Coverage Pointers - Volume XIII, No. 17

Dear Coverage Pointers Subscribers:

It is February 17th and according to most calendars, this is Random Acts of Kindness Day.  You can look it up.  Use the day wisely.

A Special Welcome to Our New Subscribers:

There must be something in the air because we’ve been flooded with requests to subscribe to our publication this week. We welcome our new subscribers to the Coverage Pointers family.  Pull up a cushioned chair, pour a glass of your favorite adult beverage and sit a spell.  You’ll feel comfortable soon.

So you understand the cadence of this publication, each issue is introduced by this cover letter, which outlines upcoming training programs, provides the headlines for the week’s issue, brings you words of wisdom or wit of some of our writers and offers you historical perspective on something or another.  Generally, we take a snapshot of headlines from a century earlier because we’re like that (or because I’m like that). 

The issue itself is attached.  We send it in MS Word format, rather than .pdf or some other fancier and prettier format.  Why?  Simple. We know that many of our readers cut and paste summaries and case reviews from our issue into claims files or post them on company Intranets and networks.  It’s easier for you to do so if we avoid fancy formatting, so, we keep it simple.

We review all New York State appellate opinions dealing with insurance coverage plus a little more.  You’ll get to know our authors. They love their work and so enjoy your feedback. 

• Margo Lagueras reviews all of the No Fault Serious Injury “threshold” decisions;
• Audrey Seeley writes about litigated and arbitrated No Fault decisions;
• Steve Peiper offers insight into first party property claims and other potpourri topics (Labor Law, indemnity agreements, tort issues, etc.);
• Kathy Fijal covers the federal court beat;
• Jennifer Ehman discusses the key lower court decisions that may signify developing trends;
• Cassie Kazukenus, our resident Albany lawyer, focuses on legislative and regulatory matters;
• Earl Cantwell scripts a missive about something important in the law that has caught his eye;
• Mike Perley pens the occasional article about Medicare liens;
• Scott Duquin provides the semi-occasional piece on lead paint litigation.

 

I cover the rest of the landscape, liability and casualty claims, bad faith and ECL, auto, homeowners, CGL, D&O, E&O and whatever else comes along.

Speaking of Albany, We’re There:

Some of you missed our announcement some months ago.  We now have an Albany office, staffed by Cassandra Kazukenus.  Cassie services the Capital District, the Adirondacks, the Hudson and Mid-Hudson Valleys and everywhere in between.

Training Opportunities:

Do you need someone to stop out to your office to provide some training opportunities for your claims professionals? Here’s a list of some of the topics on which we can present and we can manuscript any kind of coverage or tort program that might be important for your book of business. The first three topics, the ones highlighted below, have been the most popular ones recently. We have a traveling troupe so contact us and we can schedule a visit at a mutually convenient time:

• Tenders, Additional Insured Obligations, Indemnity Agreements and Priority of Coverage
• Good Faith, Consequential Damages and Extra-Contractual Liability – the New York Experience
• NY Disclaimer Letters - Nuts & Bolts: How to Create and Write and Send a Disclaimer Letter, and How Not To. (The Reservation of Right Letter Myth)
• Uninsured and Underinsured Claims Handling
• Preventing Bad Faith Claims - First Party Cases
• Preventing Bad Faith Claims - Liability Cases
• New Rules Regarding Notice, Developing Proof of Prejudice and a Strategic to Avoiding Direct Actions
• The Cooperation Clause - How to Handle
• No- Fault Arbitrations and Appeals: Mock Arbitrations, Preserving the Record, Taking an Appeal
• No Fault Regs - Knowledge is Power
• An Auto Liability Policy Primer
• A CGL Policy Primer
• A Homeowners Liability Policy Primer
• EUO's Under First Party Policies
• How to Resolve Coverage Disputes: DJ Actions, Insurance Law Section 3420 Direct Actions (Choice, Strategy and Timing)
• Insured Selected Counsel: When is it Necessary and How to Avoid it?
• Mediation and the Role of the Mediator
• ADR and How to Get to "Yes"
• The Internet as a Tool for the Claims Representative
• Tackling Tenders

 

Interested in training, drop me a note at [email protected].

Speaking of New York City, We’re There Every Week:

We have a robust practice in New York City and throughout all of upstate New York, particularly for insurance coverage and extra contractual liability matters.  Our attorneys travel to all corners of the state to serve our clients.

High Crimes and Misdemeanors:

Middletown Daily Times Press
February 17, 1912
Page 1

Denies He is Responsible for Shortage

Kingston, N.Y. – A deficit of $8,987 in Kingston’s city treasury, alleged to have occurred during the incumbency of Frank M. Boyce, Jr., a son of Frank M. Boyce, formerly a State Senator, was reported to the Common Council tonight by Mayor Irwin.

Boyce, who failed of reappointment to the office on January 1, denies all responsibility for the deficiency, and in a letter sent tonight to District Attorney Cunningham, refuses to comply with a demand made by the Mayor a few days ago that he refund the money.  The deficit occurred, he said, at a time when he had no custody of the funds.
Editor’s Note:  If you see the funds around, please send them over to the Mayor of Kingston.

Peiper’s Peckings:

Greetings from another rainy, sloppy day in Western New York.  I don’t know if you are aware, but Buffalo has developed a reputation for hearty winters.  Rather than dwell on the obvious drawbacks, we like to think of them as opportunities to visit with our neighbors whilst digging out our cars.  With all the rain and mild temperatures this year, I haven’t seen my neighbors all Winter.  Who knew that the rest of the County was so unfriendly from November to May. 

This issue’s offerings are, yet again, a bit thin on the first party side of things.  Do take time to peruse the interesting rescission case we review below.  If  there is one thing we can take away from the Court’s decision, it is the absolute necessity to be certain.  If you are rescinding a policy, do it, without equivocation, and certainly without accepting future premiums. 

We would humbly submit that our potpourri offering is far deserving of a preview this week.  Earlier today, the Court of Appeals issued a ruling on the liability of party hosts whose inebriated guests leave the gathering and cause havoc.  Kudos to the Court of Appeals’ restoration of sanity to premises/social host liability.  In addition, we’d also point you toward the First Department’s decision on the discoverability of reports prepared by retained experts prior to the start of litigation. 

That’s it for this week.  See you in March.

Steve
[email protected]

One Hundred Years Ago:  The Good Old Days:

Washington Post
February 17, 1912
Record Time for Wireless
Message Flashed from Honolulu to Washington
And Answered in 20 Minutes

Vallejo, California -- Just twenty minutes from the time the cruiser South Dakota, with the Pacific fleet at Honolulu flashed a wireless message to the Navy Department at Washington today a reply was received.

The message which consisted of seven lines was relayed at the Mare Island Navy Yard and at Key West.  The answer was “O.K.”

This is believed a time record in wireless communication.

On the Same Page:

Arrest for Trial Marriage
Man Says He Undertook It For Fear of Divorce

Des Moines, Iowa – A trial marriage entered into because of a dread of divorce courts resulted today in the arrest of W.H. Moon, 30 years old and Josephine Mellenberg, 19 years old. The two had been living together for six weeks.  Moon told the police that he expected to continue much longer and if everything had gone well, they were to be married.

Moon says that he has such a horror of divorce courts that he decided to take a chance on the trial marriage.  The girl had little to say during the two hour conference with the police, although she wept much.
Editor’s Note:  The term “trial marriage” referred to a concept pioneered by some including Elsie Clews Parsons.  As Parsons described it, a trial marriage was  “a new, flexible morality based on sincerity and privacy,” evident in her desire to enable women and men to enjoy "trial marriage, divorce by mutual consent, access to reliable contraception, independence and elasticity within relationships, and an increased emphasis on obligations to children rather than to sexual partners." Gender equality was at the core of her philosophy and her approach to life, an approach facilitated by her wealth. Elsie Clews Parsons was known as a modern woman as the 19th century turned into the 20th. A pioneering feminist, an eminent anthropologist, an ardent social critic, she challenged Americans to develop flexible and dynamic gender, family and social arrangements that fitted the new century.

From Audrey Seeley, the Queen of No Fault:

There has really been a surge in lost wage arbitrations.  In reviewing these decisions there are three points to walk away with.  The first is that as an Applicant your lost wage claim must have been presented to the insurer before you filed for arbitration.  The chances seem slim, based on the decisions of late, the claim will be entertained if you are presenting it for the first time to the insurer in your AR-1.  The second  is as an Applicant your claim for lost wages must not be speculative.  You should know the amount you are seeking and the timeframe you claim disability.  That disability should be documented by a medical disability note and supporting medical narrative which causally relates injuries to an accident.  The third is as an insurer the basis for your denial should be clear and if based upon a medical examination the resulting report must be thorough.  A lost wage claim probably should not be denied on a blanket denial if the insurer has already received a lost wage claim. 

Why? 

The problem is that the arbitrator will not know what time frame you are denying and ascertain if the denial is timely.  Also, medical examinations need to have a comprehensive discussion on the medical records reviewed and addressing any positive objective findings.  Further, if the opinion is lack of causal relationship then there should be an extensive discussion as to why the injury is not causally related and also what event that injury is causally related to.  In Upstate New York, we have experienced that lost wage claims are heavily scrutinized most likely because the insured is the one who feels the negative consequences of an adverse decision.  I cannot say how many times over the years at an arbitration an insured has testified that they are months away from losing their home or has no money to put gas in their vehicle to go grocery shopping for their children because they have not received a lost wage check.  Whether the statement is wholly accurate is not one you can legitimately attack.  Also, we have never seen a decision Upstate where an arbitrator took such a statement as true and used it solely as the basis for awarding in the insured’s favor.  However, such an allegation brings home the potential gravity of a decision.

It is not too late to sign up for the DRI Insurance Law Committee’s Insurance Coverage and Claims Institute being held from March 28-30 in Chicago.  If you need any information on how to register please send me an email at [email protected].

Audrey

Jennifer’s Gem:

The New York trial courts were relatively quiet over the last two weeks.  With that said, there is an interesting decision, which I reported on, in relation to a fire loss claim.  The case addresses a situation where the defendant, a mortgage company, issued a mortgage on a property that was destroyed.  After the fire, the owner’s insurance company disclaimed coverage, which resulted in the owner and the mortgage company bringing separate lawsuits for recovery on the loss.  In the reported decision, Flushing Savs. Bank, FSB v. Lending Ins. Servs., Inc., although the trial court seemed to agree with the mortgage company, it refused to issue summary judgment in its favor.  The court was concerned that, with the owner not being a party to the action, if it issued summary judgment in favor of the mortgage company, the decision would not have collateral estoppel effect.  In other words, the court in the owner’s action could reach the opposite conclusion, a tricky situation then.  Well, as we continue to trudge through February, and hopefully towards warmer months, we wish everyone well.

Jen Ehman
[email protected]

Our issue is attached, 60 pages in length.  If you want to print and read, we’d suggest you print pages 1-28, which contains the summaries of the decisions.  The full text of those New York State appellate decisions summarized will be found on the next 32 pages. Here are the headlines:

 

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

• No Coverage for Co-Insured’s Property Damage
• No Rule Compelling Subrogation Claim Be Filed as Impleader
• Another E&O Claim Against an Insurance Agent Fails
• He Doesn’t Have the Audacity to Sue Me, Not a Defense to Late Reporting
• Doctor’s Claim of Fraud, Bad Faith and Deceitful Business Practices Against Malpractice Insurer and Defense Counsel Go Nowhere in Second Department
• Doctor’s Claim of Deceitful Business Practices Against Malpractice Insurer and Defense Counsel Go Nowhere in Third Department Either
• Court Construes the Term Employee Very Narrowly

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

• Inability to Return to Part-Time Work Does Not Necessarily Satisfy Requirements Under 90/180-Day Category
• Plaintiff Fails to Raise Triable Issue of Fact Where She Does Not Address Prior Injuries
• Chiropractor’s Recommendation That Plaintiff Refrain from Cleaning, Shopping and Walking Is Sufficiently Specific Proof to Substantiate Claim
• Defendants Establish Injuries Are Neither Serious Nor Causally Related
• During a Two Years Span, Plaintiff Is Rear-Ended Three Times: Defendants’ Motions Denied as They Fail to Differentiate Causation of Injuries
• Defendant’s Motions for Judgment as a Matter of Law, and to Set Aside Jury Finding of Liability and Verdict, Denied and, on Appeal, Affirmed
• Plaintiff Successfully Rebuts Evidence of Lack of Causal Relationship
• Plaintiff Fails to Raise a Triable Issue of Fact as Evidence Not in Admissible Form
• Defendant’s Reliance on Plaintiffs’ Deposition Testimony Defeats His Motion
• Defendants Established Lack of Causal Relationship but Plaintiff Successfully Rebutted Their Evidence

 

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

• Reimbursement Denied Upon Policy Exhaustion
• Doctor’s Note Reducing Work Week Without Medical Explanation Insufficient to Prove Lost Wage Claim
• Lost Wage Claim Presented at Some Point and Blanket Denial Insufficient to Deny Lost Wage Claim
• Peer Review Report Unpersuasive When It Fails to Address Success of Equipment with in-Office Use
• Applicant Has Continuing Obligation to Submit Bills to Insurer
• Failure to Describe Why Injury Not Related to Accident Fatal to Lost Wage Denial
• MV-104 Can Provide Notice of Claim But Only if It Documents Injuries and Not Just Property Damage
• Lost Wage Claim Cannot Be Speculative

 

LITIGATION

• Plaintiff’s Bare Attorney Affirmation Insufficient to Oppose Summary Judgment on Lack of Medical Necessity
• Doctor’s Affidavit Creates Issue of Fact on Medical Necessity
• Doctor’s Affirmation Inadmissible When Doctor Is Principal of Party to Action
• Insurer Not Required to Attach Records Peer Reviewer Reviewed on Summary Judgment
• Failure to Refer to Peer Reviewer’s Conclusion Fatal in Surviving Summary Judgment
• Chiropractic Peer Review Report Inadmissible Under CPLR 2309(b)
• Insurer Entitled to Documents Regarding No-Fault Benefit Eligibility After Plaintiff Improperly Filed Notice of Trial
• Failure to Refer to Peer Reviewer’s Conclusion Fatal in Surviving Summary Judgment
• Insurer Not Required to Annex Medical Records Reviewed by Expert on Summary Judgment

 

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

• Acceptance of Premiums AFTER Misrepresentations is Uncovered Results in Waiver of Opportunity to Void the Policy

 

Potpourri

• Homeowners Have No Duty to Prevent Intoxicated Persons for Leaving
• Bill of Particulars is NOT a Pleading, and as Such Not Required in Support of a Summary Judgment Motion
• Pre-Litigation Investigative Materials Gathered by Retained Experts Entitled to Discovery Protections

 

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

• DFS Seeks Candidates To Serve As Public Members On The NYAIP Governing Committee And On NYPIUA Board
• Legislative Introductions

 

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

• “Evident Partiality” within Meaning of Federal Arbitration Act

 

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

• Court Rejects Argument that Insurer’s Policy Provides Unlimited Employers’ Liability Coverage
• Court Considers Whether a Breach of Contract Occurred Where the Insured Complied with the Insurance Procurement Requirement by Obtaining a Policy with a $500,000 Deductible
• Collateral Estoppel Prevents Court from Granting Mortgage Company Summary Judgment in Fire Loss Case

 

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

No Coverage For Bad Burritos :  Hold the Heartburn and Indemnity

That’s all for now.  Keep providing us with the meaningful feedback and thanks.

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
Liening Tower of Perley
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]

02/14/11         VBH Luxury, Inc. v. 940 Madison Associates LLC
New York State Court of Appeals
No Coverage for Co-Insured’s Property Damage
950 Madison Associations was an AI under a CGL policy secured by Excelsior for its named insured, the tenant, VGH Luxury, only with respect to liability arising “out of the ownership, maintenance and use of that part of the premises leased to the tenant.”  The high court found that the landlord would be entitled to a defense in an action commenced against it by a third party for an injury that occurred on the leased premises.  However, there is no coverage for liability to its co-insured for damage to property owned, rented or occupied by the insured.

We reported on the First Department’s decision in this case in our April 15, 2011 edition of Coverage Pointers and questioned its wisdom:

Contractual Liability Exclusion Excepts Leases
The policy's contractual liability exclusion does not apply to "insured contracts," which include leases, and that, since the liability here arises from a lease, it is not subject to the contractual liability exclusion. As there is no cross-liability exclusion, the third-party claims by the named insured against the additional insured may proceed.
Editor’s Note [then]: I know I’m missing something here, but what about anti-subrogation concerns? Inquiring minds want to know.

Editor’s Note [now]: The Court of Appeals must have been listening.  In reversing the First Department’s decision, the Court cited to anti-subrogation cases.   

02/14/12         Hudson Insurance Co. v. AK Construction Co.
Appellate Division, First Department
No Rule Compelling Subrogation Claim Be Filed as Impleader
Defendant moved to dismiss a subrogation claim, asserting that it could only be brought as an impleader.  This odd position was rejected by the First Department.

02/10/12         Sawyer v. Rutecki
Appellate Division, Fourth Department
Another E&O Claim Against an Insurance Agent Fails
Plaintiffs owned an apartment building that was damaged in a fire. They found out after a fire damaged their premises that their insurance policy for the premises had been cancelled prior to the fire.  They sued their agent alleging negligence and breach of fiduciary duties in not notifying them of the cancellation.  The policy had been canceled after an underwriting inspection shortly after the policy was issued by the insurer, Allegany.  Proof was submitted that Allegany sent a letter to plaintiffs by certified mail notifying them of the cancellation, and plaintiffs thereafter failed to obtain new coverage.

There was no proof of any kind of ongoing or special relationship between the agent and the insured under which the agent would be liable for the insured’s failure to replace its coverage.  The court also rejected the plaintiffs’ contention that the agent was negligent in failing to inform them that the policy had been cancelled.

02/09/12         Aponte v. Government Employees Insurance Company
Appellate Division, First Department
He Doesn’t Have the Audacity to Sue Me, Not a Defense to Late Reporting
Apparently, the insured had an altercation with a letter carrier and was arrested as a result.  The letter carrier thereafter sued him for his injuries.  It was not until the lawsuit that the insured notified the carrier of the incident.  When asked why he hadn’t notified the carrier earlier, he opined that he believed the “letter carrier wouldn’t have the audacity” to sue him and, in an even, he believed he was not responsible for the injuries.  The court bought neither argument, particular in light of his arrest.

