintiffs but was instead representing Goldan) or would have established the applicability of the exclusions, to the extent that the applicability of the exclusions is inconsistent with the judgment determining Daniels's liability to plaintiffs for legal malpractice (see Lang, 3 NY3d at 356; compare Fisher v Hanover Ins. Co., 288 AD2d 806 [2001], and Fusco v American Colonial Ins. Co., 221 AD2d 231 [1995] [where default judgment was entered against insured, insurer's disclaimer based on policy's notice requirements was valid defense to action pursuant to Insurance Law § 3420(b)(1)]).
"To be relieved of its duty to defend on the basis of a policy exclusion, the insurer bears the burden of demonstrating that the allegations of the complaint in the underlying claim cast the pleadings wholly within that exclusion, that the exclusion is not subject to any other reasonable interpretation, and that there is no possible factual or legal basis upon which the insurer might be eventually obligated to indemnify its insured (citations omitted)" (Utica First Ins. Co. v Star-Brite Painting & Paperhanging, 36 AD3d 794, 796 [2007]). No material issue of fact exists as to whether the allegations of plaintiffs' legal malpractice claims are based, even in part, upon Daniel's acts or omissions in his capacity as an officer, director, etc., of a business enterprise or any acts or omissions for a business enterprise in which he had a controlling interest, so as to bring them within either of the exclusions invoked by defendant (id). Rather, the allegations of legal malpractice were focused solely on Daniels's negligence as plaintiffs' counsel.
Although plaintiffs allege that Daniels was a member of Goldan, the basis of the legal malpractice action was that Daniels agreed to act as plaintiffs' attorney in the preparation of mortgages and related notes, in arranging for title insurance at Goldan's expense, and in recording the mortgage liens, that he failed to record the mortgages and obtain title insurance, and that his failure was a departure from good and accepted legal practice, and caused injury to plaintiffs. It was not alleged that Daniels was negligent in rendering legal services to his business enterprise, Goldan. The action was based exclusively on his obligation to plaintiffs, not to Goldan. With respect to defendant's duty to indemnify, Daniels's alleged controlling interest in Goldan did not affect his obligations to plaintiffs as their lawyer. His liability to plaintiffs is premised solely on the attorney-client relationship between him and plaintiffs, not on any interest that he had in Goldan.
Thus, the exclusions relied upon by defendant are patently inapplicable. That Daniels was an owner of Goldan or might have been acting in the interests of Goldan instead of those of his clients may explain why Daniels acted as he did, but it does not change the essence of the complaint, or the basis of liability, which is that Daniels committed legal malpractice in his representation of plaintiffs (see American Guar. & Liab. Ins. Co v Moskowitz, 58 AD3d 426 [2009] [rejecting similar arguments advanced by defendant]). Daniels committed legal malpractice while he was an owner, officer, etc., of Goldan. However, the policy does not exclude coverage for all conduct occurring while he was an owner or officer but only for claims arising out of his capacity as such (see RJC Realty Holding Corp. v Republic Franklin Ins. Co., 2 NY3d 158, 165 [2004]).
The dissent concludes that there is an issue of fact as to the actual basis of Daniels's liability to plaintiff, and thus as to the applicability of the exclusions, pointing to issues that can be raised by defendant outside the allegations of the complaint and the default judgment of legal malpractice, such as whether Daniels also represented Goldan. This interpretation of the policy exclusions is overly broad, as the exclusions are more reasonably understood to be "designed to exclude claims based upon legal work performed by an insured for an enterprise in which he or she has some kind of ownership interest and thus where the insured is likely to benefit directly from recovery under the policy" (Oot v Home Ins. Co. of Ind., 244 AD2d 62, 70 [1998]; see also Niagara Fire Ins. Co. v Pepicelli, Pepicelli, Watts and Youngs, P.C., 821 F2d 216, 220 [3d Cir 1987] ["The exclusions speak of excluded claims, and thus the character of the specific legal claims, rather than the malpractice suit's general factual background, must be analyzed to determine the exclusion issue. The claims made by (the legal malpractice claimant) deal only with negligence and breach of contract in the Law Firm's representation of the (legal malpractice claimant), and resolution of the claims will affect only the interests of (the legal malpractice claimant) and the Law Firm . . . Therefore, the legal malpractice claims are not omitted from coverage by the two exclusions . . . designed to exclude business risk and collusive suits from coverage under the policy]" [emphasis added)][FN1] . Because neither Daniels's actions in furtherance of Goldan's business nor his financial interest in Goldan are part of the legal malpractice claim made by plaintiffs for malpractice committed by Daniels, the legal malpractice claim is not excluded from coverage.
Contrary to the dissent's conclusion, the analysis in Oot (244 AD2d at 70) is applicable to this case. Oot points out that these types of exclusions are designed to apply to legal work performed by the insured for his enterprise. The allegations of the legal malpractice claim here simply do not include a claim that Daniels performed legal work for Goldan. The dissent's focus on the discontinued causes of action on the guarantees obscures the relevant analysis, which is whether the judgment, based solely on legal malpractice, was a judgment based on legal work performed for Goldan. Clearly, it was not.
This situation is to be contrasted with that in American Guar. & Liab. Ins. Co. v Hoffman (61 AD3d 410 [2009]), relied upon by defendant, where the policy at issue excluded from coverage any claims based "in whole or in part" on acts "in connection with" a trust, and "each claim in the underlying proceeding centered on the transfer of stock held by a trust for the petitioners therein to a trust created by defendants of which they were the sole trustees and beneficiaries" (id. at 410 [internal quotation marks omitted]).
Finally, plaintiffs failed to establish a prima facie case of bad faith based upon defendant's "gross disregard" of the insured's interests under the policy (see Pavia v State Farm Mut. Auto. Ins. Co. (82 NY2d 445, 453 [1993]), given Daniels's representation to defendant that, notwithstanding the allegations of the complaint concerning his legal representation of plaintiffs, his law firm rendered services to Goldan, and the overall questionable circumstances of the underlying transactions.
All concur except Tom and Andrias, JJ. who dissent in part in a memorandum by Andrias, J. as follows:

ANDRIAS, J. (dissenting in part)
I agree with the majority that plaintiffs failed to establish a prima facie case of bad faith based upon defendant's alleged gross disregard of its insured's interests. However, I disagree with the majority's position that the policy exclusions relied on by defendant are "patently" inapplicable. Therefore, I dissent from the majority's affirmance of the judgment in plaintiffs' favor on the causes of action to enforce the default judgment in the underlying action, and would deny all parties summary judgment as to those claims.
Plaintiffs loaned $2,830,000 to Goldan, LLC, a real estate company owned by Jeffrey Daniels and Mark Goldman. Plaintiffs claim that Daniels, an attorney, agreed to represent them in the transactions and that he failed to record mortgages securing the loans or obtain title insurance.
Daniels had a lawyers professional liability policy with defendant American Guarantee and Liability Insurance Co. (American) that extended indemnity coverage, subject to the policy terms, for amounts Daniels became legally obligated to pay as damages because of a claim based on an act or omission in his rendering or failing to render legal services for others. The relevant policy exclusions provide:
"This policy shall not apply to any Claim based upon or arising out of, in whole or in part:
. . .
"D. the Insured's capacity or status as:
"1. an officer, director, partner, ... shareholder, manager or employee of a business enterprise . . . [Insured's Status Exclusion].