02/09/12         Dinhofer v. Medical Liability Mutual Insurance Co mpany
Appellate Division, First Department
Doctor’s Claim of Fraud, Bad Faith and Deceitful Business Practices Against Malpractice Insurer and Defense Counsel Go Nowhere in Second Department
Dr. Dinhofer claimed that MLMIC engaged in fraud, deceitful business practices, and breach of their duty to defend him in good faith.  The court rejected the argument, on equitable estoppel considerations. The carrier established that in reasonable reliance upon plaintiff's execution of the Consent to Settle the underlying medical malpractice action they made a prejudicial change in their position by, inter alia, disbanding the advisory committee that, pursuant to the policy, would have resolved the matter of settlement absent plaintiff's consent, and paying to settle the claim against him. Indeed, the doctor never sought to rescind the Consent.

All related claims of fraud, extra-contractual liability and violation of the General Business Law equally failed.
Editor’s Note:  Must be something in the water, see the Kaufman case, next reported.

02/09/12         Kaufman v. Medical Liability Mutual Ins. Co.
Appellate Division, Third Department
Doctor’s Claim of Deceitful Business Practices Against Malpractice Insurer and Defense Counsel Go Nowhere in Third Department Either

In November 2003, Jamie Norton presented at the hospital for the birth of her second child. The child was delivered by Nguyen, an obstetrician employed by the hospital. During the course of her hospital stay, Norton, who received treatment from both Nguyen and any obstetrician, Kaufman developed an infection that required surgery and other extensive treatment

Norton sued the two docs and the hospital and the defense of all parties was assigned to the Carter Conboy law firm. A jury awarded Norton and her spouse $5.75 million in damages, which the trial court reduced to $3.5 million and then to $3.2 million after appeal. MMLIC paid the judgment. .

After the verdict was rendered, Kaufman protested the joint representation and MLMIC provided and paid for separate appellate counsel. Later, Kaufman commenced a legal malpractice action against the law firm and an extra-contractual liability claim against MLMIC, alleging deceptive business practices.

The Third Department agreed that the plaintiff's General Business Law § 349 cause of action should be dismissed because of a failure to allege that the carrier’s acts have a broad impact on consumers at large.

The breach of contract claim was also dismissed.  There was no evidence of any dissatisfaction with defense counsel and there were no facts alleged in the underlying complaint to demonstrate a conflict of interest.  Absent any other evidence suggesting an actual or apparent conflict of interest with respect to plaintiff, MFMIC had no duty to appoint separate counsel to represent her.

01/31/12         Farm Family Insurance Company v. Habitat Revival, LLC
Appellate Division, Second Department
Court Construes the Term Employee Very Narrowly
John Bardes, the sole member of the defendant Habitat Revival, was allegedly struck by a truck owned by Habitat Revival and operated by one of its employees.  When Mr. Bardes made a claim against the company, Farm Family, Habitat Revival’s insurer, denied coverage based on three exclusions in its business auto policy:  Workers’ Compensation exclusion, Employee Indemnification and Employer’s Liability exclusion and Fellow Employee exclusion. 

Farm Family took the position that Mr. Bardes was an employee of Habitat Revival at the time of the accident.  The court disagreed and essentially found that the definition of employee in the business auto policy was ambiguous.  Further, because Mr. Bardes did not receive wages and W-2 forms, according to the court, he was not an employee as that term was used in both the employee exclusion and fellow employee exclusion. 

Further, the court held that because Mr. Bardes elected to opt out of coverage under Habitat Revival’s workers’ compensation policy and, accordingly, did not have this type of coverage in place for the claim, the worker’s compensation exclusion also did not apply.
Editor’s Note:  The court’s decision essentially limits the definition of employee to only those receiving W-2 forms. It also endorses the idea that an individual owner’s decision to opt out of his company’s workers’ compensation policy, will then create new coverage (or what are essentially workers’ compensation benefits) under the insured’s CGL or auto policy. 

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

02/10/12         Delk v. Johnson
Appellate Division, Fourth Department
Inability to Return to Part-Time Work Does Not Necessarily Satisfy Requirements Under 90/180-Day Category
Plaintiff originally claimed, in her bill of particulars, injuries under the permanent loss of use, permanent consequential limitation, significant limitation of use and 90/180-day categories.  In opposition to defendant’s motion, she abandoned all but the 90/180-day claim, and defendant established, through two IMEs and plaintiff’s deposition testimony that, although she missed time from her physically-demanding part-time job, she nevertheless was not unable to perform substantially all her usual and customary activities. 

In opposition, plaintiff submitted an MRI report and an affirmation from her treating physician which, while raising an issue of fact with respect to whether she sustained a serious injury, did not raise an issue of fact with respect to the requirements under the 90/180-day category.  Thus, even if she was unable to return to her part-time work, she did not establish that her daily activities were curtailed to a great extent, nor did her evidence establish that she was disabled from working for 90 of the 180 days. 

02/10/12         Overhoff v. Perfetto
Appellate Division, Fourth Department
Plaintiff Fails to Raise Triable Issue of Fact Where She Does Not Address Prior Injuries
Defendant’s expert examined plaintiff and reviewed her medical records, including imaging studies performed both before and following the accident.  He found that the condition of her spine was essentially the same and that she had no functional disability or limitations causally related to the accident.  Plaintiff’s submissions in opposition failed to raise an issue of fact because they did not address the manner in which her injuries were related to the accident in light of her prior medical history, and the doctor that examined her on her behalf did not refute defendant’s expert and compare her pre- and post-accident limitations.

02/09/12         Williams v. Tatham
Appellate Division, First Department
Chiropractor’s Recommendation That Plaintiff Refrain from Cleaning, Shopping and Walking Is Sufficiently Specific Proof to Substantiate Claim
In support of her 90/180-day claim, plaintiff submitted the affidavit of her treating chiropractor who examined her two days after the accident, concluded she sustained an injury to her spine, and advised her to refrain from certain activities such as cleaning, shopping and walking.  In her affidavit, plaintiff stated that she was confined to her home for approximately six months following the accident and was unable to clean, shop or carry bags.  This specificity was sufficient to constitute the required medical proof to support the claim.

In addition, plaintiff also raised a triable issue of fact with regard to her claims under the permanent consequential and significant limitation categories through her chiropractor’s affidavit.  Although defendants’ expert radiologist stated that MRI films revealed degenerative conditions in plaintiff’s back and right shoulder, plaintiff’s chiropractor stated that the injuries were a direct result of the accident, basing his conclusions on objective ROM testing which showed restrictions.  Because a different, plausible cause for the injuries was proffered, summary judgment should not have been granted.

02/07/12         Torres v. Posy
Appellate Division, Second Department
Defendants Establish Injuries Are Neither Serious Nor Causally Related
Plaintiff claimed serious injury to her right knee and that she was unable to perform substantially all her usual daily activities for 90 of the first 180-days following the accident.  However, defendants met their burden of showing the injury to the knee did not constitute a serious injury and that, in any event, such injury was not causally related to the accident.  Defendants’ also submitted sufficient evidence that plaintiff did not sustain an injury under the 90/180-day category.  In opposition, plaintiff failed to rebut and, in addition, failed to explain the cessation of her medical treatment, warranting a reversal of the trial court’s denial of defendants’ motion.

02/07/12         Balducci v. Velasquez
Appellate Division, Second Department
During a Two Years Span, Plaintiff Is Rear-Ended Three Times: Defendants’ Motions Denied as They Fail to Differentiate Causation of Injuries
In August 2005, plaintiff was rear-ended, while stopped at a red light, by defendant Velasquez.  In May 2007, he was rear-ended by defendant Behnambakhsh and in October 2007 he was again rear-ended, while stopped at a red light, by defendant Decanio. 

Velasquez’s expert examined plaintiff in December 2009 and found significant limitations.  He opined that the limitations were caused by the two subsequent accidents but did not provide any foundation for his conclusion and, therefore, Velasquez failed to meet his burden making it unnecessary for the court to consider plaintiff’s opposing papers.

The report submitted by Behnambakhsh was unaffirmed and thus inadmissible. In addition, the remainder of the evidence submitted did not eliminate all material issues of fact as to whether plaintiff sustained a serious injury as a result of the second accident.

Decanio’s evidence similarly failed to eliminate all material issues of fact as to whether plaintiff suffered a serious injury as a result of the third accident.  Since neither defendant met their respective burdens, the court did not need to consider plaintiff’s opposing papers.  Therefore, the trial court correctly denied the motion and two cross-motions.

However, plaintiff’s cross-motion on the issue of liability was unopposed by Velasquez, and Behnambakhsh and Decanio simply relied on the contention that they did not see brake lights on plaintiff’s vehicle.  These submissions were insufficient and plaintiff’s cross-motion on liability was improperly denied.

02/07/12         Liounis v. New York City Transit Authority
Appellate Division, Second Department
Defendant’s Motions for Judgment as a Matter of Law, and to Set Aside Jury Finding of Liability and Verdict, Denied and, on Appeal, Affirmed
Defendant Zlita brought motions at the close of plaintiff’s case, and at the close of all the evidence, for judgment as a matter of law on the ground that plaintiff did not sustain a serious injury, and both times was denied.  He also moved for judgment as a matter of law upon a jury verdict finding him 100% at fault and awarding damages of $175,000, and also upon denial of his motion to set aside the verdict and for judgment as a matter of law or to set aside the verdict as contrary to the weight of the evidence.  All were denied and, on appeal, affirmed as the court found that a fair interpretation of the evidence supported the jury’s conclusion that plaintiff sustained a serious injury as a result of the accident.

01/31/12         Purdie v Perdomo
Appellate Division, Second Department
Plaintiff Successfully Rebuts Evidence of Lack of Causal Relationship
In a decision without details, the court acknowledges that defendants met their prima facie burden establishing that plaintiff’s alleged cervical and lumbar injuries did not constitute serious injuries and, in any event, were not causally related to the accident.  The court determined, however, that plaintiff submitted sufficient evidence to raise an issue of fact under the permanent consequential and/or significant limitation of use categories, as well as sufficiently rebutting defendants’ assertions that the injuries were not causally related to the accident.  On appeal, the trial court was reversed and defendants’ motion denied.

01/31/12         Paul-Austin v McPherson
Appellate Division, Second Department
Plaintiff Fails to Raise a Triable Issue of Fact as Evidence Not in Admissible Form
The trial court denied defendants’ motion.  On appeal, the court reversed and granted defendants’ motion finding that defendants established that plaintiff’s alleged injuries to the cervical spine and right shoulder did not constitute serious injuries and that, in addition, plaintiff’s claimed injuries to her lumbar spine were neither serious nor causally related to the accident.  Defendants also submitted evidence to defeat plaintiff’s claim under the 90/180-day category.  Plaintiff’s reliance on the opinion of her chiropractor did not suffice to raise an issue of fact because it was not in affidavit form. 

01/31/12         Katechis v Batista
Appellate Division, Second Department
Defendant’s Reliance on Plaintiffs’ Deposition Testimony Defeats His Motion
Plaintiffs made claims under the 90/180-day category.  Defendant relied on plaintiff’s deposition testimony arguing that the testimony established that plaintiffs were not prevented from performing substantially all of the usual and customary acts of their daily activities for more than 90 days.  On appeal, the court affirmed the trial court which had found that plaintiffs’ deposition testimony actually revealed the existence of triable issue of fact with respect to the alleged injuries. 

01/31/12         Echevarria v G&G Classic, Inc.
Appellate Division, Second Department
Defendants Established Lack of Causal Relationship but Plaintiff Successfully Rebutted Their Evidence
The trial court denied defendants’ motion finding that they did not meet their prima facie burden.  On appeal, the court determined that while defendants did not submit competent medical evidence to show that plaintiff’s alleged injuries to her lumbosacral spine did not constitute a serious injury, defendants did sufficiently establish that the alleged injuries were not caused by the accident.  However, the court affirmed the lower court’s decision because plaintiff submitted evidence to rebut defendants’ showing of lack of causal relationship and, in addition, provided a reasonable explanation for her cessation of treatment.

 

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

ARBITRATION
02/14/12         RS Medical v. American Transit Ins. Co.
Arbitrator Veronica K. O’Connor, Erie County
Reimbursement Denied Upon Policy Exhaustion
The Applicant sought reimbursement for a TENS unit and LSO device provided to the assignor as a result of a September 22, 2004, motor vehicle accident.  The insurer denied the durable medical equipment based upon the independent medical examination conducted by Dr. Pierre Helou as well as policy exhaustion.  The insurer submitted the PIP payment ledger demonstrating the $50,000.00 policy limits were exhausted.  The Applicant was afforded the opportunity to review and respond to the PIP payment ledger but did not do so.  Therefore, the denial was upheld based upon policy exhaustion.

02/13/12         Applicant v. 21st Century Ins. Co.
Arbitrator Thomas J. McCorry, Erie County
Doctor’s Note Reducing Work Week Without Medical Explanation Insufficient to Prove Lost Wage Claim
The Applicant sought lost wages in form of the difference between her regular work week and her now reduced work week due to injuries from a January 2, 2009, motor vehicle accident.  The assigned arbitrator indicated that aside from her not always credible testimony was that it was unclear when the Applicant actually submitted this claim to the insurer.  At the hearing, the Applicant testified that after the accident she left her employment to “explore better options.”  She was working for a new company working 37 ½ hours per week.  She then left that company and began work for another which required her to work split shifts.  The Applicant submitted a physician’s prescription that contained a notation with no explanation that she should not work more than 30 hours or at one point 32 hours a week.  The physician provided no medical report with a medical explanation for the limitation on work hours.

The assigned arbitrator determined that the Applicant had not proven her claim that she was disabled from working her regular work week and denied the claim.

02/09/12         Applicant v. GEICO Ins. Co.
Arbitrator Thomas J. McCorry, Erie County
Lost Wage Claim Presented at Some Point and Blanket Denial Insufficient to Deny Lost Wage Claim
The Applicant sought lost wages from December 26, 2011 through January 24, 2011 as a result of an October 9, 2009, motor vehicle accident.  The Applicant testified that he was disabled from work during that timeframe from left eye surgery.  His treating physician opined that the Applicant had an underlying left eye problem which was exacerbated by the accident resulting in the need for surgery.  The Applicant testified that at the time of the accident he was not working but had been cleared to return to work.

While not clear, it appears perhaps the insurer argued that the Applicant never presented a lost wage claim prior to the arbitration filing.  The insurer issued a blanket denial based upon the peer review of Dr. Fastenberg.  The denial did not specifically mention lost wages but did indicate that Dr. Fastenberg opined the eye surgery was not causally related to the accident.  Further, the no-fault application the Applicant filled out was submitted and indicated that Applicant did not lose any time from work.  The insurer also admitted that it paid lost wages to the Applicant from November 1, 2009 through March 30, 2010.

Based upon the admission of a prior lost wage payment the assigned arbitrator indicated that this was evidence that at some point lost wages were requested but he could not find a denial. The claim for wages was granted because the arbitrator could not find a timely denial.  He determined that the blanket denial provided no indication of  timely denial and it was not specific enough to deny a lost wage claim.

02/09/12         Elite Medical Supply of NY, LLC v. GEICO Ins. Co.
Arbitrator Thomas J. McCorry, Erie County
Peer Review Report Unpersuasive When It Fails to Address Success of Equipment with in-Office Use
The insurer denied an LSO brace the Applicant prescribed allegedly as a result of a January 14, 2011, motor vehicle accident based upon the peer review report of Dr. Robert Sohn.  The Applicant prescribed the LSO brace for adjunctive therapy to continue the office chiropractic treatment.  It is noted that the Applicant did have the assignor undergo an in-office trial with the brace to ascertain if it reduced low back symptoms.

The assigned arbitrator did not find Dr. Sohn’s peer review report persuasive.  The assigned arbitrator noted that Dr. Sohn documented the assignor’s progress with chiropractic treatment and relied upon a medical journal to support his conclusion of lack of medical necessity.  However, the peer review report did not address the treating chiropractor’s record of in-office trial with the brace which alleviated low back pain.

02/07/12         Applicant v. Allstate Ins. Co.
Arbitrator Mary Anne Theiss, Onondaga County
Applicant Has Continuing Obligation to Submit Bills to Insurer
The Applicant sought reimbursement of chiropractic care rendered as a result of a February 28, 2009, accident after the bills in question were never submitted the insurer.  It appears perhaps the insurer at some point issued a blanket denial for chiropractic benefits which is not discussed in the decision.  The Applicant admitted that he treated with a chiropractor on a monthly basis pre accident and that he did not submit his bills for treatment post-accident to the insurer.

The assigned arbitrator determined that the Applicant has an ongoing obligation to submit medical bills to the insurer, which he failed to do here.  The failure to submit the bills prejudices the carrier’s opportunity to review the bills.  Accordingly, the Applicant’s claim was denied.

02/07/12         Applicant v. Farmers Ins. Co.
Arbitrator Veronica K. O’Connor, Albany County
Failure to Describe Why Injury Not Related to Accident Fatal to Lost Wage Denial
The Applicant sought reimbursement for lost wages from April 1, 2011 through October 1, 2011, arising out of a July 25, 2009, accident.  The insurer denied the wages upon the independent medical examinations of Dr. Edward Mills and Dr. Sheldon Staunton.

Dr. Mills opined that the Applicant had resolved cervical, thoracic, and lumbar sprain/strain and had no disability.

Dr. Staunton opined that Applicant’s alleged symptoms of dizziness and headaches came about some time after the accident and were currently worse than a year ago.  This was unexplainable since there was no additional trauma that could cause the symptoms to become worse.  Dr. Staunton acknowledged abnormal MRI and CT scans but there was nothing of any acute injury.  Rather, the abnormalities stemmed from a more significant injury in the United States Air Force.  Also, the Applicant had neuropathy but that was not attributed to the accident.  Rather, it was attributed to an unknown cause.  He was also diagnosed with a significant brain injury related to his Air Force injury.  Overall, Dr. Staunton opined that Applicant’s findings were nonphysiologic and “strongly suggest that the patient is trying, somewhat unsuccessfully, to make himself look much more sick than what he really is.”  Dr. Staunton concluded that the Applicant could work but because of his other unrelated conditions he had restrictions.

The Applicant and his wife testified at the hearing.  The Applicant was involved in a significant motorcycle accident in 1980 resulting in a head injury.  The VA disabled him 10% from that accident.  After the July 2009 accident the VA disabled him 40%.  The Applicant also submitted a report from his treating physician at the VA opining that his dizziness and poor balance was a result of head injuries, the most recent from the July 2009, accident.

The assigned arbitrator did not uphold the denials as Dr. Mills’ examination never addressed the dizziness complaints but referred them to a different specialty.  Also, Dr. Staunton’s report did not support his conclusion that neuropathy was not related to the accident.

02/07/12         Applicant v. Travelers Prop. Cas. Ins. Co.
Arbitrator Veronica K. O’Connor, Erie County
MV-104 Can Provide Notice of Claim But Only if It Documents Injuries and Not Just Property Damage
The Applicant sought reimbursement for medical expenses that the insurer denied based upon violation of the rule to provide notice of claim 30 days from the date of the accident.  The Applicant contended she contacted the insurer the date of the accident.  She provided her first written notice within approximately five days by providing the MV-104 form.  The insurer sent the Applicant an acknowledgement of her property damage claim.