"E. the alleged acts or omissions by any Insured, with or without compensation, for any business enterprise, whether for profit or not-for profit, in which any Insured has a Controlling Interest [Business Enterprise Exclusion]."
On December 2, 2008, Daniels placed American on notice of plaintiffs' potential claim, stating:
"I have become aware of circumstances that would lead me to believe that a claim may be asserted against my law firm as a result of legal services that I have rendered to a real estate development company, Goldan, LLC. Goldan is [a] company that is owned by myself and an individual named Mark Goldman. My law firm provided legal services to Goldan on a retainer basis.
"[Claimants] have indicated that they believed I was representing their interests in ensuring that the funds in excess of several million dollars that were lent to Goldan over several transactions were secured by filed mortgages against real property. I do not have personal knowledge of these mortgages which, I believe, were negotiated directly with Mark Goldman. However, it appears that these mortgages may not have been recorded."
On or about December 31, 2008, American reserved its rights to deny coverage on various grounds, including the Insured's Status Exclusion and Business Enterprise Exclusion. On or about January 16, 2009, plaintiffs sued Daniels, Goldman and Goldan. In the first and second causes of action, plaintiffs asserted that Daniels's failure to record the mortgages or obtain title insurance was a departure from good and accepted legal practice and deprived plaintiffs of a secured interest in the properties. In the fifth and sixth cause of actions, they alleged that Daniels breached his personal guarantees of the loans.
American allegedly retained counsel to represent Daniels, who received extensions of time to answer. By letter dated March 9, 2009, American informed Daniels that it was ceasing to pay for his defense and was disclaiming coverage on various grounds, including that the action fell outside the policy insuring clause because it was based on self dealing; was excluded from coverage under the Insured's Status Exclusion and Business Enterprise Exclusion; and sought restitution of loan principal and interest owed by Goldan and Daniels (as guarantor), not "damages" as defined by the policy. American also reserved its rights under other policy provisions, as well as generally.
On June 8, 2009, plaintiffs wrote to Daniels demanding $450,000 "in full resolution of the claims asserted in [the underlying] action." Daniels forwarded the letter to American, which, by letter dated July 8, 2009, reiterated its disclaimer and rejected the settlement offer.
On October 2, 2009, a default judgment was entered against Daniels that held him liable to plaintiff K2 for $2,404,378.36 and plaintiff ATAS for $688,716. Upon plaintiffs' application, the personal guarantee claims were discontinued without prejudice. American states that it was not notified of the application for the default judgment or of the discontinuance.
On or about December 14, 2009, Daniels assigned his claims against American to plaintiffs, which commenced this action. In the first and second causes of action, plaintiffs seek to recover the amount of the default judgment, up to the policy limits. In the third and fourth causes of action, plaintiffs assert that American breached the implied covenant of good faith and fair dealing, and seek to recover the full amount of the judgment.[FN1]
Pursuant to Insurance Law § 3420(b), an injured party can recover against the carrier to the same extent that the insured would be entitled to recover under the terms of the policy. A default judgment entered against an insured in an underlying suit is binding on the carrier, which cannot contest the merits of the plaintiff's claim in a subsequent suit under § 3420 (see Robbins v Michigan Millers Mut. Ins. Co., 236 AD2d 769, 771 [1997]; Matychak v Security Mut. Ins. Co., 181 AD2d 957 [1992], lv denied 80 NY2d 758 [1992]). However, the carrier may contest the scope of coverage under the policy and is entitled to raise defenses with respect to the applicability of the insuring and exclusionary provisions (see Lang v Hanover Ins. Co., 3 NY3d 350, 356 [2004]; Fisher v Hanover Ins. Co., 288 AD2d 806 [2001]); Fusco v American Colonial Ins. Co., 221 AD2d 231 [1995]; see also Cirgone v Tower Ins. Co. of N.Y., 76 AD3d 883, 884 [2010], lv denied 16 NY3d 708 [2011] ["As Navana's assignees, plaintiffs are now suing upon a claim which is subject to the same defenses Tower could have asserted against Navana"]).
In contrast to the duty to defend, the duty to pay is determined "by the actual basis for the insured's liability to a third person" (Servidone Constr. Corp. v Security Ins. Co. of Hartford, 64 NY2d 419, 424 [1985]). "[T]he breach by [a] defendant of its duty to defend does not create coverage, and [a] defendant is not precluded from demonstrating that the actual basis of the insured's liability to plaintiff[s] is such that the loss falls entirely within the policy exclusion'" (Matijiw v New York Cent. Mut. Fire Ins. Co., 292 AD2d 865, 865 [2002], quoting Robbins v Michigan Millers Mut. Ins. Co., 236 AD2d 769, 771 [1997], supra). Thus, even if American were found to have breached a duty to defend, it would not be required to indemnify Daniels, and in turn plaintiffs, for a judgment for a loss that is excluded by the policy.
Although the default judgment in the underlying action established Daniels's liability to plaintiffs, it did not establish American's. American's liability to plaintiff, as an indemnitor, depends on facts outside of the default judgment (see Holmes v Allstate Ins. Co., 33 AD2d 96, 97-98 [1969]). Even if the default judgment mandates a finding that Daniels is liable to plaintiffs, it does not foreclose a finding that Daniels represented both Goldan and plaintiffs in connection with the mortgage transactions and that his conduct falls within the ambit of either the Insured's Status Exclusion or the Business Enterprise Exclusion, or both, because his failure to record the mortgages and obtain title insurance was a business decision to benefit his company, Goldan.
The majority finds that the Insured's Status Exclusion and Business Enterprise Exclusion do not apply because plaintiff's underlying malpractice claims were "based on" Daniels's status as plaintiffs' attorney, and not, even in part, on his performance of services for, or his status as an owner of, Goldan. This interpretation of the exclusions is too narrow.
The policy language is broad, expressly stating that the policy "shall not apply to any Claim based upon or arising out of, in whole or in part etc." (emphasis added) the insured's capacity or status as an officer or director of a business enterprise or from the alleged acts or omissions of the insured for any business enterprise in which he has a controlling interest. While plaintiffs allege in the underlying complaint that Daniels represented them, in his notice of the potential claim, Daniels advised American that to the extent he rendered legal services at all, those services were rendered to his own company, Goldan. Further, the complaint states that Daniels was a principal of Goldan, and American contends that Daniels engaged in self-dealing by representing one, if not both, of the parties to the loan transaction and also acting as the principal of the business enterprise receiving the loans. Thus, even if plaintiffs' allegations of malpractice triggered the policy's insuring clause, an issue of material fact remains as to whether plaintiffs' legal malpractice claims, at least in part, are based upon or arose out of Daniels's capacity or status as an officer, director, shareholder or employee of Goldan, or out of his alleged acts or omissions on behalf of Goldan, a business enterprise in which he had a controlling interest (see Denihan Ownership Co., LLC v Commerce & Indus. Ins. Co., 37 AD3d 314, 315 [2007] ["Words like 'arising from,' when used in exclusion clauses, are generally taken as a broad and comprehensive reference to events originating from, incident to, or having connection with the subject of the exclusion"]).