The MV-104 form fails to document that Applicant sustained any injury.  Therefore, that form did not provide sufficient notice of a no-fault claim.  The assigned arbitrator upheld the insurer’s denial.

02/06/12         Applicant v. Allstate Ins. Co.
Arbitrator Thomas J. McCorry, Erie County
Lost Wage Claim Cannot Be Speculative
The Applicant sought over $70,000.00 in lost wages from a September 15, 2007, accident that the insurer denied based upon Applicant’s lack of employment at the time of the accident as well as a speculative, unsubstantiated lost wage claim.

The assigned arbitrator noted that the this case proceeded through six hearings with the Applicant being afforded the opportunity to provide medical and lost wage documentation to support his claim.  He supplied a 2006 tax return that documented reported income at only $2,052.00.  The Applicant also submitted a medical record from his treating chiropractor.  The problem with that record is that it documents two different motor vehicle accidents and never distinguishes which accident caused his current pain.  He also submitted another slip from his chiropractor dated July 8, 2008, generally indicated the inability to work from the September 2007, accident.  Also, a workers’ compensation form was submitted indicating disability from this accident until December 1, 2007.  Finally, the Applicant presented evidence that he was offered a job by a recruiter but only after the accident occurred.

The assigned arbitrator cited to the no-fault statute, regulation and interpretative arbitration award for the proposition that a no-fault lost wage award cannot be speculative.  The assigned arbitrator determined that it was speculative as to which accident caused the Applicant’s injuries as well as the nature and severity of those injuries.  Further, the Applicant was not working at the time of the accident due to an undocumented disability.  For these reasons, the Applicant did not establish a prima facie case entitlement to lost wages.

LITIGATION

02/02/12         Diagnostic Medicine, PC a/a/o Angelo Kitkas v. Clarendon Nat’l Ins.Co.
Appellate Term, Second Department
Plaintiff’s Bare Attorney Affirmation Insufficient to Oppose Summary Judgment on Lack of Medical Necessity
The insurer’s summary judgment motion should have been granted.  The insurer established its prima facie case entitlement to summary judgment by establishing timely and proper mailing of the denial of claim and submitted competent medical evidence that the diagnostic testing was not medically necessary.  It is noted that the insurer submitted a sworn peer review report.  The plaintiff only submitted an attorney affirmation in opposition to the motion.  This was not accompanied by any medical evidence to raise a triable issue of fact.

01/24/12         Neomy Med., PC a/a/o Albert Bookal v. GEICO Ins. Co.
Appellate Term, Second Department
Doctor’s Affidavit Creates Issue of Fact on Medical Necessity
The insurer’s cross-motion for summary judgment was properly denied as the plaintiff submitted an doctor’s affidavit creating an issue of fact regarding medical necessity.

01/24/12         Radiology Today, PC a/a/o Ludmillia Jean-Francois v. Mercury Ins. Co.
Appellate Term, Second Department
Doctor’s Affirmation Inadmissible When Doctor Is Principal of Party to Action
The plaintiff failed to submit sufficient admissible evidence to oppose the insurer’s summary judgment motion on lack of medical necessity.  The insurer objected to plaintiff’s doctor’s affirmation on the ground that it failed to comply with CPLR 2106.  The doctor’s affirmation was improper because the doctor was a principal of the professional corporation, which is a party to the action.  Rather, the doctor was required to submit an affidavit.  The court further held that even if the affirmation were considered it would be insufficient as the affirmation failed to meaningfully refer to the peer reviewer’s conclusions.

01/24/12         Ortho-Med Surgical Supply, Inc. a/a/o Kenny Ingram v. Progressive Cas. Ins. Co.
Appellate Term, Second Department
Insurer Not Required to Attach Records Peer Reviewer Reviewed on Summary Judgment
The insurer established it timely denied a $498.00 claim on the ground of lack of medical necessity.  It was not required to annex to its motion papers copies of the medical records reviewed by defendant’s peer reviewer.  While the plaintiff claimed it needed those medical records to oppose the insurer’s motion, the plaintiff did not demonstrate that discovery was needed to show an issue of fact precluding summary judgment.  Further, the plaintiff’s counsel’s affirmation was insufficient to oppose the motion without an affidavit from a health care provider rebutting the peer review report’s conclusions.

01/24/12         New Life Med., PC a/a/o Ella Eyshinskaya v. GEICO Ins. Co.
Appellate Term, Second Department
Failure to Refer to Peer Reviewer’s Conclusion Fatal in Surviving Summary Judgment
The insurer’s cross-motion for summary judgment was properly granted as the plaintiff’s doctor’s affirmation did not meaningfully refer to the peer reviewer’s conclusions or rebut same.

01/24/12         Eagle Surg. Supply, Inc. a/a/o Keisha Jones v. Progressive Cas. Ins. Co.
Appellate Term, Second Department
Chiropractic Peer Review Report Inadmissible Under CPLR 2309(b)
On summary judgment, the insurer’s submission of two peer review reports by a chiropractor were inadmissible since the reports were affirmed and did not comply with CPLR 2309(b).  While one report was notarized there was no attestation that chiropractor had been duly sworn or appeared before the notary.  Further, even if the affirmation were admissible the plaintiff’s doctor’s affidavit was sufficient to raise a triable issue of fact precluding summary judgment.

01/24/12         Q-B Jewish Med. Rehab., PC a/a/o Roman Abramov v. Allstate Ins. Co.
Appellate Term, Second Department
Insurer Entitled to Documents Regarding No-Fault Benefit Eligibility After Plaintiff Improperly Filed Notice of Trial
The plaintiff’s notice of trial and certificate of readiness stating discovery was complete were improper.  The defendant set forth detailed and specific reasons why it believed plaintiff is a professional service corporation which failed to comply with licensing laws thus rendering it ineligible to recover no-fault benefits.  The plaintiff was compelled to provide financial and tax records to the insurer to ascertain plaintiff’s eligibility to recover no-fault benefits.

01/24/12         BY, MD, PC a/a/o Mohammad Cheema v. Global Liberty Ins. Co. of NY
Appellate Term, Second Department
Failure to Refer to Peer Reviewer’s Conclusion Fatal in Surviving Summary Judgment
The plaintiff’s summary judgment motion should not have been denied without prejudice holding the action in abeyance until the workers’ compensation board determined whether plaintiff’s assignor was injured during the course of employment rendering workers’ compensation primary.  Instead, the court remitting the motion to the district court for a new determination after final resolution of a prompt application to the workers’ compensation board.  If the plaintiff failed to file proof with the district court of an application within 90 days of the date of the order entered then the district court must deny plaintiff’s motion and grant the insurer’s cross-motion for summary judgment.

01/24/12         Elmont Open MRI & Diag. Radiology a/a/o Joanne Cunningham v. Tri-State Ins. Co.
Appellate Term, Second Department
Insurer Not Required to Annex Medical Records Reviewed by Expert on Summary Judgment
The insurer was entitled to summary judgment on lack of medical necessity as it was not required to annex to its motion papers the medical records the doctor reviewed in the peer review in order to establish its prima facie case.

 

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

02/14/12         The US Life Ins. Co. in the City of NY v Blumenfeld
Appellate Division, First Department
Acceptance of Premiums AFTER Misrepresentations Are Uncovered Results in Waiver of Opportunity to Void the Policy
Plaintiff, US Life, rescinded a life insurance policy issued to defendant after it was determined that Ms. Blumenfeld had misrepresented her net worth and real estate holdings.  The misrepresentations were discovered in March of 2007, and US Life notified the insured of the rescission in April of 2007.  Two days prior to the expiration of the two year incontestability clause, US Life commenced the instant action. 

In response, defendant argued that US Life’s continued acceptance of premiums in April, May and September of 2007 resulted in a ratification of the policy.  In any event, defendant argued that US Life should be estopped from rescinding a policy after it accepted premiums on a policy it alleged was improperly issued.

In granting the insured’s motion for summary judgment, the Appellate Division noted that US Life’s failure to promptly rescind the policy after learning of the misrepresentations resulted the policies ratification.  Further, the Court noted that acceptance of premiums after a notice of a rescission resulted in the waiver of the carrier’s right to void the policy.  In so holding, the Court specifically rejected US Life’s contention that it accepted the premiums so that the insured would not be prejudiced if the policy was ultimately upheld. 

Potpourri

02/16/12         Martino v Stolzman
Court of Appeals
Homeowners Have No Duty to Prevent Intoxicated Persons from Leaving
Plaintiff commenced this action after she was involved in a New Year’s Eve collision with an automobile driven by defendant Stolzman.  At the time of the accident, defendant Stolzman was in the process of backing his vehicle out of a driveway owned by Michael Oliver.  Immediately prior to the incident, Mr. Stolzman was a guest at a New Year’s Eve party hosted by Mr. Oliver.  Mr. Stolzman’s blood alcohol level was recorded to be nearly twice the legal limit at the time of the collision. 

Ms. Martino sued the homeowners under Dram Shop principles, as well as common law negligence.  The Dram Shop claims were dismissed at the trial court, but a 3-2 split Appellate Division ruled that a question of fact existed as to the homeowners’ duty to warn Mr. Stolzman, whom they knew or should have known to be intoxicated, about the possible dangerous condition as he was exiting the home’s driveway. 

In reversing, and dismissing plaintiff’s remaining negligence claim against the homeowners, the Court of Appeals ruled that homeowners had no duty to control guests after Mr. Stolzman entered his vehicle and began to exit the premises.  The Court went on to hold that “requiring social hosts to prevent intoxicated persons from leaving their property would inappropriately expand the concept of duty.” 

02/10/12         Osgood v. KDM Development Corp.
Appellate Division, Fourth Department 
Bill of Particulars Is NOT a Pleading and, as such, Not Required in Support of a Summary Judgment Motion
Defendant in a Labor Law action commenced a third-party action seeking an award of common law indemnification/contribution against owner/broker Royal Manufactured Home Sales, Inc. (“Royal”).  Where, as here, there was no indication that the Royal directed, controlled or supervised plaintiff’s work, and no indication that Royal provided any equipment to the injured worker, no claim for common law indemnity existed.  Accordingly, Royal’s motion for summary judgment dismissing KDM’s third-party action was granted.

KDM had opposed Royal’s motion, in part, on the grounds that Royal’s failure to include a copy of the plaintiff’s Bill of Particulars was a fatal error.  In rejecting KDM’s position, the Court noted that a movant under CPLR 3212 need only include copies of pleadings.  A Bill of Particulars is an amplification of a pleading, but is not, in and of itself, a pleading.  Accordingly, the omission of the document was not fatal to Royal’s motion. 

02/07/12         Ambac Assurance Corporation  v DLJ Mortgage Capital, Inc.
Appellate Division, First Department
Pre-Litigation Investigative Materials Gathered by Retained Experts Entitled to Discovery Protections
Plaintiff Ambac issued a policy of insurance guaranteeing payments of certain classes of securities.  When those insured loans began to default at a usual rate, Ambac retained counsel to investigate.  Counsel, in turn, retained an accounting firm who conducted a forensic review of the loans.  At the conclusion of the analysis, Ambac commenced this instant action seeking to terminate its insurance obligations under the policy issued to DLJ. 

DLJ, upon answering, moved to compel the findings of the accounting firm.  While the raw date reviewed by the firm was provided, Ambac refused to provide the accounting firm’s conclusions/recommendations which were presented to Ambach’s retained counsel.  Ambac maintained that the documents were privileged by attorney-work product and/or material prepared for trial. 

DLJ countered that the documents were the sole issue in this case, and as such were not entitled to any privileged protection.  In affirming the privilege, the First Department noted that the documents supported an independent cause of action asserted by Ambac.  While the documents were useful, the Court noted that Ambac could have made the same allegations without the disputed documents.  As such, where the reports were not an element of the claim, they were entitled to discovery protections.

 

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

DFS Seeks Candidates to Serve as Public Members on the NYAIP Governing Committee and on NYPIUA Board

The New York Automobile Insurance Plain (“NYAIP”) provides auto liability and physical damage coverage for those insureds unable to obtain such in the voluntary market.  The risks are assigned to auto insurers who retain the premium and pay the losses.  The assignments are equitably apportioned amongst the insurers who must write the coverage for a minimum of three years.  The NYAIP is administered by a Governing Committee.

DFS is seeking individuals interested in serving as public members of the governing committee which consists of 22 members, 10 of which are public members.  Two must be licensed insurance agents or brokers appointed by Superintendent Lawsky and the remaining are nominated by the Superintendent for election by subscribing insurers.  The governing committee meets in Manhattan about 6 times a year.  DFS is requesting an email or letter of interest and resume no later than February 24th.

New York Property Insurance Underwriting Association (“NYPIUA”) is a joint underwriting association consisting of insurers authorized and engaged in writing fire and extended coverage in New York, including homeowners and commercial multiple peril package policies.  NYPIUA objective is to provide property insurance for those who can’t afford it in the voluntary market.

Again, DFS is seeking individuals interested in serving as public members on the Board.  The Board is responsible for the administration of NYPIUA and is comprised of 13 directors, three of who are public directors appointed by the Superintendent.  The Superintendent also needs to appoint three alternate members.  The members must be licensed agents or brokers.

Legislative Introductions:

A1921

This bill, that was passed by the Assembly last year but died in the Senate, is once again before the Assembly.  This bill would create a new insurance law section (2616) which would prohibit insurers from reporting inquiries about coverage under a homeowners’, personal lines fire, or private auto policy to any insurance support organization or company that maintains an insurance claim history data base. 

This bill would also prohibit insurers from refusing to issue or renew a policy, charging a higher premium or assigning to a more expensive affiliate or rating tier on the basis of any inquiry about any of the above enumerated policies.

A3283-A
Another bill that passed the Assembly last year and died in the Senate is once again before the Assembly.  This bill seeks to require the Superintendent to create standards to create uniformity in the application of the hurricane windstorm deductible and what is a triggering event.

A02204

This bill seeks to add two new provisions to New York’s Unfair Claims Practice Laws.  The Assembly Insurance Committee referred this bill to Codes once again.  In 2011, the bill never made it out of the Codes Committee and to the Assembly Calendar. 

This bill would add as unfair claims practices

Requiring or requesting that any individual or entity deny or promote the denial of a certain number or percentage of claims during a given period; or
Requiring or requesting that any individual or entity cancel or promote cancellation of a certain number or percentage of policies during a given time.

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

01/28/12         Scandinavian Reinsurance Co. v. St. Paul Fire
Second Circuit Court of Appeals – New York
“Evident Partiality” Within Meaning of Federal Arbitration Act
The primary question presented on this appeal is whether the failure of two arbitrators to disclose their concurrent service as arbitrators in another, arguably similar, arbitration constitutes “evident partiality” within the meaning of the Federal Arbitration Act (the “FAA”), 9 U.S.C. §10(a)(2).

St. Paul appeals from a decision of the United States District Court for the Southern District of New York granting a petition by Scandinavian to vacate an arbitral award rendered in St. Paul’s favor and denying a cross-petition by St. Paul to confirm the same award.  St. Paul had initiated the arbitration to resolve a dispute concerning the interpretation of the parties’ reinsurance contract.

On August 21, 1999, Scandinavia and St. Paul – both reinsurance companies – entered into a specialized type of reinsurance contract known as a stop-loss retrocessional agreement.  Under the Agreement, St. Paul ceded to Scandinavian some of the reinsurance liabilities that St. Paul had assumed from other insurance companies under reinsurance business that had been, or would be, written by St. Paul between January 1, 1999 and December 31, 2001. In exchange for Scandinavian’s assumption of these liabilities, St. Paul became obligated to pay premiums to Scandinavian.  But the agreement contemplated that instead of paying the premiums to Scandinavian directly, St. Paul would provisionally retain those funds within an “experience account”, where the funds would accumulate interest. Any amounts that Scandinavian became obligated to pay St. Paul based on the assumed liabilities would first be paid out of that account.   Only if the experience account became fully depleted would Scandinavian have to pay St. Paul out of its own funds.

In January 2002, Scandinavia entered into “run-off” thereby ceasing to underwrite new business.  St. Paul also entered into run off later that same year. After St. Paul requested that Scandinavian indemnify it for much of its loss, two disputes emerged between the parties concerning the Agreement’s interpretation.  First, the parties could not agree on whether they had intended the Agreement to limit the volume of liability assumed by Scandinavian.  Scandinavian argued that the parties had intended the Agreement to be “finite”, and that the maximum possible loss to Scandinavian that the parties contemplated was about $21 million.  St. Paul contended that the Agreement contained no express limitation on the extent of risk that Scandinavian had assumed and that no such limitation should be read into the Agreement.  St. Paul ultimately sought to charge Scandinavian with losses of approximately $290 million. 

Second, the parties could not agree on whether the Agreement provided for a single experience account, or instead three separate experience accounts (one for each year covered by the Agreement).  Scandinavian argued the Agreement provided for one, while St. Paul argued that there were three separate accounts.

To resolve these disputes, in September 2007, St. Paul demanded arbitration.  As members of the arbitral panel Scandinavian appointed Jonathan Rosen, and St. Paul appointed Peter Gentile.  Paul Dassenko was selected to serve as umpire.

The AIDA Reinsurance and Insurance Arbitration Society [“ARIAS”] promulgated ethical guidelines for certified arbitrators, including Canon IV, which instructs arbitrators to “disclose” any interest or relationship likely to affect their judgment” and to resolve any doubt about whether to disclose in favor of disclosure”.

The arbitral panel issued their award [“Award”] on August 19, 2009.  A majority of the panel concluded that the Agreement was valid and should be enforced according to its terms, thereby exposing Scandinavian to an aggregate limit of approximately $290 million in liability.  With respect to several other matters, including the question of whether the Agreement had created one experience account or three, the panel ruled unanimously in favor of St. Paul.

While the proceedings in the St. Paul Arbitration were ongoing, another reinsurance arbitration – the Platinum Arbitration – began.  Two of the arbitrators from the St. Paul Arbitration, Gentile and Dassenko were selected to serve on the panel in the Platinum Arbitration.

Despite many disclosures made by Dassenko and Gentile during the St. Paul Arbitration, neither Dassenko nor Gentile ever disclosed to the parties the fact of their concurrent service in the Platinum Arbitration.  As described by the district court, the Platinum Arbitration resembled the St. Paul Arbitration in several ways:  (1) Gentile served as the party appointed arbitrator for the claimant in both proceedings and Dassenko presided as umpire over each panel; (2)  St. Paul’s business was related in several ways to Platinum’s; (3) A past employee of both Scandinavian and Platinum testified in both proceedings; and, (4) the two arbitrations “shared similar legal issues”.  The district court determined that by participating in both the St. Paul Arbitration, Dassenko and Gentile placed themselves in a position where they could receive ex parte information about the kind of reinsurance business at issue in the St. Paul Arbitration, be influenced by recent credibility determinations they made as a result of the former employees testimony in the Platinum Arbitration, and influence each other’s thinking on issues relevant to the St. Paul Arbitration.  Further stating that by failing to disclose their participation in the Platinum Arbitration, Dassenko and Gentile deprived Scandinavian of an opportunity to object to their service on both arbitration panels and/or adjust their arbitration strategy.

In deciding that vacatur was warranted on “evident partiality” grounds, the district court relied principally on the fact that two of the three members of the arbitral panel in the St. Paul Arbitration – Paul Dassenko and Peter Gentile – had failed to disclose that they were simultaneously serving as panel members in another arbitration proceeding - the Platinum Arbitration.  The district court noted that the Platinum Arbitration “overlapped in time, shared similar issued, involved related parties, and included a common witness”.  The district court determined that “these factors indicate that Dassenko and Gentile’s simultaneous service as arbitrators in both proceedings constituted a material conflict of interest.” The court then concluded that the arbitrators’ failure to disclose this conflict required vacatur of the arbitral award.  The Second Circuit Court of Appeals [“Court”] reversed for the following reasons.

The Court disagreed noting that the evident partiality standard is, at its core, directed to the question of bias. Looking to a standard for evident partiality adopted by the Fourth Circuit the court determined that a court should assess four factors:  (1) the extent and character of the personal interest, pecuniary or otherwise, of the arbitrator in the proceedings; (2) the directness of the relationship between the arbitrator and the party he is alleged to favor; (3) the connection of that relationship to the arbitrator; and (4) the proximity in time between the relationship and the arbitration proceeding. Analyzing these four factors the Court concluded that Scandinavian has not met its burden of establishing that Dassenko and Gentile’s service in the Platinum Arbitration was indicative of bias in the St. Paul Arbitration so as to constitute a nontrivial conflict of interest.

First, despite the overlap in arbitration, the court noted that there was no indication that either of the arbitrators was predisposed to rule any particular way in the Scandinavian Arbitration as a result of the Platinum Arbitration. The Court did not consider any of the identified similarities between the St. Paul Arbitration and the Platinum Arbitration to suggest bias.  The fact that one arbitration resembles another in some respects does not suggest to us that an arbitrator presiding in both is somehow therefore likely to be biased in favor of or against any party.  For a relationship to be material, and therefore require disclosure, it must be such that a reasonable person would have to conclude that an arbitrator who failed to disclose it was partial to one side.

Second, the Court rejected Scandinavian’s assertion that the nondisclosure can only be explained by bias in favor of St. Paul.  The record did not indicate why the information was not disclosed, but the Court did not find it implausible that Dassenko and Gentile labored under the false impression that they had made a disclosure which in fact they failed to make, particularly in light of the fact that they did disclose the existence of the Scandinavian Arbitration in the Platinum Arbitration.

Finally, the Court, citing to case law in other Circuits, stated that arbitrators are not disqualified merely because they acquired relevant knowledge in a previous arbitration.  Further noting that evident partiality may not be based simply on speculation.

Accordingly, the Court reversed the judgment of the district court, remanding the case with instruction to the district court to deny Scandinavian’s petition to vacate the Award, to grant St. Paul’s cross-petition to confirm the Award, and to enter judgment accordingly.

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

02/07/12         Transcontinental Ins. v. Twin City Fire Ins.
Supreme Court, New York County
Court Rejects Argument that Insurer’s Policy Provides Unlimited Employers’ Liability Coverage
This decision addresses the limits of a workers’ compensation policy.  Twin City issued a workers’ comp. policy to a Massachusetts company.  While performing work in New York, an employee of that company was injured and suffered a “grave injury.” 

Plaintiffs’ insureds brought common law claims against Twin City’s insured.  Eventually, the case was settled with plaintiffs’ paying over three million and Twin City paying its limit of $100,000.  Plaintiffs then brought this action arguing that the Twin City policy should provide unlimited coverage consistent with New York State mandates. 

The information page on the policy stated the following regarding the available coverages:

3.         A.        Workers Compensation Insurance: Part One of the
policy applies to the Workers Compensation Law of the states listed here: MA
B.        Employment Liability Insurance: Part Two of the policy applies to work In each state listed In Item 3A. The limits
of our liability under Part Two are:
Bodily Injury by Accident $1 00,000 each accident
Bodily Injury by Disease $500,000 policy limit
Bodily Injury by Disease $100,000 each employee
C.        Other State Insurance-: Part Three of the policy applies to the states, if any, listed here:

ALL STATES EXCEPT ND, OH, WA, WV, WY, AND
STATES DESIGNATED IN ITEM 3A OF THE INFORMATION PAGE.

Plaintiffs took the position that New York should be a 3A state, which would mean that the express terms of the policy should be disregarded in favor of the state’s workers compensation law. 

The court disagreed and, in applying the Courts of Appeals decision in Preserver Ins. Co. v. Ryba, it determined that New York was a 3C state and nothing within the policy suggested that the cap disappeared when an accident occurred in a 3C state. Further, according to the court, even if New York should be treated as a 3A state, the expressed financial limits of the policy still applied. 

The court also rejected any argument that Twin City was on notice that work was being done in New York.  Nevertheless, according to the court, notice alone does would not automatically trigger unlimited liability coverage.  Rather, once an insurer is notified that different coverage is required, with increased potential liability, they would then have the right to negotiate premiums for any New York endorsement that would be required.  Lastly, the court rejected Twin City’s request for sanctions against plaintiffs for having brought this motion.  As stated by the court, the fact that a party does not ultimately prevail in an action does not necessarily mean that the action was frivolous.   

01/26/12         Merrill Lynch/WFC/L, Inc. v. Continental Cas. Co.
Supreme Court, New York County       
Court Considers Whether a Breach of Contract Occurred Where the Insured Complied with the Insurance Procurement Requirement by Obtaining a Policy with a $500,000 Deductible
A woman allegedly slipped and fell while in the bathroom of a building leased to Merrill Lynch.  She brought an action against Merrill Lynch and the owner alleging that they failed to maintain the premises in a safe condition.  The complaint further alleged that ABM Co. was responsible for creating the defective condition or permitting it to exist. 

Pursuant to a Janitorial Maintenance Service Agreement, Merrill engaged ABM Co. to perform janitorial services at the premises.  The agreement contained an insurance procurement provision. 

Merrill Lynch and the owner brought this action seeking a defense and indemnification in the underlying action under the CGL and umbrella policies issued to ABM Co.  It then moved for partial summary judgment against ABM Co. on its allegation that ABM Co. failed to procure coverage. 

The janitorial agreement specifically provided that ABM Co. would procure comprehensive general liability insurance and umbrella liability for minimum Combined Bodily Injury and Property Damage Coverage limits of $3,000,000 - $5,000,000 per occurrence. 

The issue here is that ABM Co. obtained a policy with a $500,000 per occurrence deductible.  Merrill asserted that this was a breach of ABM Co.’s agreement to procure insurance.  Notably, Merrill had its own policy with Travelers; however, that policy likewise had a high deductible.  In opposition, ABM Co. asserted that nothing in the contract barred it from obtaining a policy with a deductible and that it provided Merrill the opportunity to examine the insurance policies it purchased.

Ultimately, the court determined that Merrill’s motion was premature.  In its complaint, it alleged a failure to procure “in the alternative” if it was determined that ABM Co. did not add Merrill as an additional insured on the CGL and umbrella policy and that those policies did not provide primary-layer, first dollar insurance coverage.  As the responsibilities of the primary and excess carriers had not been determined yet, the motion was premature.  With that said, the court did note that contrary to ABM’s assertion, where the contract makes no reference to deductibles, then the party obligated to procure insurance is liable for the deductible. 

01/24/12         Flushing Savs. Bank, FSB v. Lending Ins. Servs., Inc.
Supreme Court, Nassau County
Collateral Estoppel Prevents Court from Granting Mortgage Company Summary Judgment in Fire Loss Case
Flushing Savings Bank (“FSB”) lent money to W&X Evergreen (“W&X”) to purchase a property and obtained mortgage on that property.  As required under the mortgage, W&X obtained an all-risk insurance policy from defendant which covered damage or destruction of the property caused by fire. 

After the policy was issued, there was a fire at the property resulting in a total loss.  Thereafter, W&X filed a claim with defendant and sought payment for the loss under the policy.  Defendant disclaimed asserting that, based on its investigation, the property was not protected by an operational fire sprinkler system.  Further, W&X made a material misrepresentation on its insurance application by representing that it did have one.  Accordingly, defendant was retroactively rescinding the policy.

Both W&X and FSB eventually brought separate actions seeking payment for the loss, which created an issue in this case when FSB moved for summary judgment.  Specifically, FSB argued that it was entitled to payment of the outstanding mortgage. It submitted evidence that FSB obtained appraisals and inspections of the property prior to the fire, all which reflected the presence of a sprinkler. 

Ultimately, the court denied FSB’s motion for summary judgment based on concerns regarding issues of collateral estoppel.  Specifically, the court was concerned about the possibility that granting summary judgment in this action, to which W&X was not a party, could create a decision that was inconsistent with the outcome of the action brought by W&X.  In other words, in the related action, it was possible that the court could find that the insurer met is burden proving a material misrepresentation, while in this case, the court went the opposite way. 

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

NO COVERAGE FOR BAD BURRITOS: HOLD THE HEARTBURN AND INDEMNITY

            A recent case decided that an insurance company properly denied coverage for losses claimed by a food manufacturer as a result of contaminated burritos.  The federal court determined that coverage did not apply because the strain of listeria found in the burritos was not harmful to humans and hence not a covered loss.  Little Lady Foods, Inc. v. Houston Casualty Co., 2011 WL 4473517 (N.D.Illinois 9/22/11). 

            The product manufacturer, Little Lady Foods, was insured by Houston Casualty under a policy that covered losses resulting from “accidental product contamination”.  One item of potentially covered loss was the cost of testing to determine if food products were contaminated.  Little Lady manufactured burritos for convenience stores using a new process that left the burrito partially uncooked.  The company was required by federal law to test the burritos for bacteria prior to shipment.  Six samples were found to be contaminated by listeria, but only one form of listeria causes illness in humans. 

            During the testing, the company placed on hold more than 57,000 cases of burritos.  Some were later sold to consumers and others were destroyed because of concerns relating to the testing and handling of the product.  Ultimately, the burritos were determined to be safe for human consumption. 

            Houston Casualty denied the insurance claim on grounds that there was no “accidental product contamination”.  This term was defined as contamination likely to cause physical symptoms of bodily injury, sickness, disease or death to people. 

Little Lady sued Houston Casualty for breach of contract and bad faith.  The insurance company ultimately moved for summary judgment on its disclaimer.  The federal court agreed with Houston Casualty that the manufacturer’s losses were not covered by the “accidental product contamination” provision because any harm to consumers was not probable or possible in this situation, and that Little Lady’s initial belief that the burritos “could be” dangerous was both in error and irrelevant. The policy coverage defined contamination as likely to cause physical symptoms and sickness to people, but ultimately the testing showed that the listeria in these burritos was not the harmful strain. 

            Looking at the factual pattern and the policy language, the federal court believed that taken to its logical extreme, Little Lady’s interpretation would allow the company to file a claim every time its products tested positive for any type of bacteria without regard to the physical symptom, disease, sickness part of the clause.  The court refused to “rewrite the policy” to require a mere likelihood that a product was contaminated rather than the likelihood that the contaminant was dangerous or harmful. 

            The federal court also rejected Little Lady’s contention that the policy language conflicted with public policy because the federal government requires that listeria-tainted food products be placed on hold until further testing is performed.  The federal court rejected this argument again noting that mere contamination was not sufficient, but rather contamination must be such that it is likely to cause actual physical symptoms and sickness. 

            The good news in this case is that product testing did timely discover the contamination, and the contamination proved to be benign and not dangerous.  The bad news for Little Lady was that the policy did not provide coverage for the cost of placing the burritos on hold, testing them, and other product storage, handling, and related expenses. 

            Another lesson of Little Lady is to read policy provisions and exclusions as a whole taking into account all of the language since the burritos here were contaminated but failed the further test of being likely to cause symptoms in people.  So next time you’re examining a policy coverage provision or an exclusion, remember this “burrito theory” in your analysis.  

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

02/10/12         Breimer v. Life Ins. Co. of North America
Tenth Circuit Court of Appeals
Tenth Circuit Makes It Tougher for Beneficiaries to Challenge Procedurally Improper Denials of Benefits Under an ERISA-governed Insurance Plan
Brimer sued the Life Insurance Company of North America for denying her claim for benefits on an accidental death policy. Specifically, Brimer alleged that the denial of her claim for benefits at the administrative appeals stage on grounds not asserted in the initial claim denial by the insurer was a violation of ERISA’s procedural requirements. The district court determined that the insurer’s denial of benefits was proper and Brimer then appealed. On appeal, the Tenth Circuit held that “[denying] a claim at the administrative appeal stage based on grounds not asserted in the initial claim denial is. . . a violation of ERISA’s procedural requirements.” However, the court stated that a showing of prejudice to the beneficiary due to the alleged ERISA violation must be present, even if the insurer denied a claim on grounds not asserted in the initial claim. Essentially, the Tenth Circuit concluded that an ERISA plan participant must show both a violation of ERISA and a prejudice to the participant because of the violation for a remedy to be granted, while also acknowledging that an insurer can’t deny a claim at the appeal stage on grounds not asserted in the initial claim denial.
Submitted by: Barron Brown and Bill Corum; American Fidelity Corporation Law Department 

02/03/12         National Casualty Co. v. Western World Insurance Co.
Fifth Circuit Court of Appeals
Fifth Circuit Holds under Texas Law that Automobile and Professional Liability Exclusions Fail to Bar Duty to Defend Suit Alleging a Patient Died from Injuries Sustained as a Result of EMT’s Failure to Secure Patient to an Ambulance Gurney
The underlying suit alleged that emergency medical technicians improperly secured a patient into an ambulance. That patient sustained injuries as a result and died several days later. Two insurers disputed their respective duties to defend and how defense costs should be shared. The Fifth Circuit held that under Texas law’s eight corners analysis, the use of automobile exclusion does not clearly bar coverage because the allegations of the underlying complaint do not assert when the failure to secure the patient happened. In addition, the professional services exclusion does not bar the duty to defend because the underlying lawsuit alleged both professional services and non-professional services (for instance, decisions relating to the dispatching of EMTs to an accident scene). Finally, the Fifth Circuit held that one insurer’s other insurance clause is not triggered and that the cost of defense must be shared equally between the two insurers.
Submitted by: Carlos Del Carpio of Meckler, Bulger, Tilson, Marick & Pearson LLP - Posted: 02/06/2012

 

Reported Decisions

Echevarria v. G & G Classic, Inc.

Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y. (Stacy R. Seldin of counsel), for appellants.
Sanders, Sanders, Block, Woycik, Viener & Grossman, P.C., Mineola, N.Y. (Melissa C. Ingrassia of counsel), for respondent.

DECISION & ORDER

In an action to recover damages for personal injuries, the defendants appeal from an order of the Supreme Court, Queens County (Pineda-Kirwan, J.), dated June 2, 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) as a result of the subject accident.

ORDERED that the order is affirmed, with costs.

While we affirm the order appealed from, we do so on a ground different from that relied upon by the Supreme Court. The Supreme Court erred in concluding that the defendants failed to meet their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). The plaintiff alleged, inter alia, that as a result of the subject accident, the lumbosacral region of her spine sustained certain injuries. Although the Supreme Court correctly determined that the defendants failed to submit competent medical evidence establishing, prima facie, that those alleged injuries did not constitute a serious injury within the meaning of Insurance Law § 5102(d) (see Scott v Gresio, 90 AD3d 736, 736), the defendants did submit competent medical evidence establishing, prima facie, that those alleged injuries were not caused by the accident (see Jilani v Palmer, 83 AD3d 786, 787).

However, in opposition, the plaintiff submitted competent medical evidence raising a triable issue of fact as to whether the alleged injuries to the lumbosacral region of her spine were caused by the subject accident (see Perl v Meher, 18 NY3d 208 at *6-*7; Jaramillo v Lobo, 32 AD3d 417, 418). In addition, the plaintiff provided a reasonable explanation for a cessation of her medical treatment (see Pommells v Perez, 4 NY3d 566, 574; Abdelaziz v Fazel, 78 AD3d 1086). Accordingly, the Supreme Court properly denied the defendants' motion for summary judgment dismissing the complaint.

Katechis v. Batista

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

DECISION & ORDER

In an action to recover damages for personal injuries, etc., the defendant appeals from an order of the Supreme Court, Queens County (Strauss, J.), dated April 7, 2011, which denied his motion for summary judgment dismissing the complaint on the ground that neither of the plaintiffs sustained a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is affirmed, with costs.

The defendant failed to meet his prima facie burden of establishing, prima facie, that neither of the plaintiffs sustained a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955). The plaintiffs alleged, inter alia, that as a result of the subject accident, they each sustained a serious injury under the 90/180-day category of Insurance Law § 5102(d). In addressing the plaintiffs' 90/180-day claims, the defendant, relying on the deposition testimony of the plaintiffs, essentially argued that the testimony established that during the 180-day period following the accident, the plaintiffs did not have injuries or impairments which, for more than 90 days, prevented the plaintiffs from performing substantially all of the material acts which constituted the plaintiffs' usual and customary daily activities (see Karpinos v Cora, 89 AD3d 994). However, the plaintiffs' deposition testimony actually revealed the existence of a triable issue of fact as to whether the plaintiffs had such injuries or impairments (cf. Aujour v Singh, 90 AD3d 686). Under these circumstances, the defendant failed to adequately address the plaintiffs' 90/180-day claims (see Cohn v Kahn, 89 AD3d 1052).

Since the defendant failed to meet his prima facie burden, it is unnecessary to determine whether the papers submitted by the plaintiffs in opposition were sufficient to raise a triable issue of fact (id.).

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

Paul-Austin v. McPherson

Robert P. Tusa (Sweetbaum & Sweetbaum, Lake Success, N.Y. [Marshall D. Sweetbaum], of counsel), for appellants.
Mallilo & Grossman, Flushing, N.Y. (Francesco Pomara, 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, Queens County (Rosengarten, J.), dated June 17, 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 reversed, on the law, with costs, and the defendants' motion for summary judgment dismissing the complaint is granted.