The majority contends that this interpretation of the policy exclusions is overbroad, "as the exclusions are more reasonably understood to be designed to exclude claims based upon legal work performed by an insured for an enterprise in which he or she has some kind of ownership interest and thus where the insured is likely to benefit directly from recovery under the policy' (Oot v Home Ins. Co. of Ind., 244 AD2d 62, 70 [1998])." However, Oot is distinguishable on its facts.
In Oot, Olde Mill sued Earl Oot, Thomas Oot, and the Oot Law Offices, alleging that Earl had performed legal services for it with respect to the refinancing of a note and mortgage held by Earl and others as mortgagees, without disclosing his conflict of interest and in breach of his fiduciary duty. The Fourth Department held that coverage for the underlying claims against Thomas was not excluded by a policy provision excluding claims based on work with respect to any business venture in which the insured had a pecuniary or beneficial interest. However, in so ruling, the court, noting that the carrier had made "that argument despite its failure to cross-appeal from that part of the judgment in favor of Earl, which implicitly finds that the claim was covered under the policy" (244 AD2d at 69-70), found the clause inapplicable because "[t]he underlying action arises out of work performed by Earl for Olde Mill; Thomas did not participate, and his liability arises solely by virtue of his partnership with Earl" (id. at 70). The court further held that "the exclusion applies only to a pecuniary or beneficial' interest that the insured has' at the time the claim is made for which the insured seeks coverage" and that "[b]ecause Earl was no longer a mortgagee at the time the claim was made, no such benefit exists" (id.).
Here, in contrast, plaintiffs allege that it was Daniels who committed the malpractice, which arises out of loan transactions between plaintiffs and Goldan, an entity in which Daniels held a pecuniary interest at the time of the claim and whose obligations he personally guaranteed. Further, Daniels advised American that he represented Goldan, and he will receive a direct benefit if American pays the judgment because that will relieve him of personal liability under his guarantees of Goldan's obligations, a claim that was included in the underlying action but discontinued without prejudice.
Nor does Niagara Fire Ins. Co. v Pepicelli, Pepicelli, Watts and Youngs, P.C. (821 F2d 216 [3d Cir 1987]), cited by the majority, mandate a different result. In Niagara, the exclusions at issue were not as broad as those at issue in this case, which apply to claims "based upon or arising out of, in whole or in part," the insured's capacity or status as an officer, director, partner, etc., or his acts or omissions for a business enterprise he controls. Further, in Niagra the alleged malpractice did not simultaneously involve business decisions by Pepicelli, whereas here a question exists as to whether Daniels's failure to record the mortgage was, in whole or in part, a business decision to benefit his company, Goldan (see Darwin Nat'l Assur. Co. v Hellyer, 2011 WL 2259801, 2011 US Dist Lexis 60592 [ND Ill [2011]).
In Darwin, the claimants sold land to Harmony Stone LLC for $1.9 million, secured by a $1,362,500 mortgage, which Harmony's principals, attorney Hellyer and his partner, guaranteed. Harmony also obtained a $600,000 mortgage from American Community Bank & Trust (Community). Subsequently, Hellyer entered into an agreement with Community to increase Harmony's loan from $600,000 to $1,225,000. As a condition thereof, Community required Harmony to obtain a subordination of mortgage agreement from the claimants. The claimants later sued Hellyer alleging that he acted as their counsel with respect to the loan subordination and committed professional negligence by failing to properly advise them. The claimants also sought to recover the full amount owed on their loan from Harmony or from Hellyer and his partner on their personal guaranty. In holding that the Business Enterprise Exclusion applied, the court explained that:
"[I]t is reasonable to conclude that these allegations of failing to properly advise his clients are, at a minimum, either indirectly resulting from or in consequence of Hellyer's business interest in Harmony Stone. As another court recently explained, business enterprise exclusions are frequently included in policies because [i]nsurers calculate liability insurance rates on the assumption that insured attorneys act solely in a legal capacity, and that their professional judgment is unaffected by personal interests. Business enterprise exclusions diminish risk associated with an insured's decision to pursue business opportunities that may result in conflicts between the lawyers' best interests and those of his client.' Minn. Lawyers Mut. Ins. Co. v. Antonelli, Terry, Stout & Kraus, LLP, No. 1:08-CV-1020, 2010 WL 4853300, at *10 (E.D. Va. Nov. 18, 2010) (citation omitted). Here, the claim of malpractice is based on the fact that Hellyer had a personal financial stake in his business venture, and this is precisely the increased risk that plaintiff has excluded from its coverage with the Business Enterprise Exclusion" (2011 WL 225980 at *5, 2011 US Dist LEXIS 60592 at *15-16).
This view is consistent with New York law recognizing that
"[a]n errors and omissions policy is intended to insure a member of a designated calling against liability arising out of the mistakes inherent in the practice of that particular profession or business," and is not so comprehensive as "to protect against all business vicissitudes" (Albert J. Schiff Assoc. v Flack, 51 NY2d 692, 700 [1980]). "To hold otherwise, on a fair reading of
the policies, would be to create additional coverage beyond that which was bought and paid for" (id.; see also Societe Generale v Certain Underwriters at Lloyd's, London, 1 AD3d 164 [2003]; Tartaglia v Home Ins. Co., 240 AD2d 396 [1997]).
In this regard, the duty of good faith and fair dealing implied in every contract is an integral part of an insurance contract (see New York Univ. v Continental Ins. Co., 87 NY2d 308, 318 [1995]; Pavia v State Farm Mut. Auto. Ins. Co., 82 NY2d 445, 452 [1993]), and New York's public policy prohibits indemnification for intentionally caused injuries (see Public Serv. Mut. Ins. Co. v Goldfarb, 53 NY2d 392, 399 [1981]). American should be allowed discovery to determine if Daniels intentionally failed to record the mortgages. To hold otherwise and allow the insured to shift liability to the insurer would allow the wrongdoer to evade responsibility for his actions.
Accordingly, as issues of fact exist as to whether the Insured's Status Exclusion or the Business Enterprise Exclusion applies, plaintiffs should not have been granted summary judgment on their first and second causes of actions seeking to enforce the default judgment in the underlying action, and that portion of the judgment should be vacated.
Footnotes