The defendants met their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). Although the plaintiff alleged that she sustained certain injuries to the cervical region of her spine and her right shoulder as a result of the subject accident, the defendants submitted competent medical evidence establishing, prima facie, that those alleged injuries did not constitute serious injuries within the meaning of Insurance Law § 5102(d) (see Rodriguez v Huerfano, 46 AD3d 794, 795). In addition, although the plaintiff alleged that she sustained certain injuries to the lumbar region of her spine as a result of the subject accident, the defendants submitted competent medical evidence establishing, prima facie, that those alleged injuries did not constitute a serious injury within the meaning of Insurance Law § 5102(d) (see Rodriguez v Huerfano, 46 AD3d at 795), and, in any event, were not caused by the subject accident (see Jilani v Palmer, 83 AD3d 786, 787). Finally, although the plaintiff alleged that she sustained a serious injury under the 90/180-day category of Insurance Law § 5102(d) as a result of the subject accident, the defendants submitted evidence establishing, prima facie, that she did not sustain such an injury (cf. Geliga v Karibian, Inc., 56 AD3d 518, 519).

In opposition, the plaintiff failed to raise a triable issue of fact because the opinion of her chiropractor, on which she relied, was not submitted in the form of an affidavit (see Vejselovski v McErlean, 87 AD3d 1062, 1063). Accordingly, the Supreme Court should have granted the defendants' motion for summary judgment dismissing the complaint.

Purdie v. Perdomo

Sanders, Sanders, Block, Woycik, Viener & Grossman, P.C., Mineola, N.Y. (Melissa C. Ingrassia of counsel), for appellant.
Russo, Apoznanski & Tambasco, Westbury, N.Y. (Susan J. Mitola of counsel), for respondents.

DECISION & ORDER

In an action to recover damages for personal injuries, the plaintiff appeals, as limited by her brief, from so much of an order of the Supreme Court, Nassau County (Phelan, J.), entered February 9, 2011, as granted the defendants' motion for summary judgment dismissing the complaint on the ground that she did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and the defendants' motion for summary judgment dismissing the complaint is denied.

The defendants met their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). The plaintiff alleged, inter alia, that as a result of the subject accident, the cervical and lumbar regions of her spine sustained certain injuries. The defendants established, prima facie, that the alleged injuries to the cervical region of the plaintiff's spine did not constitute a serious injury within the meaning of Insurance Law § 5102(d) (see Rodriguez v Huerfano, 46 AD3d 794, 795), and, in any event, were not caused by the accident (see Jilani v Palmer, 83 AD3d 786, 787). The defendants also established, prima facie, that the alleged injuries to the lumbar region of the plaintiff's spine were not caused by the accident (id.).

However, in opposition, the plaintiff submitted 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 or significant limitation of use categories of Insurance Law § 5102(d) (see Perl v Meher, 18 NY3d 208). The plaintiff also submitted evidence raising a triable issue of fact as to whether those alleged injuries, as well as the alleged injuries to the lumbar region of her spine, were caused by the accident (id.; see Jaramillo v Lobo, 32 AD3d 417, 418). Accordingly, the Supreme Court should have denied the defendants' motion for summary judgment dismissing the complaint.

Aponte v. Government Employees Insurance Company

The McDonough Law Firm, L.L.P., New Rochelle (Howard S. Jacobowitz of counsel), for appellant.
Levine & Gilbert, New York (Richard Gilbert of counsel), for respondent.

Order, Supreme Court, Bronx County (Norma Ruiz, J.), entered January 25, 2011, which, to the extent appealed from as limited by the briefs, denied defendant Government Employees Insurance Company's (GEICO) motion for summary judgment dismissing the complaint, unanimously reversed, on the law, without costs, and the motion granted. The Clerk is directed to enter judgment dismissing the complaint as against GEICO.

GEICO made a prima facie showing of entitlement to judgment as a matter of law by submitting evidence of plaintiff's 13-month delay in notifying it of the incident with the letter carrier (see e.g. Tower Ins. Co. of N.Y. v Classon Hgts., LLC, 82 AD3d 632, 634 [2011]).

Plaintiff's contention that he had a reasonable excuse for failing to give timely notice because he acted in self-defense and did not think the letter carrier "would have the audacity to sue him," failed to raise a triable issue of fact (see Great Canal Realty Corp. v Seneca Ins. Co., Inc., 5 NY3d 742, 744 [2005]; Tower Ins. Co., 82 AD3d at 634-635). Plaintiff's purported belief in nonliability was unreasonable as a matter of law, given that the police arrested him, not the letter carrier, for the incident and that he was indicted in federal court for assaulting the letter carrier.

Dinhofer v. Medical Liability Mutual Insurance Company

M. Suzanne Landwehrle, Vestal, for appellant.
Dewey & LeBoeuf, LLP, New York (John M. Aerni of counsel), for Medical Liability Mutual Insurance Company, Fager & Amsler, LLP, Donald Fager & Associates, Inc., Donald J. Fager, Edward J. Amsler, Beth Murphy, Louis Neuburger, Pam Knoop and Ronald Femia, respondents.
Furman Kornfeld & Brennan LLP, New York (Andrew S. Kowlowitz of counsel), for Brown & Tarantino, LLC, Jeffrey S. Albanese, Dennis Gruttadaro and Phylis Hines, respondents.

Orders, Supreme Court, New York County (Paul Wooten, J.), entered January 20, 2011 and February 2, 2011, which granted defendants Medical Liability Mutual Insurance Company (MLMIC), Fager & Amsler, LLP, Donald Fager & Associates, Donald J. Fager, Edward J. Amsler, Beth Murphy, Louis Neuburger, Pam Knoop and Ronald Femia's (the MLMIC defendants) and defendants Brown & Tarantino, LLC, Jeffrey S. Albanese, Dennis Gruttadaro and Phylis Hines's (the B & T defendants) respective motions for summary judgment dismissing the complaint as against them, unanimously affirmed, with costs.

Plaintiff's claims against the MLMIC defendants of fraud, deceitful business practices, and breach of their duty to defend him in good faith are barred by the doctrine of equitable estoppel. The MLMIC defendants established that in reasonable reliance upon plaintiff's execution of the Consent to Settle the underlying medical malpractice action they made a prejudicial change in their position by, inter alia, disbanding the advisory committee that, pursuant to the policy, would have resolved the matter of settlement absent plaintiff's consent, and paying to settle the claim against him (see River Seafoods, Inc. v JPMorgan Chase Bank, 19 AD3d 120, 122 [2005]). These claims are also barred by the doctrine of ratification, since plaintiff failed to act promptly to seek rescission of the Consent (see Matter of Guttenplan, 222 AD2d 255, 257 [1995], lv denied 88 NY2d 812 [1996]), and indeed accepted and retained the benefits of the settlement (see Napolitano v City of New York, 12 AD3d 194 [2004]).

Plaintiff failed to establish that but for the B & T defendants' alleged negligence he would have prevailed or received a better result in the underlying action (see AmBase Corp. v Davis Polk & Wardwell, 8 NY3d 428, 434 [2007]; Leder v Spiegel, 31 AD3d 266, 267-268 [2006], affd 9 NY3d 836 [2007], cert denied 552 US 1257 [2008]). Thus, even assuming plaintiff raised an issue of fact whether the B & T defendants wrongfully concealed their joint representation of multiple defendants in the medical malpractice action, or otherwise were negligent in their defense of him, his legal malpractice claim was correctly dismissed.

Plaintiff's remaining claims against the B & T defendants also were correctly dismissed. His fraud claim is duplicative of his legal malpractice claim since it arose from the same underlying facts and alleged similar damages (see InKine Pharm. Co. v Coleman, 305 AD2d 151 [2003]). His Judiciary Law § 487 claim is unsupported by evidence of "the requisite chronic and extreme pattern of legal delinquency" (see Nason v Fisher, 36 AD3d 486, 487 [2007] [internal quotation marks and citation omitted]). His General Business Law § 349 claim is unsupported by evidence that the alleged conduct had "a broad impact on consumers at large" (see Natural Organics Inc. v Anderson Kill & Olick, P.C., 67 AD3d 541, 542 [2009], lv dismissed 14 NY3d 881 [2010]).

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

Kaufman v. Medical Liability Mutual Ins. Co.

Calendar Date: November 15, 2011
Before: Spain, J.P., Lahtinen, Malone Jr., Stein and Egan Jr., JJ.

Dewey & LeBouef, L.L.P., New York City (John M. Aerni of counsel), for appellant-respondent.
Morton Povman, P.C., Forest Hills (Bruce Povman of counsel), for respondent-appellant.

MEMORANDUM AND ORDER

Egan Jr., J.

Cross appeals from an order of the Supreme Court (Devine, J.), entered April 20, 2011 in Albany County, which denied a motion by defendant Medical Liability Mutual Insurance Company for summary judgment dismissing the complaint against it.

In November 2003, Jamie Lee Norton presented at Nathan Littauer Hospital and Nursing Home in Fulton County for the birth of her second child. The child was delivered by Patricia Nguyen, an obstetrician employed by the hospital. During the course of her hospital stay, Norton — who received treatment from both Nguyen and plaintiff, also an obstetrician employed by the hospital — developed a virulent infection that ultimately necessitated extensive surgical and other medical interventions.

Norton and her spouse, derivatively, thereafter commenced a medical malpractice action against the hospital, Nguyen and plaintiff, and defendant Medical Liability Mutual Insurance Company (hereinafter defendant) assigned defendant Carter, Conboy, Case, Blackmore, Maloney & Laird, P.C. (hereinafter Carter Conboy) — a well-respected law firm engaged in the defense of medical malpractice actions — to represent them. Following a trial, a jury awarded Norton and her spouse $5.75 million in damages,[FN1] which the trial court reduced to $3.5 million. Upon appeal, this Court further reduced the award of damages to $3.2 million, but otherwise affirmed (Norton v Nguyen, 49 AD3d 927 [2008]). Defendant thereafter paid the full amount of the judgment awarded to Norton and her spouse.

In the interim, and approximately two weeks after the verdict was rendered, plaintiff — for the first time — protested the fact that she, Nguyen and the hospital had been represented by the same attorney. In response, and upon plaintiff's request, defendant provided plaintiff — at its expense — with separate appellate counsel. Following this Court's decision in the underlying case, plaintiff commenced this action against defendant and Carter Conboy, asserting breach of contract and deceptive business practices claims against defendant and alleging legal malpractice as to Carter Conboy. After issue was joined, defendant moved for summary judgment dismissing the complaint against it [FN2] . Supreme Court denied defendant's motion in its entirety, and both defendant and plaintiff now appeal.[FN3]

Initially, we agree with defendant that Supreme Court erred in failing to grant its motion for summary judgment as to plaintiff's General Business Law § 349 cause of action. "A party seeking to recover under section 349 must, as a threshold [matter], allege that the defendant's acts or practices have a broad impact on consumers at large" (Walsh v Liberty Mut. Ins. Co., 289 AD2d 842, 843-844 [2001] [citation omitted]; see Elacqua v Physicians' Reciprocal Insurers, 52 AD3d 886, 888 [2008]; Green Harbour Homeowners' Assn. v G.H. Dev. & Constr., 307 AD2d 465, 468 [2003], lv dismissed 100 NY2d 640 [2003]). "Private contract disputes, unique to the parties . . . [do] not fall within the ambit of the statute" (Oswego Laborers' Local 214 Pension Fund v Marine Midland Bank, 85 NY2d 20, 25 [1995] [citation omitted]; see Wellsburg Truck & Auto Sales, Inc. v Peoples State Bank of Wyalusing, 80 AD3d 942, 943 [2011]). Here, plaintiff did nothing more than assert — in a conclusory and otherwise unsubstantiated fashion — that defendant "engaged in deceptive business practices" and that its conduct in this regard "was not an isolated incident." As there is nothing in the record to suggest a pattern of consumer-oriented misconduct on the part of defendant (compare Elacqua v Physicians' Reciprocal Insurers, 52 AD3d at 888-889), defendant's motion for summary judgment dismissing this particular cause of action should have been granted.

We reach a similar conclusion as to plaintiff's breach of contract claim. In support of its motion for summary judgment, defendant submitted an affidavit from one of its claims adjusters, who averred that upon its receipt, he reviewed the complaint in the Norton action, ascertained that all of the claims asserted against each of the covered insureds — the hospital, Nguyen and plaintiff — fell within the coverage of the underlying insurance policy and promptly arranged for Carter Conboy to defend the subject litigation. The adjuster further averred that defendant had no contact with either plaintiff or Nguyen between defendant's receipt of the summons and complaint and the assignment of Carter Conboy as defense counsel, and there is no evidence that plaintiff expressed any dissatisfaction with the joint representation provided by defendant until after she had sampled the verdict. Further, the underlying complaint failed to set forth any facts that would have placed defendant on notice of an actual or apparent conflict of interest. Notably, the complaint itself was so terse that it did not even hint at the particular acts of malpractice allegedly attributable to the hospital, Nguyen or plaintiff, nor did it in any way suggest that the Nortons considered one of the defendants named therein to be any more culpable than the others. Absent any other evidence suggesting an actual or apparent conflict of interest with respect to plaintiff, which the record before us fails to disclose, defendant had no duty to appoint separate counsel to represent her (see generally Public Serv. Mut. Ins. Co. v Goldfarb, 53 NY2d 392, 401 n [1981]). Thus, we are satisfied that defendant discharged its initial burden on the motion for summary judgment, thereby imposing upon plaintiff the obligation to tender sufficient admissible proof to raise a question of fact in this regard.

This she failed to do. To the extent that plaintiff asserted — in a bill of particulars verified only by counsel — that she was "misle[d] . . . on multiple occasions that the case against her would be discontinued and that [Nguyen] would be the only party to either pay a settlement or take a verdict," we need note only that this statement fails to qualify as proof in admissible form (see Rought v Price Chopper Operating Co., Inc., 73 AD3d 1414, 1417 [2010] [Rose, J., dissenting]; Matter of Allen, 210 AD2d 856, 857 [1994]; see also Benaquista v Burke, 74 AD3d 1514, 1515-1516 [2010]) and, in any event, is insufficient to raise a question of fact as to the purported conflict of interest. Accordingly, defendant's motion for summary judgment should have been granted in its entirety.
Spain, J.P., Lahtinen, Malone Jr. and Stein, JJ., concur.

ORDERED that the order is reversed, on the law, with costs, motion granted, summary judgment awarded to defendant Medical Liability Mutual Insurance Company and complaint dismissed against it.

Footnotes

Footnote 1: The jury apportioned liability between Nguyen (65%) and plaintiff (35%).

Footnote 2: Carter Conboy took no position on the motion, except to assert that it "did not have a conflict of interest with respect to the legal services it provided to . . . plaintiff . . . and that all appropriate consents and waivers were obtained."

Footnote 3: The stated basis for plaintiff's cross appeal is her belief that, by failing to expressly address her claim against defendant for deceptive business practices, Supreme Court "implicitly dismiss[ed]" that particular cause of action.

Williams v. Tatham

Mitchell Dranow, Sea Cliff, for appellant. Richard T. Lau & Associates, Jericho (Keith E. Ford of counsel), for Karl W. Tatham, respondent.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York (Stacy R. Seldin of counsel), for Ceesay Alagy, respondent.

Appeal from amended order, Supreme Court, Bronx County (Norma Ruiz, J.), entered October 19, 2010, which, to the extent appealed from as limited by the briefs, inter alia, granted defendants' motions for summary judgment dismissing the complaint, deemed an appeal from judgment, same court and Justice, entered November 22, 2010 (CPLR 5501[c]), dismissing the complaint, and, as so considered, unanimously reversed, on the law, without costs, and the complaint reinstated. Appeal from the order, same court and Justice, entered May 5, 2011, unanimously dismissed, without costs, as taken from a nonappealable paper, and to the extent it denied renewal, dismissed, without costs, as academic.

Defendants established their prima facie entitlement to judgment as a matter of law, as to both the permanent and nonpermanent categories of serious injury, by submitting evidence, in the form of an affirmed report from a radiologist, demonstrating that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) since the MRI films revealed evidence of degeneration in plaintiff's back and right shoulder that preexisted the accident (see Linton v Nawaz, 62 AD3d 434, 438 [2009], affd 14 NY3d 821 [2010]; Guadalupe v Blondie Limo, Inc., 43 AD3d 669 [2007]; Shuji Yagi v Corbin, 44 AD3d 440 [2007]; Thompson v Abbasi, 15 AD3d 95, 96 [2005]).

In opposition, however, plaintiff submitted an affidavit from her treating chiropractor who medically examined her several times, employed objective range of motion testing, found restricted range of motion in plaintiff's lumbar and cervical spine, and thereafter concluded that "as a direct result of the accident [plaintiff] sustained permanent injury to her spine, muscular, and neurological systems." Accordingly, with respect to the permanent categories of serious injury alleged, plaintiff, by submitting expert opinion "attributing the injuries to a different, yet altogether equally plausible, cause, that is, the accident" (Linton at 439-440; Yuen v Arka Memory Cab Corp. 80 AD3d 481, 482 [2011]), raised an issue of fact with respect to whether she sustained a serious injury thereby precluding summary judgment in defendants' favor (id.; Lavali v Lavali, 89 AD3d 574, 575 [2011] [expert opinion that plaintiff's injuries were degenerative in nature and thus unrelated to her accident sufficiently rebutted by opinion of plaintiff's expert, who upon a physical examination of the plaintiff opined that plaintiff's injuries were caused by the accident]).

Plaintiff also established that she sustained a medically determined injury, which prevented her from performing her usual and customary daily activities for not less than 90 days during the 180 days immediately following this accident. She thus raised an issue of fact precluding summary judgment with respect to this nonpermanent category of serious injury (Padilla v Style Mgt. Co., Inc., 256 AD2d 27, 27 [1998]). Specifically, plaintiff's chiropractor stated that upon an examination performed two days after plaintiff's accident, he concluded that as a result of this accident plaintiff sustained an injury to her spine, and he therefore advised her to refrain from engaging in certain activities, such as cleaning, shopping, and walking. Moreover, plaintiff, by affidavit, stated, that subsequent to this accident she was confined to her home for approximately six
months and was unable to clean, shop, or carry bags (cf. Mercado-Arif v Garcia, 74 AD3d 446, 447 [2010] ["chiropractor's statement that plaintiff was told to limit her physical activities for approximately four months was too general to constitute the requisite competent medical proof to substantiate the claim"]).

To the extent that plaintiff seeks to appeal from the motion court's denial of her motion to reargue, that portion of her appeal is hereby dismissed because a denial of reargument is not appealable (see CPLR 5701 [a][2][viii]; Prime Income Asset Mgt., Inc. v American Real Estate Holdings L.P., 82 AD3d 550, 551 [2011], lv denied 17 NY3d 705 [2011]). In view of our reversal of the motion court's determination as to summary judgment, plaintiff's appeal from the court's order, tacitly denying renewal is dismissed as academic.

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

Balducci v. Velasquez

Gallo, Vitucci & Klar, New York, N.Y. (Yolanda Ayala and Kimberly A. Ricciardi of counsel), for appellant-respondent George Velasquez.
Connors & Connors, P.C., Staten Island, N.Y. (Leonard A. Robusto of counsel), for appellants-respondents Abbas Behnambakhsh and Roxana Behnambakhsh.
Verrill & Goodstein, Jericho, N.Y. (Thomas Torto, Jason Levine, and Crafa & Sofield [Thomas R. Sofield], of counsel), for appellant-respondent Marie Decanio.
Louis Grandelli, P.C., New York, N.Y. (Ari Lieberman and Leigh David Eskenasi of counsel), for respondents-appellants.

DECISION & ORDER

In an action to recover damages for personal injuries, etc., the defendant George Velasquez appeals from so much of an order of the Supreme Court, Richmond County (McMahon, J.), dated November 5, 2010, as denied his motion for summary judgment dismissing the complaint and all cross claims insofar as asserted against him on the ground that the plaintiff Charles H. Balducci did not sustain a serious injury within the meaning of Insurance Law § 5102(d), the defendants Abbas Behnambakhsh and Roxana Behnambakhsh separately appeal, and the defendant Marie Decanio separately appeals, from so much of the same order as denied their respective cross motions for summary judgment dismissing the complaint insofar as asserted against them on the ground that the plaintiff Charles H. Balducci did not sustain a serious injury within the meaning of Insurance Law § 5102(d), and the plaintiffs cross-appeal from so much of the same order as denied their cross motion for summary judgment on the issue of liability.

ORDERED that the order is affirmed insofar as appealed from; and it is further,

ORDERED that the order is reversed insofar as cross-appealed from, on the law, and the plaintiffs' cross motion for summary judgment on the issue of liability is granted; and it is further,

ORDERED that one bill of costs is awarded to the plaintiffs, payable by the defendants appearing separately and filing separate briefs.

This action arises out of three separate car accidents on Staten Island which each allegedly caused the plaintiff Charles H. Balducci (hereinafter the injured plaintiff) to sustain serious injuries within the meaning of Insurance Law § 5102(d). The first accident occurred on August 20, 2005, on Targee Street at or near its intersection with Narrows Road North, when the injured plaintiff was stopped at a red light and a vehicle owned and operated by the defendant George Velasquez struck the injured plaintiff's vehicle from behind. The second accident occurred on May 25, 2007, on Amboy Road at its intersection with Chesterton Avenue, when a vehicle operated by the defendant Roxana Behnambakhsh and co-owned by the defendant Abbas Behnambakhsh (hereinafter together the Behnambakhshes), rear-ended the injured plaintiff's vehicle. The third accident occurred on October 23, 2007, on Forest Avenue at its intersection with Richmond Hill Road, when a vehicle owned and operated by the defendant Marie Decanio rear-ended the injured plaintiff's vehicle as it was stopped at a red light.

Although we affirm so much of the order as denied the motion and cross motions of the respective defendants for summary judgment dismissing the complaint, we do so on grounds other than those relied upon by the Supreme Court. Contrary to the holding of the Supreme Court, the respective defendants failed to meet their prima facie burdens of showing that the injured plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accidents (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957).

As to the first accident, Velasquez moved for summary judgment and relied upon, inter alia, the affirmed medical report of Dr. Robert Israel, Velasquez's examining orthopedic surgeon. Dr. Israel examined the injured plaintiff on December 3, 2009, and during cervical spine testing reported finding significant limitations. Accordingly, Velasquez failed to sustain his prima facie burden of showing that the injured plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) (see Taylor v Taylor, 87 AD3d 1129; Astudillo v MV Transp., Inc., 84 AD3d 1289; Rhodes v Stoddard, 79 AD3d 997; Kharzis v PV Holding Corp., 78 AD3d 1122). Moreover, while Dr. Israel opined that the injured plaintiff's disability was causally related to the subsequent accidents and not to the first one, he provided no foundation for that conclusion (see Franchini v Palmieri, 1 NY3d 536; Bengaly v Singh, 68 AD3d 1030; Buono v Sarnes, 66 AD3d 809; see also Borras v Lewis, 79 AD3d 1084; Landman v Sarcona, 63 AD3d 690; Powell v Prego, 59 AD3d 417). Since Velasquez failed to establish his prima facie entitlement to judgment as a matter of law, it is unnecessary to consider the sufficiency of the plaintiffs' opposition papers, and the Supreme Court properly denied his motion (see Coscia v 938 Trading Corp., 283 AD2d 538).

The Supreme Court also properly denied the separate cross motions of the Behnambakhshes and Decanio. The medical report of Dr. George V. DiGiacinto, submitted by the Behnambakhshes, was unaffirmed and, thus, in inadmissible form (see Grasso v Angerami, 79 NY2d 813; Lively v Fernandez, 85 AD3d 981; Pierson v Edwards, 77 AD3d 642; Vasquez v John Doe #1, 73 AD3d 1033). Furthermore, the admissible evidence relied upon by the Behnambakhshes did not eliminate all material issues of fact as to whether the injured plaintiff sustained a serious injury as a result of the second accident, and the evidence relied upon by Decanio similarly did not eliminate all material issues of fact as to whether the injured plaintiff sustained a serious injury as a result of the third accident (see Alvarez v Prospect Hosp., 68 NY2d 320, 324; Olic v Pappas, 47 AD3d 780). Since the Behnambakhshes and Decanio failed to establish their prima facie entitlement to judgment as a matter of law, it is unnecessary to consider whether the plaintiffs' opposition papers were sufficient to raise a triable issue of fact (see Coscia v 938 Trading Corp., 283 AD2d 538).

As a general matter, the operator of a motor vehicle has a duty to see what should be seen and to exercise reasonable care under the circumstances to avoid an accident (see Filippazzo v Santiago, 277 AD2d 419; Johnson v Phillips, 261 AD2d 269). The operator of a motor vehicle approaching another motor vehicle from the rear is obligated to maintain a reasonably safe rate of speed and control over his or her vehicle, and to exercise reasonable care to avoid colliding with the other vehicle (see Power v Hupart, 260 AD2d 458; see also Vehicle and Traffic Law § 1129[a]). However, a driver also has the duty "to not stop suddenly or slow down without proper signaling so as to avoid a collision" (Drake v Drakoulis, 304 AD2d 522, 523; see Purcell v Axelsen, 286 AD2d 379, 380; Colonna v Suarez, 278 AD2d 355; see also Vehicle and Traffic Law § 1163).

"A rear-end collision with a stopped or stopping vehicle creates a prima facie case of negligence against the operator of the rear vehicle, thereby requiring that operator to rebut the inference of negligence by providing a nonnegligent explanation for the collision" (Volpe v Limoncelli, 74 AD3d 795, 795 [internal quotation marks omitted]; see Parra v Hughes, 79 AD3d 1113; DeLouise v S.K.I. Wholesale Beer Corp., 75 AD3d 489, 490; Staton v Ilic, 69 AD3d 606; Lampkin v Chan, 68 AD3d 727; Klopchin v Masri, 45 AD3d 737, 737). Here, in support of the plaintiffs' cross motion for summary judgment on the issue of liability, they established their prima facie entitlement to judgment as a matter of law on the issue of liability by submitting the deposition testimony of the injured plaintiff which established, with respect to each of the three accidents, that his vehicle was stopped when the defendants' respective vehicles struck his vehicle from the rear (see Cortes v Whelan, 83 AD3d 763, 763-764; Gross v Marc, 2 AD3d 681).

Velasquez did not oppose the plaintiffs' cross motion, and Decanio and the Behnambakhshes merely relied on the contention that in relation to their respective accidents with the injured plaintiff, they did not recall seeing brake lights or any other illumination on his vehicle before the collisions. These submissions were insufficient to raise a triable issue of fact (see Cortes v Whelan, 83 AD3d at 764; Macauley v Elrac, Inc., 6 AD3d 584, 585; Gross v Marc, 2 AD3d 681; Waters v City of New York, 278 AD2d 408, 409; Barile v Lazzarini, 222 AD2d 635). Accordingly, the Supreme Court erred in denying the plaintiffs' cross motion for summary judgment on the issue of liability.

Liounis v. New York City Transit Authority

Robert P. Tusa (Sweetbaum & Sweetbaum, Lake Success, N.Y. [Marshall D. Sweetbaum], of counsel), for appellant.
Arze & Mollica, LLP, Brooklyn, N.Y. (Raymond J. Mollica of counsel), for respondent.

DECISION & ORDER

In an action to recover damages for personal injuries, the defendant Moussa Zlita appeals from a judgment of the Supreme Court, Kings County (Schneier, J.), dated August 2, 2010, which, upon the denial of his motion pursuant to CPLR 4401, in effect, made at the close of the plaintiff's case, for judgment as a matter of law on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d), upon the denial of his renewed motion pursuant to CPLR 4401, made at the close of all the evidence, for judgment as a matter of law on the same ground, upon a jury verdict finding him 100% at fault in the happening of the accident, upon a jury verdict on the issue of damages awarding the plaintiff the principal sum of $175,000, and upon the denial of his motion pursuant to CPLR 4404(a) to set aside the jury verdict and for judgment as a matter of law or to set aside the jury verdict as contrary to the weight of the evidence, is in favor of the plaintiff and against him in the total sum of $187,288.75.

ORDERED that the judgment is affirmed, with costs.

" To be entitled to judgment as a matter of law pursuant to CPLR 4401, a defendant has the burden of showing that there is no rational process by which the jury could find in favor of the plaintiff and against the moving defendant'" (Delaney v Delaney, 83 AD3d 647, 648, quoting Velez v Goldenberg, 29 AD3d 780, 781). " In considering the motion for judgment as a matter of law, the trial court must afford the party opposing the motion every inference which may properly be drawn from the facts presented, and the facts must be considered in a light most favorable to the nonmovant'" (Delaney v Delaney, 83 AD3d at 648, quoting Szczerbiak v Pilat, 90 NY2d 553, 556). Contrary to the defendant Moussa Zlita's contention, viewing the facts in the light most favorable to the plaintiff, there was a rational process by which the jury could find that the plaintiff sustained a serious injury within the meaning of Insurance Law § 5102(d).

Zlita's challenge to the Supreme Court's denial of that branch of his motion pursuant to CPLR 4404(a) which was to set aside the jury verdict and for judgment as a matter of law is also without merit, as there was a valid line of reasoning and permissible inferences which could lead rational people to the conclusion reached by the jury on the basis of the evidence presented at trial (see Cohen v Hallmark Cards, 45 NY2d 493, 499).

"A jury verdict should not be set aside as against the weight of the evidence unless the verdict could not have been reached on any fair interpretation of the evidence" (Rosenfeld v Baker, 78 AD3d 810, 811; see Lolik v Big V Supermarkets, 86 NY2d 744). " Where, as here, conflicting expert testimony is presented, the jury is entitled to accept one expert's opinion, and reject that of another expert'" (Morales v Interfaith Med. Ctr., 71 AD3d 648, 650, quoting Ross v Mandeville, 45 AD3d 755, 757). "When a verdict can be reconciled with a reasonable view of the evidence, the successful party is entitled to the presumption that the jury adopted that view" (Handwerker v Dominick L. Cervi, Inc., 57 AD3d 615, 616; see Tapia v Dattco, Inc., 32 AD3d 842, 842). Here, a fair interpretation of the evidence supports the jury's conclusion that, based on the evidence before it, the plaintiff sustained a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject motor vehicle accident.

Torres v. Posy

Rivkin Radler, LLP, Uniondale, N.Y. (Evan H. Krinick, Cheryl F. Korman, Harris J. Zakarin, and Melissa M. Murphy of counsel), for appellants.
Gary J. Mandel, Far Rockaway, N.Y. (Shawn J. Wallach 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, Queens County (Pineda-Kirwan, J.), dated May 13, 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 reversed, on the law, with costs, and the defendants' motion for summary judgment dismissing the complaint is granted.

The defendants met their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). Although the plaintiff alleged that she sustained certain injuries to her right knee as a result of the subject accident, the defendants submitted competent medical evidence establishing, prima facie, that those alleged injuries did not constitute a serious injury within the meaning of Insurance Law § 5102(d) (see Staff v Yshua, 59 AD3d 614), and, in any event, were not caused by the subject accident (see Jilani v Palmer, 83 AD3d 786, 787). In addition, although the plaintiff alleged that she sustained a serious injury under the 90/180-day category of Insurance Law § 5102(d) as a result of the subject accident, the defendants submitted evidence establishing, prima facie, that she did not sustain such an injury (see McIntosh v O'Brien, 69 AD3d 585, 587).

In opposition, the plaintiff, who failed to adequately explain a cessation of her medical treatment (see Pommells v Perez, 4 NY3d 566, 574; Vasquez v John Doe #1, 73 AD3d 1033, 1034), failed to raise a triable issue of fact (see Pommels v Perez, 4 NY3d at 579). Accordingly, the Supreme Court should have granted the defendants' motion for summary judgment dismissing the complaint.

Delk v. Johnson

Appeal from an order of the Supreme Court, Erie County (Frederick J. Marshall, J.), entered November 10, 2010 in a personal injury action. The order, among other things, granted defendant's motion for summary judgment.

Law Offices Of Eugene C. Tenney, Buffalo (Nathan C. Doctor Of Counsel), For Plaintiff-Appellant.
Hagelin Kent LLC, Buffalo (Sean M. Spencer Of Counsel), For Defendant-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 she allegedly sustained when a vehicle owned and operated by defendant rear-ended the vehicle she was driving. Defendant moved for summary judgment dismissing the complaint on the ground that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102 (d), and plaintiff cross-moved for, inter alia, partial summary judgment on liability. Supreme Court granted defendant's motion and dismissed the complaint. We now affirm.

According to her bill of particulars, plaintiff sustained a serious injury under the permanent loss of use, the permanent consequential limitation of use, the significant limitation of use, and the 90/180-day categories of serious injury. In opposition to the motion, however, plaintiff abandoned her contentions with respect to all categories of serious injury with the exception of the 90/180-day category, nor does she contend on appeal that the court erred in denying her cross motion (see Ciesinski v Town of Aurora, 202 AD2d 984). We therefore consider only whether the court properly granted that part of defendant's motion with respect to the 90/180-day category.

Defendant met his initial burden on the motion by submitting the affirmed reports of two physicians who examined plaintiff at his request and concluded that there was no objective evidence that plaintiff sustained a serious injury as a result of the accident (see Lauffer v Macey, 74 AD3d 1826, 1827). In addition, defendant submitted plaintiff's deposition testimony in which she testified that, although she missed time from her physically demanding part-time job, she was still able "to perform substantially all of the material acts that constituted [her] usual and customary daily activities" (Robinson v Polasky, 32 AD3d 1215, 1216).

In opposition to the motion, plaintiff submitted, inter alia, an MRI report and an affirmation from her treating physician. Although both submissions raise triable issues of fact whether plaintiff sustained an injury in the accident, neither is sufficient to raise a triable issue of fact whether that injury prevented her " from performing substantially all of the material acts which constitute [her] usual and customary daily activities' for at least 90 out of the 180 days immediately following the accident" (Hoffmann v Stechenfinger, 4 AD3d 778, 780, quoting Insurance Law § 5102 [d]; see Elmer v Amankwaah, 2 AD3d 1350). Even assuming, arguendo, that plaintiff's inability to return to her part-time employment curtailed her daily activities to a great extent, we conclude that plaintiff nevertheless failed to establish that she was disabled from working 90 out of the 180 days immediately following the accident (see Travis v Batchi, 18 NY3d 208, 220).
Overhoff v. Perfetto

Appeal from an order of the Supreme Court, Erie County (Paula L. Feroleto, J.), entered June 7, 2011 in a personal injury action. The order denied defendant's motion for summary judgment.

Burgio, Kita & Curvin, Buffalo (James P. Burgio Of Counsel), For Defendant-Appellant.
Duke, Holzman, Photiadis & Gresens LLP, Buffalo (Howard E. Berger Of Counsel), For Plaintiffs-Respondents.

It is hereby ORDERED that the order so appealed from is unanimously reversed on the law without costs, the motion is granted, and the complaint is dismissed.

Memorandum: Plaintiffs commenced this action seeking damages for injuries allegedly sustained by Theresa Overhoff (plaintiff) when a vehicle operated by defendant collided with a vehicle driven by plaintiff. Supreme Court erred in denying defendant's motion seeking summary judgment dismissing the complaint on the ground that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102 (d). Defendant met her initial burden on the motion "by submitting medical records and reports constituting persuasive evidence that plaintiff's alleged pain and injuries were related to . . . preexisting condition[s]' " rather than the instant accident (Spanos v Fanto, 63 AD3d 1665, 1666). In particular, defendant submitted the report of a physician who reviewed plaintiff's medical records and conducted a medical examination of plaintiff on defendant's behalf. The physician opined that plaintiff did not sustain a serious injury in the accident at issue, that imaging studies of plaintiff's spine performed prior to and subsequent to the instant accident were "essentially the same," and that plaintiff had no functional disability or limitations causally related to the instant accident. The burden thus shifted to plaintiffs "to come forward with evidence addressing defendant's claimed lack of causation" (Pommells v Perez, 4 NY3d 566, 580). Plaintiffs, however, failed to meet that burden inasmuch as their submissions in opposition to the motion "failed to address the manner in which plaintiff's physical injuries were causally related to the accident in light of [her] past medical history" (Smith v Besanceney, 61 AD3d 1336, 1337-1338). In addition, the physician who examined plaintiff at the request of her attorney failed to refute the opinion of defendant's expert that plaintiff did not sustain a functional disability or limitation related to the accident by, for example, comparing plaintiff's pre- and post-accident range of motion restrictions in her neck or back or assessing her pre- and post-accident qualitative limitations (see Jaromin v Northrup, 39 AD3d 1264, 1265).

VBH Luxury, Incorporated v. 940 Madison Associates LLC

Submitted by Richard E. Lerner, for third-party appellant.
Submitted by David Einhorn, for third-party respondent

MEMORANDUM:

The order of the Appellate Division should be reversed, with costs, the judgment of Supreme Court reinstated, and the certified question answered in the negative.

Third-party plaintiff/landlord 940 Madison Associates, LLC is an additional insured under a commercial general liability policy issued by third-party defendant Excelsior Insurance Company to plaintiff/tenant VBH Luxury, Inc. "only with respect to liability arising out of the ownership, maintenance or use of that part of the premises leased to [tenant]." Although landlord would be entitled to a defense in an action commenced against it by a third party for an injury suffered on the leased premises (see ZKZ Assoc. v CNA Ins. Co., 89 NY2d 990, 991 [1997]), the policy does not provide coverage for liability to its co-insured for damage to property owned, rented, or occupied by the insured (see Insurance Corp. of N.Y. v Cohoes Realty Assoc., L.P., 50 AD3d 1228, 1229-1230 [3d Dept 2008]; Utica Mut. Ins. Co. v Watertown Indus. Ctr. Local Dev. Corp., 9 AD3d 836, 837 [4th Dept 2004], lv denied 11 AD3d 1053 [4th Dept 2004]). Thus, Excelsior was not obligated to defend landlord in the underlying action.