Footnote 1: While the dissent notes that the Niagara analysis applied Pennsylvania law, the discussion of the purpose and applicability of these types of exclusions is apt and has general relevance. The dissent does not suggest that New York law is different in this regard. We disagree with the dissent's assessment that the exclusions in Niagara (for any claim arising out of any insured's activities as an officer, etc., of a company) are not as broad as the exclusions here.

Footnote 1: The complaint alleges that on or about February 18, 2009, an involuntary petition for relief was filed under Chapter 7 of the United States Bankruptcy Code, 11 USC §§ 101 et seq, naming Goldan as debtor, and that on or about April 3, 2009, a default judgment was entered in the underlying action against Goldman in the amount of $2,945,474.35.

Fuentes v. Sanchez

Baker, McEvoy, Morrissey & Moskovits, P.C., New York (Stacy R. Seldin of counsel), for appellants.
Arce Law Office, PLLC, Bronx (Yolanda Castro-Arce of counsel), for respondents.
Order, Supreme Court, Bronx County (Ben R. Barbato, J.), entered April 13, 2011, which, to the extent appealed from, denied defendants' motion for summary judgment dismissing the complaint alleging that plaintiff sustained serious injuries under Insurance Law § 5102(d), unanimously affirmed, without costs.
On December 16, 2008, then-81-year-old plaintiff Irma Fuentes was driving through a intersection when defendants' car allegedly ran a red light and struck her. Plaintiffs commenced this action, alleging injuries to plaintiff's cervical spine, lumbar spine, and left knee under the "permanent consequential limitation of use," "significant limitation of use," and 90/180-day categories of Insurance Law § 5102(d).
Defendants met their initial burden by submitting the affirmed reports of their orthopedist and neurologist finding normal ranges of motion in the cervical and lumbosacral spine and the left knee, and concluding that symptoms in those parts of the body had resolved, as well as the MRI reports of their neuroradiologist concluding that the MRI films of the cervical spine, lumbosacral spine, and left knee revealed degenerative changes and no evidence of posttraumatic injuries related to the accident (see Torres v Triboro Servs., Inc., 83 AD3d 563 [2011]). Contrary to plaintiffs' contention, the failure of defendants' experts to review plaintiff's medical records in preparing their reports does not render the reports insufficient, as the experts detailed the specific objective tests they used in their personal examination of plaintiff, which revealed full range of motion, and defendants' radiologist found, upon review of plaintiff's MRI films, no evidence of traumatic injury (see Canelo v Genolg Tr., Inc., 82 AD3d 584 [2011]; DeJesus v Paulino, 61 AD3d 605, 607 [2009]).
In response, plaintiffs submitted the affirmations of plaintiff's neurologist and orthopedist, who both found limitations in the range of motion of plaintiff's cervical and lumbar spine shortly after the accident and 1½ year later. Plaintiffs also submitted the MRI reports of plaintiff's radiologist noting disc bulges and herniations in both the cervical and lumbar spine. This evidence raises triable issues of fact as to whether plaintiff sustained a "significant limitation of use" and "permanent consequential limitation of use" of the cervical and lumbar spine (see Perl v Meher, __ NY3d __, 2011 NY Slip Op 08452 [2011]; Toure v Avis Rent A Car Sys., 98 NY2d 345 [2002]). Although plaintiffs submitted no evidence quantifying the range of motion limitation in the left knee, the MRI finding of a meniscus tear in the knee, the orthopedist's observations of progressively worsening knee symptoms throughout the course of treatment, plaintiff's eventual need for viscosupplementation injections to the knee, and the orthopedist's conclusion that she would not be able to return to her job as a home attendant, sufficiently raise a triable issue of fact as to a significant and permanent consequential limitation of use of the knee (see Toure, 98 NY2d 345).
As to causation, plaintiffs submitted plaintiff's radiologist's reports finding disc bulges and herniations in the cervical and lumbar spine, and joint effusion and a meniscus tear in the left knee, as well as the radiologist's affirmation that the conditions were causally connected to trauma sustained during the accident. Plaintiff's treating physicians also concluded that plaintiff's neck and back injuries were causally related to the accident. Further, plaintiffs adequately addressed defendants' evidence of degenerative conditions in the neck and back and a pre-existing neck condition resulting from a prior 2003 accident. Plaintiff's neurologist averred in his affirmation that age-related stenosis is usually asymptomatic in the cervical spine, and that, although lumbar stenosis could produce pain, the pain would emerge gradually and not as suddenly and severely as the pain that plaintiff had been experiencing. The neurologist also explained that, given that plaintiff was asymptomatic and working as a home attendant without difficulty for five years following the 2003 accident, her current complaints and measurable limitations "could only be due to the [subject] accident." Additionally, plaintiff's radiologist's finding of joint effusion and a tear in the posterior horn of the medial meniscus, conflicts with defendants' neuroradiologist's finding of a degenerative condition in the posterior horn of the medial meniscus. Because plaintiffs' evidence negates a finding as a matter of law that plaintiff's degenerative and pre-existing conditions were the sole cause of the injuries, plaintiffs raised an issue of fact as to causation (see Perl, __ NY3d __, 2011 NY Slip Op 08452; Jacobs v Rolon, 76 AD3d 905 [2010]).
Defendants met their initial burden of showing prima facie that plaintiff did not sustain a 90/180-day injury by submitting plaintiffs' bill of particulars stating that she was confined to bed and home for three days after the accident (see Hospedales v "John Doe", 79 AD3d 536 [2010]). Plaintiffs raised a triable issue of fact by submitting the disability notices issued by plaintiff's treating physicians noting her inability to resume her job duties as of December 24, 2008 until at least May 6, 2009 (see Escobar v Guzman, 60 AD3d 421 [2009]).
Mitrotti v. Elia