Hudson Insurance Co. v. AK Construction Co.

Robinson Brog Leinwand Greene Genovese & Gluck, P.C., New York (Robert M. Milner of counsel), for appellant.
White Fleischner & Fino, LLP, New York (Gil M. Coogler of counsel), for respondent.

Order, Supreme Court, New York County (Richard F. Braun, J.), entered July 19, 2010, which, to the extent appealed from as limited by the briefs, denied defendant AK Construction Co. LLC's motion to dismiss the complaint as against it, unanimously affirmed, with costs.

Contrary to defendant's contention, there is no rule that a subrogation claim can be brought only by impleader under CPLR 1007 (see e.g. Allianz Underwriters Ins. Co. v Landmark Ins. Co., 13 AD3d 172 [2004]). The claim may be brought either as an impleader or by separate plenary action. Indeed, the language of CPLR 1007 is permissive, rather than mandatory, and nowhere suggests that an impleader action is the only vehicle available to an insurer so situated (see Krause v American Guar. & Liab. Ins. Co., 22 NY2d 147, 152-153 [1968]).

Plaintiff was not bound to wait until its liability was established in the underlying coverage action to bring this lawsuit (see Allianz, 13 AD3d at 175). This is true even though this is an action for declaratory relief and not "third-party practice" under CPLR 1007.

Sawyer v. Rutecki

Appeal from a judgment of the Supreme Court, Erie County (Joseph R. Glownia, J.), entered April 14, 2011. The judgment dismissed plaintiffs' complaint on the merits.

Hodgson Russ LLP, Buffalo (Heather K. Zimmerman Of Counsel), For Plaintiffs-Appellants.
Keidel, Weldon & Cunningham, LLP, Syracuse (Christopher B. Weldon Of Counsel), For Defendants-Respondents.

It is hereby ORDERED that the judgment so appealed from is unanimously affirmed without costs.

Memorandum: Plaintiffs, the owners of an apartment building in Buffalo that was damaged in a fire, commenced this action asserting causes of action for breach of contract, breach of fiduciary duty and negligence premised upon defendants' alleged failure to notify plaintiffs that their insurance policy for the premises had been cancelled prior to the fire and their failure to procure new coverage. Victor Rutecki (defendant) was plaintiffs' insurance agent, and the remaining defendants are his associated business entities. At plaintiffs' request, defendant procured insurance for the premises from Allegany Co-Op Insurance Company (Allegany). Shortly after the subject policy was issued, Allegany sent an inspector to examine the property for underwriting purposes. Following that inspection, which revealed problems related to the condition of the property, Allegany cancelled the insurance policy. In support of their motion, defendants submitted evidence that Allegany sent a letter to plaintiffs by certified mail notifying them of the cancellation, and plaintiffs thereafter failed to obtain new coverage. Less than eight months later, the subject fire caused extensive damage to the uninsured property.

We conclude that Supreme Court properly granted defendants' motion for summary judgment dismissing the complaint. Although "insurance agents have a common-law duty to obtain requested coverage for their clients within a reasonable time or inform the client of the inability to do so[,] . . . they have no continuing duty to advise, guide or direct a client to obtain additional coverage" (Murphy v Kuhn, 90 NY2d 266, 270). "Exceptional and particularized situations may arise in which insurance agents, through their conduct or by express or implied contract with customers and clients, may assume or acquire duties in addition to those fixed at common law" (id. at 272). For instance, where a "special relationship" develops between an agent and the insured, the agent may be held to have assumed duties in addition to merely "obtain[ing] requested coverage" (id. at 270). Such a special relationship may arise where "(1) the agent receives compensation for consultation apart from payment of the premiums . . . (2) there was some interaction regarding a question of coverage, with the insured relying on the expertise of the agent . . .; or (3) there is a course of dealing over an extended period of time which would have put objectively reasonable insurance agents on notice that their advice was being sought and specially relied on" (id. at 272).

Here, defendants met their initial burden on the motion, and plaintiffs failed to raise a triable issue of fact to defeat it (see generally Zuckerman v City of New York, 49 NY2d 557, 562). Specifically, defendants established that defendant did not have a special relationship with plaintiffs by submitting evidence that defendant received no compensation from plaintiffs over and above the commissions he received for the insurance policies he had procured, that plaintiffs did not use defendant as their exclusive agent, and that Jeffrey M. Sawyer (plaintiff) retained final decision-making authority over what coverage to obtain. Even accepting as true plaintiffs' allegations that they informed defendant that plaintiff had health issues and that plaintiff referred to defendant as his "insurance guy," we conclude that the uncontroverted evidence establishes that the interactions between the parties "would [not] have put [an] objectively reasonable insurance agent on notice that [his or her] advice was being sought and specially relied on" (Murphy, 90 NY2d at 272). We note that plaintiffs had known defendant for only three years prior to the fire, and that defendant had obtained insurance coverage for only three of the six rental properties owned by plaintiffs.

We also reject plaintiffs' contention that defendant was negligent in failing to inform them that the policy had been cancelled. Defendant satisfied his duty to plaintiffs by procuring the Allegany policy, and no further duty was imposed on defendant based on the subsequent cancellation of the policy (see Thompson & Bailey, LLC v Whitmore Group, Ltd., 34 AD3d 1001, 1002-1003, lv denied 8 NY3d 807). Moreover, as noted, defendants submitted evidence that Allegany notified plaintiffs of the policy cancellation by certified mail, and plaintiffs failed to overcome the presumption of receipt that attaches to such mailing (see generally Nassau Ins. Co. v Murray, 46 NY2d 828, 829-830).

The United States Life Insurance Company in the City of New York v Blumenfeld
Lipsius BenHaim Law, LLP, Kew Gardens (Ira S. Lipsius of counsel), for appellants.
Wilson Elser Moskowitz Edelman & Dicker LLP, White Plains (Michelle M. Arbitrio of counsel), for respondent.
Order, Supreme Court, New York County (Milton A. Tingling, J.), entered March 29, 2011, which, in a declaratory judgment action seeking rescission of a life insurance policy, denied defendants' motion for summary judgment dismissing the amended complaint, unanimously reversed, on the law, without costs, and the motion granted, and it is declared that the life insurance policy is valid.
On April 25, 2006, plaintiff insurer issued a life insurance policy with a $5,000,000 death benefit, requiring quarterly premiums of $70,658.25. Defendant Rebeka Blumenfeld was the insured, and the beneficiary/policy owner was defendant the Blumenfeld Family Irrevocable Life Insurance Trust (the Trust). The policy included a two-year contestability clause, pursuant to New York Insurance Law § 3203(a)(3).
Defendant insured, who was retired and in her late 70s, represented in her January 2006 life insurance application to plaintiff that she had a net worth of $35-40 million and household income of $400,000-500,000 and that she was a beneficiary of two multi-million dollar life insurance policies. The application gave her address as an apartment in Williamsburg, Brooklyn. The Trust's address was given as 2 West 47th Street in Manhattan.
By letter dated April 22, 2008, plaintiff notified the Trust of its intent to rescind the policy because of material misrepresentations concerning the insured's financial status at the time of her signing the life insurance application. Plaintiff noted an ongoing fraud investigation. The letter cited a March 2007 investigative report that had revealed the insured owned no real estate and that she rented an apartment in a neighborhood in Brooklyn that had a median household income of $29,625. The letter further noted that plaintiff would refund any applicable premiums and that it would file a declaratory judgment action to rescind the policy unless it received additional information from the insured or a signed copy of the rescission agreement enclosed with the letter.
It is undisputed that after the insurer received the March 2007 investigative report, plaintiff retained and processed premium payments in April and May 2007, in the respective amounts of $43,452.50 and $130,387.50.
An investigative report from February 2008 identified the insured's residence as 2 West 47th Street, the same address the insured gave as the Trust's address in the policy application in January 2006.
Plaintiff commenced this action against the insured and the beneficiary/policy owner, on April 23, 2008, two days before the end of the policy's two year contestability provision. The insurer sought a declaratory judgment rescinding the policy based upon alleged misrepresentations in the insured's application. Plaintiff amended the complaint in September 2009.
Thereafter, by letter dated September 25, 2008, plaintiff notified the Trust that the policy was in its grace period and would terminate without value unless plaintiff received an additional premium in the amount of $81,262.73 prior to November 25, 2008. The Trust timely paid this premium.
In June 2010, defendants moved for summary judgment dismissing the amended complaint, arguing that plaintiff had ratified the policy and waived its right to rescind by failing to promptly seek rescission upon learning, as early as March 2007, of the insured's alleged misrepresentations (see S.E.C. v Credit Bancorp, Ltd., 147 F Supp 2d 238, 256-57 [SD NY 2001]). Defendants further argued that plaintiff was estopped from rescinding the policy because it had retained premiums after learning of the insured's alleged misrepresentations (see Continental Ins. Co. v Helmsley Enters., 211 AD2d 589 [1995]).
In opposition to defendants' motion, plaintiff argued that it did not waive its right to rescind because its retention of premiums was inadvertent. Plaintiff claimed that its computer system was not designed to reject premiums. Moreover, rejecting premiums could be potentially detrimental to the policy holder in the event the court rejected the insurer's request for a declaration of rescission. Plaintiff further argued that it could not have waived its right to rescind because it lacked the requisite intent, citing its April 22, 2008 letter to the Trust that plaintiff did not intend to waive its rights or remedies.
The trial court, while expressing doubt as to the merit of plaintiff's arguments, denied defendants' motion, pending further discovery, noting plaintiff's argument that summary judgment was premature as discovery was incomplete.
An insurer's failure to rescind a policy promptly after obtaining sufficient knowledge of alleged misrepresentations by an insured constitutes ratification of the policy (see S.E.C., 147 F Supp 2d at 256). The court in S.E.C. rejected the insurers' argument that it was not fully aware of the insured's alleged fraud, noting that " knowledge which is sufficient to lead a prudent person to inquire about the matter, when it could have been ascertained conveniently, constitutes notice of whatever the inquiry could have disclosed, and will be regarded as knowledge of the facts'" (id., quoting Union Ins. Exchange, Inc. v Gaul, 393 F2d 151, 155 [7th Cir 1968]). The insurers in S.E.C. were on notice of the insured's alleged misrepresentations for more than one year but chose not to rescind the policies at issue promptly.
Moreover, an insurer that accepts premiums after learning of facts that it believes entitles it to rescind the policy has waived the right to rescind (see Security Mut. Life Ins. Co. of N.Y. v Rodriguez, 65 AD3d 1, 7-11 [2009]; American General Life Ins. Co. v Salamon, 2011 WL 976411, *3, 2011 US Dist LEXIS 27118, *9-10 [ED NY 2011, Matsumoto, J.]). An insurer's attempt to reserve its rights while accepting premiums is unenforceable for lack of mutuality (see Continental Ins. Co. v Helmsley Enters., 211 AD2d 589 [1995]). This rule applies even where the insurer claims it accepted premiums after commencing a rescission action to "protect" the insured pending a determination of the action, as is the case here (see US Life Ins. Co. v Grunhut, 83 AD3d 528, 529 [2011], citing Security Mut. Life Ins. Co. of N.Y., 65 AD3d at 7-11).
In Grunhut, we specifically rejected the insurer's argument that it was protecting the rights of all parties when it continued to accept premiums for months after commencing the rescission action (83 AD3d at 529). Similarly, in Rodriguez, we found that by accepting premiums for several months following the commencement of its rescission action, the insurer waived its right to rescind the policy (65 AD3d at 8). In Salamon, virtually on point with the case before us, the court found the insurer's argument that it lacked intent to rescind the policy unpersuasive, finding that "[i]ntent is established if the insurer had sufficient information' regarding grounds for rescission but chose not to exercise its right to rescind" (2011 WL 976411 at *3, 2011 US Dist LEXIS 27118 at *9). The Salamon court further found compelling the grave inconsistencies in the insurer's conduct, similar to those here, where the insurer had sent a rescission letter that specifically stated that it did not intend to waive any rights and where the insurer sent grace and lapse notices to the insured while maintaining the policy in active status (2011 WL 976411 at *6, 2011 US Dist LEXIS 27118 at *10-11).
Here, plaintiff learned, more than one year prior to commencing this action, that the insured owned no real estate and resided in a neighborhood that had an average median income of $29,625, despite the insured's representations in her life insurance application that she had a net worth of $35-40 million and a household income of $400,000-500,000. Thus, we find that, as early as March 2007, plaintiff had sufficient knowledge of potential material misrepresentations warranting rescission of the policy. However, plaintiff continued to accept premiums and both sought and accepted a further premium payment following the commencement of this action. Therefore, the insurer's conduct constituted a ratification of the policy and a waiver of its right to rescind (see S.E.C., 147 F Supp 2d at 256-57).
Martino v Stolzman

Rost v Stolzman

Victor M. Wright, for appellants.
Lisa A. Poch and Sarah P. Rera, for respondent Martino.
Amanda L. Machacek, for respondent Stolzman.
John A. Collins, for respondent Rost.
Sarah P. Rera, for respondent Avino.

MEMORANDUM:
The order of the Appellate Division, insofar as appealed from, should be reversed, with costs, the Oliver defendants' motion for summary judgment granted, the complaint in Action No. 1 and the amended complaint in Action No. 2 dismissed against them, and the certified question answered in the negative.
On the evening of December 31, 2006 and into January 1, 2007, Michael and Susan Oliver (the Olivers) hosted a New Year's Eve party at their home in Gasport, New York. Michael Stolzman, and his friend, Judith Rost, attended the party and consumed alcohol. At approximately 12:30 a.m., Stolzman left the party and got into his truck, with Rost in the passenger seat. Stolzman backed his truck out of the Olivers' driveway onto the main road and collided with an oncoming vehicle driven by Jennifer Martino. Martino sustained severe injuries, including a dislocated ankle and leg fractures. Rost also suffered severe injuries, including fractures of her hip, pelvis, and spine, an amputated finger, and herniated discs. Following the accident, a test revealed that Stolzman had a blood alcohol content of .14 percent, nearly twice the legal limit. He later pleaded guilty to driving while intoxicated (see Vehicle and Traffic Law § 1192 [3]).
Martino and Rost commenced separate actions against various defendants including the Olivers alleging, as relevant here, claims for a violation of the Dram Shop Act (General Obligations Law § 11-101) and common-law negligence. Essentially, Martino and Rost allege in their respective complaints that the Olivers served Stolzman an unreasonable amount of alcohol rendering him intoxicated and failed to control Stolzman while he was on their property. Martino and Rost also allege that the Olivers had a duty to warn Stolzman that, as he exited their driveway, vehicles parked on the road adjacent to the driveway may obstruct the view.
The Olivers filed one motion as to both actions, seeking dismissal of the Dram Shop Act claims and summary judgment as to the common-law negligence claims. Supreme Court denied the Olivers' motion in its entirety. The Olivers appealed the order, and the parties agreed to consolidate the appeals and have them perfected in one record.
The Appellate Division, with two Justices dissenting in part, modified the order by granting the Olivers' motion to dismiss the Dram Shop Act claims in both actions, and as so modified, affirmed (see Martino v Stolzman, 74 AD3d 1764, 1765 [4th Dept 2010]). In affirming Supreme Court's denial of the Olivers' motion for summary judgment as to the common-law negligence claims, the majority concluded that "the Olivers knew or should have known that Stolzman left the party in a dangerous state of intoxication" (id. at 1766). The majority also opined that "[t]he Olivers both had an opportunity to control or at least to guide Stolzman as he exited their driveway," observing that the Olivers had "acknowledged that sightlines near the end of their driveway were limited at the time of the accident" (id. at 1767).
The dissenting Justices would have granted the Olivers' motion for summary judgment as to the common-law negligence claims (see id.). The dissenters concluded that the Olivers had no duty to prevent Stolzman "from leaving their house or to assist him in pulling out of their driveway in his vehicle" (id.).
The same panel of the Appellate Division granted the Olivers' motion for leave to appeal to this Court (see Martino v Stolzman, 79 AD3d 1832 [4th Dept 2010]), and certified this question: "Was the order of this Court entered June 11, 2010 properly made?" We now reverse and answer the certified question in the negative.
It has long been the rule in New York that "[l]andowners in general have a duty to act in a reasonable manner to prevent harm to those on their property" (D'Amico v Christie, 71 NY2d 76, 85 [1987]). "In particular, they have a duty to control the conduct of third persons on their premises when they have the opportunity to control such persons" (id.). Here, the Olivers were no longer in a position to control Stolzman when he entered his vehicle and drove away. Furthermore, we agree with the dissenting Justices at the Appellate Division that "requiring social hosts to prevent intoxicated guests from leaving their property would inappropriately expand the concept of duty" (Martino, 74 AD3d at 1767).
We also conclude that the Olivers had no duty to assist Stolzman as he pulled out of their driveway, or otherwise warn him that vehicles parked along the road next to the driveway may obstruct the view when exiting. Of course, "a landowner's duty to warn of a latent, dangerous condition on his property is a natural counterpart to his duty to maintain his property in a reasonably safe condition" (Galindo v Town of Clarkstown, 2 NY3d 633, 636 [2004]). In this case, the vehicles parked adjacent to the Olivers' driveway did not create a latent or dangerous condition on the Olivers' property. That the Olivers may have been aware of this potential obstruction did not create a duty on their part to assist or warn Stolzman (see Pulka v Edelman, 40 NY2d 781, 785 [1976], rearg denied 41 NY2d 901 [1977] ["(f)oreseeability should not be confused with duty"]).
* * * * * * * * * * * * * * * * *
Order, insofar as appealed from, reversed, with costs, the Oliver defendants' motion for summary judgment granted, the complaint in Action No. 1 and the amended complaint in Action No. 2 dismissed against them, and the certified question answered in the negative, in a memorandum. Chief Judge Lippman and Judges Ciparick, Graffeo, Read, Smith, Pigott and Jones concur.
Decided February 16, 2012
Sawyer v The Rutecki Agency

Appeal from a judgment of the Supreme Court, Erie County (Joseph R. Glownia, J.), entered April 14, 2011. The judgment dismissed plaintiffs' complaint on the merits.

Hodgson Russ LLP, Buffalo (Heather K. Zimmerman Of Counsel), For Plaintiffs-Appellants.
Keidel, Weldon & Cunningham, LLP, Syracuse (Christopher B. Weldon Of Counsel), For Defendants-Respondents.