Max D. Leifer, P.C., New York (Ira H. Zuckerman and Max D. Leifer of counsel), for appellant.
McCabe, Collins, McGeough & Fowler, LLP, Carle Place (Patrick M. Murphy of counsel), for respondent.
Order, Supreme Court, New York (George J. Silver, J.), entered August 17, 2010, which, in this action for personal injuries sustained in a motor vehicle accident, granted defendant's motion for summary judgment dismissing the complaint, unanimously affirmed, without costs.
Defendant established his entitlement to judgment as a matter of law by demonstrating that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d). Defendant submitted an affirmed report of an orthopedist finding normal ranges of motion in plaintiff's cervical and lumbar spine, and left knee (see Porter v Bajana, 82 AD3d 488 [2011]). Defendant also submitted the affirmed report of a radiologist who opined that changes shown in MRIs of the then 64-year-old plaintiff were degenerative, and that the condition of his spine was unchanged since 2002, when MRIs were taken following a prior motor vehicle accident.
In opposition, plaintiff failed to raise a triable issue of fact. Plaintiff's medical affirmations did not provide an opinion as to causation (see Jackson v Delossantos-Diaz, 82 AD3d 489 [2011]), and while plaintiff has admitted that he was involved in another accident two years before the one at issue, his doctors ignored the effect of that accident on the purported neck and back symptoms attributable to the subject accident (see Farrington v Go On Time Car Serv., 76 AD3d 818, 818 [2010] ["even where there is objective medical proof of an injury, summary dismissal of a serious injury claim may be appropriate when additional contributory factors, such as preexisting conditions, interrupt the chain of causation between the accident and the claimed injury"]). Plaintiff also failed to submit an affirmation of any medical expert showing current range-of-motion deficits to rebut the findings of defendant's medical experts.
Dismissal of the 90/180-day claim was also proper. Plaintiff's bill of particulars stated that he was confined to bed for two weeks and home for two months following the accident (see Williams v Baldor Specialty Foods, Inc., 70 AD3d 522, 523 [2010]).
We have considered plaintiff's remaining contentions, and find them unavailing.
PMA Management Corp. v. White

Appeal from an order of the Supreme Court, Onondaga County (Donald A. Greenwood, J.), entered October 19, 2010. The order denied the motion of respondents to dismiss and granted the petition.

Hinman, Howard & Kattell, LLP, Binghamton (Paul T. Sheppard Of Counsel), Respondent-Appellant Pro Se, And For Robert White, Respondent-Appellant.
Bond, Schoeneck & King, Pllc, Syracuse (J.P. Wright Of Counsel), For Petitioner-Respondent.

It is hereby ORDERED that the order so appealed from is unanimously reversed on the law without costs, the motion is granted and the petition is dismissed.
Memorandum: Petitioner, a third-party administrator for the New York Liquidation Bureau (NYLB), commenced this proceeding seeking payment of a workers' compensation lien (see Workers' Compensation Law § 29). The NYLB paid workers' compensation benefits to respondent Robert White after his original workers' compensation insurer, Legion Insurance Company (Legion), was placed into liquidation by the Commonwealth Court of Pennsylvania in 2003. The NYLB then retained the Risk Management Planning Group (RMPG), and thereafter petitioner, to administer the workers' compensation claim, including the task of collecting from respondents the portion of the post-liquidation lien to which NYLB is entitled, i.e., a portion of the settlement proceeds from White's third-party personal injury action. Indeed, in March 2007, RMPG and the company representing Legion in liquidation each separately consented to the settlement of White's third-party personal injury action. White settled his third-party action on or about May 23, 2007 and reached an agreement with the company representing Legion in liquidation with respect to the amount of the lien owed to Legion, which amount has since been paid. No agreement was reached with respect to the amount of the lien owed to NYLB, however, and thus this proceeding ensued. In response to the petition, respondents moved, inter alia, to dismiss the petition as time-barred. Supreme Court denied the motion and granted the relief requested in the petition. We reverse.
It is well settled that the statute of limitations applicable to workers' compensation liens created by Workers' Compensation Law § 29 is three years, and that it begins to run on the date of settlement of the third-party action (see Matter of Nunes v National Union Fire Ins. Co., 272 AD2d 401, 402). The current proceeding was not commenced until July 22, 2010, however, more than three years after the settlement. We thus conclude that the court erred in denying respondents' motion to dismiss the petition as time-barred.
In denying respondents' motion, the court concluded that White's payment to Legion on October 1, 2007 to settle the lien owed to Legion constituted a partial payment on a single lien, restarting the statute of limitations. The record supports respondents' contention, however, that Legion and RMPG treated the amounts due to each of them as separate liens.
The NYLB was not "stand[ing] in the shoes of a private entity" inasmuch as the NYLB had no right to consent to the settlement of the third-party action on behalf of Legion (Matter of Dinallo v DiNapoli, 9 NY3d 94, 103). In fact, the NYLB did not do so inasmuch as the record establishes that, when RMPG consented to the settlement of the third-party action, it directed White's attorney to contact Legion, which was already in liquidation, for information on workers' compensation benefits paid by Legion. The record further establishes that the company representing Legion in liquidation consented to the settlement of the third-party action separately from RMPG. Indeed, there is no indication in the record that NYLB took " immediate possession and control of the assets and proceeds [of Legion] to a liquidation of its affairs' " (id., quoting Bohlinger v Zanger, 306 NY 228, 234, rearg denied 306 NY 851), such that it would be reasonable to view the pre-liquidation lien and the post-liquidation lien as a single lien.
Under the circumstances of this case, Legion had one lien and the NYLB had a separate lien. This proceeding, therefore, was required to be commenced within three years of the settlement of the third-party action (see Nunes, 272 AD2d at 402), and it was not.

Miller v. Mack

Cruz & Gangi and Associates (Kornfeld, Rew, Newman & Simeone, Suffern, N.Y. [Scott A. Dow] of counsel), for nonparty-respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Kings County (Starkey, J.), dated April 9, 2008, which denied those branches of his motion which were to restore the action to active status and to compel the nonparty Motor Vehicle Accident Indemnification Corporation to interpose an answer on behalf of the defendants Delores Mack and Isaiah Smalls in accordance with a prior order of the same court dated November 16, 2005, and granted the cross motion of the nonparty Motor Vehicle Accident Indemnification Corporation pursuant to CPLR 5015 to vacate the order dated November 16, 2005, entered upon its default, which had granted the plaintiff's motion to compel it to provide a defense and indemnification to the defendants.
ORDERED that the order is affirmed, with costs.
Contrary to the plaintiff's contentions, the Supreme Court properly granted the cross motion of the nonparty Motor Vehicle Accident Indemnification Corporation (hereinafter MVAIC) to vacate the order dated November 16, 2005, entered upon its default. MVAIC succeeded in establishing a reasonable excuse for its default in opposing the underlying motion to compel it to provide a defense and indemnification to the defendants, and it further demonstrated a potentially meritorious opposition to the motion based on the plaintiff's alleged failure to comply with the substantive and timeliness requirements of Insurance Law § 5208 (see generally Knight v Motor Veh. Acc. Indem. Corp., 62 AD3d 665, 666; Naula v Dela Puente, 48 AD3d 434, 434-435; Barillas v Rivera, 32 AD3d 872; Matter of Wilcox v Motor Veh. Acc. Indem. Corp., 187 AD2d 909, 910-911; Carty v Davis, 140 AD2d 661; Sain v Forrest, 130 AD2d 733; Matter of Bailey v Motor Veh. Acc. Indem. Corp., 67 AD2d 707; Matter of Ramos v Motor Veh. Acc. Indem. Corp., 54 AD2d 734).
Furthermore, under the circumstances of this case, the Supreme Court did not improvidently exercise its discretion in denying those branches of the plaintiff's motion which were to restore the action to active status and to compel MVAIC to interpose an answer on behalf of the defendants Delores Mack and Isaiah Smalls.

Charney v. Lechase Construction

Appeals from an order of the Supreme Court, Erie County (John A. Michalek, J.), entered November 24, 2010 in a personal injury action. The order, inter alia, denied the motion of plaintiffs for partial summary judgment on liability pursuant to Labor Law § 240 (1), granted those parts of the motions of defendants-third-party plaintiffs and third-party defendant seeking summary judgment dismissing the complaint, and granted that part of the motion of third-party defendant seeking summary judgment dismissing the third-party complaints.

Maxwell Murphy, LLC, Buffalo (Alan D. Voos Of Counsel), For Plaintiffs-Appellants.
Brown & Tarantino, LLC, Buffalo (Ann M. Campbell Of Counsel), For Defendants-Respondents And Third-Party Plaintiffs-Appellants.
Mackenzie Hughes LLP, Syracuse (Jennifer P. Williams Of Counsel), For Third-Party Defendant-Respondent.

It is hereby ORDERED that the order so appealed from is unanimously modified on the law by denying those parts of the motions of defendants-third-party plaintiffs and third-party defendant with respect to the Labor Law § 240 (1) claim as well as the Labor Law § 241 (6) claim to the extent that it is premised on a violation of 12 NYCRR 23-3.3 (h), reinstating those claims and denying that part of the motion of third-party defendant seeking summary judgment dismissing the third-party complaints and reinstating the third-party complaints, and as modified the order is affirmed without costs.
Memorandum: Plaintiffs commenced this Labor Law and common-law negligence action seeking damages for injuries sustained by Christopher M. Charney (plaintiff) during the demolition of the Finger Lakes Performing Arts Center (Center). Plaintiff, an ironworker employed by third-party defendant, was part of a crew that was demolishing the structural steel canopy of the Center in a step-by-step process. Plaintiff and a coworker were assigned to cut a portion of a steel beam, place a cable around the beam, attach the cable to a crane and cut the remaining portion of the beam. The steel beam would then be lifted away from the structure by the crane and deposited in an area near the stage. At the time of the accident, plaintiff and his coworker had partially cut a beam and secured the cable to it, but the crane was not in position to enable them to attach the cable to the crane. Plaintiff was lowered to the stage of the Center, approximately four feet above the ground, where he retrieved additional hose for his cutting torch and waited for the crane to be repositioned. He heard a noise, realized that the structural steel canopy was collapsing, and ran to the edge of the stage, and he was injured when he jumped into a pile of debris.
We note at the outset that plaintiffs do not contend in their brief that Supreme Court erred in granting those parts of the motions of defendants-third-party plaintiffs (defendants) and third-party defendant seeking summary judgment dismissing the Labor Law § 200 claim and the common-law negligence cause of action, and we thus deem any issues with respect thereto abandoned (see Ciesinski v Town of Aurora, 202 AD2d 984).
With respect to the Labor Law § 240 (1) claim, we conclude that the court properly denied plaintiffs' motion seeking partial summary judgment on liability, but erred in granting those parts of the motions of defendants and third-party defendant seeking summary judgment dismissing that claim. We agree with defendants and third-party defendant that, insofar as plaintiff "was working on a large and stable surface only four feet from the ground [at the time of the accident, this] is not a situation that calls for the use of a device like those listed in section 240 (1) to prevent a worker from falling" (Toefer v Long Is. R.R., 4 NY3d 399, 408). Nevertheless, defendants' alleged liability under the statute also is premised on the collapse of the structural steel canopy, and the section 240 (1) claim may be viable to the extent that the accident causing plaintiff's injuries was elevation-related (see Wilinski v 334 E. 92nd Hous. Dev. Fund Corp., ___ NY3d ___ [Oct. 25, 2011]). We are unable to discern on the record before us, however, whether it is in fact the type of elevation-related accident to which the protective devices in section 240 (1) apply (see id. at ___). None of the parties submitted evidence establishing the cause of the collapse of the canopy. Thus, the record fails to establish as a matter of law whether the cause of the collapse was the failure to use appropriate safety devices to secure the partially cut beam (see Portillo v Roby Anne Dev., LLC, 32 AD3d 421), or whether the cause was unrelated to such failure. Because triable issues of fact remain with respect to the cause of the accident, we modify the order by denying those parts of the motions of defendants and third-party defendant with respect to the Labor Law § 240 (1) claim.
With respect to the Labor Law § 241 (6) claim, we conclude that the court erred in granting those parts of the motions of defendants and third-party defendant seeking summary judgment dismissing that claim to the extent that it is premised on a violation of 12 NYCRR 23-3.3 (h). That regulation is sufficiently specific to support the claim under section 241 (6) (see generally Misicki v Caradonna, 12 NY3d 511, 520-521), and triable issues of fact remain whether it was violated (see McGovern v Gleason Bldrs., Inc., 41 AD3d 1295) and, if so, whether such violation was a proximate cause of the accident (see Calderon v Walgreen Co., 72 AD3d 1532, appeal dismissed 15 NY3d 900). We further conclude that the court properly granted those parts of the motions of defendants and third-party defendant seeking summary judgment dismissing the remainder of the section 241 (6) claim.
Finally, the court properly concluded that, to the extent that the indemnification provision in the subcontract of third-party defendant obligates it to indemnify defendants for their own acts of negligence, it is void and unenforceable under General Obligations Law § 5-322.1 (1) (see Agostinelli v Stein, 17 AD3d 982, 986, lv dismissed 5 NY3d 824). Insofar as it requires indemnification "[t]o the fullest extent permitted by law," however, it does not run afoul of the statute (see Bink v F.C. Queens Place Assoc., LLC, 27 AD3d 408, 409). Because issues of fact remain with respect to the cause of the accident and the respective fault, if any, of defendants and third-party defendant, we conclude that any determination whether third-party defendant must provide contractual indemnification to defendants would be premature (see Stranz v New York State Energy Research & Dev. Auth. [NYSERDA], 87 AD3d 1279, 1283; Niagara Frontier Transp. Auth. v City of Buffalo Sewer Auth., 1 AD3d 893, 895). We therefore further modify the order by denying that part of third-party defendant's motion seeking summary judgment dismissing the third-party complaints.
Simone v Liebherr Cranes, Inc.