It is hereby ORDERED that the judgment so appealed from is unanimously affirmed without costs.
Memorandum: Plaintiffs, the owners of an apartment building in Buffalo that was damaged in a fire, commenced this action asserting causes of action for breach of contract, breach of fiduciary duty and negligence premised upon defendants' alleged failure to notify plaintiffs that their insurance policy for the premises had been cancelled prior to the fire and their failure to procure new coverage. Victor Rutecki (defendant) was plaintiffs' insurance agent, and the remaining defendants are his associated business entities. At plaintiffs' request, defendant procured insurance for the premises from Allegany Co-Op Insurance Company (Allegany). Shortly after the subject policy was issued, Allegany sent an inspector to examine the property for underwriting purposes. Following that inspection, which revealed problems related to the condition of the property, Allegany cancelled the insurance policy. In support of their motion, defendants submitted evidence that Allegany sent a letter to plaintiffs by certified mail notifying them of the cancellation, and plaintiffs thereafter failed to obtain new coverage. Less than eight months later, the subject fire caused extensive damage to the uninsured property.
We conclude that Supreme Court properly granted defendants' motion for summary judgment dismissing the complaint. Although "insurance agents have a common-law duty to obtain requested coverage for their clients within a reasonable time or inform the client of the inability to do so[,] . . . they have no continuing duty to advise, guide or direct a client to obtain additional coverage" (Murphy v Kuhn, 90 NY2d 266, 270). "Exceptional and particularized situations may arise in which insurance agents, through their conduct or by express or implied contract with customers and clients, may assume or acquire duties in addition to those fixed at common law" (id. at 272). For instance, where a "special relationship" develops between an agent and the insured, the agent may be held to have assumed duties in addition to merely "obtain[ing] requested coverage" (id. at 270). Such a special relationship may arise where "(1) the agent receives compensation for consultation apart from payment of the premiums . . . (2) there was some interaction regarding a question of coverage, with the insured relying on the expertise of the agent . . .; or (3) there is a course of dealing over an extended period of time which would have put objectively reasonable insurance agents on notice that their advice was being sought and specially relied on" (id. at 272).
Here, defendants met their initial burden on the motion, and plaintiffs failed to raise a triable issue of fact to defeat it (see generally Zuckerman v City of New York, 49 NY2d 557, 562). Specifically, defendants established that defendant did not have a special relationship with plaintiffs by submitting evidence that defendant received no compensation from plaintiffs over and above the commissions he received for the insurance policies he had procured, that plaintiffs did not use defendant as their exclusive agent, and that Jeffrey M. Sawyer (plaintiff) retained final decision-making authority over what coverage to obtain. Even accepting as true plaintiffs' allegations that they informed defendant that plaintiff had health issues and that plaintiff referred to defendant as his "insurance guy," we conclude that the uncontroverted evidence establishes that the interactions between the parties "would [not] have put [an] objectively reasonable insurance agent on notice that [his or her] advice was being sought and specially relied on" (Murphy, 90 NY2d at 272). We note that plaintiffs had known defendant for only three years prior to the fire, and that defendant had obtained insurance coverage for only three of the six rental properties owned by plaintiffs.
We also reject plaintiffs' contention that defendant was negligent in failing to inform them that the policy had been cancelled. Defendant satisfied his duty to plaintiffs by procuring the Allegany policy, and no further duty was imposed on defendant based on the subsequent cancellation of the policy (see Thompson & Bailey, LLC v Whitmore Group, Ltd., 34 AD3d 1001, 1002-1003, lv denied 8 NY3d 807). Moreover, as noted, defendants submitted evidence that Allegany notified plaintiffs of the policy cancellation by certified mail, and plaintiffs failed to overcome the presumption of receipt that attaches to such mailing (see generally Nassau Ins. Co. v Murray, 46 NY2d 828, 829-830).

Ambac Assurance Corporation v DLJ Mortgage Capital, Inc.

Patterson Belknap Webb & Tyler LLP, New York (Harry Sandick of counsel), for appellants.
Orrick, Herrington & Sutcliffe LLP, New York (John Ansbro of counsel), for respondents.
Order, Supreme Court, New York County (Shirley Werner Kornreich, J.), entered June 3, 2011, which granted defendants' motion seeking, inter alia, to compel the production of certain documents related to a third-party consultant's work, unanimously reversed, on the law, without costs, and the motion denied.
This action arises from the securitization of home equity lines of credit, which were aggregated into a "pool" by defendant DLJ Mortgage Capital, Inc., and then transferred to a trust that was formed to issue securities to investors. The securities would be paid down based on the cash flow from the pooled loans. Defendant Credit Suisse Securities USA LLC served as the underwriter for the public offering of these securities, and plaintiff Ambac Assurance Corporation, through plaintiff The Segregated Account of AMBAC Assurance Corporation, issued an insurance policy guaranteeing payment of certain classes of the securities issued.
When the loans began to default at what plaintiffs considered to be a high rate, they retained a law firm, which retained RMG Global (RMG) to conduct a forensic re-underwriting review of the loans in the securitization. Following plaintiffs' commencement of this action based on RMG's findings, defendants served demands seeking any and all records surrounding RMG's review. Plaintiffs provided defendants with RMG's conclusions and the raw data RMG used in its analysis of the loans at issue. However, asserting the attorney work product and trial preparation privileges, plaintiffs objected to the remainder of defendants' demands, including any correspondence between RMG and the law firm plaintiffs retained, and documents concerning the methodology employed by RMG in its review.
Defendants moved to compel disclosure on the ground that plaintiffs had placed RMG's findings "at issue," and plaintiffs opposed, without providing evidence to establish the basis for their assertion of privilege. Defendants argued, in reply, that plaintiffs failed to meet their burden of establishing privilege in the first instance. The court granted defendants' motion, both on the ground that plaintiffs failed to meet their burden of establishing privilege and on the ground that they waived privilege by placing the materials "at issue."
Although the party challenging disclosure bears the burden of establishing that the information sought is immune from disclosure (see Spectrum Sys. Intl. Corp. v Chemical Bank, 78 NY2d 371, 376-377 [1991]), defendants here, as proponents of the motion, did not challenge the existence of a privilege until their reply. "[T]he function of a reply affidavit is to address arguments made in opposition to the position taken by the movant and not to permit the movant to introduce new arguments in support of the motion" (Ritt v Lenox Hill Hosp., 182 AD2d 560, 562 [1992]). Accordingly, the court erred in granting defendants' motion on burden grounds.
Furthermore, the " [a]t issue' waiver of privilege occurs where a party affirmatively places the subject matter of its own privileged communication at issue in litigation, so that invasion of the privilege is required to determine the validity of a claim or defense of the party asserting the privilege, and application of the privilege would deprive the adversary of vital information" (Deutsche Bank Trust Co. of Ams. v Tri-Links Inv. Trust, 43 AD3d 56, 63 [2007]). However, the fact "that a privileged communication contains information relevant to issues the parties are litigating does not, without more, place the contents of the privileged communication itself at issue' in the lawsuit" (id. at 64; see also Long Is. Light. Co. v Allianz Underwriters Ins. Co., 301 AD2d 23, 33 [2002]). Generally, no "at issue" waiver is found where the party asserting the privilege does not need the privileged documents to sustain its cause of action (see Deutsche Bank at 65).
Here, plaintiffs did not waive privilege by placing RMG's review of the loans "at issue." All references to the "third-party consultant" in their complaint could be stricken and it would still stand. Mention of a third-party consultant was not made as an element of the claim, but as a good-faith basis for the allegations made. Since plaintiffs do not "need the privileged documents to sustain [their] cause of action," they have not "waived the attorney-client privilege by injecting privileged materials into the lawsuit" (Manufacturers & Traders Trust Co. v Servotronics, Inc., 132 AD2d 392, 397 [1987]). Nor did plaintiffs waive the privilege by making a selective non-disclosure (see Carone v Venator Group, 289 AD2d 185 [2001]).
Ambac Assurance v DLJ Mortgage
Motion seeking to have the Court take judicial notice of certain court records granted on consent.

Osgood v Kdm Development Corp.

Appeal from an order of the Supreme Court, Erie County (Timothy J. Drury, J.), entered April 28, 2011. The order denied the motion of third-party defendant Royal Manufactured Home Sales, Inc. for summary judgment.

Goldberg Segalla LLP, Buffalo (Colleen M. Murphy Of Counsel), For Third-Party Defendant-Appellant.
Goergen, Manson & Huenke, Buffalo (Joseph G. Goergen, II, Of Counsel), For Third-Party Plaintiffs-Respondents.

It is hereby ORDERED that the order so appealed from is unanimously reversed on the law without costs, the motion is granted and the third-party complaint against third-party defendant Royal Manufactured Home Sales, Inc. is dismissed.
Memorandum: Plaintiff commenced this Labor Law and common-law negligence action seeking damages for injuries he sustained when he fell from a ladder while installing siding on a mobile home (home). The home was located in a mobile home park owned by defendant-third-party plaintiff Tuscarora Village MHP, LLC and managed by defendant-third-party plaintiff KDM Development Corp. Defendant-third-party plaintiff Tuscarora Village Manufactured Home Sales, Inc. sold mobile homes to customers at the mobile home park, and the home on which plaintiff was working at the time of his accident was brokered by third-party defendant Royal Manufactured Home Sales, Inc. (Royal). Defendants commenced the third-party action seeking, inter alia, common-law indemnification and contribution from Royal, and Royal moved for summary judgment dismissing the third-party complaint against it. Supreme Court denied the motion, and we reverse.
Even assuming, arguendo, that Royal is the owner of the home for purposes of the Labor Law, we conclude that Royal met its initial burden on the motion by submitting evidence that it did not supervise or control the injury-producing work, and that it did not provide the ladder from which plaintiff fell (see McCarthy v Turner Constr., Inc., 17 NY3d 369, 377-378; see generally Zuckerman v City of New York, 49 NY2d 557, 562; Carro v Lyons Falls Pulp and Paper, Inc., 56 AD3d 1276, 1277-1278). Defendants-third-party plaintiffs (defendants) failed to raise a triable issue of fact in opposition to the motion (see generally Zuckerman, 49 NY2d at 562). Defendants contend, as an alternative ground for affirmance, that the motion should be denied because Royal failed to submit the bill of particulars in support of its motion (see generally Parochial Bus Sys. v Board of Educ. of City of N.Y., 60 NY2d 539, 545-546; Cataract Metal Finishing, Inc. v City of Niagara Falls, 31 AD3d 1129, 1130). We reject that contention.  " [A] bill of particulars is not a pleading, but just an expansion of one' " (Abbotoy v Kurss, 52 AD3d 1311, 1312, quoting Siegel, NY Prac § 238, at 401 [4th ed]), and thus Royal's failure to support its motion with a copy thereof does not require denial of the motion (see generally CPLR 3212 [b]; D.J. Enters. of WNY v Benderson, 294 AD2d 825; Niles v County of Chautauqua, 285 AD2d 988).

Farm Family Cas. Ins. Co. v. Habitat Revival, LLC, et al.

DECISION & ORDER
In an action, inter alia, in effect, for a judgment declaring that the plaintiff is not obligated to defend or indemnify the defendants Habitat Revival, LLC, and Gallo Pintado in an underlying action entitled Bardes v Pintado, commenced in the Supreme Court, Putnam County, under Index No. 465/09, the defendants appeal, as limited by their brief, from so much of an order of the Supreme Court, Putnam County (Nicolai, J.), dated September 15, 2010, as granted that branch of the plaintiff's motion which was for summary judgment declaring that it is not obligated to defend or indemnify the defendants Habitat Revival, LLC, and Gallo Pintado in the underlying action, and, in effect, denied those branches of their cross motion which were for summary judgment, in effect, declaring that the plaintiff is so obligated and for a hearing on the issue of attorneys' fees.
ORDERED that the order is reversed insofar as appealed from, on the law, with costs, that branch of the plaintiff's motion which was for summary judgment declaring that it is not obligated to defend or indemnify the defendants Habitat Revival, LLC, and Gallo Pintado in the underlying action is denied, those branches of the defendants' cross motion which were for summary judgment, in effect, declaring that the plaintiff is so obligated and for a hearing on the issue of attorneys' fees are granted, and the matter is remitted to the Supreme Court, Putnam County, for a hearing on the issue of attorneys' fees and thereafter for the entry of a judgment, inter alia, declaring that the plaintiff is obligated to defend and indemnify the defendants Habitat Revival, LLC, and Gallo Pintado in the underlying action entitled Bardes v Pintado, commenced in the Supreme Court, Putnam County, under Index No. 465/09.
The defendant John A. Bardes, the sole member of the defendant Habitat Revival, LLC (hereinafter Habitat), allegedly was injured when struck by a truck owned by Habitat and operated by the defendant Gallo Pintado, an employee of Habitat, while in the course of Pintado's employment. The truck was insured under a business auto policy issued by the plaintiff to Habitat.
Bardes and his wife, suing derivatively, commenced a personal injury action against Pintado and Habitat. After investigating the accident, the plaintiff denied coverage based on three exclusions in the business auto policy: the "Workers' Compensation," "Employee Indemnification And Employer's Liability," and "Fellow Employee" exclusions. Thereafter, the plaintiff commenced this action, inter alia, in effect, seeking a declaration that it is not obligated to defend or indemnify Habitat and Pintado in the underlying action.
The plaintiff moved, among other things, for summary judgment declaring that it is not obligated to defend or indemnify Habitat and Pintado in the underlying action based on the three exclusions: the workers' compensation exclusion, which excluded coverage for "[a]ny obligation for which the insured' or the insured's' insurer may be held liable under any workers' compensation . . . law," the employee indemnification and employer's liability (hereinafter employee indemnification) exclusion, which excluded coverage for bodily injury to an employee of the insured, "arising out of and in the course of . . . [e]mployment," and the fellow employee exclusion, which excluded coverage for bodily injury to "any fellow employee' of the insured' arising out of and in the course of the fellow employee's' employment." The plaintiff argued that because Bardes was an employee of Habitat eligible for workers' compensation coverage at the time of the accident, coverage for his injuries was excluded.
The defendants cross-moved, inter alia, for summary judgment, in effect, declaring that the plaintiff is required to defend and indemnify Habitat and Pintado in the underlying action, and for a hearing on the issue of attorneys' fees. They argued, among other things, that the exclusions did not apply because Bardes was not an employee of Habitat under the business auto policy, but, rather, a member of the LLC, and was not entitled to workers' compensation coverage.
"[A]mbiguities in an insurance policy are to be construed against the insurer, particularly when found in an exclusionary clause" (Breed v Insurance Co. of N. Am., 46 NY2d 351, 353). "[W]henever an insurer wishes to exclude certain coverage from its policy obligations, it must do so in clear and unmistakable' language" (Seaboard Sur. Co. v Gillette Co., 64 NY2d 304, 311, quoting Kratzenstein v Western Assur. Co. of City of Toronto, 116 NY 54, 59). "Any such exclusions or exceptions from policy coverage must be specific and clear in order to be enforced. They are not to be extended by interpretation or implication, but are to be accorded a strict and narrow construction" (Seaboard Sur. Co. v Gillette Co., 64 NY2d at 311). The definition of employee in the business auto policy is ambiguous. Since the employee indemnification and fellow employee exclusions relied upon by the plaintiff depend on employee status, the term, as used in those exclusions, must be construed narrowly, and against the plaintiff. Further, the record, including Bardes' deposition testimony, showed that, while Habitat had employees who received wages and W-2 forms, he himself was not an employee of Habitat and did not receive wages, W-2 forms, or 1099 forms. Accordingly, under the circumstances of this case, the defendants demonstrated, prima facie, that Bardes was not an employee of Habitat, and, therefore, the employee indemnification and fellow employee exclusions did not apply (see e.g. Commissioners of State Ins. Fund v Hermitage Ins. Co., 225 AD2d 649, 650-651; cf. Giovannucci v Petrone, 51 AD3d 632).
The defendants also demonstrated, prima facie, that Bardes was not entitled to workers' compensation coverage and, therefore, the workers' compensation exclusion also did not apply to him (see Workers' Compensation Law § 54[6]; Commissioners of State Ins. Fund v Hermitage Ins. Co., 225 AD2d at 650-651). In opposition, the plaintiff failed to raise a triable issue of fact.
Accordingly, the Supreme Court should have denied that branch of the plaintiff's motion which was for summary judgment declaring that it is not obligated to defend and indemnify Habitat and Pintado in the underlying action, and should have granted that branch of the defendants' cross motion which was for summary judgment, in effect, declaring that it is so obligated.
"[A]n insured who is cast in a defensive posture by the legal steps an insurer takes in an effort to free itself from its policy obligations,' and who prevails on the merits, may recover an attorney's fee incurred in defending against the insurer's action" (Insurance Co. of Greater N.Y. v Clermont Armory, LLC, 84 AD3d 1168, 1171, quoting U.S. Underwriters Ins. Co. v City Club Hotel, LLC, 3 NY3d 592, 598 [internal quotation marks omitted]; see Mighty Midgets v Centennial Ins. Co., 47 NY2d 12, 21; Johnson v General Mut. Ins. Co., 24 NY2d 42). " It is well settled that [*3]an insurer's responsibility to defend reaches the defense of any actions arising out of the occurrence, and defense expenses are recoverable by the insured, including those incurred in defending against an insurer seeking to avoid coverage for a particular claim'" (RLI Ins. Co. v Smiedala, 77 AD3d 1293, 1294-1295, quoting National Grange Mut. Ins. Co. v T.C. Concrete Constr., Inc., 43 AD3d 1321, 1322 [internal quotation marks omitted]). "Moreover, an insured who prevails in an action brought by an insurance company seeking a declaratory judgment that it has no duty to defend or indemnify the insured may recover attorneys' fees regardless of whether the insurer provided a defense to the insured'" (RLI Ins. Co. v Smiedala, 77 AD3d at 1295, quoting U.S. Underwriters Ins. Co. v City Club Hotel, LLC, 3 NY3d at 598 ).
Since the defendants are entitled to a declaration that the plaintiff is obligated to defend and indemnify Habitat and Pintado in the underlying action, they may recover attorneys' fees incurred in defending this action (see Insurance Co. of Greater N.Y. v Clermont Armory, LLC, 84 AD3d at 1171). Accordingly, the Supreme Court should have granted that branch of the defendants' motion which was for a hearing on the issue of attorneys' fees, and we remit the matter to the Supreme Court, Putnam County, for a hearing to determine the amount of the award of the attorneys' fees.
In light of our determination, we need not reach the defendants' remaining contentions.

Since this is a declaratory judgment action, we also remit the matter to the Supreme Court, Putnam County, for the entry of a judgment, inter alia, declaring that the plaintiff is obligated to defend and indemnify Habitat and Pintado in the underlying action entitled Bardes v Pintado, commenced in the Supreme Court, Putnam County, under Index No. 465/09 (see Lanza v Wagner, 11 NY2d 317, 334, appeal dismissed 371 US 74, cert denied 371 US 901).