White, Quinlan & Staley, LLP, Garden City, N.Y. (Joanne Emily Bell of counsel), for defendant second third-party defendant-appellant.
Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, New York, N.Y. (Mathew P. Ross and Debra A. Adler of counsel), for defendant second third-party plaintiff-
respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, etc., the defendant second third-party defendant, Resun Leasing, Inc., appeals, as limited by its notice of appeal and brief, from so much of an order of the Supreme Court, Kings County (Schmidt, J.), dated October 1, 2010, as granted that branch of the cross motion of the defendant second third-party plaintiff, Beys Contracting, Inc., which was for summary judgment on the cause of action asserted in the second third-party action against it for contractual indemnification with respect to attorneys' fees and costs.
ORDERED that the order is affirmed insofar as appealed from, with costs.
The contract between the defendant Resun Leasing, Inc. (hereinafter the appellant), as subcontractor, and the defendant Beys Contracting, Inc. (hereinafter the respondent), as contractor provided that "[t]o the extent permitted by law, Subcontractor shall indemnify, hold harmless and defend . . . Contractor . . . and [its] agents and employees . . . from and against all claims, damages, losses and expenses including but not limited to attorneys' fees arising out of or resulting from the performance of the agreement, provided any such claim, damage, loss or expenses (a) is attributable to bodily injury . . . and (b) is caused in whole or in part by any act or omission of the Subcontractor or anyone directly or indirectly employed by it or anyone for whose acts it may be liable pursuant to the performance of the agreement."
Contrary to the appellant's contention, the respondent established its prima facie entitlement to judgment as a matter of law by showing that this action arose out of the appellant's performance of the contract and the acts or omissions of persons and entities directly and indirectly employed by the appellant (cf. Langner v Primary Home Care Servs., Inc., 83 AD3d 1007, 1010; D'Angelo v Builders Group, 45 AD3d 522). The plain and unambiguous terms of the contract did not condition the appellant's obligation for attorneys' fees and costs upon a finding of fault (see Diudone v City of New York, 87 AD3d 608; Sand v City of New York, 83 AD3d 923, 926). Since the contract did not require as a condition for contractual indemnification that the acts or omissions be negligent or wrongful, whether those acts or omissions constituted negligent conduct was not relevant to the appellant's liability for contractual indemnification with respect to attorneys' fees and costs (cf. Martinez v City of New York, 73 AD3d 993, 999; Quiroz v Beitia, 68 AD3d 957, 961; Bryde v CVS Pharmacy, 61 AD3d 907, 908). In opposition, the appellant failed to raise a triable issue of fact.
The appellant's remaining contentions are without merit.

Accordingly, the Supreme Court properly granted that branch of the respondent's cross motion which was for summary judgment on its cause of action asserted in the second third-party action against the appellant for contractual indemnification with respect to attorneys' fees and costs.

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